/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230605.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, June 5, 2023, Vol. 27, No. 155 Headlines 2M RESEARCH: 2M Unsecureds to Get $10K per Month for 60 Months 2ND CHANCE: Taps Bewley Lassleben as Legal Counsel 5200 SAMPLE ROAD: Taps Kelley Fulton Kaplan & Eller as Counsel ACCELERATED HEALTH: $875M Bank Debt Trades at 22% Discount ACTION PROPERTY: Court OKs Interim Cash Collateral Access AGILE THERAPEUTICS: Closes $7.5 Million Public Offering AH DEVELOPMENT: Seeks to Hire Carrow as Real Estate Broker ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access AMC ENTERTAINMENT: $2B Bank Debt Trades at 21% Discount APEX TOOL: $350M Bank Debt Trades at 15% Discount AT HOME GROUP: Moody's Cuts CFR to Caa3 & Alters Outlook to Neg. ATLAS SYSTEMS: Seeks to Hire Croskey Lanni as Accountant AUDACY CAPITAL: $770M Bank Debt Trades at 50% Discount AVENIR MEMORY: Court OKs Cash Collateral Access Thru July 31 AVENTIV TECHNOLOGIES: $282.5M Bank Debt Trades at 19% Discount AVIS BUDGET: Notes Amendment No Impact on Moody's 'Ba3' Rating B AND C BROS: Seeks to Hire Center City Law as Bankruptcy Counsel BADGER FINANCE: $268.7M Bank Debt Trades at 19% Discount BALTIMORE HOTEL: S&P Raises Secured Revenue Bonds Rating to 'B' BCPE NORTH: $20M Bank Debt Trades at 15% Discount BERTUCCI'S RESTAURANTS: $225K Sale of Liquor License to 523 Okayed BERTUCCI'S RESTAURANTS: Court Approves $380K Sale of Liquor License BEVERLY COMMUNITY: Seeks to Hire Sheppard Mullin as Legal Counsel BEVERLY COMMUNITY: Taps Orrick as Conflicts Counsel BEVERLY COMMUNITY: Taps Triple P RTS as Restructuring Advisor BF MANAGEMENT: Voluntary Chapter 11 Case Summary BHD SLT: Taps Reynolds Law Corporation as Bankruptcy Counsel BIGHORN RESTAURANTS: Seeks Cash Collateral Access BLUE LIGHTNING: Court OKs Cash Collateral Access BOXED INC: June 26 Deadline for Proofs of Claim Set BRIDGER STEEL: June 7 Hearing on Sale of Surplus Equipment Vacated CEN TEX SUPERIOR: Unsecureds Will Get 100% of Claims over 5 Years CENPORTS COMMERCE: May Use Cash Collateral Thru June 16 CENTERPOINT RADIATION: Voluntary Chapter 11 Case Summary CENTURY BUILDERS: Case Summary & 12 Unsecured Creditors CHARLES DEWEESE: Hearing Tuesday on Plan Exclusivity CHARLES LAU: Seeks Cash Collateral Access CHG PPC: Moody's Rates New EUR230MM First Lien Term Loan 'B1' CHIEF INVESTMENTS: Sale of Substantially All Assets for $1.65M OK'd CHOCTAW GENERATION: Fitch Affirms 'D' Rating on Series 1 Notes CHRISTMAS TREE: Taps Kurtzman Carson as Administrative Advisor CHUBBY'Z 2 D&D: Case Summary & 20 Largest Unsecured Creditors CITY BREWING: $850M Bank Debt Trades at 51% Discount CLEAR CHOICE SHUTTERS: Case Summary & 15 Unsecured Creditors CLEAR CHOICE: Case Summary & Five Unsecured Creditors CLEARWATER ORGANIC: Deadline to Submit Bids Set for July 11 COMIC RELIEF: Hires Carmody MacDonald as Bankruptcy Counsel COMPASS POINTE: Amends Unsecured Claims Pay; Plan Hearing June 28 COREL CORP: Moody's Affirms B3 CFR, Outlook Remains Stable CORIZON LLC: Bouton's Lawsuit Stayed for 90 Days CROWN FINANCE: $650M Bank Debt Trades at 78% Discount DECURTIS HOLDINGS: Seeks to Hire Cooley LLP as Bankruptcy Counsel DECURTIS HOLDINGS: Seeks to Hire Province LLC as Financial Advisor DECURTIS HOLDINGS: Taps Omni as Administrative Agent DECURTIS HOLDINGS: Taps Potter Anderson & Corroon as Co-Counsel DEVILLE CORP: Court OKs Interim Cash Collateral Access DIGITAL MEDIA: Unit Draws Down $10M Under Revolving Credit Facility DIOCESE OF ALBANY: Taps Donlin Recano as Administrative Advisor DVD FACTORY: Unsecureds Will Get 14.3% of Claims over 5 Years EMPLOYBRIDGE LLC: $925M Bank Debt Trades at 21% Discount ENTRADA DEVELOPMENT: Gets Ok to Hire Smeberg Law Firm as Counsel ERICKSEN ARBUTHNOT: Seeks to Hire Lee CPA Audit Group as Auditor ESCO LTD: Seeks to Hire Stretto as Administrative Advisor ESOURCE RESOURCES: Has $150,000 DIP Loan from Midwest Business FINTHRIVE SOFTWARE: $1.44B Bank Debt Trades at 16% Discount FKB LLC: Seeks Approval to Hire SC&H Group as Financial Advisor FORMATION GROUP: Taps Consilio as Litigation Support Consultant FORTREA HOLDINGS: Fitch Gives BB(EXP) LongTerm IDR, Outlook Stable FORTREA HOLDINGS: Moody's Assigns First Time 'Ba3' CFR FORTREA HOLDINGS: S&P Assigned 'BB' Rating, Outlook Stable GARCIA GRAIN: Access to Cash Collateral Granted on Interim Basis GHOST TRAIN: $200,000 DIP Loan from PCI GT Wins Final OK GK 746 EAST: Case Summary & Six Unsecured Creditors GK 770 EAST: Case Summary & Four Unsecured Creditors GLOBAL NET: Fitch Puts 'BB+' IDR on Watch Negative GLOBAL PREMIER: Case Summary & 20 Largest Unsecured Creditors GOLDEN ENTERTAINMENT: S&P Upgrades ICR to 'BB-' on Refinancing GRACE YOUTH: Seeks to Hire Fuchs Law Office as Bankruptcy Counsel GUARDIAN FUND: Gets OK to Hire Cresco Ltd. as Real Estate Broker H & H INVESTMENT: Case Summary & Eight Unsecured Creditors HAIRY DEALINGS: Unsecureds to Get $10K per Year for 3 Years HEART OF TEXAS: Case Summary & 12 Unsecured Creditors HEARTBRAND HOLDINGS: Plan Depends on Outcome of State Court Action HELLO LIVINGSTON: Case Summary & 20 Largest Unsecured Creditors HOTSC HOLDINGS: Case Summary & Three Unsecured Creditors HURLEY MEDICAL: Moody's Alters Outlook on 'Ba1' Rating to Stable IMMEDIATE PROPERTIES: Unsecureds Will Get 100% over 60 Months INMET MINING: Committee Taps BDO Consulting as Financial Advisor J CREW PROPERTY: Seeks to Hire Garland & Greenwood as Accountant JDI DATA: Wins Cash Collateral Access Thru Aug 18 JET OILFIELD: June 28 Plan Confirmation Hearing Set JOHNSON'S ALL-SCAPES: Case Summary & 14 Unsecured Creditors JONES DESLAURIERS: Incremental Notes No Impact on Moody's 'B3' CFR JUSTICE SAND: Court OKs Final Cash Collateral Access KARAFIN SCHOOL: Wins Final Cash Collateral Access KINETIK HOLDINGS: Fitch Affirms BB+ LongTerm IDR, Outlook Positive KINTARA THERAPEUTICS: Adjourns Annual Meeting Until June 15 KRUGER PACKAGING: DBRS Confirms BB(high) Issuer Rating LAF BUTTERVILLE: Seeks to Hire Mann Law Firm as Bankruptcy Counsel LEGACY CARES: Court OKs $9MM DIP Loan From UMB Bank LITIGATION PRACTICE: Trustee Taps Marshack Hays as Legal Counsel LITTLE ROAD: Seeks to Hire Workman Nydegger as Legal Counsel LUCKY BUCKS: S&P Downgrades ICR to 'D' on Missed Payments LUMINOUS MOBILE: Seeks to Hire Robert Bassel as Legal Counsel MADERA COMMUNITY: Taps Newmark Pearson Commercial as Broker MADISON CLINIC: Court OKs $90,000 DIP Loan from Wellstone MAJOSTAN CORP: Seeks to Hire Rosalyn Maldonado as Legal Counsel MARK ALAN FORREST: Nagra Buys 40-Acre Farmland in Selma for $1.4MM MEDAILLE UNIVERSITY: S&P Lowers Revenue Bonds Rating to 'CCC' MEHR GROUP: Taps Law Offices of Jaenam Coe as Bankruptcy Counsel MERIDIEN ENERGY: Hires Whiteford Taylor & Preston as Counsel MERIDIEN ENERGY: Taps John Teitz of Compass Advisory as CRO METAL CHECK: Seeks to Hire Mark D. Cain P.C. as Accountant MICAH PROPERTY: Taps Law Offices of Stephen R. Wade as Counsel MOMENTIVE INC: Moody's Withdraws 'B2' CFR Following Debt Repayment MOVIA ROBOTICS: Court OKs Cash Collateral Access Thru June 30 MVK INTERMEDIATE: Moody's Cuts CFR to 'Ca', Outlook Negative NAVACORD CORP: Fitch Affirms 'B' LongTerm IDR, Outlook Stable NECESSITY RETAIL: Fitch Puts 'BB' IDR on Rating Watch Evolving NEW SECURITY: Unsecureds Will Get 0.03% in Subchapter V Plan NO RUST REBAR: Green Tech's Bid to Dismiss Adversary Case Denied OPULENT VACATIONS: Seeks to Hire Mortenson CPA as Accountant ORS.COM INC: Seeks to Hire Spector & Cox as Bankruptcy Counsel PACKABLE HOLDINGS: Seeks to Hire Hilco as Receivables Servicer PALADIN REINSURANCE: Enters Commutation Plan; Claims Due July 14 PALMETTO INTERSTATE: Taps Cooper Law Firm as Bankruptcy Counsel PARADISE REDEVELOPMENT: S&P Lowers 2009 Bonds Rating to 'D' PHILLIPS SEABROOK: Gets OK to Hire Dame Law as Special Counsel PLATFORM II LAWNDALE: Wins Cash Collateral Access Thru June 30 PLX PHARMA: Deadline to File Claims Set for June 26 PLYWEALTH INVESTMENT: Gets OK to Hire E. Vincent Wood as Counsel POUGHKEEPSIE, NY: Moody's Affirms 'Ba1' Issuer & GOLT Ratings PROTECH FIRE: Seeks to Hire Cooper & Scully as Bankruptcy Counsel PUG LLC: $327.5M Bank Debt Trades at 10% Discount QBS PARENT: S&P Alters Outlook to Negative, Affirms 'B-' ICR QUEST SOFTWARE: $2.81B Bank Debt Trades at 17% Discount R L BURNS: Case Summary & 20 Largest Unsecured Creditors RAP OPERATING: Case Summary & 20 Largest Unsecured Creditors RAP OPERATING: Seeks Access to GM Financial Cash Collateral RATHER OUTDOORS: $365M Bank Debt Trades at 22% Discount RC HOME SHOWCASE: Court OKs Cash Collateral Access REGAL REXNORD: Moody's Withdraws Ba3 Rating on Sr. Unsecured Notes RETAILING ENTERPRISES: Files Emergency Bid to Use Cash Collateral RIVERBED TECHNOLOGY: $900M Bank Debt Trades at 74% Discount ROBBINS ENTERPRISES: Private Sale of Wilmington Property Mooted ROBERT BROWER: Coastal's Stock Issued to Nobles Void RODGERS COMPANIES: Case Summary & Six Unsecured Creditors RUEL T. STOESSEL: Sale Proceeds & Future Earnings to Fund Plan RXB HOLDINGS: Moody's Lowers 1st Lien Bank Loans to 'B3' RXB HOLDINGS: S&P Upgrades ICR to 'B' on Operating Performance S2 ENERGY: Sale of Substantially All Assets for $1.25-Mil. Approved SAFE ELECTRIC: Case Summary & 20 Largest Unsecured Creditors SAFE FLEET: Moody's Ups CFR to 'B2' & First Lien Loans to 'B1' SHUTTERFLY LLC: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. SOUTHEASTERN UNIVERSITY: S&P Rates $79.2MM Revenue Bonds 'BB' SOUTHERN CLEARING: Court OKs Cash Collateral Access Thru July 20 SOUTHLAND NATIONAL: In Liquidation; NCIC Named as Liquidator SOUTHWEST PREPARATORY SCHOOL: S&P Rates 2023A/b Rev. Bonds 'BB+' SPIRIPLEX INC: Unsecureds to Get Share of Income for 5 Years STANFORD SONOMA: Seeks to Hire Spector & Cox as Bankruptcy Counsel STRUCTURLAM MASS: Taps Potter Anderson & Corroon as Co-Counsel T-ROLL CONSTRUCTION: Seeks to Hire Tax & Accounting Professionals T-SHACK INC: Taps Rebeca Garcilazo de Martinez of Exp as Realtor T4L INC: Case Summary & Four Unsecured Creditors TAAT INTERNATIONAL: Seeks to Hire Nellis Auction as Auctioneer TENNISWOOD INC: Seeks to Hire Wilson Harrell Farrington as Counsel THUNDER CONSTRUCTION: Seeks to Hire Sagre Law Firm as Counsel TOKEN BUYER: $360M Bank Debt Trades at 20% Discount VIASAT: S&P Affirms 'BB-' Issuer Credit Rating, Outlook Stable VIVOS REAL ESTATE: Taps McNamee Hosea as Substitute Counsel WHEEL PROS: $1.18B Bank Debt Trades at 37% Discount WHITESTONE BREWERY: Taps Hayward PLLC as Bankruptcy Counsel WORLEY CHIROPRACTIC: Hires Fred Adams Tax Group as Accountant WWMAJ SYSTEMS: Taps Conroy Baran, Krigel & Krigel as Attorneys [^] BOND PRICING: For the Week from May 29 to June 2, 2023 ********* 2M RESEARCH: 2M Unsecureds to Get $10K per Month for 60 Months -------------------------------------------------------------- 2M Research Services, LLC and Marcus E. Martin filed with the U.S. Bankruptcy Court for the Northern District of Texas a Joint Disclosure Statement for Joint Plan of Reorganization dated May 29, 2023. Marcus E. Martin founded 2M Research in 2011 as a Texas limited liability company. 2M is in the business of contracting with agencies of the United States to provide services related to technical assistance, policy evaluation and research, and health information technology and advanced analytics. 2M entered into a secured loan transaction with Pragmatic Financial, LLC pursuant to which Pragmatic lent 2M $3.8 million, bearing interest at 35% per year (the "Pragmatic Loan"). Martin executed a guaranty of the Pragmatic Loan. The Debtors were unable to timely pay this heavy debt burden, which led to aggressive collection efforts by creditors and the filing of this Chapter 11 case. The Joint Plan of Reorganization filed by the Debtors provides for the reorganization of both Debtors. The Debtors shall continue their businesses after the Confirmation Date. Allowed Claims will receive the treatment afforded by the Plan. The Debtors will make all payments required under the Plan from available cash and income from the business operations of 2M and Martin. Under this Plan, Secured Claims will be paid in full and Unsecured Claims will receive a pro rata share of a total pool of $10,000.00 in the 2M case and $2,500.00 in the Marcus case paid over five years. Class 13 consists of the Allowed General Unsecured Claims against 2M. Claimants in this Class shall be paid monthly over 60 months on a Pro Rata basis out of $10,000.00 per month, commencing on the first day of the first month following the Effective Date and continuing on the first day of each month thereafter until the expiration of 60 months. Class 14 consists of Equity Interest of 2M. Equity Interests in the Debtor shall be retained. Class 9 consists of Allowed General Unsecured Claims against Martin. Claimants in this Class shall be paid monthly over 60 months on a Pro Rata basis out of $2,500.00 per month, commencing on the first day of the first month following the Effective Date and continuing on the first day of each month thereafter until the expiration of 60 months. Marcus E. Martin will retain his interests in his Assets. The Debtors will make all payments required under the Plan from available cash and income from the business operations of 2M and Martin. A full-text copy of the Joint Disclosure Statement dated May 29, 2023 is available at https://urlcurt.com/u?l=uL0lH4 from PacerMonitor.com at no charge. Proposed Attorneys for Debtors: Joyce W. Lindauer, Esq. Joyce W. Lindauer Attorney, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Telephone: (972) 503-4033 Facsimile: (972) 503-4034 Email: joyce@joycelindauer.com About 2M Research Services 2M Research Services, LLC, a company in Mansfield, Texas, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 23-40271) on Jan. 30, 2023. In the petition signed by Marcus Martin, manager and member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Mark X. Mullin oversees the case. The Debtor tapped Roquemore Skierski, PLLC and Joyce W. Lindauer Attorney, PLLC, as legal counsel. 2ND CHANCE: Taps Bewley Lassleben as Legal Counsel -------------------------------------------------- 2ND Chance Investment Group, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Bewley, Lassleben & Miller, LLP as legal counsel. The firm will assist the Debtor with the unlawful detainer actions on the following tenant occupied properties: -- 13352 Marty Lane Garden Grove CA 92843 -- 37472 Yorkshire Dr. Palmdale CA 93550 -- 324 W 47th Pl. Los Angeles CA 90037 -- 25641 Byron St. San Bernardino CA 92404 -- 43933 30 St E Lancaster CA 93535 -- 1004 Peachwood Crt. Los Banos CA 93635 -- 827 N Meridian Ave. San Bernardino CA 92410 -- 730 E 78th St Los Angeles CA 90001 -- 1611 151st St. San Leandro CA 94578 -- 37915 Marsala Dr. Palmdale CA 93552 Bewley is disinterested within the meaning of 11 U.S.C. Secs 327(a) and 101(14), as disclosed in the court filings. The firm can be reached through: Walter Pena, Esq. Bewley, Lassleben & Miller, LLP 13215 Penn St # 510 Whittier, CA 90602 Office: (562) 698-9771 Direct Line: (562)907-2017 Fax: (562) 945-7600 E-mail: WalterP@bewleylaw.com About 2ND Chance Investment Group 2ND Chance Investment Group, LLC owns in fee simple title 13 real properties located in various locations in California and Washington having an aggregate value of $7.02 million. 2ND Chance Investment Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-12142) on Dec. 21, 2022. In the petition signed by its managing member, Rayshon A. Foster, the Debtor disclosed $7,221,261 in assets and $11,002,949 in liabilities. Judge Scott C. Clarkson oversees the case. Amanda G. Billyard, Esq., at Financial Relief Law Center, APC and Grobstein Teeple, LLP serve as the Debtor's legal counsel and financial advisor, respectively. The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee is represented by Goe Forsythe & Hodges, LLP. 5200 SAMPLE ROAD: Taps Kelley Fulton Kaplan & Eller as Counsel -------------------------------------------------------------- 5200 Sample Road, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Kelley Fulton Kaplan & Eller, P.L. as legal counsel. The firm's services include: a. giving advice to the Debtor with respect to its powers and duties and the continued management of its business operations; b. advising the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; c. preparing legal documents; d. protecting the interest of the Debtor in all matters pending before the court; and e. representing the Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan. Kelley will be paid $475 per hour for attorney fees, $155 per hour for paralegal fees, and a retainer of $20,000. In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Craig Kelley, Esq., a partner at Kelley, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Craig I. Kelley, Esq. Dana Kaplan, Esq. Kelley Fulton Kaplan & Eller, P.L. 1665 Palm Beach Lakes Blvd. Suite 1000 West Palm Beach, FL 33401 Tel: (561) 491-1200 Fax: (561) 684-3773 Email: craig@kelleylawoffice.com About 5200 Sample Road 5200 Sample Road, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-13723) on May 12, 2023, with $50,001 to $100,000 in assets and as much as $50,000 in liabilities. Judge Mindy A Mora presides over the case. Craig I Kelley, Esq., at Kelley Fulton Kaplan & Eller, P.L. represents the Debtor as counsel. ACCELERATED HEALTH: $875M Bank Debt Trades at 22% Discount ---------------------------------------------------------- Participations in a syndicated loan under which Accelerated Health Systems LLC is a borrower were trading in the secondary market around 78.3 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $875 million facility is a Term loan that is scheduled to mature on February 15, 2029. The amount is fully drawn and outstanding. Accelerated Health Systems, LLC provides healthcare services. The Company offers athletic training, physical therapy, occupational therapy, and fitness services to affiliations including high schools, colleges, and many professional sports teams. ACTION PROPERTY: Court OKs Interim Cash Collateral Access --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, authorized Action Property SVCES, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. The Debtor requires the use of cash collateral to continue operating the business in the ordinary course. As previously reported by the Troubled Company Reporter, there are 22 open UCCs of record in the Florida Secured Transaction Registry secured by the Debtor's assets. PNC Bank is the secured party on 11 of the UCCs and each are secured by a specific piece of equipment. Of the remaining UCCs, seven are held by other lenders which are also each secured by specific equipment of the Debtor. The four remaining UCC-1's are "secured" by all of the Debtor's assets, and are the subject of the Debtor's request. There is one Judgment (held by Kelly Tractor Co.) filed in the Florida Judgment Registry. It was filed on June 10, 2022 and is number 5 in priority of liens secured by "all personal property" of the Debtor. The value of the Debtor's personal property that is otherwise unencumbered by specific UCC-1's (the collateral for purchase money loans) totals $410,708. Reliant Funding filed a UCC-1 on December 19, 2019; however, Reliant has been paid in full and this UCC-1 is pending termination. That allows the U.S. Small Business Administration to become first priority in a secured position with its UCC-1 filed on July 26, 2020. The SBA is owed approximately $150,000 which is fully secured. The next and final UCC-1 was filed by Rapid Finance on May 11, 2022, which encumbered all of the Debtor's assets. However, the Debtor has listed Rapid as a disputed, contingent and unliquidated debt, and as of the date of the Motion, the claims bar date has passed and Rapid has not timely filed a proof of claim which disallows the claim. However, in event Rapid files a claim and it is allowed, the SBA and Rapid are over-secured. The Court ruled that the Debtor will provide adequate protection payments on a monthly basis to the SBA in the amount of $731 pursuant to the terms of existing Note, in the face amount of $150,000 and related Security Agreement entered into on or about July 15, 2020. The Debtor will maintain commercial general liability insurance on the equipment with the SBA as "Loss Payee" with the U.S. Trustee as "Additional Interest", and will provide proof of such insurance to each lender, its counsel, and the U.S. Trustee. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=s6Pjga from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $91,523 for May 2023; $91,523 for June 2023; and $91,523 for July 2023. About Action Property SVCES Action Property SVCES, Inc. filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 22-19389) on Dec. 8, 2022, with as much as $1 million in both assets and liabilities. Judge Peter D. Russin oversees the case. The Debtor is represented by Chad Van Horn, Esq., at Van Horn Law Group, PA. AGILE THERAPEUTICS: Closes $7.5 Million Public Offering ------------------------------------------------------- Agile Therapeutics, Inc. announced the closing of its public offering of an aggregate of 1,896,286 shares of its common stock (or pre-funded warrants in lieu thereof), together with accompanying common stock warrants, at a public offering price of $3.9551 per share (or pre-funded warrant) and accompanying warrants. Each share of common stock (or pre-funded warrant) was sold in the offering together with a Series C-1 warrant to purchase one share of common stock at an exercise price of $3.69 per share and a Series C-2 warrant to purchase one share of common stock at an exercise price of $3.69 per share. The Series C-1 warrants are exercisable immediately and will expire five years from the date of issuance, and the Series C-2 warrants are exercisable immediately and will expire eighteen months from the date of issuance. Total gross proceeds from the offering, before deducting the placement agent's fees and other offering expenses, were approximately $7.5 million. H.C. Wainwright & Co. acted as the exclusive placement agent for the offering. The Company intends to use the net proceeds from this offering for working capital, business development activities, and other general corporate purposes. The securities described above were offered pursuant to a registration statement on Form S-1 (File No. 333- 271249), which was declared effective by the Securities and Exchange Commission on May 22, 2023. The offering was made only by means of a prospectus forming part of the effective registration statement relating to the offering. A final prospectus relating to the offering has been filed with the SEC. Electronic copies of the final prospectus may be obtained on the SEC's website at http://www.sec.govand may also be obtained by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (212) 856-5711 or e-mail at placements@hcwco.com. In connection with the offering, the Company also amended certain existing warrants to purchase up to an aggregate of 229,669 shares of the Company's common stock that were previously issued in October 2021 through July 2022 at exercise prices ranging from $45.00 to $1,700.00 per share, such that the amended warrants now have a reduced exercise price of $3.69 per share and expire five years from the closing of the offering. About Agile Therapeutics Inc. Agile Therapeutics, Inc. is a women's healthcare company dedicated to fulfilling the unmet health needs of today's women. The Company's product and product candidates are designed to provide women with contraceptive options that offer freedom from taking a daily pill, without committing to a longer-acting method. Its initial product, Twirla, (levonorgestrel and ethinyl estradiol), a transdermal system, is a non-daily prescription contraceptive. Agile reported a net loss of $25.41 million for the year ended Dec. 31, 2022, compared to a net loss of $71.07 million for the year ended Dec. 31, 2021. Iselin, New Jersey-based Ernst & Young LLP, the Company's auditor since 2010, issued a "going concern" qualification in its report dated March 22, 2023, citing that the Company has generated losses since inception, used substantial cash in operations, anticipates it will continue to incur net losses for the foreseeable future, requires additional capital to fund its operating needs and has stated that substantial doubt exists about the Company's ability to continue as a going concern. AH DEVELOPMENT: Seeks to Hire Carrow as Real Estate Broker ---------------------------------------------------------- AH Development Group, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of New York to employ Carrow Real Estate Services as its real estate broker. The firm will render these services: a. provide the Debtor comparative market analyses of its real properties; and b. list, market, and sell the Debtor's real properties, as necessary. The firm will earn a 6 percent commission of the gross sale price of any real estate sold. Charles Carrow, president and CEO of Carrow, assured the court that his firm represents no interest adverse to the Debtor or the estate in the matters upon which it is to be engaged. The firm can be reached through: Charles M. Carrow, RPA, SMA Carrow Real Estate Services, LLC One Commerce Plaza 99 Washington Ave Albany, NY 12260 Phone: 518-462-7491 Fax: 518-462-7503 About AH Development Group AH Development Group LLC owns various real estate holdings located throughout the City of Albany, N.Y., having an aggregate value of $1,037,000. AH Development Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-10387) on April 17, 2023. In the petition signed by Ben Gaspard, managing member, the Debtor disclosed $1,037,000 in total assets and up to $944,887 in liabilities. Judge Robert E. Littlefield Jr. oversees the case. Michael L. Boyle, Esq., at Boyle Legal, LLC represents the Debtor as legal counsel. ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, authorized All Florida Safety Institute, LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of cash collateral to continue operating the business and pay salaries. As of the Petition Date, the Debtor was indebted to the U.S. Small Business Administration in the approximate amount of $2,066,071 and Westlake Funding Company, LLC in the approximate amount of $500,000. The Debtor's obligation is evidenced by a Promissory Note, Security Agreement, Financing Statement, and Chattel Mortgage executed on May 27, 2020, to USA/SBA and July 21, 2021 to Westlake. The Debtor is permitted to pay only expenses necessary for the operation of the business and not any pre-petition expenses, officer salaries, professional fees, or insiders without further court order. As additional adequate protection to each Lender's interest and the estate's interest in cash collateral, the Lender is granted a replacement lien to the same nature, priority, and extent the Lender may have had immediately prior to the date that the case was commenced nunc pro tunc to the Petition Date. Further, the Lender is granted a replacement lien and security interest on property of the bankruptcy estate to the same extent and priority as that which existed pre-petition on all of the cash accounts, accounts receivable and other assets and property acquired by the Debtor's estate or by the Debtor on or after the Petition. The replacement lien will be deemed effective, valid and perfected as of the Petition Date, without the necessity of filing with any entity of any documents or instruments otherwise required to be filed under applicable non-bankruptcy law. The Debtor is directed to make adequate protection payments: a. $6,164.40 per month to the U.S. Small Business Administration commencing November 1, 2022 and on the 1st of the month thereafter or further Court Order; b. $0.00 per month to Westlake Funding Company, LLC. Stay to be lifted upon Court Order; c. All other UCC-1 receivable Lenders including NewCo Capital Group, Samson, Cloudfund/Delta and IOU shall receive no adequate protection at this time. This order is without prejudice to a later finding that such Lenders may be secured by receivables, personal property, inventory and/or equipment. As additional adequate protection of the Lender's interest in the cash collateral, the Debtor will (a) maintain all necessary insurance coverage on the Lender's collateral and under no circumstances will the Debtor allow its insurance coverage to lapse, (b) continue to pay such monthly insurance payment in a timely manner, and (c) within two days of the request of the Lender, the Debtor will provide to the Lender's counsel a written statement supported by evidence of Debtor's compliance with the foregoing. The Debtor's authority to use the cash collateral will terminate immediately and upon the earlier of (a) a Court order; (b) the conversion of the case to a Chapter 7 case or the appointment of a Chapter 11 trustee without the consent of the Lender; (c) the entry of an Order that alters the validity or priority of the replacement liens granted to the Bank; (d) the Debtor ceasing to operate all or substantially all of its business; (e) the entry of an order granting relief from the automatic stay that allows any entity to proceed against any material assets of the Debtor that constitute cash collateral; (f) the entry of an Order authorizing a security interest under section 364(c) or 364(d) of the Bankruptcy Code in the collateral to secure any credit obtained or debt incurred that would be senior to or equal to the replacement lien; or (g) the dismissal of the Chapter 11 case. A continued hearing on the matter is set for June 6, 2023 at 11 a.m. A copy of the order is available at https://urlcurt.com/u?l=ptjs8E from PacerMonitor.com. About All Florida Safety Institute, LLC All Florida Safety Institute, LLC offers driving lessons, driver's license testing and traffic school. All Florida Safety sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01926) on September 22, 2022. In the petition signed by Mark Allen, manager, the Debtor disclosed $2,200,185 in assets and $5,618,570 in liabilities. Judge Jacob A. Brown oversees the case. Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler, LLP, is the Debtor's counsel. AMC ENTERTAINMENT: $2B Bank Debt Trades at 21% Discount ------------------------------------------------------- Participations in a syndicated loan under which AMC Entertainment Holdings Inc is a borrower were trading in the secondary market around 78.9 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $2 billion facility is a Term loan that is scheduled to mature on April 22, 2026. About $1.92 billion of the loan is withdrawn and outstanding. AMC Entertainment Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides theatrical exhibition, movie screening, food distribution, online ticket booking, and other related services. APEX TOOL: $350M Bank Debt Trades at 15% Discount ------------------------------------------------- Participations in a syndicated loan under which Apex Tool Group LLC is a borrower were trading in the secondary market around 85.4 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $350 million facility is a Term loan that is scheduled to mature on February 8, 2030. The amount is fully drawn and outstanding. Apex Tool Group, LLC manufactures tools. The Company offers mechanics, trade, specialty tools, chains, truck boxes, jobsite storage products, and drill chucks, as well as soldering, cutting, motion control and air ventilation bits, torque measurement, metal cutting, and drilling solutions. ATG serves industrial, automobiles, aerospace, construction, and electronic markets. AT HOME GROUP: Moody's Cuts CFR to Caa3 & Alters Outlook to Neg. ---------------------------------------------------------------- Moody's Investors Service downgraded At Home Group Inc.'s corporate family rating to Caa3 from Caa1 and its probability of default rating to Caa3-PD/LD from Caa1-PD, and appended the PDR with the "/LD" (limited default) designation reflecting the close of the company's debt exchange. At the same time, Moody's downgraded the company's senior secured first lien term loan B and senior secured global notes ratings to Caa3 from Caa1 and its senior unsecured global notes rating to C from Caa3. In addition, Moody's assigned Caa3 ratings to At Home Cayman's $200 million 11.5% senior secured global notes due 2028 and At Home Group Inc.'s 7.125%/8.625% Cash/PIK Toggle senior secured global notes. The outlook was changed to negative from stable. The downgrades reflect continued weakness in the company's operating performance and Moody's view that the capital structure is unsustainable absent a significant recovery in earnings. The downgrades also reflect governance considerations including the company's debt exchange where consenting lenders of the 7.125% unsecured notes will exchange for new first lien notes at a discount to par with an option for a two year PIK toggle. Moody's views this transaction as a distressed exchange, which is an event of default under Moody's definition. Moody's will remove the /LD designation from the PDR in three business days. The company also created a new wholly-owned Cayman Islands subsidiary which issued $200 million of new notes. Both pieces of debt are secured by the assets on a pari passu basis with the term loan and the company's existing secured notes. While the transactions will boost liquidity, there is still risk of additional transactions that Moody's would view as a distressed exchange given the current business challenges and At Home's focus on store expansion in uncertain economic times. Downgrades: Issuer: At Home Group Inc. Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD/LD (LD appended) from Caa1-PD Senior Secured 1st Lien Term Loan B, Downgraded to Caa3 from Caa1 Senior Secured Global Notes, Downgraded to Caa3 from Caa1 Senior Unsecured Global Notes, Downgraded to C from Caa3 Assignments: Issuer: At Home Cayman Backed Senior Secured Global Notes, Assigned Caa3 Issuer: At Home Group Inc. Senior Secured Global Notes, Assigned Caa3 Outlook Actions: Issuer: At Home Cayman Outlook, Assigned Negative Issuer: At Home Group Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE At Home's Caa3 CFR is constrained by its private equity ownership and very high lease-adjusted leverage. The rating is also constrained by At Home's modest scale, and operations in the discretionary, cyclical and highly competitive home decor segment. Demand for the home decor segment has been highly volatile and the combination of high inflation and costs has contributed to significant earnings deterioration. In addition, as a retailer, At Home needs to make ongoing investments in its brand and infrastructure, as well as in social and environmental drivers including responsible sourcing, product and supply sustainability, privacy, and data protection. The rating is supported by the company's adequate liquidity. The $200M debt issuance will boost liquidity with pro forma balance sheet cash and asset-based revolving credit facility (ABL) availability to be over $300 million. The rating is also supported by At Home's differentiated home décor "fast fashion" value proposition. Moody's also positively views the company's recent accelerated implementation of omni-channel capabilities, including buy-online/pick-up in store, curbside pick-up, and delivery options through third parties. The negative outlook reflects Moody's expectation that credit metrics will remain weak and that the company's capital structure is unsustainable absent a material recovery in earnings which increases the risk of future distressed exchange transactions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would require a reduction in the likelihood of default and sustained improvement in operating performance and liquidity such that it would allow the company improve leverage, funded debt/EBITDA, to a more sustainable level. The ratings could be downgraded if the company defaults or if Moody's recovery estimates deteriorate. At Home Group Inc. operated 258 home décor and home improvement retail stores and generated about $2 billion of revenue for the last twelve months ended January 31, 2023. The company is owned by Hellman & Friedman LLC. The principal methodology used in these ratings was Retail published in November 2021. ATLAS SYSTEMS: Seeks to Hire Croskey Lanni as Accountant -------------------------------------------------------- Atlas Systems, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Croskey Lanni, PC as its accountant. The firm will render these services: a. prepare and file Debtor's 2022 federal and state tax returns; and b. assist the Debtor with preparation of financial statements and general accounting, where needed. The firm will bill these rates: Partner $365 - $425 / Hour Manager / Director $220 - $335 / Hour Senior Associate $175 - $230 / Hour Associate $150 - $195 / Hour Administrative / Business Resource Services $110 - $200 / Hour Joel Zielke, CPA, director at Croskey Lanni, assured the court that the firm is a "disinterested person" within the meaning of 11 U.S.C. 101(14). The firm can be reached through: Joel Zielke, CPA Croskey Lanni, PC 345 Diversion Street, Suite 400 Rochester, MI 48307 Phone: 248-659-5300 Fax: 248-659-5305 About Atlas Systems Atlas Systems, Inc. was established in 1999 as an independent distributor of new and use telephones and telephone systems. Atlas Systems sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-43287) on April 10, 2023, with up to $10 million in both assets and liabilities. Christopher Klow, vice president of Atlas Systems, signed the petition. Judge Maria L. Oxholm oversees the case. John J. Stockdale, Jr, Esq., at Schafer and Weiner, PLLC, represents the Debtor as legal counsel. AUDACY CAPITAL: $770M Bank Debt Trades at 50% Discount ------------------------------------------------------ Participations in a syndicated loan under which Audacy Capital Corp is a borrower were trading in the secondary market around 49.6 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $770 million facility is a Term loan that is scheduled to mature on November 17, 2024. About $630.5 million of the loan is withdrawn and outstanding. Audacy Capital Corp. owns and operates radio stations. The Company focuses on sports, news, and music and entertainment. Audacy Capital produces, co-produces, and co-promotes events across markets, including concerts, multi-day musical festivals, speaker series, trade shows, and sports-related events. AVENIR MEMORY: Court OKs Cash Collateral Access Thru July 31 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona authorized Avenir Memory Care @ Fayetteville LP to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through July 31, 2023. The Debtor requires the use of cash collateral to pay its ordinary and necessary operating expenses, vendors, payroll, taxes and other general and administrative expenses. The Court said the Debtor is not authorized to pay professional fees and management fees during the Interim Period. However, the Debtor is directed to make adequate protection payments in the amount of $20,000 each to Merchants Bank on or before June 5 and July 5. The Debtor owns a memory care facility known as Avenir Memory Care @ Fayetteville in Fayetville, Arkansas, which is valued at at least $11.875 million. The Facility is managed by Avenir Senior Living, LLC, an Arizona limited liability company, whose principal place of business is located at 11648 East Shea Blvd., Suite 101, Scottsdale, Arizona, pursuant to an Operations Management Agreement between the Debtor and the Facility Manager dated June 20, 2018. Like many industries, the memory care industry in general, and the Facility specifically, were significantly adversely affected by the global COVID-19 pandemic, and the Debtor's operations and revenues suffered greatly beginning in 2020 and have not yet reached their pre-COVID levels. The Facility is encumbered by an asserted first position lien favor of Merchant's Bank of Indiana, whose principal place of business is in Carmel, Indiana. The Bank asserts the Debtor owes it the principal amount of $8.4 million pursuant to a Promissory Note dated June 27, 2018, in the face amount of $8.640 million. The Debtor disputes the amount asserted to be due to the Bank. The Bank asserts a blanket lien in all of the Debtor's assets, including the Facility. The Bank Note has matured and efforts to reach a forbearance agreement with the Bank have not been successful. To avoid the costs associated with defending the receivership action in the State Court, to prevent a potential foreclosure sale of the Facility, and prevent the loss of value that can be used to, among other things, pay other financial obligations of the Debtor, the Debtor filed its bankruptcy petition. As additional adequate protection of its interests in cash collateral, if any, Merchants Bank will have a replacement in post-petition cash collateral to the extent that its interests in the prepetition cash collateral are diminished. A copy of the order is available at https://urlcurt.com/u?l=Pw6f2R from PacerMonitor.com. About Avenir Memory Care @ Fayetteville LP Avenir Memory Care @ Fayetteville LP owns a memory care facility known as Avenir Memory Care @ Fayetteville located at 1967 W. Truckers Drive in Fayetteville, Arkansas. The facility consists of 59 private, furnished units, a full kitchen, dining areas, meeting rooms and lounging areas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02640) on April 25, 2023. In the petition signed by David L. Craik, president and director of the General and Limited Partners, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Brenda Moody Whinery oversees the case. Philip R. Rudd, Esq., at Sacks Tierney PA, represents the Debtor as legal counsel. AVENTIV TECHNOLOGIES: $282.5M Bank Debt Trades at 19% Discount -------------------------------------------------------------- Participations in a syndicated loan under which Aventiv Technologies LLC is a borrower were trading in the secondary market around 81.3 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $282.5 million facility is a Term loan that is scheduled to mature on November 1, 2025. The amount is fully drawn and outstanding. Aventiv Technologies is a diversified technology company that provides innovative solutions to customers in the corrections and government services sectors. AVIS BUDGET: Notes Amendment No Impact on Moody's 'Ba3' Rating -------------------------------------------------------------- Moody's Investor Services announced that the amendment to the series 2011-4 supplement would not, in and of itself and as of this point in time, result in a reduction, placement on review for possible downgrade or withdrawal of Moody's current ratings assigned to any outstanding series of notes issued by Avis Budget Rental Car Funding (AESOP) LLC (the issuer), an affiliate of Avis Budget Car Rental, LLC (Ba3 stable). Moody's rates the following series of notes issued by the issuer: the series 2018-1 notes, the series 2018-2 notes, the series 2019-2 notes, the series 2019-3 notes, the series 2020-1 notes, the series 2020-2 notes, the series 2021-1 notes, the series 2021-2 notes, the series 2022-1 notes, the series 2022-3 notes, the series 2022-4 notes, the series 2022-5 notes, the series 2023-1 notes, the series 2023-2 notes, the series 2023-3 notes, the series 2023-4 notes, the series 2023-5 notes, and the series 2023-6 notes (collectively the rated notes). The series 2011-4 variable funding notes are not rated by Moody's. The series 2011-4 amendment extends the scheduled increase expiration date to July 7, 2023. The change under the amendment is series-specific and do not affect amounts payable to, or the rights of holders of, the rated notes, and therefore have no impact on the ratings of the rated notes. The principal methodology used in reaching this conclusion and in monitoring the ratings of the rated notes issued by the Issuer is "Rental Vehicle Securitizations Methodology" published in October 2021. B AND C BROS: Seeks to Hire Center City Law as Bankruptcy Counsel ----------------------------------------------------------------- B and C Bros., LLC asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Center City Law Offices, LLC as its counsel. The firm's services include: a) preparation of all papers required to be filed in connection with this bankruptcy proceeding including all Schedules, Statement of Financial Affairs, Lists of Creditors, review of Operating Reports and other papers; b) giving the Debtor legal advice with respect to the powers and duties as Debtors in Possession; c) representing the Debtor at its Initial Debtor Interview, its first meeting of creditors, all status hearings; confirmation hearings and any Rule 2004 examinations; d) preparing on behalf of the Debtor in Possession, all necessary Applications, Answers, Complaints, Motions, Orders, Reports and all legal papers; and e) performing all other legal services for the Debtor as Debtor in Possession as may be required and necessary concerning the continued administration of this case including the preparation of the Disclosure Statement, if necessary, Disposable Income Test and Plan of Reorganization. The firm will charge $275 per hour for services rendered by its principal starting Jan. 1, 2023 and $300 per hour on Jan 1, 2024. The Debtor paid a retainer fee of $7,000 to the law firm. Maggie S. Soboleski, sole proprietor of the firm, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Maggie S. Soboleski, Esq. Center City Law Offices, LLC 2705 Bainbridge Street Philadelphia, PA 19107 About B and C Bros. B and C Bros., LLC is in the business of operating a commercial plumbing and heating business with its assets in Bucks County, Pennsylvania. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No. 23-10986-amc) on April 12, 2023. In the petition signed by Bill Davies, managing member, the Debtor disclosed up to $50,000 in both assets and liabilities. BADGER FINANCE: $268.7M Bank Debt Trades at 19% Discount -------------------------------------------------------- Participations in a syndicated loan under which Badger Finance LLC is a borrower were trading in the secondary market around 80.9 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $268.7 million facility is a Term loan that is scheduled to mature on September 28, 2024. About $255.9 million of the loan is withdrawn and outstanding. Based in Little Chute, Wisconsin, Badger Finance, LLC is an intermediate holding company of Trilliant Food and Nutrition, LLC, Horseshoe Beverage Company, LLC, and affiliated companies. The company is a U.S. manufacturer of private label and value branded beverage products, mainly single serve coffee pods. The company's branded coffee products are primarily sold under its Victor Allen brand. Badger also recently expanded into ready-to-drink (RTD) coffee beverages through its Horseshoe Beverages subsidiary. Badger is sponsored by private equity firm Blackstone Group, which acquired the company in 2017 and holds a majority equity interest in the company. BALTIMORE HOTEL: S&P Raises Secured Revenue Bonds Rating to 'B' --------------------------------------------------------------- S&P Global Ratings raised its issue-level rating on Baltimore Hotel Corp.'s (BHC) senior secured revenue refunding bond to 'B' from 'CCC+' due to the hotel's solid performance recovery during 2022 and the first quarter of 2023. BHC's monthly net cash flows were positive during the first quarter of 2023 and for most of 2022. All administrative expenses have been paid with no overdue. Therefore, S&P believes BHC's ability to meet all financial commitments will be sustainable in the long term. S&P said, "The 'B' rating incorporates our new forecast, supported by the hotel's solid recovery trend, our weak view of the hotel's competitive position, and concern regarding its liquidity cushion against any further potential market volatility or operating challenge. "The stable outlook reflects our view of the hotel's expected recovery on revenue per available room (RevPAR) and operating margin, which supports the current rating. We expect the project to continue generating positive cash flow and replenishing its reserves." BHC owns Hilton Baltimore, which is close to the Baltimore Convention Center (BCC) and has been operated by Hilton Worldwide since August 2008. It is a 757-room convention center hotel in downtown Baltimore's Inner Harbor area, overlooking the Camden Yards baseball park and connected to BCC by a pedestrian bridge. The hotel has 29 meeting rooms with approximately 110,000 square-foot meeting and pre-function space, two ballrooms at total of over 42,000 square-foot, and a 567-space, four-story parking garage with two subterranean levels. The hotel's net revenues and pledged city tax revenues secure the bonds. City revenues include a $7 million annual guarantee funded through a second lien on the citywide hotel occupancy tax revenue; a pledge of site-specific hotel occupancy tax revenue, which will vary based on the project's occupancy; and the tax increment payment, which is equal to the hotel's property tax payment. BHC's improving performance lifts our concern regarding its ability to meet financial commitments in the long term. The hotel's operating performance has been improving since the last summer, achieving an 84% ($100) RevPAR recovery of 2019 levels for the 12 months in 2022 and 87% ($82) for the first quarter of 2023. Its group business segment demonstrated a strong rebound, contributing about 60% to total room revenues. Corporate events, association conventions, and sports tournaments in Baltimore resumed, with the size and number of events close to prepandemic levels. Despite rising labor and energy costs, the hotel achieved an operating margin of about 34% in 2022. S&P said, "Though this is lower than the high 30% historicals before the pandemic, we view this as an early sign of recovery on profitability. Its monthly net cash flows turned positive for the first quarter of 2023 and for most of 2022 (except for January and December) due to strong top-line revenue recovery and effective operating cost management. The hotel has paid all administrative expenses without any overdue. For 2023, we expect administrative expenses to be about $500,000, which the project is well positioned to cover by its operating cash flow. The project also used operating cash flow to pay the $6.4 million debt service payment due in March 2023. Its debt service reserve account (DSRA) and other reserves remain untouched. Therefore, we believe the project no longer depends on favorable business conditions to meet its financial commitments." S&P said, "The 'B' rating reflects our updated forecast assumption, BHC's relatively weaker competitive position, and its liquidity cushion. On the city level, we believe Baltimore's RevPAR would return to pre-pandemic level in 2023. For BHC specifically, we believe a two-year lag is reasonable given the hotel's concentration on group businesses, which is slightly behind the overall lodging demand recovery. Under our base case, we assume the hotel's RevPAR would recover 87% of 2019 levels in 2023, 95% in 2024, and 100% in 2025. Post-2025, we assume the occupancy would be flat at a prepandemic level of 67% and the average daily rate (ADR) would grow from $178 as per S&P Global economists' inflation assumption of 2%. In our downside scenario, we assume recession stress affects RevPAR, resulting in a slow recovery at 50% in 2023, 65% in 2024, 80% in 2025, and 100% in 2026 compared with 2019 RevPAR. Starting from 2033 to 2045, we assume a standard eight-year stressed period followed by a five-year stabilized period, which we refer to as the Phoenix stress cycle. The growth rate used in the stabilized period is also 50 basis points (bps) lower than our base case 2% growth rate given the aging asset and rising competition. The Phoenix stress cycle repeats in 2046. Given rising labor and utility costs as the result of scarcity on local labor markets and energy commodity price increases, our base case assumes the operating margin would be 30.8% throughout the debt term. We may revise the margin assumption until we observe signs of relief on cost pressure." On average, Baltimore's lodging market underperformed 10% against the national level of the U.S. in the last six years on a RevPAR basis. The demand for this market has been impaired by concern around safety issues due to the civil unrest in 2015 and a relatively outdated convention center, which was built in 1977 and renovated in 1996. Compared with other large metropolitan areas where we have rated hotels (Austin, Denver, and Atlanta), Baltimore's RevPAR clearly has a sizeable gap (about 30%) for the first quarter of 2023 as the overall market warms up. Although the hotel itself outperformed its local competitive peers with benefits from its proximity to the BCC, S&P believes the weaker Baltimore market suppressed the hotel's performance. BHC's liquidity cushion is also weaker than it was before the pandemic. The project used a significant portion of its liquidity during the pandemic to fulfill cost and debt service payment obligations. About $5 million of its cash trap fund and $2.5 million of its subordinated furniture, fixture, and equipment (FF&E) reserve were fully depleted. $4 million out of the $5 million operating reserve and $3.7 million out of the $18.9 million DSRA were drawn. Currently, the cash trap fund is not replenished, the operating reserve remains at the $1 million minimum balance, and the DSRA is partially funded. The project also has a limited cushion against its 1.35x financial covenant for the debt service coverage ratio (DSCR) under the bond indenture. If cash flow available for debt service declines 15% in our base case, this could lead to a covenant breach for more than 20 years. This poses an ongoing cash flow and operating risk, which might require additional effort for the management team to demonstrate long-term profitability by coordinating with hotel consultants. S&P said, "The stable outlook reflects our view of the hotel's expected RevPAR and operating margin recovery, which supports the current rating level. We expect the project to continue generating positive cash flow and replenish its reserves. By the end of 2023, we expect the DSCR to achieve 1.28x and the DSRA to be fully funded at about $18.9 million. We forecast a minimum DSCR of 1.16x in 2046. "We could lower the rating if BHC's RevPAR recovery falls significantly below our expectation or its operating margin discounts dramatically behind our expectation, leading to minimum DSCR falling to 1.05x-1.00x for a consistent period. Resurgence of severe public health issues or an economic recession under material inflationary pressures could trigger a downgrade by significantly deteriorating travelers' confidence and delay travel and lodging demand, leading to another disruption in leisure bookings and further postponing or canceling conferences and events. "We could raise the rating if the hotel outperforms our base-case projection significantly, leading to minimum DSCR rising to 1.35x-1.50x on a consistent basis. A full rebound of convention-related group bookings that exceeds our expectation of recovery could trigger an upgrade by improving the hotel's top-line revenue and operating margin." BCPE NORTH: $20M Bank Debt Trades at 15% Discount ------------------------------------------------- Participations in a syndicated loan under which BCPE North Star US Holdco 2 Inc is a borrower were trading in the secondary market around 84.6 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $20 million facility is a Delay-Draw Term loan that is scheduled to mature on June 10, 2029. BCPE North Star US Holdco 2 (Dessert Holdings) operates as a manufacturer of dessert cakes, cheesecakes, brownies, and bars. The Company sells dessert cakes, cheesecakes, brownies, and bars to retail and foodservice customers across the US and Canada. BERTUCCI'S RESTAURANTS: $225K Sale of Liquor License to 523 Okayed ------------------------------------------------------------------ Judge Grace E. Robson of the U.S. Bankruptcy Court for the Middle District of Florida authorized Bertucci's Restaurants, LLC's sale of Pennsylvania Liquor License No. R-19419 issued to the Debtor by The Pennsylvania Liquor Control Board ("PLCB") for its vacated restaurant located at 523 West Lancaster Avenue, in Wayne, Pennsylvania 19087, to 523 Restaurant, LP, or its nominee in accordance with the Agreement for Sale of Liquor License for $225,000. The sale is free and clear of all Encumbrances. The APA is approved and assumed in all respects. The Debtor is authorized to enter the APA, and to act and perform in accordance with its terms. The proceeds from the Sale will be deposited and such proceeds will be used by the Debtor for its business operations, subject to any requirements of any cash collateral order in effect upon receipt, and/or other expenses approved by the Court. The Purchaser will be entitled to assign its rights as the Purchaser pursuant to the APA, and any such nominee or assignee will be entitled to all of the rights of Purchaser under the Order. Notwithstanding Bankruptcy Rules 6004, 6006, and 7062, the Order will be effective and enforceable immediately upon entry. The Court expressly finds that there is no reason for delay in the implementation of the Order. About Bertucci's Restaurants Bertucci's Restaurants, LLC, is a Florida limited liability company that was formed in May 2018. The Company owns and operates approximately 47 Italian-themed restaurants under the name Bertucci's Brick Oven Pizza & Pasta. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04313) on Dec. 5, 2022. In the petition signed by Jeffrey C. Sirolly, secretary, the Debtor disclosed up to $50,000 in assets and up to $100 million in liabilities. Judge Grace E. Robson oversees the case. R. Scott Schuker, Esq., at Shuker and Dorris, P.A., is the Debtor's legal counsel. BERTUCCI'S RESTAURANTS: Court Approves $380K Sale of Liquor License ------------------------------------------------------------------- Judge Grace E. Robson of the U.S. Bankruptcy Court for the Middle District of Florida authorized Bertucci's Restaurants, LLC's sale of Pennsylvania Liquor License No. R-95140 issued to the Debtor by The Pennsylvania Liquor Control Board ("PLCB") for its vacated restaurant located at 860 Bethlehem Pike, North Wales, PA 19454, to Redner's Markets, Inc., or its nominee in accordance with the Agreement for Sale of Liquor License for $380,000. The sale is free and clear of all Encumbrances. The APA is approved and assumed in all respects. The Debtor is authorized to enter into the APA, and to act and perform in accordance with its terms. The proceeds from the Sale will be used by the Debtor in accordance with its proposed Plan. The Purchaser will be entitled to assign its rights as the Purchaser pursuant to the APA, and any such nominee or assignee will be entitled to all of the rights of Purchaser under the Order. Notwithstanding Bankruptcy Rules 6004, 6006, and 7062, the Order will be effective and enforceable immediately upon entry. The Court expressly finds that there is no reason for delay in the implementation of the Order. About Bertucci's Restaurants Bertucci's Restaurants, LLC, is a Florida limited liability company that was formed in May 2018. The Company owns and operates approximately 47 Italian-themed restaurants under the name Bertucci's Brick Oven Pizza & Pasta. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04313) on Dec. 5, 2022. In the petition signed by Jeffrey C. Sirolly, secretary, the Debtor disclosed up to $50,000 in assets and up to $100 million in liabilities. Judge Grace E. Robson oversees the case. R. Scott Schuker, Esq., at Shuker and Dorris, P.A., is the Debtor's legal counsel. BEVERLY COMMUNITY: Seeks to Hire Sheppard Mullin as Legal Counsel ----------------------------------------------------------------- Beverly Community Hospital Association and its affiliates seek approval from the U.S. Bankruptcy Court for the Central District of California to employ Sheppard, Mullin, Richter & Hampton, LLP as their counsel. The firm's services include: a) advising the Debtors with respect to their powers and duties in the continued management and operation of their businesses and properties; b) advising and consulting on the conduct of the Debtors' Chapter 11 cases, including all of the legal and administrative requirements of operating in Chapter 11; c) attending meetings and negotiating with representatives of creditors and other parties involved in the cases; d) taking all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the estates; e) preparing pleadings; f) representing the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; g) advising the Debtors in connection with any potential sale of assets; h) appearing before the bankruptcy court and any appellate courts to represent the interests of the Debtors' estates; i) advising the Debtors regarding tax matters; j) taking any necessary action on behalf of the Debtors to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a Chapter 11 plan and all documents related thereto; and k) other necessary legal services. The firm will charge these hourly fees: Partners $910 to $1,770 Special Counsel/Associates $565 to $1,595 Paraprofessionals $160 to $760 In addition, the firm will seek reimbursement for its out-of-pocket expenses. The Debtor paid the firm a retainer in the amount of $2.05 million. Sheppard disclosed the following information in response to the request for additional information set forth in Paragraph D.1. of the Revised U.S. Trustee Guidelines: Question: Did you agree to any variation from, or alternatives to, your standard or customary billing arrangements for this engagement? Answer: No. Questions: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Answer: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Answer: Sheppard did not give any discounts off of the firm's normal and customary rates. Question: Has the Debtor approved your prospective budget and staffing plan, and, if so, for what budget period? Answer: The Debtor has approved a preliminary budget and staffing plan for the projected length of the bankruptcy case. Justin Bernbrock, Esq., a partner at Sheppard, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Justin R. Bernbrock, Esq. Catherine Jun, Esq. Robert B. Mclellarn, Esq. Sheppard, Mullin, Richter & Hampton, LLP 321 North Clark Street, 32nd Floor Chicago, IL 60654 Telephone: 312-499-6300 Email: jbernbrock@sheppardmullin.com cjun@sheppardmullin.com rmclellarn@sheppardmullin.com About Beverly Community Hospital Association Beverly Community Hospital Association and affiliates operate general medical and surgical hospitals. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 23-12359) on April 19, 2023. In the petition signed by its chief executive officer, Alice Cheng, Beverly Community disclosed $1 million to $10 million in assets and $100 million to $500 million in liabilities. Judge Sandra R. Klein oversees the case. The Debtors tapped Sheppard, Mullin, Richter and Hampton, LLP as bankruptcy counsel; Orrick, Herrington & Sutcliffe, LLP as special and conflicts counsel; and Triple P RTS, LLC, a wholly owned subsidiary of Portage Point Partners, LLC, as restructuring advisor. The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Beverly Community Hospital Association. The committee is represented by Tania Moyron, Esq. BEVERLY COMMUNITY: Taps Orrick as Conflicts Counsel --------------------------------------------------- Beverly Community Hospital Association and its affiliates seek approval from the U.S. Bankruptcy Court for the Central District of California to employ Orrick, Herrington & Sutcliffe, LLP as their special and conflicts counsel. The firm's services include: a) advising and assisting the Debtors in connection with their pre-bankruptcy debt documents, bonds, and related public finance matters; b) advising the Debtors with respect to matters involving U.S. Bank; c) appearing in court; and d) taking such other actions and performing such other services as the Debtors may require of Orrick in connection with their Chapter 11 cases and any related proceedings. Orrick proposes to charge its normal and customary standard hourly rates, subject to periodic increases, less a 10 percent discount. The current discounted hourly rates are: Partners $886.50 to $1,696.50 Special Counsel $738 to $1,273.50 Associates $414 to $873 Paraprofessionals $216 to $432 Robyn Helmlinger, Esq., a partner at Orrick, disclosed in a court filing that her firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Ms. Helmlinger also disclosed the following in response to the request for additional information set forth in Paragraph D.1. of the Revised U.S. Trustee Guidelines: Question: Did you agree to any variation from, or alternatives to, your standard or customary billing arrangements for this engagement? Answer: Yes, as set forth above and in the Application, Orrick has agreed to discount its normal and customary standard hourly rates by 10 percent. Questions: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Answer: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Answer: Orrick agreed to give the Debtors a 10% discount off of its normal and customary standard rates at the end of 2022. Prior to that time, Orrick agreed to give the Debtors a 5% discount off of its normal and customary standard hourly rates. Question: Has your client approved your prospective budget and staffing plan, and, if so, for what budget period? Answer: Not applicable. Orrick can be reached through: Robyn Helmlinger, Esq. Orrick, Herrington & Sutcliffe, LLP The Orrick Building 405 Howard Street San Francisco, CA 94105-2669 Telephone: +1 415 773 5925 Email: rhelmlinger@orrick.com About Beverly Community Hospital Association Beverly Community Hospital Association and affiliates operate general medical and surgical hospitals. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 23-12359) on April 19, 2023. In the petition signed by its chief executive officer, Alice Cheng, Beverly Community disclosed $1 million to $10 million in assets and $100 million to $500 million in liabilities. Judge Sandra R. Klein oversees the case. The Debtors tapped Sheppard, Mullin, Richter and Hampton, LLP as bankruptcy counsel; Orrick, Herrington & Sutcliffe, LLP as special and conflicts counsel; and Triple P RTS, LLC, a wholly owned subsidiary of Portage Point Partners, LLC, as restructuring advisor. The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Beverly Community Hospital Association. The committee is represented by Tania Moyron, Esq. BEVERLY COMMUNITY: Taps Triple P RTS as Restructuring Advisor ------------------------------------------------------------- Beverly Community Hospital Association and its affiliates seek approval from the U.S. Bankruptcy Court for the Central District of California to employ Triple P RTS, LLC, a wholly owned subsidiary of Portage Point Partners, LLC, as their restructuring advisor. The firm's services include: (a) assisting in the evaluation or development of a short-term cash flow model and related liquidity management tools for Beverly Hospital; (b) assisting in the evaluation or development of a business plan or such other related forecasts and analyses for Beverly Hospital; (c) assisting in obtaining and presenting information required by parties involved in the Debtors' Chapter 11 cases, including any statutory committees appointed in the cases. (d) advising Beverly Hospital on tactics and strategies for negotiating with constituents; (e) rendering financial advice to Beverly Hospital and participating in meetings or negotiations with the constituents and rating agencies or other appropriate parties in connection with any restructuring, sale transaction or financing; (f) assisting Beverly Hospital in preparing documentation within Triple P RTS's area of expertise that is required in connection with any restructuring, sale transaction or financing; (g) attending meetings of the board of directors (or similar governing body) of Beverly Hospital; (h) providing testimony, as necessary; and (i) other financial restructuring services. The firm will charge these hourly fees: Managing Partner $980 Senior Advisor $800 - $925 Managing Director $800 - $880 Director $655 - $735 Vice President $530 - $640 Associate $395 - $440 Triple P RTS received pre-bankruptcy retainers from the Debtors in the amount of $200,000 on March 22, and $100,000 on April 5. As of the petition date, the firm holds an unapplied retainer balance of $166,733.45. Alyssa Lozynski, a senior director at Triple P RTS, disclosed in a court filing that her firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Alyssa Lozynski Triple P RTS, LLC 300 North LaSalle, Suite 1420 Chicago, IL 60654 Tel :(630) 388-9694 Email: alozynski@pppllc.com About Beverly Community Hospital Association Beverly Community Hospital Association and affiliates operate general medical and surgical hospitals. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 23-12359) on April 19, 2023. In the petition signed by its chief executive officer, Alice Cheng, Beverly Community disclosed $1 million to $10 million in assets and $100 million to $500 million in liabilities. Judge Sandra R. Klein oversees the case. The Debtors tapped Sheppard, Mullin, Richter and Hampton, LLP as bankruptcy counsel; Orrick, Herrington & Sutcliffe, LLP as special and conflicts counsel; and Triple P RTS, LLC, a wholly owned subsidiary of Portage Point Partners, LLC, as restructuring advisor. The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Beverly Community Hospital Association. The committee is represented by Tania Moyron, Esq. BF MANAGEMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: BF Management LLC 34877 Harry Byrd Hwy Round Hill Va 20141 Business Description: The Debtor owns and operates a fitness center. Chapter 11 Petition Date: June 1, 2023 Court: United States Bankruptcy Court Eastern District of Virginia Case No.: 23-10919 Debtor's Counsel: John P. Forest, II, Esq. LAW OFFICE OF JOHN P. FOREST, II 11350 Random Hills Rd, Suite 700 Fairfax VA 22030 Tel: (703) 691-4940 Email: j.forest@stahlzelloe.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Raymond Rahbar as manager. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/QTQEQNQ/BF_Management_LLC__vaebke-23-10919__0001.0.pdf?mcid=tGE4TAMA BHD SLT: Taps Reynolds Law Corporation as Bankruptcy Counsel ------------------------------------------------------------ BHD SLT, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to employ Reynolds Law Corporation. The Debtor requires legal counsel to: (a) prepare and file complete schedules and statements of financial affairs; (b) advise and represent the Debtor in its Chapter 11 case; (c) seek employment of bankruptcy professionals; (d) communicate and negotiate with creditors and other parties involved in the Debtor's case; (e) obtain court authority for actions necessary to administer the Debtor's estate; (f) propose and obtain confirmation of a plan of reorganization; and (g) other necessary legal services. The firm received $11,738 from the Debtor as a pre-bankruptcy retainer. Stephen Reynolds, Esq., an attorney at the firm, will be paid at his normal hourly rate of $400. Mr. Reynolds disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Stephen Reynolds, Esq. Reynolds Law Corporation 424 Second Street, Suite A Davis, CA 95616 Tel: (530) 297-5030 Fax: (530) 297-5077 Email: sreynolds@lr-law.net About BHD SLT BHD SLT, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Calif. Case No. 23-21573) on May 15, 2023, with as much as $50,000 in both assets and liabilities. David Sousa has been appointed as Subchapter V trustee. Judge Fredrick E. Clement oversees the case. Stephen M. Reynolds, Esq., at Reynolds Law Corporation is the Debtor's bankruptcy counsel. BIGHORN RESTAURANTS: Seeks Cash Collateral Access ------------------------------------------------- Bighorn Restaurants, LLC asks the U.S. Bankruptcy Court for the District of Colorado for authority to use cash collateral and provide adequate protection to Cadence Bank. The Debtor requires the use of cash collateral to permit, among other things, the orderly continuation of the operation of the Debtors' businesses and to make payroll and to satisfy other working capital needs and other costs associated with the Debtors' business operations during the chapter 11 cases. The Prepetition Secured Parties consented to the use of cash collateral to cover all known expenses associated with the Chapter 11 Case. This has allowed the Debtors' businesses to continue, stores to remain open, employees to remain employed and paid, millions of dollars to be paid to vendors and landlords, royalty and ad fees to be paid to franchisor, and Debtors' professionals to be paid. Prior to the Petition Date, the MS Facilities LLC made a loan in the amount of $21.5 million as evidenced by the Term Loan Note dated December 9, 2020 in the original principal amount of $21.5 million. In connection therewith, the Debtors and the Lender entered into a Loan and Security Agreement, dated December 9, 2020, as amended by the Forbearance and Amendment to Loan Agreement dated March 3, 2023. Pursuant to the Loan Documents, the Debtors incurred loan obligations in favor of Lender. Those Secured Obligations were in default as of the Petition Date. As of the Petition Date, the Secured Obligations owed to the Lender in the amount of $22.4 million as of the Petition Date, consisting of principal in the amount of $22.121 million and unpaid accrued interest in the amount of $206,717, plus attorneys' fees and expenses existing immediately prior to the Petition Date. As adequate protection, the Agent, on behalf of itself and for the benefit of the Lender, will be granted a continuing replacement security interest in, and lien, junior only to the Carve Out. The Replacement Liens will have the same priority, validity, force, extent, and effect as the liens that they replace, effective as of the Petition Date without the necessity of Agent taking any further action, upon the right, title and interest in the following property of the Debtors: (a) all Prepetition Collateral of Agent and/or Lender, including all proceeds, profits, rents, and products thereof; and (b) property acquired by the Debtors after the Petition Date, which is of the same nature, kind, and character as the Prepetition Collateral, and all proceeds, profits, rents, and products thereof. As additional adequate protection, the Agent and the Lender's claim in the Chapter 11 Case will have priority under 11 U.S.C. section 507(b) to the extent, if any, that the adequate protection for the Debtor's use of the Prepetition Collateral and cash collateral provided proves to be inadequate. A copy of the motion is available at https://urlcurt.com/u?l=o43fli from PacerMonitor.com. About Bighorn Restaurants Bighorn Restaurants, LLC and affiliates constitute one of the largest current franchisees of Hardee's restaurants. They currently operate 108 restaurants, which span the states of Alabama, Florida, Georgia, South Carolina, Kansas, Missouri, Wyoming and Montana. The restaurants are operated by Empire, Heartland, Bighorn, and Atlantic Star. Bighorn Restaurants and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case No. 23-11919) on May 4, 2023. In the petition signed by its chief executive officer, Dewey R. Brown, Bighorn Restaurants disclosed $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Michael E. Romero oversees the cases. The Debtors tapped Markus Williams Young & Hunsicker, LLC as bankruptcy counsel; Hutchinson Black and Cook, LLC as their special counsel; MorrisAnderson & Associates, Ltd. as financial advisor; Brookwood Associates, LLC as investment banker; and A&G Realty Partners as real estate advisor. BMC Group, Inc. is the Debtors' noticing agent. Cadence Bank, as lender, is represented by Frank W. DeBorde, Esq., and Lisa Wolgast, Esq., at Morris, Manning & Martin, LLP. BLUE LIGHTNING: Court OKs Cash Collateral Access ------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, entered an order approving a factoring agreement on a post-petition basis and authorizing Blue Lightning Holdings, Inc., et al. to sell accounts to RTS Financial Service, Inc. , on a post-petition basis and to incur credit and use cash collateral. The Debtors need to obtain credit pursuant to the Factoring Agreement and use cash collateral to enable the Debtors to continue operations, minimize the disruption of the Debtors as a "going concern," and administer and preserve the value of their estates. RTS, the Debtors' proposed post-petition factor, is willing to purchase the Debtors' Accounts post-petition and make advances and extend financing to the Debtors only upon the conditions contained in the Factoring Agreement. The RTS' agreement to enter into and operate under the Factoring Agreement and provide financial accommodations to fund the Debtors' required operations is conditioned upon the Debtors agreeing that advances made by RTS to the Debtors will be used, in each case in a manner consistent with the terms and conditions of the Factoring Agreement, the Order and the Budget solely for (1) working capital and other general corporate purposes, (2) permitted payment of costs of administration of the Case, and (3) payment of fees and expenses as approved by the Court. The Debtors are further authorized to sell to RTS, Debtors' post-petition Accounts and RTS will have a first and priority interest in the Accounts over any creditor of the Debtors. Notwithstanding anything to the contrary herein or as set forth in the Factoring Agreement, the Debtors are only permitted to sell Accounts, but not any of the Debtors' accounts arising prior to April 15, 2023. Only upon entry of the Order will RTS purchase accounts under the Factoring Agreement. Upon purchase by RTS, it is authorized to make advances against, and in its sole and exclusive discretion, over advances, and provide any other financial accommodations to the Debtors under the Factoring Agreement, subject to the terms and conditions thereof. The advances by RTS will constitute its cash collateral and will be used in accordance with the monthly budget as set forth in the Budget for: (a) the necessary operation and maintenance costs associated with the Debtors' business in the amounts and categories and time set forth in the Budget; and (b) other costs and expenses of administration of the Chapter 11 cases in the amounts and categories and time set forth in the Budget. As part of the cash collateral use, the Debtors are authorized to (i) post and replenish a deposit not to exceed $20,000 with Comdata Inc. or any of its affiliates to secure the payment of fuel purchases or maintenance expenses of the rolling stock fleet; and (ii) pay Comdata for expenses incurred in connection with Fuel and Maintenance costs advanced by Comdata in the ordinary course of the Debtors' and Comdata's business. These events constitute an "Event of Default": (i) The failure to timely make payments RTS as and when due; (ii) The failure of the Debtors to pay all of their administrative expenses in full in accordance with and subject to the terms as provided for in the Budget; (iii) The Order becomes stayed, reversed, vacated, amended or otherwise modified in any respect without the prior written consent of RTS; (iv) The dismissal of the Chapter 11 cases, conversion of the Chapter 11 cases to Chapter 7 cases, or suspension of the Chapter 11 cases under section 305 of the Bankruptcy Code; (v) The appointment of a chapter 11 trustee or an examiner with enlarged powers; (vi) The granting of relief from the automatic stay to permit foreclosure with respect to a material asset of the Debtors, by any entity other than RTS on any Collateral; (vii) The entry of an order granting any superpriority claim which is senior or pari passu with that of RTS pursuant to the Order; (viii) The payment of or granting adequate protection with respect to prepetition indebtedness of the Debtors other than as set forth in the Budget or as provided for in the Order; (ix) Any of the liens or claims or RTS granted pursuant to this Order to be valid, perfected and enforceable in all respects; or (x) The payment of estate professional fees by the Debtors other than to the extent set forth in the Budget. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=mwLimt from PacerMonitor.com. The Debtor projects $495,350 in total expenses. About Blue Lightning Holdings Blue Lightning Holdings, Inc. and its affiliates filed voluntary petitions for Chapter 11 protection (Bankr. N.D. Texas Lead Case No. 23-41064) on April 15, 2023. At the time of the filing, Blue Lightning Holdings reported as much as $50,000 in assets and $1 million to $10 million in liabilities. Judge Mark X. Mullin oversees the cases. The Debtors tapped Howard Marc Spector, Esq., at Spector & Cox, PLLC as legal counsel and Sabrina Hill, CPA, PLLC as accountant. BOXED INC: June 26 Deadline for Proofs of Claim Set --------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set June 26, 2023, at 5:00 p.m. (ET) as the last date and time for each person or entity to file proofs of claim against Boxed Inc. and its debtor-affiliates. The Court also set Sept. 29, 2023, at 5:00 p.m. (ET) as the deadline for governmental units to file their claims against the Debtors. Proofs of Claim and payment requests must be sent: a) by first-class mail to the Claims Agent at: Boxed, Inc. Claims Processing Center c/o Epiq Corporate Restructuring, LLC, P.O. Box 4421 Beaverton, OR 97076-4421; b) by hand delivery or overnight mail to the Claims Agent at: Boxed, Inc. Claims Processing Center c/o Epiq Corporate Restructuring, LLC 10300 SW Allen Blvd. Beaverton, OR 97005; or c) electronically by submitting a Proof of Claim or Payment Request through the Claims Agent's website: https://epiqworkflow.com/cases/Box. The proof of claim form, the payment request form, the bar date order, and all other pleadings filed in the Chapter 11 cases are available free of charge on the claims agent's website at https://dm.epiq11.com/case/boxedinc/info About Boxed Inc. Boxed, Inc. (OTCMKTS: BOXDQ) -- http://www.boxed.com/-- is an e-commerce retailer and an e-commerce enabler in New York. It operates an e-commerce retail service that provides bulk pantry consumables to businesses and household customers, without the requirement of a "big-box" store membership. This service is powered by the company's own purpose-built storefront, marketplace, analytics, fulfillment, advertising, and robotics technologies. Boxed further enables e-commerce through its Software & Services business, which offers customers in need of an enterprise-level e-commerce platform access to its end-to-end technology. Boxed and four affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10397) on April 2, 2023. In the petition signed by its chief executive officer, Chieh Huang, Boxed disclosed $100 million to $500 million in both assets and liabilities. Judge Brendan Linehan Shannon presides over the cases. The Debtors tapped Freshfields Bruckhaus Deringer US, LLP and Potter Anderson & Corroon, LLP as legal counsels; FTI Consulting, Inc. as financial advisor; and Solomon Partners, L.P. as investment banker. Epiq Corporate Restructuring, LLC is the claims and noticing agent and administrative advisor. The U.S. Trustee for Regions 3 and 9 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. Fox Rothschild, LLP and Alvarez & Marsal North America, LLC serve as the committee's legal counsel and financial advisor, respectively. BRIDGER STEEL: June 7 Hearing on Sale of Surplus Equipment Vacated ------------------------------------------------------------------ Judge Benjamin P. Hursh of the U.S. Bankruptcy Court for the District of Montana vacated the hearing on Bridger Steel Inc.'s Motion for Leave to Incur Debt set for May 22, 2023, and motion to sell surplus equipment set for June 7, 2023. The Debtor has withdrawn both Motions and the hearings are no longer required. About Bridger Steel Bridger Steel Inc. -- https://www.bridgersteel.com/about/bridger-steel -- is a manufacturer of metal panel systems for roofing, siding & wall, interior, and fencing applications. Bridger Steel Inc. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Mon. Case No. 23-20019) on February 25, 2023. In the petition filed by Dennis L. Johnson, as president, the Debtor reported assets between $1 million and $10 million and liabilities between $10 million and $50 million. The Honorable Bankruptcy Judge Benjamin P. Hursh oversees the case. The Debtor is represented by James A. Patten, Esq. at PATTEN PETERMAN BEKKEDAHL & GREEN. CEN TEX SUPERIOR: Unsecureds Will Get 100% of Claims over 5 Years ----------------------------------------------------------------- Cen Tex Superior Installation LLC filed with the U.S. Bankruptcy Court for the Western District of Texas a Plan of Reorganization dated May 30, 2023. The Debtor started operations in September 2012. Cen Tex manages and operates an architectural millwork installation business. Cen Tex elected to file a chapter 11 reorganization as the best means to resolve the current liabilities of the company and determine the secured portions of those creditors. The Debtor is currently owned 50% by Travis Bronson Kendall and 50% by Julie Ann Kendall, who are both managing members. Both will remain managing members and retain their 50% ownership interests going forward. The Debtor filed this case on February 27, 2023. Debtor proposed to pay allowed unsecured based on the liquidation analysis and cash available. Debtor anticipates having enough business and cash available to fund the plan and pay the creditors pursuant to the proposed plan. It is anticipated that after confirmation, the Debtor will continue in business. Based upon the projections, the Debtor believes it can service the debt to the creditors. The Debtor will continue operating its business. The Debtor's Plan will break the existing claims into six classes of Claimants. These claimants will receive cash repayments over a period of time beginning on or after the Effective Date. Class 5 consists of Unsecured Claims. All allowed unsecured creditors shall receive a pro rata distribution at zero percent per annum over the next 5 years beginning not later than the 15th day of the first full calendar month following 30 days after the effective date of the plan and continuing every year thereafter. Debtor will distribute up to $147,386.01 (includes claim objection creditor) to the general allowed unsecured creditor pool over the 5-year term of the plan, includes the under-secured claim portions. The Debtor's General Allowed Unsecured Claimants will receive 100% of their allowed claims under this plan. This Class is impaired. The current owners will receive no payments under the Plan; however, they will be allowed to retain ownership in the Debtor. Class 6 Claimants are not impaired under the Plan. Debtor anticipates the continued operations of the business to fund the Plan. All guarantees and other obligations shall be deemed modified to reflect the restructuring of the primary obligations under the Plan. If the plan is confirmed, a creditor may not enforce liability under a guaranty or other third-party claim unless the Debtor defaults under the Plan for that creditor. In the event of default, only the amount owing under the Plan shall be recovered from the guarantor. This provision is intended to apply to creditors who had previously recovered judgments against the guarantor. A full-text copy of the Plan of Reorganization dated May 30, 2023 is available at https://urlcurt.com/u?l=1OIHrA from PacerMonitor.com at no charge. Debtor's Counsel: Robert C. Lane, Esq. Joshua D. Gordon, Esq. The Lane Law Firm, PLLC 6200 Savoy, Suite 1150 Houston, TX 77036 Telephone: (713) 595-8200 Facsimile: (713) 595-8201 Email: notifications@lanelaw.com Joshua.gordon@lanelaw.com About Cen Tex Superior Installation Cen Tex Superior Installation LLC manages and operates an architectural millwork installation business. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Texas Case No. 23-10106) on Feb. 27, 2023, with up to $500,000 in both assets and liabilities. Bronson Kendall, managing member, signed the petition. Judge Shad Robinson oversees the case. The Debtor tapped the Lane Law Firm, PLLC as bankruptcy counsel and Stephanie's Accounting, PLLC as accountant. CENPORTS COMMERCE: May Use Cash Collateral Thru June 16 ------------------------------------------------------- Cenports Commerce Inc. sought and obtained authority from the U.S. Bankruptcy Court for the Central District of California to use cash collateral and provide adequate protection. A Final Hearing on the Debtor's request is set for June 16, 2023, at 11:00 a.m. Objections to the Debtor's request must be filed and served by June 14. The Debtor requires the use of cash collateral to pay the reasonable expenses it incurs during the ordinary course of its business. The Secured Creditors effected by the Debtor's proposed use of cash collateral -- in the order of priority of UCC filings -- are: 1. Fundbox: $86,200; UCC filed on May 12, 2020 2. SBA: $97,500; UCC filed on May 5, 2020 3. Payability: $1,115; UCC filed on July 17, 2020 4. Cedar Advance: $ is unknown; UCC filed on September 30, 2020 5. Wolters Kiuwer Lien Solutions: $ is unknown; UCC filed on February 16, 2021 6. Swift Financial: $ is unknown; UCC filed on September 7, 2021 7. Toyota Industrial Commercial Finance: $20,022; UCC filed on September 16, 2021. Collateral securing Toyota's claim is a used Toyota Forklift; Serial No.: FBE15U-12408 8. Arc Technologies, Inc.: $163,846; UCC filed on February 18, 2022 9. Wolters Kiuwer Lien Solutions: $ is unknown; UCC filed on March 30, 2022 10. Toyota Industrial Commercial Finance: $23,245; UCC filed on April 12, 2022. Collateral securing Toyota's claim is a used Toyota Forklift; Serial No.: 8FBE2OU-10728 11. Wynwest Advance: $88,160; UCC filed on March 2, 2023 12. Uptown Fund LLC: $262,000; UCC filed on March 15, 2023 13. Halo T LLC: $550,510; UCC filed on March 29, 2023 14. PIRS Capital, LLC: $158,390; UCC filed on April 6, 2023 15. Vernon Capital: $ is unknown; UCC filed on April 18, 2023 16. Unique Funding Solutions: $190,050; UCC filed on April 19,2023 17. Webfund: $348,777; UCC filed on April 20, 2023. The Debtor is offering to make monthly adequate protection payments to Fundbox and Small Business Administration in the amount of $1,400 and $480 respectively. The Debtor believes the Secured Creditors are adequately protected by the ongoing business operations and the income to be generated throughout the pendency of the Debtor's bankruptcy case, and the granting of a replacement lien to the extent of any diminution in value of collateral as a result of the Debtor's use of cash collateral. The replacement lien would be on all post-petition assets in the same priority and to the same extent and validity as the Secured Creditors asserted their pre-petition security interests. A copy of the motion is available at https://urlcurt.com/u?l=lv5vcR from PacerMonitor.com. About Cenports Commerce Inc. Cenports Commerce Inc. is a B2B drop shopping (virtual distribution) company that helps brands sell products online to HomeDepot, Lowes, etc. under their own account. The Company has no inventory and uses internal tools to help retailers. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. case No. 23-40478) on April 25, 2023. In the petition signed by Derrick Chen, as CEO of Censports Commerce Holding Inc., the Debtor's shareholder, the Debtor disclosed $212,973 in assets and $7,391,240 in liabilities. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger, represents the Debtor as legal counsel. CENTERPOINT RADIATION: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: CenterPoint Radiation Oncology, LLC 8929 Wilshire Blvd, Suite 100 Beverly Hills, CA 90211 Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Central District of California Case No.: 23-13448 Debtor's Counsel: Ron Bender, Esq. LEVENE, NEALE, BENDER, YOO & GOLUBCHICK L.L.P. 2818 La Cienega Avenue Los Angeles, CA 90034 Tel: (310) 229-1234 Fax: (310) 229-1244 Email: rb@lnbyg.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Dr. Rosalyn Morrell as member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OTI6IPY/CenterPoint_Radiation_Oncology__cacbke-23-13448__0001.0.pdf?mcid=tGE4TAMA CENTURY BUILDERS: Case Summary & 12 Unsecured Creditors ------------------------------------------------------- Debtor: Century Builders Management Inc. 205 Maspeth Avenue Brooklyn, NY 11211 Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Eastern District of New York Case No.: 23-41978 Judge: Hon. Elizabeth S. Stong Debtor's Counsel: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 2799 Coney Island Avenue Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347) 342-3156 Email: alla@kachanlaw.com Total Assets: $810,446 Total Liabilities: $1,080,393 The petition was signed by Gustavo Reyes as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 12 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/S52BZMY/Century_Builders_Management_Inc__nyebke-23-41978__0001.0.pdf?mcid=tGE4TAMA CHARLES DEWEESE: Hearing Tuesday on Plan Exclusivity ---------------------------------------------------- The Hon. Joan A. Lloyd of the United States Bankruptcy Court for the Western District of Kentucky will hold a hearing Tuesday, June 6, 2023, at 11 a.m. to consider the Motion to Extend Exclusivity Period for Filing a Chapter 11 Plan and Disclosure Statement Requesting 90−Day Extension filed by associated debtors CoCo LLC, Drakes Creek Holding Company, LLC, Jed Holding Company LLC, Weldon Inc., Debtor Charles Weldon Deweese, Joint Debtor Penny Whitfield Deweese. The Debtors are seeking a 90-day extension, until August 28, 2023, of their exclusive right to file a plan; and until October 27, 2023, of their exclusive right to solicit acceptances of a plan filed within that time period. The Debtors' exclusive right to file a plan was scheduled to expire by operation of law after Friday, May 30, if the Court does not enter an order by then; similarly, their exclusive right to solicit acceptances of a plan expires 60 days thereafter, or July 31, 2023. Judge Lloyd entered a bridge order, at the Debtors' behest, extending their exclusive rights to propose a plan and solicit acceptances thereof until the Court rules on the Debtors' extension request. In the first months of their cases, the Debtors, among other things, have been investigating claims that the estates may have against others and exploring the estates' engagement of conflicts counsel; marketing and selling the estates' real property and reducing and eliminating certain secured claims associated therewith; negotiating the payoff of a real estate purchase contract with a buyer; selling and facilitating the sale by Charles Deweese Construction, Inc.'s trustee of certain personal property owned by the Debtors; and negotiating agreements for relief from the stay with several creditors with an interest in equipment. The Debtors anticipate listing several additional properties -- substantially all their remaining unimproved land -- for sale with a realtor in the immediate future. Though much progress has been made in the cases to date and the Debtors will continue this summer to simplify their balance sheets and reduce the claims against the estate by liquidating assets and paying the claims secured by them, the Debtors contend their Chapter 11 Cases present too many unknowns for the Debtors to propose a plan at this time: 1. The extent of their liability to the Internal Revenue Service for trust taxes unpaid by CDC is entirely unknown at this time. 2. The secured claims against the estate continue to be paid down. Many of them -- particularly with respect to Farmers Bank and Franklin Bank -- are secured by multiple properties. Both of these creditors have liens on equipment that will be sold in June. The outcome of these sales will determine how much debt will remain owing against the properties that the Debtors hope to keep, and those balances, in turn, will constrain the Debtors' ability to fund a plan that enables them to retain them. 3. The deficiency claims against the Debtors' estates by equipment lenders and lessors are yet unknown. 4. Beyond all the uncertain claims, the assets of the estates are not entirely clear, or at least the amount that the Debtors will ultimately realize from them. The Debtors have identified certain transfers in their schedules which may give rise to avoidance actions under chapter 5 of the Bankruptcy Code. Rather than attempt to resolve these issues themselves, they intend to hire conflicts counsel to do so, in light of insider relationships with certain transferees. About the Dewesees Charles Weldon Deweese and Penny Whitfield Deweese are longtime residents of Franklin County, Kentucky who have invested in and developed residential and commercial properties throughout the county. Charles Weldon Deweese and Penny Whitfield Deweese sought Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Case No. 23-10072) on Jan. 27, 2023. Real estate owning entities of the Deweeses also sought Chapter 11 protection: CoCo LLC (Case No. 23-10073); Drakes Creek Holding Company, LLC (Case No. 23-10074); Jed Holding Company LLC (Case No. 23-10075); and Weldon Inc. (Case No. 23-10076). The Debtors' Chapter 11 cases are jointly administered under Case No. 23-10072. The Debtors are represented by Neil Charles Bordy, Esq., at Seiller Waterman LLC. CHARLES LAU: Seeks Cash Collateral Access ----------------------------------------- Charles Lau DDS MSD LLC asks the U.S. Bankruptcy Court for the Western District of Wisconsin for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to operate its business during the reorganization and meet its ordinary business expenses. Wells Fargo Practice Finance is the holder of a Master Loan and Security Agreement dated October 2, 2018. The balance due on the Loan Documents is approximately $428,000 as of the Petition Date. The loans made by Wells Fargo to the Debtors are secured by all assets of the Debtor. As security for the Debtor's obligations to Wells Fargo, the Debtor pledged all of its accounts, chattel paper, other rights to payment, inventory, equipment, general intangibles and contract rights, together with all substitutions and replacements. Wells Fargo properly perfected its lien on the Collateral. Since its in corporation, the Debtor's business has been mostly profitable or at least able to meet its expenses. However, the Debtor has experiencing a cash flow problem due to increasing costs while the amounts paid for services by insurance companies have stagnated. The payments from insurance companies account for the majority of the income the Debtor receives. As of the Petition Date, the total value of the Collateral, which Wells Fargo asserts a properly perfected, first-position security interest in, is $69,929 -- taking into account specific pledges to other secured creditors and PMSI balances on certain equipment -- consisting of: 1. Depository Accounts/Cash on Hand: $21,231 2. Accounts Receivable: $34,613 3. Inventory: $500 4. Furniture and Office equipment: $200 5. Dental Equipment: $13,385 The creditor is undersecured and is not entitled to adequate protection in the form of periodic cash payments but is entitled to compel the Debtor to file a Plan of Reorganization within a reasonable period of time. Wells Fargo's interest in the cash collateral will be adequately protected as the Debtor will provide Wells Fargo with a replacement lien on post-petition generated cash collateral (accounts receivable and inventory), to the extent that the Debtor's pre-petition accounts receivable are utilized in the business on a post-petition basis. The replacement lien shall only attach to the Debtor's postpetition receivables to the extent that pre-petition receivables and inventory are utilized on a postpetition basis. Additionally, the Debtor will keep all of Wells Fargo's collateral insured and well maintained. Further, the debtor has a commitment and has moved the Court for an Order to authorize it to borrow working capital which will allow it to move forward profitably, on a net operating income basis, and develop a cushion of cash as well as propose a Plan. A copy of the Debtor's motion and budget is available at https://urlcurt.com/u?l=bZzkV8 from PacerMonitor.com. The Debtor projects total general and administrative expenses, on a monthly basis, as follows: $7,735 for June 2023; $7,592 for July 2023; and $10,136 for August 2023 About Charles Lau DDS MSD LLC Charles Lau DDS MSD LLC's business operations consist of a dental practice doing business as Wisconsin Dental Wellness, which is the primary source of its income. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wis. Case No. 23-10874) on May 25, 2023. In the petition signed by Charles Lau, the owner, the Debtor disclosed up to $100,000 in assets and up to $1 million in liabilities. John P. Driscoll, Esq., at Krekeler Law, S.C., represents the Debtor as legal counsel. CHG PPC: Moody's Rates New EUR230MM First Lien Term Loan 'B1' ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to CHG PPC Parent LLC's ("C.H. Guenther" or "CHG") proposed new EUR230 million (roughly equates to $248 million) EUR first lien senior secured term loan B that matures in 2028. The company's existing ratings including the B2 Corporate Family Rating, B2-PD Probability of Default Rating, B1 ratings for its first lien senior secured credit facilities (revolver and term loans) and negative outlook are not affected. Proceeds from the new term loan will be used to repay the existing EUR190 million (roughly equates to $205 million) EUR first lien senior secured term loan due 2025 as well as add $37 million of cash to the balance sheet. The company also intends to upsize the $250 million first lien senior secured revolver due 2026 by $25 million to $275 million. The $289 million second lien senior secured term loan is not rated. Moody's expects to withdraw the B1 rating on the existing EUR first lien term loan due 2025 at the close of the refinancing transaction if it is retired as anticipated. The refinancing transaction is credit positive because it will extend the company's maturity profile with the next maturity being the revolver expiry in 2026. Without the refinancing of the EUR term loan due 2025, the revolving credit facility maturity would spring to 91 days prior to the maturity of the EUR term loan, or December 2024. The refinancing transaction is also net leverage neutral. The planned $25 million revolver upsize will also provide more operational flexibility. The B2 CFR and negative outlook are not affected because there is execution risk related to reducing leverage and improving free cash flow levels in line with Moody's expectation for the B2 CFR given a highly challenging operating environment including elevated costs, weakening consumer backdrop and rising interest rates. The company's good liquidity provides some flexibility for CHG to execute its operating plans, reduce leverage, and return free cash flow to a comfortably positive level over the next 12-18 months. On May 15, 2023, CHG closed on a $75 million fungible add-on to its existing USD first lien senior secured term loan due 2028. The incremental term loan proceeds were used to repay all outstanding borrowings on the revolving credit facility. The transaction improved CHG's liquidity as the revolver will be undrawn pro forma the repayment. CHG's good liquidity is also supported by a projected cash balance of $60 million as of March 25, 2023, pro forma the aforementioned transactions. Moody's expects the additional liquidity to be used to fund opportunistic acquisitions as the company has a history of targeting bolt on acquisitions that improve sales diversity and add manufacturing scale and capabilities. CHG's debt/EBITDA leverage increased to more than 7x (on a Moody's adjusted basis) in mid-2022 as the company faced significant inflationary pressures given broad based inflation and its high input exposure to commodities such as wheat and edible oils that experienced material price spikes due to the Russia-Ukraine military conflict. Additionally, CHG faced various supply chain challenges related to labor and raw material shortages. Cost pressures and supply chain challenges began moderating towards the end of 2022, though costs still remain very elevated. Importantly, the company's pricing actions began catching up to higher costs towards the second half of fiscal year ended March 25, 2023. Moody's projects CHG's debt/EBITDA leverage to decline to roughly 6.5x (on a Moody's adjusted basis) for the fiscal year ended March 25, 2023, reflecting projected mid-single digit EBITDA growth for the fiscal year. In fiscal 2024, Moody's projects continued mid-single digit EBITDA growth and further deleveraging driven by a full year's impact of pricing, benefits from capacity expansion, and modest volume growth driven mainly by the QSR channel. While Moody's expects overall volumes to grow, channels such as casual dining, which Moody's estimates to be roughly 15-20% of total sales, are likely to see pressure as consumers pull back on spending. Moody's projects free cash flow to turn positive $10-$20 million in fiscal 2024, compared to projected negative free cash flow of $5-$10 million in fiscal 2023, with the improvement driven by higher earnings and less working capital cash drag, partially offset by the impact of higher interest rates. Higher interest rates negatively impact the company's cash flow meaningfully given the floating rate nature of its approximately $1.5 billion term loan debt, partially mitigated by the company's interest rate hedging arrangements. Moody's projects free cash flow to improve significantly in fiscal 2025 as capital spending normalizes as the UK Coventry bakery is projected to be completed in the summer of 2023 (early/mid fiscal 2024). Moody's took the following rating actions: Assignments: Issuer: CHG PPC Parent LLC Backed Senior Secured 1st Lien Term Loan B, Assigned B1 RATINGS RATIONALE CHG'S B2 CFR reflects the company's high, but manageable financial leverage, acquisitive growth strategy, and low organic sales growth. The credit profile is supported by good product and geographic diversity, stable product demand from consumers, low earnings volatility, and good liquidity. Debt/EBITDA leverage increased to more than 7x (on a Moody's adjusted basis) in mid-2022 due to inflationary pressures, supply chain challenges, rising interest rates, and increased capital spending related to capacity investments. Moody's projects debt/EBITDA leverage to decline to roughly 6.5x (on a Moody's adjusted basis) for the fiscal year ended March 31, 2023 as pricing catches up to higher costs, with further deleveraging projected in fiscal 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The negative outlook reflects the execution risk related to reducing leverage and improving free cash flow levels in line with Moody's expectation for the B2 CFR given a highly challenging operating environment including elevated costs, weakening consumer backdrop and rising interest rates. The company's good liquidity provides some flexibility for CHG to execute its operating plans, reduce leverage, and return free cash flow to a comfortably positive level over the next 12-18 months. A rating downgrade could occur if operating performance fails to improve, liquidity deteriorates, or the financial policy becomes more aggressive. Quantitatively, a downgrade could occur if debt/EBITDA is not sustained below 6.5x, or free cash flow is not restored to a comfortably positive level. A rating upgrade could occur if CHG is able to meaningfully increase scale and improve operating performance including higher profitability and consistent and solid free cash flow generation. CHG would also need to sustain debt/EBITDA at or below 5x. ESG CONSIDERATIONS CHG's CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. This reflects the weight placed on CHG's governance including aggressive financial policies and concentrated control under private equity ownership. Environmental and social risks are present and are scored similarly to other companies across the packaged food sector but overall are lesser factors than the governance risks driving the CIS-4. PRINCIPAL METHODOLOGY The principal methodology used in this rating was Consumer Packaged Goods published in June 2022. COMPANY PROFILE CHG produces a broad set of grain-based and seasoning products, including artisan breads, buns, rolls, biscuits, cookies, desserts, dry gravy mixes, spices, frozen appetizers and snacks, and pizza dough. Revenue was $1.6 billion for the last twelve months ended December 24, 2022. Following a 2018 leveraged buyout, CHG is indirectly owned by investors led by the private capital firm Pritzker Private Capital. CHIEF INVESTMENTS: Sale of Substantially All Assets for $1.65M OK'd ------------------------------------------------------------------- Judge Jason D. Woodard of the U.S. Bankruptcy Court for the Northern District of Mississippi approved Chief Investments, LLC's proposed sale of substantially all assets, including the real property located at 2014 University Avenue, in Oxford, Mississippi 38655, and substantially all of the personal property except for the wine and liquor inventory, to Andy Patel and Kishan Patel for $1.65 million, in accordance with the terms of their Commercial Purchase and Sale Agreement. The sale is free and clear of all liens, claims, and interests, with the exception of customary costs of closing and ad valorem tax claims which will be prorated upon possession, and paid at closing, with the remaining funds to be disbursed as set forth in the Order. Trustmark National Bank has the only voluntary lien upon the Debtor's real estate, as well as substantially all of the Debtor's personal property. The ad valorem taxes for 2023 will be paid/prorated at closing based upon possession as between the Purchasers and the Debtor. At closing, the lien of Trustmark, the only known consensual lienholder, will be paid in full from the available sales proceeds; the ad valorem taxes for 2022 and the prorated 2023 ad valorem taxes will be paid from the available sales proceeds; the allowed broker's/realtor's commissions will be paid; the lien of the MDOR will be paid; and the remaining sales proceeds (if any) will be placed in an interest bearing escrow account at an Ofﬁce of the United States Trustee authorized depository by counsel for the Debtor, with the funds to be disbursed only upon further order of the Court, after notice and a hearing. The Responses of Trustmark and the Mississippi Department of Revenue are resolved by the Agreed Order. The informal objection of the Office of the United States Trustee is resolved by the agreement that the Debtor will file a report of sale with the Court within seven days after the sale closes, pursuant to Fed. R. Bankr. P. 6004(t)(1). The Court authorized Doug Kyser to execute all reasonable and necessary sale documents. The Movant has filed a separate application for the approval of the employment, and payment, of its real estate broker or realtor, and the Court has entered an order granting that application. It is a final judgment as contemplated by the applicable Bankruptcy Rules. About Chief Investments Oxford, Miss.-based Chief Investments, LLC filed its voluntary petition for Chapter 11 protection (Bankr. N.D. Miss. Case No. 21-11765) on Sept. 20, 2021, listing as much as $10 million in both assets and liabilities. Joy Kyser Kizziah, managing member, signed the petition. The Law Offices of Craig M. Geno, PLLC represents the Debtor as legal counsel. CHOCTAW GENERATION: Fitch Affirms 'D' Rating on Series 1 Notes -------------------------------------------------------------- Fitch Ratings has affirmed the ratings of Choctaw Generation Limited Partnership, LLLP's Series 1 Notes at 'D' and Series 2 Notes at 'C'. RATING RATIONALE The 'D' rating on Series 1 Notes reflects the failure to pay principal and interest due Dec. 15, 2022. The rating on the Series 1 notes has reached the lowest level on Fitch's rating scale. The 'C' rating on Series 2 Notes reflects the lender's ability to accelerate debt service under the cross-default provisions and ongoing restructuring negotiations. KEY RATING DRIVERS Operation Risk - Weaker The owner-lessor, a subsidiary of Southern Company, funded substantial modifications to improve plant performance that were complete in 2015, but failed to achieve adequate performance improvements. The operator, also a Southern subsidiary, is considered strong, but the facility continues to experience volatility in operations since completing the modifications, including declining availability and increasing heat rate. Lack of a dedicated O&M reserve additionally weakens the project's ability to withstand periods of underperformance, potentially eroding cash flow cushion available for repayment. The major maintenance reserve was depleted as of YE 2021. Supply Risk - Weaker CGLP's mine-mouth location fuel supply contract through 2032 moderates some supply risk. However, early termination or expiration of the supply agreement resulting in less favorable pricing could lead to inadequate fuel cost recovery. Revenue Risk (Series 1): Midrange CGLP has a power purchase agreement (PPA) with Tennessee Valley Authority (TVA; AA/Stable) for the project's full capacity and energy output through mid-2032. The Series 1 notes mature four months prior to PPA expiration. While the project's contracted revenues are a stronger feature, cash flows are moderately sensitive to dispatch levels with some vulnerability to deterioration in the economic environment contributing to Fitch's midrange revenue risk assessment Significant Merchant Exposure - Revenue Risk (Series 2): Weaker Series 2 debt matures in 2040, exposing debtholders to an entirely merchant revenue stream after the PPA expires in 2032. Debt Structure - 1 - Weaker; Debt Structure - 2 - Weaker Both series lack a dedicated debt service reserve, relying instead on draws from other project accounts to fund Series 1 payment shortfalls. The ability to defer Series 2 target interest and principal payments introduces the risk of a high outstanding balance to be repaid after the PPA expires resulting in exposure to refinancing risk. Financial Profile Persistent underperformance combined with higher operating expenses have depleted liquidity and contributed to the project's failure to meet debt service obligations and debt restructuring process. Fitch's base and rating cases are not applicable considering the ratings. PEER GROUP AES Puerto Rico (rated C) is a comparable coal project in that its financial performance includes projections of below break-even debt service coverage ratios, limited liquidity to make payments, and reliance on a single offtaker (albeit in Default). In public ratings outside the U.S., a higher-rated coal project in Indonesia, Minejesa Capital BV (BBB-/Stable), is supported by the absence of merchant exposure under the PPA, favorable pass-through of fuel costs, stable operating history, and a stronger average rating case coverage of 1.45x. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The Series 2 Notes would be downgraded to 'D' if the results of the restructuring process reflect a material reduction in terms compared with the original contractual terms. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades are unlikely given that both tranches are currently going through a debt restructuring process. CREDIT UPDATE Following an event-driven committee held on Dec. 19, 2022, Series 1 lessor notes were downgraded to 'D' as a debt service payment due on Dec. 15, 2022 was not made. Series 2 lessor notes were downgraded to 'C' to reflect cross-default provisions that allow the lenders to accelerate debt service on the Series 2 notes. The issuer has signed a forbearance agreement with the lenders to avoid debt acceleration while the restructuring process is finalized. The negotiations with the lenders are continuing with a resolution expected in the near future. FINANCIAL ANALYSIS Fitch has relied on management representations as the basis for the ratings. SECURITY CGLP is structured as a leveraged lease transaction and the Series 1 and 2 notes are pass-through trust certificates secured by the project's rent payments. Although Series 2 is structurally subordinated in the payment waterfall, the two series of notes are pari passu. The security interests are typical of project finance transactions and include all project revenues and accounts, all project agreements (PPA and supply agreements), as well as the physical assets of CGLP. Sources of Information The principal sources of information used in the analysis are described in the Applicable Criteria. Fitch has relied on management representations as the basis for the ratings. ESG CONSIDERATIONS Choctaw Generation Limited Partnership, LLLP has an ESG Relevance Score of '4' for Waste & Hazardous Materials Management; Ecological Impacts due to exposure to waste disposal related to coal ash management and pollution incidents, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Prior ----------- ------ ----- Choctaw Generation Limited Partnership, LLLP Choctaw Generation Limited Partnership, LLLP/Debt/1 LT LT D Affirmed D Choctaw Generation Limited Partnership, LLLP/Debt/2 LT LT C Affirmed C CHRISTMAS TREE: Taps Kurtzman Carson as Administrative Advisor -------------------------------------------------------------- Christmas Tree Shops LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Kurtzman Carson Consultants, LLC as their administrative advisor. The Debtors require an administrative advisor to: (a) assist with, among other things, solicitation, balloting and tabulation of votes, prepare any related reports in support of confirmation of a Chapter 11 plan, and process requests for documents; (b) prepare an official ballot certification and, if necessary, testify in support of the ballot tabulation results; (c) assist with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs, and gather data in conjunction therewith; (d) provide a confidential data room, if requested; and (e) manage and coordinate any distributions pursuant to a Chapter 11 plan. The Debtors paid Kurtzman a retainer in the amount of $25,000. As disclosed in court filings, Kurtzman is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Evan Gershbein Kurtzman Carson Consultants LLC 222 N. Pacific Coast Highway, 3rd Floor El Segundo, CA 90245 Tel: (310) 823-9000 Fax: (310) 823-9133 About Christmas Tree Shops Christmas Tree Shops is a home-decor retailer that was spun off from Bed Bath & Beyond in 2020. CTS operates a chain of brick-and-mortar home goods retail stores that specializes in year-round seasonal goods at value pricing. CTS stores offer a variety of products including home decor, bed and bath products, kitchen and dining products, furniture, food and seasonal products. Christmas Tree Shops LLC and four of its affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del., Lead Case No. 23-10576) on May 5, 2023. The petitions were signed by Marc Salkovitz as executive chairman. The Hon. Thomas M. Horan presides over the Debtors' cases. Christmas Tree listed $50 million to $100 million in assets and $100 million to $500 million in liabilities. Troutman Pepper Hamilton Sanders LLP and Murphy & King, P.C. serves as bankruptcy counsel to the Debtors. Kurtzman Carson Consultants, LLC serves as claims and noticing agent to the Debtors. CHUBBY'Z 2 D&D: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Chubby'z 2 D&D Corp. Inc. 4109 Tamiami Trail Port Charlotte FL 33952 Chapter 11 Petition Date: June 1, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-00631 Debtor's Counsel: Mike Dal Lago, Esq. DAL LAGO LAW 999 Vanderbilt Beach Rd. Suite 200 Naples FL 34108 Tel: 239-571-6877 Email: mike@dallagolaw.com Total Assets: $36,000 Total Liabilities: $1,035,589 The petition was signed by Daniel Lutinkski as owner. A copy of the Debtor's list of 10 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2MZH52Q/Chubbyz_2_DD_Corp_Inc__flmbke-23-00631__0003.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LKCOUGI/Chubbyz_2_DD_Corp_Inc__flmbke-23-00631__0001.0.pdf?mcid=tGE4TAMA CITY BREWING: $850M Bank Debt Trades at 51% Discount ---------------------------------------------------- Participations in a syndicated loan under which City Brewing Co LLC is a borrower were trading in the secondary market around 48.8 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $850 million facility is a Term loan that is scheduled to mature on April 5, 2028. The amount is fully drawn and outstanding. City Brewing Company, LLC operates as a brewery company. The Company produces beverages by contract, including beer, malts, teas, and energy drinks. CLEAR CHOICE SHUTTERS: Case Summary & 15 Unsecured Creditors ------------------------------------------------------------ Debtor: Clear Choice Shutters, Inc. 1092 Business Lane Naples, FL 34110 Business Description: Clear Choice provides traditional hurricane protection such as hurricane shutters and hurricane fabric. Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-00638 Debtor's Counsel: R.Scott Shuker, Esq. SHUKER & DORRIS, P.A. 121 S. Orange Avenue Suite 1120 Orlando, FL 32801 Tel: (407) 337-2060 Email: rshuker@shukerdorris.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kenneth B. Pytlik as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 15 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VXYBBNI/Clear_Choice_Shutters_Inc__flmbke-23-00638__0001.0.pdf?mcid=tGE4TAMA CLEAR CHOICE: Case Summary & Five Unsecured Creditors ----------------------------------------------------- Debtor: Clear Choice Installations, Inc. 1092 Business Lane Naples, FL 34110 Business Description: Clear Choice is a family-owned and operated company serving the Southwest Florida community from single family homes, high -rise condominiums to commercial buildings. Clear Choice offers traditional hurricane protection, provides hurricane impact windows and doors, supplies local builders with hurricane protection for their remodel or new construction projects, and offers printing services. Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-00639 Debtor's Counsel: R. Scott Shuker, Esq. SHUKER & DORRIS, P.A. 121 S. Orange Avenue Suite 1120 Orlando, FL 32801 Tel: (407) 337-2060 Email: rshuker@shukerdorris.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kenneth B. Pytlik as president. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DCU5T2Y/Clear_Choice_Installations_Inc__flmbke-23-00639__0001.0.pdf?mcid=tGE4TAMA CLEARWATER ORGANIC: Deadline to Submit Bids Set for July 11 ----------------------------------------------------------- Maas Companies placed for sale a 183,296 sq. ft. greenhouse/hydroponics nursery facility with all support equipment on 31.90+/- leased acres of land owned by Clearwater Organic Farms Illinois LLC. Interested bidders have until July 11, 2023, at 4:00 p.m. CT to submit their offers for the Company's property. Broker Participation is welcome but not required. A 2% commission will be paid to the licensed broker who, at the time of registration, registers the bidder who pays for and settles for the real estate. A broker buying on his/her behalf, or on behalf of any business entity in which he/she holds an interest, is not entitled to a commission. There is a 10% buyer's premium fee. Sealed bid offers must be received by no later than 4:00 p.m. CT on July 11, 2023, with a completed Sealed Bid Form. For further information regarding the property, visit: https://www.maascompanies.com/23115_greenhouse-hydroponics-nursery-facility/ Clearwater Organic Farms Illinois, LLC, owns a facility located on land leased from Waste Management of Illinois. The facility uses excess steam generated and purchased from the neighboring facility. The waste heat is then used to heat the greenhouse and head house. The offices and cooler room are cooled by an electric heat pump system. COMIC RELIEF: Hires Carmody MacDonald as Bankruptcy Counsel ----------------------------------------------------------- Comic Relief Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Missouri to hire Carmody MacDonald P.C. as its bankruptcy counsel. The firm's services include: a. advising the Debtor with respect to its rights, power, and duties in its Chapter 11 case; b. assisting and advising the Debtor in its consultations with any appointed committee related to the administration of its bankruptcy case; c. assisting the Debtor in analyzing the claims of creditors and negotiating with such creditors; d. assisting the Debtor in investigating its assets, liabilities, financial condition and business; e. advising the Debtor in connection with the sale of its assets or business; f. assisting the Debtor in its analysis of and negotiation with any appointed committee or any third-party concerning matters related to, among other things, the terms of a plan of reorganization; g. assisting and advising the Debtor with respect to any communications with the general creditor body regarding significant matters in its case; h. commencing and prosecuting necessary and appropriate actions or proceedings on behalf of the Debtor; i. reviewing, analyzing or preparing legal documents; j. representing the Debtor at all hearings and other proceedings; k. conferring with other professional advisors in providing advice to the Debtor; l. advising the Debtor regarding pending arbitration and litigation matters in which it may be involved, including continued prosecution or defense of actions and negotiations; and m. performing all other necessary legal services. The hourly rates of the firm's counsel and staff are as follows: Partners $305 - $475 Associates $225 - $295 Paralegals/Law clerks $150 - $195 In addition, the firm will seek reimbursement for expenses incurred. As of the petition date, the firm has been paid the sum of $1,947.50 for pre-bankruptcy services. Robert Eggmann, Esq., a partner at Carmody MacDonald, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Thomas H. Riske, Esq. Carmody MacDonald, PC 120 South Central Avenue, Suite 1800 St. Louis, MO 63105 Telephone: (314) 854-8600 Facsimile: (314) 854-8660 Email: thr@carmodymacdonald.com About Comic Relief Comic Relief Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case No. 23-41696) on May 12, 2023, listing $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Thomas H Riske, Esq. at Carmody Macdonald P.C. represents the Debtor as counsel. COMPASS POINTE: Amends Unsecured Claims Pay; Plan Hearing June 28 ----------------------------------------------------------------- Compass Pointe Off Campus Partnership B, LLC, submitted a Second Amended Disclosure Statement describing a Second Amended Plan. General unsecured creditors, to the extent there are any, will be paid in full on the Effective Date of the Plan. Class 2 consists of the Secured Claim of Merced DIP Lender, LLC (DIP Lender). The Class 2 Secured Claim of Merced DIP Lender, LLC in the amount of $24,375,000. Such amount shall be paid in full after a 13-month period either by Sale of the property by the Debtor or; FANNIE MAE refinance by the Debtor via Walker Dunlop; Both methods having been approved by Legalist, Inc., the Lender. On or about December 7, 2022, the potential purchaser of the Property dropped itself from the project. In response, Debtor and DIP Lender have been working together to secure a buyer for the Property via a broker and updates on potential sale will be provided as available to this Court and all interested parties. Class 3 consists of General Unsecured Claims, if any. Debtor estimates that the total amount of Class 3 general unsecured claims to be approximately $00.00. If there be any, the Debtor shall pay all Allowed Unsecured Claims in full on the Effective Date of the Plan. The Plan will be funded by DIP financing paid pursuant to a DIP order. The Debtor shall be responsible for post-confirmation management. The Debtor shall be the disbursing agent for all Distributions under the Plan. The Disbursing Agent shall serve without bond and shall receive no compensation for distribution of services rendered and expenses incurred pursuant to the Plan. The hearing at which the Court will determine whether to confirm the Plan will take place on June 28, 2023, at 09:30 a.m., in Courtroom 11, Department A, at the United States Bankruptcy Court for the Eastern District of California, 2500 Tulare Street, Fresno, California. A full-text copy of the Second Amended Disclosure Statement dated May 30, 2023 is available at https://urlcurt.com/u?l=Ix58LN from PacerMonitor.com at no charge. Attorney for Debtor: Noel Knight, Esq. The Knight Law Group 800 J. St., Ste. 441 Sacramento, CA 95814 Telephone: (510) 435-9210 Facsimile: (510) 281-6889 Email: lawknight@theknightlawgroup.com About Compass Pointe Compass Pointe Off Campus Partnership B, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101 (51B)). Compass Pointe filed its voluntary petition for Chapter 11 protection (Bankr. E.D. Cal. Case No. 22-10778) on May 8, 2022, disclosing $1 million to $10 million in assets. David Sowels, manager, signed the petition. Judge Jennifer E. Niemann presides over the case. Noel Knight, Esq., at The Knight Law Group, serves as the Debtor's counsel. COREL CORP: Moody's Affirms B3 CFR, Outlook Remains Stable ---------------------------------------------------------- Moody's Investors Service affirmed COREL CORPORATION's B3 corporate family rating, B3-PD probability of default rating, and B2 rating on the senior secured first lien bank credit facility. The outlook remains stable. "The affirmation reflects Moody's expectation that financial leverage will improve slightly as a result of modest EBITDA growth and debt reduction, absent any debt-funded acquisitions," said Mikhil Mahore, Moody's analyst. Affirmations: Issuer: COREL CORPORATION Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 Outlook Actions: Issuer: COREL CORPORATION Outlook, Remains Stable RATINGS RATIONALE Corel's B3 CFR is constrained by: (1) high leverage (7.1x LTM Feb-23); (2) small size and weak market position relative to larger and better capitalized competitors; (3) high revenue concentration within its top four niche products (around 80% of revenue); (4) operations in mature and fragmented markets with dependence on acquisitions for growth; and (5) risk of aggressive financial policies under KKR's ownership. The company's rating benefits from: (1) its diverse and well-known product portfolio offering differentiated software solutions with a sizable active installed base of over 90 million customers globally; (2) recurring maintenance and subscription revenue mix (over 75% of revenue); and (3) positive free cash flow generation (about $20 million LTM Feb-23) supported by low capital intensity under its roll-up acquisition strategy; and (5) good liquidity. Corel has good liquidity. Sources of liquidity total about $120 million, consisting of about $27 million in cash as of February 2023, full availability under its $60 million revolving credit facility expiring July 2024 and Moody's expectation of about $35 million in positive free cash flow through May 2024. Uses of liquidity consists of about $29 million in mandatory annual debt amortizations. The revolver has a springing net first lien secured leverage covenant of 7x if drawings exceed the greater of $24 million or 40% of the credit facility capacity. Moody's expect the company to remain in compliance with the covenant although Moody's does not anticipate utilization of the revolver over the next 12 months. Moody's expects Corel will refinance its revolving credit facility well in advance of its July 2024 maturity. The B2 rating assigned to the first lien credit facility ($60 million revolver due 2024 and $585 million first lien senior secured term loan due 2026) is one notch above the company's B3 CFR, reflecting the support provided by the $100 million privately placed second lien term loan (not rated), which has a subordinate lien on the collateral package relative to the first lien debt. The first lien credit facility benefits from first priority security interest in assets of the borrower and its material domestic subsidiaries. The stable outlook reflects Moody's expectation for deleveraging below 6x (absent debt-funded acquisitions) with ongoing positive free cash flow generation. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company's revenue and EBITDA growth is sustained, its leverage declines below 6x (7.1x LTM Feb-23) on a Moody's adjusted basis, EBITDA/interest is above 2x (1.5x LTM Feb 2023), and adjusted free cash flow to debt is sustained in the mid-to-high single digit range (3% LTM Feb 2023). The ratings could be downgraded if the company's revenue and EBITDA declined, leverage is sustained above 8x (7.1x LTM Feb-23), EBITDA/interest is below 1.2x (1.5x LTM Feb 2023), or liquidity deteriorates. COREL CORPORATION, trading under the name Alludo, is a global packaged software vendor that develops and markets software covering virtualization, graphics and productivity solutions through a portfolio of recognizable brands including Parallels, CorelDRAW, MindManager and WinZip. The principal methodology used in these ratings was Software published in June 2022. CORIZON LLC: Bouton's Lawsuit Stayed for 90 Days ------------------------------------------------ Magistrate Judge Shirley Padmore Mensah of the U.S. District Court for the Eastern District of Missouri denies without prejudice the Motion to Extend Stay filed by Dr. Cherilyn Desouza and Mary Summerville in the case captioned as STEVE BOUTON, et al., Plaintiffs, v. STATE OF MISSOURI, et al., Defendants, Case No. 2:22-CV-00010-SPM, (E.D. Mo.). At the hearing of the Defendants' Motion to Extend Stay, the Plaintiff made an oral motion to stay all proceedings in this case for 90 days. The Court granted the Plaintiff's oral motion and stayed this case in its entirety for 90 days from the date of the Memorandum and Order. In addition, the Court will hold a status conference in this case on Wednesday, Aug. 16, 2023 at 10:00 a.m., in Courtroom 13-South in the Thomas F. Eagleton United States Courthouse in St. Louis, Missouri. This case arises out of the death by suicide of Plaintiffs' son, Austin Bouton, which occurred while Austin was in the custody of the Missouri Department of Corrections. The Plaintiffs assert claims against the State of Missouri, acting through MDOC; several individuals associated with MDOC; Corizon, LLC (a provider of healthcare services at MDOC); and two former Corizon employees: Cherilyn DeSouza and Mary Summerville. On Feb. 16, 2023, Defendant Corizon filed a "Suggestion of Bankruptcy and Notice of Automatic Stay," stating that on Feb. 13, 2023, Corizon had filed (under the name "Tehum Care Services") a voluntary chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of Texas. Pursuant to 11 U.S.C. Section 362(a)(1), the filing of this petition operated as an automatic stay of this case as to Defendant Corizon. On March 10, 2023, Defendants Desouza and Summerville filed the instant motion, requesting that the Court extend the automatic stay to apply to them. They argue that extending the stay would promote efficiency and judicial economy, because any discovery or dispositive motion practice conducted with Defendants Desouza and Summerville while the matter is stayed as to Corizon may have to be repeated after the stay is lifted. They also argue that, as a practical matter, they cannot effectively defend themselves without access to documents and other materials possessed by Corizon that are currently unavailable due to Corizon's non-participation in this case. A full-text copy of the Memorandum and Order dated May 16, 2023, is available https://tinyurl.com/4zck9ar7 from Leagle.com. About Tehum Care Services Tehum Care Services Inc., doing business as Corizon Health Services Inc., is a privately held prison healthcare contractor in the United States. It is based in Brentwood, Tenn. Tehum Care Services filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90086) on Feb. 13, 2023. In the petition filed by Russell A. Perry, as chief restructuring officer, the Debtor reported assets between $1 million and $10 million and liabilities between $10 million and $50 million. Judge Christopher M. Lopez oversees the case. The Debtor is represented by Jason S Brookner, Esq., at Gray Reed & McGraw, LLP. CROWN FINANCE: $650M Bank Debt Trades at 78% Discount ----------------------------------------------------- Participations in a syndicated loan under which Crown Finance US Inc is a borrower were trading in the secondary market around 22 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $650 million facility is a Term loan that is scheduled to mature on September 20, 2026. The amount is fully drawn and outstanding. Crown Finance US, Inc. operates as a movie theater. DECURTIS HOLDINGS: Seeks to Hire Cooley LLP as Bankruptcy Counsel ----------------------------------------------------------------- Decurtis Holdings LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Cooley, LLP as bankruptcy counsel. The Debtors require legal counsel to: (a) give advice regarding the rights, powers and duties of the Debtors under Chapter 11 of the Bankruptcy Code; (b) prepare legal documents and review all financial reports to be filed in the Debtors' Chapter 11 cases; (c) advise the Debtors concerning, and prepare responses to, legal papers that may be filed and served by parties involved in the Debtors' cases; (d) advise the Debtors with respect to, and assist in the negotiation and documentation of, financing agreements and related transactions; (e) review the nature and validity of any liens asserted against the Debtors' property and advise the Debtors concerning the enforceability of such liens; (f) advise the Debtors regarding their ability to initiate actions to collect and recover property for the benefit of their estates; (g) counsel the Debtors in connection with any sale of assets and related documents; (h) counsel the Debtors in connection with any Chapter 11 plan and related documents; (i) advise and assist the Debtors in connection with any potential property dispositions; (j) advise the Debtors concerning executory contract and unexpired lease assumption, assignment and rejection; (k) assist the Debtors in reviewing, estimating and resolving claims asserted against the Debtors' estates; (l) commence and conduct litigation necessary or appropriate to assert rights held by the Debtors, protect assets of the Debtors' estates, or otherwise further the goal of completing the Debtors' Chapter 11 plan; (m) provide corporate, employee benefit, litigation, tax, and other general non-bankruptcy services to the Debtors to the extent requested by the Debtors; and (n) perform all other necessary legal services. The firm will be paid at these rates: Partners $1,285 - $1,600 per hour Counsel $1,260 - $1,560 per hour Associates $625 - $1,250 per hour Paralegals $325 - $560 per hour Professional Staff $150 - $385 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The Debtors paid the firm a general retainer of $250,000. Cullen Drescher Speckhart, Esq., a partner at Cooley LLP, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Cullen Drescher Speckhart, Esq. Michael A. Klein, Esq. Evan Lazerowitz, Esq. Paul Springer, Esq. Cooley LLP 55 Hudson Yards New York, NY 10001 Tel: (212) 479-6000 Fax: (212) 479-6275 Email: cspeckhart@cooley.com mklein@cooley.com elazerowitz@cooley.com pspringer@cooley.com About Decurtis Holdings DeCurtis Holdings, LLC and affiliates provide guest experience and operational management product-focused SaaS software solutions designed to power any indoor, complex environment. It is the industry leader in transformational experience technology focused on the cruise line industry, and makes software systems used for providing guests a seamless experience with cruise ship facilities through the use of wireless sensing technologies. Beyond the cruise line industry, DeCurtis's products and services are also applicable to restaurants, theme parks, and the extended hospitality industry, with the potential to expand into healthcare and other settings. DeCurtis Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10548) on April 30, 2023. In the petition signed by its chief financial officer, Joseph J. Carino, DeCurtis Holdings disclosed $10 million to $50 million in assets and $50 million to $100 million in liabilities. Judge Kate Stickles oversees the cases. The Debtors tapped Cooley, LLP and Potter Anderson & Corroon, LLP as bankruptcy counsels; Groombridge, Wu, Baughman & Stone, LLP as special counsel; and Province, LLC as financial advisor. Omni Agent Solutions, Inc. is the Debtors' claims, noticing and administrative agent. DECURTIS HOLDINGS: Seeks to Hire Province LLC as Financial Advisor ------------------------------------------------------------------ Decurtis Holdings, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Province, LLC as financial advisor. The firm's services include: a. assisting the Debtors in evaluating their liquidity and in the preparation of short-term cash flow forecasts; b. assisting in the formulation, evaluation and implementation of various contingency plans and financial alternatives including a potential in-court or out-of-court restructuring transaction; c. assisting the Debtors in negotiations with creditors, shareholders, customers, and other appropriate parties; d. assisting the Debtors in developing materials for stakeholder diligence and coordinating any such due diligence; e. meeting with and preparing presentations for creditors, stakeholders, customers, and other appropriate parties regarding material matters related to the Debtors' business; f. assisting in any financing process, including obtaining, evaluating and negotiating term sheets, financing commitments and financing documents; g. assisting management in connection with the Debtors' development of their business plan or any other forecasts; h. providing contingency planning and ongoing advice and assistance to management through the restructuring process; i. assisting the Debtors and their counsel in undertaking a sales process for the Debtors' assets; and j. any other activities approved by the Debtors or their counsel and agreed to by Province. The firm will be paid at these rates: Managing Directors and Principals $860 - $1,350 per hour Vice Presidents/Directors/Senior Directors $580 - $950 per hour Analysts/Associates/Senior Associates $300 - $650 per hour Paraprofessionals/Others $220 - $300 per hour The Debtors paid the firm a retainer of $250,000. Michael Atkinson, a partner at Province, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael Atkinson Province, LLC 2360 Corporate Circle, Suite 340 Henderson, NV 89074 Telephone: (702) 685-5555 Email: matkinson@provincefirm.com About Decurtis Holdings DeCurtis Holdings, LLC and affiliates provide guest experience and operational management product-focused SaaS software solutions designed to power any indoor, complex environment. It is the industry leader in transformational experience technology focused on the cruise line industry, and makes software systems used for providing guests a seamless experience with cruise ship facilities through the use of wireless sensing technologies. Beyond the cruise line industry, DeCurtis's products and services are also applicable to restaurants, theme parks, and the extended hospitality industry, with the potential to expand into healthcare and other settings. DeCurtis Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10548) on April 30, 2023. In the petition signed by its chief financial officer, Joseph J. Carino, DeCurtis Holdings disclosed $10 million to $50 million in assets and $50 million to $100 million in liabilities. Judge Kate Stickles oversees the cases. The Debtors tapped Cooley, LLP and Potter Anderson & Corroon, LLP as bankruptcy counsels; Groombridge, Wu, Baughman & Stone, LLP as special counsel; and Province, LLC as financial advisor. Omni Agent Solutions, Inc. is the Debtors' claims, noticing and administrative agent. DECURTIS HOLDINGS: Taps Omni as Administrative Agent ---------------------------------------------------- Decurtis Holdings, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Omni Agent Solutions, Inc. as administrative agent. The Debtors require an administrative agent to: (a) assist with, among other things, solicitation, balloting, tabulation, and calculation of votes, as well as preparing any reports in support of confirmation of the Debtors' Chapter 11 plan; (b) handle requests for documents in connection with the balloting services; (c) generate an official ballot certification and, if necessary, testify in support of the ballot tabulation results; (d) assist with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs and gather data in conjunction therewith; (e) provide a confidential data room, if requested by the Debtors; and (f) manage and coordinate any distributions pursuant to a Chapter 11 plan if designated as distribution agent under such plan. The firm will be paid at these rates: Director of Solicitation $250 per hour Solicitation/Securities Consultant $200 - $225 per hour Senior Consultants $200 - $240 per hour Consultants $75 - $195 per hour Analysts $45 - $75 per hour The Debtors provided the firm a retainer in the amount of $20,000. Paul Deutch, executive vice president of Omni Agent Solutions, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Paul H. Deutch Omni Agent Solutions, Inc. 5955 De Soto Avenue Suite 100 Woodland Hills, CA 91367 Tel: (818) 906-8300 Fax: 818-783-2737 Email: lacontact@omniagnt.com About Decurtis Holdings DeCurtis Holdings, LLC and affiliates provide guest experience and operational management product-focused SaaS software solutions designed to power any indoor, complex environment. It is the industry leader in transformational experience technology focused on the cruise line industry, and makes software systems used for providing guests a seamless experience with cruise ship facilities through the use of wireless sensing technologies. Beyond the cruise line industry, DeCurtis's products and services are also applicable to restaurants, theme parks, and the extended hospitality industry, with the potential to expand into healthcare and other settings. DeCurtis Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10548) on April 30, 2023. In the petition signed by its chief financial officer, Joseph J. Carino, DeCurtis Holdings disclosed $10 million to $50 million in assets and $50 million to $100 million in liabilities. Judge Kate Stickles oversees the cases. The Debtors tapped Cooley, LLP and Potter Anderson & Corroon, LLP as bankruptcy counsels; Groombridge, Wu, Baughman & Stone, LLP as special counsel; and Province, LLC as financial advisor. Omni Agent Solutions, Inc. is the Debtors' claims, noticing and administrative agent. DECURTIS HOLDINGS: Taps Potter Anderson & Corroon as Co-Counsel --------------------------------------------------------------- Decurtis Holdings, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Potter Anderson & Corroon, LLP as co-counsel with Cooley, LLP. The firm's services include: a. advising the Debtors of their rights, powers, and duties under Chapter 11 of the Bankruptcy Code; b. preparing legal papers; c. assisting with any disposition of the Debtors' assets by sale or otherwise; d. taking action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors; e. preparing and prosecuting on behalf of the Debtors any proposed plan of reorganization or liquidation and any disclosure statement, and seeking approval of all transactions contemplated therein; f. preparing and prosecuting pleadings necessary to solicit votes on any proposed plan of reorganization; g. appearing in court and at any meeting required by the U.S. Trustee and creditors; h. advising the Debtors on matters in which Cooley has conflicts; i. providing additional support to Cooley, as requested; and j. performing all other services assigned by the Debtors to the firm. Potter Anderson & Corroon will be paid at these rates: Partners $675 - $865 per hour Counsels $705 per hour Associates $440 - $585 per hour Paraprofessionals $330 - $350 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The firm received a retainer in the total amount of $275,000. Christopher Samis, Esq., a partner at Potter Anderson & Corroon, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Christopher M. Samis, Esq. L. Katherine Good, Esq. Aaron H. Stulman, Esq. Gregory J. Flasser, Esq. Sameen Rizvi, Esq. Potter Anderson & Corroon, LLP 1313 N. Market Street, 6th Floor Wilmington, DE 19801 Tel: (302) 984-6000 Fax: (302) 658-1192 Email: csamis@potteranderson.com kgood@potteranderson.com astulman@potteranderson.com gflasser@potteranderson.com srizvi@potteranderson.com About Decurtis Holdings DeCurtis Holdings, LLC and affiliates provide guest experience and operational management product-focused SaaS software solutions designed to power any indoor, complex environment. It is the industry leader in transformational experience technology focused on the cruise line industry, and makes software systems used for providing guests a seamless experience with cruise ship facilities through the use of wireless sensing technologies. Beyond the cruise line industry, DeCurtis's products and services are also applicable to restaurants, theme parks, and the extended hospitality industry, with the potential to expand into healthcare and other settings. DeCurtis Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10548) on April 30, 2023. In the petition signed by its chief financial officer, Joseph J. Carino, DeCurtis Holdings disclosed $10 million to $50 million in assets and $50 million to $100 million in liabilities. Judge Kate Stickles oversees the cases. The Debtors tapped Cooley, LLP and Potter Anderson & Corroon, LLP as bankruptcy counsels; Groombridge, Wu, Baughman & Stone, LLP as special counsel; and Province, LLC as financial advisor. Omni Agent Solutions, Inc. is the Debtors' claims, noticing and administrative agent. DEVILLE CORP: Court OKs Interim Cash Collateral Access ------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized Deville Corp. to use cash collateral on an interim basis, in accordance with the budget, with a 10% variance. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Court, including payments to the US Trustee for quarterly fees; (b) the current and necessary expenses set forth in the budget, plus an amount not to exceed 10% for each line item; and (c) additional amounts as may be expressly approved in writing by FLA-Nash, LLC and H.I. Resorts Nashville, LLC, as successor-in-interest to Savannah Capital, LLC. FLA-Nash, LLC has agreed to extend the maturity date of its loan through July 1, 2023. Consistent with the Budget, the Debtor will continue to pay FLA-Nash regular mortgage payments. The Debtor and FLA-Nash are authorized, but not required, to enter into reasonable and customary documents to document the extension consistent with the Order. Each creditor with a security interest in the cash collateral will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as the prepetition lien, without the need to file or execute any document as may otherwise be required under applicable non bankruptcy law. The Debtor will maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the Secured Creditors. A continued hearing on the matter is set for June 29, 2023, at 3 p.m. A copy of the order and the Debtor's budget is available at https://urlcurt.com/u?l=yD4SO8 from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $4,533 for April 2023; $7,605 for May 2023; and $4,465 for June 2023. About Deville Corp. Deville Corp. is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B)). Deville Corp. filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04930) on Dec. 14, 2022. In the petition filed by Edgar L.T. Gay, as president and director, the Debtor reported assets between $10 million and $50 million and liabilities between $1 million and $10 million. Judge Catherine Peek McEwen oversees the case. The Debtor is represented by Daniel R. Fogarty, Esq. at Stichter, Riedel, Blain & Postler, P.A. DIGITAL MEDIA: Unit Draws Down $10M Under Revolving Credit Facility ------------------------------------------------------------------- Digital Media Solutions, LLC, a subsidiary of Digital Media Solutions, Inc., drew $10.0 million, at a borrowing rate of 9.38%, under its $50 million senior secured revolving credit facility, which is maintained under the May 25, 2021 senior secured credit facility with a syndicate of lenders, arranged by Truist Bank and Fifth Third Bank, as joint lead arrangers, and Truist Bank, as administrative agent. Together with the previously disclosed draws of $5.0 million on Oct. 4, 2022 and $35.0 million on Dec. 29, 2022, $50.0 million is currently outstanding under the Revolving Facility. The Company intends to use the borrowings for general corporate purposes. As of May 24, 2023, the Company had approximately $27.7 million of cash on hand, inclusive of the current draw down under the Revolving Facility. About Digital Media Headquartered in Clearwater, Florida, Digital Media Solutions, Inc. (NYSE: DMS) -- https://digitalmediasolutions.com -- is a provider of data-driven, technology-enabled digital performance advertising solutions connecting consumers and advertisers within the auto, home, health, and life insurance, plus a long list of top consumer verticals. The DMS first-party data asset, proprietary advertising technology, significant proprietary media distribution, and data-driven processes help digital advertising clients de-risk their advertising spend while scaling their customer bases. Digital Media reported a net loss of $52.50 million for the year ended Dec. 31, 2022. As of March 31, 2023, the Company had $238.81 million in total assets, $337.08 million in total liabilities, $4.99 million in preferred stock, and a total deficit of $103.27 million. * * * As reported by the TCR on Dec. 16, 2022, S&P Global Ratings lowered its issuer credit rating on Digital Media Solutions Inc. (DMS) to 'CCC+' from 'B-'. S&P said, "We view DMS' capital structure as unsustainable absent sustainable increases in its EBITDA and FOCF. We do not expect that the company will significantly improve its credit metrics until 2024. DMS is dependent on improvements in macroeconomic conditions and insurance carrier profitability to support increased ad spending on its platform and additional sales through its independent insurance agents." DIOCESE OF ALBANY: Taps Donlin Recano as Administrative Advisor --------------------------------------------------------------- The Roman Catholic Diocese of Albany, New York seeks approval from the U.S. Bankruptcy Court for the Northern District of New York to employ Donlin, Recano & Company, Inc. as its administrative advisor. The Debtors require an administrative advisor to: (a) assist with, among other things, any required solicitation, balloting, and tabulation and calculation of votes, as well as preparing any appropriate reports, as required in furtherance of confirmation of Chapter 11 plan; (b) prepare an official ballot certification and testify, if necessary, in support of the ballot tabulation results; (c) assist with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs and gather data in conjunction therewith; (d) provide a confidential data room, if requested; (e) manage and coordinate any distributions pursuant to a confirmed Chapter 11 plan; and (f) provide such other claims processing, noticing, solicitation, balloting, and administrative services. The hourly rates of the firm's professionals are as follows: Executive Management No charge Senior Bankruptcy Consultant $185 - $225 Case Manager $170 - $185 Consultant/Analyst $140 - $165 Technology/Programming Consultant $95 - $135 Clerical $40 - $50 In addition, the firm will seek reimbursement for expenses incurred. Nellwyn Voorhies, an executive director at Donlin, Recano & Company, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Nellwyn Voorhies Donlin, Recano & Company, Inc. 48 Wall Street New York, NY 10016 Telephone: (619) 346-1628 Email: nvoorhies@donlinrecano.com About The Roman Catholic Diocese of Albany The Roman Catholic Diocese of Albany is a religious organization in Albany, N.Y. It covers 13 counties in Eastern New York, including a portion of a 14th county. Its Mother Church is the Cathedral of the Immaculate Conception in the city of Albany. New York's Child Victims Act, which took effect in August 2019, temporarily sets aside the usual statute of limitations for lawsuits to give victims of childhood sexual abuse a year to pursue even decades-old claims. Hundreds of new lawsuits have been filed against churches and other institutions since the law took effect on Aug. 14, 2019. Facing the financial weight of new sexual misconduct lawsuits, at least four of the eight Roman Catholic dioceses in the state, has already sought Chapter 11 protection. The dioceses that have declared bankruptcy include the Diocese of Rochester and the Diocese of Rockville Centre on Long Island. The Catholic Diocese of Albany sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-10244) on March 15, 2023. In the petition filed by Fr. Robert P. Longobucco, the Debtor estimated assets between $10 million and $50 million and liabilities between $50 million and $100 million. Judge Robert E. Littlefield, Jr. oversees the case. The Debtor tapped Nolan Heller Kauffman, LLP as bankruptcy counsel; Tobin and Dempf, LLP as special litigation counsel; and Keegan Linscott & Associates, PC as financial advisor. Donlin, Recano & Company, Inc. is the claims and noticing agent. On April 17, 2023, the U.S. Trustee for Region 2 appointed two separate committees to represent unsecured creditors and tort claimants in the Debtor's Chapter 11 case. Lemery Greisler, LLC represents the unsecured creditors' committee while Stinson, LLP represents the tort committee. DVD FACTORY: Unsecureds Will Get 14.3% of Claims over 5 Years ------------------------------------------------------------- DVD Factory, Inc., filed with the U.S. Bankruptcy Court for the Central District of California a Plan of Reorganization for Small Business dated May 30, 2023. Since January 4, 2011, the Debtor has been in the business of manufacturing adult DVDs. The Plan Proponent's financial projections show that the Debtor will have projected disposable income of approximately $945.00/month x 60 months = $56,700.00. The final Plan payment is expected to be paid on August 2028. Class 3 consists of non-priority unsecured creditors. Holders of general unsecured creditor in Class 3 will be paid 14.3% of such creditors' allowed claim over 5 years, with the first payment due on the effective date, followed by 59 consecutive monthly payments, each due on the first day of each month. The monthly payments are $3,478.14. Class 4 consists of equity security holders of the Debtor. Daniel J. Quinn is the principal of the Debtor with a 100% equity interest in the Debtor. Mr. Quinn is a secured creditor of the Debtor for $600,000 (treated in Class 2C). He is also the principal of Combat Zone LLC which holds a pre-petition unsecured claim against the Debtor for $412,734.76 (treated in Class 3). Mr. Quinn holds an unsecured claim for $1,426,587.47 treated in Class 4. As an equity interest holder, because the Debtor is not proposing a 100% interest to holders of Class 3, Mr. Quinn will not be receiving any distribution through Debtor's plan on its $1,426,587.47 general unsecured claim. Distribution to creditors under this Plan will be funded primarily from the Debtor's cash on hand on the effective date and the net income derived from the continued operation of the Debtor's business. A full-text copy of the Plan of Reorganization dated May 30, 2023 is available at https://urlcurt.com/u?l=tmYB5C from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Michael Jay Berger, Esq. Law Offices of Michael Jay Berger 9454 Wilshire Blvd., 6th Floor Beverly Hills, CA 90212-2929 Telephone: (310) 271-6223 Facsimile: (310) 271-9805 Email: michael.berger@bankruptcypower.com About DVD Factory DVD Factory, Inc., a company in Valencia, Calif., filed its voluntary petition for Chapter 11 protection (Bankr. C.D. Cal. Case No. 23-11085) on Feb. 27, 2023, with $1,463,452 in assets and $2,051,540in liabilities. Daniel J. Quinn, president and chief executive officer, signed the petition. Judge Deborah J. Saltzman oversees the case. The Law Offices of Michael Jay Berger serves as the Debtor's bankruptcy counsel. EMPLOYBRIDGE LLC: $925M Bank Debt Trades at 21% Discount -------------------------------------------------------- Participations in a syndicated loan under which Employbridge LLC is a borrower were trading in the secondary market around 79.3 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $925 million facility is a Term loan that is scheduled to mature on July 19, 2028. The amount is fully drawn and outstanding. Employbridge, LLC operates as an industrial staffing company. The Company offers temporary associates in manufacturing, logistics, warehousing, and contact centers. ENTRADA DEVELOPMENT: Gets Ok to Hire Smeberg Law Firm as Counsel ---------------------------------------------------------------- Entrada Development, LLC received approval from the U.S. Bankruptcy Court for the Western District of Texas to hire The Smeberg Law Firm, PLLC to handle its Chapter 11 case. The firm will be paid at these rates: Ronald J. Smeberg, Esq. $375 per hour Attorneys $400 per hour Associate Attorneys $275 per hour Legal Assistants/Paralegals $140 per hour Accounting Professionals $225 per hour As disclosed in court filings, Smeberg Law Firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ronald Smeberg, Esq. The Smeberg Law Firm, PLLC 4 Imperial Oaks San Antonio, TX 78248-1609 Phone: 210-695-6684 Email: ron@smeberg.com About Entrada Development Entrada Development, LLC engaged in activities related to real estate. Entrada Development, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-10317) on May 2, 2023. The petition was signed by Michael Dixson as president. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Judge H. Christopher Mott presides over the case. Ronald Smeberg, Esq. at The Smeberg Law Firm represents the Debtor as counsel. ERICKSEN ARBUTHNOT: Seeks to Hire Lee CPA Audit Group as Auditor ---------------------------------------------------------------- Ericksen, Arbuthnot, Kilduff, Day & Lindstrom Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Lee CPA Audit Group as auditor. The firm will prepare the audits of the 401(k) plan for the fiscal years ending Sept. 30, 2022, and Sept. 30, 2023. Specifically, the firm will prepare the two audits in accordance with ERISA Section 103(a)(3)(c) to satisfy the Debtor's obligations to the Internal Revenue Service and Department of Labor under their sponsored 401(k) plan. Lee CPA Audit Group will be paid $8,000 upon completion of both 401(k) plan audits. The retainer is $9,000. As disclosed in court filings, Lee CPA Audit Group is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: James Lee Lee CPA Audit Group 10301 Placer Lane Sacramento, CA 95827 Tel: (916) 347-7855 About Ericksen Ericksen, Arbuthnot, Kilduff, Day & Lindstrom Inc. is a law firm in California. Ericksen filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-40134) on Feb. 3, 2023, with $1 million to $10 million in both assets and liabilities. Mark M. Sharf has been appointed as Subchapter V trustee. Judge William J. Lafferty oversees the case. The Debtor tapped Michael Delaney, Esq., at Baker & Hostetler, LLP as legal counsel and Lee CPA Audit Group as auditor. ESCO LTD: Seeks to Hire Stretto as Administrative Advisor --------------------------------------------------------- ESCO, Ltd. seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ Stretto, Inc. as administrative advisor. The Debtor requires an administrative advisor to: a. assist with, among other things, solicitation, balloting, and tabulation of votes, and prepare any related reports in support of confirmation of a Chapter 11 plan; b. prepare an official ballot certification and, if necessary, testify in support of the ballot tabulation results; c. assist with the preparation of the Debtor's schedules of assets and liabilities and statements of financial affairs, and gather data in conjunction therewith; d. provide a confidential data room; and e. manage and coordinate any distributions pursuant to a Chapter 11 plan if designated as distribution agent under such plan. Stretto received an advanced payment of $25,000. Sheryl Betance, senior managing director at Stretto, disclosed in a court filing that her firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Sheryl Betance Stretto, Inc. 410 Exchange, Ste. 100 Irvine, CA 92602 Telephone: (714) 716-1872 Email: sheryl.betance@stretto.com About ESCO Ltd. ESCO, Ltd., a retailer of apparel and footwear in Gwynn Oak, Md., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 23-12237) on March 31, 2023. In the petition signed by its chief restructuring officer, Stanley W. Mastil, the Debtor disclosed $10 million to $50 million in both assets and liabilities. The Debtor tapped Polsinelli PC as bankruptcy counsel and Gavin/Solmonese, LLC as restructuring advisor. Mr. Mastil of Gavin/Solmonese serves as the Debtor's chief restructuring officer. Stretto, Inc. is the Debtor's claims and noticing agent and administrative advisor. The U.S. Trustee for Region 4 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. Kelley Drye & Warren LLP, Cole Schotz P.C., and Berkeley Research Group LLC serve as bankruptcy counsel, local counsel and financial advisor, respectively. ESOURCE RESOURCES: Has $150,000 DIP Loan from Midwest Business -------------------------------------------------------------- Esource Resources, LLC asks the U.S. Bankruptcy Court for the Southern District of Indiana, Indianapolis Division, for authority to use cash collateral and obtain secured post-petition financing. The Debtor will use the DIP loan from Midwest Business Funding, Inc. to fund day-to-day operations. The DIP Loan will consist of a senior secured superpriority revolving credit facility in an amount not to exceed $150,000. Principal amounts under the DIP Loan may be advanced from time to time from the date of entry of the Interim Order through the Maturity Date on a revolving basis at the DIP Lender's sole discretion; provided however, before the date of the final hearing, the Debtor may only borrow the amount necessary to maintain business operations as set forth in the Initial Budget, not to exceed $80,000. The obligations under the DIP Loan, accrued or otherwise, will be due and payable in full on the earliest of: (i) The date that is 120-days after the entry of the Interim Order, unless renewed and extended by the DIP Lender in writing; (ii) A sale of all or substantially all of the assets of the Debtor under 11 U.S.C. Section 363 or otherwise; (iii) The date that is 35-days after entry of the Interim Order if the Final Order is not entered; (iv) The effective date of substantial consummation of any plan of reorganization that is confirmed by the Court; (v) The date of acceleration and termination of the DIP Loan upon the occurrence of an Event of Default; or (vi) The filing of a motion by the Debtor seeking dismissal of the Chapter 11 case, the actual dismissal of the Chapter 11 case, the filing of a motion by the Debtor seeking to convert the Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code, the conversion of the Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code, or the appointment of a trustee or examiner with expanded powers in the Chapter 11 case. The events that constitute an "Event of Default" include: (i) The Debtor's failure to comply with any provisions of the DIP Loan, the Interim Order, the Final Order, any other order of the Court, or the Debtor's failure to comply with requirements imposed by the United States Trustee's Office; (ii) Dismissal of the Debtor's Chapter 11 Case or the filing of a motion by the Debtor seeking dismissal; (iii) The conversion of the Debtor's Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code or the filing of a motion by the Debtor seeking such conversion; (iv) The appointment of a trustee or examiner with expanded powers in the Chapter 11 Case; and (v) The modification or reversal of the Interim Order or Final Order with respect to the DIP Loan without the consent of the DIP Lender. The Debtor had issues with operating cash flow and when that proved insufficient it turned to more volatile sources of operating cash using internet lenders. Despite the fundamentally unmanageable cash flow those credit facilities present, the Debtor has a core operating profitability that will allow it t o reorganize, and that profitability is what drives its ability to leverage cash collateral for the benefit of all of its creditors. Prior to the Commencement Date, the Debtor's liquidity needs were met primarily through the daily operation of the business of the Debtor and various financing options offered by MBF. The Debtor believes MBF is the superior properly perfected secured creditor having an interest in substantially all of its assets but further believes that additional creditors may claim an interest in cash collateral by virtue of UCC-1 financing statements on file. As adequate protection, MBF will be granted replacement liens in cash collateral and in the post-petition property of the Debtor of the same nature and to the same extend and in the same priority held in the cash collateral on the Commencement Date. A copy of the motion to use cash collateral available at https://urlcurt.com/u?l=6Zwjt5 from PacerMonitor.com. A copy of the motion to obtain credit is available at https://urlcurt.com/u?l=bQkvmP from PacerMonitor.com. About Esource Resources, LLC Esource Resources, LLC offers advisory services for optimal project, budget, and resource planning and road-mapping; software selection assistance; infrastructure refresh planning and execution; program integration; software build and testing; and training. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-02263) on May 26, 2023. In the petition signed by Eddie Rivers, Jr., president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge James M. Carr oversees the case. KC Cohen, Esq., at KC Cohen, Lawyer PC, represents the Debtor as legal counsel. FINTHRIVE SOFTWARE: $1.44B Bank Debt Trades at 16% Discount ----------------------------------------------------------- Participations in a syndicated loan under which FinThrive Software Intermediate Holdings Inc is a borrower were trading in the secondary market around 83.8 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.44 billion facility is a Term loan that is scheduled to mature on December 17, 2028. About $1.37 billion of the loan is withdrawn and outstanding. FinThrive is a provider of revenue cycle management software solutions to the healthcare sector. FKB LLC: Seeks Approval to Hire SC&H Group as Financial Advisor --------------------------------------------------------------- FKB LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to hire SC&H Group, Inc. as its financial advisor and accountant. The firm's services include: a. assisting the Debtor with administrative, data gathering, and compliance tasks associated with the chapter 11 process; b. preparing and maintaining the accounting books of the Debtor from the date of formation in the Commonwealth of Pennsylvania and bringing them current; c. preparing and maintaining reconciliation of cash accounts of the Debtor from the date of formation and bringing them current; d. preparing and maintaining thirteen (13)-week cash flow models and budget-to-actual variance reports, as necessary; e. reviewing bankruptcy Schedules of Assets and Liabilities and Statements of Financial Affairs to ensure completeness; f. preparing monthly operating reports and other reporting requirements associated with the Chapter 11 process; g. providing general administrative support, as needed; h. providing potential testimony regarding areas such as use of cash collateral or any debtor-in-possession financing, sales and plan processes, plan feasibility, and other bankruptcy concerns; and i. providing other financial advisory and accounting services or assistance as requested by the Debtor or Debtor's counsel. The firm will be compensated at these hourly rates: Managing Director /Principal $350 - $525 Senior Manager/Manager $275 - $450 Senior/Staff $125 - $275 Robert Patrick, managing f at SC&H Group, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert Patrick SC&H Group, Inc. 910 Ridgebrook Rd. Sparks, MD 21152 Telephone: (410) 403-1500 Email: rpatrick@schgroup.com About FKB LLC FKB LLC is a full-service fabrication studio that creates emotionally transformative experiences for brands, agencies, communities and developers. It is based in Philadelphia, Pa. FKB filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 23-11371) on May 10, 2023, with $1 million to $10 million in both assets and liabilities. James Barlow, manager, signed the petition. Judge Patricia M. Mayer oversees the case. Douglas G. Leney, Esq., at Archer & Greiner, P.C. is the Debtor's counsel. FORMATION GROUP: Taps Consilio as Litigation Support Consultant --------------------------------------------------------------- Formation Group Fund I, L.P. and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of California to employ Consilio, LLC. The Debtors require litigation support consulting services that include data collection, data processing, secure data hosting, general litigation support and project management. The firm will bill these hourly fees: Targeted Data Collection $300 Structured Data Collection & Analysis $300 Forensic Analysis $300 O365 & Legal Consulting $300 Report/Affidavit/Declaration $500 Expert Witness Preparation, Testimony or Court Appearance $550 The firm received a retainer in the amount of $50,000. Consilio is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Michael F. Flanagan, Esq. Consilio LLC 1828 L St. NW Suite 1070 Washington, DC 20036 Phone: +1 (202) 822-6222, ext. 812 Fax: +1 (202) 318-9184 Email: mike.flanagan@consilio.com About Formation Group Fund I Formation Group Fund I LP -- https://www.formationgroup.com/ -- is a venture capital firm in Palo Alto, Calif. Formation Group Fund I and Formation Group GP I, LLC filed petitions for Chapter 11 protection (Bankr. N.D. Calif. Case No. 22-50302 and 22-50303) on April 10, 2022 while Formation Group (Cayman) Fund I, L.P. filed its petition (Bankr. N.D. Calif. Case No. 22-50337) on April 21, 2022. In its petition, Formation Group Fund I listed $10 million to $50 million in assets and $1 million to $10 million in liabilities. Judge M. Elaine Hammond oversees the cases. The Debtors tapped Sheppard Mullin Richter & Hampton, LLP as legal counsel and Consilio, LLC as litigation support consultant. FORTREA HOLDINGS: Fitch Gives BB(EXP) LongTerm IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB(EXP)' Long-Term Issuer Default Rating (IDR) to Fortrea Holdings Inc. and a 'BB+(EXP)'/'RR2' rating to the proposed senior secured credit facility. The Rating Outlook is Stable. The 'BB(EXP)' IDR reflects Fortrea's competitive position as a global contract research organization (CRO) that offers a broad range of clinical development solutions and services to biopharmaceutical and medical device customers. Fitch expects Fortrea to implement a prudent financial policy comparable with some public peers by maintaining long-term net leverage of 2.5x-3.0x. However, the ratings contemplate gross EBITDA leverage being around or under 4.0x for the foreseeable future as Fortrea completes the separation transaction. Fortrea's strengths are offset by uncertainties around margin expansion, macroeconomic conditions and volatility in biotech funding. Fitch expects to convert the expected ratings to final ratings upon completion of Fortrea's separation from Laboratory Corporation of America (LabCorp) and the debt transactions, and receipt of final documentation. KEY RATING DRIVERS Healthy Long-Term Industry Trends: Fortrea will be a standalone company dedicated to clinical-stage contract research studies following its spinoff from LabCorp in 2H23. According to Fortrea, the company participates in the clinical development segment of the CRO industry with a total addressable market size of approximately $35 billion, and with a near-term growth rate in the 3%-5% range and a long-term growth rate in the 6%-9% range. Healthy long-term growth prospects are driven by increasing biopharmaceutical R&D spend, increased demand for longer and more complex clinical trials, and scientific innovation. However, Fitch notes that short-term growth can be volatile due to less robust funding activities for biotechnology companies. Competitive Player in a Consolidating Industry: The once-fragmented CRO industry has undergone significant consolidation such that a large portion of market share is controlled by a select group of vendors. Fortrea is meaningfully smaller (measured by revenue) compared with larger competitors such as IQVIA Holdings, Inc. and ICON plc. Despite its smaller scale and less diversified business mix, Fitch expects Fortrea to hold a top-ten market share in Clinical CRO post-spinoff. Fitch expects Fortrea's track record of operations and broad range of offerings will allow the company to remain competitive in the consolidating market. Slower Backlog Conversion and Business Awards: Fitch expects flat to low-single digit revenue growth in 2023 and forecasts mid- to high-single digit revenue growth thereafter, assuming improvement in macroeconomic conditions and operational optimization post-spinoff. Fitch notes that 1Q23 backlog conversion rate and net book-to-bill ratio are lower than 2022 levels. Slower backlog conversion rate was driven by investigator site constraints due to staffing challenges, increased time to fill patient recruitment in certain therapeutic areas and geographic redistributions. Net new orders were lower than expected as some customers are waiting for the completion of the spinoff to award new businesses. Margin Improvement in Focus: Fitch expects EBITDA margin to compress in 2023 by about 160 bps from 13.3% in 2022 before expanding to the mid-teens by 2026. The margin compression in 2023 is primarily attributable to credit loss provisions on certain biotech receivables and limited operating leverage due to marginal revenue growth. The margin expansions post 2023 are expected to be driven by operating leverage on higher revenue base and improved operating efficiencies. Fortrea's abilities to realize operational improvements and expand margins to levels similar to those of its public peers are important in achieving its stated financial policy of maintaining a net leverage target of 2.5x-3.0x in the medium term. Prioritizing Organic Investments: Fitch forecasts EBITDA leverage above 4.5x by YE 2023 and expects Fortrea to deleverage to just below 4.0x by YE 2024 through EBITDA growth and modest voluntary debt repayments. The 'BB(EXP)' IDR takes into account that Fortrea will maintain EBITDA leverage below 4.0x over the long term. Near- to medium-term capital deployment priorities are expected to be organic investments and opportunistic tuck-ins in selective verticals. Excess cashflows are assumed to be deployed toward voluntary debt repayments, with no shareholder returns over the forecast period. DERIVATION SUMMARY The 'BB(EXP)' IDR reflects Fortrea's competitive position as a CRO that offers a broad range of clinical development solutions and services to biopharmaceutical and medical device customers. Fitch expects Fortrea to implement a prudent financial policy comparable with some public peers by maintaining net leverage of 2.5x-3.0x. However, Fitch expects gross EBITDA leverage at or under 4.0x for the foreseeable future. Fortrea's credit profile is further supported by solid CFO relative to capital and debt service needs. However, these strengths are offset by uncertainties around margin expansion, as well as near- to medium-term macroeconomic conditions and biotech funding volatilities. The majority of Fortrea's public peers benefit from larger scale, more diversified business mix and higher profitability levels. A CRO peer rated by Fitch is Charles River Laboratories International (BBB-/Stable), which participates in the pre-clinical CRO space (as opposed to Fortrea in the clinical CRO space) and maintains a strong competitive position with a track-record of leverage maintenance. KEY ASSUMPTIONS - For 2023, revenue in the $3.0 billion-$3.1 billion range and EBITDA margin in the 11%-12% range; - Post 2023, organic revenue growth in the mid to high single-digit range and EBITDA margins gradually increase to the mid-teens; - Effective interest rates in the range of 6.0%-7.0% over the forecast period, moving with SOFR; - Capex in the 2.0%-2.5% of revenue range over the forecast period; - Positive FCF of $60 million-$70 million per year in 2023-2024 that gradually increases to $150 million- $200 million per year thereafter; - Voluntary debt repayments of $50 million per year and total acquisitions of $400 million over the forecast period; - No allocation of FCF toward shareholder-friendly actions. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Operational stability that leads to EBITDA margin expansion to levels similar to those of Fortrea's public peers; - Capital deployment strategies that lead to Fitch's expectation of EBITDA leverage sustaining below 3.5x and (CFO-capex)/debt sustaining above 10%; - Increased scale and diversification that strengthen Fortrea's competitive position among global CROs. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Operational instability that leads to EBITDA margins sustaining below the low-teens; - Capital deployment strategies that lead to Fitch's expectation of EBITDA leverage sustaining above 4.0x and (CFO-capex)/debt sustaining below 5.0%. LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: Fortrea has sufficient liquidity given the expectation of an undrawn $450 million revolving credit facility, $120 million of cash on hand and positive FCF during the forecast despite one-time stand-up costs and duplicative costs while operating under the transition services agreement with LabCorp. Fortrea will have no meaningful debt maturities beyond term loan amortization, and Fitch assumes as FCF expands it will be directed toward organic investments, tuck-in acquisitions and debt repayments. Fitch has not assumed any shareholder-friendly actions over the rating horizon. Debt Maturities: Fitch expects Fortrea's debt maturities to range between five to seven years. Term loan amortization is assumed to be approximately $31 million per year. Fitch assumes that the effective interest rate will be in the 6.0%-7.0% range. ISSUER PROFILE Fortrea Holdings Inc. is a CRO that provides clinical development and commercialization services and software applications supporting clinical trials to the biopharmaceutical and medical device industries. It has more than 19,000 staff worldwide, and supports clinical trial activities in more than 90 countries. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery ----------- ------ -------- Fortrea Holdings Inc. LT IDR BB(EXP) Expected Rating senior secured LT BB+(EXP) Expected Rating RR2 FORTREA HOLDINGS: Moody's Assigns First Time 'Ba3' CFR ------------------------------------------------------ Moody's Investors Service assigned a Ba3 Corporate Family Rating and Ba3-PD Probability of Default Rating to Fortrea Holdings Inc. At the same time, Moody's assigned a Ba3 rating to the proposed new $500 million term loan A, new $570 million term loan B and new $450 million revolving credit facility. Moody's has also assigned an SGL-2 Speculative Grade Liquidity (SGL) rating to Fortrea Holdings Inc. The outlook assigned is stable. In connection with Fortrea's spinoff from Laboratory Corporation of America ("Labcorp"), Fortrea plans to raise new secured debt, consisting of a mix of term loans and other secured debt. Fortrea will use the $1.6 billion proceeds to fund a cash distribution to Labcorp and to pay related fees and expenses. Fortrea's beginning balance sheet is expected to include $120 million of cash. Assignments: Issuer: Fortrea Holdings Inc Corporate Family Rating, Assigned Ba3 Probability of Default Rating, Assigned Ba3-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Senior Secured Term Loan A, Assigned Ba3 Senior Secured Term Loan B, Assigned Ba3 Senior Secured Revolving Credit Facility, Assigned Ba3 Outlook Actions: Issuer: Fortrea Holdings Inc Outlook, Assigned is Stable ESG factors are material to the ratings assignment. Social risk considerations relate to pharmaceutical drug pricing and industry consolidation which could result in customer additional pricing pressure. Governance risk considerations include execution risk as Fortrea operates for the first time as a standalone entity and the company's appetite for leverage and debt-funded acquisitions. Mitigating factors include Fortrea's public net leverage target of 2.5-3.0x over the medium term. RATINGS RATIONALE The Ba3 rating reflects the company's sizeable global scale, diversification, and strong market position in the Contract Research Organization ("CRO") business which will benefit from growing outsourcing from large pharmaceutical companies. The rating also reflects Fortrea's good margins, with opportunities for improvement from cost efficiencies, moderate free cash flow and good liquidity. The Ba3 rating also considers execution risks including Fortrea fully separating from Labcorp and establishing a credible track record. Moody's also believes the company's growth prospects are constrained by strong competition and an uncertain funding environment from biotech companies. Fortrea's credit profile also encompasses the risks inherent in the pharmaceutical services industry, including project delays and cancellations. Moody's expects that Fortrea will reduce its currently elevated starting leverage (4.3x) to below 4.0x by year-end 2025 reflecting earnings growth and modest outlays for business development. The outlook is stable and reflects Moody's expectation for a successful transition and stable operating performance with debt/EBITDA sustained below 4.5x. The Speculative Grade Liquidity rating of SGL-2 reflects Moody's expectation that Fortrea liquidity will remain good over the next 12 to 18 months. Liquidity is supported by $120 million of cash on hand at the close of the proposed spin off, modest positive free cash flow and no debt maturities until 2028. Liquidity will be further supported by a $450 million revolving credit facility. Moody's expect this facility to be undrawn at close. As proposed, the new credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. The credit facility contains incremental Term Loan B debt capacity up to the greater of $410 million and 100.0% of consolidated EBITDA, plus unlimited amounts so long as the first lien net leverage ratio does not exceed 3.90x (if pari passu secured). No portion of the incremental may be incurred with an earlier maturity than the initial term loans. The credit facilities also include provisions allowing the transfer of assets to unrestricted subsidiaries, subject to carve-out capacities, subject to "blocker" provisions which prohibit (i) any investment in, restricted payment to or the disposition of material intellectual property (material to the operation of the business, taken as a whole) to, any unrestricted subsidiary, (ii) the designation of any restricted subsidiary that holds exclusive licenses to, or owns, any material intellectual property as an unrestricted subsidiary; and (iii) ownership of such material intellectual property by an unrestricted subsidiary. Only wholly owned subsidiaries are required to act as subsidiary guarantors, raising the risk that guarantees may be released following a partial change in ownership, subject to protective provisions which only permit guarantee releases if such transfer is for a bona fide business purpose with a non-affiliate, and subject to investment capacity in an amount equal to the fair market value of the equity disposed. The credit agreement provides some limitations on up-tiering transactions, including the requirement that each lender directly and adversely affected must consent to a waiver or an amendment that (x) subordinates, or has the effect of subordinating the obligations under the loan documents to any other indebtedness or other obligation or (y) subordinates, or has the effect of subordinating, the liens securing the obligations under the loan documents to liens securing any other indebtedness or other obligation. The proposed terms and the final terms of the credit agreement may be materially different. The Ba3 instrument ratings, which are in line with the Corporate Family Rating, reflect the presence of only one class of debt within the capital structure. ESG CONSIDERATIONS Fortrea's ESG credit impact score is CIS-3 indicating that ESG considerations have a limited impact on the credit rating with potential for greater negative impact over time. Social risk considerations relate to pharmaceutical drug pricing and competitive pressure stemming from industry consolidation. Governance risk considerations include execution risk as Fortrea operates for the first time as a standalone entity and the company's appetite for leverage and debt-funded acquisitions. Mitigating factors include Fortrea's public net leverage target of 2.5-3.0x over the medium term, absence of planned dividend payment and plan to use excess cash flow to pay down debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's does not expect a rating upgrade in the near-term as the company transitions into a standalone entity over the next 12-24 months. Thereafter, ratings could be upgraded if the company demonstrates consistent profitable growth with strong free cash flow. In addition, ratings could be upgraded if Fortrea manages its internal strategic initiatives and external growth opportunities (i.e., acquisitions), under conservative financial policies. Quantitatively, debt/EBITDA sustained below 3.5 times on Moody's adjusted basis would support an upgrade. Moody's could downgrade the ratings if Fortrea is unable to successfully manage the transition to a standalone entity and/or faces operating disruptions related to the separation from Labcorp or if financial policies become more aggressive. In addition, a sustained and material decline in operating margins and cash flow could support a downgrade. Quantitatively, debt/EBITDA sustained above 4.5 times on Moody's adjusted basis for an extended period could result in a downgrade. Fortrea Holdings Inc - headquartered in Durham, NC - is a leading global contract research organization ("CRO") providing comprehensive phase I through IV biopharmaceutical product and medical device services, patient access solutions and other enabling services to pharmaceutical, biotechnology and medical device organizations. Fortrea Holdings Inc is being spun off from Labcorp and will become a public company. In 2022, the company had pro forma revenue of $3.1 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. FORTREA HOLDINGS: S&P Assigned 'BB' Rating, Outlook Stable ---------------------------------------------------------- S&P Global Ratings assigned its 'BB' issuer credit rating to Fortrea Holdings Inc. S&P is also assigning its 'BB' issue-level and '3' recovery ratings to the company's senior secured debt. S&P based its ratings on Fortrea on its assessment of its stand-alone credit profile, without any assumption of credit support from LabCorp. The stable outlook reflects Fortrea's position as a top-tier contract research organization (CRO) with positive business momentum and our expectation that leverage will be between 3x and 4x over the next two years and that cash flow will improve materially by 2025 as elevated capital expenditures (capex) wind down. Laboratory Corp. of America Holdings is planning to spin off its clinical development business into a separate independent company, Fortrea Holdings Inc. Fortrea plans to raise about $1.6 billion in debt and distribute the proceeds to LabCorp, with about $120 million in cash remaining on Fortrea's balance sheet for general corporate purposes. S&P said, "Our ratings reflect the company's position as a leading global CRO. Through its history with LabCorp and Covance, Fortrea's CRO business is one of the oldest and most respected in the industry. We view this as a generally stable and predictable industry with moderate barriers to entry but a high level of competition among market participants. We believe the industry has long-term growth prospects as pharmaceutical and biotechnology companies continue increasingly depend on outsourced services and as trials become more complex. Therapeutic expertise and the ability to conduct global trials are important factors in the increasingly complex clinical trial environment. We believe Fortrea's global presence and strength in oncology, a growing therapeutic area, positions the company well for growth. Fortrea is a clear industry leader across nine primary indications within oncology, but it is also a source of therapeutic concentration because it generated about 46% of its 2022 revenue. Customer concentration is also significant, with its top ten customers representing about 45% of 2022 revenue, but broadly in line with peers and with no single trial making up a material portion of revenue. "Our ratings also reflect Fortrea's narrow focus on Phase I-IV clinical trials, which limits profitability.Fortrea was among the most labor-intensive businesses within LabCorp and LabCorp Drug Development, and its profitability lagged their averages as well. Its separation from LabCorp and transition to a stand-alone company present some risks to our base case assumptions, but we believe it also provides the business an opportunity to control investment, improve efficiency, and adapt more quickly to changing market dynamics. We expect the experienced management team will take advantage of this flexibility to improve profitability annually over the next several years. However, given the company's narrow focus on Phase I-IV clinical trials, we expect profitability will remain on the low end of major CRO peers, since most peers offer additional services with more attractive margin profiles. "We expect over the next two to three years, the company will prioritize operational efficiency initiatives and organic growth and that leverage will remain between 3x and 4x.The company has committed to a net leverage target of 2.5x-3x over the medium term. We expect leverage of about 3.8x for 2023, declining to about 3.6x in 2024 and 3.1x in 2025. Given its transition to a stand-alone company and elevated capital spending over the next two years, which we expect will result in negative free cash flow, we do not expect the company to be acquisitive over the near term. "The stable outlook reflects Fortrea's position as a top-tier CRO with positive business momentum, and our expectation that leverage will be between 3x and 4x over the next two years and that cash flow will improve materially by 2025 as elevated capex winds down. "We could lower the rating on Fortrea if we expected adjusted debt to EBITDA to remain above 4x on a sustained basis. "While unlikely within the next 12 months, we could raise the rating if we expected adjusted debt to EBITDA to remain below 3x over the long term and the company to generate annual free cash flow of at least 10% of its debt." ESG credit indicators:E-2, S-2, G-2 GARCIA GRAIN: Access to Cash Collateral Granted on Interim Basis ---------------------------------------------------------------- Judge Eduardo V. Rodriguez of the U.S. Bankruptcy Court for the Southern District of Texas, McAllen Division, authorized Garcia Grain Trading Corp.'s use of cash collateral on an interim basis for the next 30 days in accordance with the budget introduced at the hearing on May 11, 2023. The cash collateral arises from post-petition payments received by the Debtor from its customers deposited in its checking accounts. The Debtor will continue to receive payments on its outstanding prepetition accounts receivable and to deposit funds received into the Debtors' checking DIP account. These funds represent the asserted cash collateral or property of StoneX Commodity Solutions LLC f/k/a FCStone Merchant Services, LLC, Falcon Bank, Grainchain, Inc., and Vantage Bank Texas. As adequate protection of StoneX, Falcon, Grainchain and Vantage interests in cash collateral or property being used these secured creditors are granted continuing replacement like kind liens or ownership positions in all of the Debtor's inventory and accounts receivable presently owned by or securing the indebtedness owing to StoneX, Falcon, Grainchain, and Vantage. The Debtor is granted permission to transfer from the Grain Proceeds Escrow account the sum of $39,492 to its DIP General Operating Account to reimburse freight expenditures disbursed by the Debtor to cover the freight charges incurred in connection with the movement of milo sold to ADM during the month of May and June 2023 and, such funds may be used by the Debtor to cover the expenses reflected on the budget. In accord with the Agreed Order Granting Emergency Joint Motion to Sell Grain at the Progresso, Texas Facility, any and all proceeds from the sale of Grain, less reasonable and necessary freight charges to transport the Grain to the purchasers, are to be deposited, and remain in, the DIP Grain Proceeds Escrow Account. A hearing on continued use of cash collateral is set for June 9, 2023, at 9:00 a.m. A copy of the Budget is available at https://tinyurl.com/yc7p9xj8 from PacerMonitor.com free of charge. About Garcia Grain Trading Corp. Garcia Grain Trading Corp.'s line of business includes buying or marketing grain, dry beans, soybeans, and inedible beans. Garcia Grain sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-70028) on February 17, 2023. In the petition signed by Octavio Garcia, its CEO and president, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Eduardo V. Rodriguez oversees the case. David R. Langston, Esq., at Mullin Hoard & Brown, LLP, represents the Debtor as legal counsel. GHOST TRAIN: $200,000 DIP Loan from PCI GT Wins Final OK -------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, authorized Ghost Train Brewing Company, Inc. to use the cash collateral of ServiFirst Bank and obtain postpetition financing from PCI GT Brewing LLC, on a final basis. The postpetition financing is a revolving credit facility whereby the Lender will lend amounts as the Debtor may request and which the Lender may accept in its sole and absolute discretion; provided, however, the total principal amount outstanding at any time will not exceed $175,000 on an interim basis and $200,000 on a final basis. The DIP Loan will terminate on the earliest of: (a) May 29, 2023, unless a final order approving the Motion -- in form and substance acceptable to the Lender in its sole and absolute discretion -- has been entered by such date, in which event the foregoing date will be extended to July 3, 2023, (b) any non-compliance by the Debtor with any of the terms or provisions of the Interim Order, (c) the termination of the Lender's commitment to make advances upon the occurrence of an Event of Default under the DIP Loan Documents, (d) the sale of all or substantially all of the assets of the Debtor or liquidation of Debtor, (e) the termination of the Debtor's APA with Lender, (f) the Debtor's failure to comply with any provision or deadline in the Plan Scheduling Order, or (g) the entry of an order modifying, reversing, revoking, staying, rescinding, vacating, or amending the Interim Order without the express prior written consent of the Lender in its sole discretion. The events that constitute an "Event of Default" include: 1. The Debtor's payment default; 2. The Debtor's representations or warranties prove to be untrue or inaccurate; 3. The Debtor's failure to perform covenants in the DIP Loan Agreement; 4. The Debtor seeks to amend, supplement, stay, vacate, or modify Financing Order; 5. The Debtor contests to the Lender's Security Interest; and 6. The Debtor objects to the Lender's claim. The Debtor has an immediate and critical need to obtain funds and use cash collateral in order to preserve and maintain its business operations and assets as a going concern. ServisFirst is provided with the following forms of adequate protection pursuant to sections solely to the extent of any diminution in value of its interests in cash collateral resulting from, and as an inducement to consent to (a) the Debtor's use of cash collateral, (b) the imposition of the automatic stay, and (c) to the extent applicable, the subordination to the Carve-Out: 1. Replacement lien in and on the Debtor's assets to the same extent and priority as ServisFirst's liens existing as of the Petition Date; provided, for sake of clarity, as set forth, (x) the DIP Security Interests granted to the Lender will be senior and prior to the ServisFirst Replacement Liens with respect to all "Accounts" and other Collateral that arise from or relate to the Debtor's business operations on or after the Petition Date; and (y) ServisFirst will have no lien on claims or causes of action under 11 U.S.C. Sections 544, 547, 548, 549, 550, 553, or the proceeds thereof. 2. ServisFirst is granted an administrative claim equal to the amount of accounts receivable paid to the Debtor that arise from services provided prior to the Petition Date it is determined that the Debtor received and failed to deliver to ServisFirst post-petition, less a credit for any post-petition account proceeds actually delivered to ServisFirst by the Debtor, that will have priority (except with respect to the Carve-Out and DIP Super-Priority Claim) under sections 11 U.S.C. 503(b) and 507(b) over all unsecured claims against the Debtor and its estates, now existing Bankruptcy Code over an unsecured claims against the Debtor and its estates; provided, the DIP Super-Priority Claim will be senior and prior to the ServisFirst Administrative Claim for all purposes. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=SyR3F3 from PacerMonitor.com. The Debtor projects total operating outflows, on a weekly basis, as follows: $135,648 for the week ending June 3, 2023; $12,675 for the week ending June 10, 2023; $200,890 for the week ending June 17, 2023; and $28,884 for the week ending June 24, 2023. About Ghost Train Brewing Company, Inc. Ghost Train Brewing Company, Inc. is engaged in the business of operating a brewery and taproom in Birmingham, Alabama with distribution across the states of Alabama, Mississippi and Florida. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-01225) on May 8, 2023. In the petition signed by David Taylor DeBoer, president, the Debtor disclosed $1,982,061 in assets and $8,398,094 in liabilities. Judge Tamara O. Mitchell oversees the case. C. Taylor Crockett, Esq., at C. Taylor Crockett, Esq., represents the Debtor as legal counsel. GK 746 EAST: Case Summary & Six Unsecured Creditors --------------------------------------------------- Debtor: GK 746 East 214 LLC 746 East 214th Street Bronx, NY 10467 Business Description: The Debtor is primarily engaged in acting as lessors of buildings used as residences or dwellings. Chapter 11 Petition Date: June 1, 2023 Court: United States Bankruptcy Court Southern District of New York Case No.: 23-10890 Debtor's Counsel: Lawrence Morrison, Esq. MORRISION TENNENBAUM PLLC 87 Walker Street, Fl 2 New York, NY 10013 Email: lmorrison@m-t-law.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert K. Dakis as authorized signatory. A copy of the Debtor's list of six unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OFFYEKQ/GK_746_East_214_LLC__nysbke-23-10890__0001.1.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/JZ3TVLQ/GK_746_East_214_LLC__nysbke-23-10890__0001.0.pdf?mcid=tGE4TAMA GK 770 EAST: Case Summary & Four Unsecured Creditors ---------------------------------------------------- Debtor: GK 770 East 214th LLC 770 East 214th Street Bronx, NY 10467 Business Description: The Debtor is primarily engaged in acting as lessors of buildings used as residences or dwellings. Chapter 11 Petition Date: June 1, 2023 Court: United States Bankruptcy Court Southern District of New York Case No.: 23-10891 Debtor's Counsel: Lawrence Morrision, Esq. MORRISON TENNENBAUM PLLC 87 Walker Street, FL 2 New York, NY 10013 Email: rd@churchillre.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert K. Dakis as authorized signatory. A copy of the Debtor's list of four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SWFQO6Y/GK_770_East_214th_LLC__nysbke-23-10891__0001.1.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SLGZUJI/GK_770_East_214th_LLC__nysbke-23-10891__0001.0.pdf?mcid=tGE4TAMA GLOBAL NET: Fitch Puts 'BB+' IDR on Watch Negative -------------------------------------------------- Fitch Ratings has placed the ratings of Global Net Lease (GNL) and its operating partnership, Global Net Lease Operating Partnership, L.P., including its 'BB+' Issuer Default Rating (IDR) and underlying issuances outstanding, on Rating Watch Negative. The rating action follows GNL's announced agreement to merge with The Necessity Retail REIT Inc. (RTL), under which GNL will acquire RTL in an all-stock transaction. The combined entity is expected to have a combined real estate value of $9.6 billion at closing, with Global Net Lease as the surviving entity. The Negative Rating Watch indicates that there is heightened probability that GNL's ratings stay the same or are downgraded upon completion of the merger with the more highly-levered RTL. The Rating Watch reflects that subsequent rating actions are contingent upon the transaction closing as well using the period to assess whether and when the combined entity will achieve metrics consistent with GNL's existing 'BB+' IDR. KEY RATING DRIVERS The proposed merger does afford some credit positives including lower expenses and higher cashflows post internalization of management, reducing single tenant office exposure on a relative basis, and mitigating some governance elements adverse to the REIT's credit profile. However, the internalization of management will not ameliorate GNL's relatively more challenged access to capital, in Fitch's view. Fitch expects the transaction to close by Sept. 30, 2023. However, resolution of the Rating Watch may take longer than six months should the merger take longer to close than expected. GNL's current 'BB+' ratings reflect its standalone credit profile, of which the following were key determinants as assessed during Fitch rating committee on Jan. 9, 2023: Elevated Leverage to Persist: Fitch expects GNL's REIT leverage (net debt before preferred stock to recurring operating EBITDA) to be in the low-8x to high-7x range through the forecast period depending on the amount of acquisitions and funding mix, exceeding or providing limited headroom relative to the negative rating sensitivity at the 'BB+' level. Although there was improvement in 2022 after elevated leverage in 2021 and 2020 (8.1x and 8.7x, respectively) due to a number of larger end-of-period acquisitions, GNL will likely be challenged in utilizing certain leverage-reducing opportunities in 2023, namely equity issuance given the large and persistent NAV discount (34% as of Jan. 4, 2023). Fitch's ratings case now assumes no equity issuance in 2023 and $125 million in 2024, compared with the previous expectation of $250 million in both of those years. Tenant Quality Balances Concentration: Tenant concentration risk is offset by strong tenant credit quality and diversification. GNL's top 10 tenants comprised 33% of the company's annualized straight-line rent (SLR) at Sept. 30, 2022, which is comparable with net lease REIT peers and appropriate for the rating. The McLaren Group is the company's largest tenant at 5% of annualized SLR, followed by FedEx (4%) and Whirlpool (4%). GNL has 141 tenants that operate in 51 industries, of which 34% have an actual investment-grade rating (rated by Fitch or other NRSROs). The company estimates an additional 27% of tenants at an implied investment-grade rating, based on parent guarantees or implied by financial metrics. This combined 61% exposure has steadily declined from 78% at 4Q18; however, the amount has improved from 55% at 3Q21. Of note, the decline did not have a major impact on rent collections during the pandemic. Granular Portfolio Mitigates Single Tenant Risk: GNL's portfolio strategy focus on single tenant assets introduces binary occupancy risk; each building is either 100% leased or 0% leased. This risk generally results in less institutional competition for the asset type, such that other participants in the space tend to be less capitalized or resourceful as traditional institutional buyers, which can create enhanced pricing and return potential. GNL mitigates single tenant risk through portfolio diversification, in contrast to smaller, less-capitalized owners with fewer assets. As of Dec. 31, 2021, the company only had one property (the McLaren property located in the United Kingdom) whose annualized rental income represented more than 5% of total portfolio annualized SLR. Long-Term Leases: GNL's weighted average lease term of 8.1 years is lower than the net lease peer average of approximately 10 years, but high compared with the broader REIT peer group, including REITs focusing on office and industrial. The company's lease expiration schedule is well balanced, with some lease maturity concentration in 2024 and 2025 at 12% and 7% of annualized SLR, respectively. Fitch also views intermediate term risk to NOI is elevated given exposure to single-tenant office properties and meaningfully decreased levels of office utilization by tenants pursuant to the pandemic. Externally Managed: Fitch views GNL's external management structure as a modest credit negative that could result in persistent equity valuation discount that challenges executing its acquisition-led growth strategy within its financial policy targets. Institutional investors generally favor internally managed REIT structures given dedicated management and fewer related party transactions and potential interest conflicts. GNL is managed by AR Global Investments, LLC, a $12 billion global real estate asset manager. Positively, GNL's management agreement incentivizes AFFO-per-share growth and equity issuance, is subject to annual caps and declines based on AUM, and includes a stock-based component. DERIVATION SUMMARY Fitch expects GNL to maintain a globally diversified, acquisition-led portfolio growth strategy, with an emphasis on growing its industrial/distribution portfolio in the U.S. and Europe. However, GNL shares trade at a wide (approximately 34%) discount to consensus NAV estimates, which could temper equity issuance to fund acquisitions in the short to medium term. GNL's portfolio is diversified by geography and property type, though it is smaller than its triple-net U.S. equity REIT peers. As of Sept. 30, 2022, the company owned 310 properties consisting of 39.5 million square feet across the U.S. and Canada (66% of annualized rental income on a straight-line basis) and Europe (34%). GNL's portfolio has some property type diversification, with industrial/distribution, office and retail comprising 56%, 41% and 3% of annualized SLR, respectively, at Sept. 30, 2022. GNL's strong portfolio quality and rental income risk profile are balanced by its less-established capital access, weaker credit metrics, and external management structure. The company's credit metrics, including leverage expected to sustain near or above 8x and net UA/UD sub-2x are weaker than 'BBB' category peers, including LXP Industrial Trust (BBB/Stable) and STAG Industrial, Inc. (BBB/Stable). GNL's credit metrics are expected to be similar to peer The Necessity Retail REIT, Inc. (BB/Rating Watch Evolving), a triple-net peer (also externally managed by AR Global) with a focus in retail real estate. Fitch rates the IDRs of the parent REIT and subsidiary operating partnership on a consolidated basis, using the weak parent/strong subsidiary approach and open access and control factors, based on the entities operating as a single enterprise with strong legal and operational ties. Fitch applies 50% equity credit to the company's perpetual preferred securities given the cumulative nature of coupon deferral. The instruments are subordinated to debt, lack material covenants and the terms of the change of control do not negate the equity credit judgement. Certain metrics calculate leverage including preferred stock. KEY ASSUMPTIONS - Low single-digit SSNOI growth through the forecast period; - Acquisitions of $33.3 million in 2022, $125 million in 2023, $250 million in 2024 and $500 million in 2025. Dispositions are in the range of $50 million-$75 million through the forecast period; - Equity issuances will be minimal in 2022 and 2023, and increase to $125 million and $250 million in 2024 and 2025, respectively. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Evidence of material improvements in EBITDA and reduction of debt such that Fitch expects leverage below 8.0x on a sustained basis; - Meaningful improvements in governance such that Fitch expects capital access to be commensurate with entities rated 'BB+' or higher; - Improvements in the combined entity's profile upon close, including asset and geographic diversification in line with those announced. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Lack of material improvements in EBITDA and reduction of debt such that Fitch expects the combined entity's leverage above 8.0x on a sustained basis; - Lack of meaningful improvements in governance such that Fitch expects capital access to remain constrained for the combined entity at the 'BB+' rating level; - Delays in completing the merger, possibly as a result of litigation or shareholder disapproval, or other reason. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch estimates GNL's liquidity coverage through fiscal YE 2024 at roughly 0.4x (all sources to all uses) and 1.6x (assuming 80% of secured debt is refinanced). As of Sept. 30, 2022, the company had $128.0 million of readily available cash and $78.9 million available under the revolving credit facility at its current borrowing base. GNL has a $1.45 billion senior unsecured revolving credit facility, the availability of borrowings under which is based on the value of a pool of eligible unencumbered real estate assets and compliance with various ratios related to those assets. The credit facility also includes an uncommitted accordion feature that gives GNL the option to increase commitments by up to an additional $500.0 million as either an addition to revolving commitments or as a term loan. This accordion feature is subject to obtaining commitments from new lenders or additional commitments from participating lenders and certain customary conditions. Fitch believes the non-recourse mortgages generate sufficient NOI to support the 80% refinancing scenario. Should refinancing of the mortgages prove challenging, Fitch expects that cross-default on the recourse debt would be avoided through a timely financing via GNL's revolving credit facility with an addition of unencumbered properties to the RCF borrowing base, their non-recourse status notwithstanding. The company has established and used at-the-market (ATM) issuance programs for common and preferred stock, which Fitch views favorably. However, GNL shares trade at a wide discount to NAV, which could temper equity issuance to fund acquisitions. Fitch defines liquidity coverage as sources of liquidity divided by uses of liquidity. Sources include unrestricted cash, availability under unsecured revolving credit facilities, and retained cash flow from operating activities after dividends. Uses include pro rata debt maturities, expected recurring capex, and forecast (re)development costs. As of Sept. 30, 2022, GNL is under various cash sweep conditions in regards to outstanding mortgages. Weaker Contingent Liquidity: Fitch estimates unencumbered asset coverage of net unsecured debt (UA/UD) was at 1.7x (at a 9% stressed cap rate), which is below the common 2.0x threshold for investment-grade U.S. equity REITs. Positively, the company's unencumbered pool is more heavily concentrated in the strong performing industrial property sector. Liquidity has also been modestly constrained by cash sweeps and reductions of revolver capacity by letter of credit provided to cure the cash sweep events. ISSUER PROFILE Global Net Lease is a publicly traded REIT that owns, acquires and manages a diversified global portfolio of industrial/distribution, office and retail properties. It focuses on sale-leaseback transactions involving single tenant, mission-critical, income-producing, net-leased assets across the U.S. and Europe. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Global Net Lease, Inc. LT IDR BB+ Rating Watch On BB+ senior unsecured LT BB+ Rating Watch On RR4 BB+ preferred LT BB- Rating Watch On RR6 BB- Global Net Lease Operating Partnership, L.P. LT IDR BB+ Rating Watch On BB+ senior unsecured LT BB+ Rating Watch On RR4 BB+ GLOBAL PREMIER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Global Premier Regency Palms Palmdale, LP 1900 Main Street, Suite 315 Irvine, CA 92614 Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Central District of California Case No.: 23-13426 Judge: Hon. Barry Russell Debtor's Counsel: Garrick A. Hollander, Esq. WINTHROP GOLUBOW HOLLANDER, LLP 301 Dove Street, Suite 500 Newport Beach, CA 92660 Tel: 949-720-4100 Email: ghollander@wghlawyers.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Christine Hanna as managing member of the General Partner. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/75AGWQA/Global_Premier_Regency_Palms_Palmdale__cacbke-23-13426__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Antelope Valley Air Quality Renewal Permit $531 Accounts Payable 43301 Division Street, ste 206 Lancaster, CA 93535 2. ARC Document Trade $669 Solutions, LLC Aileen Wilson 345 Clinton Street Costa Mesa, CA 92626 3. Ecotech Office Solutions Office Supplies $622 Accounts Payable 7521 Coldwater Canyon Avenue North Hollywood, CA 91605 4. Frame It Trade-Sub- $20,472 Accounts Payable Contractor 1420 North Daly Street Anaheim, CA 92806 Tel: 714-771-6941 5. GCW Consulting, LLC Consulting $15,000 Gary White Services 4206 Great Plains Drive NE Salem, OR 97305 6. High Desert Offsite and $252,615 Contractors, Inc Onsite Conrete Dave Bradley P.O. Box 6890 Lancaster, CA 93539 Tel: 661-810-0588 7. Isco Machinery Equipment $84,966 Accounts Payable Rental 4796 West Sierra Hwy Acton, CA 93510 Tel: 661-269-1477 8. JTC USA Holdings, Inc. EB5 Funds $6,067 Accounts Payable Administrator 99 Almaden Boulevard, ste 875 San Jose, CA 95113 9. Legacy Global Security $54,481 Private Security, Inc Emile Younan 8520 Woodley Ave North Hills, CA 91343 Tel: 818-891-6949 10. OPC Services Consulting $105 Kelly Dewitt Services 5000 Airport Plaza Drive, ste 250 Long Beach, CA 90815 11. Palmdale Recycled Utility $971 Water Authority Accounts Payable 2029 E Avenue Q Palmdale, CA 93550 12. Platinum Pro Trade-Sub- $786 Portables, Inc Contractor Accounts Payable 15559 Sierra Highway Unit 4 Santa Clarita 91390 13. RCB Equities #7, LLC Mezzanine Loan $2,866,237 Brian Dror 5862 W. 3rd Street Los Angeles, CA 90036 14. Red Pen Interior Design $90,825 Procurement, LLC Glen Parris 400 Glover Street SE Marietta, GA 30060 Tel: 470-744-0192 15. Salem Engineering Trade-Sub- $6,205 Group, Inc. Contractor Sammy Salem 4729 W. Jacquelyn Avenue Fresno, CA 93722 16. Smart Accounting and Tax Tax Return $800 Awtar Burmy 38930 Blacow Road, Ste C Fremont, CA 94536 17. Southern California Edison Utilities $79,915 Accounts Payable P.O. Box 300 Rosemead, CA 91772 Tel: 800-990-7788 18. The Gas Company Utility $254 Accounts Payable P.O. Box C Monterey Park, CA 91756 19. Urban Community Note $16,388 Builders, LLC Maher Nawar 1900 Main Street, Suite 315 Irvine, CA 92614 20. Urban Community General $1,142,834 Builders, LLC Contractor Maher Nawar 1900 Main Street, Suite 315 Irvine, CA 92614 GOLDEN ENTERTAINMENT: S&P Upgrades ICR to 'BB-' on Refinancing -------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Nevada-based gaming operator Golden Entertainment Inc. to 'BB-' from 'B+'. S&P also raised its issue-level rating on the senior secured term loan due 2024 to 'BB' from 'BB-' and its issue-level rating on the senior unsecured notes to 'B' from 'B-'. S&P removed the ratings from CreditWatch, where S&P placed them with positive implications on March 20, 2023. The stable outlook reflects S&P's expectation that Golden will maintain leverage below 4x incorporating potential operating volatility given its smaller EBITDA base and potential acquisitions and development spending. The refinancing transaction addressed Golden's debt maturing next year. Furthermore, the company's stated intent is to use most of the proceeds from its $260 million Rocky Gap sale, and possibly its distributed gaming sale later this year, to further reduce its debt. Golden expects to receive approximately $620 million of gross proceeds from these two asset sales, which will allow for significant debt reduction. S&P expects the company will use most of the net proceeds to repay debt. Golden is selling these businesses at a roughly 9x multiple of their 2022 EBITDA. This follows the company's recent track record of reducing debt mostly using free cash flow. Since the second quarter of 2021, it repaid $197 million of its 2024 term loan and repurchased $40 million of senior unsecured notes due 2026 on the open market. S&P said, "Golden has received approval from the Maryland Lottery Commission for the sale of the Rocky Gap operations to Century Casinos Inc. and is waiting for regulatory approval of the VICI Properties L.P. lease, which we expect it will receive in the very near term. We anticipate that Rocky Gap will receive full regulatory approval and Golden will complete the sale shortly thereafter. The company's S&P Global Ratings-adjusted leverage will be about 3x pro forma for the debt reduction using the Rocky Gap proceeds. The distributed gaming sale will likely close at the end of the year. We anticipate it will use the net proceeds to repay the senior unsecured notes in early 2024 when the call premium steps down to par. Furthermore, Golden has a publicly stated financial policy to maintain net leverage below 3x, which we believe is aligned with a higher rating. We estimate our adjustments add roughly 0.5x to Golden's financial policy measure, primarily because we do not net its cash." The company's lower leverage will offset its reduced scale and diversity following the asset sales. S&P said, "Pro forma for the divestures and our expectation for substantial debt reduction, we forecast S&P Global Ratings-adjusted leverage in the low-2x area in 2024, which we believe will provide Golden with a sufficient cushion to absorb potentially increased earnings volatility given its smaller, more concentrated EBITDA base solely in Nevada. Rocky Gap Casino and the distributed gaming business generated about $64 million of EBITDA over the 12 months ended March 31, 2023, which represented about 25% of the company's total EBITDA. Over the same period, Golden increased its revenue about 2%. This was a remarkably strong period for regional gaming as the country began to emerge from the COVID-19 pandemic. However, Golden's S&P Global Ratings-adjusted EBITDA margin declined about 300 basis points (bps) year over year to about 28% due to higher labor costs and cost-of-goods inflation. Still, its S&P Global Ratings-adjusted EBITDA margin was about 600 bps higher than its 2019 prepandemic levels because it maintained most of its previously realized operating efficiencies. We expect Golden's EBITDA margin will stabilize in 2023 as the upward wage pressure from last year moderates. Pro forma for the sale of Rocky Gap and the much lower-margin distributed gaming business, we expect the company's 2024 EBITDA margin will increase to the mid-30% area, which incorporates some inflationary pressures. Our expectation is supported by the concentration of its operations in Nevada, which has a lower gaming tax rate than many other states, as well as the company's lack of significant fixed-rent payments, as it owns a majority of its real estate." S&P said, "The stable outlook reflects our expectation that Golden will maintain leverage below 4x incorporating potential operating volatility given its smaller EBITDA base and potential acquisitions and development spending. "We could consider lowering the ratings if we expect Golden to maintain S&P Global Ratings-adjusted leverage over 4x. This could occur if the company makes materially leveraging acquisitions or if development spending or returns to shareholders are significantly higher than we forecast. "The rating upside is currently limited given our expectation that the company may make debt-financed acquisitions, dividends, or share repurchases within its financial policy target which translates into our adjusted measure of leverage of about 3.5x." ESG credit indicators: E-2, S-3, G-2 S&P said, "Social factors are a moderately negative consideration in our credit rating analysis of Golden. Despite mandated closures of its casinos for health and safety reasons during the pandemic, Golden's cash flow recovered quickly following its reopening as operating and capacity restrictions gradually eased, vaccinations rolled out, and customers felt increasingly comfortable venturing into public spaces. The pandemic was an extreme disruption. Although it is unlikely to recur at the same magnitude, safety and health scares are an ongoing risk factor. Golden is also exposed to the social risks of regulation in its various regions of operation." GRACE YOUTH: Seeks to Hire Fuchs Law Office as Bankruptcy Counsel ----------------------------------------------------------------- Grace Youth and Family Foundation seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Fuchs Law Office, LLC. The Debtor requires legal counsel to: a. assist in, among other things, the administration of the Debtor's estate and represent the Debtor in matters involving legal issues that are present or are likely to arise in its Chapter 11 case; b. prepare legal documents; c. review reports for legal sufficiency; and d. other necessary legal services. The firm will bill these hourly fees: David L. Fuchs $300 Teresa K. Fuchs $250 Fuchs Law Office is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: David L. Fuchs, Esq. Fuchs Law Office, LLC 554 Washington Avenue, First Floor Carnegie, PA 15106 Phone: (412) 223-5404 Fax: (412) 223-5406 Email: dfuchs@fuchslawoffice.com About Grace Youth Grace Youth and Family Foundation filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-21068) on May 18, 2023, with as much as $50,000 in assets and $500,001 to $1 million in liabilities. William Krieger, managing director at Gleason, has been appointed as Subchapter V trustee. Judge Deller oversees the case. The Debtor is represented by David L. Fuchs, Esq., at Fuchs Law Office, LLC. GUARDIAN FUND: Gets OK to Hire Cresco Ltd. as Real Estate Broker ---------------------------------------------------------------- Guardian Fund, LLC received approval from the U.S. Bankruptcy Court for the District of Nevada to employ Cresco Ltd. as real estate broker. The Debtor requires a broker to market and sell its real property located at 202212 Chagrin Blvd., Shaker Heights, Ohio. The purchase price is $610,000. Cresco will get a commission of 6 percent of the purchase price. As disclosed in court filings, Cresco is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Nathan Kelly Cresco Ltd. 3 Summit Park Drive, Suite 200 Cleveland, OH 44131 Tel: (216) 520-1200 Email: info@crescorealestate.com About Guardian Fund The WendellLa and Nancy King Family Trust and several other creditors represented by Jeffrey L. Hartman filed a Chapter 7 involuntary petition (Bankr. D. Nev. Case No. 23-50117) against Guardian Fund, LLC, a company in Reno, Nev., on March 17, 2023. On April 11, 2023, Guardian Fund filed a Chapter 11 voluntary petition (Bankr. D. Nev. Case No. 23-50233). At the time of the filing, Guardian Fund reported $10 million to $50 million in assets and $50 million to $100 million in liabilities. On April 27, 2023, the Nevada bankruptcy court approved the stipulation filed in both cases by Guardian Fund and the petitioning creditors. The order directed the consolidation of the two cases, with Case No. 23-50177 as the lead case, and set the Chapter 11 petition date to March 17, 2023. Judge Natalie M. Cox oversees the case. Harris Law Practice, LLC serves as the Debtor's legal counsel. On May 10, 2023, the U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee is represented by its bankruptcy attorney, Sallie B. Armstrong, Esq. H & H INVESTMENT: Case Summary & Eight Unsecured Creditors ---------------------------------------------------------- Debtor: H & H Investment Group, LLC 3 Jouett Sq. Alameda, CA 94501 Business Description: The Debtor owns two properties in Oakland, CA valued at $500,000. Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Northern District of California Case No.: 23-40642 Judge: Hon. William J. Lafferty Debtor's Counsel: E. Vincent Wood, Esq. THE LAW OFFICES OF E. VINCENT WOOD 2950 Buskirk Ave., #300 Walnut Creek, CA 94597 Tel: (925) 278-6680 Fax: (925) 955-1655 Email: vince@woodbk.com Total Assets: $500,000 Total Liabilities: $2,899,466 The petition was signed by Peter Choy as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ESE2W5A/H__H_Investment_Group_LLC__canbke-23-40642__0001.0.pdf?mcid=tGE4TAMA HAIRY DEALINGS: Unsecureds to Get $10K per Year for 3 Years ----------------------------------------------------------- Hairy Dealings, Inc., filed with the U.S. Bankruptcy Court for the Middle District of Florida a Subchapter V Plan of Reorganization dated May 30, 2023. The Debtor is a closely held Florida limited liability company formed in 2019 for the purpose of acquiring and operating a "Tune Up, The Manly Salon" franchise in Tampa, Florida. Debtor offers a unique haircut experience and full menu of modern men's salon services. Debtor acquired its Tune Up franchise in January 2020 shortly before the pandemic and opened its franchise at a leased location during the pandemic as the first Tune Up franchise in Florida. Like other businesses operating during the pandemic, Debtor experienced not only new business growing pains, but also labor issues and a shortage of foot traffic in the retail shopping at which debtor operates. These issues greatly impacted Debtor's operating cash flow. In January 2023, Debtor received a notice of default from The Huntington National Bank and correspondence from its landlord regarding Debtor's tenancy at: 4005 West Kennedy Blvd., Suite 8, Tampa, Florida. Faced with the prospect of litigation with its creditors, Debtor elected to pursue Chapter 11 relief to restructure its financial affairs, dispute claims, assume contracts essential to its operation, reject contracts burdensome to its operation, and preserve its going concern value of the benefit of its creditors and estate. Class 3 consists of all Allowed General Unsecured Claims against the Debtor. In full satisfaction of their Allowed Class 3 General Unsecured Claims, Holders of Class 3 Claims shall receive an annual pro rata distribution of $10,000.00 (the "Unsecured Distributions") on July 31st of each year over a term of 3 years from the Effective Date after Administrative Claims and Priority Claims are satisfied in full. The first Distribution under the Plan will occur on July 31, 2024. The maximum Distribution to Class 3 Claimholders shall be equal to the total amount of all Allowed Class 3 General Unsecured Claims. Class 3 is Impaired. Class 4 consists of all equity interests in Hairy Dealings, Inc. Class 4 Interest Holders shall retain their respective Interests in Hairy Dealings, Inc. in the same proportions such Interest were held as of the Petition Date (i.e., 50.00% Interest to Johnnie R. Tilghman and 50.00% to Lloyd S. Bumgarner). Class 4 is Unimpaired. The Plan contemplates the Debtor will continue to manage and operate its business in the ordinary course, but with restructured debt obligations and reduced overhead. It is anticipated the Debtor's post-confirmation business will mainly involve continued operation of its franchised salon in Hillsborough County, any income from such operations will be committed to make the Plan Payments. Funds generated from the Debtor's operations through the Effective Date will be used for Plan Payments; however, the Debtor's cash on hand as of Confirmation will be available for payment of Administrative Expenses. A full-text copy of the Subchapter V Plan dated May 30, 2023 is available at https://urlcurt.com/u?l=NjjMjo from PacerMonitor.com at no charge. Attorney for the Debtor: Daniel A. Velasquez, Esq. Latham Luna Eden & Beaudine, LLP 201 S. Orange Ave., Suite 1400 Orlando, FL 32801 Tel: (407) 481-5800 Fax: (407) 481-5801 Email: jluna@lathamluna.com About Hairy Dealings Hairy Dealings, Inc., is a closely held Florida limited liability company formed in 2019 for the purpose of acquiring and operating a "Tune Up, The Manly Salon" franchise in Tampa, Florida. The Debtor offers a unique haircut experience and full menu of modern men's salon services, which also include complimentary cocktails or beer with every visit. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00782) on March 1, 2023. In the petition signed by Johnnie R. Tilghman, president, the Debtor disclosed up to $500,000 in both assets and liabilities. HEART OF TEXAS: Case Summary & 12 Unsecured Creditors ----------------------------------------------------- Debtor: Heart of Texas Shooting Center, LLC 5040 S. Loop 340 Robinson, TX 76706 Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Western District of Texas Case No.: 23-60263 Judge: Hon. Michael M. Parker Debtor's Counsel: Stephen W. Sather, Esq. BARRON & NEWBURGER, P.C. 7320 N. Mopac Expressway 400 Austin TX 78731 Tel: (512) 649-3243 Email: ssather@bn-lawyers.com Total Assets: $461,151 Total Liabilities: $2,309,124 The petition was signed by Eric Nutt as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 12 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/J635MHQ/Heart_of_Texas_Shooting_Center__txwbke-23-60263__0001.0.pdf?mcid=tGE4TAMA HEARTBRAND HOLDINGS: Plan Depends on Outcome of State Court Action ------------------------------------------------------------------ Heartbrand Holdings, Inc. ("HBI") and American Akaushi Association, Inc. ("AAA") filed with the U.S. Bankruptcy Court for the Southern District of Texas a Disclosure Statement for the Joint Plan of Reorganization dated May 30, 2023. HeartBrand is a leading producer of Akaushi beef, a type of red wagyu (Japanese cattle) known for its high-quality meat. A small number of Akaushi cattle were exported from Japan in the early 1990s and bred in Texas. Faced with Twinwood's imminent execution of its judgment, the Debtors elected to commence these Chapter 11 Cases to obtain a breathing spell and preserve value for all their stakeholders, including their creditors, shareholders, employees, customers, and vendors. The Debtors believe that the judgment entered by the State District Court is wrong and are confident they will prevail on the merits of their appeal, which they are vigorously pursuing before the Fourteenth Court of Appeals of the State of Texas (the "Texas Court of Appeals"). The Debtors believe that the transactions proposed in the Plan propose a reasonable path forward that will allow the Debtors to vindicate their rights on appeal, while providing the Debtors with a flexible path to address the broad range of potential outcomes that may result from an adverse decision in the appeal. Moreover, the Debtors believe the Plan will allow HBI's profitable non debtor subsidiaries to maintain their businesses and maximize value for all stakeholders. The Plan provides that HBI will elect to pursue one of four paths once the outcome of the Appeal is known depending upon, among other things, the result in the Appeal, the financing available to the Debtors, and the current business and market conditions. HBI's four-path plan structure is predicated on the defined term "Toggle Event," which will occur if Twinwood is successful on Appeal and obtains a final non-appealable judgment against HBI in any amount. The first path provides that, if HBI prevails in the Appeal, and there is no judgment against HBI, then no Toggle Event will have occurred and the Twinwood Claim-HBI and the Arch Claim HBI will be Disallowed. With respect to Twinwood, the other three paths contemplate that a Toggle Event has occurred. Upon a Toggle Event, the Twinwood Claim-HBI would be deemed Allowed in the amount of the final non appealable judgment against HBI, and HBI would have up to 60 days to choose whether to pay the Allowed amount of the Twinwood Claim HBI: * In a single payment within 60 days of the Toggle Event, from cash on hand and/or cash obtained from a financing facility with one or more third-party lenders (if obtained), as described in the Disclosure Statement; * First from the Existing Bond-HBI and any Supplemental Bond, with any amount not paid by such bond(s) paid in equal monthly installments over 7 years at the Plan Interest Rate; or * with pro rata proceeds from a sale of HBI's assets (the "Sale Process"). The Plan also addresses the contingent Claim of Arch if a Toggle Event occurs and Twinwood calls the existing (approximately $6.7) million supersedeas bond. Upon the occurrence of a Toggle Event and corresponding judgment against HBI, the Arch Claim-HBI will be deemed Allowed in the amount called from the Existing Bond-HBI to satisfy any such judgment against HBI. If the Existing Bond-HBI is called and Arch therefore has an allowed Claim against HBI, Arch will receive a Cash payment equal to 50% of the amount called from the Existing Bond, with the remainder of Arch's Allowed Claim paid in equal monthly installments over 7 years at the Plan Interest Rate. The Claim of ISL arises from the $134,264.00 annual renewal premium for the existing bond and will be deemed Allowed on the Effective Date. Under the Plan, ISL will receive a Cash payment equal to 50% of its Allowed Claim on the Effective Date, with the balance of its Allowed Claim paid in equal monthly installments over 7 years at the Plan Interest Rate. With respect to AAA, the Plan similarly provides that if AAA prevails in the Appeal and there is no judgment against AAA, then the Twinwood Claim-AAA and the Arch Claim-AAA will be Disallowed. To the extent the Appeal results in a final non-appealable judgment against AAA alone (i.e., a judgment against AAA on which HBI is not liable), the Twinwood Claim-AAA will be deemed Allowed in the amount of such judgment against AAA. If the Appeal results in a final non-appealable judgment against both AAA and HBI, and the Twinwood Claim-AAA exceeds the Twinwood Claim-HBI, the Twinwood Claim-AAA will be deemed Allowed in the amount by which the Twinwood Claim-AAA exceeds the Twinwood Claim-HBI. If the amount of the Allowed Twinwood Claim-AAA exceeds the amount of AAA's existing bond, AAA's existing bond will be used to satisfy the judgment (in part), AAA's assets will be sold, and the Twinwood Claim-AAA and Arch Claim-AAA will be satisfied solely from those sale proceeds. If the Appeal results in a final non-appealable judgment against AAA which does not exceed the final non-appealable judgment against HBI, then the treatment of and distributions for the Allowed Twinwood Claim-HBI shall control and suffice for all purposes under both the HBI Plan and the AAA Plan. In accordance with its treatment for its Claim against HBI, on the Effective Date, ISL will receive Cash equal to 50% of the $134,264.00 annual renewal premium for the existing bond, with the remainder paid in equal monthly installments over 7 years at the Plan Interest Rate. For the avoidance of doubt, ISL is only entitled to a single satisfaction of its annual renewal premium under the Plan. Within 60 business days after a Toggle Event, HBI will file a notice with the Court stating whether HBI will fund payment of the Allowed Twinwood Claim-HBI from (a) one or more of the Backstop Facility, Cash on hand, the Existing Bond-HBI, the Supplemental Bond, or the Exit Facility, or (b) the proceeds from a Sale Process. To the extent that HBI elects to pay any portion of the Allowed Twinwood Claim-HBI in installments over time, the notice will also indicate the proposed payment schedule. Although the AAA Plan does not provide for full payment of all Allowed Claims against AAA, the AAA Plan provides for the sale of AAA's assets in the event there is an Allowed Twinwood Claim-AAA, with the proceeds of such sale being distributed to the Holders of Allowed Claims against AAA. An orderly sale of AAA's assets by the Reorganized Debtors would avoid the disruption of a chapter 7 conversion, and the Debtors accordingly believe that the AAA Plan satisfies the best interests test because a sale of such assets under the Plan would provide at least as much value to any Holders of Allowed Claims against AAA as a chapter 7 liquidation of AAA. HBI Existing Interests shall be Reinstated on the Effective Date. Class B-6 consists of all Intercompany Interests. Solely to preserve the Debtors' corporate structure, the Intercompany Interests shall be Reinstated on the Effective Date. A full-text copy of the Disclosure Statement dated May 30, 2023 is available at https://urlcurt.com/u?l=hBAjnG from Omni Agent Solutions, the claims agent. Attorneys for Debtors: Vinson & Elkins LLP Harry A. Perrin, Esq. Kiran Vakamudi, Esq. 845 Texas Avenue Suite 4700 Houston, TX 77002 David S. Meyer, Esq. Zachary A. Paiva, Esq. 1114 Avenue of the Americas 32nd Floor New York, NY 10036 Jordan W. Leu, Esq. 2001 Ross Avenue Suite 3900 Dallas, TX 75201 About HeartBrand and American Akaushi Assoc. HeartBrand Holdings Inc. -- https://www.heartbrandbeef.com -- is a beef company in Texas. It is a leading producer of Akaushi beef, a type of red Wagyu Japanese cattle known for its high-quality meat. HeartBrand Holdings and American Akaushi Association, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-90127) on Aug. 2, 2022. In the petition filed by Ronald Beeman as chairman of the Board of Directors, HeartBrand reported assets between $50 million and $100 million and liabilities between $10 million and $50 million while American Akaushi Association reported assets between $100,001 and $500,000 and liabilities between $10 million and $50 million. Judge David R. Jones oversees the cases. The Debtors tapped Vinson & Elkins as counsel and ADKF, PC as tax and accounting services provider. Omni Agent Solutions is the claims agent. HELLO LIVINGSTON: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Hello Livingston Extended LLC 46 Main Street, Suite 176 Monsey, NY 10952 Business Description: The Debtor is the fee owner of a property located at 291 Livingston Street, Brooklyn, NY 11217 valued at $29.5 million. Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Southern District of New York Case No.: 23-22422 Judge: Hon. Sean H. Lane Debtor's Counsel: Robert L. Rattet, Esq. DAVIDOFF HUTCHER & CITRON LLP 605 Third Avenue 34th Floor New York, NY 10158 Tel: 212-557-7200 Fax: 212 286 1884 Email: rlr@dhclegal.com Total Assets: $29,500,000 Total Liabilities: $37,034,732 The petition was signed by David Goldwasser as chief restructuring officer. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CSF2APA/Hello_Livingston_Extended_LLC__nysbke-23-22422__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. 293 Livingston Realty LLC $0 Attn: Jack Glanzberg Molod Spitz & DeSantis, P.C. 1430 Broadway, 21st Floor New York, NY 10018 2. Abel Ochoa $0 Attn: Andrew Kreidman, Esq. Zaremba Brown PLLC 40 Wall Street, 52nd Floor New York, NY 10005 3. Acres Loan $4,500,000 Orgination, LLC 865 Merrick Avenue, Suite 200S Westbury, NY 11590 4. Best Super Cleaning Mechanic's Lien $15,117 LLC 5014 16th Avenue #231 Brooklyn, NY 11204 5. Capital Concrete NY, Inc. Mechanic's Lien $1,129,012 199 Lee Avenue #421 Brooklyn, NY 11211 6. Classic Touch USA Corp. Mechanic's Lien $128,412 223 Spencer Street #304 Brooklyn, NY 11205 7. Core Scaffold Systems, Inc. Mechanic's Lien $180,219 417 Myrtle Avenue, Ste. 14 Brooklyn, NY 11205 8. Cube 4 Equities, Inc. Mechanic's Lien $171,402 29 Exeter Street Brooklyn, NY 11235 9. Gene Kaufman Mechanic's Lien $166,636 Architect, P.C. 79 Fifth Avenue, 18th Floor New York, NY 10003 10. International Tile Mechanic's Lien $96,855 Collection, Inc. 6 Mosley Avenue Staten Island, NY 10312 11. Jun's Construction Inc. Mechanic's Lien $85,750 122-03 14th Ave College Point, NY 11356 12. Live Lion Security LLC Mechanic's Lien $28,721 5014 16th Avenue #231 Brooklyn, NY 11204 13. MLS Service Group Inc. Mechanic's Lien $12,675 5308 13th Avenue #150 Brooklyn, NY 11219 14. Park Lumber Yard Corp. Mechanic's Lien $10,731 1071 38th Street Brooklyn, NY 11219 15. PBS Services, Inc. Mechanic's Lien $183,960 4403 15th Avenue Brooklyn, NY 11219 16. Prestige Mechanic's Lien $363,593 Construction NY LLC 4010 14th Avenue Brooklyn, NY 11218 17. Prime Piping & Mechanic's Lien $228,959 Heating, Inc. 543 Bedford Avenue #269 Brooklyn, NY 11211 18. Soho Masons Corp. Mechanic's Lien $48,938 1046 54th Street Brooklyn, NY 11219 19. Worldwide Mechanic's Lien $105,972 Plumbing Supply, Inc. 4002 15th Avenue Brooklyn, NY 11218 20. YD Wood Floors LLC Mechanic's Lien $77,774 1440 61 Street Brooklyn, NY 11219 HOTSC HOLDINGS: Case Summary & Three Unsecured Creditors -------------------------------------------------------- Debtor: HOTSC Holdings, LLC 5040 S. Loop 340 Robinson, TX 76706 Business Description: The Debtor owns an indoor shooting range located at 5040 S. Loop 340 Waco, TX 76706 valued at $1.02 million. Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Western District of Texas Case No.: 23-60264 Judge: Hon. Michael M. Parker Debtor's Counsel: Stephen W. Sather, Esq. BARROWN & NEWBURGER, P.C. 7320 N. MoPac Expressway 400 Austin TX 78731 Tel: (512) 653-1009 Email: ssather@bn-lawyers.com Total Assets: $1,018,566 Total Liabilities: $2,207,788 The petition was signed by Eric Nutt as member. A full-text copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/JYE4HVI/HOTSC_Holdings_LLC__txwbke-23-60264__0001.0.pdf?mcid=tGE4TAMA HURLEY MEDICAL: Moody's Alters Outlook on 'Ba1' Rating to Stable ---------------------------------------------------------------- Moody's Investors Service has affirmed Hurley Medical Center's (MI) Ba1 rating and revised the outlook to stable from positive. The organization has approximately $70 million of debt outstanding. RATINGS RATIONALE Affirmation of the Ba1 reflects the important role Hurley plays in its service area's healthcare delivery system, including provision of trauma services, a children's hospital, and safety net provider. The rating is supported by the organization's essentiality as the only provider of a number of services including a Level I Trauma, burn unit, and children's hospital, and through government support intended to help offset financial challenges caused by its payor mix, which has a higher than average share of Medicaid and uninsured patients. Though Moody's expect Hurley will breach its debt service coverage covenant at fiscal yearend June 30, 2023, there is no acceleration risk; moreover although the organization's balance sheet has deteriorated due to large operating losses in fiscal 2023, it remains good for the rating category and Hurley maintains sufficient liquidity. Key credit challenges include a large unfunded pension liability, payor mix, and greater than typical operating losses due to Covid related challenges impacting staffing and patient volume. Labor cost, in particular, is elevated relative to historical trend and high exposure to human capital risk, which is a part of Moody's ESG methodology, is a contributing factor to the revision in the outlook to stable from positive. RATING OUTLOOK Revision in the outlook to stable reflects Moody's expectation that it will take Hurley at least several quarters to restore operating performance to sustainable levels that allow it to meet debt service coverage requirements and generate sufficient cash to maintain liquidity. The organization's still good liquidity, essential role, and proactive management responses preclude a negative outlook, but inability to demonstrate improving cash flow and stable liquidity over the near term could result in a negative outlook. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING -- Restoration of cash flow margin to level allowing for capex while building unrestricted liquidity -- Material growth in supplemental funding available FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING -- Inability to stabilize margins and generate operating surpluses -- Material weakening of liquidity below Mach 31, 2023 balances -- Material negative change in supplemental funding available LEGAL SECURITY Bonds are secured by a pledge of net revenues of the obligated group, as defined in the bond documents. Hurley is the only member of the obligated group. While Hurley is component unit of the City of Flint, MI, the bonds are not secured by the full faith and credit of the City of Flint. There is a debt service reserve fund for the Series 2013 and Series 2020 bonds. There is no mortgage pledge. PROFILE Hurley Medical Center is a 457-licensed bed tertiary care teaching facility and safety-net hospital located in Flint, MI and a component unit of the City of Flint. The hospital provides clinical training for medical and nursing students and residents and maintains academic affiliations with Michigan State University and the University of Michigan. The hospital operates a Level I Trauma Center and a Children's Hospital within the hospital. Hurley only employs a small number of physicians, most of whom are specialists and also includes primary care physicians in residency training faculty roles. METHODOLOGY The principal methodology used in these ratings was Not-For-Profit Healthcare published in December 2018. IMMEDIATE PROPERTIES: Unsecureds Will Get 100% over 60 Months ------------------------------------------------------------- Immediate Properties, LLC, filed with the U.S. Bankruptcy Court for the Central District of California a Plan of Reorganization for Small Business dated May 30, 2023. Since September 2019, the Debtor has been in the business of real estate investments. The Debtor's principal asset at this time is a real property located at 5077 Schumacher Road, Calabasas, CA 91302 (the "Property"). The Property is encumbered by a deed of trust in favor of Wilmington with an estimated outstanding balance of $3,507,284.13. The Property is currently listed for sale for $4,190,000. The final Plan payment is expected to be paid on August 2028. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 100 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 3 consists of non-priority unsecured creditors. General unsecured creditors in Class 3 will receive a 100% repayment of their allowed claim, without interest, over 60 months. Distribution to creditors under this Plan will be funded primarily from the Debtor's cash on hand on the effective date and the net income derived from the continued operation of the Debtor's business. This Plan proposes to pay creditors using the net disposable income of the Debtor over the five-year period after the effective date. This Plan will allow non-insider general unsecured creditors (Class 3) to recover 100 percent more than if the Debtor's assets were sold in a hypothetical Chapter liquidation and the proceeds paid out to each respective creditors. On the effective date, Xavier Mitchell, who is the owner of the Debtor, shall remain the owner of the Reorganized Debtor with the same proportionate equity ownership interest as it existed prior to the filing of Debtor's bankruptcy. Mr. Mitchell, as the principal of the Reorganized Debtor, shall serve as the Disbursing Agent for all obligations of Reorganized Debtor under this Plan and shall not be compensated for the services as a disbursing agent. A full-text copy of the Plan of Reorganization dated May 30, 2023 is available at https://urlcurt.com/u?l=1ZuwBT from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Michael Jay Berger, Esq. Law Offices of Michael Jay Berger 9454 Wilshire Blvd., 6th Floor Beverly Hills, CA 90212-2929 Telephone: (310) 271-6223 Facsimile: (310) 271-9805 Email: michael.berger@bankruptcypower.com About Immediate Properties Immediate Properties, LLC, owns 12 properties in California, having an aggregate value of $4.26 million. Immediate Properties filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10248) on Feb. 28, 2023, with $4,278,395 in assets and $3,676,696 in liabilities. Xavier Mitchell, chief executive officer of Immediate Properties, signed the petition. Judge Martin R. Barash presides over the case. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger, is the Debtor's counsel. INMET MINING: Committee Taps BDO Consulting as Financial Advisor ---------------------------------------------------------------- The official committee of unsecured creditors of Inmet Mining, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Kentucky to employ BDO Consulting Group, LLC as its financial advisor. The committee requires a financial advisor to: (a) advise and assist the committee in its analysis and monitoring of the Debtor's historical, current and projected financial affairs, including, schedules of assets and liabilities, statement of financial affairs and monthly operating reports; (b) advise and assist the committee with respect to the use of cash collateral and debtor-in-possession (DIP) financing, including evaluation of the Debtor's covenant review protocol and monitoring thereof; (c) advise and assist the committee and counsel in their review of the pre-bankruptcy lending facilities and evaluation of the Debtor's contractual arrangements; (d) review the proposed payments of pre-bankruptcy expenses by the Debtor and perform procedures to ensure that the payments are appropriate; (e) advise and assist the committee and counsel in reviewing and evaluating any court motions, applications, or other forms of relief filed or to be filed by the Debtor or any other party involved in the Debtor's Chapter 11 case; (f) analyze and evaluate cash flows or other projections of the Debtor, including scrutinizing cash receipts and disbursements on an on-going basis and, as needed, prepare alternative business projections relating to the valuation of the Debtor's business enterprise; (g) prepare valuation analyses of the Debtor's businesses and assets using various professionally accepted methodologies; (h) evaluate financing proposals and alternatives proposed by the Debtor for use of cash collateral, exit financing and capital raising supporting any plan of reorganization; (i) work to develop strategies to maximize recoveries from the Debtor's assets and advise and assist the committee with respect to such strategies; (j) monitor the Debtor's sales process, assist with identifying potential purchasers of the Debtor's assets, assist the committee in evaluating sales proposals and alternatives, and attend any auctions of the Debtor's assets; (k) analyze the financial ramifications of any proposed transactions for which the Debtor seeks bankruptcy court approval, including, but not limited to, sale of all or a portion of the Debtors' assets or employee incentive and severance plans; (l) monitor the Debtor's claims management process, analyze claims including guarantee claims, administrative claims (including 503(b)(9) claims), secured claims, priority claims and potential deficiency claims, and summarize claims by entity, as needed; (m) advise and assist the committee in investigating, identifying or reviewing any related party transactions, asset sales or other pre-bankruptcy transactions, fraudulent conveyances, preference payments, and other potential causes of action that the Debtor's estate may hold against insiders or third parties; (n) analyze the Debtor's assets and potential recoveries to creditor constituencies under various scenarios and prepare the associated recovery waterfall; (o) review and provide analysis of any plan and disclosure statement relating to the Debtor, including, if applicable, the development and analysis of any plan proposed by the committee; (p) advise and assist the committee in its assessment of the Debtor's employee needs and related costs, including evaluation of any proposed KERP or KEIP plans; (q) advise and assist the committee in the evaluation of the Debtor's contractual arrangements; (r) attend committee meetings, court hearings, and auctions as may be required; (s) assist the committee in the evaluation of the tax impact of any proposed transaction; (t) assist the committee counsel in preparing for any depositions and testimony and provide expert testimony at depositions and court hearings, as requested; (u) assist in restructuring negotiations or strategic restructuring analysis; and (v) other items as requested by the committee. The customary hourly rates charged by BDO professionals range as follows: Partners/Managing Directors $695 to $1,095 Directors/Sr. Managers $650 to $795 Managers $550 to $695 Senior Associates $350 to $595 Staff $175 to $350 In addition, the firm will seek reimbursement for out-of-pocket expenses incurred. David Berliner, a partner at BDO USA, LLP, the parent entity of BDO Consulting Group, disclosed in court filings that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. BDO Consulting Group can be reached through: David E. Berliner BDO Consulting Group, LLC 100 Park Avenue New York, NY 10017 Telephone: (212) 885-8000 Facsimile: (212) 697-1299 About Inmet Mining Inmet Mining, LLC is a company in Knoxville, Tenn., which operates in the coal mining industry. Inmet Mining sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case No. 23-70113) on April 5, 2023, with $50 million to $100 million in assets and $100 million to $500 million in liabilities. Jeffrey Strobel, chief restructuring officer, signed the petition. Judge Gregory R. Schaaf oversees the case. Jeffrey Phillips, Esq., at Steptoe & Johnson, PLLC is the Debtor's legal counsel. Paul Randolph, Acting U.S. Trustee for Region 8, appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee tapped Dentons Bingham Greenebaum, LLP and Whiteford, Taylor & Preston, LLP as legal counsels; and BDO Consulting Group, LLC as financial advisor. J CREW PROPERTY: Seeks to Hire Garland & Greenwood as Accountant ---------------------------------------------------------------- J Crew Property Management, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Arkansas to employ Garland & Greenwood, PLLC as its accountant. The Debtor requires an accountant to prepare tax returns, operating reports, and provide general accounting services. Garland & Greenwood will charge $125 per hour for its services. As disclosed in court filings, Garland & Greenwood is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: J. Michael Tuohey, CPA Garland & Greenwood, PLLC 2836 Malvern Ave., Ste. D Hot Springs, AR 71901 Tel: (501) 262-5500 About J Crew Property Management J Crew Property Management, LLC provides commercial landscaping services in Hot Springs, Ark. Its services include basic turf maintenance, which can include mowing, weed control, overseeding and pest control. It also offers specialty services such as irrigation system design, installation, maintenance and repair, landscape improvement and enhancements services, seasonal flower management and ornamental tree and shrub care. J Crew Property Management filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ark. Case No. 23-70143) on Feb. 3, 2023. In the petition filed by Jason Blankenship, incorporator and managing member, the Debtor reported as much as $50,000 in assets and $1 million to $10 million in liabilities. Judge Bianca M. Rucker oversees the case. The Debtor tapped Marc Honey, Esq., at Honey Law Firm, PA as legal counsel and Garland & Greenwood, PLLC as accountant. JDI DATA: Wins Cash Collateral Access Thru Aug 18 ------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, authorized Scott N. Brown, the trustee of JDi Data Corporation, to use cash collateral on an interim basis from the date of his appointment, April 18, 2023 through August 19, 2023, in the manner set forth in the budget, with a 25% variance. As previously reported by the Troubled Company Reporter, the Debtor requires the use of cash collateral to: a. pay its secured creditor, the U.S. Small Business Administration, its monthly due. The SBA Loan was for $1.8 million. The SBA has a UCC-1 recorded in the Secured Transaction Registry in Florida, which is the State of Incorporation for the Debtor; b. pay all necessary utilities, including remote cloud services provided by AWS; c. pay all applicable taxes and insurances; and d. otherwise remain compliant with its current monthly operational expenses. The SBA appears to be the Debtor's only secured creditor but the Debtor's management is verifying the execution of a Security Agreement to the UCC-1, which was recorded on September 5, 2020, being owed the principal sum of $1.8 million plus applicable interest. Although the SBA retains a blanket UCC-1 interest in the Debtor's personal property, the Debtor proposed to provide adequate protection to the SBA in the form of regular monthly payments due under the note, or in a lesser amount as agreed upon. The Court ruled that, to the extent it is determined the SBA possesses a valid, perfected, enforceable, and otherwise non-avoidable lien, as adequate protection for the Trustee's use of the SBA's cash collateral, the SBA is granted a replacement lien pursuant to 11 U.S.C. section 361(2) with the same validity and priority as its prepetition lien attached to the prepetition collateral. The Replacement Lien granted will be at all times subject and junior to all unpaid fees due to the Office of the United States Trustee pursuant to 28 U.S.C. section 1930; and all unpaid fees required to be paid to the Clerk of the Bankruptcy Court. A continued hearing on the matter is set for August 16, 2023 at 1:30 p.m. A copy of the order is available at https://urlcurt.com/u?l=j80Ee9 from PacerMonitor.com. About JDi Data Corporation JDi Data Corporation has developed innovative solutions for professionals within the insurance, risk, and legal communities. Its software solutions are designed to allow organizations to invest in tools that truly transform their day-to-day processes. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11322) on February 17, 2022. In the petition signed by John Heller as CRO, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Scott M. Grossman oversees the case. Scott M. Grossman, Esq., at Moffa & Bierman, represents the Debtor as legal counsel. JET OILFIELD: June 28 Plan Confirmation Hearing Set --------------------------------------------------- On May 23, 2023, Jet Oilfield Services, LLC, filed with the U.S. Bankruptcy Court for the Western District of Texas a Disclosure Statement referring to Amended Plan. On May 25, 2023, Judge Shad M. Robinson approved the Disclosure Statement and ordered that: * June 28, 2023, at 10:00 a.m. at 903 San Jacinto, Courtroom No. 1, Austin, TX 78701 is fixed for the hearing on confirmation of the Plan. * June 22, 2023, is fixed as the last day for filing written acceptances or rejections of the Plan. * June 22, 2023, is fixed as the last day for filing and serving written objections to confirmation of the Plan. * The Debtor shall file a report of ballots by June 26, 2023. A copy of the order dated May 25, 2023 is available at https://urlcurt.com/u?l=LfqIVR from PacerMonitor.com at no charge. Attorneys for the Debtor: Stephen W. Sather, Esq. BARRON & NEWBURGER, P.C. 7320 N. Mopac Expwy, Ste. 400 Austin, TX 78701 Tel: (512) 476-9103 E-mail: ssather@bn-lawyers.com About Jet Oilfield Services Jet Oilfield Services, LLC, provides support activities for mining, and oil and gas extraction industry. Jet Oilfield Services sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 22-70126) on Oct. 12, 2022. In the petition signed by Brian T. Owen, manager, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Tony M. Davis oversees the case. Angelo DeCaro serves as the Debtor's Chief Restructuring Officer. Stephen W. Sather, Esq., at Barron and Newburger, PC, is the Debtor's legal counsel. JOHNSON'S ALL-SCAPES: Case Summary & 14 Unsecured Creditors ----------------------------------------------------------- Debtor: Johnson's All-scapes, LLC 402 South Brown Street Fruitland, MD 21826 Business Description: The Debtor builds pools and patios. It also offers landscaping and fencing services. Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court District of Maryland Case No.: 23-13911 Debtor's Counsel: George R. Roles, Esq. RLC LAWYERS & CONSULTANTS, LLC 8737 Brooks Dr., Suite 107 Easton, MD 21601 Tel: 443-262-8501 Email: groles@groleslaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Thomas E. Johnson, Jr. as managing member. A copy of the Debtor's 14 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OEY2DDA/Johnsons_All-scapes_LLC__mdbke-23-13911__0002.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/YFKEXDY/Johnsons_All-scapes_LLC__mdbke-23-13911__0001.0.pdf?mcid=tGE4TAMA JONES DESLAURIERS: Incremental Notes No Impact on Moody's 'B3' CFR ------------------------------------------------------------------ Moody's Investors Service said the B3 corporate family rating and B3-PD probability of default rating of Jones DesLauriers Insurance Management Inc., a wholly owned subsidiary of Navacord Corp., remain unchanged following the company's announcement that it plans to issue an incremental USD125 million of senior secured notes, raising the total outstanding amount of senior secured notes to USD725 million (rated B2). Jones DesLauriers will use net proceeds from the offering for general corporate purposes and to help fund acquisitions. The rating outlook for Jones DesLauriers is unchanged at stable. RATINGS RATIONALE According to Moody's, the company's ratings reflect Navacord's growing market presence as the fourth-largest commercial lines insurance broker in Canada generally serving middle market clients. The company has a good mix of business across commercial and personal property & casualty insurance and employee benefits, with specialties in construction and transportation. The company is diversified geographically across Canada, particularly in Ontario, Alberta and British Columbia. Navacord has produced strong organic growth in the low double digits in past years, supporting healthy EBITDA margins in the low-30s (per Moody's calculations). The company maintains an active acquisition strategy and operates using a decentralized model that allows acquired entities to manage their business fairly autonomously while benefitting from Navacord's centralized services. These strengths are tempered by Navacord's aggressive financial leverage and low fixed charge coverage, execution risk associated with acquisitions, and limited scale relative to other rated insurance brokers. Navacord also faces potential liabilities arising from errors and omissions, a risk inherent in professional services. Giving effect to the proposed incremental financing, Moody's estimates that Navacord's pro forma debt-to-EBITDA ratio will be slightly above 7.5x. (EBITDA-capex) coverage of interest of 1.2x-1.5x and a free-cash-flow-to-debt ratio in the low single digits. These pro forma metrics include Moody's adjustments for operating leases, certain other debt-like obligations, and run-rate earnings from acquisitions. Moody's expects the company to improve its coverage metrics in the next 12 to 18 months through growth in EBITDA. Based in Toronto, Canada, Navacord Corp. offers a diversified mix of property & casualty insurance, employee benefits and specialized products mainly to middle market businesses across Canada. The company generated revenue of CAD483 million for the 12 months through January 2023. JUSTICE SAND: Court OKs Final Cash Collateral Access ---------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Galveston Division, authorized Justice Sand Co. to use cash collateral on a final basis in accordance with the revised budget. The Debtor requires the use of cash collateral to finance its operations. As previously reported by the Troubled Company Reporter, a search in the Texas Secretary of State shows that allegedly secured positions in cash collateral are held by: (1) Community Bank of Texas (aka Stellar Bank); (2) CT Corporation (Unknown Creditor); (3) U.S. Small Business Administration; (4) FinWise Bank; and (5) Gulf Coast Stabilized Materials. As adequate protection for the use of cash collateral, the parties are granted replacement liens on all post-petition cash collateral and post-petition acquired property to the same extent and priority they possessed as of the Petition Date. A copy of the order is available at https://urlcurt.com/u?l=iDMG7g from PacerMonitor.com. A copy of the budget is available at https://urlcurt.com/u?l=JQZUS7 from PacerMonitor.com. The Debtor projects $200,000 in cash receipts and $195,104 in cash disbursements. About Justice Sand Co., Inc. Justice Sand Co., Inc. is a family-owned and operated company that manufactures and provides a variety of construction materials and site work to commercial and residential customers. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-80085) on May 8, 2023. In the petition signed by Rush Claxton, president, the Debtor disclosed $1,800,713 in assets and $2,975,864 in liabilities. Judge Jeffrey P. Norman oversees the case. Robert C. Lane, Esq., at the Lane Law Firm, represents the Debtor as legal counsel. KARAFIN SCHOOL: Wins Final Cash Collateral Access ------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Karafin School, Inc. to use cash collateral on a final basis in accordance with the budget and its agreement with the Internal Revenue Service. A critical need exists for the Debtor to use cash collateral to continue operating its business in the ordinary course, and generally conduct its business affairs so as to avoid immediate and irreparable harm to its estate, the value of its assets, its creditors, and its students. The Debtor represents that: -- the Small Business Financial Solutions, LLC has a security interest in the Debtor's cash collateral, subordinate to that of the IRS; -- SBFS's claim is entirely under-secured; and -- SBFS is not entitled to adequate protection for the use of the Debtor's cash collateral. As previously reported by the Troubled Company Reporter, the IRS Stipulation provided, inter alia, that: (i) The Debtor has tax liabilities to the IRS in the amount of $212,535, of which $198,004 is secured by the IRS Liens; (ii) The IRS consents to the Debtor's use of cash collateral without the requirement of a budget; (iii) The Debtor will provide the IRS with adequate protection for its interest in the cash collateral consisting of (a) monthly payments in the amount of $4,155 commencing August 18, 2023 and continuing for a total of 56 months and (b) a valid, enforceable, fully-perfected, security interest, effective as of the Filing Date, to the extent of, and as security for any decrease in the value of the IRS' interest in the cash collateral since the Filing Date, in, to and upon all existing and hereafter acquired property of Debtor of any kind or nature, in the same validity, order and priority as the prepetition IRS Liens, subordinate only to United States Trustee fees, pursuant to 28 U.S.C. section 1930 and any interest thereon, and will not extend to estate causes of action and the proceeds of any recoveries of estate causes of action under Chapter 5 of the Bankruptcy Code; (iv) The IRS reserves its right to assert a superpriority claim pursuant to 11 U.S.C. section 507(b), and the Debtor reserves its defenses to such a claim; (v) The Debtor will remain current with all post-Filing Date tax liabilities, timely file all required post-Filing Date tax returns, file all past due tax returns within 45 days of the entry of the IRS Stipulation, and timely make all required tax deposits, and serve notice of all tax deposits on the IRS; (vi) A "Default" will occur if the Debtor fails to remain current on its Post-Filing Date tax liabilities and if such Default is not cured within five business days after written notice to the Debtor, the Debtor's attorneys, the United States Trustee, and the Subchapter V Trustee, and any official committee of unsecured creditors, the Default will serve as an appropriate basis for the case to be dismissed or converted to Chapter 7 on motion of the IRS; and (vii) The Debtor's right to use cash collateral under the IRS Stipulation will terminate immediately upon the occurrence of any of the following: (a) confirming any plan of reorganization in the Case; (b) converting the Case to a case under Chapter 7 of the Bankruptcy Code; (c) dismissing the Case; (d) approving the sale of any collateral pursuant to 11 U.S.C. section 363(b); or (e) pursuant to which the Court abstains from hearing the Case. A copy of the order is available at https://urlcurt.com/u?l=ONqd3m from PacerMonitor.com. About The Karafin School, Inc. The Karafin School, Inc. is a special education school in Mount Kisco, New York. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22281) on April 18, 2023. In the petition signed by Renee Donow, president, the Debtor disclosed $90,000 in total assets and $2,595,369 in total liabilities. Judge Sean H. Lane oversees the case. A. Scott Mandelup, Esq., at Pryor and Mandelup, LLP, represents the Debtor as legal counsel. KINETIK HOLDINGS: Fitch Affirms BB+ LongTerm IDR, Outlook Positive ------------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of Kinetik Holdings LP (Kinetik) at 'BB+' and senior unsecured rating at 'BB+'/'RR4'. The Rating Outlook remains Positive. Kinetik's ratings reflect sizable EBITDA generation, a majority fee-based revenue stream, and contract revenue-assurance features that support steady cash flow. This is balanced by considerable volumetric risk arising from gathering and processing (G&P) operations. Asset concentration in a top-tier basin such as the Permian basin is a moderate positive as similarly sized peers have more basin diversity. The Positive Outlook is driven by Kinetik's ability to deleverage below 4.0x in 2024 as the company is set to benefit from producer activity in 2024 as well as organic growth projects coming online at the end of 2023. The sizable capital spending in 2023 is expected to be largely funded by dividend reinvestment program (DRIP) but keeping leverage above 4.0x in 2023. The potential sale of Kinetik's 16% economic interest in Gulf Coast Express (GCX) pipeline would accelerate deleveraging. KEY RATING DRIVERS Size and Scale of Permian Asset Base: Kinetik's scale in terms of EBITDA is strong for the 'BB+' rating category as the company generates approximately $800 million of EBITDA. Kinetik has a balanced profile given its pairing of supply and demand territories. Approximately two-thirds of EBITDA will come from G&P operations in the Delaware basin. The Delaware basin has been the faster-growing (percentage basis) of the Permian basin's two sub-basins in recent years. The Permian overall is the leading U.S. oil basin. Over half of all oil-directed rigs working in the U.S. are located there. Kinetik supplements its G&P business with a long-haul pipeline business (via joint ventures). Its three biggest joint venture pipelines each terminate in robust demand centers at different points along the Texas coast. Fitch expects both segments of Kinetik will continue to develop operations by capitalizing on their geography and the company's size. Elevated Capital Spending Drives 2024 Benefits: Capex in 2023 is significantly higher than its previous expectations largely driven by the Permian Highway Pipeline (PHP) expansion and Delaware Link pipeline projects. Kinetik's capex guidance for 2023 is $490 million - $540 million, which Fitch anticipates to end up closer to the top end of the guidance range. The PHP expansion and Delaware Link account for roughly half of total capex and will be immediately accretive once in-service in early 2024. Kinetik is also adding in well-connects with several producer customers as activity has continued to steadily grow despite the yoy drop in commodity prices. Additionally, Kinetik has achieved new G&P commercial agreements that will require integration investment. Kinetik's capex program is expected to be funded by the DRIP, which has been extended to 2023. Fitch expects capex will return to more moderate levels in 2024 and does not forecast Kinetik will achieve leverage sustained below 4.0x until then. Potential GCX Sale Increases Deleveraging Capacity: During Kinetik's 1Q23 earnings call the company announced the potential sale of their economic interest in GCX. Targa Resources Corp sold its 25% stake in the pipeline in May 2022, and Kinetik could achieve a similar multiple in the 10x-11x range. Fitch expects potential proceeds from the sale to be used to bring the company closer to their stated 3.5x leverage target. If the GCX sale occurs, Kinetik would lose approximately $50 million of annual distributions from take-or-pay contracts that provide predictable cash flows. This loss should be largely offset by the PHP expansion project, which is expected to be in service by YE 2023. Deleveraging Progress: Kinetik could achieve leverage sustained below 4.0x in 2024 as producer customers continue to drill and it realizes benefits from new commercial agreements and capital growth projects. Kinetik is targeting a leverage ratio (on management definition) of 3.5x or less and has committed to not growing dividends until this target is achieved. Converting management's definition to Fitch's definition, that translates into a policy of approximately 3.8x or less. The financial policy, when achieved with corporate actions in management's control, would position Kinetik strongly in its rating category and could support an upgrade. Exposure to Volumetric Risk: Fitch expects Kinetik's Midstream and Logistics segment, comprised of primarily natural gas G&P activities, to contribute approximately 65% of 2023 EBITDA. The company has very few minimum volume commitments in this segment. The segment depends on customers with dedicated acreage to Kinetik to drill and complete wells. The majority of Kinetik's assets are focused in Reeves County in the Delaware Basin, which has an average breakeven (an investment return metric) that places the basin among the best oil regions in the U.S. However, Fitch also believes that global forces could eventually cause even U.S. regions as elite as the Delaware basin to be the site of volume-downside scenarios for Kinetik and its peers. Dividend Reinvestment Supports Leverage Target: Kinetik's board has continued the dividend reinvestment program (DRIP) in 2023 as the core shareholders have again committed to take 100% of dividends as stock. As such, this program decreases the amount of cash dividends the company pays to shareholders allowing for cash flows to support the company's robust capex program. Completion of the GCX stake sale would likely result in the Kinetik slowing the DRIP on or before dividends are received in 4Q23. Diversified Customer Base: Of Kinetik's take-or-pay counterparties, only Apache (BBB-/Stable) is anticipated to contribute more than 10% of gross profit in 2023. The company has strong counterparty diversification with over 30 customers. Fitch expects roughly two-thirds of 2023 gross profit will come from investment grade customers. Additionally, the weighted average counterparty credit rating is 'BBB-'. Permian Highway (the largest joint venture pipeline by dividend contribution to Kinetik) features a large array of customers with many rated above 'BBB-'. DERIVATION SUMMARY The best comparable for Kinetik is DT Midstream, Inc. (DTM; BB+/Stable). Both companies have volumetric risk. Each company has a large presence in regions that have had long-term fast-paced growth, giving some assurance that the volumetric risk at each company is bounded. Both companies have approximately 90% fee-based business (i.e., taking title to hydrocarbons and selling them at market prices is a small part of each company). Kinetik has better counter-party risk than DTM when isolating long-term take-or-pay payments. However, DTM's most salient take-or-pay exposure is to a 'BB+' rated company with a Positive Outlook, so a contract rejection in bankruptcy is relatively unlikely. Fitch estimates that DTM has a higher percentage of run-rate operating cash flows coming from revenue-assurance-type contracts (i.e., take or pay and minimum volume commitments). Fitch calculated Kinetik's FY22 leverage to be in line with DTM's at approximately 4.2x. Fitch expects DTM's leverage to drop below 4.0x by 2023 and remain comfortably below 4.0x through 2025. Fitch expects Kinetik's 2023 leverage to be in a range of 3.9x to 4.1x (Fitch definition) depending in part on the potential sale of GCX. The two companies differ in terms of their "focus hydrocarbons" as well as operating regions. While Kinetik is mainly a gas gatherer (focuses on the wellhead side of the business), the Delaware basin thus far has been explored in the last decade for crude oil, not natural gas. DTM's two regions are explored for the purpose for finding natural gas. Each hydrocarbon has a different volumetric risk profile. Over the last nine years, volumes for oil in the U.S. have shown their strongest downward moves on OPEC+ actions (with the most recent one being exacerbated by COVID-19). U.S. natural gas volumes over the same period have shown vulnerability to warm U.S. winters (especially consecutive warm winters, which is the case for the past three winters). As U.S. LNG export volumes continue to grow, winter weather in Europe and Asia may be a factor in the future. Fitch expects these volume risk for each hydrocarbon to generally have different cycles. The companies are rated the same as they are similar on most features. Regarding areas where Kinetik is superior (take or pay counterparty risk), the difference is not highly significant. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Fitch macro assumptions, e.g., the Fitch price deck for oil and natural gas, and the Global Economic Outlook with respect to Kinetik's unhedged portion of interest rates; - EBITDA remains relatively flat in 2023 to 2022 with volumes expected to grow in 2024 expansion projects, new contract and increased producer activity resulting mid-single digit percentage growth yoy. - Capex near the upper end of management's guidance for 2023 but declining closer to $150 million in 2024; - Distribution growth expected in 2024 by 5% following dividend reinvestment program in 2023; - Modest equity repurchases in 2023. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - EBITDA leverage below 4.0x, together with an expectation that the leverage can be sustained below 4.0x; - Maintaining or improvement of existing business risk. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Fitch may revert to a Stable Outlook if early 2024 performance indicates a lack of achievement of leverage below 4.0x; - EBITDA leverage expected to be sustained above 5.0x; - A cluster of large shippers on the joint venture pipelines experiencing business shocks or radically changing financial policy results in the cluster's credit quality falling to 'B'. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of March 31, 2023, Kinetik LP had available liquidity of approximately $715 million consisting of $713 million of availability on the senior unsecured revolving credit facility and approximately $2 million of cash and cash equivalents. There were no letters of credit outstanding on the revolver. Maturities are manageable with the nearest maturity being the $2 billion term loan A due in June 2025. Kinetik LP's credit agreements contain a financial covenant which require Kinetik LP to maintain a net leverage ratio below 5.00 to 1.00 at the end of any fiscal quarter. Following certain acquisition periods this ratio is raised to 5.50 to 1.00. As the quarter ended March 31, 2023, Kinetik LP was in compliance for all covenants. ISSUER PROFILE Kinetik is a gathering and processing focused midstream company handling natural gas, NGLs, and crude oil with assets primarily focused in the Delaware Basin in the Permian. SUMMARY OF FINANCIAL ADJUSTMENTS Under Fitch's typical calculation of EBITDA, distributions from investees accounted for under the equity method of accounting are included in EBITDA. Equity earnings or EBITDA from these entities are excluded. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Kinetik Holdings LP LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ KINTARA THERAPEUTICS: Adjourns Annual Meeting Until June 15 ----------------------------------------------------------- Kintara Therapeutics, Inc. convened and then adjourned its 2023 Annual Meeting of Stockholders on May 25, 2023, being held to consider and vote on, among other things, an amendment to the Company's Articles of Incorporation, as amended, to increase the number of shares of common stock authorized for issuance thereunder from 5,500,000 to 75,000,000. The proposal that was presented at the Annual Meeting was the proposal to adjourn the Annual Meeting until 12:00 p.m. Eastern Time on June 15, 2023, to allow for additional time for stockholders to vote on the Charter Amendment Proposal. The stockholders approved the Adjournment Proposal. Accordingly, the Annual Meeting was adjourned to 12:00 p.m., Eastern Time, on June 15, 2023, via the Internet. The Company's stockholders of record as of the Record Date will continue to be entitled to vote at the reconvened Annual Meeting. Stockholders may attend the Annual Meeting at the website address http://www.viewproxy.com/kintara/2023/vm. About Kintara Located in San Diego, California, Kintara Therapeutics, Inc. (formerly DelMar Pharmaceuticals) is dedicated to the development of novel cancer therapies for patients with unmet medical needs. Kintara is developing two late-stage, Phase 3-ready therapeutics for clear unmet medical needs with reduced risk development programs. The two programs are VAL-083 for GBM and REM-001 for CMBC. Kintara reported a net loss of $22.66 million for the year ended June 30, 2022, compared to a net loss of $38.30 million for the year ended June 30, 2021. As of Sept. 30, 2022, the Company had $13.21 million in total assets, $3.59 million in total liabilities, and $9.62 million in total stockholders' equity. San Francisco, CA-based Marcum LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Sept. 27, 2022, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. KRUGER PACKAGING: DBRS Confirms BB(high) Issuer Rating ------------------------------------------------------ DBRS Limited confirmed the Issuer Rating and Senior Unsecured Notes rating of Kruger Packaging Holdings L.P. (KPH or the Company) at BB (high) with Stable trends. The rating confirmations reflect KPH's consistent and demonstrated operating performance during the period of economic slowdown following the Coronavirus Disease (COVID-19) recovery phase. The ratings continue to be supported by (1) KPH's exposure to the less volatile paper packaging industry relative to other subsectors of the forest products industry; (2) stable, nondiscretionary end-market customers, including in food and beverages and nondurable consumer products; and (3) low-cost, efficient operations. The ratings are supported by a conservative financial policy and low leverage for the current rating category. However, the ratings are constrained by the Company's lack of size and market position in the North American containerboard segment, lack of diversification in the broader paper and forest products industry, exposure to volatile input costs, and relatively low (albeit increasing) forward integration into its corrugated box plants. The Stable trends reflect DBRS Morningstar's expectation that KPH's key credit metrics will continue to support the overall ratings. KPH's earnings and cash flow increased in 2022 compared with 2021 because of a favorable pricing environment across product segments, including containerboard and pulp products, and lower raw material costs for the containerboard segment. The Company's key credit metrics also improved because of higher earnings and cash flows. KPH generated 78% and 73% of revenue and EBITDA, respectively, in 2022 from its Containerboard, Paperboard & Boxes segment, with the remainder from the Paper & Pulp Products segment. EBITDA from the Paper & Pulp Products segment improved in 2022 because of strong price realizations. However, given that North American demand for newsprint has been in secular decline for many years now, the Company has appropriately scaled down operations in this segment over the last several years. DBRS Morningstar expects KPH's 2023 EBITDA to decline year over year because of an anticipated decline in containerboard prices, coupled with higher expected old corrugated container (OCC) costs. KPH's new greenfield box plant in Elizabethtown, Kentucky, became operational in 2022. The total capital cost for the project was USD 142 million, excluding start-up capital. The box plant will likely reach full capacity by the end of 2026, and KPH expects the new plant to increase the forward integration for its linerboard production to about 70% by 2026 from 46% currently. DBRS Morningstar expects containerboard prices to decline in 2023 compared with average 2022 prices as a result of weak economic activity. Furthermore, the input costs in the form of OCC prices are also likely to increase as a result of inflationary pressures. As a result, DBRS Morningstar expects the adjusted debt-to-EBITDA ratio to increase to about 2.1 times (x) in 2023 compared with 1.7x in 2022. DBRS Morningstar expects KPH to continue to benefit from its stable end markets in the containerboard segment and its conservative financial policy for the rating category. DBRS Morningstar believes a negative rating action is unlikely in the near term unless there is a significant deterioration in the overall financial risk profile. DBRS Morningstar could consider a positive rating action if there is a substantial improvement in the business risk profile. Notes: All figures are in Canadian dollars unless otherwise noted. LAF BUTTERVILLE: Seeks to Hire Mann Law Firm as Bankruptcy Counsel ------------------------------------------------------------------ LAF Butterville LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of New York to hire Mann Law Firm P.C. as its bankruptcy counsel. The firm will aid the Debtor in continuing legal matters, and represent the Debtor at any and all proceedings. The firm will charge $400 per hour for its services. The firm received a retainer in the amount of $5,000. Matthew Mann, Esq., principal of the Mann Law Firm, assured the court that his firm is disinterested within the meaning of 11 U.S.C. Section 101 (14) with no interest adverse to the estate of debtor corporation and is eligible to serve as counsel for the estate . The firm can be reached through: Matthew J. Mann, Esq. Mann Law Firm P.C. 426 Troy Schenectady Road Latham, NY 12110 Phone: (518) 785-3300 Email: info@mannlawpc.com About LAF Butterville LAF Butterville LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-10490) on May 15, 2023, listing $100,001 - $500,000 in both assets and liabilities. The petition was signed by Joanna Sacramone, managing member. The firm is represented by Matthew J. Mann, Esq. at Mann Law Firm, PC. LEGACY CARES: Court OKs $9MM DIP Loan From UMB Bank --------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona authorized Legacy Cares, Inc. to use cash collateral and obtain postpetition financing, on an interim basis. As previously reported by the Troubled Company Reporter, Legacy Cares sought authority to enter into a debtor-in-possession financing in the amount of up to $9 million with UMB Bank, N.A., as trustee. About $1.6 million will be made available upon emergency financing approval. The DIP Facility will have a maturity date of the earlier of (a) September 30, 2023, (b) the closing date of any restructuring or sale of substantially all of Cares' assets pursuant to an order entered by the Bankruptcy Court, and (c) the confirmation of a plan of reorganization or liquidation for Debtor in the Chapter 11 Case, subject to acceleration in the event of default. Cares is obligated to UMB as trustee for certain holders of municipal bonds issued to fund the development of the Legacy Park sports park facility and entertainment complex. As of the Petition Date, the Debtor owes the bondholders $310.3 million. These obligations, in turn, are secured by a perfected, first-position lien on (a) Cares' leasehold interest under its Ground Lease with Pacific Proving; (b) the structures and other improvements at the Park; (c) the revenues generated by the Park; and (d) Cares' personal property. Pursuant to the Indenture of Trust, dated as of August 1, 2020, by and between the Arizona Industrial Development Authority and UMB Bank, N.A., as trustee, the IDA issued Economic Development Revenue Bonds Tax-Exempt Series 2020A, Economic Development Revenue Bonds, Taxable Series 2020B, and Economic Development Revenue Bonds, Tax-Exempt Turbo Redemption Series 2020C, to make a loan to Cares to finance the cost of the acquisition, construction, improvement or equipping of the Park. The Development Loan was in the aggregate principal amount of $250.770 million, of which $212.960 million was to accrue interest at the rate of interest due on the 2020A Bonds, $6.810 million was to accrue interest at the rate of interest due on the 2020B Bonds, and $31 million was to accrue interest at the rate of interest due on the 2020C Bonds. Following construction of Legacy Park, a number of contractors, suppliers and materialman recorded mechanic's liens against the Park. The former general contractor on the project, Okland Construction, has asserted the largest claim in the approximate amount of $24 million. All told, approximately 21 ML Claimants have asserted mechanic's liens aggregating approximately $37 million, although some liens appear to be duplicative. In 2022, the ML Claimants filed multiple actions in Maricopa Superior Court seeking foreclosure of their liens against Cares' interest in Legacy Park. The Court held that, to secure the obligations evidenced by the DIP Credit Facility on an interim basis, UMB is granted continuing, valid, binding, enforceable, non-avoidable and automatically and properly perfected postpetition security interests and liens on (i) all property of the estate with the same priority as UMB's liens had on the Petition Date, and (ii) junior liens on all property of the estate, and (iii) senior liens on all property of the estate that was unencumbered on the Petition Date. To adequately protect UMB with respect to the Debtor's use of cash collateral, all liens of UMB will attach to collateral acquired by Debtor after the bankruptcy filing to the extent that, and in the priority of, UMB's liens on the Petition Date. A continued hearing on the matter is set for June 13 at 3 p.m. A copy of the order is available at https://urlcurt.com/u?l=jjjN5d from PacerMonitor.com. About Legacy Cares, Inc. Legacy Cares, Inc. is a 501c3 non-profit organization dedicated to providing athletes and non-athletes of all ages, economic backgrounds and levels of athletic proficiency, the opportunity to participate in sports and e-sports while fostering the enjoyment and camaraderie of teamwork and perseverance, key components in athletic competition and lifetime success. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02832) on May 1, 2023. In the petition signed by Douglas Moss, president, the Debtor disclosed $242,329,104 in assets and $366,719,676 in liabilities. Judge Daniel P. Collins oversees the case. Henk Taylor, Esq., at Warner Angle Hallam Jackson Formanek PLC, represents the Debtor as legal counsel. LITIGATION PRACTICE: Trustee Taps Marshack Hays as Legal Counsel ---------------------------------------------------------------- Richard Marshack, the Chapter 11 trustee for The Litigation Practice Group P.C., seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Marshack Hays, LLP as its general counsel. The trustee requires legal assistance in the Debtor's Chapter 11 case to: a. analyze and evaluate assets of and claims against the Debtor's estate; b. assist the trustee in analyzing the Debtor's ability to reorganize and confirm a Chapter 11 plan of reorganization; c. assist the trustee in analyzing whether the best interests of creditors and the estate would be better served by conversion to Chapter 7; and d. represent the trustee in any proceedings or hearings in the bankruptcy court or in any other court where the rights of the estate or the trustee may be litigated or affected. The firm will be paid at these rates: Partners $460 to $690 per hour Of Counsel $590 per hour Associates $340 to $430 per hour Paralegals $260 to $290 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. D. Edward Hays, Esq., a partner at Marshack Hays, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: D. Edward Hays, Esq. Chad V. Haes, Esq. Marshack Hays, LLP 870 Roosevelt Irvine, CA 92620 Telephone: (949) 333-7777 Facsimile: (949) 333-7778 Email: ehays@marshackhays.com chaes@marshackhays.com About The Litigation Practice Group The Litigation Practice Group P.C. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10571) on March 20, 2023, with as much as $1 million in both assets and liabilities. Judge Scott C. Clarkson presides over the case. Khang & Khang, LLP represents the Debtor as legal counsel. Richard A. Marshack, the Debtor's Chapter 11 trustee, is represented by Marshack Hays, LLP. LITTLE ROAD: Seeks to Hire Workman Nydegger as Legal Counsel ------------------------------------------------------------ Little Road Co., LLC seeks approval from the U.S. Bankruptcy Court for the District of Utah to employ Workman Nydegger to handle its Chapter 11 bankruptcy case. The firm will be paid at the rate of $425 per hour. In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. T. Edward Cundick, Esq., a partner at Workman Nydegger, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: T. Edward Cundick, Esq. Workman Nydegger 60 East South Temple, Suite 1000 Salt Lake City, UT 84111 Tel: (801) 533-9800 Fax: (801) 328-1707 Email: tcundick@wnlaw.com About Little Road Co. Little Road Co. is an online apparel store in Draper, Utah, which offers a range of clothing for kids. Little Road Co. filed its voluntary petition for Chapter 11 protection (Bankr. D. Utah Case No. 23-22020) on May 18, 2023, with $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. Sydni Sorensen, managing member, signed the petition. Judge Joel T. Marker oversees the case. T. Edward Cundick, Esq., at Workman Nydegger serves as the Debtor's legal counsel. LUCKY BUCKS: S&P Downgrades ICR to 'D' on Missed Payments --------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating and issue-level ratings on Atlanta-based coin-operated amusement machine operator Lucky Bucks LLC to 'D' from 'CCC-' and removed the ratings from CreditWatch, where S&P placed them with negative implications on Jan. 17, 2023. Lucky Bucks missed the interest and debt amortization payments due March 30, 2023, and March 31, 2023, respectively, on its first-lien debt. The company's capital structure comprises a $55 million revolver maturing in 2026 and a $555 million term loan due 2027. Lucky Bucks had roughly $610 million of debt outstanding as of May 24, 2023, including accrued interest and principal payments. S&P said, "We classify the missed interest and amortization payments as a general default under our methodology. We believe the company will fail to pay all or substantially all of its obligations as they come due. Therefore, we lowered our issuer credit rating and issue-level ratings on Lucky Bucks to 'D'. We expect to withdraw the ratings after 30 days." LUMINOUS MOBILE: Seeks to Hire Robert Bassel as Legal Counsel ------------------------------------------------------------- Luminous Mobile, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Robert Bassel, Esq., a practicing attorney in Clinton, Mich., to handle its Chapter 11 case. Mr. Bassel will be paid an hourly fee of $350 per hour and will be reimbursed for out-of-pocket expenses incurred. In court papers, Mr. Bassel disclosed that he is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Mr. Bassel can be reached at: Robert Bassel, Esq. P.O. Box T Clinton, MI 49236 Tel: (248) 835-7683 Email: bbassel@gmail.com About Luminous Mobile Luminous Mobile, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-43724) on April 23, 2023, with $50,001 to $100,000 in assets and $100,001 to $500,000 in liabilities. Kimberly Ross Clayson of Jaffe Raitt Heuer & Weiss, P.C. has been appointed as Subchapter V trustee. Judge Lisa S. Gretchko oversees the case. The Debtor is represented by Robert N. Bassel, Esq. MADERA COMMUNITY: Taps Newmark Pearson Commercial as Broker ----------------------------------------------------------- Madera Community Hospital seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to employ Newmark Pearson Commercial. The Debtor requires a broker to market and lease out its property located at 1250 E. Almond Ave., Madera, Calif. Newmark will be compensated as follows: Term of Lease Commission ------------- ---------- Less than 2 years 5% of total scheduled rent 2 to 3 years 5% of total scheduled rent 4 to 5 years 5% of total scheduled rent 6 to 10 years 5% of total scheduled rent for the first 5 years, plus 2.5% of total scheduled rent in excess of 5 years 11 to 25 years Per schedule above, plus 3% of total scheduled rent in excess of 10 years Beyond 25 years To be negotiated with company approval Beyond 30 years To be computed at 6% of the appraised value of the leased property and shall be treated as a sale of real estate Phil Souza, senior vice president of Newmark, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Phil Souza Newmark Pearson Commercial 7480 N Palm Ave., Suite 101 Fresno, CA 93711 Tel: (559) 432-6200 About Madera Community Hospital Madera Community Hospital operates a general medical and surgical hospital in Madera, Calif. Madera Community Hospital sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 23-10457) on March 10, 2023. In the petition signed by its chief executive officer, Karen Paolinelli, the Debtor disclosed $50 million to $100 million in assets and $10 million to $50 million in liabilities. Judge Rene Lastreto II oversees the case. The Debtor tapped Riley C. Walter, Esq., at Wanger Jones Helsley, as bankruptcy counsel; McCormick Barstow LLP and Ward Legal, Inc. as special counsels; and JWT & Associates, LLP as accountant. MADISON CLINIC: Court OKs $90,000 DIP Loan from Wellstone --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama, Northern Division, authorized The Madison Clinic for Applied Behavior Analysis, LLC, to use cash collateral and obtain postpetition financing, on a final basis. The Debtor obtained a post-petition financing arrangement with Wellstone, Inc. The loan is a revolving facility whereby the Lender will lend a total principal amount not exceed $15,000 on an interim basis and $90,000 on a final basis. The Debtor requires the use of cash collateral and DIP financing to pay normal operating expenses. The Debtor's cash on hand and the proceeds of the Debtor's assets subject to unavoidable liens as of the bankruptcy filing date may constitute the cash collateral of, among others, US MED Capital, LLC. The Debtor is authorized to enter into the Post-Petition Loan Agreement and borrow funds, incur debt, reimbursement obligations and other obligations, grant liens, and perform its obligations solely in accordance with the terms and conditions of the Post-Petition Loan Documents, including without limitation all conditions to borrowing set forth in such Post-Petition Loan Documents. US MED is provided with the following forms of adequate protection pursuant to 11 U.S.C sections 361, 363(c) and 363(e) solely to the extent of any diminution in value of its interests in cash collateral resulting from, and as an inducement to consent to (a) the Debtor's use of cash collateral, (b) the imposition of the automatic stay, and (c) to the extent applicable, the subordination to the Carve-Out: a. Replacement Lien. The Debtor grants, assigns and pledges to US MED post-petition replacement security interests and liens, subject to the Carve-Out, in and on the Debtor's assets to the same extent and priority as US MED's liens existing as of the Filing Date; provided, the Post-Petition Security Interests granted to the Lender will be senior and prior to the US MED Replacement Liens with respect to all "Accounts" and other Collateral that arise from or relate to the Debtor's business operations on or after the Filing Date; and (y) US MED will have no lien on claims or causes of action. The US MED Replacement Liens will be valid, perfected and enforceable without further filing or recording of any document or instrument or the taking of any further actions; b. Administrative Priority Claim. US MED is granted an administrative claim equal to the amount of accounts receivable paid to the Debtor that arise from services provided prior to the Filing Date it is determined that the Debtor received and failed to deliver to US MED post-petition, less a credit for any post-petition account proceeds actually delivered to US MED by the Debtor, that will have priority under 11 U.S.C sections 503(b) and 507(b) of the Bankruptcy Code over all unsecured claims against the Debtor and its estates, now existing or hereafter arising; provided, the DIP Super-Priority Claim will be senior and prior to the US MED Administrative Claim for all purposes; c. Funds on Deposit. The funds on deposit at Park National Bank in the amount of $25,622 and held by counsel for US MED in the amount of $13,492 will be turned over to US MED and applied to the debts owing to US MED; d. Segregation of Pre-Petition Accounts Receivable. The Debtor will segregate and deposit in the Park National Bank account any accounts receivable paid to the Debtor that arise from services provided prior to the Filing Date; and e. Accounts Receivable Reporting. The Debtor will provide US MED reporting on the recovery of accounts receivable every week until the closing of the proposed sale to Lender, and share any reporting with Lender as well. The DIP Loan will terminate on the earliest of (a) June 30, 2023, (b) any non-compliance by Debtor with any of the terms or provisions of the Final Order, (c) the termination of Lender's commitment to make advances upon the occurrence of an Event of Default under the Post-Petition Loan Documents, (d) the sale of all or substantially all of the assets of Debtor or liquidation of Debtor, (e) the termination of the Debtor's APA with Lender, (f) the entry of an order modifying, reversing, revoking, staying, rescinding, vacating, or amending this Final Order without the express prior written consent of Lender in its sole discretion. A copy of the order is available at https://urlcurt.com/u?l=UN7w1u from PacerMonitor.com. About the Madison Clinic for Applied Behavior Analysis, LLC The Madison Clinic for Applied Behavior Analysis, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-80259-CRJ11) on February 14, 2023. In the petition signed by Lindsay Chapman, owner, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Clifton R. Jessup, Jr oversees the case. Stuart M. Maples, Esq., at Maples Law Firm, PC, represents the Debtor as legal counsel. MAJOSTAN CORP: Seeks to Hire Rosalyn Maldonado as Legal Counsel --------------------------------------------------------------- Majostan Corp. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Rosalyn Maldonado P.C. as its counsel. The firm's services include: a. advising the Debtor with respect to its power and duties in the continued management and operation of its business; b. attending meetings, negotiating with representatives of creditors and other parties involved in the Debtor's Chapter 11 case, and advising on the conduct of the case; c. taking all necessary action to protect and preserve the Debtor's estate; d. preparing legal papers; e. preparing and negotiating any Chapter 11 plans, disclosure statements and related documents; f. advising on any sale of assets, auctions or other transactions; g. appearing before the court; and g. other necessary legal services. Rosalyn Maldonado, Esq., founder of Rosalyn Maldonado P.C., disclosed in a court filing that her firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Rosalyn Maldonado, Esq. Rosalyn Maldonado P.C. 108 S. Franklin Avenue, Suite 11 Valley Stream, NY 11580 Phone: +1 (516) 274-0613 Email: hello@rosalynmaldonadopc.com About Majostan Corp. Majostan Corp. is a primarily engaged in renting and leasing real estate properties. It owns a three-story building located at 23-52 31st St., Astoria, N.Y. Majostan filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40331) on Jan. 31, 2023, with total assets of $2,600,000 and total liabilities of $676,282. Andrew Moulinos, president, signed the petition. Judge Elizabeth S. Stong oversees the case. The Debtor is represented by Rosalyn Maldonado, Esq., at Rosalyn Maldonado P.C. MARK ALAN FORREST: Nagra Buys 40-Acre Farmland in Selma for $1.4MM ------------------------------------------------------------------ Mark Alan Forrest asks the U.S. Bankruptcy Court for the Eastern District of California to authorize the private sale of 40 acres of farmland located at 8603 South McCall Avenue, in Selma, California, to Deepinder Singh Nagra or his nominee for $1.4 million. A hearing on the Motion is set for June 14, 2023, at 9:30 a.m. The McCall Avenue Property includes about 32.50 acres of almond trees and other improvements. The Debtor believed the McCall Avenue Property had a value of $1,155,555.55 when he ﬁled his Schedule A/B: Property on July 22, 2021. However, he has determined that it has a value greater than the value indicated in the Schedule A/B: Property. He believes that the McCall Avenue Property has a value of $1.4 million at the present time. The McCall Avenue Property is subject to the following liens: a. Fresno County Treasurer-Tax Collector: Tax Lien - $22,407 b. Mid Valley Investors Deed of Trust - $2.8 million Debtor has accepted an offer to purchase the McCall Property from Deepinder Singh Nagra or his nominee for $1.4 million. The terms under which Debtor has The Debtor agreed to sell the McCall Avenue Property to Nagra are described in a Vacant Land Purchase Agreement and Joint Escrow Instructions. The proceeds received from the sale of the McCall Avenue Property will be paid and distributed as follows: a. Fresno County Treasurer-Tax Collector for claim secured by tax lien $22,407.10 b. Mid Valley Investors for claim secured by Deed of Trust $1,266,592.90 c. Real Estate Commission (5%) $70,000 d. Cost of Sale including escrow fees, closing cost, and title insurance (1.5%) $21,000 e. The Debtor's attorney fees and cost authorized for payment by Bankruptcy Court $15,000 f. Subchapter V Trustee's fees and costs authorized for payment by Bankruptcy Court $5,000 The amounts indicated are estimates and represent the Debtor's best approximation of the payments that will be made from proceeds received from the sale of the McCall Avenue Property. The sale of the McCall Avenue Property will be a private sale and will not be subject to higher and better bids. Such a sale procedure is permitted by the law and will help to facilitate the sale of the McCall Avenue Property to a good and qualified buyer. The Debtor asks that the 14-day stay of Federal Rule of Bankruptcy Procedure 6004(h) be waived because Nagra is prepared to close escrow after the Bankruptcy Court grants the Motion and enters an Order Authorizing Debtors to Sell Real Property. Mark Alan Forrest sought Chapter 11 protection (Bankr. E.D. Cal. Case No. 21-11814) on July 22, 2021. The Debtor tapped Leonard Welsh, Esq., as counsel. MEDAILLE UNIVERSITY: S&P Lowers Revenue Bonds Rating to 'CCC' ------------------------------------------------------------- S&P Global Ratings has lowered its long-term rating on Buffalo & Erie County Industrial Land Development Corp., N.Y.'s, series 2013 and series 2018 revenue bonds, issued for Medaille University to 'CCC' from 'BB-'. The outlook is negative. "The multi-notch rating action reflects our view that Medaille's obligations are vulnerable to nonpayment given the university's announcement that it will close on Aug. 31, 2023, and does not anticipate any additional revenues beyond the potential sale of its property and any other assets," said S&P Global Ratings credit analyst Vicky Stavropoulos. "In our view, Medaille is likely to face nonpayment in the near term should a covenant default or other events of default trigger principal acceleration on bonds outstanding." The negative outlook reflects S&P's view of the ongoing uncertainty surrounding the university's plans for closure and uncertainty regarding the ability to make timely payments in the event of a principal acceleration. MEHR GROUP: Taps Law Offices of Jaenam Coe as Bankruptcy Counsel ---------------------------------------------------------------- Mehr Group of Companies Holding Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ the Law Offices of Jaenam Coe, PC. The Debtor requires legal counsel to: a. give advice regarding the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and the requirements of the Office of the United States Trustee pertaining to the administration of the estate; b. advise the Debtor concerning its rights and remedies regarding assets of the estate; c. prepare legal papers; d. protect and preserve the estate by prosecuting and defending actions commenced by or against the Debtor; e. analyze and prepare objections to proofs of claim filed against the estate; f. conduct examinations of witnesses, claimants and other parties; g. represent the Debtor in court proceedings or hearings; h. negotiate, formulate and draft any plan of reorganization and disclosure statement; i. represent the Debtor in the investigation of potential causes of action against persons or entities, including, but not limited to, avoidance actions, and the litigation thereof, if warranted; and j. provide other legal services in connection with the Debtor's Chapter 11 case. The firm will be paid at these rates: Jaenam Coe, Partner $550 per hour Tae Jung, Legal Assistant $200 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The firm received the sum of $18,262 from the Debtor, which is being kept in attorney-client trust account, and a separate filing fee of $1,738. Jaenam Coe, Esq., a partner at the Law Offices of Jaenam Coe, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jaenam Coe, Esq. Law Offices of Jaenam Coe PC 3731 Wilshire Blvd. Suite 910 Los Angeles, CA 90010 Tel: (213) 389-1400 Email: coelaw@gmail.com About Mehr Group of Companies Holding MEHR Group of Companies Holding, Inc., a company in Laguna Hills, Calif., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10760) on April 17, 2023. In the petition signed by its chief executive officer, S. Javad K. Mehrvijeh, the Debtor disclosed up to $10 million in assets and up to $500,000 in liabilities. Judge Scott C. Clarkson oversees the cases. The Law Offices of Jaenam Coe PC serves as the Debtor's counsel. MERIDIEN ENERGY: Hires Whiteford Taylor & Preston as Counsel ------------------------------------------------------------ Meridien Energy, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Whiteford, Taylor & Preston LLP as its counsel. The firm's services include: (a) providing legal advice with respect to the Debtor's powers and duties as a debtor in possession in the continued operation of their business and management of its property; (b) preparing on behalf of the Debtor necessary applications, motions, answers, orders, reports, and other legal papers; (c) appearing in Court on behalf of the Debtor and in order to protect the interests of the Debtor before the Court; (d) representing and advising the Debtor in negotiations with its lenders, other creditors, equity holders and other parties in interest; and (e) performing all other legal services for the Debtor that may be necessary and proper in this case. The firm will be paid at these rates: Michael J. Roeschenthaler, Partner $750 per hour Daniel R. Schimizzi, Partner $535 per hour Harry A. Readshaw, Counsel $565 per hour Vivi Besteman, Associate $350 per hour Paralegal $365 per hour Whiteford is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Brandy M. Rapp, Esq. Whiteford, Taylor & Preston LLP Two James Center 1021 E. Cary Street, Suite 1700 Richmond, VA 23219 Tel: (540) 759-3577 Email: brapp@whitefordlaw.com About Meridien Energy Meridien Energy, LLC is a full-service pipeline construction company headquartered in New York state with division offices in Pennsylvania, Virginia, and Florida. Meridien Energy sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31377) on April 20, 2023. In the petition signed by its chief restructuring officer, John W. Teitz, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Keith L. Phillips oversees the case. Brandy M. Rapp, Esq., at Whiteford, Taylor and Preston, LLP, represents the Debtor as legal counsel. MERIDIEN ENERGY: Taps John Teitz of Compass Advisory as CRO ----------------------------------------------------------- Meridien Energy, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Compass Advisory Partners, LLC, and designate John W. Teitz as chief restructuring officer. The firm's services include: a. providing oversight and direction to the management and employees of the Debtor, as needed; b. assisting the Debtor with cash management and other various liquidity management activities, including, without limitation, the development and maintenance of cash flow forecasts, working capital requirements, creation of a Debtor-in-Possession/Cash Collateral budget as necessary, and preparation of reports and analyses to manage cash commitments and disbursements; c. monitoring daily cash allocation and cash management/accounts payable processes and assist management with cash maximization strategies; d. directing communications and negotiations with the Debtor's vendors, lessors, customers, employees, lenders, creditor creditors, attorneys and other professionals, as required; e. assisting the Debtor in operating as a debtor in possession in this Chapter 11 Case, including assisting the Debtor and its counsel with issues related to its financing and reorganization efforts, including preparation of the petition, first day motions, proposed orders, creditor matrix, schedules of assets and liabilities, statement of financial affairs, monthly operating reports, post-confirmation quarterly reports, and the general administrative requirements of the Chapter 11 Case and the Bankruptcy Code; f. formulating and assisting with the development and execution of a restructuring and/or reorganization plan, including preparation of a plan of reorganization and related disclosure statement, a liquidation analysis and/or claims analyses, and related projections; g. assisting with the analysis and investigation of potential causes of action held by, or asserted against, the Debtor; and h. offering testimony before the Court and participating in depositions. The firm will be paid at these rates: John W. Teitz $425 per hour Nicholas Arrington $375 per hour Aimee E. Rice $350 per hour Lee Mazzarini $300 per hour Donita Rudy $350 per hour Compass received a prepetition retainer in the amount of $35,000. The Debtor submits that Compass is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: John W. Teitz, CPA Compass Advisory Partners, LLC 306 Fourth Avenue: Suite 701 Pittsburgh, Pennsylvania 15222 USA Mobile: 412-855-7625 Jack@CompassAdvisoryPartners.com About Meridien Energy Meridien Energy, LLC is a full-service pipeline construction company headquartered in New York state with division offices in Pennsylvania, Virginia, and Florida. Meridien Energy sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31377) on April 20, 2023. In the petition signed by its chief restructuring officer, John W. Teitz, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Keith L. Phillips oversees the case. Brandy M. Rapp, Esq., at Whiteford, Taylor and Preston, LLP, represents the Debtor as legal counsel. METAL CHECK: Seeks to Hire Mark D. Cain P.C. as Accountant ---------------------------------------------------------- Metal Check, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Oklahoma to employ Mark D. Cain P.C. as accountant. The firm's services include: a. preparation and filing of tax returns and reports; b. preparation of financial reports required for the Chapter 11 bankruptcy case; c. participation in the preparation of a business plan for reorganization; and d. various accounting services which may be required to comply with state, city and other bankruptcy laws. The firm will be paid at the rate of $250 per hour. Mark Cain, a partner at Mark D. Cain P.C., disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Mark D. Cain Mark D. Cain P.C. 6825 S Western Ave A. Oklahoma City, OK 73139 Tel: (405) 631-8464 About Metal Check Metal Check, Inc., a company in Oklahoma City, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Okla. Case No. 23-11279) on May 16, 2023, with $841,675 in assets and $2,033,069 in liabilities. Stephen Moriarty, Esq., at Fellers Snider Blankenship Bailey & Tippens, PC has been appointed as Subchapter V trustee. Judge Janice D. Loyd oversees the case. The Debtor tapped Christopher Wood, Esq., at Christopher A. Wood & Associates, P.C. as legal counsel and Mark D. Cain P.C. as accountant. MICAH PROPERTY: Taps Law Offices of Stephen R. Wade as Counsel -------------------------------------------------------------- Micah Property LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire the Law Offices of Stephen R. Wade as its bankruptcy counsel. The firm will render these services: a. advise the Debtor with respect to compliance with the requirement of the Office of the U.S. Trustee; b. advise the Debtor concerning the requirements of the bankruptcy court, the Federal Rules of Bankruptcy Procedure, the Local Rules, and the Central District of California; c. advise the Debtor regarding matters of bankruptcy law, including the rights and remedies of the Debtor in regard to its assets and the claims of its creditors; d. conduct examinations of witnesses, claimants, or adverse parties with respect to any necessary or pending litigation arising in the bankruptcy case; e. prepare or assist in the preparation of reports, accounts, applications, motions, complaint, orders and other pleadings required in the bankruptcy case; f. represent the Debtor in any proceedings or hearings in the bankruptcy court and any proceedings in other courts where the Debtor's rights under the Bankruptcy Code may be litigated or affected; g. file any motions, applications or other pleadings appropriate to effectuate the reorganization of the Debtor; h. review claims and file objections to disputed claims; i. assist the Debtor in the negotiation, formulation, confirmation and implementation of a Chapter 11 plan of reorganization; j. assist the Debtor in negotiation with secured creditors; k. serve as the Debtor's general insolvency counsel in cooperation with any special counsel or other professionals retained by the Debtor in the case; and l. perform other necessary legal services. The firm will be paid at these rates: Stephen R. Wade $500 per hour Kathy Chevalier $150 per hour In addition, the firm will receive reimbursement for its out-of-pocket expenses. The firm received a retainer from the Debtor in the amount of $2,000. Stephen Wade, Esq., a partner at the firm, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Stephen R. Wade can be reached at: Stephen R. Wade, Esq. Law Offices of Stephen R. Wade P.C. 405 N. Indian Hill, Blvd. Claremont, CA 91711 Tel: (909) 985-6500 Fax: (909) 912-8887 Email: srw@srwadelaw.com About Micah Property Micah Property LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Micah Property LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12496) on April 25, 2023. In the petition was signed by Lucy Seh as manager, the Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. Judge Ernest M. Robles presides over the case. Stephen R. Wade, Esq. at The Law Offices of Stephen R. Wade represents the Debtor as counsel. MOMENTIVE INC: Moody's Withdraws 'B2' CFR Following Debt Repayment ------------------------------------------------------------------ Moody's Investors Service has withdrawn all ratings of Momentive Inc. including the B2 corporate family rating, the B2-PD probability of default rating, the B2 senior secured bank credit facility and the SGL-1 speculative grade liquidity rating. This rating action follows the completion of the company being acquired on May 31, 2023. Withdrawals: Issuer: Momentive Inc. -- Corporate Family Rating, Withdrawn, previously rated B2 -- Probability of Default Rating, Withdrawn, previously rated B2-PD -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-1 -- Backed Senior Secured Bank Credit Facility, Withdrawn, previously rated B2 Outlook Actions: Issuer: Momentive Inc. -- Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Following the completion of the acquisition of Momentive, the company terminated the credit agreements and all indebtedness outstanding thereunder was paid off and all commitments under the credit facilities were terminated. Consequently, Moody's has withdrawn the ratings of Momentive. Momentive, maker of SurveyMonkey, empowers people with the insights they need to make business decisions with speed and confidence. The company's experience and insights management solutions connect millions of users at more than 330,000 organizations worldwide with AI-powered technology and up-to-the-minute insights, so they can shape what's next for their products, industries, customers, employees, and the market. Revenue for the LTM period ending March 31, 2023 was $483 million. MOVIA ROBOTICS: Court OKs Cash Collateral Access Thru June 30 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut, Hartford Division, authorized Movia Robotics, Inc. to use cash collateral on an interim basis in accordance with the budget, with a 10% variance, through June 30, 2023. The Debtor requires the use of cash collateral to pay business expenses. The U.S. Small Business Administration, Clean Feet Investors I, LLC, and Webster Bank, N.A. assert an interest in the Debtor's cash collateral. In exchange for the preliminary use of cash collateral by the Debtor and as adequate protection, the SBA, Clean Feet, and Webster Bank are granted replacement or substitute liens as provided in 11 U.S.C. section 361(1) in all of the Debtor's post-petition assets and proceeds thereof, excluding any bankruptcy avoidance causes of action. The replacement liens will have the same validity, extent and priority that the SBA, Clean Feet, and Webster Bank possessed on the Petition Date. The Debtor will also provide to the SBA, Clean Feet, and Webster Bank monthly statements reflecting the financial activity of the Debtor. The liens of the SBA, Clean Feet, and Webster Bank and any replacement thereof, and any priority to which the SBA, Clean Feet, and Webster Bank may be entitled or become entitled under section 507(b), will be subject and subordinate to a carve-out of such liens for amounts payable by the Debtor for (i) fees of the United States Trustee under 28 U.S.C. section 1930(a)(6); (ii) wages due the Debtor's employees and (iii) court-approved fees of the Debtor's professionals. A final hearing on the matter is set for June 29 at 3 p.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=SgfvCI from PacerMonitor.com. The Debtor projects $56,000 in total revenue and $66,887 in total expenses for June 2023. About Movia Robotics, Inc. Movia Robotics, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Conn. Case No. 23-20024) on January 18, 2023. In the petition signed by Timothy Gifford, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge James J. Tancredi oversees the case. Timothy D. Miltenberger, Esq., at Cohn Birnbaum & Shea, P.C., represents the Debtor as legal counsel. MVK INTERMEDIATE: Moody's Cuts CFR to 'Ca', Outlook Negative ------------------------------------------------------------ Moody's Investors Service downgraded MVK Intermediate Holdings, LLC's Corporate Family Rating to Ca from Caa1 and Probability of Default Rating to Ca-PD/LD from Caa1-PD. Moody's additionally downgraded the company's senior secured first lien revolving credit facility and $335 million first lien secured term loan ratings to Ca from Caa1. Concurrently, Moody's appended a limited default designation ("/LD') to the PDR. The outlook is negative. The downgrades and the /LD designation follow the change in terms under the company's recently amended revolving credit facility and first lien term loan that now allows for interest to be paid-in-kind through maturity. In addition, MVK did not make the cash interest payments on its revolver and term loan beginning with payments originally due at the end of March 2023. The downgrades and the /LD designation reflects Moody's view that the missed cash interest payment represent a default because the payments were not made on the original due dates or within the applicable grace periods. The credit agreement provided a three business day grace period for interest payments. The amended agreements with lenders provides the company with an option to pay-in-kind (PIK) interest in lieu of cash payments and in substance provide for a forebearance from action on the missed payments. Governance considerations are a key factor in the rating action since the company missed the interest payments and is substantively in lender forebearance while it is pursuing strategic alternatives, and due to management turnover. These factors lead to a change in the governance issuer profile score to G-5 from G-4 and the credit impact score to CIS-5 from CIS-4. The downgrades also reflects MVK's weaker than expected financial results for fiscal 2022 and concerns regarding potential liquidity needs in fiscal 2023. Given the seasonality of the stone fruit business, MVK generates the majority of its earnings and cash flow in the third quarter. The company recently obtained a $100 million seasonal revolving credit facility that should allow it to cover its cash needs until the company begins to generate seasonally positive free cash flow in the third quarter. While earnings in each growing season is independent, the recent increase in debt will likely lead to higher leverage even if earnings are flat to last year. Moody's believes that MVK's debt-to-EBITDA could increase to over 12x in the next 12 to 18 months with high leverage constraining the company's financial flexibility and increasing the need of a restructuring to alleviate the burden from an unsustainable debt structure. The following ratings/assessments are affected by the action: Downgrades: Issuer: MVK Intermediate Holdings, LLC Corporate Family Rating, Downgraded to Ca from Caa1 Probability of Default Rating, Downgraded to Ca-PD /LD (/LD appended) from Caa1-PD Senior Secured 1st Lien Term Loan, Downgraded to Ca from Caa1 Senior Secured 1st Lien Revolving Credit Facility, Downgraded to Ca from Caa1 Outlook Actions: Issuer: MVK Intermediate Holdings, LLC Outlook, Remains Negative RATINGS RATIONALE MVK's Ca CFR reflects the company's high debt-to-EBITDA estimated at 9.8x (Moody's adjusted) for the 12-month period ended March 31, 2023, cash flow volatility due to seasonality of business, relatively small scale with desirable but concentrated growing acreage in California's San Joaquin Valley, and customer concentration with nearly 50% of sales generated from its top five customers. The stone fruit business is also subject to significant season-to-season volatility from weather-dependent growing conditions, competition for distribution and shelf space with retailers, and fluctuating fruit prices. Moody's believes that MVK needs to maintain good liquidity to weather the typical variations in operating performance. Negative free cash flow in 2020, 2021, and 2022 raises the debt burden (including lease liabilities) while the sale of the citrus operations in early 2021 reduced the company's earnings base. These factors create upward pressure on leverage. In fiscal 2023, Moody's projects MVK's debt-to-EBITDA leverage could increase to over 12x as a result negative free cash flow and continued weak earnings. Because the company received lender approval to delay the completion of its audit until the end of July, credit metrics cited are preliminary estimates based off unaudited results. The credit profile is supported by the company's strong position in the US conventional and organic stone fruit market (primarily peaches and nectarines), positive secular trends in organic and healthy living, and good profit margins. Liquidity is weak because of the high seasonal cash needs relative to cash of $31 million and $24 million of availability under the new $100 million seasonal revolving credit facility due October 2023 as of May 2023. The $61.25 million revolving credit facility that is due September 2024 is fully drawn. The revolver maturities also weaken liquidity. As of March 31, 2023, prior to obtaining the $100 million season revolving credit facility, MVK had $14 million in cash. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook reflects Moody's view that MVK does not have sufficient liquidity to meet seasonal cash needs over the next 12 to 18 months absent an extension of the $100 million revolver expiring October 2023. Although the company had $31 million in cash and $24 million of availability on its new $100 million seasonal revolving credit facility due October 2023 (unrated) as of May 2023, MVK's normal off season cash flow needs have ranged from $70 to $100 million. Failure to maintain sufficient liquidity could restrict reinvestment and weaken recovery estimates. The ratings could be upgraded if operating performance improves, the company sustains positive free cash flow generation, reduces leverage meaningfully, and exhibits meaningful liquidity throughout the fiscal year. Ratings could be downgraded if liquidity or operating performance weakens or recovery estimates decline. The principal methodology used in these ratings was Protein and Agriculture published in November 2021. Headquartered in Fresno, California, MVK Intermediate Holdings, LLC (MVK) is the holding company of Wawona Packing Co, LLC and subs (owning the operating assets), and Wawona Farm Co, LLC (owning the farmland and trees). In September 2019, legacy companies, Wawona Packing Company (Wawona) and Gerawan Farming (Gerawan), merged their businesses into MVK, which is majority owned and controlled by private equity firm Paine Schwartz Partners with minority ownership by Dan Gerawan. Wawona (founded in 1948) and Gerawan (founded in 1938) are growers, packers and suppliers of organic and conventional stone fruit including peaches, nectarines, plums, tree nuts and citrus. The combined company generates revenue of approximately $300 million per year. NAVACORD CORP: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ------------------------------------------------------------- Fitch has affirmed the Long-Term Issuer Default Rating (IDR) for both Navacord Corp. (Navacord) and its wholly owned borrower subsidiary, Jones DesLauriers Insurance Management Inc., at 'B'. The Rating Outlook is Stable. Fitch also affirmed ratings of 'B+'/'RR3' to the company's senior secured USD notes (including the expected incremental notes) being issued by its borrower subsidiary. Fitch additionally affirmed the company's senior secured revolving credit facility at 'B+'/'RR3', first lien CAD term loans at 'B+'/'RR3', and its senior unsecured notes at 'CCC+'/'RR6'. While leverage is notably high at more than 8.0x pro forma for the pending acquisition of Home Hardware Financial, Navacord's 'B' rating is reflective of the company's resilient organic growth profile and strong operating margin profile. The rating also reflects its position as a top four commercial brokerage firm in Canada. Limitations to the rating include an aggressive financial policy and the expectation it will maintain an elevated leverage profile. KEY RATING DRIVERS Solid Market Position: Fitch views Navacord's solid position in the Canadian insurance distribution market as a credit positive, with it being the fourth largest commercial brokerage and benefits firm in Canada. The insurance brokerage industry is highly fragmented and competitive, but Navacord realized solid organic revenue growth at least in the mid-single digit range since 2017 (double digit organic growth from 2019-2022). This compares favorably against other Fitch-rated brokers in North America. Fitch expects the industry to grow mid- to high-single digits over time but certain higher growth brokers such as Navacord may exceed this growth rate. Navacord also sustained solid EBITDA margins in the high-20% to mid-30% range in the past five years. High Leverage: Fitch views high leverage as a limiting factor for the IDR and will likely constrain the rating to the 'B' rating category in the near-term. Pro forma for M&A and the pending secured notes issuance, reported EBITDA leverage (debt/EBITDA) is in the low-8.0x range while net leverage is in the mid-6.0x range. Fitch expects leverage will remain high due to the company's aggressive M&A strategy. Well-managed insurance brokerage firms can tolerate a higher degree of financial leverage versus other Corporates sectors given the industry's high degree of stability throughout the economic cycle, with large brokers having only experienced organic sales declines in the low-single digit range following the 2008 global financial crisis. However, Navacord's leverage is higher versus other Fitch-rated peers. M&A Growth Strategy: Fitch views Navacord's aggressive M&A growth strategy as a key rating consideration that constrains the IDR to the 'B' category. The pending $275 million acquisition of Home Hardware Financial is the company's largest deal to date and was a relatively expensive valuation for the sector, so Fitch will closely monitor the company's execution in the next couple of years. The company spent more than $1.3 billion on 85 deals since FY 2019, including the pending Home Hardware deal, and Fitch expects acquisitions will remain core to its future strategy. Diversification: Navacord benefits from broad client, broker, and carrier diversification although it solely operates in Canada. It operates throughout Canada, with more than 50,000 commercial clients and its top 20 customers only comprise 4% of revenue. Its top 10 producers are less than 10% of revenue and it is also diversified by insurance carrier partners. It is also fairly well diversified by lines of business, with a mix of commercial property & casualty (P&C), personal P&C, and benefits offerings. Its geographic concentration does not constrain the rating to its current IDR, given its strong market position. However, Fitch believes the company could expand outside Canada over time. Stable Business Model: Fitch believes the company operates a fairly predictable business model in an industry that performs well throughout the economic cycle. Navacord was founded in 2014 and has a more limited operating history versus other Fitch-rated brokers, but Fitch expects the industry to exhibit much lower revenue and earnings declines in a recession versus other sectors given the highly sticky nature of insurance. Many large global insurance brokers grew organically each year since 2007, except for a modest decline during 2009, and also grew during the 2020 coronavirus pandemic. However, Navacord faces more unique risk given its geographic exposure solely to the Canadian market. Cash Flow Ratios Constrained: Fitch-defined FCF will likely be constrained over the ratings horizon due to debt-financed M&A that has led to high financial leverage and rising interest costs. Interest coverage is also low in the near-term and below Fitch's negative sensitivity threshold for the 'B' IDR. The constrained FCF is largely a derivative of its M&A roll-up strategy, and Fitch views the underlying cash generation profile of the business as healthy. If the company were to significantly slow its M&A strategy, Fitch believes cash flow generation would improve materially unless all of excess cash flow were then diverted to shareholder capital returns. DERIVATION SUMMARY Navacord competes in a fragmented landscape of insurance brokerage and benefits services providers that includes other local/regional companies, national agents and large multi-national brokers. Fitch rates numerous companies in the insurance brokerage industry that are comparable in terms of scale, operating profile and business model. Navacord maintains a top four position among commercial brokers in Canada and has established reasonable size with revenue approaching CAD600 million and annual premium of more than CAD3.0 billion. However, it remains relatively small and has meaningfully higher financial leverage versus larger global brokers such as Marsh & McLennan Companies, Inc. (A-), Aon plc (BBB+), among others. The 'B' rating is reflective of the company's strong historic growth profile, solid profitability, and diversification among its customers and business segments. This is offset by an aggressive, debt-financed M&A strategy, that has led to high gross leverage. KEY ASSUMPTIONS - Organic revenue growth in the mid-single digit percentage range over the ratings horizon plus contributions from incremental M&A through FY 2025; - EBITDA margins estimated in the low-30% range, with some forecasted pressures from cost/wage inflation and additional growth investments. Also, Fitch expects further cost normalization as the company returns to post-COVID-19 working practices; - Interest rates assumptions are as follows: CDOR of 5% during 2023-2025; - Cash taxes and working capital remain a modest use of cash flow in the next few years; - Fitch assumes Navacord will continue its growth-driven M&A strategy and will incur cash outflows related to purchase and integration costs. Fitch assumes this remains the primary use of cash flow and incremental M&A is funded via internal cash flow and incremental debt. Recovery Analysis - For entities rated 'B+' and below, where default is closer and recovery prospects are more meaningful to investors, Fitch undertakes a tailored, or bespoke, analysis of recovery upon default for each issuance. The resulting debt instrument rating includes a Recovery Rating or published 'RR' (graded from RR1 to RR6), and is notched from the IDR accordingly. In this analysis, there are three steps: (i) estimating the distressed enterprise value (EV); (ii) estimating creditor claims; and (iii) distribution of value. - Fitch assumes Navacord would emerge from a default scenario under the going concern approach liquidation. Key assumptions used in the recovery analysis are as follows: (i) Going concern EBITDA - Fitch estimates a going concern EBITDA of approximately CAD145 million, or meaningfully below the company's current run-rate EBITDA. This lower level of EBITDA considers competitive and/or company-specific pressures that hurt earnings in the future while also considering that its M&A strategy could lead to a much higher EBITDA base before any risk of bankruptcy. (ii) EV Multiple - Fitch assumes a 6.5x multiple, which is validated by historic public company trading multiples, industry M&A and past reorganization multiples Fitch has seen across various industries. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - EBITDA Leverage, or Debt/EBITDA, sustained below 6.5x; - (CFO-capex)/Debt sustained in low double digits. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Deterioration in operating fundamentals that lead to weaker revenue trends, margin underperformance, and compression of cash flows; - Interest Coverage, or EBITDA/Interest paid, sustained below 1.5x; - (CFO-capex)/Debt sustained near 0% or below; - EBITDA Leverage sustained above 8.0x. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: Navacord has a fairly well-positioned balance sheet pro forma for the new senior notes issuance. The company had roughly CAD147 million of unrestricted cash on its balance at January 2023 and is projected to have more following the debt raise. Additionally, it has full access to its CAD150 million senior secured revolving credit facility. Cash needs are fairly minimal given the nature of its business that has low capital intensity and working capital needs, along with fairly manageable debt amortization and cash taxes. This should provide sufficient liquidity to both operate its current business as well as invest for organic growth and M&A. Debt Structure: Pro forma for the upcoming senior notes issuance, the company's debt capital consists of: (i) a CAD150 million senior secured revolver (i) CAD384 million of senior secured first lien term loans; (iii) more than USD 700 million of senior secured notes (including upcoming issuance of incremental USD notes); and (iv) USD300 million of senior unsecured notes. Its revolver and term loans are floating rate while the senior notes will have a fixed coupon. There are no near-term maturities with the first lien debt maturing in 2028 while the senior notes will mature in 2030. Fitch expects its debt will grow in the future as the company continues its M&A driven growth strategy. ISSUER PROFILE Navacord Corp. was founded in 2014 and competes in the Canadian commercial insurance brokerage space. It was incorporated under Navacord Corp. in 2018. The company is a top four commercial insurance broker and benefits provider in Canada. Navacord has a network of over 40 offices serving in excess of 50,000 commercial clients. Madison Dearborn Partners (MDP) completed its investment in Navacord in August 2018, currently owning 47% of the company. Navacord's management and employees account for the 53% remaining ownership. The company has approximately 2,200 employees. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Jones Deslauriers Insurance Management Inc. LT IDR B Affirmed B senior unsecured LT CCC+ Affirmed RR6 CCC+ senior secured LT B+ Affirmed RR3 B+ Navacord Corp. LT IDR B Affirmed B NECESSITY RETAIL: Fitch Puts 'BB' IDR on Rating Watch Evolving -------------------------------------------------------------- Fitch Ratings has placed the ratings of The Necessity Retail REIT Inc. (RTL) and its operating partnership, The Necessity Retail REIT Operating Partnership, L.P., including its 'BB' Issuer Default Rating (IDR) and underlying issuances outstanding, on Rating Watch Evolving. The rating action follows RTL's announced agreement to merge with Global Net Lease (GNL), under which GNL will acquire RTL in an all-stock transaction. The combined entity is expected to have a combined real estate value of $9.6 billion at closing with Global Net Lease as the surviving entity. The Rating Watch Evolving indicates that RTL's ratings may be upgraded, affirmed or downgraded given conflicting positive and negative elements. Positively, the proposed merger with a lower-levered, more highly rated entity should improve RTL's leverage versus stand-alone, increases its scale and addresses some corporate governance considerations post internalization of management. Negatively, Fitch views stand-alone RTL's leverage to be high relative to the existing 'BB' rating and the expectation that the REIT will have limited ability to dispose of assets and/or raise additional equity in order to reduce debt. Absent the announced merger with GNL, Fitch believes that RTL would be at risk for negative momentum in the ratings and/or Outlook. KEY RATING DRIVERS Should GNL assume RTL's notes and terminate RTL's credit agreement, as described in the 8-K dated May 23, 2023, Fitch would likely withdraw ratings on the repaid debt and related entities and continue to rate the surviving debt obligations in line with the combined entity. The latter will be subject to confirmation of their being pari passu with the surviving entity's debt. Fitch expects the transaction to close by Sept. 30, 2023. However, resolution of the Rating Watch may take longer than six months should the merger take longer to close than expected. RTL's current 'BB' ratings reflect its standalone credit profile, of which the following were key determinants as assessed during Fitch's rating committee on Jan. 3, 2023: Leverage Elevated Post-CIM Portfolio Acquisition: Fitch expects REIT leverage to increase to the mid-9x as of YE 2022, due to the timing effects of the CIM portfolio acquisition, and settle in the low- to mid-8x range through the remainder of the forecast period. Fitch considers leverage of 8x-9x for RTL at 'BB'. In Fitch's view, the issuer's plan to de-lever, which was to be achieved through continued lease-up within the portfolio, asset sales and equity issuance under its at-the-market (ATM) equity offering program, has and will continue to face headwinds. While there is minimal-to-moderate execution risk to RTL's asset sales during 2022 and 2023 (forecasted to be $402 million and $262 million, respectively), equity issuance has been challenging, given the large and persistent NAV discount (59%) at which RTL shares trade. Fitch's rating case assumes $108 million of equity issuance during 2022 and $75 million during 2023, compared to the previous expectation of $330 million and $250 million, respectively. The company's difficult position is further exacerbated by the current challenging economic and financial trends. In addition to higher capital costs, wider bid-ask spreads in cap rates, and increased uncertainty in both capital markets and commercial property transactions, Fitch expects growth to slow for the net lease sector, with moderated demand and leasing. Acquisition Represents A Favorable Strategy Shift: The CIM portfolio acquisition, which represented a strategic shift away from a primary focus on single-tenant retail properties, provides several benefits to RTL's credit profile. The transaction resulted in numerous portfolio enhancements, including increased multi-tenant occupancy (90.6% as of 3Q22 vs. 87.6% as of 4Q21, the last full quarter prior to the CIM portfolio acquisition), reduced top-10 tenant straight-line rent (SLR) concentration (28% annualized vs. 38%), reduced SLR derived from office assets (1% vs. 7%), and increased emphasis on necessity-based retail tenants, which now account for 55% of portfolio SLR. Moreover, the deal increased RTL's operating scale and portfolio granularity. Based on annualized rental income on a straight-line basis as of Sept. 30, 2022, single- and multi-tenant properties comprised 47% and 53% of its total portfolio, respectively. Externally Managed Structure: Fitch views RTL's external management structure as a modest credit negative that could result in persistent equity valuation discount, which challenges the execution of its acquisition-led growth strategy. Fitch believes institutional investors generally favor internally managed REIT structures given dedicated management and fewer related party transactions and potential conflicts of interest. RTL is managed by AR Global Investments, LLC, a $12 billion global real estate asset manager. Net Lease Mortgage Notes: RTL's ABS funding program has mixed implications for its credit profile. As the buyers are typically ABS-focused and not traditional commercial real estate lenders, RTL has access to an incremental source of capital compared to peers, which Fitch views as a credit positive. Moreover, as the structure is more flexible than CMBS in regard to asset sales and substitutions, it allows RTL to re-tenant or dispose of underperforming assets with greater ease than if held in a CMBS structure, thus better matching the investment strategy of focusing on non-rated entities. Further, the program demonstrates leveragability and contingent liquidity for the company's portfolio. Nonetheless, Fitch expects diminished capital market activity overall in 2023. Limited Operating History: RTL's rapid growth and shorter operating history result in limited comparable performance metrics, even more so with the CIM portfolio acquisition. Positively, the company's occupancy and collection rates have been strong during the pandemic, likely aided by its necessity-based service retail focus and high percentage of IG-rated tenants. DERIVATION SUMMARY RTL's 'BB' ratings consider the expectation of generally durable cash flows offset by higher leverage and weaker relative access to capital. Fitch views RTL's portfolio quality favorably and believes it has improved following the CIM portfolio acquisition. However, certain of the company's metrics, including occupancy, are weaker than its net lease peers and the weighted average lease term of seven years is also lower than the Fitch-rated net lease average of 10 years. RTL's credit metrics are weaker than net lease peers Getty Realty Corp. (GTY; BBB-/Stable), Four Corners Property Trust, Inc. (FCPT; BBB/ Stable) and Essential Properties Realty Trust, Inc. (EPRT; BBB/Stable), which have leverage policies ranging from the mid-4x to 6.0x. RTL and Global Net Lease, Inc. (GNL; BB+/Rating Watch Negative) are relatively comparable from a leverage standpoint. Fitch rates the IDRs of the parent REIT and subsidiary operating partnership on a consolidated basis, using the weak parent/strong subsidiary approach and open access and control factors, based on the entities operating as a single enterprise with strong legal and operational ties. Fitch applies 50% equity credit to the company's perpetual preferred securities given the cumulative nature of coupon deferral. The instruments are subordinated to debt, lack material covenants and the terms of the change of control do not negate the equity credit judgement. Certain metrics calculate leverage including preferred stock. KEY ASSUMPTIONS - Negative SSNOI growth assumption in 2022, with low-single digit SSNOI growth in 2023-2025; - Approximately $1.4 billion of acquisitions in 2022, $75 million in 2023, and $300 million in 2024-2025 at 7%-9% yields; - Dispositions of over $400 million and $260 million in 2022 and 2023, respectively, with minimal dispositions in the following years; - Equity issuance of over $100 million in 2022, $75 million in 2023, and $175 million in 2024-2025. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Evidence of material improvements in EBITDA and reduction of debt such that Fitch expects combined leverage below 8.0x for the combined entity on a sustained basis; - Improvements in the combined entity's profile upon close, including asset and geographic diversification in line with those announced; - Completion of the announced merger prior to Sept. 30,2023. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Lack of material improvements in EBITDA and reduction of debt such that Fitch expects the combined entity's leverage above 8.0x for the combined entity on a sustained basis; - Lack of meaningful improvements in governance such that Fitch expects capital access to remain constrained for the combined entity at the 'BB+' rating level; - Delays in completing the merger, possibly as a result of litigation or shareholder disapproval, or for other reasons. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity Given Non-Recourse Maturities: Fitch estimates RTL's base case liquidity coverage at 0.3x-0.4x for the Oct. 1, 2022 to Dec. 31, 2024 period, though Fitch notes that none of the maturities through 2024 are recourse and the ratio is 0.9x when assuming the amounts related to non-recourse mortgages are mostly refinanced. Moreover, Fitch expects these ratios to improve meaningfully pro forma for dispositions completed in 4Q22 and expected to be completed in 2023 as referenced in the company's 8-K dated Dec. 21, 2022. As of Sept. 30, 2022, RTL had $41 million in cash and $40 million of availability under the revolving credit facility given the borrowing base and borrowings as of Sept. 30, 2022. RTL does not have any material maturities, with 0%, 10%, 2% and 25% due in 2022, 2023, 2024 and 2025, respectively. The senior unsecured revolver is due in April 2026 subject to the company's right to extend the maturity by up to two six-month terms and the notes are due in 2028. Of note, the company does not engage in development projects and the double- and triple-net lease nature of the business does not require material recurring maintenance capex, although Fitch expects capex needs to increase due to the CIM portfolio acquisition and includes these amounts in the above analysis. The company has established and used at-the-market issuance programs for common and preferred stock, which Fitch views favorably. However, RTL shares currently trade at a discount to NAV, which has and could continue to temper equity issuances. Contingent Liquidity: Fitch estimates RTL's net unencumbered asset coverage of unsecured debt at 1.5x based on a stressed cap rate of 10.0% at Sept. 30, 2022, which is expected for U.S. equity REITs in the 'BB' category. Fitch views contingent liquidity as an important ratings consideration as it allows the company to encumber its assets during periods of liquidity stress and access the secured mortgage market to service its debt maturities. ISSUER PROFILE The Necessity Retail REIT (RTL) is an externally managed REIT focusing on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution-related commercial real estate properties located primarily in the United States. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- The Necessity Retail REIT Operating Partnership, L.P. LT IDR BB Rating Watch On BB senior unsecured LT BB Rating Watch On RR4 BB The Necessity Retail REIT, Inc. LT IDR BB Rating Watch On BB senior unsecured LT BB Rating Watch On RR4 BB NEW SECURITY: Unsecureds Will Get 0.03% in Subchapter V Plan ------------------------------------------------------------ New Security Investigation and Correctional Consultant, Inc., filed with the U.S. Bankruptcy Court for the District of Colorado a Plan of Reorganization for Small Business under Subchapter V dated May 30, 2023. Debtor is a closed corporation authorized to do business in the Commonwealth of Puerto Rico since May 8, 2009. Debtor's main business is to provide security services, including security guards and preventive security surveillance, to privately owned entities mainly homeowner's associations, hospitals, and universities. The principal place of business of the Debtor is located in Urb. Royal Town, Ave. Las Cumbres, Road No. 5, # X-28, Bayamon, Puerto Rico. Debtor leases the premises from where it operates, based on a month-to-month lease with Ms. Laura Esther Santiago Berrios. On January 18, 2023, the PR Department of Treasury sent Debtor a Notice of Attachment, demanding payment for owed sales tax, and withholding taxes, in the total amount of $766,643.87, corresponding to certain periods for years 2015 thru 2022 (the core of the debt is for years 2019, 2020 and 2021). The Debtor did not have the funds to comply with the demand for payment from the PR Treasury Department and filed a Chapter 11 Subchapter V petition for relief. After the filing for relief, Debtor has continued to operate its business which has seen its activity increase since the filing for relief. Debtor, through its counsel, has also held good faith negotiations with its largest creditor, the Puerto Rico Department of Treasury, in order to propose a consensual plan for the treatment of their claims. Negotiations with Treasury have led to the filing of this plan. The Debtor's financial projections show that the Debtor will have projected disposable income in the amount of $2,986.00 for payment to priority creditor, the PR Department of Treasury. The final payment under the proposed plan is expected to be paid on August 30, 2029. This Plan of Reorganization proposes to pay creditors of the Debtor from its future income. Treatment of priority claims 1 and 2 in the total amount of $451,639.56 to the PR Department of Treasury. These priority claims are subject to a lump sum payment in the amount of $282,625.97 from amounts held at Treasury. The balance of the priority claims totaling $169,015.59 shall be paid at 3.00% annual interest in 66 monthly payments of $2,986.00. Class 2 of the plan is composed of the allowed unsecured nonpriority portion of claims 1 and 2 by Treasury in the total amount of $285,510.25. These claims would not receive any distribution in a Chapter 7 liquidation scenario and will receive a total distribution of $1,000.00 to be applied as follows: payment of $440.90 to be applied to claim no. 1 and payment of $559.10 to be applied to claim no. 2. Claims in Class 2 shall receive full payment on the effective date of the Plan. With this plan, Debtor submits cash flow projections identified as Exhibit B which shows that Debtor will have the required funds to make cash payments to administrative and priority claims within the first 36 months of the plan. The debtor reports that according to its review of the filed and as scheduled claims, it has a total of all claims general unsecured claims of $285,510.25 for which reason it estimates that all creditors will receive a least of 0.03% distribution of each allowed claim. A full-text copy of the Plan of Reorganization dated May 30, 2023 is available at https://urlcurt.com/u?l=h2dyZM from PacerMonitor.com at no charge. Counsel for Debtor: Noemi Landrau Rivera, Esq. Landrau Rivera & Assoc. P.O. Box 270219 San Juan, PR 00927-0219 Telephone: (787) 774-0224 Facsimile: (787) 793-1004 Email: nlandrau@landraulaw.com About New Security Investigation and Correctional Consultant New Security Investigation and Correctional Consultant, Inc., is a closed corporation authorized to do business in the Commonwealth of Puerto Rico since May 8, 2009. The Debtor filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 23-00217) on Jan. 30, 2023, with as much as $1 million in both assets and liabilities. Judge Maria De Los Angeles Gonzalez oversees the case. The Debtor tapped Landrau Rivera & Assoc. as legal counsel and Angel Mattei as accountant. NO RUST REBAR: Green Tech's Bid to Dismiss Adversary Case Denied ---------------------------------------------------------------- Judge Peter D. Russin of the U.S. Bankruptcy Court for the Southern District of Florida denies the motion to dismiss filed by Green Tech Development, LLC in the adversary proceeding captioned as In re: No Rust Rebar, Inc., Chapter 7, Debtor. No Rust Rebar, Inc., Plaintiff, v. Green Tech Development, LLC, Defendant, Case No. 21-12188-PDR, Adv. Case. No. 21-1111-PDR, (Bankr. S.D. Fla.). In the Motion to Dismiss, Green Tech Development LLC argues that, because of intervening events this adversary proceeding should be dismissed. Green Tech seeks dismissal pursuant to Article III, Section 2 of the U.S. Constitution or under theories of equitable mootness. Green Tech further argues that there is no live controversy because the parties have entered into a settlement agreement and the conversion of the case to Chapter 7 moots the specific performance remedy sought in the adversary because the Chapter 7 Trustee is not "in the business of making real estate investments" and is unable "to pay for the Property" were she to prevail. The Court finds numerous problems with Green Tech's arguments. Foremost, while the parties have entered into a settlement agreement and the Court has approved it, the parties agreed the settlement agreement "shall be subject to and conditioned upon" the Court entering a final order "which has not been stayed and as to which order. . . the time to appeal... has expired and as to which no appeal. . . has been taken." However, an appeal has been taken and is pending, so the settlement remains conditional. Naturally, should the appeal be successful, the settlement would be void, and at that point, the controversy would still be "live." The Court finds that the Trustee did not voluntarily dismiss this adversary when she had an opportunity to do so and instead negotiated a provision that includes dismissal in exchange for consideration. The Court need not surmise the Trustee's strategy in doing so but concludes by virtue of the terms of the settlement agreement itself that the parties attribute some value to the claim. There is no reason for the Court to believe that the Trustee will not seek to extract some value in exchange for dismissal or, even if the likelihood of prevailing in this adversary is remote, seek ways to try the case and finance the purchase of the Property. In the end, Green Tech's argument relies on conjecture, which cannot be the basis for a finding of constitutional mootness. Green Tech next argues that the case should be dismissed under the doctrine of equitable mootness. In general, the doctrine of equitable mootness "permits courts sitting in bankruptcy appeals to dismiss challenges when (typically to confirmation plans) effective relief would be impossible." Naturally, issues that are exclusive to one chapter of the Bankruptcy Code are indeed moot upon conversion to another chapter. However, if the bankruptcy court can provide relief under the chapter to which the case is converted, then the court is entitled to do so. However, in the case at bar, the Trustee still retains control over the Debtor's interest in this litigation and is free to continue to pursue it. The Court sees no reason that this adversary proceeding could not continue merely because the main case was converted to chapter 7. The rights of the parties remain uncertain, and relief is available under Chapter 7. But for the settlement agreement and appeal, this case may proceed to trial -- a decision to be made by the Trustee if the order approving the settlement is overturned. In other words, effective relief is not "impossible" post conversion, and so the case is not moot under this theory either. A full-text copy of the Order dated May 16, 2023, is available https://tinyurl.com/4tc22nmu from Leagle.com. About No Rust Rebar No Rust Rebar is a Pompano Beach, Fla.-based company that manufactures and sells composite reinforcement for concrete. No Rust Rebar filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No, 21-12188) on March 5, 2021. Don Smoth, president, signed the petition. At the time of the filing, the Debtor disclosed $1,763,496 in assets and $4,378,630 in liabilities. Judge Peter D. Russin oversees the case. Kevin Christopher Gleason, Esq., at Florida Bankruptcy Group, LLC, serves as the Debtor's legal counsel. OPULENT VACATIONS: Seeks to Hire Mortenson CPA as Accountant ------------------------------------------------------------ Opulent Vacations, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Utah to hire Swen Mortenson, CPA at Mortenson CPA as its general accountant and tax preparer. The firm's services include: a. rendering general accounting assistance, payroll assistance, and tax preparation services; b. rendering assistance in connection with Debtor's efforts to sell its business; c. rendering accounting assistance and oversight regarding assisting Debtor in keeping reliable and accurate books and records on a going forward basis; and d. rendering accounting advice and services to Debtor regarding such other matters as may arise from time to time in this case. Mortenson will charge the Debtor an hourly rate of $200/hr. Swen Mortenson, CPA, owner of Swen A Mortenson CPA Inc., assured the court that his firm is disinterested and does not hold any interest adverse to the Debtor. The firm can be reached through: Swen Mortenson, CPA Mortenson CPA 2292 South Redwood Rd West Valley City, UT 84119-1322 Phone: +1 801-466-0041 Email: Swen@mortensoncpa.com About Opulent Vacations Opulent Vacations, Inc. offers high-end luxury vacation homes in scenic destinations like Park City, Lake Tahoe, Palm Springs, San Diego, and more. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Utah Case No. 23-21941) on May 15, 2023. In the petition signed by Jeff Jenson, chief executive officer, the Debtor disclosed up to $10 million in assets and liabilities. Judge Joel T. Marker oversees the case. Jeffrey L. Trousdale, Esq., at Cohne Kinghorn, PC, represents the Debtor as legal counsel. ORS.COM INC: Seeks to Hire Spector & Cox as Bankruptcy Counsel -------------------------------------------------------------- ORS.COM, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Spector & Cox, PLLC as its counsel. The firm's services include: a. providing the Debtors with legal advice with respect to their powers and duties; b. preparing and pursuing confirmation of a Chapter 11 plan; c. preparing legal papers; d. appearing in court and protecting the interests of the Debtors; and e. performing all other legal services for the Debtors which may be necessary and proper in these Chapter 11 proceedings. The hourly rates charged by the firm's attorneys range from $350 to $395. Paralegals charge $115 per hour for their services. In addition, the firm will seek reimbursement for out-of-pocket expenses incurred. The firm holds $7,500 as a retainer. Howard Marc Spector, Esq., a partner at Spector & Cox, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Howard Marc Spector, Esq. Spector & Cox, PLLC 12770 Coit Road, Suite 850 Dallas, TX 75251 Tel: (214) 365-5377 Fax: (214) 237-3380 Email: hspector@spectorcox.com About ORS.COM Inc. ORS.COM, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-30749) on April 17, 2023. In the petition signed by Aaron Brewer as chief executive officer, the Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. Judge Michelle V. Larson presides over the case. Howard Marc Spector, Esq. at Spector & Cox, PLLC represents the Debtor as counsel. PACKABLE HOLDINGS: Seeks to Hire Hilco as Receivables Servicer -------------------------------------------------------------- Packable Holdings, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to employ Hilco Receivables, LLC to assist with monetizing their outstanding receivables. Since December last year, the Debtors have sold a substantial portion of their remaining assets. The Debtors, however, have certain estate claims and causes of action that have not been liquidated to date, including claims related to receivables owed to the Debtors. Hilco will be paid a fee equal to 10 percent of the gross cash receipts received. As disclosed in court filings, Hilco is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Sarah Baker Hilco Receivables, LLC 5 Revere Dr Suite 206 Northbrook, IL 60062 Tel: +91 84750 91100 Email: sbaker@hilcoglobal.com About Packable Holdings Packable Holdings, LLC, now known as Pack Liquidating, LLC, is a multi-marketplace e-commerce enablement platform. Packable Holdings and five affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10797) on Aug. 29, 2022. In the petition filed by Maria Harris, chief legal officer, Packable Holdings reported between $100 million and $500 million in both assets and liabilities. Judge Craig T. Goldblatt oversees the cases. The Debtors tapped Cooley LLP and Potter Anderson & Corroon, LLP as legal counsels; Alvarez and Marsal North America, LLC as financial advisor; and Hilco Merchant Resources, LLC as liquidation agent. Epiq Corporate Restructuring, LLC is the claims agent. On Sept. 13, 2022, the U.S. Trustee for Region 3 appointed the official committee of unsecured creditors in the Debtors' cases. The committee selected Kelley Drye & Warren, LLP and A.M. Saccullo Legal, LLC as bankruptcy counsels; ASK, LLP as special litigation counsel; and Dundon Advisers, LLC as financial advisor. JPMorgan Chase Bank, N.A., as administrative agent, is represented by Richards, Layton & Finger, P.A. and Morgan, Lewis & Bockius LLP. PALADIN REINSURANCE: Enters Commutation Plan; Claims Due July 14 ---------------------------------------------------------------- Paladin Reinsurance Corporation advises all creditors that it is entering into a commutation plan under Section 1321(b) of the New York Insurance Law and Department Regulation 141 (11 NYCRR Section 128). Any person who has and can provide details of a claim against this estate should email by July 14, 2023, details of their claims to commutation@paladinreinsurance.com. Paladin Reinsurance Corporation offers reinsurance services. PALMETTO INTERSTATE: Taps Cooper Law Firm as Bankruptcy Counsel --------------------------------------------------------------- Palmetto Interstate Development II, Inc. received approval from the U.S. Bankruptcy Court for the District of South Carolina to hire The Cooper Law Firm as its legal counsel. The firm's services include: a. providing legal advice with respect to the Debtor's power and duties in the continued management and control of its assets, and its responsibilities to its creditors; b. providing legal advice regarding its responsibility to provide insurance and bank account information, file monthly operating reports, and file a plan of reorganization and disclosure statement; c. preparing legal documents relative to the Debtor's Chapter 11 case. The firm received a retainer in the amount of $25,000, plus $1,738 filing fee. The firm will be paid at these rates: Attorneys $295 per hour Associates $150 to $195 per hour Paralegals $95 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Robert Cooper, Esq., a partner at The Cooper Law Firm, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Robert H. Cooper, Esq. The Cooper Law Firm 150 Milestone Way, Suite B Greenville, SC 29615 Tel: (864) 271-9911 Fax: (864) 232-5236 Email: rhcooper@thecooperlawfirm.com About Palmetto Interstate Development II Palmetto Interstate Development II, Inc. is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). Palmetto Interstate Development II filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. S.C. Case No. 23-01102) on April 17, 2023. At the time of filing, the Debtor reported $10 million to $50 million in assets and as much as $50,000 in liabilities. Judge Elisabetta Gm Gasparini oversees the case. Robert H. Cooper, Esq., at The Cooper Law Firm represents the Debtor as counsel. PARADISE REDEVELOPMENT: S&P Lowers 2009 Bonds Rating to 'D' ----------------------------------------------------------- S&P Global Ratings lowered its long-term rating to 'D' from 'CC' on Paradise Redevelopment Agency, Calif.'s series 2009 refunding tax allocation bonds (TABs). "The rating being lowered to 'D' reflects a payment default on the 2009 refunding bonds due June 1, 2023," said S&P Global Ratings credit analyst Li Yang. S&P understands the debt service reserve fund has $86,069.11 remaining and is insufficient to fully cover the principal and interest payment. PHILLIPS SEABROOK: Gets OK to Hire Dame Law as Special Counsel -------------------------------------------------------------- Phillips, Seabrook & Wilson, LLC received approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Dame Law, P.C. as special counsel. The Debtor needs the firm's legal assistance in connection with the case styled Melinda A. Willingham v. Lynette Wilson-Phillips, Jonathan Phillips, Phillips, Seabrook & Wilson, LLC and Socotra Reit I LLC (Civil Action No. 21-CV03280-5). The case is pending in the Superior Court of DeKalb County, Ga. Dame Law will be paid at these rates: Partners $450 to $495 per hour Associates $350 per hour Legal Assistants $150 per hour As disclosed in court filings, Dame Law is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: H. Michael Dever, Esq. Dame Law, P.C. 1867 Independence Square, Suite 201 Atlanta, GA 30338 Tel: (404) 236-8614 Email: mdever@damelawpc.com About Phillips Seabrook & Wilson Phillips, Seabrook & Wilson, LLC, a company in Lithonia Ga., filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-60626) on Dec. 30, 2022, with $1 million to $10 million in both assets and liabilities. Todd E. Hennings, Esq., at Macey, Wilensky & Hennings, LLP has been appointed as Subchapter V trustee. Judge Barbara Ellis-Monro oversees the case. The Debtor tapped Howard D. Rothbloom, Esq., at The Rothbloom Law Firm as bankruptcy counsel; Dame Law, P.C. as special counsel; and Kelly Coughlin, CPA, at EveryDay CPA, Inc. as accountant. PLATFORM II LAWNDALE: Wins Cash Collateral Access Thru June 30 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, astern Division, authorized Platform II Lawndale LLC to use cash collateral on an interim basis in accordance with the budget for the entire month of June. GreenLake Real Estate Fund, LLC purports to hold a first priority lien and security interest in the Debtor's property, and the Debtor's cash and cash receipts received from the leasing of storage units, through a security interest and assignment of rents granted by the Debtor under an Open-End Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing dated May 18, 2018, and recorded with the Cook County Recorder of Deeds on May 22, 2018. The assets secure the repayment of a promissory note dated May 18, 2018, in the original principal sum of $6.250 million. As adequate protection, Greenlake is granted a replacement lien on the Debtor's rents, accounts and accounts receivables. As further adequate protection for Greenlake's interests in the Pre-Petition Collateral, and consistent with 11 U.S.C. section 552, the Debtor grants Greenlake a replacement lien on the Debtor's rents, accounts, and accounts receivables derived from the Property, which are of the same type or nature as the Pre-Petition Collateral, coming into existence or acquired by the Debtor respecting the Property on or after the Petition Date. The Post-Petition Liens granted to Greenlake under the terms of the Order will be valid and perfected as of the date of the Order, without the need for the execution or filing of any further document or instrument otherwise required to be executed or filed under applicable non-bankruptcy law. The Debtor's authority to use Cash Collateral will terminate on the earlier of (a) the date of entry by the Court of an order modifying or otherwise altering the effectiveness of the Order, (b) an Event of Default, or (c) the expiration of the Budget Period. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=exDWit from PacerMonitor.com. The Debtor projects $32,200 in total operating revenue and $107,000 in total expenses for May 2023. About Platform II Lawndale LLC Platform II Lawndale LLC is an Illinois limited liability company that owns a self-storage facility at 1750 North Lawndale Avenue in Chicago's West Logan Square neighborhood. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-07668) on July 11, 2022. In the petition signed by Scott Krone, manager, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Deborah L. Thorne oversees the case. Gregory J. Jordan, Esq., at Jordan & Zito LLC is the Debtor's counsel. PLX PHARMA: Deadline to File Claims Set for June 26 --------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set June 26, 2023, at 5:00 p.m. (Prevailing Eastern Time) as the last date and time for creditors of PLx Pharma Inc. and its debtor-affiliates to file their proofs of claim against the Debtors. The Court also set Oct. 10, 2023, at 5:00 p.m. (Prevailing Eastern Time) as the deadline for governmental units to file their claims against the Debtors. All original proofs of claim must be filed so as to be received on or before the applicable bar date at 5:00 p.m. (Prevailing Eastern Time) either (i) electronically through the claims agent's Website at https://www.donlinrecano.com/Clients/plx/FileClaim or (ii) by first-class mail, overnight delivery service, or hand delivery at the following address: a) if sent by United State Postal Services, send to: Donlin Recano & Company Inc. Re: PLx Pharma Inc. et al. P.O. Box 199043 Blythebourne Station Brooklyn, NY 11219 b) if sent by hand delivery or overnight delivery, send to: Donlin Recano & Company Inc. Re: PLx Pharma Inc. et al. 62011 15th Avenue Brooklyn, NY 11219 About PLx Pharma PLx Pharma Inc. and PLx Opco Inc. are a commercial-stage drug delivery platform technology company, focused on improving how and where active pharmaceutical ingredients are absorbed in the gastrointestinal tract, via its clinically-validated and patent-protected PLxGuard technology. PLx Pharma Inc. and PLx Opco filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10456) on April 13, 2023. The petitions were signed by Lawrence Perkins as chief restructuring officer. The Hon. Mary F. Walrath oversees the cases. As of Dec. 31, 2022, the company had $21,750,000 in total assets against $12,285,000 in total liabilities. Lawyers at Olshan Frome Wolosky LLP and Young Conaway Stargatt & Taylor LLP serve as counsel to the Debtors; SierraConstellation Partners serves as CRO Provider; Donlin, Recano & Company serves as notice, claims, solicitation & balloting agent. PLYWEALTH INVESTMENT: Gets OK to Hire E. Vincent Wood as Counsel ---------------------------------------------------------------- Plywealth Investment Group, LLC received approval from the U.S. Bankruptcy Court for the Northern District of California to employ The Law Offices of E. Vincent Wood as counsel. The firm's services include: a. consulting with the Debtor concerning its present financial situation and realistic achievable goals; b. advising the Debtor concerning its duties under the Bankruptcy Code; c. identifying, prosecuting and defending claims and causes of actions assertable by or against the estate; d. preparing legal papers in connection with the administration of the estate, including formulating a Chapter 11 plan, drafting the plan and disclosure statement, and prosecuting legal proceedings to seek confirmation of the plan; e. if necessary, preparing, and prosecuting pleadings to avoid preferential transfers or transfers deemed fraudulent as to creditors, motions for authority to borrow money, sell property or compromise claims, and objections to claims; and f. taking all necessary actions to protect and preserve the estate and providing all other legal services requested. The firm will be paid at these rates: E. Vincent Wood, Attorney $425 per hour Nicole Zorrilla, Paralegal $175 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The firm received from the Debtor a retainer of $7,512. E. Vincent Wood, Esq., a partner at The Law Offices of E. Vincent Wood, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: E. Vincent Wood, Esq. The Law Offices of E. Vincent Wood 2950 Buskirk Ave., #300 Walnut Creek, CA 94597 Tel: (925) 278-6680 Fax: (925) 955-1655 Email: vince@woodbk.com About Plywealth Investment Group Plywealth Investment Group, LLC is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). The company is based in Oakland, Calif. Plywealth Investment Group filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 23-40479) on April 26, 2023, with $1 million to $10 million in assets and liabilities. Peter Choy, managing member, signed the petition. Judge Charles Novack oversees the case. E. Vincent Wood, Esq., at The Law Offices of E. Vincent Wood, is the Debtor's bankruptcy counsel. POUGHKEEPSIE, NY: Moody's Affirms 'Ba1' Issuer & GOLT Ratings ------------------------------------------------------------- Moody's Investors Service has affirmed the City of Poughkeepsie, NY's Ba1 issuer and general obligation limited tax (GOLT) ratings and revised the outlook to positive from stable. The city's had roughly $60.2 million in debt as of the 2021 audit. RATINGS RATIONALE The Ba1 issuer rating reflects the city's weak, albeit improved financial position. Although the city has made material strides in improving its operations and governance, its financial position remains weak as the negative general fund balance position accumulated in previous years is still being dealt with. Favorably, total governmental fund balance is positive and the city is continuing to take action to reduce the negative general fund position. Management's endeavors are aided by a recent uptick in development which is causing economic expansion. The Ba1 rating on the city's GOLT bonds is at the same level as the issuer rating because the city has pledged its faith, credit and taxing authority for repayment of the bonds. RATING OUTLOOK The positive outlook reflects Moody's expectation that management will continue its efforts to improve governance and control, leading to on time financial reporting and strengthened finances. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -- Significant and sustained improvement in reserves and liquidity -- Continued governance and control improvements -- Improved resident wealth and income FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -- Reversion to structural imbalance -- Declines in the economy or resident wealth and income LEGAL SECURITY The city's bonds are backed by its full faith and credit general obligation pledge supported by its authority to levy property taxes as limited by New York State's Property Tax Cap-Legislation (Chapter 97 (Part A) of the Laws of the State of New York, 2011). PROFILE The City of Poughkeepsie is the county seat of Dutchess County (Aa2 stable) and is located on the Hudson River, approximately 70 miles north of New York City (Aa2 stable). The city provides standard municipal services, including some utilities, to approximately 31,500 residents. METHODOLOGY The principal methodology used in these ratings was US Cities and Counties Methodology published in November 2022. PROTECH FIRE: Seeks to Hire Cooper & Scully as Bankruptcy Counsel ----------------------------------------------------------------- Protech Fire & Security, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Cooper & Scully, PC as its legal counsel. The Debtor requires legal counsel to: a. prepare and file the Debtor's bankruptcy schedules and statement of financial affairs; b. negotiate with creditors and handle routine motions; c. file objections to claims, if necessary; d. perform legal work necessary to sell property of the estate; e. file and prosecute adversary proceedings necessary to determine the extent, validity and priority of liens; f. file and prosecute avoidance actions, if necessary; g. file and prosecute adversary proceedings, motions and contested pleadings as necessary; h. prepare and file a Chapter 11 plan and disclosure statement; i. conduct discovery that is required for the completion of the Debtor's Chapter 11 case or any matter associated with the case; j. perform all legal matters that are necessary for the completion of the case; and k. perform miscellaneous legal duties to complete the bankruptcy case. The firm will be paid at these rates: Julie M. Koenig $450 per hour Paralegal $125 per hour The Debtor paid the firm a retainer of $10,000 and $1,738 for the filing fee. Julie Koenig, Esq., a shareholder of Cooper & Scully, disclosed in a court filing that her firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Julie M. Koenig, Esq. Cooper & Scully, P.C. 815 Walker St., Suite 1040 Houston, TX 77002 Tel: (713) 236-6800 Fax: (713) 236-6880 Email: julie.koenig@cooperscully.com About ProTech Fire & Security ProTech Fire & Security, LLC installs, monitors and maintains fire and security alarms, surveillance systems, access control, voice and data solutions, bi-directional antenna BDA and a host of other ancillary products and services for general contractors, architects, property managers and end users in the State of Texas. ProTech Fire & Security sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 23-31839) on May 19, 2023, with $453,929 in assets and $1,896,142 in liabilities. Garrett Steiger, president, signed the petition. Judge Eduardo V. Rodriguez oversees the case. Julie M. Koenig, Esq., at Cooper & Scully, PC, represents the Debtor as legal counsel. PUG LLC: $327.5M Bank Debt Trades at 10% Discount ------------------------------------------------- Participations in a syndicated loan under which Pug LLC is a borrower were trading in the secondary market around 90.3 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $327.5 million facility is a Term loan that is scheduled to mature on February 13, 2027. About $321.8 million of the loan is withdrawn and outstanding. PUG LLC provides an online marketplace for secondary tickets along with payment support, logistics, and customer service. It acquired the StubHub business of eBay Inc. QBS PARENT: S&P Alters Outlook to Negative, Affirms 'B-' ICR ------------------------------------------------------------ S&P Global Ratings revised the outlook on QBS Parent Inc. (dba Quorum Software) to negative from stable, reflecting S&P's view that a third year of negative free cash flow and a persistently high interest burden may impair Quorum's ability to sustainably service its capital structure. At the same time, S&P affirmed all ratings on the company, including its 'B-' issuer credit rating. While Quorum has about 70% recurring revenue and no near-term maturities, S&P believes there is risk that the company can face additional business operations or greater-than-expected macroeconomic headwinds such that it underperforms S&P's forecast of positive free cash flow generation in 2024. Revenue growth over the next 12 months will slow on more conservative spending in the oil and gas industry amid a weakening macroeconomic environment. Quorum increased revenues 3% in 2022, with growth in its subscription and field services segments offset by a 9% decline in professional services. While this is an improvement from a 6% decline in 2021, the moderate pace reflected more conservative spending by Quorum's customers even as oil prices surged in the first half of 2022. The company expanded its base of recurring software-as-a-service (SaaS) revenues about 5% for the year, reaching about 70% of all sales. However, weakness in its professional services segment, which represents about 20% of its business and are more project-based and discretionary in nature. While S&P expects commodity prices to remain broadly stable over the next 12-24 months, which should support upstream players and allow Quorum's small and midsize producers to continue to invest in software, the weakening macroeconomic backdrop limits our revenue growth forecast to the low- to mid-single-digit percentage area over the next two years. S&P Global Ratings-adjusted EBITDA margins were 26% in 2022, down from 30% in 2021, as the result of the eventual reversal of temporary COVID-19-related cost reductions, continued investment in product development for SaaS-based products, and higher personnel costs in a tight labor market. S&P expects about 250 basis points of improvement in 2023 through lower labor costs, roll-off of integration costs from tuck-in acquisitions, and cost-cutting initiatives such as a reduced real estate footprint. S&P said, "Quorum's considerable amount of floating-rate debt results in our forecast of negative to break-even FOCF for 2023, which could further constrain liquidity. While we expect a slight improvement in both revenue and profitability in 2023, we project cash interest expense to increase considerably to about $50 million, from about $35 million in 2022, and it may be challenging for the firm to outgrow its interest burden. This dynamic is exacerbated by the fact that Quorum continues to operate with lower levels of liquidity at Dec. 31, 2022, and while we expect its liquidity position to improve in the beginning of the year due to the seasonally strong first quarter, we project Quorum will continue to draw on its revolver throughout the year to meet working capital requirements. S&P Global Ratings-adjusted leverage reached 12x by the end of 2022, and we expect it to remain 9x-10x through 2024. "We project positive free cash flow of about $10 million-$15 million in 2024, however persistently high interest rates and macroeconomic uncertainty increase downside risks for Quorum and narrow the path to sustainably positive generation. At this point, if there are additional headwinds to business operations from a weaker-than-expected demand environment or inflated operating expenses, we believe increasing debt service could continue to constrain FOCF generation to break-even or a deficit in 2024, which could warrant a downgrade. We also view the firm's upcoming maturities, including a 2024 maturity revolver and 2025 first-lien term loan maturity, may present refinancing risks absent improvement in business fundamentals. Failure to address these maturities proactively could also lead to a downgrade. "The negative outlook reflects our view that QBS will face macroeconomic pressures, a high interest rate environment, and more conservative capital spending in the oil and gas industry over the next 12 months. This could weaken operating results, including sustained negative free cash flow." S&P could lower its rating on QBS if: -- S&P believes it cannot generate positive FOCF in the next 12 months or faces weak demand for its products, particularly in software bookings, and lower profitability than it projects as the result of end-market turmoil or weaker-than-expected spending by customers; -- S&P believes the capital structure is unsustainable; or -- While not an immediate concern, the company faces challenges in refinancing its first-lien term loan maturing in September 2025. S&P could revise its outlook to stable if: -- The company's operating performance improves, including a rebound in revenue growth, improvement in margins, and sustained positive free cash flow; and -- S&P believes it can maintain a sustainable capital structure with at least adequate liquidity. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of the company, as is the case for most rated entities owned by private-equity sponsors. We believe QBS' highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of controlling owners. This also reflects the generally finite holding periods and a focus on maximizing shareholder returns. Although over the longer term we see the decarbonization of the global economy and consumption of renewable energy as potential risks, environmental factors are an overall neutral consideration." QUEST SOFTWARE: $2.81B Bank Debt Trades at 17% Discount ------------------------------------------------------- Participations in a syndicated loan under which Quest Software Inc is a borrower were trading in the secondary market around 83.1 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $2.81 billion facility is a Term loan that is scheduled to mature on February 1, 2029. About $2.79 billion of the loan is withdrawn and outstanding. Quest Software Inc. provides software solutions. The Company offers enterprise software that identities, users and data, streamlines IT operations, and hardens cybersecurity from the inside out. Quest Software serves customers in the United States. R L BURNS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: R L Burns Inc. 1203 W Gore Street Orlando, FL 32805 Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-02186 Debtor's Counsel: Jeffrey S. Ainsworth, Esq. BRANSONLW, PLLC 501 E. Concord Street Orlando, FL 32803 Tel: 407-894-6834 Fax: 407 894 8559 Email: jeff@bransonlaw.com Total Assets: $751,416 Total Liabilities: $3,997,262 The petition was signed by Robert L. Burns Sr., as CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DEK72QQ/R_L_Burns_Inc__flmbke-23-02186__0001.0.pdf?mcid=tGE4TAMA RAP OPERATING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: RAP Operating, LLC 298 Kirby Lane Jena LA 71342 Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Western District of Louisiana Case No.: 23-80316 Judge: Hon. Stephen D. Wheelis Debtor's Counsel: Thomas R. Willson, Esq. THOMAS R. WILLSON 1330 Jackson Street, Suite C Alexandria LA 71301 Tel: (318) 442-8658 Email: rocky@rockywillsonlaw.com Total Assets: $98,300 Total Liabilities: $1,609,309 The petition was signed by James E. Robbins as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/EKE3UEA/RAP_Operating_LLC__lawbke-23-80316__0001.0.pdf?mcid=tGE4TAMA RAP OPERATING: Seeks Access to GM Financial Cash Collateral ----------------------------------------------------------- Rap Operating, L.L.C. asks the U.S. Bankruptcy Court for the Western District of Louisiana, Alexandria Division, for authority to use the cash collateral of GM Financial and provide adequate protection. The Debtor needs to use the cash collateral in the ordinary course of the Debtor's business to pay expenses related to operation during the course of the case. The Debtor's assets include a 2023 Chevrolet Flatbed Truck used primarily in LaSalle Parish, Louisiana. This asset is subject to a lien in favor of GM Financial. The vehicle is insured with full coverage against loss with the Louisiana Farm Bureau Casualty Insurance Company under Policy No. A R64056, with GM Financial shown as lienholder. The Debtor seeks permission to use this asset and provide adequate protection thereof in the form of cash payments representing the depreciation of the asset as required by law. The Debtor does not believe there is any significant amount of depreciation of this asset, as it is regularly inspected and maintained. A copy of the motion is available at https://urlcurt.com/u?l=DSrmPv from PacerMonitor.com. About Rap Operating, L.L.C. Rap Operating, L.L.C. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. La. Case No. 23-80316) on June 2, 2023. In the petition signed by James E. Robbins, managing member, the Debtor disclosed up to $100,000 in assets and up to $10 million in liabilities. Thomas R. Willson, Esq. represents the Debtor as legal counsel. RATHER OUTDOORS: $365M Bank Debt Trades at 22% Discount ------------------------------------------------------- Participations in a syndicated loan under which Rather Outdoors Corp is a borrower were trading in the secondary market around 77.8 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $365 million facility is a Term loan that is scheduled to mature on February 11, 2028. The amount is fully drawn and outstanding. Rather Outdoors Corporation operates as a holding company. The Company, through its subsidiaries, provides fishing equipment, such as casting, spinning, rods, tools, and accessories. Rather Outdoors Corp serves customers in the State of Missouri. RC HOME SHOWCASE: Court OKs Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, authorized RC Home Showcase, Inc. to continue using cash collateral on an interim basis in accordance with the budget. The Debtor is directed to continue paying Manuhen Enterprises, LLC an adequate protection payment in the amount of $4,000 per month, and with each additional payment due on the 1st day of every month thereafter, pending further Court order. Manuhen will further be entitled to a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as its prepetition lien, without the need to file or execute any document as may otherwise be required under applicable nonbankruptcy law. In addition, the Debtor will maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with Manuhen. A continued hearing on the matter is set for June 26 at 9:30 a.m. A copy of the Court's order is available at https://urlcurt.com/u?l=n4g6fe from PacerMonitor.com. About RC Home Showcase, Inc. RC Home Showcase, Inc. is in the glass product manufacturing business. RC designs and manufactures windows, sliding glass doors, glass railings and curtain wall. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-19571) on December 15, 2022. In the petition signed by Eusebio Paredes, president, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Laurel M. Isicoff oversees the case. Chad Van Horn, Esq., at Van Horn Law Group, P.A., represents the Debtor as legal counsel. REGAL REXNORD: Moody's Withdraws Ba3 Rating on Sr. Unsecured Notes ------------------------------------------------------------------ Moody's Investors Service withdrew the rating on Regal Rexnord Corporation's 6.125% senior notes due October 2026. These notes were assumed by Regal Rexnord as part of its March 2023 acquisition of Altra Industrial Motion Corp. The senior notes were issued in October 2018 by Stevens Holding Company, Inc., a subsidiary of Altra. Regal Rexnord assumed the $18.1 million of aggregate principal outstanding under the notes on March 27, 2023. The Altra senior notes may be redeemed by the company on or after October 1, 2023. Regal Rexnord's Baa3 senior unsecured ratings are unaffected. Withdrawals: Issuer: Regal Rexnord Corporation Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated Ba3, Placed on Review for Upgrade RATINGS RATIONALE Moody's has decided to withdraw the rating for its own business reasons. Headquartered in Beloit, Wisconsin, Regal Rexnord Corporation, is a publicly-traded leading global manufacturer and engineer of industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products and specialty electrical components and systems. Pro forma for the Altra acquisition, projected full year 2023 revenues will be approximately $7 billion. RETAILING ENTERPRISES: Files Emergency Bid to Use Cash Collateral ----------------------------------------------------------------- Retailing Enterprises, LLC asks the U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, for authority to use the cash collateral of City National Bank of Florida and provide adequate protection. As of the filing date, the Debtor is indebted to the Lender in the total amount of approximately $7.6 million. The Indebtedness is comprised of a line of credit and two term loans which are secured by, inter alia, a Promissory Note, Commercial Security Agreement, and Guaranties of Payment and Performance executed by Retailing Enterprises PR, Inc., Newport Venture Limited, The Watch Brand Company, LLC, and Mauricio Krantzberg. Initially, on October 28, 2018, the Debtor and Lender entered into a loan agreement in the aggregate amount of $10 million. The Initial Amount was bifurcated into a revolving loan in the amount of $6.5 millin and a term loan in the amount of $3.5 million. The Initial Revolving Loan was to be used by the Debtor to finance its short term financing requirements and letters of credit, and the Initial Term Loan was to be used by the Debtor to term out a portion of existing accounts payable owed to Invicta Watch Company of America. To perfect its security interest, the Lender filed a UCC financing statement in the Florida Secured Transaction Registry on November 1, 2018, bearing ID number 201806923848. On December 29, 2021, the Debtor executed an amended Note in connection with the Initial Loans at which time the balance of the Initial Revolving Loan was $6.499 million and the balance of the Initial Term Loan was $590,327. Pursuant to the Amended Promissory Notes, the Initial Revolving Loan amount was adjusted to $4.2 million. The payment terms, which commenced on December 29, 2021, required the Debtor to make consecutive monthly payments of accrued interest only with such interest accruing on the unpaid principal balance of the Amended Revolving Loan at a rate per annum equal to the Wall Street Journal Prime Rate. A balloon payment will be due from the Debtor upon maturity of the loan which will occur on December 29, 2024. Pursuant to the Amended Promissory Notes, the Initial Term Loan amount was adjusted to $2.889 million. The Amended Term Loan has a five-year term with a fixed rate per annum equal to 4.25%. Commencing December 29, 2021, the Debtor made accrued interest only payments for six months. Commencing on June 29, 2022, the applicable principal payment amount was set at $12,500 for six months, followed by $20,000 for 12 months, $47,500 for 12 months, $72,500 for 12 months, and $97,500 for the last 12 months of the 60-month loan term. On March 29, 2019, the Lender agreed to make a term loan to the Debtor in the original principal amount of $5 million. The purpose of the Second Term Loan was to finance the Debtor's expansion of Invicta Stores. To perfect its security interest, the Lender filed a second UCC financing statement in the Florida Secured Transaction Registry on April 2, 2019, bearing ID number 201908272153. On February 15, 2023, the Debtor executed an Amended and Restated Promissory Note in connection with the Second Term Loan balance of $833,333. Pursuant to the Amended Second Term Loan Agreement, the Debtor, commencing on March 15, 2023, and continuing on the 15th of each month thereafter, the Debtor is to make equal monthly payments of principal and interest in the amount of $37,398 with the entire outstanding principal balance plus all accrued interest to be due and payable on February 15, 2025. In order to (i) adequately protect the Lender in connection with the Debtor's use of the cash collateral, and (ii) provide the Lender with additional adequate protection in respect to any decrease in the value of its interests in the Property and cash collateral resulting from the stay imposed under 11 U.S.C. section 362, or the use of the Collateral by the Debtor, the Debtor would offer as adequate protection of the Lender's collective lien, a first priority post-petition lien on all cash generated by the Debtor's sales post-petition. A copy of the Debtor's motion and budget is available at https://urlcurt.com/u?l=cRe653 from PacerMonitor.com. The Debtor projects $8.7 million in income and $8.672 million in expenses for the period from May 30 to June 30, 2023. About Retailing Enterprises, LLC Retailing Enterprises, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-14169-SMG) on May 30, 2023. In the petition signed by Mauricio Krantzberg, president, the Debtor disclosed up to $50 million in assets and up to $100 million in liabilities. Aaron A. Wernick, Esq., at Wernick Law, PLLC, represents the Debtor as legal counsel. RIVERBED TECHNOLOGY: $900M Bank Debt Trades at 74% Discount ----------------------------------------------------------- Participations in a syndicated loan under which Riverbed Technology Inc is a borrower were trading in the secondary market around 26.4 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $900 million facility is a payment-in-kind Term loan that is scheduled to mature on December 7, 2026. The amount is fully drawn and outstanding. Riverbed Technology, Inc. provides application performance monitoring, cloud migration, network performance monitoring, and security solutions. Riverbed Technology serves customers globally. ROBBINS ENTERPRISES: Private Sale of Wilmington Property Mooted --------------------------------------------------------------- Judge Janet E. Bostwick of the U.S. Bankruptcy Court for the District of Massachusetts deemed as moot Robbins Enterprises LLC's request for approval of proposed private sale of the real property located at 363 Middlesex Ave., in Wilmington, Massachusetts 01887. The Debtor has filed a superseding motion. About Robbins Enterprises Robbins Enterprises, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 23-10508) on April 3, 2023, listing under $1 million in both assets and liabilities. Judge Janet E. Bostwick oversees the case. Peter M. Daigle, Esq., at Daigle Law Office represents the Debtor as counsel. ROBERT BROWER: Coastal's Stock Issued to Nobles Void ---------------------------------------------------- In the appealed case captioned as IN RE: ROBERT BROWER, SR., Debtor. ANTHONY NOBLES, Appellant, v. MUFG UNION BANK, N.A., Appellee, Case No. 5:20-cv-06889-EJD, (N.D. Cal.), Judge Edward J. Davila of the U.S. District Court for the Northern District of California affirms the Bankruptcy Court's order and judgment holding that 50,000 shares of Coastal Cypress Corporation stock issued to Appellant Anthony Nobles were void for lack of consideration. In 1982, the Debtor Robert Brower, Sr. founded Coastal Cypress Corporation. In January 2011, Appellant Anthony Nobles executed an agreement to purchase 200,000 shares of Coastal stock for $200,000, and he paid that amount into an account held jointly by Brower and his wife. Brower deposited $50,000 of that money into a Coastal account. However, bank records show that between Jan. 12, 2011 and Feb. 11, 2011, there was only one $50,000 transfer between Brower and Coastal. In May 2017, Appellee MUFG Union Bank, N.A. filed its adversary complaint against Nobles and other defendants, seeking a declaration that Brower and his wife owned 100% of the equity interests in Coastal. The Bankruptcy Court determined that, because the $50,000 were repaid to Brower, Coastal never received consideration for 50,000 of the shares that it issued to Nobles, and therefore those shares were void. The Bankruptcy Court further determined that those 50,000 shares were void for lack of consideration. As a threshold issue, Nobles argues that MUFG is without standing to bring its claims against him. The Court determined that MUFG suffered an injury in fact because the transfer of 50,000 Coastal shares to Nobles diluted Brower's ownership interest in Coastal and therefore reduced the value of Brower's bankruptcy estate. This, in turn, created a risk that MUFG would not be repaid or would be repaid less on the unsecured debt owed to it by Brower. Thus, granting relief in favor of MUFG would increase the value of the bankruptcy estate by increasing Brower's ownership interest in Coastal. It is highly probable that the increased value will flow to MUFG because it is by far the largest of Brower's creditors, being owed approximately $5.09 million out of a total of $5.25 million in claimed debts. Thus, the Court concludes that MUFG has Article III standing to pursue its claims. Next, Nobles argues that the Bankruptcy Court erred in finding that the 50,000 shares of Coastal stock issued to Nobles are void for lack of consideration under California Corporations Code Section 409. The Court finds that Nobles transferred his funds to one of Brower's personal accounts -- not to Coastal's account. Despite Brower transferring $50,000 from his personal account to Coastal shortly after receiving Nobles' payment, the fact that Coastal executed a promissory note for the same amount on the same day suggests that the transfer did not represent the consideration paid by Nobles. Rather it suggests that the transfer was a loan from Brower to Coastal. That conclusion is reinforced by Coastal's repayment of principal and interest to Brower as well as by evidence showing that there were no other transfers in the amount of $50,000 from Brower's account. Therefore, the Court determines that it was not clear error for the Bankruptcy Court to conclude that Coastal never received Nobles' $50,000. Lastly, Nobles contends that the Bankruptcy Court failed to make findings of fact and conclusions of law explaining why Nobles' shares were deemed property of Brower's bankruptcy estate, as required by Federal Rule of Civil Procedure 52(a). The Court determines that the Bankruptcy Court explicitly declared that Nobles' Coastal shares were "void for lack of consideration," erasing Nobles' ownership interest instead of transferring it. Since the Bankruptcy Court never transferred ownership of Nobles' shares to Brower's bankruptcy estate, the Court concludes that it was not required to make findings of fact or conclusions of law as to such transfer. A full-text copy of the Order dated May 16, 2023, is available https://tinyurl.com/4xrtx7e6 from Leagle.com. Robert S. Brower, Sr. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 15-50801) on March 11, 2015. He is represented by William J. Healy, Esq. at CAMPEAU, GOODSELL AND SMITH. RODGERS COMPANIES: Case Summary & Six Unsecured Creditors --------------------------------------------------------- Debtor: Rodgers Companies, LLC 1908 Yorkstown Drive Ennis, TX 75119 Business Description: The Debtor owns a properties located at 707 Chester Court, Ennis; 703 Chester Court, Ennis, 2880 FM 1446 Waxahacie, and 1753 FM 66, Waxahachie valued at $1.59 million. Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Northern District of Texas Case No.: 23-31124 Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS 12770 Coit Road Suite 850 Dallas, TX 75251 Tel: 972-991-5591 Fax: 972-991-5788 Email: eric@ealpc.com Total Assets: $1,600,000 Total Liabilities: $1,551,079 The petition was signed by Tim Rodgers as authorized representative of the Debtor. A full-text copy of the petition containing, among other items, a list of the Debtor's six unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/GH6LNAI/Rodgers_Companies_LLC__txnbke-23-31124__0001.0.pdf?mcid=tGE4TAMA RUEL T. STOESSEL: Sale Proceeds & Future Earnings to Fund Plan -------------------------------------------------------------- Ruel T. Stoessel, M.D., P.A., filed with the U.S. Bankruptcy Court for the Southern District of Florida a Subchapter V Plan dated May 30, 2023. The Debtor is a high risk obstetrics practice. Ruel T. Stoessel is the principal of the Debtor and, currently, its sole physician. Dr. Stoessel went through an acrimonious divorce with his former spouse. An order was entered in the state court divorce action which resulted in the freezing of the Debtor's bank accounts and made it impossible for the Debtor to maintain its ongoing business operations. In addition, the Debtor had accumulated a significant amount of debt, including merchant cash advance loans, which necessitated a financial restructuring. After the freezing of the bank accounts, there was an exodus of employees. A few employees came back and a few more employees were hired. However, all the physicians, other than Ruel T. Stoessel, resigned and were not replaced. The location in Lake Worth (Palm Springs) is no longer operating. The location in Port St. Lucie is in the process of being closed and the real property, owned by the Debtor, sold. The Debtor may rent space if such arrangements can be economically justified. The Debtor is evaluating its options in Belle Glade on whether to close the location, attempt to renegotiate a lease, or find another lease. The Debtor will sell the real property located at 1405 SE Goldtree Drive, Units 1405-1407, Port Saint Lucie, Florida. In addition, the Debtor asserts that it will have sufficient net disposable monthly income due to future earnings to make the payments required under the Plan. In order produce the income necessary to fund the Plan, the Debtor will continue to run its medical practice and the income generated from the medical practice will be sufficient to fund ongoing operating expenses and the Debtor's Plan distributions provided for herein. The Debtor will continue to receive a portion of the income from Premier to pay for expenses of Premier and shared expenses of both practices. It is expected that in June of 2023, the combined gross revenues will be $180,000.00 and will continue to increase as additional income producing staff is added. At the same time, the Debtor is closing the St. Lucie and Lake Worth/Palm Springs offices. The Debtor has greatly reduced the amount of Medicaid patients increasing profitability. Class 22 consists of non-priority unsecured claims. The Debtor shall pay to nonpriority unsecured creditors a sum equal to the net proceeds of the sale of the real property located at 1405 SE Goldtree Drive, Unit 1405-1407, Port Saint Lucie, Florida and after the payment of all allowed administrative and priority claims on the Effective Date. The payments to be made to Class 22 claimants under the Plan will meet or exceed the amount to be paid to Class 22 claimants in the event of a liquidation. Class 22 is impaired. A full-text copy of the Subchapter V Plan dated May 30, 2023 is available at https://urlcurt.com/u?l=zOeZjE from PacerMonitor.com at no charge. About Ruel T. Stoessel, M.D. Ruel T. Stoessel, M.D., P.A. is a high risk obstetrics practice. The Debtor sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11671) on March 1, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Erik P. Kimball oversees the case. Alan R. Crane, Esq., at Furr & Cohen, is the Debtor's counsel. RXB HOLDINGS: Moody's Lowers 1st Lien Bank Loans to 'B3' --------------------------------------------------------- Moody's Investors Service affirmed RXB Holdings, Inc.'s ("RxBenefits") B3 corporate family rating and the B3-PD probability of default rating. Concurrently, Moody's assigned B3 rating to the incremental senior secured first lien term loan borrowings and downgraded the ratings on the company's existing senior secured first lien bank credit facilities to B3 from B2. The company intends to raise $150 million in incremental first lien term loan borrowings. Proceeds will be used to repay second lien term debt (unrated). The outlook remains stable. The downgrade of the senior secured first lien bank credit facilities reflects the addition of incremental first lien debt, and the removal of the loss absorption provided by roughly $150 million of second lien debt cushion. The rating for the senior secured first lien revolver and term loan matches the B3 corporate family rating, as these instruments represent the preponderance of liabilities in the capital structure. The following is a summary of the rating actions: Affirmations: Issuer: RXB Holdings, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Downgrades: Issuer: RXB Holdings, Inc. Backed Senior Secured 1st Lien Revolving Credit Facility, Downgraded to B3 from B2 Backed Senior Secured 1st Lien Term Loan, Downgraded to B3 from B2 Assignments: Issuer: RXB Holdings, Inc. Backed Senior Secured 1st Lien Term Loan, Assigned B3 Outlook Actions: Issuer: RXB Holdings, Inc. Outlook, Remains Stable RATINGS RATIONALE RxBenefits' B3 corporate family rating is constrained by its modest size with approximately $263 million in revenue and its high financial leverage. Moody's estimates debt/EBITDA of approximately 5.7x for the twelve months ended March 31, 2023, with expectation of modest improvement over the next 12 months. RxBenefits relies heavily on the three largest pharmacy benefit managers (PBMs), for a majority of its revenue. While RxBenefits' back-office connectivity with its PBM partners is a competitive advantage for the company, the market for managing pharmacy benefits is highly competitive. RxBenefits' rating is supported by high EBITDA margins and a strong earnings outlook driven by meaningful growth in new lives under contract that utilize RxBenefits' services. The rating is also supported by RxBenefits' good liquidity profile. Moody's expects RxBenefits to maintain good liquidity over the next 12 - 18 months. The company reported cash of approximately $275 million at March 31, 2023 (however majority of the cash balance is made up of a float that will be paid out to PBMs and employer plans in the form of rebates pass through from PBMs). Moody's does not view this balance as a benefit to creditors but it is a source of operating liquidity to manage quarterly working capital fluctuations. Moody's expects RxBenefits will generate about $30-$35 million in free cash flow over the next 12 months, with capital expenditures spend elevated for the next two years at roughly $8 million per year, to fund IT investments. Mandatory debt amortization is modest at roughly $6 million per year. RxBenefits' liquidity is further supported by access to an undrawn $40 million revolver. The revolver has a 7.7x springing maximum first lien net leverage financial covenant that is tested once borrowings exceed 35% ($14 million). RxBenefits' CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. This reflects social risk considerations related to scrutiny on prescription drug pricing in the US, such as the recently passed US Inflation Reduction Act. Among governance risk (G-4) considerations are company's high financial leverage, partially driven by sizable debt-funded acquisitions, as well as private equity ownership, which creates risk of further aggressive financial policies. The senior secured first lien bank credit facilities will represent the entirety of RxBenefits' funded debt structure. The senior secured bank credit facilities are rated identically to the corporate family rating of B3. The bank credit facilities are comprised of a $40 million senior secured first lien revolving credit facility and pro forma $565 million senior secured term loan due 2027. The credit facilities are secured by substantially all of the borrower's and guarantor's assets. The outlook is stable. Moody's expects earnings' growth, driven by new lives under management, but that debt/EBITDA will remain elevated at roughly 6.0 times, over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include RxBenefits sustaining strong earnings growth while meaningfully increasing its scale. Additionally, for Moody's to consider an upgrade debt/EBITDA would need to be sustained below 6.0x, along with good liquidity supported by free cash flow-to-debt consistently in the mid-single digits. Factors that could lead to a downgrade include aggressive financial policies including sizable debt funded shareholder distributions or acquisitions or if RxBenefits' liquidity weakens, reflected in sustained negative free cash flow. Additionally, rating could be downgraded if the net number of newly implemented lives are weak on a sustained basis, or if claims volumes materially decline. Headquartered in Birmingham, Alabama, RXB Holdings, Inc. ("RxBenefits") is a benefits consultant and administrator of pharmacy benefits for self-insured small and mid-sized employers. RXB Holdings, Inc. was acquired by Advent International Corporation and Great Hill Partners in December 2020. For the twelve months ended March 31, 2023, the company generated revenues of approximately $263 million. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. RXB HOLDINGS: S&P Upgrades ICR to 'B' on Operating Performance -------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Alabama-based pharmacy benefits optimizer RxB Holdings Inc. (doing business as RxBenefits) to 'B' from 'B-' and maintain a stable outlook. S&P said, "The stable outlook reflects our expectation for the company to continue to generate low-teens percent revenue growth and solid FOCF through 2023, leading to leverage between 5x-6x by year end. "At the same time, we raised our issue-level rating on first-lien debt to 'B' from 'B-' with a '3' recovery rating, indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a payment default. "We also assigned a 'B' issue-level rating to the $150 million non-fungible add-on first-lien term loan. The recovery rating on this debt is '3', indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a payment default. "The upgrade to 'B' reflects the company's strong operating performance, deleveraging, and our expectation for FOCF to debt to remain above 6%. RxB's value proposition to self-funded employers has remained resilient through a period of economic and inflationary headwinds. As prescription drug costs continued to rise and constitute a larger percentage of health care spending, employers have increasingly turned to RxB to help manage costs by negotiating group prescription drug discounts and providing tailored pharmacy benefit analyses. Furthermore, the proliferation of high-cost specialty drugs has given RxB an opportunity to provide value to clients through formulary management and other professional, white glove services. "In 2022, RxB's operating performance was characterized by strong growth due to an increase in total lives managed, total claims, and per claim fees. As of year-end 2022, the company reported stronger-than-expected sales, EBITDA, and FOCF (which we view before working capital impact). Strong growth continued in the first quarter of 2023 and we project solid cash flow generation through the remainder of the year due to higher absolute EBITDA and a low maintenance capital expenditure (capex) requirement. Furthermore, the company's liquidity position supports its ability to withstand a protracted downturn that would result in a reduction in total lives managed or claims. "We still view the company's narrow scope and low barriers to entry as a key business risk. By partnering with the three largest pharmacy benefit managers (PBMs), RxB can offer competitive drug cost savings and additional services to small- and medium-sized employers that are not typically provided by larger PBMs. However, the industry RxB operates in is characterized by intense competition and low barriers to entry, leaving the company vulnerable to disruption and margin pressure. Moreover, the company relies on continued partnerships with large PBMs and a network of employee benefit consultants. Acting as an intermediary between PBMs, brokers, and employers could also present some risks. Service issues originating from the partner PBM could cause friction with clients, and the company cannot control drug reimbursement for clients. Losing a relationship with one or several PBMs would diminish the company's selling proposition and scope. Although the company does not keep rebates or employ spread pricing (fees are earned on a per-claim basis), pressure on PBM margins could increase the likelihood of resistance to further increases in fees paid to the company. "While not reflected in our base-case scenario, the risk of a prolonged recession characterized by high unemployment would likely weigh on the company's top line. Though the company has a diversified client base spanning numerous industries and geographic regions within the U.S., a steep rise in the unemployment rate would likely cause a decline in the number of lives managed and claims. "We expect leverage to remain between 5x-6x. S&P Global Ratings-adjusted debt to EBITDA declined to 5.9x in 2022 from 7.1x in 2021. Following this deleveraging, we expect RxB will maintain modest headroom under the rating in 2023 due to strong organic growth prospects. Our leverage expectation incorporates our forecast for low-teens percent revenue growth and an EBITDA margin around 36%. This follows double-digit revenue growth in 2022 and a modest decline in EBITDA margin because of higher general and administrative costs. Although we expect the company to pursue debt-financed acquisitions, we believe its strong operational performance will offset any additional debt burden on leverage. We expect RxB's financial sponsor ownership will limit the potential for additional, sustained deleveraging over the medium term. "We do not net the company's cash balance against debt in our calculations because it includes significant pass-through payments between self-funded employers and PBMs, and because of sponsor ownership. While the company is able to capture modest interest income from the float, it is not a representation of true operating cash. "The stable outlook reflects our expectation for sustained, low-teens revenue growth and S&P Global Ratings-adjusted EBITDA margins between 34%-36%. It also reflects our expectation for rising annual FOCF through the balance of 2023 and 2024." S&P could lower its rating if the company's FOCF-to-debt falls below 3% or leverage rises above 7x. Either could result from: -- Increasing competition; -- A prolonged recession leading to a sharp reduction in lives managed; or -- Loss of one or many PBM relationships. S&P said, "Although highly unlikely at this stage, we could raise our rating if there is commitment from the private equity sponsors and thus a change in financial policy to sustain leverage below 5x. We would likely view any improvement in the company's credit metrics as temporary, given our belief that its financial sponsor's financial policies will prioritize debt-financed acquisitions or shareholder-friendly activities instead of deleveraging." ESG credit indicators: E-2, S-2, G-3 S2 ENERGY: Sale of Substantially All Assets for $1.25-Mil. Approved ------------------------------------------------------------------- Judge Meredith S. Grabill of the U.S. Bankruptcy Court for the Eastern District of Louisiana authorized S2 Energy Operating, LLC, Krewe Energy, LLC, S2 Energy 1, LP, and Krewe-TBay, LLC, to sell substantially all of their assets to Extex Production Offshore, LLC, for $1.25 million. The Sale Transaction contemplated by the Purchase Agreement is approved in all respects. The sale is free and clear of all liens and claims except as otherwise explicitly set forth in the Purchase Agreement and the Order. Notwithstanding anything to the contrary in the Order or any document governing the Sale Transaction, any assumption, assignment, and/or transfer of any real rights and interests in the federal oil and gas leases or rights-of-way or in the Louisiana oil and gas leases requiring consent or where regulatory authority is required will be ineffective absent the consent of the party required give the consent under such Consent Leases. Within 60 days following the Closing, the Debtors will file and serve notice of executory contracts desired by Buyer to be assumed and assigned in connection with the Sale Transaction, which notice will set forth the applicable contract, the contract counterparty, and any cure costs to be paid in connection with the assumption and assignment of such contracts. Upon the expiration of the Assumption and Assignment Objection Period, or entry of a final order overruling a timely filed Assumption and Assignment Objection, the Debtors' assumption and assignment of contracts to the Buyer will become effective. Upon payment of the Cure Costs pursuant to the terms of the Order and the Purchase Agreement, and the Debtors' assignment of the Assumed Contracts to the Buyer under the provisions of the Order, no default or other obligations arising or accruing prior to the Closing will exist under any Assumed Contracts. The assumption and assignment of the Assumed Contracts will not be effectuated if the Closing does not occur and the Purchase Agreement is terminated. In connection with the Closing of the Sale, the Debtors are authorized to make the following payments: a) Seaport Global - $287,722 b) State of Louisiana, in connection with past due royalties and a waiver of its consent rights $337,500 c) Non-Governmental counterparty to and oil and gas lease or other real right owned by the Debtors will be paid their pro-rata share of $50,000 in exchange for such party's consent to the Sale herein and waiving rights to claim a default under the applicable lease for non-payment of royalties due under such lease. Pursuant to Section 7.07 of the Purchase Agreement, the Buyer will cause Letter of Credit no. 444109 issued by Prosperity Bank (described in Schedule 5.15 to the Purchase Agreement) to be replaced on or before June 30, 2023, and delivered to Apache Louisiana Minerals, LLC ("ALM") as per the ALM Lease. Notwithstanding Bankruptcy Rules 6004, 6006, and 7062 and any other applicable Bankruptcy Rules or applicable Local Rules to the contrary, the Order will be effective immediately upon entry and will not be subject to any stay in the implementation, enforcement, or realization of the relief granted. About S2 Energy Operating S2 Energy Operating, LLC operates in the oil and gas extraction industry. S2 Energy Operating filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 23-10066) on Jan. 16, 2023. The petition was signed by Barry R. Salsbury as member. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and in liabilities. Judge Meredith S. Grabill presides over the case. The Debtor tapped Douglas S. Draper, Esq. at Heller, Draper & Horn, LLC as legal counsel, and Seaport Global Securities, LLC as financial advisor and investment banker. SAFE ELECTRIC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Safe Electric, LLC 1170 Greenskeep Drive, Suite D Kissimmee, FL 34741 Business Description: Safe Electric is an electrical contractor serving commercial and residential clients. Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-02185 Debtor's Counsel: Daniel A. Velasquez, Esq. LATHAM LUNA EDEN & BEAUDINE LLP 201 S. Orange Avenue Suite 1400 Orlando, FL 32801 Tel: (407) 481-5800 Fax: (407) 481-5801 Email: dvelasquez@lathamluna.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jesus A. Castro as sole managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/JVHAENA/Safe_Electric_LLC__flmbke-23-02185__0001.0.pdf?mcid=tGE4TAMA SAFE FLEET: Moody's Ups CFR to 'B2' & First Lien Loans to 'B1' -------------------------------------------------------------- Moody's Investors Service upgraded Safe Fleet Holdings LLC's corporate family rating to B2 from B3 and the probability of default rating to B2-PD from B3-PD. At the same time, Moody's upgraded the senior secured first lien credit facilities ratings to B1 from B2 and the senior secured second lien term loan rating to Caa1 from Caa2. The outlook is stable The ratings upgrade reflects the company's strong and consistent track record of positive free cash flow and earnings growth that have resulted in a notable reduction in financial leverage over the past year. Moody's expects further improvement in credit metrics with adjusted debt-to-EBITDA approaching 6.0x in 2023-24 from the current levels of 6.6x at the end of March 2023. Moody's also forecasts that the company will maintain good liquidity, bolstered by over $30 million of annual free cash flow in 2023. Upgrades: Issuer: Safe Fleet Holdings LLC Corporate Family Rating, Upgraded to B2 from B3 Probability of Default Rating, Upgraded to B2-PD from B3-PD Backed Senior Secured 1st Lien Bank Credit Facility, Upgraded to B1 from B2 Backed Senior Secured 2nd Lien Bank Credit Facility, Upgraded to Caa1 from Caa2 Outlook Actions: Issuer: Safe Fleet Holdings LLC Outlook, Remains Stable RATINGS RATIONALE The B2 CFR on Safe Fleet reflects the company's high financial leverage with adjusted debt-to-EBITDA in excess of 6.5x. With revenue of $595 million, the company's scale is modest relative to Moody's universe of rated manufacturers, reflecting its niche market focus as a manufacturer of safety and productivity products for fleet vehicles. Additionally, Moody's believes that Safe Fleet's focus on debt-financed acquisitive growth will lead to periodic increases in leverage. Nonetheless, the ratings are supported by the mission-critical nature of Safe Fleet's products. Its large installed base generates a sizable aftermarket business (47% of revenue) that is relatively more stable and commands higher margins than the original equipment business. Safe Fleet's strong EBITDA margin of close to 20% and low capital requirements support healthy cash generation. Liquidity is very good, supported by $96 million of cash and full availability under its $50 million revolving credit facility. The stable outlook reflects Moody's expectation of modest deleveraging through 2023, with positive free cash flow and debt-to-EBITDA close to 6.0x. ESG considerations reflects the company's high governance risk given its private equity ownership and history of debt-financed acquisitions. Environmental and social risks are largely aligned with the broader manufacturing sector. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if deterioration in market conditions, loss of a customer or competitive pressures weaken earnings or cash flow. Adjusted debt-to-EBITDA sustained above 6.5x or a material deterioration in free cash flow could result in a ratings downgrade. The ratings could be upgraded if the company effectively manages its growth while adopting more conservative financial policies such that adjusted debt-to-EBITDA approaches 5.0x. The presence of very good liquidity with strong free cash flow would also be a consideration for a ratings upgrade. Headquartered in Belton, Missouri, Safe Fleet Holdings LLC manufactures safety and productivity products for fleet vehicles including school and transit buses, fire EMS and law enforcement vehicles, truck & trailers used in various industries and military vehicles. Among Safe Fleet's products are cameras and surveillance systems, ladder racks, ramps and platforms, nozzles and valves, and stop signs and crossing arms for school buses. The company is majority-owned by Oak Hill Capital Partners. Revenue for the twelve months ending March 31, 2023 were $595 million. The principal methodology used in these ratings was Manufacturing published in September 2021. SHUTTERFLY LLC: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg. ----------------------------------------------------------------- Moody's Investors Service downgraded Shutterfly, LLC's ratings, including the Corporate Family Rating to Caa2 from B3, Probability of Default Rating to Caa3-PD from B3-PD and senior secured debt ratings to Caa1 from B2. The downgrades were driven by the impact of a weak macroeconomy on consumer demand and Moody's expectation of a downshift in global economic growth in the second half of this year. In addition, Moody's expects that Shutterfly's operating performance, leverage and liquidity will remain challenged over the rating horizon following weaker-than-expected earnings in Q4 2022. The downgrade also considers a likely debt exchange to recapitalize the debt-heavy balance sheet, reduce cash interest expense via a new PIK (payment-in-kind) debt structure and address liquidity challenges. The outlook was revised to negative from stable. Following is a summary of the rating actions: Downgrades: Issuer: Shutterfly, LLC Corporate Family Rating, Downgraded to Caa2 from B3 Probability of Default Rating, Downgraded to Caa3-PD from B3-PD $300 Million Backed Senior Secured First-Lien Revolving Credit Facility due 2024, Downgraded to Caa1 from B2 $1,083 Million outstanding (originally $1,105 Million) Backed Senior Secured First-Lien Term Loans due 2026, Downgraded to Caa1 from B2 $750 Million outstanding (originally $785 Million) 8.5% Senior Secured First-Lien Notes due 2026, Downgraded to Caa1 from B2 $300 Million 11.0% Senior Unsecured Notes due 2027, Downgraded to Ca from Caa2 Outlook Actions: Issuer: Shutterfly, LLC Outlook, Changed to Negative from Stable On May 15, 2023, Shutterfly launched a comprehensive debt exchange offer and announced that lenders holding 80% of the principal amount of its existing term loans (TL) and holders with 74% of the principal amount of the existing senior secured notes (SSN) have agreed to the proposed exchange and entered into a Transaction Support Agreement (TSA) with the company. The consent requirement to approve the exchange agreement is 50% for the term loans and secured notes. As currently proposed under the TSA, a new debt issuing entity, Shutterfly Finance, LLC ("NewCo"), would be created to facilitate a capital raise and debt exchange as follows: (i) $200 million of capital would be raised via new money first-lien debt issued at NewCo maturing October 2027 to all eligible TL and SSN lenders on a pro rata basis; (ii) existing TL and SSN lenders would exchange 100% principal amount of their secured first-lien debt into new second-lien debt at NewCo with extended maturity of October 2027 at a 90% exchange price ($1.65 billion new face amount total) if they execute the exchange agreement or consent (as required) by 5 June and fund their pro rata portion of the new money debt by 6 June (the exchange price decreases to 87% if lenders wait until 14 June and 15 June, respectively to execute the agreement and fund their pro rata portion of the new debt); (iii) existing lenders in the fully drawn revolving credit facility (RCF) would exchange 100% principal amount of their secured first-lien debt into a new second-lien RCF at NewCo with extended maturity of October 2026 at a 7.5% commitment reduction ($277.5 million); (iv) existing unsecured noteholders would exchange at par into a new unsecured position at NewCo with extended maturity of October 2028 and retain unsecured claims at Shutterfly; (v) existing holders of the $72 million outstanding unsecured seller notes would have the option to exchange into a new unsecured 100% PIK note at NewCo with extended maturity of October 2028 at a 70% exchange price ($51 million new face amount) or remain outstanding at Sherwood Intermediate Holdings, LLC (the "HoldCo") with an extended maturity and no interest; (vi) the NewCo debt obligations would retain essentially the same interest rates as the original obligations at Shutterfly, except 50% of the interest on the second-lien debt would PIK for two years (excluding the RCF) and 100% of the interest on the unsecured notes would PIK until the second-lien debt obligations are fully repaid; and (vii) proceeds from the $200 million new money first-lien debt raise would be used to pay down a portion of the existing fully drawn RCF ($141 million), effect the new RCF commitment reduction ($22.5 million), pay transaction fees and expenses and add cash to the balance sheet. Moody's considers the proposed debt exchange to be a distressed exchange default. Upon closing of the transaction, Moody's will append the "/LD" designation to the PDR to signal that a "limited default" has occurred on the converted securities. The "/LD" component will be removed after three business days. The designation results from Moody's practice of interpreting circumstances in which a debt holder accepts a compromise offering of a diminished financial obligation as an indication of an untenable debt capital structure. In Shutterfly's case, the debt exchange is designed to reduce the interest expense burden, with creditors recognizing losses relative to the original principal amounts. Given the limited options available, the proposed debt exchange persuades creditors to convert their original debt into new securities with a maturity date later than previously agreed to and shift their collateral claims to a subordinate ranking in the debt capital structure compared to the initial debt obligations' claims. RATINGS RATIONALE As proposed, the $1.65 billion new second-lien debt is structured 50% cash pay/50% PIK, enabling Shutterfly to avoid paying a portion of the interest on these securities through 2025, subject to certain liquidity requirements, while the new $300 million unsecured notes would be 100% PIK until the second-lien obligations are fully repaid. Moody's estimates the proposed PIK structure would cut the company's annual cash interest expense in half by approximately $113 million, providing a temporary lifeline. Despite the reduced interest burden, Moody's projects Shutterfly would continue to generate negative free cash flow (FCF) in fiscal 2023 due to weak customer demand in the consumer business and slow recovery in the Lifetouch school photography segment. Financial leverage is not expected to decline materially following the proposed distressed exchange given that pro forma gross debt outstanding would reduce by roughly 7%, or $168 million. This is because Shutterfly plans to issue $200 million of new first-lien debt, which offsets the effect of converting $1.83 billion of the existing senior secured first-lien debt to $1.65 billion new second-lien debt. More importantly, since a good portion of the new capital structure is expected to accrete at an estimated 5.7% blended rate, gross debt would increase by roughly $113 million at the end of the first year after closing and $121 million at the end of the second year (less the $9.75 million annual amortization on the new second-lien term loan), which collectively more than cancels the $168 million debt reduction. Hence, Moody's continues to expect leverage would remain in the 9x-10x area (as calculated and adjusted by Moody's) over the next two years given the company's profitability and liquidity challenges. The ratings downgrades reflect governance risks related to Shutterfly's untenable debt capital structure during a period of flattish revenue growth, declining order volumes in the consumer segment (the largest business unit, which is highly sensitive to the current weak macroeconomic pressures), and gross margin erosion due to rising raw material costs and slow revenue recovery at Lifetouch. The downgrade embeds Moody's expectation that Shutterfly will experience delayed deleveraging, weaker-than-expected earnings and tight liquidity over the next 12-18 months, chiefly due to Moody's current expectation that the US economy will likely show slowing growth in the second half of 2023. Macroeconomic pressures combined with high interest rates and inflation will continue to lead to reduced customer spending on discretionary products such as photo books, cards, wall art, home décor, calendars and gifts offered by Shutterfly's consumer business. Shutterfly's Caa2 CFR is driven by the company's exposure to cyclical consumer discretionary spend, a highly seasonal business with idled capacity during non-peak selling periods and absence of meaningful international diversification. Shutterfly is heavily dependent on fourth quarter earnings to offset operating losses in the first nine months of the year, which stem from a sizable fixed cost base and large product discounting during the seasonally weak January-to-September period to stimulate customer demand. Though the consumer segment has transitioned from commoditized print-based and other legacy consumer product categories to premium priced items such as personalized photo-based products, home décor and crafting goods (which have higher ASPs), consumers have pulled back on spending at a time when inflation and interest rates remain high relative to recent historical levels. This has also increased competition in an already intensely competitive marketplace for photo-based consumer products. Shutterfly's lack of pricing power in certain categories is evidenced by its historically low single-digit operating margins. The Lifetouch segment has experienced revenue contraction and operating losses due to pandemic-induced account losses, which will require several years before revenue and profitability return to pre-pandemic levels. The rating is supported by Shutterfly's strong brands, leadership position and manufacturing scale as a retailer of personalized photo products and services, broad range of customized goods and seamless user experience that facilitate recurring customer usage increasingly transacted via online engagement. The company benefits from a vertically-integrated operation with relatively low customer acquisition costs. Nonetheless, Shutterfly has identified $135 million of cost reductions that it plans to realize by year end 2024 to improve profitability. Business line diversification is provided by Lifetouch, the US market leader in school photography, and Snapfish, a global online retailer of digital photography and personalized photo-based products in the value segment. The addition of Spoonflower extends Shutterfly's home décor business into the fast-growing direct-to-consumer personalization market and creator economy as well as contributes to the company's vertically-integrated production, workflow and fulfillment strategy. The negative outlook reflects the likelihood of a near-term distressed debt exchange and Moody's expectation that Shutterfly will continue to consume cash this year, resulting in weak liquidity. Even if the proposed debt exchange closes as planned, the company will rely on RCF borrowings due to muted revenue growth and timing of savings from scheduled cost actions. Over the next 12-18 months, Moody's expects Shutterfly will maintain weak liquidity due to sluggish consumer demand and the impact of higher interest rates. Shutterfly will continue to produce the bulk of its positive FCF in the October-to-December quarter to offset negative FCF produced during January-to-September. However, FCF for the entire year will remain negative. Assuming the debt exchange closes by the end of June, Moody's estimates negative FCF this year will be -$30 million to -$80 million. Moody's expects Shutterfly to maintain minimum unrestricted cash balances of $50 million to $60 million. As of December 31, 2022, unrestricted cash totaled $433 million, however the company typically draws down cash balances in the March and June quarters to fund sizable working capital requirements (unrestricted cash at March 31, 2023 was $143 million). Shutterfly also relies on RCF borrowings during the first nine months of the year to offset negative operating cash flows. The existing $300 million RCF matures in September 2024 and is currently fully drawn. The company is required to pay annual amortization of $11.05 million equal to 1% of the original principal amounts on the existing term loans, which are paid in the fourth calendar quarter when Shutterfly generates positive FCF. ESG CONSIDERATIONS Shutterfly's ESG Credit Impact Score is CIS-5. This reflects governance risks as indicated by the G-5 governance score. Governance risks include the aggressive financial policy that has resulted in a highly leveraged balance sheet and the proposed debt exchange transaction, which Moody's views as a distressed exchange. Governance risks also embed the concentrated ownership by a private equity sponsor that has a tendency to tolerate high leverage and favor high capital return strategies. To the extent future EBITDA and cash flow growth fail to materialize in line with Moody's baseline projections, given the high reliance on fourth quarter earnings to offset operating losses in the first nine months of the year, the company's already high financial leverage could increase and lead to further deterioration in the overall credit profile. Environmental risks as indicated by the E-2 environmental score, reflect Shutterfly's limited exposure to physical climate risk and very low emissions of pollutants and carbon. The S-3 social score is primarily driven by customer relations. This risk is attributed to a history of ransomware cyberattacks and breaches of customers' personal data resulting in safety and security concerns that could damage Shutterfly's reputation and prompt users to avoid using its e-commerce sites. The Lifetouch school photography unit is experiencing shifting demographic and societal trends creating volume pressures that surfaced during the pandemic and led to account losses, which are still evident and will take some years to return account volume to pre-pandemic levels. STRUCTURAL CONSIDERATIONS The Caa1 ratings on the existing senior secured first-lien bank credit facilities and senior secured notes reflect the obligations' priority position in Shutterfly's debt capital structure compared to the existing senior unsecured notes, which are rated Ca. The Caa1 ratings on the secured debt obligations are one notch higher than the implied outcome to reflect the somewhat adequate asset coverage for this debt class, but also the expected principal loss and reduced interest income to debt holders when the proposed debt exchange closes. The Ca rating on the senior unsecured notes reflects the very low anticipated recovery prospects given their junior position relative to a sizeable amount of first-lien debt ahead of them, lack of secured claims as well as the expected loss of interest income to noteholders upon closing of the proposed debt exchange. With respect to the proposed debt exchange, Shutterfly intends to transfer trademarks and customer data across certain brands into NewCo to collateralize the new secured debt obligations, while residual assets would remain at Shutterfly. NewCo second-lien debtholders would retain a first-lien priority claim on non-transferred assets that remain at Shutterfly. To the extent, lenders do not convert their securities, their existing debt obligations would be stripped of certain covenants, and any obligations that were previously secured to collateral that was transferred to NewCo would not have a claim against NewCo assets or guarantee from NewCo. Nonetheless, existing secured debt obligations would retain a first-lien priority claim on non-transferred Shutterfly assets. Moody's expects Shutterfly would provide a downstream guarantee of the new debt obligations issued by NewCo. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Shutterfly demonstrates organic revenue growth and EBITDA margin expansion that lead to sustained reduction in total debt to EBITDA approaching 7.5x and free cash flow as a percentage of total debt in the -1% to +1% range (all metrics as calculated and adjusted by Moody's). The company would also need to exhibit enhanced liquidity and prudent financial policies that translate into an improved credit profile to be considered for an upgrade. Ratings could be downgraded if: (i) the proposed debt exchange as outlined in the TSA fails to close; (ii) revenue continues to remain flat or declines while margins erode, free cash flow remains negative on a sustained basis and/or liquidity deteriorates; (iii) the company exhibits poor execution on reducing operating expenses and achieving cost savings in a timely manner; or (iv) Moody's expects total debt to EBITDA will remain above 9.5x (as calculated and adjusted by Moody's). Headquartered in San Jose, CA, Shutterfly, LLC is a leading online manufacturer and retailer of personalized consumer photo products and services (62% of fiscal 2022 revenue) through premium brands such as Shutterfly (photo books, personalized holiday cards, announcements, invitations, stationery and home décor products); and Tiny Prints Boutique (online cards and stationery boutique offering stylish announcements, invitations and personal stationery). The Lifetouch unit (28%) is a leading provider of school photography in the US serving over 51,000 schools, while the SBS business unit (10%) provides customized direct marketing and variable print-on-demand solutions to enterprise customers. Apollo Global Management, Inc. purchased Shutterfly in September 2019 and combined it with Snapfish, LLC (acquired in January 2020), for a total purchase price of $3 billion (including balance sheet cash and transaction fees and expenses). GAAP revenue totaled approximately $2.2 billion for the fiscal year ended December 31, 2022. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. SOUTHEASTERN UNIVERSITY: S&P Rates $79.2MM Revenue Bonds 'BB' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB' long-term rating to the Capital Trust Authority, Fla.'s anticipated $79.19 million series 2023 educational facilities revenue refunding bonds, issued on behalf of Southeastern University (SEU). The outlook is stable. "The rating reflect our view of SEU's weak financial resource ratios and variable operating performance," said S&P Global Ratings credit analyst Ruchika Radhakrishnan. "The rating further reflects our view of the university's manageable debt service burden and solid freshman selectivity and matriculation rates," Ms. Radhakrishnan added. The series 2023 bonds will constitute a fixed-rate general obligation pledge of the university. The bonds are further secured by a mortgage on the university's Lakeland campus, subject to certain exceptions. Proceeds from the approximately $79.19 million series 2023 bonds will be used to refund outstanding debt, to fund a debt service reserve fund, and to pay the associated bond issuance costs. S&P understands management has no additional debt plans at this time. Southeastern University was founded in 1935 as a Christian university associated with the movement of the Assemblies of God. The university's main campus is located in Lakeland, Fla., with several extension sites and partnerships with institutions across the United States, as well as recent partnerships in Moldova and Latin America. SOUTHERN CLEARING: Court OKs Cash Collateral Access Thru July 20 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, held a continued preliminary hearing June 1, at 2 p.m. to consider the request of Southern Clearing and Grinding, Inc. to use cash collateral on an interim basis. Following the hearing, the Court granted the Debtor continued cash collateral access and set a further hearing for July 20 at 9:30 a.m. In a prior order, the Court authorized Southern Clearing to use cash collateral through June 1, 2023. The Debtor is authorized to use cash collateral to pay: (a) amounts expressly authorized by this Court; (b) the current and necessary expenses set forth in the budget, plus an amount not to exceed 10% for each line item; and (c) additional amounts as may be expressly approved in writing by Synovus Bank. As previously reported by the Troubled Company Reporter, as of the Petition Date, the Debtor has approximately $65,852 of cash in deposit accounts. It is owed approximately $19,000 in accounts receivable that are 90 days old or less, and $511,021 in accounts receivable that are over 90 days old; and a tax refund in the approximate amount of $125,000. The Debtor's other personal property -- consisting mostly of equipment, machinery, and vehicles -- is valued at approximately $3.6 million. The Debtor's earnings going forward may arguably be subject to creditors' alleged liens, and to the extent the future earnings may be deemed to be cash collateral, the Debtor seeks authority to use same. The Debtor owes approximately $2.713 million to Synovus Bank for a U.S. Small Business Administration loan that is secured by a UCC Financing Statement (No. 145-2019-000462) filed on September 30, 2019. These entities may hold an inferior lien or security interest in the Debtor's cash collateral: CT Corporation System, as Representative Corporation Service Company, as Representative Channel Partners, LLC IMS Fund LLC North Mill Credit Trust John Deere Construction and Forestry Company Everyday Funding Group The Court said the Senior Secured Creditor and the Inferior Interests will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as the pre-petition lien, without the need to file or execute any documents as may otherwise be required under applicable non-bankruptcy law. The Debtor will maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with Secured Creditors. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=x21tIX from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $81,650 for June 2023; $81,650 for July 2023; $81,650 for August 2023; $81,650 for September 2023; and $81,650 for October 2023. About Southern Clearing & Grinding, Inc. Southern Clearing & Grinding, Inc. is a turnkey vegetation removal contractor. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01586) on April 21, 2023. In the petition signed by Shane Dinkins, president, the Debtor disclosed $4,205,593 in assets and $4,212,083 in liabilities. Judge Catherine Peek McEwen oversees the case. Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC, represents the Debtor as legal counsel. SOUTHLAND NATIONAL: In Liquidation; NCIC Named as Liquidator ------------------------------------------------------------ The Superior Court of Wake County, North Carolina, ordered Southland National Insurance Corporation ("SNIC") into liquidation on May 2, 2023 and appointed the North Carolina Insurance Commissioner as liquidator of SNIC. The order of liquidation enjoins all persons from instituting or prosecuting any suit or other action against the liquidator, SNIC, or SNIC's property or assets, in accordance with the automatic, nondiscretionary statutory prohibition in NCGS Section 58-30-130. All persons indebted to or having any property of SNIC in their possession are hereby notified to tender an account of the indebtedness and to pay the same and deliver such property to the liquidator. You can obtain information about the liquidation proceeding and how to file a proof of claim at the North Carolina Department of Insurance website: http://www.ncdoi.gov/insurance-industry/regulatory-actions-receiverships. Additional information about the status of the liquidation will be posted on the SNIC website on an ongoing basis. If you believe you have a claim to pursue against SNIC, other than a claim for policy benefits under a policy of insurance, you must file a completed proof of claim form with the liquidator by May 2, 2025. If you do not have access to the internet and would like a proof of claim form mailed to you, you may request one from the Special Deputy Liquidator at: Southland National Insurance Corporation, in Liquidation Attn: Claim Form Request 555 Fayetteville Street, Suite 201 Releigh, NC 27601 Southland National Insurance Corporation -- https://southlandnational.com -- operated as an insurance company. SOUTHWEST PREPARATORY SCHOOL: S&P Rates 2023A/b Rev. Bonds 'BB+' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' long-term rating to New Hope Cultural Education Finance Corp., Texas' series 2023A and series 2023B charter school revenue bonds, to be issued for Southwest Winners Foundation Inc., doing business as Southwest Preparatory School (SW Prep). S&P also affirmed its 'BB+' long-term rating on SW Prep's series 2020A and 2020B educational revenue bonds. The outlook is stable. "The 'BB+' rating reflects our view of SW Prep's improved academics, stable management, and low debt burden, even with the issuance of series 2023, offset by a weak overall market position, minimal waitlist, and somewhat softer financial profile, though improvements for fiscal 2023 are expected," said S&P Global Ratings credit analyst Alexander Enriquez. S&P said, "We assessed the enterprise profile as vulnerable and the financial profile as adequate; combined, these credit factors lead to an anchor of 'bb' and a final rating of 'BB+'. In our opinion, the 'BB+' rating better reflects the school's growing demand in Seguin, relatively low levels of debt, and our expectation for continued stability in maximum annual debt service (MADS) coverage and improvement in days' cash on hand over the outlook." S&P said, "The stable outlook reflects our expectation that, over the next fiscal year, SW Prep will at least maintain its cash reserves, maintain MADS coverage consistent with rating level peers, and sustain recent academic improvements. "We could consider a negative rating action if enrollment continues to decline, if demand pressures translate to a material deterioration of the financial profile, or if there is a decline in unrestricted reserves. "We could consider a positive rating action if SW Prep were to stabilize and increase enrollment, maintain academic improvements, and increase cash and MADS coverage to levels consistent with a higher rating category." SPIRIPLEX INC: Unsecureds to Get Share of Income for 5 Years ------------------------------------------------------------ Spiriplex, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Illinois a Plan of Reorganization under Subchapter V dated May 30, 2023. The Debtor is an Illinois corporation operating from 100 Tri State Drive, Suite 100, Lincolnshire, Illinois, and David C. Fleisner is the Chief Executive Officer of the Debtor. The Debtor specializes in micro-sample allergenic diagnostics, providing clinical laboratory services throughout the United States. The Plan pays the Debtor's creditors all of the Debtor's disposable income over a period of 5 years. The Debtor's Chapter 11 case was precipitated by an inability to resolve litigation with one of the Debtor's creditors. The Debtor's Chapter 11 case was filed in order to take advantage of the automatic restraining provisions of section 362 of the Bankruptcy Code with respect to litigation filed by Gary P. Cullen, in the District Court of the Northern District of Illinois as case no. 1:22-cv-06486 (the "Cullen Litigation"). Cullen is one of the Debtor's noteholders and is also a shareholder of the Debtor. The Debtor's bankruptcy schedules show 6 priority claimants totaling $497,987.00. The Debtor's schedules show the United States Small Business Administration ("SBA") as a secured creditor in the approximate amount of $315,000. The Debtor's unsecured claims total $2,600,000 (approx.) and consist of 15 claimants, most or all of which are also shareholders. The Debtor will fund distributions under the Plan from operating income. During the Chapter 11 case, the Debtor has worked jointly with the Subchapter V trustee in preparing and proposing this Plan in the hopes of making the Plan consensual. The Plan provides for distribution to creditors of all of the Debtor's disposable income over 5 years. The Debtor is the proponent of the Plan. Distributions to creditors will be realized from the continued operation of the business by the Debtor. Class 1 consists of the Secured Claim of the SBA. The secured claim of the SBA will be paid on a monthly basis, beginning thirty days after the Effective Date, according to the terms of the loan documents between the Debtor and the SBA, at the approximate rate of $1,500 per month. Class 1 is impaired. Class 2 consists of General Unsecured Claims, Including Scheduled Wage Claims General Unsecured Claims totaling approximately $2.6 million, including approximately $498,000 of unpaid non-priority wage claims, and approximately $2.1 million of noteholder claims will be paid their pro-rata share of the Debtor's disposable income on an annual basis, beginning 1 year after the Effective Date, over a period of 5 years from the Effective Date. Class 2 Claims are impaired. Class 3 consists of Shareholder Interests. Shareholder interests will remain unaffected by the Plan. Class shareholding interests are unimpaired and are not entitled to vote on the Plan. Distributions under the Plan shall be made from proceeds realized from the continued operation of the Debtor's business by the Debtor. The Debtor does not intend to borrow funds but reserves the right to borrow funds in order to make the Plan payments. The Debtor projects to have cash to pay Administrative Claims in full. A full-text copy of the Plan of Reorganization dated May 30, 2023 is available at https://urlcurt.com/u?l=Ptd1Dn from PacerMonitor.com at no charge. Debtor's Counsel: Scott R. Clar CRANE, SIMON, CLAR & GOODMAN 135 S. LaSalle, #3950 Chicago, IL 60603 (312) 641-6777 Email: sclar@cranesimon.com About Spiriplex Inc. Spiriplex, Inc., specializes in micro-sample allergenic diagnostics, providing clinical laboratory services throughout the U.S. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-02773) on March 1, 2023. In the petition signed by David C. Fleisner, CEO, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Jacqueline Cox oversees the case. Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, serves as counsel to the Debtor. STANFORD SONOMA: Seeks to Hire Spector & Cox as Bankruptcy Counsel ------------------------------------------------------------------ Stanford Sonoma Corp. seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Spector & Cox, PLLC as its counsel. The firm's services include: a. providing the Debtors with legal advice with respect to their powers and duties; b. preparing and pursuing confirmation of a Chapter 11 plan; c. preparing legal papers; d. appearing in court and protecting the interests of the Debtors; and e. performing all other legal services for the Debtors which may be necessary and proper in these Chapter 11 proceedings. The hourly rates charged by the firm's attorneys range from $350 to $395. Paralegals charge $115 per hour for their services. In addition, the firm will seek reimbursement for out-of-pocket expenses incurred. The firm holds $7,500 as a retainer. Howard Marc Spector, Esq., a partner at Spector & Cox, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Howard Marc Spector, Esq. Spector & Cox, PLLC 12770 Coit Road, Suite 850 Dallas, TX 75251 Tel: (214) 365-5377 Fax: (214) 237-3380 Email: hspector@spectorcox.com About Stanford Sonoma Corp. Stanford Sonoma Corp. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-30748) on April 17, 2023, listing under $1 million in both assets and liabilities. Judge Michelle V Larson handles the case. Howard Marc Spector, Esq. at Spector & Cox, PLLC represents the Debtor as counsel. STRUCTURLAM MASS: Taps Potter Anderson & Corroon as Co-Counsel -------------------------------------------------------------- Structurlam Mass Timber U.S., Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Potter Anderson & Corroon LLP as co-counsel with Chipman Brown Cicero & Cole, LLP. The firm's services include: a. advising the Debtors of their rights, powers and duties under Chapter 11 of the Bankruptcy Code; b. preparing legal papers; c. assisting with any disposition of the Debtors' assets by sale or otherwise; d. taking action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors; e. preparing and prosecuting on behalf of the Debtors any proposed plan of reorganization or liquidation and any disclosure statement, and seeking approval of all related transactions contemplated; f. preparing and prosecuting pleadings necessary to solicit votes on any proposed plan of reorganization; g. appearing in court and at any meeting required by the U.S. trustee and creditors; h. advising the Debtors on matters in which Chipman has conflicts; i. providing additional support to Chipman, as requested; and j. other necessary legal services in connection with the Debtors' Chapter 11 cases. The firm will be paid at these rates: Partner $675 to $1,345 per hour Counsel $705 per hour Associates $440 to $575 per hour Paraprofessionals $330 to $350 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Potter Anderson & Corroon disclosed the following: a. Potter Anderson & Corroon has not agreed to a variation of its standard or customary billing arrangement for this engagement. b. None of Potter Anderson & Corroon's professionals included in this engagement have varied their rate based on the geographic location of these Chapter 11 cases. c. Potter Anderson & Corroon has only represented the Debtors in connection with this matter. The billing rates and material terms of the representation prior to the petition date are the same as the rates and terms proposed by the firm. d. The Debtors and Potter Anderson & Corroon expect to develop a prospective budget and staffing plan for the firm's engagement for the post-petition period as appropriate. In accordance with the U.S. Trustee Guidelines, the budget may be amended as necessary to reflect changed or unanticipated developments. M. Blake Cleary, Esq., a partner at Potter Anderson & Corroon, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Potter Anderson & Corroon can be reached at: M. Blake Cleary, Esq. Jeremy W. Ryan, Esq. Katelin A. Morales, Esq. Elizabeth R. Schlecker, Esq. Potter Anderson & Corroon, LLP 1313 North Market Street, 6th Floor Wilmington, DE 19801 Tel: (302) 984-6000 Fax: (302) 658-1192 Email: bcleary@potteranderson.com jryan@potteranderson.com kmorales@potteranderson.com eschlecker@potteranderson.com About Structurlam Mass Timber Structurlam Mass Timber U.S., Inc. -- http://structurlam.com/-- is a North American provider of mass timber solutions for construction and industrial markets in Canada and the U.S. Established in 1962, Structurlam is based in Penticton, British Columbia and has mass timber production facilities in Canada and the U.S. After reaching a deal with Mercer International Inc. to sell its assets in British Columbia and Arkansas for US$60 million, Structurlam and certain of its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 23-10497) on April 21, 2023. The Debtors have sought recognition of the Chapter 11 proceedings in the Supreme Court of British Columbia. Structurlam Mass Timber estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. The Debtors tapped Chipman Brown Cicero & Cole, LLP and Potter Anderson Corroon, LLP as bankruptcy counsels; Paul Hastings, LLP as special counsel; Gowling WLG as Canadian counsel; Alvarez & Marsal Canada, Inc. as financial advisor; and Stifel, Nicolaus & Company, Incorporated and Miller Buckfire & Co., LLC as investment bankers. Kurtzman Carson Consultants, LLC is the claims and noticing agent and administrative advisor. The U.S. Trustee for Regions 3 and 9 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Morris, Nichols, Arsht & Tunnell, LLP. T-ROLL CONSTRUCTION: Seeks to Hire Tax & Accounting Professionals ----------------------------------------------------------------- T-Roll Construction, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Colorado to employ Tax & Accounting Professionals, Inc. The Debtor requires an accountant to prepare its monthly operating reports, monthly budget and cash flow projections. Tax & Accounting Professionals will charge a flat fee of $1,000 for any tax return filed and $125 per hour for the preparation of financial statements. Tax & Accounting Professionals is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Charles R. Wickstrom Tax & Accounting Professionals, Inc 5230 W. Quarles Drive Littleton, CO 80128 Tel: 303-437-1303 About T-Roll Construction T-Roll Construction, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 23-11154) on March 24, 2023. In the petition signed by Seth Cvancara, owner and chief executive officer, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Thomas B. Mcnamara oversees the case. Stephen Berken, Esq., at Berken Cloyes, PC, represents the Debtor as legal counsel. T-SHACK INC: Taps Rebeca Garcilazo de Martinez of Exp as Realtor ---------------------------------------------------------------- T-Shack Inc. filed an amended application seeking approval from the U.S. Bankruptcy Court for the District of Nevada to employ Rebeca Garcilazo de Martinez, a realtor at Exp Realty, to sell the remaining six properties. The realtor will get a commission of 7 percent of the properties' gross selling price. Ms. de Martinez disclosed in a court filing that she is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The realtor can be reached at: Rebeca Garcilazo de Martinez Exp Realty 2219 Rimland Drive, Suite 301 Bellingham, WA 98226 About T-Shack Inc. T-Shack Inc., a wholesale and retail company in Mantador, N.D., filed for Chapter 11 protection (Bankr. D. Nev. Case No. 22-11197) on April 5, 2022. In the petition filed by Raymond Zajac, registered agent, the Debtor listed $1 million to $10 million in both assets and liabilities. Judge Mike K. Nakagawa oversees the case. Michael J. Harker, Esq., at The Law Offices of Michael J. Harker is the Debtor's counsel. T4L INC: Case Summary & Four Unsecured Creditors ------------------------------------------------ Debtor: T4L, Inc. T4Lc/o Gravitas Infinitum, LLC 4850 Tamiami Trail, Suite 301 Naples, FL 34103 Chapter 11 Petition Date: June 2, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-00637 Debtor's Counsel: Jonathan Bierfeld, Esq. MARTIN LAW FIRM 3701 Del Prado Blvd. S. Cape Coral, FL 33904 Email: jonathan.bierfeld@martinlawfirm.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Allen Witter as CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SHFXAWY/T4L_Inc__flmbke-23-00637__0001.0.pdf?mcid=tGE4TAMA TAAT INTERNATIONAL: Seeks to Hire Nellis Auction as Auctioneer -------------------------------------------------------------- Taat International, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ CRET Series 2012-2, LLC, a Nevada Limited Liability Company d/b/a Nellis Auction, as its auctioneer. Nellis Auction will offer the Debtor's personal property for online public auction. Nellis Auction charges a buyer’s premium of 15 percent. Nellis Auction and its associates are "disinterested persons" as defined by 11 U.S.C. Sec. 101 and do not hold or represent any interest adverse to the bankruptcy estate, according to court filings. The firm can be reached through: Joseph Deighan Spencer Chupinsky CRET Series 2012-2, LLC d/b/a Nellis Auction 7440 Dean Martin Dr Suite 204 Las Vegas, NV Telephone: (702) 531-1300 General Email: info@nellisauction.com About Taat International TAAT International, LLC -- https://trytaat.com/ -- is a Las Vegas-based company, which develops, manufactures and distributes alternative products in categories such as tobacco and hemp. TAAT International filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-10592) on Feb. 18, 2023, with $1 million to $10 million in assets and $10 million to $50 million in liabilities. Edward Burr has been appointed as Subchapter V trustee. Judge August B. Landis oversees the case. The Debtor is represented by Ryan A. Andersen, Esq., at Andersen & Beede. TENNISWOOD INC: Seeks to Hire Wilson Harrell Farrington as Counsel ------------------------------------------------------------------ Tenniswood, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Florida to hire Wilson, Harrell, Farrington, Ford, Wilson, Spain & Parsons, PA to handle its Chapter 11 case. Wilson received a retainer in the amount of $15,000. J. Steven Ford, Esq., the firm's attorney who will be providing the services, charges an hourly fee of $350 while legal assistants charge $150 per hour. Mr. Ford disclosed in court filings that he and other members of the firm neither hold nor represent any interest adverse to the Debtor and its bankruptcy estate. Wilson can be reached through: Steven J. Ford, Esq. Wilson, Harrell, Farrington, Ford, Wilson, Spain & Parsons, P.A. 307 S. Palafox Street Pensacola, FL 32502 Tel: 850-438-1111 Email: jsf@whsf-law.com amanda@whsf-law.com About Tenniswood Inc. Tenniswood, Inc. is a full dry cleaner and laundry services provider in Pensacola, Fla. It conducts business under the name Vick's Cleaners. Tenniswood filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-30350) on May 19, 2023, with $214,164 in assets and $2,173,933 in liabilities. Jodi Daniel Dubose has been appointed as Subchapter V trustee. Judge Jerry C. Oldshue, Jr. oversees the case. J. Steven Ford, Esq., at Wilson Harrell Farrington Ford Wilson Spain & Parsons, P.A. is the Debtor's legal counsel. THUNDER CONSTRUCTION: Seeks to Hire Sagre Law Firm as Counsel ------------------------------------------------------------- Thunder Construction Corp seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Sagre Law Firm, P.A. as its legal counsel. The firm will provide these services: a. give advice to the Debtor with respect to its powers and duties and the continued management of its business operations; b. advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; c. prepare legal documents; d. protect the interest of the Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan; and e. assist the Debtor in the preparation of a plan. The firm will be paid based upon its normal and usual hourly billing rates and will be reimbursed for out-of-pocket expenses incurred. Ariel Sagre, Esq., a partner at Sagre Law Firm, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Sagre Law Firm can be reached through: Ariel Sagre, Esq. Sagre Law Firm, P.A. 5201 Blue Lagoon Drive, Suite 892 Miami, FL 33126 Tel: (305) 266-5999 Fax: (305) 265-6223 Email: law@sagrelawfirm.com About Thunder Construction Thunder Construction Corp sought protection for relief under Chapter 11 of the Bankruptcy Court (Bankr. S.D. Fla. Case No. 23-13835) on May 16, 2023, listing $100,001 to $500,000 in assets and $50,000 in liabilities. Ariel Sagre, Esq. at Sagre Law Firm, P.A. represents the Debtor as counsel. TOKEN BUYER: $360M Bank Debt Trades at 20% Discount --------------------------------------------------- Participations in a syndicated loan under which Token Buyer Inc is a borrower were trading in the secondary market around 80.4 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $360 million facility is a Term loan that is scheduled to mature on June 1, 2029. About $357.3 million of the loan is withdrawn and outstanding. Token Buyer, Inc. does business as Therm-O-Disc Inc., a designer and manufacturer of mission critical safety sensors and sealed connecting components, such as bimetal snap controls and thermal cutoff fuses, found in home appliances as well as air conditioning terminals and temperature sensors used in HVAC systems. VIASAT: S&P Affirms 'BB-' Issuer Credit Rating, Outlook Stable -------------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' issuer credit rating on U.S.-based satellite provider Viasat. S&P raised its issuer credit rating on Connect Bidco Ltd. (Inmarsat) to 'BB-' from 'B+' and removed it from CreditWatch with positive implications, where it was placed on Feb. 16, 2022. The stable outlook reflects S&P's expectation for meaningful pro forma EBITDA growth to drive deleveraging over time. However, an upgrade is unlikely over the next year due to cash flow deficits through at least 2024 stemming from elevated capital spending. Additional debt will increase leverage but provides ample liquidity. Viasat's debt balance has increased to about $7.5 billion (from about $2.5 billion) with the incremental $1.35 billion raised at closing plus the assumption of Inmarsat's debt. This will result in pro forma debt to EBITDA rising to about 4.8x for the last 12 months ended March 31, 2023 (from below 3x). However, S&P estimates the company now has enough liquidity to fund peak capital spending requirements as well as to pay down the $700 million notes that mature in 2025, without requiring additional access to capital. The company's liquidity position and credit metrics were enhanced by the receipt of about $1.9 billion in cash for the divestiture of its Link-16 Tactical Data Link (TDL) business in January 2023. S&P views this sale favorably given that net debt to EBITDA is now about 0.7x lower than it originally anticipated it would be at closing (before the announcement of the TDL sale). S&P also believes the company is well positioned to increase earnings 10%-15% per year over the next three years as launches of upcoming satellites provide substantially more network capacity and geographic reach, which will likely result in leverage approaching 3.5x by 2025. Elevated capital expenditures are likely to result in negative free operating cash flow (FOCF) through 2024. Both companies are amid peak capital spending to fund the launch of new high throughput satellites. As a result, S&P expects consolidated capital expenditures (capex) to rise to about $1.7 billion in calendar year 2023, before gradually returning to more normal levels of about $1.1 billion-$1.2 billion by the end of 2025. On a combined basis, there are seven next generation satellites planned for launch over the next three years. More specifically: -- Viasat plans two more Viasat-3 satellites, with one each in Europe and Asia-Pacific (APAC). Each satellite will have total throughput of more than 1,000 gigabytes per second (GBps) compared with 140 GBps on Viasat-1 and 260 GBps on Viasat-2, resulting in exponentially more network capacity by 2025. In the event of a launch failure, the company will carry both launch and in-orbit insurance to mitigate credit risk. -- Inmarsat also plans to expand its fleet with three geosynchronous equatorial orbit (GEO) Ka satellites (GX 7,8,and 9) and two highly elliptical orbit (HEO) satellites (GX 10A and GX10B)for polar coverage. However, Inmarsat tends to procure less expensive and lower capacity satellites than Viasat. For example, Inmarsat expects the upcoming GX satellites to have only 10%-20% throughput of each Viasat-3 satellite. The combined capacity on the existing global GX fleet of five satellites is about 100 GBps and the new satellites will have about six times the capacity compared with the existing fleet. S&P said, "With associated earnings growth from these new satellites, combined with a more normal level of capital spending, we expect FOCF to approach break-even in 2025 and turn positive thereafter with about $200 million-$500 million in FOCF in 2026. "The acquisition improves Viasat's diversity while accelerating its global coverage plans. Inmarsat derives roughly 65% of its revenue from mobility markets (maritime and aviation) and about 35% from government, which are both mostly growing. We view this mix shift favorably since the combined company will have less exposure to the increasingly competitive North American in-home broadband market. The merger will also improve Viasat's geographic diversity as Inmarsat generates about one-third of its revenue from European customers and 15%-20% from APAC, thereby reducing total concentration with North America to about 70% on a combined basis (from 86%). The combination will also improve Viasat's diversity of services, as Inmarsat has a roughly even split of offerings in both the high-throughput Ka-band and lower frequency L-band. In addition, the company has a substantial in-flight connectivity (IFC) backlog that should allow Viasat to significantly increase its airplane count and increase revenue in this segment in the coming years. "Finally, we believe Inmarsat will bring significant experience in global aviation and maritime markets that Viasat planned to enter with its new Viasat-3 constellation. We believe there are opportunities to expand existing relations with international airlines from the cockpit (where Inmarsat offers L-band solutions to about 10,000 aircraft) to the cabin (many airlines don't yet have a Wifi provider) given the increased capacity that Viasat-3 European and APAC satellites will bring. We also believe the transaction will result in network and service quality synergies that will enable the combined company to offer a more robust suite of services to meet customer demand. "However, existing rating thresholds remain unchanged primarily due to increasing competition. We had initially expected to loosen our leverage thresholds by 0.5x when the deal was announced. However, the competitive landscape is rapidly evolving as several high-profile new entrants are emerging in various stages of launching low-Earth orbit (LEO) constellations that could compete with incumbent operators' services, made possible by significant declines in launch and production costs. We believe that virtually all Viasat's end markets will face more competition from LEO providers." More specifically, Viasat's North American in-home broadband (about 20% pro forma revenue) business faces headwinds from a variety of sources: -- SpaceX has been successful in gaining market share, adding about 400,000 U.S. customers in 2022. S&P believes the company will continue to grow over time as it launches new satellites and will be a formidable competitor to Viasat for the long term. -- S&P also believes new low earth orbit (LEO) satellite providers such as Amazon Kuiper will add to competitive pressure, as it plans to launch satellite in 2024. -- Separately, fixed wireless access (FWA) from T-Mobile has blanketed much of the U.S. with an affordable in-home option not previously available, offering internet speeds of 30 Mbps – 180 Mbps. While S&P recognizes competitive FWA service may not be available in deeply rural markets where Viasat's customer base is concentrated, FWA has been a contributing factor to recent subscriber declines. -- Finally, federally subsidized terrestrial fiber builds in rural markets under the $42.5 billion Broadband, Equity, Access, and Deployment Program will likely shrink the addressable market significantly (estimated at about 10 million-15 million homes) for Hughes and other satellite internet players given the speed, reliability, and cost advantages of fiber-based technology that will likely be deployed. S&P said, "In aviation (about 20%), we believe Viasat could also face increasing competition from Starlink and other LEO providers for future IFC revenue, which represents a significant growth opportunity. Starlink has won a number of contracts covering different regions (U.S., APAC, and Europe), aircraft types (widebody and narrowbody), and airlines (both low-cost carriers and full-service carriers), demonstrating that Starlink is already capable of winning contracts with a broad mix of customers. Starlink is also continuing to launch satellites that will increase its capacity and geographic coverage. While we recognize that LEOs have smaller beams that make it more challenging to serve areas where demand is concentrated (such as airports), we expect Starlink to become a stronger competitor over the next few years as it launches additional satellites, obtains more certifications, builds its customer support network, gains more experience from serving customers, and can demonstrate to other potential customers that its technology is mature." Nascent LEO competitors are becoming more active in the government segment (about 30%) becauseStarlink, One Web, and Kuiper have all signed government contracts in 2022. LEO constellations bring a new capability for military communications due to the low latency and reasonable bandwidth that can be used to fly unmanned aircraft and connect outposts and vessels. LEO constellations are also somewhat more difficult to interfere with given the volume of satellites and relatively inexpensive nature of each satellite. Therefore, S&P expects LEOs to take growth share as significant capacity becomes available. Still, S&P expects some growth in GEO government revenues too, because they will remain well positioned for several use cases, including fixed data transfer, bandwidth on demand, and mobility services for non-latency sensitive support vessels and aircraft. Inmarsat has experienced market share losses from Iridium in its maritime L-band business, but this represents only about 5% of pro forma revenue. Iridium has been successful in pricing aggressively while also leveraging the quality of its cross-linked network and clean wholesale strategy with key OEM relationships. Finally, the recent divestiture of the Link 16 Tactical Data Links (TDL) business weakens Viasat's business risk position modestly. This business generated roughly $125 million in EBITDA (about 10% pro forma) but had solid growth potential, as represented by the roughly 15x multiple paid by L3Harris. Mobility markets (about 30% of total revenue) present growth opportunities. New satellites will open avenues for monetization, primarily around high-speed internet in aviation and maritime in new geographies. S&P believes differentiated capacity with the ability to target specific high-use locations will be critical to stemming pricing pressure and monetizing demand for high-speed connections. The relatively low penetration of global aircraft combined with continued growth in consumer data usage make this an attractive market for satellite operators. Roughly 70% of global aircraft do not have an internet provider, mostly outside of the U.S., which is more mature. Capacity constraints have been a limitation in the past, but new satellites should improve customer experience and passenger adoption rates per aircraft. While this could result in higher average revenue per aircraft (ARPA), new entrants could out downward pressure on pricing. S&P said, "We believe Viasat is well positioned to increase IFC revenue for the next several years given its strong reputation, recent market share gains, and large backlog. Viasat has IFC systems installed on 2,270 commercial aircraft as of March 31, 2023 with another 1,310 additional aircraft in the backlog to be installed. Inmarsat had 919 installed aircraft at the end of 2022 with a sizable backlog as well. We do not believe these existing contracts are at risk from new competition given high switching costs and high-quality service provided by Viasat. However, we believe emerging LEO competition could make it more challenging to win new contracts on aircraft that do not have an IFC provider yet. "Inmarsat has a leading position in the global maritime market, which we believe could grow significantly as passengers demand greater connectivity at sea (and there is no competition from land-based technology). Increased capacity and targeted throughput should enable the company to capitalize on higher volumes. We expect it to continue to expand its higher-ARPU Ka-band very small aperture terminal service--dubbed Fleet Express (FX)--which should offset declines in its lower-ARPU L-band service –dubbed Fleet Broadband (which is experiencing elevated competition from Iridium). Bandwidth provided to small ships on a service such as Inmarsat FX is usually up to about 10 megabits per second (Mbps), which can be matched by LEO constellations. However, Inmarsat has antennas already installed on thousands of vessels, which creates switching costs. Government revenue (30%) provides stability. The acquisition of Inmarsat provides more balance between government service revenue (45%) and products (55%) while also creating opportunities to expand L-band services, which Viasat previously did not offer. Product sales can be lumpier, so S&P views the shift toward more predictable service revenue favorably. S&P also believes Viasat is well positioned in high-priority areas of the U.S. Defense budget such as C4ISR that will receive solid funding longer term and are less susceptible to budget cuts than other areas of defense spending. Furthermore, the company has good program diversity, with no major concentration in any single platform. S&P said, "We view Inmarsat as a core subsidiary to Viasat. Therefore, we equalize our issuer credit ratings. This is because we consider Inmarsat's business as integral to Viasat's long-term strategy thus creating operational incentives to provide support. Viasat's network is interoperable with Inmarsat's, and there will be network integration over time, thus making it less likely for Viasat to spin off or sell Inmarsat, in our view. Although there will be two credit silos at the outset, we believe management will operate the companies on a combined basis with the potential for the capital structure to collapse over time.Therefore, we will no longer be maintaining a stand-alone credit profile (SACP) on Inmarsat although we recognize that the SACP is now aligned with the parent rating given the recent de-leveraging at Inmarsat." The acquisition synergies are relatively modest. Management has identified $80 million of cost savings (about 3% of operating expenses) related to the elimination of network and overhead redundancies. In addition, it expects about $110 million of capital investment savings annually from the rationalization of ground infrastructure, software, and back-office systems spending. While S&P believes there is a relatively high probability that Viasat will realize these synergies, it may take a few years to achieve them and there will likely be costs to achieve these synergies in the near-term. There are no immediate plans to alter the company's satellite launches planned over the next two to three years even though Viasat's network is interoperable with Inmarsat's. Still, longer term, there may be opportunities for management to realize some satellite fleet capital efficiencies. S&P Global Ratings-adjusted EBITDA includes certain costs. S&P said, "We do not give immediate credit in 2023 for the synergies in our adjusted EBITDA. Rather, the benefit is reflected beginning in our 2024 earnings projections as the savings accelerate and the costs to achieve moderate. Separately, Viasat incurred roughly $93 million in acquisition- and transaction-related expenses in the fiscal year ended March 2023. We do not add these costs back to EBITDA, especially considering some of them were stranded related to the TDL sale. However, these costs shrink significantly in our forward-looking forecast and are not material in our 2024 projections." S&P said, "The stable outlook incorporates our view that the company is likely to reduce leverage over time with EBITDA growth although we also consider cash flow deficits over the next two years for investment required to support growth. "We could lower our rating within the next year if debt to EBITDA rose above 5x due to elevated customer churn and pricing pressure from incremental competition or if FOCF is weaker than we project such that the path toward positive cash flow becomes more uncertian. "An upgrade is unlikely over the next year due to negative FOCF to support new satellite launches, but we could raise the rating longer term if debt to EBITDA fell below 4x and FOCF to debt rose above 10%." Viasat is now the world's largest satellite network operator and provides broadband and communications products and services worldwide. The company primarily offers global Ka-band and L-band coverage through a fleet of 20 geostationary (GEO) satellites it owns and operates. It also has seven satellites set to be launched from the later part of 2023 through 2025 which include five GEO satellites and two high-elliptical orbit (HEO) satellites for polar coverage. The company serves government, aviation, maritime and fixed broadband sectors. -- Pro forma revenue growth of 5%-10% in calendar year 2023, rising to about 15% per year in 2024 and 2025 as new capacity becomes available, primarily at legacy Viasat. -- Pro forma EBITDA margins of about 34% in 2023, rising to 37% in 2024 and beyond as cost synergies gradually increase to $80 million per year. -- Cost to achieve synergies of about $50 million in 2023. -- Capex to revenue peaks at about 40% in 2023 before gradually approaching the low-20% area by the end of 2025 as new satellite launches are complete. S&P expects liquidity sources will exceed uses by over 2.0x over the next 12 months and net sources will remain positive, even with a 15% decline in forecast EBITDA. Sources of liquidity: -- Cash of $2.1 billion pro forma for acquisition close, -- Full availability under Viasat's $700 million and Inmarsat's $700 million revolving credit facility, and -- Funds from operations of over $1 billion over the next year; Uses of liquidity: -- Mandatory debt amortization of about $27 million per year, -- Modest working capital outflows, and -- Capital spending of about $1.8 billion over the year. The company's credit facilities include financial covenants, including a maximum total leverage covenant of 6.5x that gradually steps down to 5.75x after December 31, 2024. The company also has a written agreement from a majority of its revolver lenders to extend the revolver for 5 years and decrease the minimum interest coverage covenant to 2.75x (from 3.25x). Therefore, S&P believes Viasat will maintain at least a 15% cushion against its covenants over the next year. S&P performs recovery analysis for each credit silo. There is no residual value available to flow in either direction under our default scenarios. -- S&P's simulated default scenario contemplates heightened competitive pressures from terrestrial network providers, satellite operators, and satellite service providers, which leads to increased churn and pricing pressure. This, in conjunction with the high operating costs associated with its near-term satellite launches, erodes profitability. This would cause the company's cash flow to decline to the point that it cannot cover its fixed charges (interest expense, required amortization, and minimum maintenance capex), eventually leading to a default in 2027. -- Other default assumptions include an 85% draw on the revolving credit facilities, no future draws on Viasat's export-import facility, the spread on the revolving credit facility rises to 5% as covenant amendments are obtained, and all debt includes six months of prepetition interest. -- Viasat's export-import facility is assumed to have $40 million outstanding at default. This facility is directly collateralized by ViaSat-2, so the secured debt is subordinated to the export-import facility with respect to the value of ViaSat-2. If ViaSat-2's value is insufficient to meet the export-import claims, then the export-import facility would share ratably with the unsecured noteholders with respect to the remaining value. S&P believes ViaSat-2's value exceeds $40 million and therefore have shown the export-import facility as a priority claim ahead of the secured debt for simplicity. -- S&P has valued the company on a going-concern basis using a 6x multiple of its projected emergence EBITDA to reflect the company's satellite assets and customer relationships. Viasat -- Default year: 2027 -- EBITDA at emergence: $400 million -- EBITDA multiple: 6x Inmarsat -- Default year: 2027 -- EBITDA at emergence: $500 million -- EBITDA multiple: 6x Viasat -- Net recovery value for waterfall after administrative expenses (5%): $2.3 billion -- Priority claim on ViaSat-2: $40 million -- Value available for senior secured debt: $2.2 billion -- Estimated senior secured debt: $2.5 billion --Recovery expectations: 70%-90% (rounded estimate: 85%) -- Value available for senior unsecured: $0 -- Estimated senior unsecured debt: $1.9 billion --Recovery expectations: 0%-10% (rounded estimate: 0%) Inmarsat -- Net enterprise value at default: $2.9 billion -- Senior secured debt claims: about $4.4 billion --Recovery expectation: 50%-70% (rounded estimate: 65%) ESG credit indicators: E-2 S-2 G-2 VIVOS REAL ESTATE: Taps McNamee Hosea as Substitute Counsel ----------------------------------------------------------- Vivos Real Estate Holdings, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ McNamee Hosea, P.A. to substitute for The Burns Law Firm, LLC. The firm's services include: a. preparing and filing all necessary bankruptcy pleadings; b. negotiating with creditors; c. representing the Debtor in adversary cases and other proceedings related to its Chapter 11 bankruptcy; d. preparing the Debtor's disclosure statement and plan of reorganization; and e. other legal services related to the Debtor's Chapter 11 case. McNamee Hosea will be paid at these rates: Craig M. Palik $425 per hour Associates $300 to $350 per hour Paralegal $135 per hour Legal Assistants $100 per hour As disclosed in court filings, McNamee Hosea is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Craig M. Palik, Esq. Justin P. Fasano, Esq. McNamee Hosea, P.A. 6411 Ivy Lane, Suite 200 Greenbelt, Maryland 20770 Telephone: (301) 441-2420 Facsimile: (301) 982-9450 Email: cpalik@mhlawyers.com Email: jfasano@mhlawyers.com About Vivos Real Estate Holdings Vivos Real Estate Holdings, LLC, a company in Rockville, Md., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 22-14207) on Aug. 2, 2022, with as much as $50,000 in assets and $1 million to $10 million in liabilities. Naveen Doki, manager and president, signed the petition. Judge Maria Ellena Chavez-Ruark oversees the case. McNamee Hosea, P.A. is the Debtor's legal counsel. WHEEL PROS: $1.18B Bank Debt Trades at 37% Discount --------------------------------------------------- Participations in a syndicated loan under which Wheel Pros Inc is a borrower were trading in the secondary market around 62.9 cents-on-the-dollar during the week ended Friday, June 2, 2023, according to Bloomberg's Evaluated Pricing service data. The $1.18 billion facility is a Term loan that is scheduled to mature on May 11, 2028. The amount is fully drawn and outstanding. Wheel Pros, Inc. manufactures vehicle wheels. The Company distributes wheels, tires, suspension, and accessories for vehicles. Wheel Pros serves customers in the United States and Canada. WHITESTONE BREWERY: Taps Hayward PLLC as Bankruptcy Counsel ----------------------------------------------------------- Whitestone Brewery, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Hayward, PLLC to handle its Chapter 11 bankruptcy proceedings. The firm's services include: a. providing the Debtor with legal advice with respect to its powers and duties in the continued operation of its business and management of its property; b. advising the Debtor of its responsibilities under the Bankruptcy Code; c. preparing and filing legal papers; d. assisting the Debtor in preparing and filing its schedules, statement of affairs, monthly financial reports, and initial report; e. representing the Debtor in adversary proceedings and other contested and uncontested matters, both in the bankruptcy court and in other courts of competent jurisdiction, concerning any and all matters related to its bankruptcy proceedings and financial affairs; f. representing the Debtor in the negotiation and documentation of any sales or refinancing of property of the estate, and in obtaining approvals by the court; and g. assisting the Debtor in the formulation of a plan of reorganization and in taking the necessary steps to obtain confirmation of the plan. The firm will be paid at these rates: Charlie Shelton $375 per hour Todd Headden $375 per hour Ron Satija $500 per hour Other attorneys $250 - $450 per hour Paralegals $150 - 195 per hour Legal Assistant $95 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The Debtor paid the firm a retainer of $28,000. Charlie Shelton, Esq., a partner at Hayward, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Charlie Shelton, Esq. Hayward, PLLC 7600 Burnet Road, Suite 530 Austin, TX 78757 Tel: 737-881-7100 Email: cshelton@haywardfirm.com About Whitestone Brewery Whitestone Brewery, LLC operates in the beverage manufacturing industry. The company is based in Cedar Park, Texas. Whitestone Brewery sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Texas Case No. 23-10325) on May 5, 2023. In the petition signed by Ryan Anglen, owner, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Charlie Shelton, Esq., at Hayward PLLC, represents the Debtor as legal counsel. WORLEY CHIROPRACTIC: Hires Fred Adams Tax Group as Accountant ------------------------------------------------------------- Worley Chiropractic Clinic, PA seeks approval from the U.S. Bankruptcy Court for the District of South Carolina to employ Fred Adams Tax Group, Inc. as its accountant. The firm will prepare the Debtor's Chapter 11 monthly operating reports, income tax returns, and other accounting duties. The firm will charge $95 - $125 per hour for its services. As disclosed in the court filings, Fred Adams Tax Group does not represent any interest adverse to the Debtor or its estate and is a "disinterested person" as defined in 11 U.S.C. Sec 101(14). The firm can be reached through: David Adams Fred Adams Tax Group, Inc. 3447 Pelham Road, Suite 101 Greenville, SC 29615 Tel: 864-458-8151 Fax: 864-458-8198 Email: brenda@fredadamstax.com About Worley Chiropractic Clinic Worley Chiropractic Clinic PA, a chiropractic clinic in Greenwood, S.C., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. S.C. Case No. 22-01831) on July 12, 2022, with $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Donald B. Worley, president, signed the petition. Judge Helen E. Burris oversees the case. Robert H. Cooper, Esq., at The Cooper Law Firm, serves as the Debtor's legal counsel while Montgomery & Company, CPAs, PA is the Debtor's accountant. WWMAJ SYSTEMS: Taps Conroy Baran, Krigel & Krigel as Attorneys -------------------------------------------------------------- WWMAJ Systems LLC seeks approval from the U.S. Bankruptcy Court for the District of Kansas to hire Conroy Baran, LLC, and Krigel & Krigel, P.C. as its attorneys. The firms will advise the Debtor of its duties under the Bankruptcy Code and will provide other legal services related to its Chapter 11 cases. The firm will be paid at these rates: Robert Baran $295 per hour Erlene Krigel $300 per hour Paralegals $95 - $145 per hour Conroy Baran has received a retainer in the amount of $39,562 plus the filing fees of $1,738. As disclosed in the court filings, the firms are "disinterested persons" within the meaning of Section 101(14) and as required by Section 327(a) of the Bankruptcy Code. The firms can be reached through: Robert S. Baran, Esq. CONROY BARAN 1316 Saint Louis Ave, 2nd FL Kansas City, MO 64101 Phone: (816) 616-5009 Email: rbaran@conroybaran.com Erlene W. Krigel, Esq. KRIGEL & KRIGEL, P.C. 4520 Main St., Ste. 700 Kansas City, MO 64111 Phone:(816) 756-5800 Fax: (816) 474-3216 - Fax Email: ekrigel@krigelandkrigel.com About WWMAJ Systems WWMAJ Systems LLC is an online retailer with experience in the beverage and grocery industries. WWMAJ Systems LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Court (Bankr. D. Kan. Case No. 23-20536) on May 16, 2023. The petition was signed by Will Young as CEO/President. At the time of filing, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Judge Dale L. Somers presides over the case. Robert Baran, Esq. at CONROY BARAN represents the Debtor as counsel. [^] BOND PRICING: For the Week from May 29 to June 2, 2023 ---------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 99 Escrow Issuer Inc NDN 7.500 38.500 1/15/2026 99 Escrow Issuer Inc NDN 7.500 36.979 1/15/2026 99 Escrow Issuer Inc NDN 7.500 36.979 1/15/2026 AMC Entertainment Holdings Inc AMC 5.875 41.137 11/15/2026 Acorda Therapeutics Inc ACOR 6.000 64.283 12/1/2024 Air Methods Corp AIRM 8.000 4.052 5/15/2025 Air Methods Corp AIRM 8.000 4.882 5/15/2025 Amyris Inc AMRS 1.500 22.125 11/15/2026 Applied Optoelectronics AAOI 5.000 75.865 3/15/2024 Audacy Capital Corp CBSR 6.500 3.499 5/1/2027 Audacy Capital Corp CBSR 6.750 4.967 3/31/2029 Audacy Capital Corp CBSR 6.750 4.362 3/31/2029 BCB Bancorp Inc BCBP 5.625 94.410 8/1/2028 BCB Bancorp Inc BCBP 5.625 94.410 8/1/2028 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Bed Bath & Beyond Inc BBBY 5.165 2.700 8/1/2044 Bed Bath & Beyond Inc BBBY 3.749 2.800 8/1/2024 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Diebold Nixdorf Inc DBD 9.375 25.830 7/15/2025 Diebold Nixdorf Inc DBD 8.500 2.000 10/15/2026 Diebold Nixdorf Inc DBD 9.375 16.446 7/15/2025 Diebold Nixdorf Inc DBD 9.375 47.250 7/15/2025 Diebold Nixdorf Inc DBD 8.500 3.750 10/15/2026 Diebold Nixdorf Inc DBD 9.375 16.446 7/15/2025 Diebold Nixdorf Inc DBD 9.375 17.058 7/15/2025 Diebold Nixdorf Inc DBD 8.500 1.915 10/15/2026 Discover Bank DFS 4.682 91.676 8/9/2028 Endo Finance LLC / Endo Finco Inc ENDP 5.375 5.000 1/15/2023 Endo Finance LLC / Endo Finco Inc ENDP 5.375 5.000 1/15/2023 Energy Conversion Devices ENER 3.000 0.551 6/15/2013 Envision Healthcare Corp EVHC 8.750 0.750 10/15/2026 Envision Healthcare Corp EVHC 8.750 0.462 10/15/2026 Esperion Therapeutics Inc ESPR 4.000 41.750 11/15/2025 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 11.404 7/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 11.627 7/15/2026 Federal Farm Credit Banks Funding Corp FFCB 2.250 99.755 6/7/2023 Federal Home Loan Banks FHLB 2.250 99.334 6/9/2023 Federal Home Loan Banks FHLB 2.200 99.334 6/9/2023 First Citizens Bancshares Inc/TX FIRCTZ 6.000 89.661 9/1/2028 First Citizens Bancshares Inc/TX FIRCTZ 6.000 89.661 9/1/2028 First Republic Bank/CA FRCB 4.375 2.102 8/1/2046 First Republic Bank/CA FRCB 4.625 1.176 2/13/2047 GNC Holdings Inc GNC 1.500 0.502 8/15/2020 Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022 Gossamer Bio Inc GOSS 5.000 29.375 6/1/2027 Groupon Inc GRPN 1.125 35.750 3/15/2026 H-Food Holdings LLC / Hearthside Finance Co Inc HEFOSO 8.500 39.719 6/1/2026 H-Food Holdings LLC / Hearthside Finance Co Inc HEFOSO 8.500 41.877 6/1/2026 Inseego Corp INSG 3.250 41.250 5/1/2025 Invacare Corp IVC 4.250 4.836 3/15/2026 Invacare Corp IVC 5.000 1.625 11/15/2024 JPMorgan Chase & Co JPM 6.735 98.116 6/15/2023 JPMorgan Chase & Co JPM 2.000 85.700 8/20/2031 JPMorgan Chase Bank NA JPM 2.000 82.231 9/10/2031 KeyBank NA/Cleveland OH KEY 0.433 96.600 6/14/2024 Lannett Co Inc LCIN 7.750 7.500 4/15/2026 Lannett Co Inc LCIN 4.500 2.691 10/1/2026 Lannett Co Inc LCIN 7.750 7.531 4/15/2026 Lightning eMotors Inc ZEV 7.500 54.331 5/15/2024 MBIA Insurance Corp MBI 16.520 5.500 1/15/2033 MBIA Insurance Corp MBI 16.756 2.000 1/15/2033 Macy's Retail Holdings LLC M 6.900 89.434 1/15/2032 Macy's Retail Holdings LLC M 6.900 89.434 1/15/2032 Mashantucket Western Pequot Tribe MASHTU 7.350 41.250 7/1/2026 Morgan Stanley MS 8.000 98.937 6/9/2023 Morgan Stanley MS 1.800 72.397 8/27/2036 National CineMedia LLC NATCIN 5.750 2.625 8/15/2026 OMX Timber Finance Investments II LLC OMX 5.540 0.850 1/29/2020 Pacific Western Bank PACW 3.250 38.607 5/1/2031 Party City Holdings Inc PRTY 8.750 14.875 2/15/2026 Party City Holdings Inc PRTY 10.130 14.500 7/15/2025 Party City Holdings Inc PRTY 8.750 15.000 2/15/2026 Party City Holdings Inc PRTY 6.625 1.000 8/1/2026 Party City Holdings Inc PRTY 6.625 0.750 8/1/2026 Party City Holdings Inc PRTY 10.130 10.155 7/15/2025 Photo Holdings Merger Sub Inc SFLY 11.000 37.875 10/1/2027 Porch Group Inc PRCH 0.750 32.375 9/15/2026 Protective Life Global Funding PL 1.082 99.875 6/9/2023 Rackspace Technology Global Inc RAX 5.375 25.382 12/1/2028 Rackspace Technology Global Inc RAX 5.375 25.602 12/1/2028 Radiology Partners Inc RADPAR 9.250 28.017 2/1/2028 Radiology Partners Inc RADPAR 9.250 27.879 2/1/2028 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Rite Aid Corp RAD 7.700 31.587 2/15/2027 Rite Aid Corp RAD 6.875 29.001 12/15/2028 Rite Aid Corp RAD 6.875 29.001 12/15/2028 RumbleON Inc RMBL 6.750 43.309 1/1/2025 SVB Financial Group SIVB 4.000 6.999 N/A SVB Financial Group SIVB 4.100 8.250 N/A SVB Financial Group SIVB 4.250 7.002 N/A SVB Financial Group SIVB 4.700 8.000 N/A Shift Technologies Inc SFT 4.750 10.999 5/15/2026 Signature Bank/ New York NY SBNY 4.000 1.000 10/15/2030 Signature Bank/ New York NY SBNY 4.125 1.266 11/1/2029 Talen Energy Supply LLC TLN 6.500 30.875 6/1/2025 Talen Energy Supply LLC TLN 10.500 31.125 1/15/2026 Talen Energy Supply LLC TLN 7.000 22.250 10/15/2027 Talen Energy Supply LLC TLN 6.500 22.250 9/15/2024 Talen Energy Supply LLC TLN 10.500 30.000 1/15/2026 Talen Energy Supply LLC TLN 9.500 22.271 7/15/2022 Talen Energy Supply LLC TLN 6.500 43.750 9/15/2024 Talen Energy Supply LLC TLN 9.500 22.271 7/15/2022 Talen Energy Supply LLC TLN 10.500 30.000 1/15/2026 Team Health Holdings Inc TMH 6.375 43.113 2/1/2025 Team Health Holdings Inc TMH 6.375 43.374 2/1/2025 Team Inc TISI 5.000 81.179 8/1/2023 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Tricida Inc TCDA 3.500 10.800 5/15/2027 US Renal Care Inc USRENA 10.625 29.655 7/15/2027 US Renal Care Inc USRENA 10.625 28.178 7/15/2027 UpHealth Inc UPH 6.250 31.046 6/15/2026 Vroom Inc VRM 0.750 35.678 7/1/2026 WeWork Cos Inc WEWORK 7.875 43.745 5/1/2025 WeWork Cos Inc WEWORK 7.875 51.496 5/1/2025 WeWork Cos LLC / WW Co-Obligor Inc WEWORK 5.000 46.192 7/10/2025 WeWork Cos LLC / WW Co-Obligor Inc WEWORK 5.000 48.395 7/10/2025 Wesco Aircraft Holdings WAIR 9.000 9.500 11/15/2026 Wesco Aircraft Holdings WAIR 8.500 4.500 11/15/2024 Wesco Aircraft Holdings WAIR 13.125 8.500 11/15/2027 Wesco Aircraft Holdings WAIR 13.125 6.201 11/15/2027 Wesco Aircraft Holdings WAIR 8.500 4.519 11/15/2024 Wesco Aircraft Holdings WAIR 9.000 9.401 11/15/2026 Western Global Airlines WGALLC 10.375 6.635 8/15/2025 Western Global Airlines WGALLC 10.375 7.497 8/15/2025 Wright Medical Group Inc WMGI 1.625 98.125 6/15/2023 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***