/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230630.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 30, 2023, Vol. 27, No. 180 Headlines 1618 17TH STREET: Claims to be Paid from Property Sale Proceeds 1716 R STREET: 4220 Ninth Street, 4649 Hillside File Amended Plan 1716 R STREET: Lerae Towers Files Second Amended Plan 1716 R STREET: Washingtonian, 1616 27th Street File Amended Plan 5280 AURARIA: Plan Targets Sale or Refinancing in 2024 5752 NW 1ST: Gets OK to Hire Joel M. Aresty as Legal Counsel ACASTI PHARMA: Incurs $42.4 Million Net Loss in FY Ended March 31 ADMI CORP: S&P Downgrades ICR to 'B-' on Weaker Credit Metrics AEQUOR MGT: Hearing on Disclosure Continued to August 9 ALIERA COMPANIES: Files Amendment to Disclosure Statement ALPHA ENTERTAINMENT: McMahon Can't Escape Claims from Ex-Execs ARCTIC GLACIER: Moody's Withdraws 'Caa1' CFR on Debt Repayment ASP BLADE: MetWest IB Marks $49,881 Loan at 16% Off ASP BLADE: MetWest TRB Marks $1.09M Loan at 16% Off ATHENEX INC: Sagent, Oaktree Win Bankruptcy Auction for Some Assets ATHENEX INC: Seeks to Hire Pachulski as Legal Counsel AVEANNA HEALTHCARE: MetWest Flex Marks $1.3M Loan at 15% Off BCPE NORTH: S&P Downgrades ICR to 'CCC+' on Weak Credit Measures BDC GROUP: RP Construction Appointed as New Committee Member BIOLASE INC: Macias Gini Replaces BDO as Auditor BLOCKFI INC: SEC Can Wait to Collect $30-Million Penalty BRANDYWINE REALTY: S&P Downgrades ICR to 'BB+', Outlook Negative BRYAN J. HEBERT: Sale of Mena Residence for $635K to Birtcher OK'd BW INDUSTRIES: Files Voluntary Chapter 7 Bankruptcy Petition CANO HEALTH: MetWest OHIC Marks $12,773 Loan at 24% Off CAPTAIN CORPORATION: Voluntary Chapter 11 Case Summary CARTER TABERNACLE: Voluntary Chapter 11 Case Summary CENTURYLINK INC: MetWest IB Marks $23,955 Loan at 34% Off CENTURYLINK INC: MetWest TRB Marks $11.6M Loan at 34% Off CITY BREWING: MetWest OHIC Marks $7,481 Loan at 58% Off CLOSURE SYSTEMS: Moody's Affirms 'B2' CFR, Outlook Remains Stable CREEKSIDE OPERATING: Case Summary & 20 Top Unsecured Creditors DIAMOND SPORTS: Wants Out of Diamondbacks TV Deal EARTHSTONE ENERGY: Moody's Rates New 2031 Sr. Unsecured Notes 'B3' EFS PARLIN: Gets OK to Hire SSG Advisors as Investment Banker EMPLOYEE LOAN: Sale of Assets to Sunrise for $7.97-Mil. Approved ESOURCE RESOURCES: Cash Collateral Access OK'd on Final Basis FAIRFIELD HARBOURSIDE: $700K Private Sale of Harbourside Condo OK'd FEILITECH US: Exclusivity Period Extended to September 29 FLEETCOR TECHNOLOGIES: Moody's Affirms 'Ba1' CFR, Outlook Stable FLOOR STORE: Unsecureds Will Get 9.63% of Claims in 5 Years FRASIER CONTRACTING: Proposed Sale of De Minimis Assets Approved FRASIER CONTRACTING: Sale of 3 Job Site Cameras for $3.2K Approved FRASIER CONTRACTING: Sale of Assets to Fresquez for $1.3K Approved FRASIER CONTRACTING: Sale of Assets to Trust for $1.3K Approved FREEDOM MORTGAGE: Moody's Affirms B1 CFR & Rates New Sr. Notes B2 FTX TRADING: SBF Can't Get Documents from Former Law Firm G ARATA & SON: Unsecureds Will Get 30% of Claims in Plan GREGORY A. DEAKIN: Sale of Cuba Property to Kruzan for $32K Granted GZC TRANSPORT: Files for Chapter 11 to Stop Foreclosure HAMMOND ENTERPRISES: Case Summary & 20 Top Unsecured Creditors HIGHLINE AFTERMARKET: S&P Affirms 'B' ICR, Outlook Negative HMH CONSTRUCTION: Syman LLC Out as Committee Member HOMER CITY: MetWest TRB Marks $575,805 Loan at 33% Off HOWARD MIDSTREAM: Moody's Rates New Senior Unsecured Notes 'B3' HUDSON PACIFIC: S&P Lowers ICR to 'BB+', Outlook Negative IGN 401 PROPERTIES: Unsecureds Will Get 100% of Claims in Plan iMEDIA BRANDS: Case Summary & 50 Largest Unsecured Creditors INSTANT BRANDS: U.S. Trustee Appoints Creditors' Committee INTEGRATED NANO-TECHNOLOGIES: Sale of Assets to Enplas Denied IYS VENTURES: Wins Cash Collateral Access Thru July 13 JB MONTGOMERY: Proposed Sale of Real Property in Lawnside Approved JSG II INC: Moody's Upgrades CFR to B3 & Secured Bank Loans to B2 KMS SHUTTLE: Gets OK to Hire Lentz Law PC as Counsel LAKELAND HOLDINGS: MetWest FRI Marks $634,811 Loan at 34% Off LAURA'S ORIGINAL: Unsecureds to Get 40 Cents on Dollar in Plan LIGHTSTONE HOLDCO: Moody's Rates New $34MM Revolver Loan 'B2' LOGMEIN INC: MetWest OHIC Marks $6,982 Loan at 42% Off MAGENTA BUYER: MetWest OHIC Marks $12,838 Loan at 17% Off MALINKI SLONIK: Taps Joel M. Aresty as Legal Counsel MALLINCKRODT PLC: Readies Retention Bonuses for 2nd Ch. 11 Filing MATRIX HOLDINGS: S&P Places 'B-' ICR on CreditWatch Negative MAVENIR SYSTEMS: MetWest FRI Marks $643,500 Loan at 30% Off MEGA-PHILADELPHIA LLC: Amends Centric Bank Secured Claims MIRACLE CENTER: Court OKs Deal on Cash Collateral Use Thru Aug 23 MRUCKER INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors MULTEC INDUSTRIAL: Court OKs Interim Cash Collateral Access NAKED JUICE: MetWest TRB Marks $374,515 Loan at 23% Off NEW TROJAN: MetWest FRI Marks $1.09M Loan at 31% Off OVERSEAS SHIPHOLDING: Egan-Jones Retains B- Sr. Unsecured Ratings PARADOX RESOURCES: $13.9MM DIP Loan from Legalist OK'd PAXE LATITUDE: Seeks to Extend Plan Exclusivity to September 19 PENN ENTERTAINMENT: Egan-Jones Retains B- Senior Unsecured Ratings POLAR US BORROWER: MetWest Flex Marks $1M Loan at 16% Off POLAR US BORROWER: MetWest OHIC Marks $5,500 Loan at 16% Off PROVECTUS PHARMACEUTICALS: All 6 Proposals Passed at Annual Meeting PUERTO RICO: Oversight Board Plans to Cut PREPA Bond Offer by Half RANGE RESOURCES: Moody's Alters Outlook on 'Ba2' CFR to Positive RESOURCE CONVERTING: Trustee's $15K Cash Sale of Equipment Granted RITE AID: Egan-Jones Retains CCC- Senior Unsecured Ratings RXO INC: S&P Alters Outlook to Stable, Affirms 'BB+' ICR SAFFIRE VAPOR: Continued Operations to Fund Plan SILVER TRIDENT: Commences Subchapter V Bankruptcy Case SM ENERGY: Moody's Hikes CFR to Ba3 & Senior Unsecured Notes to B1 SPECTRUM BRANDS: Moody's Confirms 'B1' CFR & Alters Outlook to Neg. SPIRIT AIRLINES: Egan-Jones Retains CCC+ Senior Unsecured Ratings SYSCO CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings SYSTEM1 INC: S&P Downgrades ICR to 'CCC', Outlook Negative TALCOTT FINANCIAL: Moody's Assigns Ba2 Issuer Rating, Outlook Pos. TD SYNNEX: Egan-Jones Retains BB+ Senior Unsecured Ratings TECTA AMERICA: S&P Upgrades ICR to 'B', Outlook Stable THEODORE FIORE, SR: $1.85MM Sale of Toms River Property Denied THOMAS PETTERS: BMO Harris to Pay Over $1B in Ponzi Scheme Case TPC GROUP: Texas Justices Rule Investors Not Liable for Explosion TRANSCENDIA INC: MetWest FRI Marks $1.5M Loan at 24% Off TRANSCENDIA INC: MetWest OHIC Marks $16,735 Loan at 24% Off TRUGREEN LP: MetWest FRI Marks $500,000 Loan at 32% Off TTM TECHNOLOGIES: Egan-Jones Retains B+ Senior Unsecured Ratings U.S. SILICA: Egan-Jones Hikes Senior Unsecured Ratings to B- UAL CORP: Egan-Jones Retains CCC+ Senior Unsecured Ratings VAIL RESORTS: Egan-Jones Retains B+ Senior Unsecured Ratings VANTAGE TRAVEL: Case Summary & 20 Largest Unsecured Creditors VANTAGE TRAVEL: Files for Chapter 11 to Sell to Nordic Hamburg VEGASNAP LLC: Files Emergency Bid to Use Cash Collateral VERINT SYSTEM: Egan-Jones Retains BB Senior Unsecured Ratings WICHITA HOOPS: Unsecureds to be Paid in Full in 5 Years WIN WASTE: Moody's Lowers CFR & First Lien Sr. Secured Debt to B3 WYNN RESORTS: Egan-Jones Retains CCC+ Senior Unsecured Ratings XEROX CORP: Egan-Jones Retains B+ Senior Unsecured Ratings ZAPPELLI BODY SHOP: Fine-Tunes Plan Documents ZAYO GROUP: MetWest IB Marks $63,313 Loan at 20% Off ZAYO GROUP: MetWest TRB Marks $1.04M Loan at 20% Off ZAYO GROUP: MetWest TRB Marks $563,487 Loan at 18% Off [^] BOOK REVIEW: The First Junk Bond ********* 1618 17TH STREET: Claims to be Paid from Property Sale Proceeds --------------------------------------------------------------- 1618 17th Street Flats LLC filed with the U.S. Bankruptcy Court for the District of Columbia a Disclosure Statement with respect to Plan of Liquidation dated June 26, 2023. The sole significant tangible asset of the Debtor is the real property located at certain real property located at 1618 17th St SE, Washington DC 20020, Lot 5596, Square 0010 (the "1618 Property") The 1609 Property is pledged to WCP Fund I LLC as Servicer for SF NU, LLC ("WCP Fund") via two liens in the asserted amount of well over $1 million. The events precipitating the Chapter 11 filing are the foreclosure filings scheduled by WCP Fund and its affiliates on twelve related debtors' properties. See Cases No. 23-17 to 23-28- ELG (Bankr. D.D.C.). Those debtors and this Debtor reached a settlement with WCP Fund and its affiliates that required the transfer of the 1618 Property pursuant to a Chapter 11 plan. WCP Fund then filed an involuntary bankruptcy against the Debtor, to which the Debtor consented. The Plan proposes the transfer of the 1618 Property to WCP Fund and release of WCP Fund's lien on a separate non-debtor property. The Plan proposes to sell the 1618 Property to WCP in exchange for a $5,250.00 reserve, plus $250 in U.S. Trustee fees (the "1618 WCP Reserve"). Class 3 consists of the Unsecured Claims against 1618 17th Place Flats LLC. On the Distribution Date, 161816 17th Place Flats LLC shall pay any amounts left over from the 1618 Reserve after payment of Administrative and Priority Tax Claims, to holders of General Unsecured Claims in full and complete satisfaction of General Unsecured Claims. The Class 3 Claim is impaired. Holders of Allowed Class 1C Claims are entitled to vote to accept or reject the Plan. Holders of Class 4 Interests shall retain their interests under the Plan. Holders of Class 4 Interests will not receive any payments unless and until all Holders of Allowed Class 1 and Class 2 and 3 Claims are paid in full. Class 4 Interests are unimpaired under the Plan. The Holders of Class 4 Interests are not entitled to vote to accept or reject the Plan. The Plan proposes the transfer of the 1618 Property to WCP Fund and release of WCP Fund's lien on a separate non-debtor property. In order to facilitate the confirmation of this Plan, within 10 days of the Confirmation Date, WCP Fund I, LLC shall pay the 1618 WCP Reserve to undersigned counsel for the Debtor to be held as security for the Debtor's obligations under this Plan (and not as a retainer for fees). A full-text copy of the Disclosure Statement dated June 26, 2023 is available at https://urlcurt.com/u?l=Uu5GsN from PacerMonitor.com at no charge. About 1618 17th Street 1618 17th Street Flats LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). The Debtor owns the real property located at certain real property located at 1618 17th St SE, Washington DC 20020, Lot 5596, Square 0010. The 1609 Property is pledged to WCP Fund I LLC as Servicer for SF NU, LLC via two liens in the asserted amount of well over $1 million. WCP Fund filed an involuntary petition against the Debtor (Bankr. D.D.C. 23-00167) on June 26, 2023. Since the Petition Date, the Debtor has continued to operate as a debtor in possession subject to the supervision of the Bankruptcy Court and the United States Trustee's Office in accordance with the Bankruptcy Code. Counsel to petitioning creditor: Maurice Belmont VerStandig The Verstandig Law Firm, LLC Tel: 301-444-4600 E-mail: mac@mbvesq.com Counsel for the Debtor: Janet M. Nesse, Esq. Justin P. Fasano, Esq. McNamee Hosea, P.A. 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Phone: 301-441-2420 Email: jnesse@mhlawyers.com jfasano@mhlawyers.com 1716 R STREET: 4220 Ninth Street, 4649 Hillside File Amended Plan ----------------------------------------------------------------- 4220 Ninth Street Flats LLC and 4649 Hillside Road Flats LLC, affiliates of 1716 R Street Flats LLC, filed with the U.S. Bankruptcy Court for the District of Columbia a Disclosure Statement with respect to Amended Joint Plan of Reorganization dated June 26, 2023. 4220 Ninth Street Flats LLC and 4649 Hillside Road Flats LLC are single asset real estate limited liability companies organized under the laws of the District of Columbia with a principal place of business located in the District of Columbia. The sole significant tangible asset of each Debtor is Debtor's real property located at: * For 4220 Ninth Street Flats LLC, the 4220 Property: 4220 9th Street, SE Washington, DC 20032, Lot 0802, Square 5924, and all improvements thereon. * 4649 Hillside Road Flats LLC 4649 Property: that certain real property located at 4649 Hillside Road, SE Washington, DC 20019, Lot 0118, Square 5363, and all improvements thereon. The 4220 Property is pledged to WCP Fund I LLC as servicer for U.S. Bank National Association, not in its individual capacity but solely as trustee of HOF Grantor Trust ("WCP Fund") in the asserted amount of $4,517,785.00 plus attorneys fees as of May 2, 2023, plus a second lien in favor of DP Capital LLC in the amount of approximately $2,059,374.69 (the "WCP Second Lien"). The 4649 Property is pledged to Sandy Spring Bank, which has an asserted balance owed as of the Petition Date of $970,181.65. DP Capital LLC also asserts the WCP Second Lien against the 4649 Property. Since the Petition Date, the Debtors have continued to operate as a debtor in possession subject to the supervision of the Bankruptcy Court and the United States Trustee's Office in accordance with the Bankruptcy Code. In addition, the Bankruptcy Court has supervised the Debtors' employment of attorneys and other professionals as required by the Bankruptcy Code. The Plan proposes the sale of the 4649 Property within one year. The Plan proposes to sell the 4220 Property to WCP in exchange for a $5,250.00 reserve, plus $250 in U.S. Trustee fees (the "4220 WCP Reserve"). Class 1C consists of the Unsecured Claims against 4649 Hillside Road Flats LLC. On the Distribution Date, 4649 Hillside Road Flats LLC shall pay any amounts left over from the 4649 Reserve after payment of Administrative and Priority Tax Claims, to holders of General Unsecured Claims in full and complete satisfaction of General Unsecured Claims. The Class 1C Claim is impaired. Holders of Allowed Class 1C Claims are entitled to vote to accept or reject the Plan. Class 2C consists of Unsecured Claims against 4220 Ninth Street Flats LLC. On the Distribution Date, 4220 Ninth Street Flats LLC shall pay any amounts left over from the 4220 Reserve after payment of Administrative and Priority Tax Claims, to holders of General Unsecured Claims in full and complete satisfaction of General Unsecured Claims. The Class 2C Claim is impaired. Holders of Allowed Class 2C Claims are entitled to vote to accept or reject the Plan. Holders of Class 3 Interests shall retain their interests under the Plan. Holders of Class 3 Interests will not receive any payments unless and until all Holders of Allowed Class 1 and Class 2 Claims are paid in full. Class 3 Interests are unimpaired under the Plan. The Holders of Class 3 Interests are not entitled to vote to accept or reject the Plan. To generate sufficient funds to assist in consummating this Plan, 4649 Hillside Road Flats LLC will select the Buyer within 300 days of entry of the Confirmation Order and sell the 4649 Property within 365 days of entry of the Confirmation Order (the "4649 Sale"). 4220 Ninth Street Flats LLC shall convey the 4220 Property to WCP Fund I LLC or any other entity to which WCP Fund I LLC directs that 4220 Ninth Street Flats LLC makes such transfer. WCP Fund I LLC shall be responsible for all costs of effectuating such transfer, including payment of all required taxes. In order to facilitate the confirmation of this Plan, within 10 days of the Confirmation Date, WCP Fund I, LLC shall pay the 4220 WCP Reserve and Richard Cunningham shall pay the 4649 Reserve to undersigned counsel for the Debtors to be held as security for the Debtors' obligations under this Plan (and not as a retainer for fees). A full-text copy of the Disclosure Statement dated June 26, 2023 is available at https://urlcurt.com/u?l=BW8bBt from PacerMonitor.com at no charge. Counsel for the Debtors: Janet M. Nesse, Esq. Justin P. Fasano, Esq. McNamee Hosea, P.A. 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Phone: 301-441-2420 Email: jnesse@mhlawyers.com jfasano@mhlawyers.com About 1716 R Street Flats 1716 R Street Flats, LLC and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.D.C. Lead Case No. 23-00017) on Jan. 16, 2023. In the petition signed by Richard Cunningham, managing member, 1716 R Street Flats disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Elizabeth L. Gunn oversees the cases. McNamee Hosea, PA, is the Debtor's legal counsel. 1716 R STREET: Lerae Towers Files Second Amended Plan ----------------------------------------------------- The Lerae Towers, LLC, and Lerae Towers II, LLC, affiliates of 1716 R Street Flats LLC, submitted a Disclosure Statement with respect to Second Amended Joint Plan of Reorganization dated June 26, 2023. The Plan proposes the reduction of WCP's lien on the 537 Property to $325,000.00, with an unsecured claim in the amount of $3 million, which is subject to a $2.5 million discount if paid within three years. The Plan proposes to sell the 1241 Property to WCP in exchange for a $5,250.00 reserve, plus $250 in U.S. Trustee fees (the "1241 WCP Reserve"). Class 1A consists of the Secured Claim of MainStreet Bank against The LeRae Towers, LLC. Between the date of the entry of the Confirmation Order and the closing of the LeRae Refinance, interest shall continue to accrue on the MainStreet Bank Allowed Secured Claim at the interest rate of 4.8% per annum. On the 8th day of each month for the three month period after the date of the entry of the Confirmation Order, the debtor The Lerae Towers, LLC shall remit to MainStreet Bank with respect to its Allowed Secured Claim monthly payments each in the amount of $5,481.80. On the 8th day of each month for the six month period following the three month period, the debtor The Lerae Towers, LLC shall remit to MainStreet Bank with respect to its Allowed Secured Claim monthly payments each in the amount of $8,078.91. Finally, on the 8th day of each month for the three-month period following the six month period, the debtor The Lerae Towers, LLC shall remit to MainStreet Bank with respect to its Allowed Secured Claim monthly payments each in the amount of $11,500.00. Upon the closing of the LeRae Refinance, the obligations of the debtor The Lerae Towers, LLC to make the monthly payments shall cease. Upon the closing of the LeRae Refinance, in full and complete satisfaction of its Allowed Secured Claim, MainStreet Bank shall be paid all amounts due from the Debtor at closing, up to the amount of its Allowed Secured Claim. MainStreet Bank shall retain its Liens pending payment of its Allowed Class 1A Claim. The Class 1A Claim is an impaired claim. The Holder of the Allowed Class 1A Claim is entitled to vote to accept or reject the Plan. Class 1C consists of the Unsecured Claims against The LeRae Towers, LLC. On the Distribution Date, The LeRae Towers, LLC shall pay any amounts left over from the LeRae Reserve after payment of Administrative and Priority Tax Claims, to holders of General Unsecured Claims in full and complete satisfaction of General Unsecured Claims. Class 1C Claims are impaired. Holders of Allowed Class 1C Claims are entitled to vote to accept or reject the Plan. Class 2C consists of the Unsecured Claims against LeRae Towers II, LLC. On the Distribution Date, LeRae Towers II, LLC shall pay any amounts left over from the LeRae II Reserve after payment of Administrative and Priority Tax Claims, to holders of General Unsecured Claims in full and complete satisfaction of General Unsecured Claims. The Class 2C Claim is impaired. Holders of Allowed Class 2C Claims are entitled to vote to accept or reject the Plan. To generate sufficient funds to assist in consummating this Plan, the LeRae Towers, LLC will refinance its secured debt to MainStreet Bank and WCP Fund I LLC as Servicer for SF NU, LLC within one (1) year of entry of the Confirmation Order (the "LeRae Refinance"). The proceeds shall first be used to pay off MainStreet Bank, and then to pay closing costs and US Trustee fees. The debtor The Lerae Towers, LLC will utilize its best efforts to secure the closing of the LeRae Refinance as quickly as possible after the the date of the entry of the Confirmation Order and will provide to MainStreet Bank on the 1st day of each month after the date of the entry of the Confirmation Order written status updates with respect to the LeRae Refinance. If the closing of the LeRae Refinance does not occur within 1 year of entry of the Confirmation Order, MainStreet Bank shall have the absolute, unrestricted right to complete a foreclosure of the 537 Property and pursue any other rights or available claims under the MainStreet loan documents without regard to any injunction, decree, or stay, automatic or otherwise, in this or any subsequent bankruptcy case. In full and complete satisfaction of the Allowed Secured Claim of the WCP Entities against LeRae Towers II, LLC, at a time of WCP Fund I LLC's choosing, after seven days notice, LeRae Towers II, LLC shall convey the 1241 Property to WCP Fund I LLC or any other entity to which WCP Fund I directs that LeRae Towers II, LLC makes such transfer. WCP Fund I LLC shall be responsible for all costs of effectuating such transfer, including payment of all required taxes, provided such transfer shall be regarded as one made pursuant to a confirmed plan of reorganization and the Debtors shall undertake all best efforts to ensure such transfer be regarded as exempt from tax pursuant to the allowances of the Bankruptcy Code. A full-text copy of the Disclosure Statement dated June 26, 2023 is available at https://urlcurt.com/u?l=7ITNch from PacerMonitor.com at no charge. Counsel for the Debtors: Janet M. Nesse, Esq. Justin P. Fasano, Esq. McNamee Hosea, P.A. 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Phone: 301-441-2420 Email: jnesse@mhlawyers.com jfasano@mhlawyers.com About 1716 R Street Flats 1716 R Street Flats, LLC and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.D.C. Lead Case No. 23-00017) on Jan. 16, 2023. In the petition signed by Richard Cunningham, managing member, 1716 R Street Flats disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Elizabeth L. Gunn oversees the cases. McNamee Hosea, PA, is the Debtor's legal counsel. 1716 R STREET: Washingtonian, 1616 27th Street File Amended Plan ---------------------------------------------------------------- The Washingtonian L.L.C. and 1616 27th Street Flats L.L.C., affiliates of 1716 R Street Flats LLC, filed with the U.S. Bankruptcy Court for the District of Columbia a Disclosure Statement with respect to Amended Joint Plan of Reorganization dated June 26, 2023. The Washingtonian L.L.C. and 1616 27th Street Flats L.L.C. are single asset real estate limited liability companies organized under the laws of the District of Columbia with a principal place of business located in the District of Columbia. The 319 Property is pledged to DP Capital LLC ("WCP") in the asserted amount of $7,170,194 plus attorneys fees as of May 2, 2023, plus a second lien of approximately $3,526,520 (the "WCP Second Lien"). The 1616 Property is pledged to Forbright Bank, which has an asserted balance owed as of the Petition Date of $2,833,340. WCP also asserts the WCP Second Lien against the 1616 Property. The events precipitating the Chapter 11 filing are the foreclosure filings scheduled by WCP on the Debtors' properties. Since the Petition Date, the Debtors have continued to operate as a debtor in possession subject to the supervision of the Bankruptcy Court and the United States Trustee's Office in accordance with the Bankruptcy Code. In addition, the Bankruptcy Court has supervised the Debtors' employment of attorneys and other professionals as required by the Bankruptcy Code. The Plan proposes the refinance of the 1616 Property with Forbright within 120 days of confirmation The Plan proposes to sell the 319 Property to WCP in exchange for a $5,250.00 reserve, plus $250 in U.S. Trustee fees (the "319 WCP Reserve"). Class 1C consists of Unsecured Claims against 1616 27th Street Flats L.L.C. On the Distribution Date, 1616 27th Street Flats L.L.C. shall pay any amounts left over from the 1616 Reserve after payment of Administrative and Priority Tax Claims, to holders of General Unsecured Claims in full and complete satisfaction of General Unsecured Claims. The Class 1C Claim is impaired. Holders of Allowed Class 1C Claims are entitled to vote to accept or reject the Plan. Class 2C consists of Unsecured Claims against The Washingtonian L.L.C. On the Distribution Date, The Washingtonian L.L.C. shall pay any amounts left over from the Washingtonian Reserve after payment of Administrative and Priority Tax Claims, to holders of General Unsecured Claims in full and complete satisfaction of General Unsecured Claims. The Class 2C Claim is impaired. Holders of Allowed Class 2C Claims are entitled to vote to accept or reject the Plan. Holders of Class 3 Interests shall retain their interests under the Plan. Holders of Class 3 Interests will not receive any payments unless and until all Holders of Allowed Class 1 and Class 2 Claims are paid in full. Class 3 Interests are unimpaired under the Plan. The Holders of Class 3 Interests are not entitled to vote to accept or reject the Plan. To generate sufficient funds to assist in consummating this Plan, 1616 27th Street Flats L.L.C. will refinance its debt to Forbright Bank within 90 days of entry of the Confirmation Order (the "1616 Refinance"). At any time of the WCP Fund I Entity's choosing, The Washingtonian L.L.C. shall convey the 319 Property to The WCP Fund Entity or any other entity to which the WCP Fund I Entity directs that The Washingtonian L.L.C. makes such transfer. The WCP Fund Entity shall be responsible for all costs of effectuating such transfer, including payment of all required taxes and any required US Trustee fees. A full-text copy of the Disclosure Statement dated June 26, 2023 is available at https://urlcurt.com/u?l=CjLrJf from PacerMonitor.com at no charge. Counsel for the Debtors: Janet M. Nesse, Esq. Justin P. Fasano, Esq. McNamee Hosea, P.A. 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Phone: 301-441-2420 Email: jnesse@mhlawyers.com jfasano@mhlawyers.com About 1716 R Street Flats 1716 R Street Flats, LLC, and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.D.C. Lead Case No. 23-00017) on Jan. 16, 2023. In the petition signed by Richard Cunningham, managing member, 1716 R Street Flats disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Elizabeth L. Gunn oversees the cases. McNamee Hosea, PA, is the Debtor's legal counsel. 5280 AURARIA: Plan Targets Sale or Refinancing in 2024 ------------------------------------------------------ 5280 Auraria, LLC, submitted a Second Amended Plan of Reorganization and a corresponding Disclosure Statement. The Debtor's Plan provides for the continued operations until a refinancing event or a sale occurs of the principal asset of the Debtor, the Auraria Student Lofts, under Chapter 11 of the Bankruptcy Code. Pursuant to the Plan, once the Debtor's assets have been liquidated or the Debtor has refinanced, the Debtor shall distribute the net proceeds to creditors in conformity with the Bankruptcy Code. The Debtor owns certain real property located at 1051 14th Street, Denver, Colorado 80202 and 1405 Curtis Street, Denver, Colorado 80202 (the "Real Property," also known as the "Auraria Student Lofts"). The Auraria Student Lofts provides off-campus student housing apartments near the University of Colorado – Denver, Metropolitan State University, Denver Community College, and the University of Denver. The Property has 125 rental units with 438 beds, occupying 153,860 square feet in downtown Denver. The Debtor filed its original plan with the Court on October 17, 2022 and then filed the first amended plan on March 27, 2023. The Debtor filed the current Plan on June 16, 2023. The Plan provides for the continued operation of the principal asset of the Debtor, i.e., the Real Property, under Chapter 11 of the Bankruptcy Code unless a sale of the Real Property takes place. Pursuant to the Plan, once the Real Property has been liquidated or the Debtor has refinanced, the Debtor shall distribute funds to creditors in conformity with the Bankruptcy Code. The Plan is a relatively simple Chapter 11 plan of reorganization. Under the Plan, Class 3 Other General Unsecured Claims are impaired. Class 3 consists of General Unsecured Claims in an amount greater than $1,500 that do not elect to be treated as a Convenience Claim. The class will be treated as follows: (a) The holders of Allowed Unsecured Claims in Class 3 will receive their Pro Rata share of Net Sale Proceeds upon the closing of the Sale in accordance with the Waterfall Recovery specified in Section 4.04 of the Plan (subject to the provisions for Disputed Claims set forth in Section 4.05 of the Plan). The foregoing payments shall be in full and final satisfaction, compromise, settlement, release, and discharge of the Class 3 claimant's Allowed Claim. (b) In the event the Real Property is not sold and the Debtor refinances, the Debtor must pay 50% of the Allowed General Unsecured Claims by the Payment Deadline. (c) The Auraria Stub Secured Claim is treated as an Allowed General Unsecured Claim under the Plan. (d) For the avoidance of doubt, a Class 3 claimant will not receive a greater amount under this Plan than the amount of its Allowed Claim. The holder of the Class 1.c Claim shall have consultation rights regarding the decision to sell the Real Property or refinance and the process for the Sale, as applicable. Should the Debtor's Real Property and associated Personal Property be sold, proceeds will be used to pay Allowed Claims and, if sufficient, provide a return to the Class 5 Claim holder. Such a Sale, if it were to occur, could take place in 2024 due to the importance of preleasing efforts and the effect that preleasing rates have on the value of the Real Property. If the Debtor decides to sell the Real Property, the Debtor intends to conduct the sale post-Plan confirmation in accordance with the following provisions: a. Marketing. In conjunction with a reputable broker, engaged in the Chapter 11 Case subject to approval of the Court, the Debtor shall commence marketing the Debtor's Assets for sale consistent with the procedures determined by the Debtor, the broker and in consultation with the holder of the Class 1.c Claim. The Debtor will provide access to information in a data room and make certain of the Debtor's Assets available for inspection to qualified buyers who have signed an appropriate non-disclosure agreement, if one is deemed advisable. b. Initial Bids. Submission of initial bids may be required to be accompanied by a deposit determined by the Debtor and evidence of financial ability to close, if not previously provided, acceptable to the Debtor in its discretion. c. Discretion to Select Stalking Horse. The Debtor may, in its discretion after consultation with the holder of the Class 1.c Claim, negotiate with a potential bidder and execute a purchase and sale agreement, subject to higher and better bids, and provide customary bid protections as part of the agreement. d. Right to Refinance. If the Debtor obtains funding sufficient to pay all Allowed Claims (in case or as may be negotiated), including sufficient reserves for Disputed Claims in accordance with Section 4.05(c) of the Plan, the Debtor may proceed with such transaction at any time, subject to the rights, if any, of a stalking horse bidder. f. Auction. If adequate bids are received, the Debtor may conduct the Sale through an auction or other process consistent with the determined Sale procedures. g. Payment Deadline. The Payment Deadline is defined in the Plan. All parties in interest reserve the right to challenge, in connection with plan confirmation, the date fixed in the Plan as the Payment Deadline. h. Back-Up Bidder. The Debtor may select a back-up bidder who will remain bound by its bid through the closing date of Sale to the bid selected as highest and best. If the Sale to the buyer designated as having the highest and best bid does not close, the Debtor may close the Sale with the back-up bidder. i. Sale Free and Clear of Liens. The Sale shall be subject to Court approval and will be free and clear of liens, with liens attaching to proceeds and distributed pursuant to the terms of this Plan. Upon selection of the highest and best bid, the Debtor shall seek Court approval of the Sale. j. Costs of Sale. The costs of Sale include, but are not limited to, the 0.5% commission to the broker engaged in the Chapter 11 Case and any U.S. Trustee fees that may have to be paid upon distribution of the gross sale proceeds collected by the Debtor on account of the Sale. To the extent that the Real Property is sold pursuant to the terms of this Plan, the Debtor will seek an exemption pursuant to section 1146(a) of the Bankruptcy Code with respect to transfer taxes, as the Debtor believes the Sale would qualify under such section. k. Financial Projections. Attached as Exhibit A is the Debtor's most recent monthly operating report1 that sets forth expenses and revenue derived from operation of the Property from the Petition Date through May 2023. Attached as Exhibit B are financial projections prepared by Debtor's management for the period from the Confirmation Date through the Payment Deadline. The Financial Projections in Exhibit B do not take into account the Net Sale Proceeds, costs of Sale, including the commissions payable to the broker engaged in the Chapter 11 Case, or U.S. Trustee fees that may be payable related to distribution of Net Sale Proceeds. Projections are inherently uncertain, but the financial projections set forth in Exhibit B are the Debtor's best effort to project the results of operations for the Debtor based on all facts and circumstances presently known to the Debtor. The Sale of the Real Property may take place in 2024. The Debtor has never sought a valuation of the Real Property, but DB Auraria sought and obtained a finding from the Court that Real Property has a $48.4 million value at the evidentiary hearing for the Stay Relief Motion, which took place in early November 2022. The Debtor believes that the Real Property will fetch a much higher price when sold under the Plan because Nelson Partners has a demonstrated track record of marketing and selling student housing properties. If carried out after the Debtor has a proven track record for preleasing the renovated units at the Real Property, the Sale is expected to generate proceeds sufficient to pay all allowed secured and unsecured claims, and generate a return to equity. Attorneys for the Debtor: Michael J. Pankow, Esq. Amalia Sax-Bolder, Esq. BROWNSTEIN HYATT FARBER SCHRECK, LLP 675 15th Street, Suite 2900 Denver, CO 80202 Phone: (303) 223-1100 Fax: (303) 223-1111 E-mail: mpankow@bhfs.com asax-bolder@bhfs.com A copy of the Disclosure Statement dated June 21, 2023, is available at https://tinyurl.ph/MltzJ from PacerMonitor.com. About 5280 Auraria 5280 Auraria, LLC, owns Auraria Student Lofts, a high-rise building in downtown Denver aimed at providing housing for college students. 5280 Auraria's sole member and manager is Nelson Partners, LLC, a Utah limited liability company. The individual principal is Patrick Nelson. 5280 Auraria sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 22-12059) on June 9, 2022. In the petition filed by Patrick Nelson, as managing member, the Debtor listed between $50 million and $100 million in both assets and liabilities. Judge Kimberley H. Tyson oversees the case. Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, LLP, is the Debtor's counsel. 5752 NW 1ST: Gets OK to Hire Joel M. Aresty as Legal Counsel ------------------------------------------------------------ 5752 NW 1st Avenue, LLC received approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ the law firm of Joel M. Aresty, P.A. The Debtor requires legal counsel to: a. give advice with respect to the powers and duties of the Debtor in 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 all matters pending before the court; e. represent the Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan. The firm will be paid at the rate of $440 per hour, plus costs against a retainer of $2,000. Joel Aresty, Esq., a partner at Joel M. Aresty, P.A., 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: Joel M. Aresty, Esq. Joel M. Aresty, P.A. 309 1st Ave S Tierra Verde FL 33715 Tel: (305) 904-1903 Fax: 800-899-1870 Email: Aresty@Mac.com About 5752 NW 1st Avenue 5752 NW 1st Avenue, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-13586) on May 7, 2023, with $100,001 to $500,000 in both assets and liabilities. Judge Robert A. Mark oversees the case. Joel M. Aresty, PA is the Debtor's legal counsel. ACASTI PHARMA: Incurs $42.4 Million Net Loss in FY Ended March 31 ----------------------------------------------------------------- Acasti Pharma Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss and comprehensive loss of $42.43 million for the year ended March 31, 2023, compared to a net loss and comprehensive loss of $9.82 million for the year ended March 31, 2022. As of March 31, 2023, the Company had $79.12 million in total assets, $11.17 million in total liabilities, and $67.95 million in total shareholders' equity. Prashant Kohli, chief executive officer of Acasti, said, "After receiving positive clarifying feedback from the FDA on the proposed Phase 3 Safety Study for GTX-104 whereby they concurred with the suitability of the 505(b)(2) regulatory pathway and that Acasti's GTX-104-002 PK study may have met the criteria for a scientific bridge, we moved swiftly to submit the full protocol for our pivotal Phase 3 Safety Study in May 2023. Further, we implemented a strategic realignment plan to maximize shareholder value, including a strategic transformation of Acasti's operating model to that of an agile biopharma company which we believe allows our cash runway to be sufficient to achieve a potential NDA filing for GTX-104 in 2025. Our new, highly motivated, and energized organization is entirely focused on achieving critical value inflection milestones in the quarters and years to come." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1444192/000095017023029498/acst-20230331.htm About Acasti Pharma Acasti Pharma Inc. -- http://www.acastipharma.com-- is a late-stage specialty pharma company with drug delivery capability and technologies addressing rare and orphan diseases. Acasti's novel drug delivery technologies have the potential to improve the performance of currently marketed drugs by achieving faster onset of action, enhanced efficacy, reduced side effects, and more convenient drug delivery -- all which could help to increase treatment compliance and improve patient outcomes. Acasti Pharma reported a net loss and comprehensive loss of $19.68 million for the year ended March 31, 2021, and a net loss and comprehensive loss of $25.51 million for the year ended March 31, 2020. As of Dec. 31, 2022, the Company had $116.80 million in total assets, $20.08 million in total liabilities, and $96.72 million in total shareholders' equity. ADMI CORP: S&P Downgrades ICR to 'B-' on Weaker Credit Metrics -------------------------------------------------------------- S&P Global Ratings lowered all ratings on U.S.-based ADMI Corp.'s (d/b/a The Aspen Group) by one notch, including the issuer credit rating, to 'B-' from 'B'. S&P said, "The stable outlook reflects our expectation that although weaker results in its urgent care segment and fallout from the cyber incident will contribute to lower earnings this year, mid-single-digit percentage revenue growth in 2024 driven by competitive pricing actions and growing volumes from its de novo investment strategy, combined with expanding margins, will likely enable solid earnings growth, allowing it to reduce its leverage to the mid-8x area and improve its free operating cash flow (FOCF), in line with our leverage parameters for the 'B-' rating. "We believe ADMI's leverage will likely remain elevated, at more than 8x over the next year, with limited FOCF.ADMI's S&P Global Ratings-adjusted leverage increased to 9.4x in 2022 due to weak results in its urgent care business (WellNow) and higher operating expense primarily due to increased labor costs. While we believe ADMI should be able to offset some of the impact from macroeconomic pressures through pricing actions and cost-cutting initiatives, its margins are likely to remain depressed over the next year. For 2023, we forecast total revenue will increase 3%-5% while EBITDA falls in the 5%-7% range as solid organic growth in its dental business (Aspen Dental), de novo contributions, and the full-year benefit of mergers and acquisitions (M&A) closed in 2022 is offset by its currently unprofitable urgent care operations and the fallout from the cyber incident that occurred in April of this year. As such, we expect leverage will increase to the low- to mid-10x area in 2023, before declining to the 8x-9x range in 2024 on improved margins. At the same time, we expect FOCF to debt of less than 3% in 2023. Our adjusted debt calculation includes the company's $475 million of preferred stock, which somewhat constrains leverage improvement due to the high payment-in-kind (PIK) interest on the preferred shares." In 2022, ADMI's EBITDA fell 16% year over year driven by a sharp decline in its WellNow business, which specializes in urgent care, due to lower visit volumes, increased labor costs, and reimbursement rate adjustments. The decline in urgent care visits partly reflects less demand for COVID-19 testing, but also lower demand for its core services. Although WellNow's overall revenue grew 22% in 2022 due to its acquisition of Physicians Immediate Care, its same-store sales and margins declined 14% (excluding polymerase chain reaction, or PCR, testing sales) and 64%, respectively. This contributed to a 79% drop in WellNow's EBITDA in 2022. ADMI's overall profitability was also hurt by wage inflation, higher M&A driven corporate overhead costs, increased advertising expense, and de novo start-up costs. The recent cyber incident that impacted its operational systems will weigh on ADMI's financial results in 2023. During its first quarter lender call, ADMI disclosed that its second quarter results would be constrained due to a cyber incident that occurred in April of this year. Although the incident affected Aspen Dental, ADMI's largest business segment, the company has taken strides to ensure the security of patient information, including the transfer of clients to a new platform with stronger security features. However, in responding to the incident, the company temporarily shut down its primary operating network, which will likely decrease its second quarter revenues by about $90 million. S&P said, "We believe that a portion of the revenue impact will flow through to EBITDA and hurt ADMI's earnings and cash flow in 2023. That said, the company has restored the affected systems and we do not expect a significant effect on the company's credit metrics or business prospects over the longer term. We will continue to monitor the company's operating performance over the coming quarters to determine whether the incident leads to increased doctor attrition or other operating disruptions." S&P said, "Beyond 2023, we expect ADMI to show solid growth, both organic and through de novos, while also gradually improving its EBITDA margin. We continue to expect revenue growth in the mid- to high-single digit area in 2024, driven by its Aspen division where ADMI has been able to pass on more aggressive price increases and grow its implant business, which adds incrementally higher dollar value transactions to the revenue mix. Furthermore, although we expect some pull back in de novo investments, the addition of these locations should help support continued top-line growth. Additionally, we anticipate cost takeout related to corporate overhead, workforce restructuring, and procurement will drive gradual improvements to its margin profile. While we expect limited benefit from these actions in 2023 because of the significant pressure on margins in its urgent care business and the impact of the cyber incident, ADMI will likely see improvement in 2024 as volume and rate pressures in urgent care ease." ADMI's recent preferred share issuance and solid growth prospects will likely support improved FOCF in 2024. Following the cyber incident, ADMI issued $475 million of preferred stock to alleviate potential pressure on its cash flow. The company used proceeds from the issuance to repay about $190 million of outstanding term loan debt, pay down about $200 million of outstanding drawings under its revolving credit facility, and add about $71 million of cash to the balance sheet. S&P said, "We treat the preferred instrument as debt because it is callable after six months and has an elevated PIK rate with step-ups, which could provide incentive for ADMI to redeem the instrument as soon as possible. That said, the PIK feature will enable the company to reduce cash interest expense, which combined with our belief that ADMI will be able to continue its solid growth trajectory, should improve its overall cash flow profile. For 2024, we project operating cash flow of about $200 million, which would be sufficient to cover its maintenance capital spending of about $100 million-$110 million and its anticipated de novo spending." S&P said, "The stable outlook reflects our expectation that although weaker results in its urgent care segment and fallout from the cyber incident will contribute to lower earnings this year, mid-single-digit percentage revenue growth in 2024 driven by pricing actions and growing volumes from its de novo investment strategy, combined with expanding margins, should enable solid earnings growth, allowing it to reduce its leverage to the mid-8x area and improve its FOCF, in line with our leverage parameters for the 'B-' rating." S&P could lower the ratings if: -- Operating performance deviates markedly from our base case, which limits EBITDA growth and FOCF generation and keeps leverage elevated such that the company's financial commitments appear unsustainable over the long term. -- Its revolving credit facility and term loan are not refinanced in a timely manner. S&P would consider an upgrade if it expects the company's leverage to be sustained below 8x and its able to consistently generate sufficient FOCF to cover most of its de novo investments. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of the controlling owners, in line with our view of the majority of rated entities owned by private-equity sponsors. Our assessment also reflects the generally finite holding periods and a focus on maximizing shareholder returns." AEQUOR MGT: Hearing on Disclosure Continued to August 9 ------------------------------------------------------- Judge Joshua P. Searcy has entered an order that the request to continue the June 21, 2023 hearing to consider approval of Aequor Mgt, LLC's Disclosure Statement is granted. The Court will conduct a hearing to consider approval of Debtors' Disclosure Statement In Person on Wednesday, August 9, 2023, at 9:30 a.m. in the Courtroom of the United States Bankruptcy Court, Plaza Tower, Ninth Floor, 110 North College Avenue, in Tyler, Texas. About Aequor Mgt Aequor Mgt, LLC -- https://BurroSand.com/ -- claims to be the lowest cost producer of 100 Mesh frac sand in the Permian Basin serving oil and gas producers. The company is based in Tyler, Texas. Aequor Mgt and Aequor Holdings, LLC filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Lead Case No. 23-60010) on Jan. 5, 2023. Aequor Mgt scheduled $57.7 million in total assets against $90.7 million in total liabilities. Judge Joshua P. Searcy oversees the cases. The Debtors are represented by Davor Rukavina, Esq., at Munsch Hardt Kopf & Harr, P.C. ALIERA COMPANIES: Files Amendment to Disclosure Statement --------------------------------------------------------- The Aliera Companies Inc. d/b/a Aliera Healthcare, Inc., et al. and The Official Committee of Unsecured Creditors submitted a Combined First Amended Disclosure Statement and Plan of Liquidation dated June 26, 2023. The Plan constitutes a liquidating chapter 11 plan for the Debtors. The Plan provides for the Debtors' assets already liquidated or to be liquidated over time and for the proceeds to be distributed to Holders of Allowed Claims in accordance with the terms of the Plan. The Plan incorporates the Unsecured Creditor Settlement negotiated by and among the Debtors, the Committee, the Sharity Trustee, and Unity Class Representatives, on behalf of the Unity Members. It is contemplated that the Unsecured Settlement shall be approved in connection with the Confirmation of the Plan. Among other things, it provides for distributions from the Trust to Holders of Class 3 Unsecured Trade Claims and Class 4 Unsecured Medical Claims under the Plan pursuant to a distribution waterfall negotiated by the parties. The Unsecured Creditor Settlement fixes and allows the Class 4 Unsecured Medical Claims, comprised of the Sharity Trust Claim and the Unity Member Class Claim, in a total amount of $660,667,598. The total amount of Allowed Unsecured Trade Claims in Class 3 under the Plan is not fixed, but the Plan Proponents estimate these will range from $10,000,000 to $15,000,000. The proposed waterfall distribution provides that the first $2,500,000 in Available Cash will be distributed to Class 3, and the next $6,000,000 in Available Cash will be distributed to Class 4. Available Cash after that will be distributed pursuant to negotiated percentages. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors and the equity holder: * Class 3 Unsecured Trade Claims total $10,000,000 to $15,000,000 and will receive a pro rata share of UTC Cash available after payment of or reserve for Allowed Claims on the later of: (a) the date or dates determined by the Liquidating Trustee, to the extent there is Cash available for distribution in the judgment of the Liquidating Trustee, having due regard for the anticipated and actual expenses, and the likelihood and timing, of the process of liquidating or disposing of the Assets; and (b) the date on which such Claim becomes Allowed. Creditors will recover 15 to 35% of their claims. * Class 4 Unsecured Medical Claims total $660,667,598 and will receive a pro rata share of UMC Cash available after payment of or reserve for Allowed Claims on the later of: (a) the date or dates determined by the Liquidating Trustee, to the extent there is Cash available for distribution in the judgment of the Liquidating Trustee, having due regard for the anticipated and actual expenses, and the likelihood and timing, of the process of liquidating or disposing of the Assets; and (b) the date on which such Claim becomes Allowed. Creditors will recover 1 to 5% of their claims. * Class 7 Equity Interests Will receive no distributions and retain no equity interests. This Plan will be primarily funded by a combination of the Assets that are Cash on hand and proceeds from liquidation or other disposition of non-cash Assets, including Avoidance Actions Recoveries and General Litigation Claim Recoveries. Certain funding may also be provided from other Trust Assets. A hearing before the Honorable Thomas M. Horan has been scheduled for August 14, 2023 at 11:00 a.m. to consider confirmation of the Plan pursuant to section 1129 of the Bankruptcy Code. Responses and objections must be filed and served on August 4, 2023. A copy of the Combined First Amended Disclosure Statement and Plan of Liquidation dated June 26, 2023, is available at https://urlcurt.com/u?l=sYkb8d from Epiq, the claims agent. Counsel for the Debtors: J. Robert Williamson, Esq. Ashley Reynolds Ray, Esq. SCROGGINS & WILLIAMSON, P.C. 4401 Northside Parkway, Suite 450 Atlanta, GA 30327 Tel: (404) 893-3880 - and - Rachel B. Mersky, Esq. MONZACK MERSKY AND BROWDER, P.A. 1201 Orange Street, Suite 400 Wilmington, DE 19801 Tel: (302) 656-8162 Fax: (302) 656-2769 E-mail: rmersky@monlaw.com Counsel for the Official Committee of Unsecured Creditors: Dennis A. Meloro, Esq. GREENBERG TRAURIG, LLP 1007 North Orange Street, Suite 1200 Wilmington, DE 19801 Tel: (302) 661-7000 E-mail: melorod@gtlaw.com - and - John D. Elrod, Esq. 3333 Piedmont Road, NE, Suite 2500 Atlanta, GA 30305 Tel: (678) 553-2259 Fax: (678) 553-2269 E-mail: elrodj@gtlaw.com About Aliera Cos. Inc. Aliera Cos. Inc. is focused on providing a full spectrum of revolutionary options and services to a multitude of industries that fit every need and budget. The company provides services to support its subsidiaries which focus on the unique aspects of the health care industry. Plaintiffs in a case -- docketed as Hanna Albina and Austin Willard, individually and on behalf of others similarly situated, Plaintiffs, v. The Aliera Companies, Inc., Trinity Healthshare, Inc. and Oneshare Health, LLC Unity Healthshare, LLC, Case No. 20-CV-00496, (E.D. Ky., Dec. 11, 2020) -- filed an involuntary petition under Chapter 11 of the Bankruptcy Code against Aliera (Bankr. D. Del. Case No. 21-11548) on Dec. 5, 2021. Joseph H. Huston, Jr., Esq., of Stevens & Lee, P.C., is the petitioners and plaintiffs' counsel. On Dec. 21, 2021, Aliera filed a voluntary Chapter 11 petition (Bankr. N.D. Ga. Case No. 21-59493), disclosing assets of $1 million to $10 million and liabilities of $500 million to $1 billion. Advevo LLC and three other Aliera affiliates – Ensurian Agency LLC, Tactic Edge Solutions LLC and USA Benefits & Administrators LLC -- also filed voluntary Chapter 11 petitions on Dec. 21, 2021. On Jan. 25, 2022, the petitioning creditors obtained an order granting their motion to transfer the voluntary Chapter 11 cases to the Delaware Bankruptcy Court, which has been overseeing the liquidation of Aliera's affiliated corporation, Trinity Healthshare, Inc., now known as Sharity Ministries, Inc. On Feb. 16, 2022, Judge John T. Dorsey of the Delaware Bankruptcy Court ordered the consolidation of Aliera's voluntary Chapter 11 proceeding with the involuntary case filed by the petitioning creditors (with Case No. 21-11548 being the surviving case number) and terminated the company's voluntary proceeding. Meanwhile, Judge Dorsey ordered the joint administration of the involuntary proceeding and the four other voluntary cases filed by the Aliera affiliates, with Case No. 21-11548 as the lead bankruptcy case. The Debtors tapped J. Robert Williamson, Esq., at Scroggins & Williamson, P.C. and Monzack Mersky and Browder, PA as bankruptcy counsels; SeatonHill Partners, LP as financial advisor; and Katie Goodman, managing member of GGG Partners, LLC, as chief liquidation officer. Epiq Corporate Restructuring, LLC is the claims and noticing agent and administrative advisor. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on Feb. 21, 2022. The committee is represented by Greenberg Traurig, LLP. ALPHA ENTERTAINMENT: McMahon Can't Escape Claims from Ex-Execs -------------------------------------------------------------- Vince Sullivan of Law360 reports that sports entertainment tycoon Vince McMahon lost his bid to escape claims from the former commissioner of the XFL involving efforts to claw back $11.1 million of his salary in bankruptcy court, with a Connecticut judge saying the fired executive adequately pled claims under his employment contract. About Alpha Entertainment Alpha Entertainment LLC, which does business as the "Xtreme Football League" -- https://www.alphaentllc.com/ -- is a professional American football league. The XFL kicked off with games beginning in February 2020. The XFL offered fast-paced, three-hour games with fewer play stoppages and simpler rules. The XFL featured eight teams, 46-man active rosters, and a 10-week regular season schedule, with a postseason consisting of two semifinal playoff games and a championship game. The eight XFL teams were the DC Defenders, the Dallas Renegades, the Houston Roughnecks, the Los Angeles Wildcats, the New York Guardians, the St. Louis BattleHawks, the Seattle Dragons, and the Tampa Bay Vipers. Alpha Entertainment, based in Stamford, CT, filed a Chapter 11 petition (Bankr. D. Del. Case No. 20-10940) on April 13, 2020. The Hon. Laurie Selber Silverstein oversees the case. In its petition, the Debtor was estimated to have $10 million to $50 million in both assets and liabilities. The petition was signed by John Brecker, independent manager. The Debtor hired Young Conaway Stargatt & Taylor, LLP as counsel. Donlin Recano & Company, Inc., is the claims agent and administrative advisor. ARCTIC GLACIER: Moody's Withdraws 'Caa1' CFR on Debt Repayment -------------------------------------------------------------- Moody's Investors Service has withdrawn Arctic Glacier U.S.A., Inc.'s ratings including the Caa1 Corporate Family Rating, the Caa1-PD Probability of Default Rating, and the Caa1 rating on the company's first-lien senior secured debt. The rating action follows Arctic Glacier's full repayment of its previously rated senior secured debt. Withdrawals: Issuer: Arctic Glacier U.S.A., Inc. Corporate Family Rating, Withdrawn, previously rated Caa1 Probability of Default Rating, Withdrawn, previously rated Caa1-PD Senior Secured First Lien Bank Credit Facility, Withdrawn, previously rated Caa1 Outlook Actions: Issuer: Arctic Glacier U.S.A., Inc. Outlook, Changed To Rating Withdrawn From Stable RATINGS RATIONALE Moody's has withdrawn the ratings because Arctic Glacier's debt previously rated by Moody's has been fully repaid. Arctic Glacier U.S.A., Inc., a subsidiary of holding company Chill Parent, Inc., is a manufacturer, marketer, and distributor of packaged ice products in the US and Canada. The company sells to more than 75,000 retail locations including mass merchants, national and regional grocery chains, convenience stores, and gas stations among others. Arctic Glacier's infrastructure includes over 100 production and distribution facilities and over 52,000 stand-alone merchandising freezer units. Arctic Glacier was sold to The Carlyle Group in March 2017 for approximately $723 million. ASP BLADE: MetWest IB Marks $49,881 Loan at 16% Off --------------------------------------------------- Metropolitan West Fund's Intermediate Bond Fund has marked its $49,881 loan extended to ASP Blade Holdings, Inc to market at $41,817 or 84% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Intermediate Bond Fund is a participant in a First Lien Term Loan B (LIBOR plus 4%) to ASP Blade Holdings, Inc. The loan accrues interest at a rate of 8.94% per annum. The loan matures on October 16, 2028. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. ASP Blade Holdings, Inc. operates as Oregon Tool, Inc. and formerly known as Blount International, Inc. Oregon Tool, Inc., headquartered in Portland, Oregon, is a global manufacturer and distributor of professional-grade, consumable parts and attachments for use in forestry, agriculture, lawn and garden and other cutting applications. Platinum Equity, through its affiliates, is the owner of Oregon Tool. ASP BLADE: MetWest TRB Marks $1.09M Loan at 16% Off --------------------------------------------------- Metropolitan West Fund's Total Return Bond Fund has marked its $1,097,387 loan extended to ASP Blade Holdings, Inc to market at $919,978 or 16% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Total Return Bond Fund a participant in a First Lien Term Loan B (LIBOR plus 4%) to ASP Blade Holdings, Inc. The loan accrues interest at a rate of 8.94% per annum. The loan matures on October 16, 2028. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. ASP Blade Holdings, Inc. operates as Oregon Tool, Inc. and formerly known as Blount International, Inc. Oregon Tool, Inc., headquartered in Portland, Oregon, is a global manufacturer and distributor of professional-grade, consumable parts and attachments for use in forestry, agriculture, lawn and garden and other cutting applications. Platinum Equity, through its affiliates, is the owner of Oregon Tool. ATHENEX INC: Sagent, Oaktree Win Bankruptcy Auction for Some Assets ------------------------------------------------------------------- James Nani of Bloomberg Law reports that bankrupt Athenex Inc. will sell its pharmaceutical division's assets in deals valued at about $41 million to creditor Oaktree Capital Management and Sagent Pharmaceuticals. Handling the deal through its affiliates, Oaktree will apply $20 million it's due to acquire Athenex Pharmaceutical Division's accounts receivable, deposits and refund claims, according to Athenex's filing Thursday, June 22, 2023, with the US Bankruptcy Court for the Southern District of Texas. Injectable products maker Sagent won the bankruptcy auction for the rest of Athenex Pharmaceutical Division's assets with a $14 million bid and a deal to assume at least $7 million in liabilities. About Athenex Inc. Founded in 2003, Athenex, Inc. (NASDAQ: ATNX) -- http://www.athenex.com/-- is a clinical-stage biopharmaceutical company dedicated to becoming a leader in the discovery, development, and commercialization of next-generation cell therapy products for the treatment of cancer. The Company's mission is to become a leader in bringing innovative cancer treatments to the market and to improve patient health outcomes. In pursuit of this mission, Athenex leverages years of experience in research and development, clinical trials, regulatory standards, and manufacturing. The Company is focused on its innovative Cell Therapy platform, based on natural killer T ("NKT") cells. On May 14, 2023, Athenex, Inc. and five affiliated companies initiated voluntary Chapter 11 proceedings (Bankr. S.D. Tex. Lead Case No. 23-90295). The Company's cases have been assigned to the Honorable David R. Jones. Athenex commenced these proceedings after conducting a strategic review and reaching an agreement with its lenders to conduct an expedited, orderly sales process of the Company's assets across its primary businesses: Athenex Pharmaceutical Division ("APD"), Orascovery, and Cell Therapy. In the petition filed by Nicholas K. Campbell, as chief restructuring officer, the Debtor reported assets and liabilities between $100 million and $500 million. Pachulski Stang Ziehl & Jones LLP is acting as Athenex's legal counsel. MERU is serving as its financial advisor, and Cassel Salpeter & Co., LLC as its investment banker. Epiq is the claims agent. ATHENEX INC: Seeks to Hire Pachulski as Legal Counsel ----------------------------------------------------- Athenex Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Pachulski Stang Ziehl & Jones, LLP as their legal counsel. The Debtors require legal counsel to: a. assist, advise, and represent the Debtors in their consultations with estate constituents regarding the administration of these Chapter 11 cases; b. assist, advise, and represent the Debtors in any manner relevant to the Debtors' financing needs, asset dispositions, and leases and other contractual obligations; c. assist, advise, and represent the Debtors in any issues associated with the acts, conduct, assets, liabilities, and financial condition of the Debtors; d. assist, advise, and represent the Debtors in the negotiation, formulation, and drafting of any plan of reorganization and disclosure statement; e. assist, advise, and represent the Debtors in the performance of their duties and the exercise of their powers under the Bankruptcy Code, the Bankruptcy Rules, and any applicable local rules and guidelines; and f. provide such other necessary advice and services as the Debtors may require in connection with these Chapter 11 cases. The firm will be paid at these rates: Partners $895 to $1,995 per hour Of Counsel $875 to $1,525 per hour Associates $725 to $895 per hour Paraprofessionals $425 to $595 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The firm received payments from the Debtors during the year prior to the petition date in the aggregate amount of $1.1 million. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Pachulski disclosed the following: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: 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. Response: Not applicable. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: The firm's anticipated budget is reflected in any budget with respect to the Debtors' use of cash collateral. Richard Pachulski, Esq., a partner at Pachulski, 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: Richard Pachulski, Esq. Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Blvd., 13th Floor Los Angeles, CA 90067-4003 Tel: (310) 277-6910 Fax: (310) 201-0760 Email: rpachulski@pszjlaw.com About Athenex Inc. Founded in 2003, Athenex, Inc. (NASDAQ: ATNX) -- http://www.athenex.com/-- is a clinical-stage biopharmaceutical company dedicated to becoming a leader in the discovery, development, and commercialization of next-generation cell therapy products for the treatment of cancer. The Company's mission is to become a leader in bringing innovative cancer treatments to the market and to improve patient health outcomes. In pursuit of the mission, Athenex leverages years of experience in research and development, clinical trials, regulatory standards, and manufacturing. The Company is focused on its innovative Cell Therapy platform, based on natural killer T ("NKT") cells. On May 14, 2023, Athenex, Inc. and five affiliated companies initiated voluntary Chapter 11 proceedings (Bankr. S.D. Texas Lead Case No. 23-90295). The Debtors' cases have been assigned to the Honorable David R. Jones. Athenex commenced these proceedings after conducting a strategic review and reaching an agreement with its lenders to conduct an expedited, orderly sales process of the Company's assets across its primary businesses: Athenex Pharmaceutical Division, Orascovery, and Cell Therapy. In the petition filed by Nicholas K. Campbell, as chief restructuring officer, Athenex reported assets and liabilities between $100 million and $500 million. The Debtors tapped Pachulski Stang Ziehl & Jones, LLP as legal counsel; MERU as financial advisor; and Cassel Salpeter & Co., LLC as investment banker. Epiq is the claims agent. AVEANNA HEALTHCARE: MetWest Flex Marks $1.3M Loan at 15% Off ------------------------------------------------------------ Metropolitan West Fund's Flexible Income Fund has marked its $1,347,145 loan extended to Aveanna Healthcare LLC to market at $1,150,361 or 85% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Flexible Income Fund is a participant in a Term Loan B, 1st Lien Loan B (SOFR plus 3.75%) to Aveanna Healthcare LLC. The loan accrues interest at a rate of 8.70% per annum. The loan matures on July 17, 2028. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Aveanna Healthcare LLC provides health care services. The Company offers pediatric skilled nursing, therapy, autism, enteral nutrition, and adult services. BCPE NORTH: S&P Downgrades ICR to 'CCC+' on Weak Credit Measures ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based BCPE North Star Holdings L.P.'s (operating as Dessert Holdings, DH) to 'CCC+' from 'B-' and its issue-level rating on its $155 million revolving credit facility, $855 million first-lien term loan, and $75 million first-lien delayed-draw term loan to 'CCC+' from 'B-'. S&P also lowered its issue-level rating on the company's $225 million second-lien term loan and $20 million second-lien delayed-draw term loan to 'CCC-' from 'CCC'. The negative outlook reflects the possibility that S&P could lower the ratings if it envisioned default scenarios over the next 12 months, resulting from the company's inability to turn around operating performance and liquidity constraints. The downgrade reflects S&P's view that DH's capital structure is unsustainable. DH maintains a heavy debt load due to its ownership by financial sponsors and its acquisitive growth strategy, with roughly $1.3 billion in funded debt. Since its leveraged buyout (LBO) by Bain Capital in 2021, the company has increased funded debt by about $800 million, primarily to fund the acquisitions of Steven Charles and Dianne's Fine Desserts (DFD). S&P said, "We estimate S&P Global Ratings-adjusted pro forma leverage was about 11.9x and EBITDA to interest coverage was 1.2x for the 12 months ended March 31, 2023. We forecast credit metrics to remain weak but improving for the end of 2023 as EBITDA sequentially improves from pricing actions coming through." S&P expects liquidity to remain less than adequate over the next 12 months because the company has recently used external sources of liquidity to fund its operations. DH had about $27 million of cash and $12 million revolver availability at the end of the first fiscal quarter. The company received a shareholder loan from its financial sponsor, Bain Capital, during the first fiscal quarter. This follows an equity contribution of about $50 million in October 2022 to partly fund the DFD acquisition. The proceeds provided the company with incremental liquidity to fund an earn-out on one of its recent acquisitions. In April, DH subsequently returned half of the proceeds received from the sponsor. The company also received $33 million in net proceeds from the sale of its interest rate caps in April this year. DH is also seeking to execute a sale leaseback transaction on some of DFD's manufacturing facilities. S&P said, "We believe these financing transactions improve DH's liquidity position and alleviate near-term pressure. However, given the company's limited revolver availability and expected weak cash flow generation, the company may face renewed liquidity constraints next year. We believe the company's tight liquidity position makes it more vulnerable to unforeseen operating headwinds such as weaker demand conditions; operating disruptions; or an uptick in input costs, particularly another increase in the price of dairy products or eggs." Despite favorable demand trends, moderating input costs, and sequential improvements in profitability, rising interest costs will result in negative free operating cash flow (FOCF) in fiscal 2023. Demand for sweet baked goods remains favorable, despite price increases. S&P forecasts sales volumes to remain steady, supported by favorable category trends, especially in the company's food service segment, new business wins, and higher volumes at existing customers. DH's reported revenue grew by 24.8% in the first quarter of fiscal 2023, after increasing by 21.1% during fiscal 2022, driven by the contribution from the DFD acquisition, higher prices, and volume increases reflecting continued growth in demand for its products by its customers. However, pro forma S&P Global Ratings-adjusted EBITDA was unchanged during the quarter as the company continued to offset input cost inflation with pricing actions with a 60- to 90-day time lag (contractually required) that hurt profitability. The company's ingredient exposure is more weighted in commodity categories, such as dairy products (butter, cream, and cream cheese) and eggs, which have seen some of the highest inflationary pressures in the food industry. S&P also expects profitability to improve sequentially in the subsequent quarters, benefitting from higher wrap-around pricing and lower commodity costs. However, improvements in profitability will take longer to translate into positive free cash flow generation and improved credit metrics. S&P said, "We expect FOCF to remain negative with a deficit of $10 million-$15 million in 2023, after two years of consecutive FOCF deficits. DH entered into a new interest rate cap agreement that bears a higher cap rate than its terminated one to continue to protect itself from rising interest rates on its variable-rate debt through June 30, 2026. Although all of the company's debt obligations are covered under hedging instruments, we expect cash interest costs to increase to about $110 million in 2023 compared with $85 million in 2022 as a result of higher interest rates under the new cap agreement and higher debt balances. These interest costs will substantially limit DH's ability to generate positive free cash flow despite our expectations for increasing EBITDA and working capital improvements in 2023. In addition, we expect capital expenditure (capex) to remain heightened at about $31 million to support capacity expansion projects and information technology investments. "The negative outlook reflects the possibility that we could lower the ratings if default scenarios became more likely within the next 12 months. "We could lower the ratings on DH if a near-term default scenario such as a liquidity shortfall, distressed exchange, or a violation of financial covenants became imminent." This could occur if: -- Liquidity worsened such that the company continued to seek external support to fund its operations; -- The company pursued additional acquisitions while performance remained weak; or -- The company's profitability and cash flow did not improve due to lower demand or persistent high inflation. S&P could take a positive action if DH's operations improved, it generated positive FOCF generation, and EBITDA interest coverage approached 1.5x. This could occur if: -- The company successfully implemented its operating plan and steadily increased EBITDA as a result of stable volumes, lower costs, savings from productivity initiatives, and other operational improvements; and -- Liquidity continued to improve without the company relying on external sources of funding for its ongoing operations. BDC GROUP: RP Construction Appointed as New Committee Member ------------------------------------------------------------ Mary Jensen, Acting U.S. Trustee for Region 12, appointed RP Construction, LLC as new member of the official committee of unsecured creditors in the Chapter 11 case of BDC Group, Inc. As of June 26, the members of the committee are: 1. Liquid Capital Exchange Tammy Kemp, Chief Credit Officer 5075 Yonge Street, Ste 700 Toronto, Ontario Canada M2N 6C6 Phone: 416-707-4202 Email: tammy.kemp@garringtonco.com 2. West Pacific Drilling, Inc. Brandon Kuenzi, Secretary P.O. Box 882 Silverton, OR 97381 Phone: 503-931-9252 Email: brandonkuenzi@westpacificdrilling.com 3. RP Construction, LLC Reyna Paz, President and CEO 24008 Bishop Meade Place Ashburn, VA 20148 Phone: (703) 699-3153 Email: emajdoub@rp-constructionllc.com About BDC Group Inc. BDC Group, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Iowa Case No. 23-00484) on June 13, 2023. In the petition signed by Dennis Bruce, president, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Thad J. Collins oversees the case. Austin J. Peiffer, Esq., at AG & Business Legal Strategies, represents the Debtor as legal counsel. Mary Jensen, Acting U.S. Trustee for Region 12, appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. BIOLASE INC: Macias Gini Replaces BDO as Auditor ------------------------------------------------ The Audit Committee of the Board of Directors of Biolase, Inc. dismissed BDO USA, LLP as the Company's independent registered public accounting firm on June 21, 2023, according to a Form 8-K filed with the Securities and Exchange Commission. The Company said BDO USA's reports on the Company's consolidated financial statements of the Company as of and for the years ended Dec. 31, 2022 and 2021, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles, except that the report on the Company's consolidated financial statements as of and for the years ended Dec. 31, 2022 and 2021 contained an explanatory paragraph regarding the Company's ability to continue as a going concern. During the years ended Dec. 31, 2022 and 2021, and the subsequent interim period through June 21, 2023, there were no disagreements with BDO USA on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of BDO USA, would have caused it to make reference to the subject matter of the disagreement in connection with its reports on the Company's financial statements for such periods. During the years ended Dec. 31, 2022 and 2021, and the subsequent interim period through June 21, 2023, there were no events otherwise reportable under Item 304(a)(1)(v) of Regulation S-K. On June 21, 2023, the Company engaged Macias Gini & O'Connell LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2023, effective immediately. During the fiscal years ended Dec. 31, 2022 and 2021 and through June 21, 2023, neither the Company nor anyone on its behalf consulted with MGO regarding (i) the application of accounting principles to any specified transaction, either completed or proposed or the type of audit opinion that might be rendered on the Company's consolidated financial statements, and neither a written report nor oral advice was provided to the Company that MGO concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a "disagreement," as defined in Item 304(a)(1)(iv) of Regulation S-K, or a "reportable event," as defined in Item 304(a)(1)(v) of Regulation S-K. About Biolase Biolase, Inc. -- http://www.biolase.com-- is a medical device company that develops, manufactures, markets, and sells laser systems in dentistry and medicine. BIOLASE's products advance the practice of dentistry and medicine for patients and healthcare professionals. BIOLASE's proprietary laser products incorporate approximately 259 actively patented and 24 patent-pending technologies designed to provide biologically and clinically superior performance with less pain and faster recovery times. Biolase reported a net loss of $28.63 million in 2022, a net loss of $16.16 million in 2021, a net loss of $16.83 million in 2020, a net loss of $17.85 million in 2019, and a net loss of $21.52 million in 2018. As of Sept. 30, 2022, the Company had $42.86 million in total assets, $29.01 million in total liabilities, and $13.86 million in total stockholders' equity. Costa Mesa, California-based BDO USA, LLP, the Company's auditor since 2005, issued a "going concern" qualification in its report dated March 28, 2023, citing that the Company has suffered recurring losses from operations and has had negative cash flows from operations for each of the three years ended Dec. 31, 2022. These factors, among others, raise substantial doubt about its ability to continue as a going concern. BLOCKFI INC: SEC Can Wait to Collect $30-Million Penalty -------------------------------------------------------- Jessica Corso of Law360 reports that the U.S. Securities and Exchange Commission has agreed to wait in line behind BlockFi customers before collecting $30 million from an enforcement settlement, saying it hoped to avoid delay in getting the customers of the bankrupt crypto firm paid. BlockFi Inc. and the U.S. Securities and Exchange Commission have signed a stipulation with respect to the treatment of the SEC Penalty Claims under the Debtors' proposed First Amended Joint Chapter 11 Plan. On June 13, 2023, the SEC timely filed a proof of claim, in the amount of $30,284,696, against the Debtors as Claim No. 32249 on account of amounts that remain due under that certain Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 9(f) of the Investment Company Act of 1940, Making Findings, and Imposing a Cease-and-Desist Order entered on February 14, 2022 in an Administrative Proceeding before the Commission (the "Commission POC"). The Plan provides for the SEC Penalty Claims to be subordinated to Account Holder Claims, General Unsecured Claims and Intercompany Claims pursuant to sections 726(a)(4) and 1129(a)(7) of the Bankruptcy Code (the "Proposed Plan Treatment"). The SEC disagrees with the Proposed Plan Treatment and asserts that its claims are general unsecured claims entitled to participate pari passu with other general unsecured creditors in the Debtors' Chapter 11 cases but due to the specific facts of the Chapter 11 cases, in order to maximize the amount that may be distributed to investors and avoid delay in such distribution, the SEC has agreed to forego participating in any distributions under the Plan or requiring any cash reserve in connection with such distributions, on account of any claims that may be or become Allowed Claims based on the Commission POC until all other allowed claims in Classes 1, 2 , 3, 4 and 11 are paid in full. Pursuant to the Stipulation signed June 22, 2023, the parties agreed that: 1. The Commission POC will be re-classified as a general unsecured claim in new Class 15. 2. The SEC consents to the Debtors making distributions to holders of Allowed Claims in the Debtors' Chapter 11 cases without making such a distribution to the SEC on account of the Commission POC, or reserving cash available for such distribution on account of the Commission POC, until payment in full of all other Allowed Claims in Classes 1, 2, 3, 4 and 11. 3. The SEC retains all rights with respect to the Commission POC, including the right to amend the Commission POC. The Debtors retain all objections and defenses to the Commission POC. 4. The Stipulation shall continue to remain in full force and effect with respect to any amended Plan; provided that the classification and treatment of Allowed Claims in Classes 1, 2, 3 and 4 remains substantially the same as in the Plan. 5. Any Allowed Commission POC shall be subject to the terms of this Stipulation and shall not be subject to reconsideration, provided that, this Stipulation shall be of no force or effect if the Plan is not confirmed by this Court or the Plan does not thereafter become effective. 6. Nothing in the Stipulation precludes the Commission from objecting to the classification or allowance of any claim other than the SEC Penalty Claims. About BlockFi Inc. BlockFi is building a bridge between digital assets and traditional financial and wealth management products to advance the overall digital asset ecosystem for individual and institutional investors. BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in its early days had backing from influential Wall Street investors like Mike Novogratz and, later on, Valar Ventures, a Peter Thiel-backed venture fund as well as Winklevoss Capital, among others. BlockFi made waves in 2019 when it began providing interest-bearing accounts with returns paid in Bitcoin and Ether, with its program attracting millions of dollars in deposits right away. BlockFi grew during the pandemic years and had offices in New York, New Jersey, Singapore, Poland and Argentina. BlockFi worked with FTX US after it took an $80 million hit from the bad debt of crypto hedge fund Three Arrows Capital, which imploded after the TerraUSD stablecoin wipeout in May 2022. BlockFi had significant exposure to the companies founded by former FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a $400 million credit line from FTX US in an agreement that also gave FTX the option to acquire BlockFi through a bailout orchestrated by Bankman-Fried over the summer. BlockFi also had collateralized loans to Alameda Research, the trading firm co-founded by Bankman-Fried. BlockFi is the latest crypto firm to seek bankruptcy amid a prolonged slump in digital asset prices. Lenders Celsius Network LLC and Voyager Digital Holdings Inc. also filed for court protection this year. Kirkland & Ellis is also advising Celsius and Voyager in their separate Chapter 11 cases. BlockFi Inc. and eight affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on Nov. 28, 2022. In the petitions signed by their chief executive officer, Zachary Prince, the Debtors reported $1 billion to $10 billion in both assets and liabilities. Judge Michael B. Kaplan oversees the cases. The Debtors tapped Kirkland & Ellis and Haynes and Boone, LLP as general bankruptcy counsels; Walkers (Bermuda) Limited as special Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; and Street Advisory Group, LLC as strategic and communications advisor. Kroll Restructuring Administration, LLC is the notice and claims agent. BRANDYWINE REALTY: S&P Downgrades ICR to 'BB+', Outlook Negative ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Brandywine Realty Trust to 'BB+' from 'BBB-'. At the same time, S&P affirmed its 'BBB-' issue-level rating on the company's senior unsecured notes. S&P assigned a '2' recovery rating on the unsecured notes, as well. S&P said, "The negative outlook reflects our view that the company's fixed charge coverage ratio could weaken beyond current expectations from higher interest expenses related to upcoming refinancing of near-term maturities. Moreover, we believe the office sector could continue to be under pressure amid secular decline amid a slow economic growth landscape. "Brandywine's heightened debt maturity schedule through 2024 will continue to pressure its coverage ratios, given our forecast that interest rates will remain high for at least the next several quarters which will create challenged refinancing conditions. At the end of the first quarter, the company's fixed charge coverage (FCC) ratio declined to 2.8x from 3.4x during the same quarter last year driven by higher interest expense following the refinancing of lower-coupon debt at higher rates over the past year. Over the same period, S&P Global Ratings-adjusted debt to EBITDA remained relatively unchanged at 7.9x. We expect the company's FCC will continue to weaken over the next several quarters as BDN refinances its upcoming maturities (which total $90 million this year and $528 million in 2024, including the company's share of joint venture debt) amid a high interest rate environment and challenged credit market conditions." These debt maturities – which are much higher relative to peers – pose refinancing risk which is a key factor in our analysis and downgrade. In particular, the company faces a challenging debt maturity schedule heading into 2024 when approximately $528 million of its debt matures, which is front loaded during the first three to four months of the year, including a $70 million unsecured term loan due in February and approximately $108 million of joint-venture debt at BDN's share. Brandywine's $350 million unsecured notes do not mature until October 2024 which offers some flexibility. Some of its early 2024 maturities include extension options, which we expect the company will elect to exercise where possible. That said, as of March 31, 2023, the company's consolidated debt was mostly fixed rate (including hedges). If Brandywine chooses to draw on the revolver to fund part or all of the repayment of its unsecured notes, this could pressure its liquidity. S&P said, "We expect the company's investment spending will remain muted over the next year as it pauses new development starts and focuses on leasing initiatives, preserving liquidity and its credit measures. Moreover, we expect the EBITDA contribution from Brandywine's three wholly owned development projects, which are highly pre-leased (82.5%) and expected to come online and stabilize over the next few quarters, to mitigate some of the impact from higher interest expense. "We expect Brandywine will maintain adequate liquidity over the next year despite its upcoming debt maturities.As of March 31, 2023, the company had approximately $97 million of cash on hand and full availability under its $600 million revolving credit facility maturing in 2026. Approximately $200 million of its debt maturing over the next 12 months are non-recourse mortgage loans with its joint-venture partners, which mitigates some of the risk to its liquidity position (we do not typically incorporate these maturities in our assessment of a company's liquidity given the non-recourse nature of this type of financing). We expect Brandywine will refinance these loans as they come due. However, given tightening capital markets conditions and weak economic backdrop, the company could potentially seek extensions for some of these maturities (similar to the two-month extension it received from the lenders of its Commerce Square debt that matured earlier this year) or hand back the keys, which we view as less likely but possible. "Brandywine's operating performance was in line with our expectations, buoyed by resilient fundamentals in Pennsylvania, though we expect the decline in office fundamentals--which has accelerated in recent months—could put additional pressure on Austin and DC markets. As of April 14, 2023, the company's same-property portfolio was 89% occupied and 90.4% leased, which was in line with the average occupancy among our rated office REITs (approximately 90%). Brandywine's same-store net operating income (NOI) also rose 3.6% on a cash basis during the first quarter. We expect the company's same-store NOI will be flat to slightly positive over the next year and anticipate its occupancy will likely remain in the high 80%-90% range supported by its manageable lease expiration schedule and the healthier fundamentals in its core markets (Philadelphia and suburban Pennsylvania; 75% of NOI). "That said, we anticipate the pressure facing the office sector will negatively impact leasing, particularly for properties located in Austin (18% of NOI) where employment is more concentrated in the technology sector, which has led most of the lay-offs over the last year leading to softening demand and where BDN's occupancy remains below peers. We expect these market dynamics could constrain Brandywine's net effective rents and pressure its leasing, leading it to offer greater concessions or tenant improvements to incentivize leasing. This pressure could also prolong the lease-up and stabilization of its speculative development projects--which have experienced minimal leasing traction year to date—resulting in lower EBITDA growth and erode its operating margins. "The negative outlook reflects our expectation for the company's FCC to further decline over the next year as it refinances its near-term debt maturities with higher-rate debt. We expect the company's operating performance will be placed under pressure from secular changes and macroeconomic headwinds over the next year but that the portfolio should remain highly occupied and generate flat to low single digit NOI growth supported by healthier fundamentals in its core market, Philadelphia and surrounding suburbs, partially offset by leasing pressure in Austin and DC." S&P could lower its ratings on Brandywine by one notch if: -- The company's operating performance deteriorates beyond S&P's expectations, from perhaps increased tenant move-outs, stress in the company's core markets, or difficulty in leasing-up its spec development pipeline that leads us to view its business prospects less favorably than those of its similarly rated peers; or -- FCC falls below 2.1x or S&P adjusted debt to EBITDA remains above 7.5x for a prolong period, or -- The company is unable to successfully refinance its upcoming debt maturities and/or execute on asset dispositions, heightening capital structure concerns. S&P could revise its outlook on Brandywine to stable if: -- Its operating performance improves, including sustained occupancy above current levels, its development projects are highly leased and stabilize as expected, and the company experiences positive business prospects; -- The company is successful in refinancing its upcoming debt maturities well within its maturity profile and improves its weighted average maturity and -- S&P Global Ratings-adjusted debt to EBITDA declines below 7.0x and FCC is comfortably above 2.1x for a sustained period. ESG credit indicators: E-2, S-2, G-2 S&P said, "ESG factors have no material influence on our credit rating analysis of Brandywine. That said, the company refined its ESG strategy in 2020 to align its objectives with the United Nations' Sustainable Development Goals. Thus far, Brandywine has achieved 10 objectives, with others on track. Brandywine is focused on enhancing the energy efficiency of its properties to combat climate change, with 100% of its new construction receiving Leadership in Energy and Environmental Design (LEED) certification since 2016. To support health and wellness in response to the coronavirus pandemic, Brandywine implemented enhanced ventilation and filtration measures at its properties, as well as cleaning protocols. We expect real estate operators to have relatively low exposure to social risks given that the sector is not labor-intensive, maintains good community and customer relations, and faces no material safety issues." BRYAN J. HEBERT: Sale of Mena Residence for $635K to Birtcher OK'd ------------------------------------------------------------------ Judge of the U.S. Bankruptcy Court for the Western District of Arkansas authorized Bryan J. Hebert and Amye G. Hebert's sale of a residence located at 1700 Church Ave., Mena, Arkansas 71953, to Birtcher Properties LLC for $635,000. All liens and closing cost will be paid at closing. The Debtors will retain the net proceeds of the sale to be used for the purchase of a new residence. An Order Granting Application to Employ Real Estate Agents Docket # 45 was filed on May 18, 2023. Bryan J. Hebert and Amye G. Hebert sought Chapter 11 protection (Bankr. W.D. Ark. Case No. 23-70443) on April 3, 2023. BW INDUSTRIES: Files Voluntary Chapter 7 Bankruptcy Petition ------------------------------------------------------------ BW Industries, Inc on June 29, 2023, disclosed that the Company and its subsidiaries, Bitwise Industries, BWRD, LLC, Alpha Works, and Bruce's Bagels, have filed a voluntary petition for relief under Chapter 7 of the U.S. Bankruptcy Code. The filing with the U.S. Bankruptcy Court for Delaware will result in federal appointment of a bankruptcy trustee to liquidate the Company's assets and distribute any proceeds. The filing follows an investigation conducted by the Board of Directors, which concluded it is in the best interest of the Company and its investors, creditors, former employees, and other interested parties to file for Chapter 7 relief. Fresno, California-based BW Industries Inc. filed a Chapter 7 petition (Bankr. D. Del. Case No. 23-10844) on June 28, 2023. The Debtors' counsel: William E. Chipman, Jr. Chipman Brown Cicero & Cole, LLP Tel: 302-295-0193 E-mail: chipman@chipmanbrown.com CANO HEALTH: MetWest OHIC Marks $12,773 Loan at 24% Off ------------------------------------------------------- Metropolitan West Fund's Opportunistic High Income Credit Fund has marked its $12,773 loan extended to Cano Health, LLC to market at $9,644 or 76% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Opportunistic High Income Credit Fund is a participant in a First Lien Term Loan (SOFR plus 4%) to Cano Health, LLC. The loan accrues interest at a rate of 8.81% per annum. The loan matures on November 23, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Cano Health, LLC operates primary care centers and supports affiliated medical practices. The Company specializes in primary care for seniors, as well as promotes activities and care to improve both physical health and well-being and offers population health management programs. Cano Health serves patients in the United States. CAPTAIN CORPORATION: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Captain Corporation 1870 El Camino Real Suite 100 Burlingame, CA 94010 Business Description: The Debtor is engaged in activities related to real estate. The Debtor owns a property located at 30 Falkirk Lane, Hillsborough, CA valued at $6 million. Chapter 11 Petition Date: June 28, 2023 Court: United States Bankruptcy Court Northern Distric of California Case No.: 23-30421 Judge: Hon. Dennis Montali Debtor's Counsel: Stephen D. Finestone, Esq. FINESTONE HAYES LLP 456 Montgomery St., 20th Floor San Francisco, CA 94104 Tel: 415-421-2624 Fax: 415 398-2820 Email: sfinestone@fhlawllp.com Total Assets: $6,000,016 Total Liabilities: $5,218,557 The petition was signed by Shirlin Wong as president. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/5AV7SEI/Captain_Corporation__canbke-23-30421__0001.0.pdf?mcid=tGE4TAMA CARTER TABERNACLE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Carter Tabernacle Christian Methodist Episcopal Church, Inc. 1 South Cottage Hill Road Orlando, FL 32805 Business Description: The Debtor is a church in Orlando, Florida. Chapter 11 Petition Date: June 29, 2023 Court: United States Bankruptcy Court Middle District of Florida Case No.: 23-02613 Debtor's Counsel: Jeffrey S. Ainsworth, Esq. BRANSONLAW, PLLC 1501 E. Concord Street Orlando, FL 32803 Tel: 407-894-6834 Fax: 407 894 8559 Email: jeff@bransonlaw.com Total Assets: $3,773,092 Total Liabilities: $2,884,315 The petition was signed by Lenita C. Frith, chair, Board of Stewards. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RRWOIMQ/Carter_Tabernacle_Christian_Methodist__flmbke-23-02613__0001.0.pdf?mcid=tGE4TAMA CENTURYLINK INC: MetWest IB Marks $23,955 Loan at 34% Off --------------------------------------------------------- Metropolitan West Fund's Intermediate Bond Fund has marked its $23,955 loan extended to CenturyLink, Inc to market at $15,915 or 66% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Intermediate Bond Fund is a participant in a First Lien Term Loan B (SOFR plus 2.36%) to CenturyLink, Inc. The loan accrues interest at a rate of 7.17% per annum. The loan matures on March 15, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. CenturyLink, Inc., headquartered in Monroe, Louisiana, is an integrated communications company that provides an array of communications services to residential, business, governmental and wholesale customers. CENTURYLINK INC: MetWest TRB Marks $11.6M Loan at 34% Off --------------------------------------------------------- Metropolitan West Fund's Total Return Bond Fund has marked its $11,695,472 loan extended to CenturyLink, Inc to market at $7,770,179 or 66% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Total Return Bond Fund is a participant in a First Lien Term Loan B (SOFR plus 2.36%) to CenturyLink, Inc. The loan accrues interest at a rate of 7.17% per annum. The loan matures on March 15, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. CenturyLink, Inc., headquartered in Monroe, Louisiana, is an integrated communications company that provides an array of communications services to residential, business, governmental and wholesale customers. CITY BREWING: MetWest OHIC Marks $7,481 Loan at 58% Off ------------------------------------------------------- Metropolitan West Fund's Opportunistic High Income Credit Fund has marked its $7,481 loan extended to City Brewing Co. LLC to market at $3,163 or 42% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Opportunistic High Income Credit Fund is a participant in a First Lien Term Loan B (LIBOR plus 3.50%) to City Brewing Co. LLC. The loan accrues interest at a rate of 8.32% per annum. The loan matures on April 5, 2028. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. City Brewing Company, LLC operates as a brewery company. The Company produces beverages by contract, including beer, malts, teas, and energy drinks. CLOSURE SYSTEMS: Moody's Affirms 'B2' CFR, Outlook Remains Stable ----------------------------------------------------------------- Moody's Investors Service affirmed Closure Systems International Group Inc.'s (CSI Group) corporate family rating at B2 and its probability of default rating at B2-PD. Moody's also affirmed the B2 rating on the first-lien senior secured credit facility, including term loan and revolving credit facility. The outlook remains stable. "The affirmation reflects Moody's expectation that CSI Group will be able to maintain its leverage within the rage assumed for the B2 CFR, supported by largely stable sales volume and its ability to generate steady profit despite some time lag," said Motoki Yanase, VP-Senior Credit Officer at Moody's. Affirmations: Issuer: Closure Systems International Group Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 Outlook Actions: Issuer: Closure Systems International Group Inc. Outlook, Remains Stable RATINGS RATIONALE CSI Group's leverage rose to 5.9x for the twelve months to March 2023, close to the high-end of the range Moody's assumes for the B2 CFR. In late 2022 and Q1 2023, sales and profits were negatively affected in Japan, which accounted for about 17% of revenue in 2022. Despite steady sales volume, a weaker yen to dollar exchange rate increased CSI Group's US dollar-denominated resin costs in Japan and squeezed its profit. As of Q1 2023, roughly 60% of the higher cost has yet to be passed on through pricing in the country due to a contractual lag. Moody's expects most of this exchange rate impact to be passed through in its prices by the end of 2023, which will normalize profit and improve leverage, unless the yen further weakens against the dollar. The company has generated relatively stable EBITDA of around $100 million each year between 2017 and 2022, which sufficiently covered capital spending and generated positive free cash flow. More recently, free cash flow has been negative. Moody's projects EBITDA will recover to the historical level in 2024 once the higher cost in the Japanese operation is passed through. Moody's also expects CSI Group to increase capital spending to expand its production capacity and market share in 2023-24, unless it finds suitable acquisition targets. Higher capex will also constrain free cash flow in 2023-24, diminishing the company's capacity to reduce its debt. However, additional capacity is normally tied to new business wins, which bodes well for future profit and cash flow generation. Moody's expects CSI Group to have good liquidity for the next 12-18 months. Moody's expects the company will record near break-even free cash flow but keep full availability on the $80 million revolver that expires on December 20, 2024. The stable outlook reflects Moody's expectation that moderate earnings growth, successful pricing pass through when contractually permitted, and the company's ability to generate steady profit will support gradual leverage improvement. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade the company's credit rating if the company increases its scale and reduces its customer or product concentration. The upgrade would also require the company to improve volumes, while maintaining strong credit metrics with debt/EBITDA below 5 times, EBITDA/Interest above 3.5 times and funds from operations to debt above 10%. Moody's could downgrade the company's rating if credit metrics weaken, liquidity deteriorates and/or the operating and competitive environment worsens. Failure to renew credit facilities before they become current later in 2023 or debt-financed dividends could also lead to a downgrade. The ratings could also be downgraded if debt/EBITDA rises above 6 times and free cash flow is consistently negative. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers published in December 2021. Headquartered in Indianapolis, Indiana, Closure Systems International Group Inc. (CSI Group) is a leading beverage closures manufacturer, operating eight manufacturing locations spread across the US, Mexico, Costa Rica, China and Japan. The company recorded sales of about $662 million for the twelve months that ended March 2023. CREEKSIDE OPERATING: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Four affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Creekside Operating LLC (Lead Case) 23-08539 1175 Davis Road Elgin, IL 60123 Elections Operating LLC 23-08542 1175 Davis Road Elgin, IL 60123 Byers Holding LLC 23-08545 1175 Davis Road Elgin, IL 60123 Byers Operating LLC 23-08547 Byers Printing Company Byers Printing Co. 901 N. MacArthur Boulevard Springfield, IL 62702 Business Description: The Debtors offer printing and related support services. Chapter 11 Petition Date: June 29, 2023 Court: United States Bankruptcy Court Northern District of Illinois Case No.: 23-10458 Debtors' Counsel: William S. Hackney, Esq. BRYAN CAVE LEIGHTON PAISNER LLP 161 North Clark Street Suite 4300 Chicago, IL 60601-3315 Tel: (312) 602 5000 Fax: (312) 602-5050 Email: william.hackney@bclplaw.com Creekside Operating's Total Assets as of June 1, 2023: $1,072,207 Creekside Operating' Total Liabilities as of June 1, 2023: $1,496,170 Elections Operating's Total Assets as of June 1, 2023: $3,400,477 Elections Operating's Total Long-Term Liabilities as of June 1, 2023: $5,971,916 Byers Holding's Estimated Assets: $500,000 to $1 million Byers Holding's Estimated Liabilities: $0 to $50,000 Byers Operating's Estimated Assets: $0 to $50,000 Byers Operating's Estimated Liabilities: $1 million to $10 million The petitions were signed by Matthew M. Sandretto, authorized representative of Byers Holding LLC, manager. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/HC2E6EA/Creekside_Operating_LLC__ilnbke-23-08539__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/OACCP5Y/Elections_Operating_LLC__ilnbke-23-08542__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/OJLPSUA/Byers_Holding_LLC__ilnbke-23-08545__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/3F7RLBA/Byers_Operating_LLC__ilnbke-23-08547__0001.0.pdf?mcid=tGE4TAMA DIAMOND SPORTS: Wants Out of Diamondbacks TV Deal ------------------------------------------------- The bankrupt owner of Bally Sports has asked a Texas bankruptcy judge to allow it to drop a money-losing contract to broadcast the MLB games of the Arizona Diamondbacks, three weeks after it was ordered to continue payments under the agreement. Diamond Sports Group, LLC, and its affiliated debtors on June 22, 2023, filed an emergency motion to reject its exclusive broadcast agreement with the Arizona Diamondbacks, effective as of June 30, 2023. Debtor Diamond Sports Net Arizona, LLC, is party to an Amended and Restated Telecast Rights Agreement, dated as of January 9, 2015, with AZPB Limited Partnership d/b/a Arizona Diamondbacks, an MLB team (the "Diamondbacks Agreement"). Pursuant to the Agreement, Diamond Arizona has the exclusive right to telecast all local Diamondbacks games selected for exclusive national telecast) within a specified territory in exchange for annual payments to the Diamondbacks. The current term of the Diamondbacks Agreement extends through Dec. 31, 2035. The rights fee payments under the Diamondbacks Agreement total tens of millions of dollars annually and increase yearly. Unfortunately, the Debtors lose significant sums on the Diamondbacks Agreement. Absent timely rejection, the next such payment would be due to the Diamondbacks on July 1, 2023. On April 6, 2023, the Diamondbacks filed a motion to compel the Debtors to make payment in the full contractual amounts specified in the Diamondbacks Agreement and/or to compel assumption or rejection of that agreement (the "Diamondbacks Motion to Compel"). The Court held an evidentiary hearing on May 31 and June 1, 2023 regarding the Diamondbacks Motion to Compel and similar motions filed by MLB and other MLB teams (the "Motion to Compel Hearing"). Following the Motion to Compel Hearing, on June 2, 2023, the Court entered the Order Granting Motions Re: Telecast Rights Agreements (the "June 2 Order"). The June 2 Order requires the Debtors to "pay the Clubs any future amounts due under the Telecast Rights Agreements in accordance with the terms of such Agreements." As the Debtors' representatives testified at the Motion to Compel Hearing, the Debtors have been conducting an ongoing analysis of their rights agreement portfolio to identify those rights agreements that are burdensome and/or otherwise unnecessary for the Debtors' go-forward business operations. As a result of this ongoing analysis and other developments, the Debtors have determined, in their business judgment, that the Diamondbacks Agreement is unnecessary and burdensome to the Debtors' estates and should be rejected. The Debtors lose significant amounts under the Diamondbacks Agreement, and thus have determined that the Diamondbacks Agreement no longer fits within the Debtors' longer-term plans. About Diamond Sports Group Diamond Sports Group, LLC, operates as a sports marketing company. It offers seminars, combine, speed and agility assessments, recruiting tools, and online training sessions for sports including football, baseball, soccer, and basketball. Diamond Sports is an unconsolidated and independently run subsidiary of Sinclair Broadcast Group. Diamond Sports owns and/or operates the Bally Sports Regional Sports Networks (the "RSNs"), making them the nation's leading provider of local sports programming. Diamond's 19 Bally Sports RSNs served as the home for 42 Major League Baseball ("MLB"), National Basketball Association, and National Hockey League teams, including 14 MLB teams. Diamond Sports Group and 29 of its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90116) on March 14, 2023. Diamond said it plans to restructure its balance sheet while continuing to broadcast local games on its portfolio of 19 networks under the Bally Sports brand across the U.S. In the petition filed by David F. DeVoe, Jr., as chief financial officer and chief operating officer, Diamond Sports Group listed $1 billion to $10 billion in both assets and liabilities. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler Pickering Hale and Dorr, LLP as special corporate and litigation counsel; AlixPartners, LLP as financial advisor; Moelis & Company, LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax, LLP as tax advisor; Deloitte Financial Advisory Services, LLP as accountant; and Deloitte Consulting, LLP as consultant. Kroll Restructuring Administration, LLC, is the claims agent. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Akin Gump Strauss Hauer & Feld LLP as counsel; FTI Consulting, Inc., as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. EARTHSTONE ENERGY: Moody's Rates New 2031 Sr. Unsecured Notes 'B3' ------------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to Earthstone Energy Holdings, LLC's proposed senior unsecured notes due 2031. The existing ratings are unchanged, including the B1 Corporate Family Rating, B1-PD Probability of Default Rating, and the B3 ratings on the existing senior unsecured notes. The Speculative Grade Liquidity Rating is unchanged at SGL-2. The rating outlook is stable. The proceeds from the proposed $500 million senior unsecured notes will be used to partially fund Earthstone's $1 billion share of the purchase of Novo Oil & Gas Holdings, LLC, which is expected to close in the third quarter of 2023. Earthstone will draw on its revolving credit facility to fund the remainder of the purchase. "The Novo acquisition provides Earthstone with quality Delaware Basin acreage and production at a reasonable price," noted John Thieroff, Moody's Senior Credit Officer. "Commodity price hedging and a supportive oil price environment should allow Earthstone to reduce revolver borrowings, allowing leverage to approach pre-acquisition levels in 2024." Assignments: Issuer: Earthstone Energy Holdings, LLC Backed Senior Unsecured Regular Bond/Debenture, Assigned B3 RATINGS RATIONALE The proposed notes are rated B3, two notches below the CFR. The double notching results from the priority ranking of the senior secured revolving credit facility, the $1.65 billion elected commitment of the revolver, which is large relative to the notes, and the heavy utilization of the revolver. Earthstone Energy Holdings, LLC's (Earthstone) B1 CFR reflects its competitive cost structure, moderate financial leverage and concentrated operations in the Midland and Delaware Basins (subsets of the larger Permian Basin). The company's scale has increased considerably following a series of acquisitions since the beginning of 2021, most recently with the Novo acquisition in the Delaware Basin – its largest acquisition to date. Earthstone's credit profile is challenged by its aggressive acquisition strategy, having undertaken seven transactions since December 2020. Geographic concentration is a challenge to Earthstone's credit profile, as the company lacks sufficient scale to give it negotiating leverage for materials and services and also leaves it exposed to takeaway and processing limitations within the basin during outages or periods where capacity is constrained. Earthstone's three largest owners, private equity firms EnCap Investments, Warburg Pincus LLC, and Post Oak Energy Capital continue to be patient in terms of distributions, enabling the company to utilize free cash flow to repay revolver borrowings following its frequent acquisitions. In acquiring Novo, Earthstone will add 11,300 net acres and 200 drilling locations, along with 38,000 boe/d of production, all in the Delaware Basin. Although the acquisition increases Earthstone's exposure to federal lands in New Mexico, Moody's views the company's permit inventory as adequate. Moody's expects that, while the acquisition will be initially leveraging, improved cash flow generation and debt reduction will allow Earthstone to generate retained cash flow/debt approaching 60% in 2024, assuming $60/bbl WTI oil and $3/mcf Henry Hub natural gas prices. E arthstone's SGL-2 rating reflects its good liquidity through mid-2024, supported by its strong free cash flow generation. Moody's expects Earthstone to continue to generate meaningful free cash flow despite lower 2023 commodity prices relative to 2022. Moody's forecasts post-acquisition free cash flow will range between $200 million and $250 million in a mid-cycle commodity price environment. Based on outstandings at March 31, 2023 and pro forma for funding the Novo acquisition, Earthstone will have about $700 million of availability under its revolving credit facility, which expires in June 2027. Covenants under the revolver require Earthstone to maintain consolidated total leverage of less than 3.5x and a current ratio of greater than 1x, levels that the company will likely have little problem maintaining compliance through mid-2024. Earthstone's next debt maturity is in 2027. The stable outlook reflects Moody's expectation that Earthstone will use free cash flow to pay down revolver borrowings, with leverage approaching pre-acquisition levels in 2024. The outlook also contemplates successful integration of the company's recent acquisitions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Ratings could be upgraded if Earthstone maintains its leveraged full cycle ratio (LFCR) above 1.5x in a mid-cycle commodity price environment, with RCF/debt sustained above 40% and while demonstrating a consistent track record of successfully developing acquired acreage at competitive economics. A downgrade is possible if the company's RCF/debt declines below 25% or if its LFCR falls below 1.0x Based in The Woodlands, Texas, Earthstone is a publicly traded independent exploration and production company majority-owned by EnCap Investments, Warburg Pincus LLC, and Post Oak Energy Capital. The company operates in the Delaware and Midland basins in New Mexico and West Texas. The principal methodology used in this rating was Independent Exploration and Production published in December 2022. EFS PARLIN: Gets OK to Hire SSG Advisors as Investment Banker ------------------------------------------------------------- EFS Parlin Holdings, LLC received approval from the U.S. Bankruptcy Court for the District of Delaware to employ SSG Advisors, LLC. The Debtor requires an investment banker to: a. prepare an information memorandum describing the Debtor, its historical performance and prospects, including existing contracts, marketing and sales, labor force, and management; b. assist the Debtor in compiling a data room of any necessary and appropriate documents related to the sale of the Debtor's assets; c. assist the Debtor in developing a list of suitable potential buyers who will be contacted on a discreet and confidential basis after approval by the Debtor and update and review such list with the Debtor on an on-going basis; d. coordinate the execution of confidentiality agreements for potential buyers wishing to review the information memorandum; e. assist the Debtor in coordinating physical and/or virtual site visits for interested buyers and work with the management team to develop appropriate presentations for such visits; f. solicit competitive offers from potential buyers; g. advise and assist the Debtor in structuring of sale procedures and the conduct of any auction that may result therefrom; h. advise and assist the Debtor in structuring the sale and negotiating the transaction agreements; i. be available for meetings and court appearances in the Chapter 11 Case, including providing testimony in furtherance and support of a Sale; and j. otherwise assist the Debtor and its other professionals, as necessary, through closing on a best efforts basis. The firm will be compensated as follows: a. A monthly fee of $25,000. b. Upon the consummation of a sale transaction, SSG shall be entitled to a fee, payable in cash, equal to the greater of (i) $300,000 or (ii) 5 percent of total consideration received. J. Scott Victor, a partner at SSG Advisors, 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. The firm can be reached through: J. Scott Victor SSG Advisors, LLC 300 Barr Harbor Drive, Suite 420 West Conshohocken, PA 19428 Telephone: (610) 940-5802 Email: jsvictor@ssgca.com About EFS Parlin Holdings EFS Parlin Holdings, LLC is in the business of electric power generation, transmission and distribution. The company is based in Norwalk, Conn. EFS Parlin Holdings filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Del. Case No. 23-10539) on April 28, 2023, with $9,424,029 in assets and $12,594,508 in liabilities. Michael Whitworth, authorized representative, signed the petition. Judge John T. Dorsey oversees the case. The Debtor tapped J. Cory Falgowski, Esq., at Burr Forman, LLP as bankruptcy counsel and SSG Advisors, LLC as investment banker. EMPLOYEE LOAN: Sale of Assets to Sunrise for $7.97-Mil. Approved ---------------------------------------------------------------- Judge Christopher B. Latham of the U.S. Bankruptcy Court for the Southern District of California approved Employee Loan Solutions, LLC's sale of assets together with the assumed liabilities to Sunrise Banks, National Association, for $7,967,594, which will be paid by means of a credit against amounts due to the Buyer under the Loan Agreement dated as Feb. 12, 2018. The Purchased Assets are transferred to Sunrise on account of its credit bid and in satisfaction of Sunrise's claim which is secured by the Purchased Assets. In accordance with the APA, concurrently with the Closing, Sunrise will apply a credit of not more than $7,967,594 against the amounts due under the Loan Agreement between Sunrise and Debtor dated as of Feb. 12, 2018. The sale is free and clear of all Encumbrances. Upon the Closing, the Debtor is authorized and directed to assume, assign, and/or transfer each of the Assumed Contracts to Sunrise. It will remit payment of such Cure Amounts (if any) to the Counterparties of Assumed Contracts and such payments are deemed the necessary and sufficient amounts to "cure" all "defaults" with respect to all such Assumed Contracts under Section 365(b). The automatic stay in effect pursuant to Section 362 is lifted to the extent necessary, without further order of this Court, to (i) allow Sunrise to deliver any notice provided for in the APA and Transaction Documents and (ii) allow Sunrise to take any and all actions permitted under the APA and Transaction Documents in accordance with the terms and conditions thereof. About Employee Loan Solutions Employee Loan Solutions, LLC, a wholly owned subsidiary of Emp Loan Holdings, Inc., markets and services a web-based employee benefit platform called TrueConnect, a trademarked brand since 2016. TrueConnect is an employee financial wellness benefit offered at no cost or financial risk to employers. Employee Loan Solutions sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Calif. Case No. 22-03210) on Dec. 16, 2022. In the petition signed by its chief executive officer, Douglas Farry, the Debtor disclosed $38,144,499 in assets and $7,613,600 in liabilities. Judge Christopher B. Latham oversees the case. The Debtor tapped Caroline R. Djang, Esq., at Buchalter as bankruptcy counsel; Breakwater Law Group, LLP as special corporate counsel; Hamilton Grant, LLC as investment banker; and Impact Capital Group, Inc. as financial advisor. ESOURCE RESOURCES: Cash Collateral Access OK'd on Final Basis ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana, Indianapolis Division, for authority to use cash collateral on a final basis in accordance with the budget, with a 10% variance. The Debtor requires the use of cash collateral to continue operating its business and attempt a successful reorganization pursuant to the provisions of Chapter 11 of the Bankruptcy Code. The Debtor owed Midwest Business Funding, Inc. $800,000, plus accrued and unpaid interest and other charges as provided in the Loan Documents. The Debtor contends the Secured Creditor has valid and enforceable security interests and liens in all of the Debtor's assets, including but not limited to, the Debtor's cash collateral. As adequate protection, the Secured Creditor is granted replacement liens in the cash collateral and in the post-petition property of the Debtor of the same nature and to the same extent and in the same priority held in the cash collateral on the Petition Date. The Debtor's authorization to use the cash collateral will immediately terminate on the earlier to occur of: (a) the date on which any creditor provides, via facsimile, e-mail or overnight mail, written notice to the Debtor or Debtor's counsel, of the occurrence of an Event of Default, and the expiration of a five business-day cure period; or (b) a later date as the Court may order. These events constitute an Event of Default: (i) A trustee (other than the Subchapter V Trustee) or examiner is appointed in the Chapter 11 case; (ii) The Debtor's Chapter 11 case is converted to a Chapter 7 case or dismissed; (iii) The Debtor fails to comply with any term of the Final Order, including but not limited to its payment obligations and compliance with the Budget; (iv) The Debtor makes any payment not set forth in the Budget; (v) The Debtor fails to comply with any of the adequate protection or reporting obligations set forth therein. A copy of the order is available at https://urlcurt.com/u?l=LIKA4e from PacerMonitor.com. About Esource Resources, LLC Esource Resources, LLC offers advisory services for optimal project, budget, and resource planning and roadmapping; 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. FAIRFIELD HARBOURSIDE: $700K Private Sale of Harbourside Condo OK'd ------------------------------------------------------------------- Judge Joseph N. Callaway of the U.S. Bankruptcy Court for the Eastern District of North Carolina authorized Fairfield Harbourside Condominium Association, Inc.'s private sale of the Harbourside Condominium, together with any associated personal property, to Bluesky Properties Southeast LLC for $700,000, subject to overbid. The proposed Bidding Procedures attached to the Sale Motion are approved. In the event Bluesky is not the successful bidder at an auction triggered by placement of an overbid by a Qualifying Bidder, Bluesky will be entitled to recover a break-up fee in the amount of 3% of the Purchase Price ($21,000) from the sales proceeds at or shortly after closing. If Bluesky is the successful bidder at auction, it is not entitled to recover a break-up fee. The initial minimum overbid from a Qualified Bidder is designated as 5% greater than the Purchase Price, resulting in a minimum initial overbid of at least $735,000. Higher bids made thereafter at auction must be in increments of at least $5,000. The Purchase Agreement is subject to an overbid deadline of 4:00 p.m. on July 10, 2023, for Qualified Bidders to submit a qualifying bid to counsel for the Debtor as set forth in the Bidding Procedures. If no qualifying overbid is filed, Bluesky becomes the successful bidder. The proposed qualifications for a Qualified Bidder, including without limitation as set forth in the form of the Overbid Purchase Agreement, is approved. he Final Sale Hearing is set and noticed for 11:00 a.m., (ET) on July 13, 2023, before the United States Bankruptcy Court sitting in the 2nd Floor Courtroom, 150 Reade Circle, Greenville, North Carolina. No further notice will be provided. If overbids from a Qualified Bidder were timely placed, a public auction sale, with all Qualifying Bidders able to participate, will then be conducted in the courtroom. If no qualifying overbids were submitted, the Final Sale Hearing will still be held as scheduled for the purpose of final confirmation of the sale to Bluesky under the Purchase Agreement. About Fairfield Harbourside Condominium Association Fairfield Harbourside Condominium Association, Inc filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02267) on Oct. 4, 2022, with up to $1 million in assets and up to $500,000 in liabilities. Judge Joseph N. Callaway presides over the case. Jason L. Hendren, Esq., at Hendren Redwine & Malone, PLLC represents the Debtor as counsel. FEILITECH US: Exclusivity Period Extended to September 29 --------------------------------------------------------- Judge Selene D. Maddox of the U.S. Bankruptcy Court for the Northern District of Mississippi extended the period during which Feilitech US LLC may file its chapter 11 plan to September 29, 2023. The judge determined that the need for the requested extension of the plan deadline is attributable to circumstances for which the Debtor should not justly be held accountable. Feilitech US LLC is represented by: Kristina M. Johnson, Esq. JONES WALKER LLP 190 East Capitol Street, Suite 800 Jackson, MS 39205-0427 Tel: (601) 949-4785 Email: kjohnson@joneswalker.com - and - Allen J. Guon, Esq. Christina M. Sanfelippo, Esq. COZEN O’CONNOR 123 North Wacker Drive, Suite 1800 Chicago, IL 60606 Tel: (312) 382-3100 Email: aguon@cozen.com csanfelippo@cozen.com About Feilitech US Feilitech US, LLC is a manufacturer of spring and wire products in Belden, Miss. Feilitech US filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Miss. Case No. 23-10599) on Feb. 28, 2023, with $1 million to $10 million in both assets and liabilities. Judge Selene D. Maddox oversees the case. Judge Selene D. Maddox oversees the case. Cozen O'Connor and Jones Walker, LLP are the Debtor's legal counsels. FLEETCOR TECHNOLOGIES: Moody's Affirms 'Ba1' CFR, Outlook Stable ---------------------------------------------------------------- Moody's Investors Service affirmed FleetCor Technologies Operating Company LLC's Ba1 Corporate Family Rating, and Ba1 senior secured credit facility ratings. The outlook remains stable. Affirmations: Issuer: FleetCor Technologies Operating Company LLC Corporate Family Rating, Affirmed Ba1 Probability of Default Rating, Affirmed Ba1-PD Senior Secured Bank Credit Facility, Affirmed Ba1 Outlook Actions: Issuer: FleetCor Technologies Operating Company LLC Outlook, Remains Stable RATINGS RATIONALE The affirmation reflects FleetCor's scaled and diversified portfolio of leading corporate payment solutions supported by positive secular growth trends and strong competitive positions. Additionally, while the company is conducting a portfolio review as part of a broader strategic process, Moody's does not anticipate divestitures beyond small, non-core assets that will have a fairly limited impact on the company's overall financial profile. More significant changes to the company's business lines or financial structure could have a material impact on the company's credit profile. The company's fleet, corporate payments, lodging and Brazil businesses together accounted for 93% of revenue in the LTM period ended March 31, 2023, and are combining to deliver a solid company organic growth rate, reflecting the diversification benefit across different business lines and geographies each with differing underlying growth drivers. On a whole, these four core businesses are characterized by leading competitive positions, high profitability driven by scale, and solid free cash flow generation. While the Fleet segment, the company's largest, faces exposure to EV transition risk, the company's capability acquisitions and early offerings in the UK and Europe are showing promise and good economics, while positioning FleetCor to serve a mixed fleet environment which will likely exist for some time to come. As a result, Moody's believes that FleetCor's growth and profitability will be maintained. In the near term, Moody's expects the company to generate free cash flow of about $1.2 billion in 2023. FleetCor's capital allocation strategy has focused primarily on growth through M&A, and share repurchases. Frequent acquisition activity in recent years resulted in temporary increases in leverage and elevated integration risk. More recently, the majority of FleetCor's deployed capital has been directed towards share repurchases. Of approximately $4.7 billion in capital deployed from 2020 through the end of Q1 2023 (about $1 billion higher than adjusted net income and nearly $1.5 billion higher than free cash flow over the same period,) nearly 80% as gone towards share repurchases. Moody's expects Fleetcor's acquisition and share repurchase activity to continue (FleetCor has $1.2 billion remaining under its current authorization) while the company maintains leverage consistent with the rating category, although the company did not complete any share repurchases in Q1 2023. The company targets leverage of 3.0x or below on a credit agreement basis (standing at approximately 2.7x at March 31, 2023). Moody's adjusted leverage (which includes accounts receivable securitization and operating lease adjustments) was 3.7x at March 31, 2023. Capital deployment for acquisitions is supported by solid organic EBITDA growth, as well as by good cash flow. Moody's continues to expect FleetCor would quickly de-lever following sizable, leveraged acquisitions. The SGL-1 liquidity rating reflects FleetCor's strong liquidity which is supported by $1.3 billion in available cash balances as of March 31, 2023 and expected free cash flow of $1.2 billion in 2023. The Ba1 facility ratings for the FleetCor's credit facilities are consistent with the Ba1 CFR, reflecting the single class of secured debt comprising the preponderance of FleetCor's debt capital structure. The stable rating outlook reflects Moody's expectation of continued solid organic growth and profitability with total debt to EBITDA (including receivables securitization and standard Moody's adjustments) remaining below 4x absent debt financed acquisitions and disposition of sizable core assets in conjunction with the company's portfolio review. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if while maintaining its business scale and diversification, FleetCor committed to more conservative financial policies consistent with an investment grade credit profile. The ratings could be downgraded if FleetCor were to experience a sustained slowdown in growth, revenue or margin, experience a material reduction in scale and diversification, or if leverage were to be sustained above 4x. With revenues of $3.5 billion in the LTM period ended March 31, 2023, the Atlanta, Georgia headquartered FleetCor Technologies Operating Company LLC is a leading global provider of commercial payments solutions. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. FLOOR STORE: Unsecureds Will Get 9.63% of Claims in 5 Years ----------------------------------------------------------- The Floor Store, LLC, filed with the U.S. Bankruptcy Court for the Western District of Arkansas a Plan of Reorganization for Small Business dated June 26, 2023. The Debtor has been in the business of retail flooring and contracting. During the COVID-19 pandemic, business slowed and the debtor became delinquent on its tax debt. The debtor took out several merchant cash advance loans to stay afloat; however, due to the predatory nature of these loans, the debtor was unable to meet the terms of payment. As a result, debtor attempted to settle with these creditors, and was successful in repayment agreements, until one creditor obtained a judgment against the debtor and its bank accounts were frozen. Debtor was unable to make payroll, and filed this case as a last resort to reorganize its debts. The Plan Proponent's financial projections show that the Debtor will have projected disposable income of $62,341.21 resulting in a 9.63% distribution to general unsecured claims. This Plan of Reorganization proposes to pay creditors of The Floor Store, LLC from cash flow from operations. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 9.63% of unsecured claims. This Plan also provides for the payment of administrative and priority claims. Class 3 consists of the allowed general unsecured non-priority claims, in the approximate amount of $647,405.82 and includes any amounts of secured claims that exceed the value of the collateral securing the claim. Debtor estimates that there will be a dividend pool accumulated over the next 5 years of the Plan in the amount of $62341.21. Therefore, unsecured creditors will receive approximately 9.63% distribution on their claims. Debtor will disburse payment pro rata to unsecured creditors at the end of every year following confirmation of the plan. Forward Financing, LLC, and Switft Financial have filed secured claims in this case; however, for the purposes of this plan, Forward Financing LLC, and Swift Financial have been treated as unsecured creditors. Debtor objects to the secured status of these claims and will file Objections to Claim in order to obtain a determination on the secured status of both claims. Collection against any co-debtor or personal guarantor shall be prohibited after confirmation of the Plan provided that debtor is not in default with the terms of the Plan. Nothing herein shall constitute an admission as to the nature, validity, or amount of such claim. Debtor reserves the right to object to any and all claims. Class 4 consists of Equity security holders of the Debtor. Equity security holders will retain their equity interest in the property of the estate. Upon confirmation, Debtor shall be charged with administration of the case. Carlton Rogers will continue to perform his current position as President of The Floor Store, LLC, and payments for the plan will be made from cash flow from this business. Debtor may maintain bank accounts under the confirmed Plan in the ordinary course of business. Debtor may also pay ordinary and necessary expenses of the administration of the Plan in due course. A full-text copy of the Plan of Reorganization dated June 26, 2023 is available at https://urlcurt.com/u?l=0hQWXx from PacerMonitor.com at no charge. About The Floor Store The Floor Store, LLC, has been in the business of retail flooring and contracting. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Ark. Case No. 23-70401) on March 28, 2023, with as much as $1 million in both assets and liabilities. Judge Bianca M. Rucker oversees the case. Jennifer Wyse, Esq., at Honey Law Firm, PA, serves as the Debtor's counsel. FRASIER CONTRACTING: Proposed Sale of De Minimis Assets Approved ---------------------------------------------------------------- Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Frasier Contracting, Inc., to sell: A. to Lloyd Riley the following a purchase price of $260, "as is" and free and clear of any liens, claims, interests, encumbrances, and security interests of any kind: a) Whirlpool refrigerator; b) LodgingStar Microwave; c) Panasonic Microwave oven; d) Black & Decker toaster oven; and e) 4' step ladder; B. to Michelle Varian for $20 one large dry erase magnetic board "as is" and free and clear of any liens, claims, interests, encumbrances, and security interests of any kind; and C. its remaining de minimis assets "as is" and free and clear of any liens, claims, interests, encumbrances, and security interests of any kind, without further Court order. The liens of any secured creditors, including Bank of Central Florida, will attach to the proceeds from the sales. The Debtor will file a notice with the Court after any sales of the remaining de minimis assets have occurred. The sale proceeds will be sent to Bank of Central Florida upon consummation of the sale. The 14-day stay required under Bankruptcy Rule Section 6004(h) is waived and the Order is effective immediately upon entry. About Frasier Contracting Frasier Contracting Inc. -- https://www.frasiercontracting.com -- is a Florida State Certified Class A general contracting company. Frasier Contracting filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03776) on Sept. 15, 2022. In the petition signed by Matthew LaForest, president, the Debtor disclosed $1,253,075 in total assets and $1,025,407 in total liabilities. Amy Denton Mayer has been appointed as Subchapter V trustee. Judge Catherine Peek McEwen oversees the case. The Debtor tapped Buddy D. Ford, PA as bankruptcy counsel; Saunders Law Group as special counsel; and Hamic, Previte & Sturwold, PA as accountant. FRASIER CONTRACTING: Sale of 3 Job Site Cameras for $3.2K Approved ------------------------------------------------------------------ Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Frasier Contracting, Inc., to sell three job site cameras to Jimmy Blackwell Framing, LLC for $3,200. The sale is "as is" and free and clear of any liens, claims, interests, encumbrances, and security interests of any kind. The liens of any secured creditors, including Bank of Central Florida, will attach to the proceeds from the sales. The Debtor will file a notice with the Court after any sales of the remaining de minimis assets have occurred. The sale proceeds will be sent to Bank of Central Florida upon consummation of the sale. The 14-day stay required under Bankruptcy Rule Section 6004(h) is waived and the Order is effective immediately upon entry. About Frasier Contracting Frasier Contracting Inc. -- https://www.frasiercontracting.com -- is a Florida State Certified Class A general contracting company. Frasier Contracting filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03776) on Sept. 15, 2022. In the petition signed by Matthew LaForest, president, the Debtor disclosed $1,253,075 in total assets and $1,025,407 in total liabilities. Amy Denton Mayer has been appointed as Subchapter V trustee. Judge Catherine Peek McEwen oversees the case. The Debtor tapped Buddy D. Ford, PA as bankruptcy counsel; Saunders Law Group as special counsel; and Hamic, Previte & Sturwold, PA as accountant. FRASIER CONTRACTING: Sale of Assets to Fresquez for $1.3K Approved ------------------------------------------------------------------ Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Frasier Contracting, Inc., to sell the following to Deidre L. Fresquez Insurance Agency for $1,325: a) 6 x 4 Op Art oil painting framed; b) 6 x 4 Op Art oil painting unframed; c) Leather top dining table; d) Two MSI curved monitors; e) Two secretarial chairs; f) Reading lamp; g) Two mesh side chairs; h) Fainting couch; and i) Three secretarial/conf chairs. The sale is "as is" and free and clear of any liens, claims, interests, encumbrances, and security interests of any kind. The liens of any secured creditors, including Bank of Central Florida, will attach to the proceeds from the sales. The Debtor will file a notice with the Court after any sales of the remaining de minimis assets have occurred. The sale proceeds will be sent to Bank of Central Florida upon consummation of the sale. The 14-day stay required under Bankruptcy Rule Section 6004(h) is waived and the Order is effective immediately upon entry. About Frasier Contracting Frasier Contracting Inc. -- https://www.frasiercontracting.com -- is a Florida State Certified Class A general contracting company. Frasier Contracting filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03776) on Sept. 15, 2022. In the petition signed by Matthew LaForest, president, the Debtor disclosed $1,253,075 in total assets and $1,025,407 in total liabilities. Amy Denton Mayer has been appointed as Subchapter V trustee. Judge Catherine Peek McEwen oversees the case. The Debtor tapped Buddy D. Ford, PA as bankruptcy counsel; Saunders Law Group as special counsel; and Hamic, Previte & Sturwold, PA as accountant. FRASIER CONTRACTING: Sale of Assets to Trust for $1.3K Approved --------------------------------------------------------------- Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Frasier Contracting, Inc., to sell the following to Darryl Lloyd Riley Revocable Trust for $1,300: a) Secretarial Chair; b) Two rolling carts; c) Mesh secretarial chair; d) Folding table; e) Four two-drawer fireproof file cabinets; f) Four drawer fireproof file cabinet; g) Two drawer lateral file cabinet; h) Four four-drawer lateral file cabinets; i) Dell computer tower; j) Two Samsung monitors; k) Hewlett Packard printer; l) Three-drawer cabinet; m) Staples paper shredder; n) Dell server with back up and surge protector; o) Canon calculator; and p) MSI laptop computer. The sale is "as is" and free and clear of any liens, claims, interests, encumbrances, and security interests of any kind. The liens of any secured creditors, including Bank of Central Florida, will attach to the proceeds from the sales. The Debtor will file a notice with the Court after any sales of the remaining de minimis assets have occurred. The sale proceeds will be sent to Bank of Central Florida upon consummation of the sale. The 14-day stay required under Bankruptcy Rule Section 6004(h) is waived and the Order is effective immediately upon entry. About Frasier Contracting Frasier Contracting Inc. -- https://www.frasiercontracting.com -- is a Florida State Certified Class A general contracting company. Frasier Contracting filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03776) on Sept. 15, 2022. In the petition signed by Matthew LaForest, president, the Debtor disclosed $1,253,075 in total assets and $1,025,407 in total liabilities. Amy Denton Mayer has been appointed as Subchapter V trustee. Judge Catherine Peek McEwen oversees the case. The Debtor tapped Buddy D. Ford, PA as bankruptcy counsel; Saunders Law Group as special counsel; and Hamic, Previte & Sturwold, PA as accountant. FREEDOM MORTGAGE: Moody's Affirms B1 CFR & Rates New Sr. Notes B2 ----------------------------------------------------------------- Moody's Investors Service has affirmed the B1 corporate family rating and existing B2 long-term senior unsecured ratings to Freedom Mortgage Corporation. In addition, Moody's has assigned B2 senior unsecured ratings to Freedom's proposed new 2026 and 2027 senior notes (New 2026 and 2027 Notes) as well as a B2 long-term issuer rating. The outlook remains stable. RATINGS RATIONALE The B1 CFR assigned to Freedom reflects its strong capitalization with tangible common equity to adjusted tangible managed assets of 31% as of March 31, 2023. In addition, the CFR reflects that profitability is currently somewhat weaker than the average of rated non-bank mortgage company peers. Like most other rated peers, the company also largely relies on confidence-sensitive secured funding to finance loan originations, resulting in elevated refinancing risk. In Moody's view, with modest levels of unencumbered assets, the company's alternative financing options are limited, particularly during times of stress. Furthermore, the yield on the company's unsecured debt is high, both on an absolute basis as well as compared to peers; thereby, the company's access to the unsecured debt markets is weaker than the average peer, a credit negative for the company's liquidity profile. On June 27, 2023, the company announced that it is offering to exchange its existing senior unsecured notes maturing in 2026 and 2027 for New 2026 and 2027 Notes with the same terms and conditions. While any 2026 and 2027 bonds that are not exchanged (Stub Bonds) will no longer benefit from certain covenants, the Stub Bonds will be pari passu with all unsecured debt of Freedom. As a result, it is Moody's opinion that the credit risk of the Stub Bonds is largely unchanged. At a later date, after the satisfaction of certain conditions, in particular the repayment of the company's unsecured notes maturing in 2024 and 2025, Freedom will enter into supplemental indentures for the New 2026 and 2027 Notes whereby a new holding company, Freedom Mortgage Holdings LLC, shall automatically succeed Freedom and be subject to all the obligations of Freedom as issuer (Issuer Substitution). Freedom shall unconditionally guarantee such new senior unsecured bonds of Freedom Mortgage Holdings LLC. Given the guarantee, Moody's anticipate that the credit risk will be unchanged and therefore expect that the rating of the new Freedom Mortgage Holdings LLC bonds will be aligned with Freedom's senior unsecured rating as of the date of the Issuer Substitution. The B2 senior unsecured bond rating is one notch below the company's B1 CFR and incorporates the priority of claim and strength of asset coverage and is based on Moody's expectation that the company's financial policy is to keep the ratio of secured debt associated with MSRs and secured corporate debt to total corporate debt ("Secured Debt Ratio") below 50%. As of March 31, 2023, the company's Secured Debt Ratio was 65%, and if the 2024 senior unsecured bonds are repaid with secured debt, the Secured Debt Ratio will increase to around 70%. The senior unsecured bonds could be downgraded if the Secured Debt Ratio increases above 70%, remains above 60% as of December 31, 2023, or remains above 50% as of December 31, 2024. The stable outlook reflects Moody's expectation that over the next 12-18 months, the company's profitability will be modest, capitalization strong, and its funding and liquidity profile will be largely unchanged. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Freedom strengthens its profitability such as by demonstrating through-the-cycle a net income to assets (ROA) ratio of above 3.0%. In addition, the company would need to maintain strong capital levels, such as tangible common equity to adjusted tangible assets of around 20.0%. An upgrade would also likely be contingent upon the company exhibiting strengthened access to the unsecured debt markets that results in improved funding costs in relation to earning asset yields. The ratings could be downgraded if financial performance deteriorates, for example if the company's tangible common equity to adjusted tangible managed assets falls below and is expected to remain below 15.0%, or profitability deteriorates with ROA falling below peer average profitability such that through-the-cycle average ROA is below 2.0%. The senior unsecured bonds could be downgraded if the Secured Debt Ratio increases above 70%, remains above 60% as of December 31, 2023, or remains above 50% as of December 31, 2024. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. FTX TRADING: SBF Can't Get Documents from Former Law Firm --------------------------------------------------------- Bob Van Voris of Bloomberg News reports that FTX co-founder Sam Bankman-Fried's bid to get documents from the cryptocurrency exchange's former law firm to help prove his innocence was denied by the federal judge overseeing his fraud case. The ruling comes as Bankman-Fried has been laying the groundwork for a possible defense that he relied on the advice of the firm, Fenwick & West LLP, in taking many of the actions for which he is being prosecuted, and therefore had no criminal intent. Dealing a blow to that defense, US District Judge Lewis Kaplan on Friday denied his request for the documents, ruling that Fenwick and FTX debtors aren't part of the prosecution team and that a subpoena would be no more than an overbroad "fishing expedition." Mr. Bankman-Fried, 31, is accused of orchestrating and concealing a yearslong fraud in which he used billions of dollars in FTX customer funds for risky investments, personal expenses and political donations. He has pleaded not guilty to his 13-count indictment and is due to stand trial in October. His defense team has tried to argue that he depended on the lawyers' advice. Criminal defendants sometimes make such an argument to counter prosecution claims that they broke the law intentionally. Kaplan wrote in his order that Bankman-Fried's proposed subpoena for the documents "does not meet the specificity, relevance and admissibility requirements" of the law. The topics of Fenwick's counsel included the use of encrypted messaging apps, the provision of multimillion-dollar loans to FTX executives and the exchange's compliance with US banking regulations, Bankman-Fried's lawyers said. They contend that those are all key elements of the charges against their client. The case is US v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan). About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. G ARATA & SON: Unsecureds Will Get 30% of Claims in Plan -------------------------------------------------------- G Arata & Son Inc. filed with the U.S. Bankruptcy Court for the Eastern District of California a Plan of Reorganization for Small Business dated June 26, 2023. The Debtor was formed as a California corporation on November 27, 2017, and remains in good standing. The Debtor purchased substantial farm equipment which was to be used for shredding trees in old orchards. The two shareholders of the Debtor are George S. Arata, Sr., and Mark R. Goldberg. Until the summer of 2022, George S. Arata, Jr., operated the Debtor's business. George S. Arata, Jr., started a new business in June, 2022 called A5 Ag Service, Inc., but continued to use equipment and fuel owned by the Debtor. A mediation was conducted to resolve the issues among the various parties and it was believed that a settlement had been reached. Thereafter, a dispute arose over the terms of the settlement. The Plan of Reorganization proposes to pay creditors of the Debtor from cash flow from liquidation of assets over a one-year period. The final Plan payment is expected to be paid on June 30, 2024. Non-priority unsecured non-insider creditors holding allowed claims will receive distributions of not less than 30 cents on the dollar. The Plan also provides for full payment of administrative and priority tax claims. Finally, the Plan also provides for the full payment of allowed secured claims. Class 6 consists of Non-priority unsecured claims held by non-insiders. This class is impaired. The holders of claims in this class will collectively receive all remaining proceeds after all other claims are paid, but in no event less than 30% of allowed claims, no later than June 30, 2024. Class 7 consists of Non-priority unsecured claims held by insiders. This class is impaired. The holders of claims in this class will receive nothing. Class 8 consists of Equity interests in the Debtor. This class is not impaired. The present shareholders, George S. Arata, Sr., and Mark R. Goldberg, will retain their shares in the Debtor. The Debtor intends, with Court approval, to liquidate all tangible assets and to pursue all claims it may have against third persons, all to generate cash to pay creditors. To the extent there are insufficient funds to perform the terms of this Plan, the shareholders will contribute additional capital to meet the shortfall. A full-text copy of the Plan of Reorganization dated June 26, 2023 is available at https://urlcurt.com/u?l=MnJgNl from PacerMonitor.com at no charge. Attorney for Debtor: David C. Johnston, Esq. 1600 G Street, Suite 102 Modesto, CA 95354 Phone: (209) 579-1150 Fax: (209) 900-9199 Email: david@johnstonbusinesslaw.com About G Arata & Son G Arata & Son, Inc., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 23-90129) on March 28, 2023, with $500,001 to $1 million in both assets and liabilities. Judge Ronald H. Sargis oversees the case. David C. Johnston, Esq., is the Debtor's bankruptcy attorney. GREGORY A. DEAKIN: Sale of Cuba Property to Kruzan for $32K Granted ------------------------------------------------------------------- Judge Peter W. Henderson of the U.S. Bankruptcy Court for the Central District of Illinois authorized Debora R. Deakin's sale of the property located at 203 W Jackson St., Cuba, IL 61427, PIN 13-13-19-201-009, to Ronald E. Kruzan for a gross price of $32,000. The Property is described as Lot Number One (1) in O. H. Park’s Addition to the City of Cuba, situated in the City of Cuba, County of Fulton, and State of Illinois. The bankruptcy case is In re: Gregory A. Deakin and Debora R. Deakin, Case No. 22-80176 (Bankr. C.D. Ill.). GZC TRANSPORT: Files for Chapter 11 to Stop Foreclosure ------------------------------------------------------- GZC Transport LLC filed for chapter 11 protection in the Northern District of California. On June 7, 2023, the Debtor filed the instant case to stop the attempted foreclosure of the real property that the Debtor has a ~$4.8 milllion deed of trust (second position) against. The Debtor's sole managing member stands to lose millions if the Property is foreclosed. The Property further has equity in it (more than $20 million) and so allowing it to foreclose by the primary lienholder would 'kill' the Debtor as well as a significant amount of unsecured creditors that are owed money. The related case of the Limited Liability Company holding the Property is titled In Re Diamond Creek Villa, LLC, Case No. 22-5112. The property in foreclosure consists of three parcels of real property (the "Property") which includes the real property commonly known as 15680 Santorini Lane, Morgan Hill, California, 15655 Venice Lane, Morgan Hill, California, and 15665 Nice Lane, Morgan Hill, California; this consists of two apartment buildings and a clubhouse, which include 63 apartment units. GZC Transport estimates between $1 million and $10 million in debt to 1 to 49 creditors. The petition states that funds will be available to unsecured creditors. About GZC Transport GZC Transport LLC is a trucking company in California. GZC Transport LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-50602) on June 7, 2023. In the petition filed by Lin Dee Liu, as managing member, the Debtor reported assets and liabilities between $1 million and $10 million. The Debtor is represented by: Arasto Farsad, Esq. Farsad Law Office, P.C. 1907 Concourse Dr. San Jose, CA 95131 Tel: 408-641-9966 Email: Farsadlaw1@gmail.com HAMMOND ENTERPRISES: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Hammond Enterprises Inc. 559 Garcia Ave, #A Pittsburg, CA 94565 Business Description: Founded in 1989, the Debtor operates a machine shop in Pittsburg, Calif. Chapter 11 Petition Date: June 29, 2023 Court: United States Bankruptcy Court Northern District of California Case No.: 23-40776 Judge: Hon. William J Lafferty Debtor's Counsel: Chris Kuhner, Esq. KORNFIELD, NYBERG, BENDES, KUHNER & LITTLE P.C. 1970 Broadway, Ste 600 Oakland, CA 94612 Tel: 510-763-1000 Fax: 510-273-8669 Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Melissa Kozar 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/GXT6KOY/Hammond_Enterprises_Inc__canbke-23-40776__0001.0.pdf?mcid=tGE4TAMA HIGHLINE AFTERMARKET: S&P Affirms 'B' ICR, Outlook Negative ----------------------------------------------------------- S&P Global Ratings affirmed all of its ratings on U.S.-based Highline Aftermarket Acquisition Parent LLC, including its 'B' issuer credit rating and its 'B' issue-level rating on its senior secured first-lien credit facilities. S&P's '3' recovery rating on the senior secured debt indicates its expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a default. S&P said, "The negative outlook reflects the potential that we will lower our rating on the company over the next 12 months if we are unable to see a pathway for it to reduce its leverage below 7x while generating positive free operating cash flow (FOCF). "Despite underperforming our previous forecast, we anticipate Highline will likely strengthen its cash flow and credit metrics to sufficient levels for the current rating over the next 12 months. "The company's S&P Global Ratings-adjusted leverage of almost 10x as of the end of fiscal year 2022 came in well above our previous expectations, though we note its operating trends are sequentially improving. Highline's revenue and S&P Global Ratings-adjusted EBITDA rose by about 11% and 20%, respectively, in the first quarter of 2023 on healthy demand and an easing cost environment. We expect the company will maintain this momentum for the rest of the year, which will support material year-over-year improvements in its S&P Global Ratings-adjusted EBITDA and credit metrics, including debt to EBITDA of near 7.5x by the end of fiscal year 2023 and 7.0x or below sometime in the first half of 2024. While these improved credit measures could lead us to revise our outlook to stable, the downside risks to our forecast remains elevated, given the potential volatility in base oil costs and Highline's still very high leverage." The input-cost inflation in base oils will likely ease. S&P said, "Although Highline's sales and demand continued to recover in 2022, its profit metrics were weaker than we expected due to escalating input-cost inflation, primarily in base oil prices, which it was only able to partially offset via pricing actions (albeit with a significant lag). The company uses first-in first-out (FIFO) accounting to value its manufactured oil inventory during the first three quarters of its fiscal year; however, it uses the last-in first-out (LIFO) method in its annual audit. While the difference between the company's interim FIFO and audited LIFO financials is typically not material, rapid and frequent base oil cost increases in 2022 caused its S&P Global Ratings-adjusted EBITDA to underperform our forecast by about $20 million. Given the trend in base oil costs thus far in 2023, Highline anticipates a limited difference in profitability between its FIFO and LIFO inventory accounting. "We anticipate Highline will generate positive FOCF in 2023 on an improvement in its working capital position and higher profitability. "Over the past few quarters, the company was able to effectively manage its elevated working capital by selling down its inventory and standardizing its customer payment terms. Consequently, we expect Highline will generate about $15 million of FOCF in 2023 after capital expenditure (capex) of about $30 million. Thereafter, we expect it will further expand its revenue amid easing inflation, which will support greater FOCF generation in 2024, though this will be partially offset by rising interest costs because its favorable interest rate hedges will expire in the first quarter of 2024. "Our ratings on Highline continue to reflect its participation in the automotive aftermarket, which we believe will remain relatively resilient in a recession. "The company continues to report rising volumes, despite slowing consumer spending, supported by the non-discretionary nature of its core products. Highline's performance is further bolstered by its concentration in private-label products (about 40% of revenue), which we anticipate will perform relatively well amid a weaker macroeconomic backdrop. "We assume the short- to medium-term fundamentals in the motor oil business will remain healthy despite the industry's shift toward electric vehicles (EVs). "Our assumption is supported by the rising average age of the U.S. car parc, the expanding volume of vehicle miles traveled, and the continued steady demand for internal combustion engine (ICE) vehicles. Further, Highline's business is fairly diverse, given that it derives about 60% of its sales from its consumables business (including washer fluids, filtration products, and other accessories), which are agnostic to engine type." The negative outlook reflects the potential that S&P will lower its rating over the next 12 months if it is unable to see a pathway for Highline to reduce its S&P Global Ratings-adjusted leverage below 7x and generate positive FOCF. This could occur if it faces: -- Renewed inflationary pressure and supply chain challenges; -- Additional base oil price increases, which it is unable to rapidly offset with price actions; -- A spike in gas prices or the unemployment rate that leads to a reduction in miles driven and lower demand for the company's products; or -- Escalating competition from other players in the space. S&P said, "We could also lower our rating if Highline adopts more aggressive financial policies that include large acquisitions or debt-financed distributions, which would derail our forecast deleveraging path. "We could revise our outlook on Highline to stable if it continues to improve its operating performance such that it sustains S&P Global Ratings-adjusted leverage of below 7x and its positive FOCF momentum." This could occur if: -- Its input-cost inflation and labor and supply chain challenges continue to ease; and -- The company effectively manages its working capital. ESG credit indicators: E-2, S-2, G-3 HMH CONSTRUCTION: Syman LLC Out as Committee Member --------------------------------------------------- Gregory Garvin, Acting U.S. Trustee for Region 18, disclosed in a notice filed with the U.S. Bankruptcy Court for the District of Idaho that as of June 27, these creditors are the remaining members of the official committee of unsecured creditors in the Chapter 11 case of HMH Construction, LLC: 1. Steel National, LLC Lucus Hansen, Owner 4114 Nelson Lane Caldwell, ID 83605 Attorney: Nathan Thomas, Esq. Peak Law 9201 W. State St. Ste 108 Boise, ID 83714 2. P.C.A.S., LLC Joe Leatham 111 E. 39th St. Garden City, ID 83714 Attorney: Henry Rudolph, Esq. Skinner Fawcett, LLP 250 W. Bobwhite Ct. Ste 240 Boise, ID 83701-0708 Syman, LLC was previously identified as member of the creditors committee. Its name no longer appears in the new notice. About HMH Construction HMH Construction, LLC, a company in Meridian, Idaho, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Idaho Case No. 23-00191) on April 20, 2023, with $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. John Odom, managing member, signed the petition. Judge Joseph M. Meier presides over the case. The Debtor tapped D. Blair Clark, Esq., at the Law Offices of D. Blair Clark, PC as bankruptcy counsel and BC Business Services, Inc. as accountant. Gregory Garvin, Acting U.S. Trustee for Region 18, appointed an official committee of unsecured creditors in the Debtor's Chapter 11 case on June 22, 2023. HOMER CITY: MetWest TRB Marks $575,805 Loan at 33% Off ------------------------------------------------------ Metropolitan West Fund's Total Return Bond Fund has marked its $575,805 loan extended to Homer City Generation L.P to market at $386,748 or 67% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Total Return Bond Fund is a participant in a Second Lien Term Loan (LIBOR plus 11%) to Homer City Generation L.P. The loan accrues interest at a rate of 15% per annum. The loan matured last April 5, 2023. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Homer City Generation L.P. is a special purpose company that owns a 1,884 MW coal-fired plant in Homer City, Pa. HOWARD MIDSTREAM: Moody's Rates New Senior Unsecured Notes 'B3' --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Howard Midstream Energy Partners, LLC's (Howard Midstream or HMEP) proposed offering of senior unsecured notes. Howard Midstream's other ratings, including its B1 Corporate Family Rating, and stable rating outlook remain unchanged. Net proceeds from the notes offering will be used to repay a portion of outstanding borrowings under Howard Midstream's revolving credit facility. "The proposed notes issuance is opportunistically repaying existing debt while improving financial flexibility," commented Amol Joshi, Moody's Vice President and Senior Credit Officer. Assignments: Issuer: Howard Midstream Energy Partners, LLC Senior Unsecured Regular Bond/Debenture, Assigned B3 RATINGS RATIONALE Howard Midstream's proposed notes have been rated B3, consistent with the ratings of its existing notes, and two notches below the company's B1 CFR reflecting the priority claim of its large $1 billion secured revolving credit facility. Howard Midstream's B1 CFR reflects its diversified asset base and meaningful contracted revenue, with a mix of natural gas gathering and processing, liquids transportation and processing, and terminalling, storage and rail assets. These assets connect supply sources to attractive demand markets with a diverse customer base including producers, refiners and power generators. The company faces modest commodity price and volume risk affecting earnings in the near-term, even as HMEP benefits from meaningful fee-based revenue and contracts underpinned by minimum contracted payments and acreage dedications providing cash flow and volume visibility. Howard Midstream's debt balances are increasing in 2023 to fund growth capital spending, but project completions including the Port Arthur Terminal expansion will benefit scale and earnings growth should lead to improving leverage metrics over time. The company has a stated long-term net leverage target of below 4x. Howard Midstream is challenged by its limited scale and modest track record in its current form. The company's credit profile is tempered by the inherent risks associated with discretionary yet potentially sizeable excess cash distributions to its private owner, although no equity distributions are expected in 2023 while funding its significant capital spending this year. The company has primary operations in several regions, and also has interests in certain joint ventures, including a 50% operating interest in the Nueva Era pipeline connecting to Monterrey, Mexico. Howard Midstream should maintain adequate liquidity through 2024. Howard Midstream's $1 billion revolving credit facility matures in December 2025. At March 31, HMEP had $13.5 million in cash and $596 million of revolver borrowings. Pro forma for the notes offering, outstanding revolver borrowings should be significantly less. Moody's expects the company to fund its debt service obligations, capital expenditures and potential equity distributions through cash flow from operations and additional revolver borrowings. The revolving credit facility has financial covenants including maximum Total Leverage Ratio of 5x, maximum Senior Secured Leverage Ratio of 3.75x and minimum Interest Coverage Ratio of 2.5x. While these covenants will limit the company's ability to borrow, Moody's expect HMEP to be in compliance with these covenants through 2024. Howard Midstream's stable outlook reflects improving cash flow into 2024 upon project completions including its Port Arthur Terminal expansion project. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Howard Midstream's ratings could be upgraded if the company has meaningful growth in scale and cash flow, its overall counterparty risk profile is supportive, Moody's adjusted leverage proportionately consolidated for its joint ventures remains below 4.5x, distribution coverage is sufficient, and liquidity is at least adequate. Howard Midstream's ratings could be downgraded if Moody's adjusted leverage exceeds 5.5x, its counterparty risk profile deteriorates, or liquidity weakens considerably. Howard Midstream Energy Partners, LLC, headquartered in San Antonio, Texas, is a privately owned midstream energy company with primary operations in Texas, Mexico, the Appalachian Basin and the Gulf Coast. The principal methodology used in this rating was Midstream Energy published in February 2022. HUDSON PACIFIC: S&P Lowers ICR to 'BB+', Outlook Negative --------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Hudson Pacific Properties Inc. (HPP) to 'BB+' from 'BBB-'. The outlook is negative. S&P is also lowering its issue-level rating on the company's preferred stock to 'B+' from 'BB'. S&P affirmed its 'BBB-' issue-level rating on the company's senior unsecured notes with no subsidiary guarantees and assigned a '2' recovery rating (80% rounded estimate). S&P said, "The negative outlook reflects our expectation that HPP's material upcoming lease expirations present a heightened risk given the cyclical and secular office headwinds, particularly for technology-focused tenants. We anticipate leasing activity and operating performance could be pressured over the near term. We expect that S&P Global Ratings-adjusted debt to EBITDA will improve modestly to the high-8x area over the next year. "We expect Hudson Pacific Properties' leverage metrics will remain elevated with only modest improvement expected over the near term. HPP's credit metrics have weakened over the past few years, primarily stemming from higher external funding for acquisitions and development spending, including Sunset Glenoaks Studios and Washington 1000, which are expected to be completed this year. The company's S&P Global Ratings-adjusted debt to EBITDA rose to 9.4x as of first quarter 2023, compared to 7.1x at year-end 2019. While we do expect some modest deleveraging over the near term due to the stabilization of development projects, cash savings from the dividend reduction, other cost saving initiatives, and asset sale proceeds used to pay down debt, we continue to project S&P Global Ratings-adjusted debt to EBITDA will remain in the high-8x area at year-end 2023. As of March 31, 2023, the company had approximately $550 million in projects under construction, with about $70 million of remaining spending to complete its Sunset Glenoaks Studios over the next three quarters. Development funding is likely to rise, and we expect both tenant improvements and leasing commissions to be more generous to incentivize leasing. Our adjusted debt calculation incorporates preferred stock as 100% debt, which is our common treatment for preferred stock owned by REITs." Material upcoming lease expirations for Hudson Pacific Properties Inc. (HPP) present a heightened risk given the cyclical and secular office headwinds, particularly for technology-focused tenants. As of March 31, 2022, Hudson Pacific Properties' office lease expirations represented 11.2% of annualized base rent (ABR) in 2023, and 15.2% in 2024, totaling over 26% over the next two years. S&P said, "We anticipate that re-leasing these spaces could pressure occupancy and rent spreads and pose a challenge over the next few years given the weakening economic backdrop, which we think will lead companies to delay leasing decisions when possible." Moreover, tenants will likely need to be incentivized (through higher concessions including tenant improvements and additional free months of rent) to sign longer-term leases. As of March 31, 2023, the company's same-property office portfolio and same-property studio portfolio were 86.9% and 86.3% occupied, respectively, approximately 300 basis points below the average occupancy of our rated office REITs (approximately 90%). Same-property net operating income (NOI) was up 7.2% on a cash basis, largely due to significant office lease commencements at Harlow and 1918 Eighth. S&P thinks the company's occupancy could exhibit modest additional pressure over the next two years, stemming from move-outs of some large tenants. Similarly, rent spreads decreased 4.9% and 2.8% on a cash basis and GAAP basis, respectively. As of May 2, 2023, the Writers Guild of America (WGA) elected to strike, which affects Hudson Pacific Properties' short-term lease side of the studio business. While the potential duration and impact of the strike on the business is still unknown, the length of previous WGA strikes have ranged from 2-22 weeks. Unlike previous strikes, HPP saw a significant slowdown in production activity leading up to the strike, which impacted first quarter results. As of first quarter 2023, HPP derived approximately 7.6% of its total same-property NOI from its studio portfolio, and S&P Global Ratings anticipates approximately half of the studio NOI will be impaired throughout the strike. S&P said, "The negative outlook reflects our expectation for Hudson Pacific Properties' portfolio to remain challenged due to secular changes and macroeconomic headwinds over the next year, especially given the company's material upcoming lease expirations that could pressure occupancy further. We expect credit protection measures to improve modestly, with S&P Global Ratings-adjusted debt to EBITDA declining to the high 8x area by year-end 2023." S&P could lower its ratings by one notch if: -- The company's operating performance deteriorates beyond S&P's current projections, with total portfolio weighted average leased rate and occupancy materially lower than peers; -- The company is unable to successfully refinance its upcoming debt maturities, heightening capital structure concerns; or -- S&P Global Ratings-adjusted debt to EBITDA fails to decline below 9x or fixed-charge coverage (FCC) deteriorates below 2.1x over the next 12-24 months. S&P could revise the outlook to stable on HPP if: -- The company is able to effectively manage upcoming lease expirations while maintaining occupancy near current levels; -- The company is able to successfully refinance its upcoming debt maturities; and -- Credit protection measures are strengthened such that S&P Global Ratings-adjusted debt to EBITDA declines to and is sustained below 8.5x. ESG credit indicators: E-2, S-2, G-2 S&P said, "ESG factors are an overall neutral consideration in our credit rating analysis of HPP. HPP's increased proportion of green-certified properties--at 90% of its in-service office portfolio as of year-end 2022 (compared to 82% one year prior)--positions it favorably to retain and attract premier technology tenants. The company obtained LEED Gold certification for its most recent developments (Harlow is LEED Gold certified and One Westside is on track to achieve LEED Gold certification this year) and aims to obtain this or higher certifications on all new developments. We view this as a key component of the company's competitive position, as tenants--particularly those that HPP caters to--increasingly demand green buildings to host their operations, in alignment with their corporate strategies." IGN 401 PROPERTIES: Unsecureds Will Get 100% of Claims in Plan -------------------------------------------------------------- IGN 401 Properties, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Ohio a Plan of Reorganization under Subchapter V dated June 26, 2023. Debtor is an Ohio corporation formed in 2013. Mark Bolenski has been the sole shareholder of Debtor since 2016. Debtor is the owner of four multiunit residential rental properties located in Cuyahoga County, Ohio. The properties consist of nine total units. The properties were purchased by Debtor between the years 2014 – 2019. The properties are encumbered by separate mortgages, each of which is serviced by the same entity, Fay Servicing, Inc. Each of the mortgages were obtained between June 2019 and August 2020. The Debtor's financial difficulties arose shortly after the start of the COVID-19 pandemic in March 2020. Since that time, the Debtor has continued to rent and maintain the properties and negotiate with its lenders in an effort to cure the defaults on the loans without success. Each of the properties is now subject to a pending foreclosure in Cuyahoga County. A sheriff sale was scheduled in one of the cases, Cuyahoga County Case No. CV-22-963064, for March 27, 2023, which precipitated the filing of the present case. On June 8, 2023, the Debtor filed a motion seeking authority to sell 3903 Woodway Avenue for the sum of $266,000.00. If the proposed sale is approved by the court, the Debtor anticipates the sale of real estate will close on or about June 30, 2023, netting approximately $83,000 for use in funding the chapter 11 plan. The final Plan payment is expected to be paid on August 15, 2026. This Plan of Reorganization proposes to pay creditors of the Debtor from the liquidation of a parcel of real estate and from future rental income. Non-priority unsecured creditors holding allowed claims will receive a lump sum dividend of 100%, plus accrued post-petition interest immediately upon the effective date of the Plan. This Plan also provides for the payment of unclassified administrative and priority claims in full on the Effective Date of this Plan with respect to any such claim. Class 5 consists of all non-priority unsecured claims, estimated to be $9,391.02. Class 5 is unimpaired by this Plan. The Debtor shall pay Class 5 claimants 100% of their claim on the effective date of the Plan, plus post-petition interest. Class 6 consists of Equity interest holders. Class 6 is unimpaired by this Plan. The holder of an equity interest in the Debtor shall retain their interest upon confirmation of the Plan. On June 8, 2023, the Debtor filed a motion seeking authority to sell 3903 Woodway Avenue for the sum of $266,000.00. The Debtor anticipates the sale of real estate will close on or about June 30, 2023, with the Debtor receiving net sale proceeds of approximately $83,000.00 after payment in full of the mortgage held by RAS and related closing costs. Therefore, the Class 1 claim will be paid in full prior to confirmation. Upon the effective date of the Plan, or upon court approval, Debtor shall make the following payments: * Payment in full of approved administrative expense claims. * Payment to Class 2 and Class 3 claimants for the full amount of the arrearage claims. * Payment in full to Class 5 claimants, plus interest accruing post-petition based upon the Federal Post Judgment Interest Rate, currently 5.23%. A full-text copy of the Plan of Reorganization dated June 26, 2023 is available at https://urlcurt.com/u?l=R5H1mH from PacerMonitor.com at no charge. Attorney for the Debtor: Steven J. Heimberger, Esq. Roderick Linton Belfance, LLP 50 S. Main Street, 10th Floor Akron, OH 44308 Telephone: (330) 434-3000 Facsimile: (330) 434-9220 Email: sheimberger@rlbllp.com About IGN 401 Properties IGN 401 Properties, Inc., is the owner of four multiunit residential rental properties located in Cuyahoga County, Ohio. IGN 401 Properties filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 3-50410) on March 26, 2023, with up to $1 million in both assets and liabilities. Mark Bolenski, president, signed the petition. Judge Alan M. Koschik oversees the case. The Debtor tapped Steven J. Heimberger, Esq., at Roderick Linton Belfance, LLP as counsel and Daniel C. Ferencz, CPA, as accountant. iMEDIA BRANDS: Case Summary & 50 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: iMedia Brands, Inc. 6740 Shady Oak Road Eden Prairie, MN 55344-3433 Business Description: The Company is an interactive, global media company that offers, manages, and markets merchandise, including men's and women's accessories and apparel, under owned and third-party brands through various entertainment, e-commerce, and digital service platforms. Chapter 11 Petition Date: June 28, 2023 Court: United States Bankruptcy Court District of Delaware Twelve affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- iMedia Brands, Inc. (Lead Case) 23-10852 ValueVision Media Acquisitions, Inc. 23-10851 ValueVision Interactive, Inc. 23-10853 Portal Acquisition Company 23-10854 VVI Fulfillment Center, Inc. 23-10855 ValueVision Retail Inc. 23-10856 JWH Acquisition Company 23-10857 PW Acquisition Company, LLC 23-10858 EP Properties, LLC 23-10859 FL Acquisition Company 23-10860 Norwell Television, LLC 23-10861 867 Grand Avenue, LLC 23-10862 Debtors' General Bankruptcy Counsel: Ryan Preston Dahl, Esq. Cristine Pirro Schwarzman, Esq. ROPES & GRAY LLP 1211 Avenue of the Americas New York, New York 10036 Tel: (212) 596-9000 Fax: (212) 596-9090 E-mail: ryan.dahl@ropesgray.com cristine.schwarzman@ropesgray.com - and - Stephen L. Iacovo, Esq. ROPES & GRAY LLP 191 North Wacker Drive, 32nd Floor Chicago, Illinois 60606 Tel: (312) 845-1200 Fax: (212) 845-5500 E-mail: stephen.iacovo@ropesgray.com Debtors' Co-Bankruptcy Counsel: Laura Davis Jones, Esq. Timothy P. Cairns, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 (Courier 19801) Tel: 302-652-4100 Fax: 302-652-4400 Email: ljones@pszjlaw.com tcairns@pszjlaw.com Debtors' Financial Advisor: HURON CONSULTING SERVICES LLC Debtors' Investment Banker: LINCOLN PARTNERS ADVISORS LLC Debtors' Notice, Claims, Solicitation & Balloting Agent: STRETTO, INC. Total Assets as of April 29, 2023: $272,596,462 Total Debts as of April 29, 2023: $373,713,748 The petitions were signed by James Alt as chief transformation officer. Full-text copies of two of the Debtors' petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/7KYOS3I/iMedia_Brands_Inc__debke-23-10852__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/7NYCMJI/ValueVision_Media_Acquisitions__debke-23-10851__0001.0.pdf?mcid=tGE4TAMA 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: List of Debtors' 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. US Bank, NA as Trustee for Unsecured Notes $81,706,000 8.5% Senior Unsecured Notes Due 2026 60 Livingston Avenue St. Paul, MN 55107 Corporate Trust Office 2. AT&T Trade Claim $19,890,069 PO Box 2971 Omaha, NE 68103-2971 Lois Saucedo Tel: 800-847-3595 Email: lmsaucedo@directv.com 3. WRNN-TV Associates LP Trade Claim $10,435,570 800 Westchester Ave Ste S-640 Rye Brook, NY 10573 Wilma Rijos Phone: 914-417-2716 Email: wrijos@rnntv.com 4. Dish Network Corporation Trade Claim $10,207,073 Attn: AR Dept 13155 Collections Center Dr Chicago, IL 60693 Katherine Richter Phone: 303-723-2620 Email: katherine.richter@dish.com 5. Emotion Invest GMBH & Co. Unsecured Notes $6,379,311 KG TheatinerstraBe 7 c/o Arcus Capital AG 80333 Munich, Germany Daniel Bachmeier Email: bachmeier@arcuscapital.de 6. BE Beteiligungen Unsecured Notes $6,128,686 Fonds GMBH & Co. Geschlossene Investmentkommandit Gesellschaft Hohenzollernring 72 50672 Cologne, Germany Roland Eschmann Email: roland.eschmann@be-invest.de 7. AT & T U-Verse Trade Claim $5,557,974 ATTN 0511006 PO Box 8106 Aurora, IL 60507 Karim Babool Email: karim.babool@directv.com 8. Iris Capital Fund II Unsecured Notes $4,167,104 62 Rue Pierre Charron c/o Iris Capital Management 75008 Paris, France Erik De La Riviere Email: erik@iris.vc 9. Clarus Commerce LLC Trade Claim $3,869,012 500 Enterprise Dr 2nd Floor Rocky Hill, CT 06067 J Marco Phone: 860-358-9198 X267 Email: jmarco@claruscommerce.com 10. Sterling Time DBA SLM Trade Claim $3,793,796 Trading GRP 2361 Nostrand Ave Ste 803 Brooklyn, NY 11210 Eli Glieberman Phone: 718-437-8723 Email: eli@sterlingtimellc.com 11. Charter Communications Inc. Trade Claim $3,782,064 ATTN Accounts Payable 165 Knights Way Fond Du Lac, WI 54935 Jacqueline King Phone: 314-2883314 Email: jacqueline.king@charter.com 12. MacKenzie-Childs LLC Trade Claim $3,535,762 Dept 116227 PO Box 5211 Binghamton, NY 13901-5211 Amber Gansert Phone: 315-364-6105 Email: agansert@auroraholdings.com 13. Sterling Apparel Ltd Trade Claim $3,292,566 18-19th Floor, WIN Plaza 9 Sheung Hei Street San Po Kong, Hong Kong Winnie Wong Phone: 852-3588-6285 Email: winnie.wong@sphk.com.hk 14. Comcast Trade Claim $3,278,052 P.O. Box 1577 Newark, NJ 07101-1577 Tel: (888) 633-4266 15. FamJams Trading LLC Trade Claim $3,258,842 2361 Nostrand Ave Ste 803 Brooklyn, NY 11210 Michael Friedman Phone: 718-663-3960 Email: mfriedman@famjamstrading.com 16. Growth Capital Unsecured Notes $2,900,000 Partners, LLC 250 E. 200 S., Floor 16 Salt Lake City, Utah 84111 Scott Brown Phone: 312-297-7068 Email: notice@growthcapitalpartnersllc.com 17. Altice USA (Cablevision Trade Claim $2,855,668 Systems Corp) Attn Gina Squillante 1111 Stewart Ave Bethpage, NY 11714 Phone: 929-418-4235 Email: gina.squillante@alticeusa.com 18. UPS Trade Claim $2,410,144 P.O. Box 34486 Louisville, KY 40232 19. Fiskars Living US LLC Trade Claim $2,115,555 32501 Collection Center Drive Chicago, IL 60693-0325 Kimberly Gunderson Phone: 732-835-4406 Email: kimberly.gunderson@fiskars.com 20. BSMF LLC Unsecured Notes $1,665,000 7 Harrison Street, 2N New York, NY 10013 Michael Frishberg Email: frish1948@gmail.com 21. Isomers Labs Trade Claim $1,603,070 105 Tycos Drive Toronto Ontario M6B 1W3, Canada Manuela Marcheggiani Phone: (416) 787-2465 Email: manuela@isomers.ca 22. C&B Ipco LLC Trade Claim $1,538,029 5 Revere Dr, Ste 206 Northbrook, IL 60062 Jason Devoss Phone: 973-790 1600 Email: jdevoss@hilcoglobal.com 23. Grant Thornton LLP Professional $1,531,279 33562 Treasury Center Services Claim Chicago, IL 60694-3500 Anthony Bonaguro Phone: 312 602 8670 Email: anthony.bonaguro@us.gt.com 24. Faegre Drinker Biddle Professional $1,501,689 & Reath LLP Services Claim NW 6139 PO Box 1450 Minneapolis, MN 55485-6139 Janet L. Papproth Phone: 612-766-7000 Email: janet.papproth@faegredrinker.com 25. Investstrong LLC Trade Claim $1,298,429 3940 Laurel Canyon Blvd Suite 100 Studio City, CA 91604 Mark Falthzik Phone: 978-390-5597 Email: mfalthzik@gmail.com 26. Exorigos Ltd Trade Claim $1,193,492 6 Beit Hillel, 3rd Foor Tel Aviv, Israel 6701706 Brandin-Shuker Email: ina.s@exorigos.com 27. G-III Apparel Group Trade Claim $1,175,555 231 West 39th Street New York, NY 10018 Julien Trouchaud Phone: 852-2751-8682 Email: julien@giii.com.cn 28. Aniview Inc. Trade Claim $1,153,903 79 Madison Ave New York, NY Anna Phone: 646 883-3377 Email: anna@aniview.com 29. GEO Management Corp Trade Claim $1,061,262 DBA Siborg LLC 7310 Smoke Ranch Rd Ste 1 Las Vegas, NV 89128 Donald Troutman Phone: 702-228-8950 Email: donald@geomgmt.com 30. Service Electric Trade Claim $1,045,045 Cable TV ATTN Accounts Payable 2200 Avenue A Bethlehem, PA 18017 31. Ocean Communications Inc. Trade Claim $1,042,100 477 S Rosemary Ave #306 West Palm Beach, FL 33401 Amanda Miller Phone: (561) 684-5657 Email: amiller@olympusat.com 32. IEnjoy LLC Trade Claim $1,017,290 2021 Sunnydale Blvd Suite 130 Clearwater FL 33765 Danette Rose Phone: 727-216-6754 Email: danette@ienjoyhome.com 33. VXI Global Solutions LLC Trade Claim $1,005,335 220 W 1st St Ste 300 Los Angeles CA 90012 Rexy Pulanco Phone: (632) 899-2200 Ext. 34792 Email: rexy.pulanco@vxi.com 34. Benjamin Schrag Unsecured Notes $1,000,000 Address on File Email: bschrag@gmail.com 35. Milor Group Inc. Trade Claim $991,143 Citizens Bank c/o Brian Sweeney 2 East Baltimore Ave Media PA 19063 Loran Klein Phone: 39-0286960232 Email: accounting.department@milor.it 36. Donna Salyers Trade Claim $982,429 Fabulous-Furs 25 W Robbins St Covington KY 41011 Kathryn Wallace Phone: 859-392-3501 Email: kwallace@fabulousfurs.com 37. Basic Research Trade Claim $952,583 5742 Harold Gatty Dr Salt Lake City UT 84116 Amy Henderson Phone: 801-517-7040 Email: amy.henderson@basicresearch.org 38. Chromadex Inc. Trade Claim $926,920 PO Box 8003 Carol Stream IL 60197-8003 James Lee Phone: 949-419-0288 X109 Email: jamesl@chromadex.com 39. RCN Telecom Services Inc. Trade Claim $876,375 650 College Rd E Princeton, NJ 08540 Ashey Holanda Email: ashley.holanda@rcn.net 40. Wealthy Brand Intl Ltd Trade Claim $829,969 B2-G, 1/F Hang Fung Ind Bldg PH2 Hunghom Kathy Ng Phone: 1-85262100080 Email: kathy.hkcn@gmail.com 41. Oracle America Inc. Trade Claim $759,505 PO Box 203448 Dallas, TX 75320-3448 42. Presslink Limited Trade Claim $731,523 Avenida Da Praia Grande, Nos 367-371 Kengou Bldg, EM Macao Raysa Chan Phone: +1-501-958-7060 Email: raysachn@pvumgroup.com 43. Mediacom Trade Claim $772,314 1 Mediacom Way Mediacom Park, NY 10918 Kim Stacklum Phone: 845-443-2714 Email: kstacklum@mediacomcc.com 44. Cosmetic Changes LLC Trade Claim $663,493 PO Box 172 Nahant, MA 01908 Sheldon Sevinor Phone: 617-592-3632 Email: ss@drsevinor.com 45. Inspire Jewelry Conn Trade Claim $642,876 DBA IJC 5000 Centre Green Way Ste 500 Cary, NC 27513 Dennis Reed Phone: 919-229-4332 X106 Email: dreed@idc-us.com 46. Vidazoo Ltd Trade Claim $627,033 Yigal Alon St 114 Tel Aviv-Yafo, Israel Daniel Phone: 00972549948535 Email: daniel@vidazoo.com 47. Atlantic Broadband Trade Claim $625,588 1 Battery March Park Quincy, MA 02169 Pat Bratton Phone: 888-536-9600 48. Taboola Inc. Trade Claim $619,609 16 Madison SQ W New York, NY 10010 49. Wells Fargo Trade Claim $617,558 Equipment Finance PO Box 3072 Cedar Rapids, IA 52406-3072 Michael Mcaulay Phone: 855-249-9681 Email: michal.mcaulay@oracle.com 50. Outbrain Inc. Trade Claim $604,754 111 West 19th Street 3rd Floor New York NY 10011 Rajaana Jones Email: rjones@outbrain.com INSTANT BRANDS: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Instant Brands Acquisition Holdings, Inc. and its affiliates. The committee members are: 1. Midea Electric Trading (Singapore) Co Pte Ltd c/o Brian Mitteldorf, U.S. Agent 4340 Fulton Ave., Third Floor Sherman Oaks, CA 91423 Phone: 818-523-6660 Email: blm@cabcollects.com 2. Pension Benefit Guaranty Corporation Attn: Cynthia Wong 445 12th St. S.W. Washington, D.C. 20024-2101 Phone: 202-229-3033 Email: wong.cynthia@pbgc.gov 3. United Steelworkers International Union Attn: Nathan Kilbert, Assistant General Counsel 60 Boulevard of the Allies, Room 807 Pittsburgh, PA 15222 Phone: 412-562-2548 Email: nkilbert@usw.org 4. Topim Intelligent Manufacturing Attn: Lingan Liu Topim Intelligent Manufacturing Industrial Park Baima Avenue, ShuangQuing District Shao Yang City Hunan Province, China Phone: 86-1-560-283-3115 Email: zhouyuanqing@topim.net 5. Criteo Corp. Petrie Terblanche, Senior Vice President, Finance 32 Rue Blanche Paris, France Phone: p.terblanche@criteo.com Email: r.damon@criteo.com 6. Ravago Americas, LLC dba Muehlstein Attn: Martin Olson 10 Westport Road Wilton, CT 06897 Phone: 203-722-6223 Email: Martin.olson@ravago.com 7. Brandon Thomas 11716 48th Street East Edgewood, WA 98372 Phone: (512) 924-2825 Email: brandonbthomas@gmail.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Instant Brands Instant Brands designs, manufactures and markets a global portfolio of innovative and iconic consumer lifestyle brands: Instant, Pyrex, Corelle, Corningware, Snapware, Chicago Cutlery, ZOID and Visions. Instant Brands Acquisition Holdings Inc. and its affiliates, including Instant Brands LLC, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90716) on June 12, 2023. Judge David R. Jones oversees the case. In addition, the Company commenced ancillary proceedings in Canada under the Companies' Creditors Arrangement Act (CCAA) seeking recognition of the U.S. Chapter 11 proceedings in Canada. In the Chapter 11 petition signed by Adam Hollerbach, chief restructuring officer, Instant Brands disclosed up to $1 billion in both assets and liabilities. In the Chapter 11 cases, Davis Polk & Wardwell LLP is serving as Instant Brands' legal counsel and AlixPartners is serving as restructuring advisor. Guggenheim Securities LLC is the investment banker. Haynes and Boone, LLP, is the Debtors' Texas counsel and Stikeman Elliott LLP is the Canadian counsel. Epiq Corporate Restructuring, LLC, is the claims, noticing, agent, solicitation and administrative advisor. INTEGRATED NANO-TECHNOLOGIES: Sale of Assets to Enplas Denied ------------------------------------------------------------- Judge Paul R. Warren of the U.S. Bankruptcy Court for the Western District of New York entered an Amended Order denying without prejudice Integrated Nano-Technologies, Inc.'s sale of its assets free and clear of liens to Enplas America, Inc. Based upon the record and the representations made at the status conference, the Court determines that the auction sale mechanism did not comply with the letter of or the spirit of the Bid Procedures Order. Specifically, the required $10 million minimum bid was not disclosed by the Debtor, requested by the Debtor, or incorporated into the Order approving bid procedures. However, it appears that the Debtor was fully aware that the notice of sale to be circulated by Compass Advisory Partners, LLC, would contain that term. The failure of the Debtor to fully disclose the pre-ordained auctions terms appears to have been a calculated ploy, making the overall fairness of the auction questionable. The United States Trustee's objection to approval of the sale is sustained. The Debtor's request for entry of the proposed order at ECF No. 144, approving the sale of its assets free and clear of liens to Enplas is denied without prejudice to the Debtor bringing a new motion seeking relief under Section 363. Under Rules 9023 and 9024 FRBP and Rule 60(a) FRCP, narrow relief requested in the Motion to Reconsider filed by Enplas is granted for the reasons stated on the record at a hearing held on May 30, 2023. The Amended Order supersedes the Court's Order Denying Motion for Sale of Property Free and Clear of Liens Under Section 363(f) docketed at ECF No. 175. About Integrated Nano-Technologies Integrated Nano-Technologies, Inc. is a company in Henrietta, N.Y., which offers scientific research and development services. Integrated Nano-Technologies filed its voluntary petition for Chapter 11 protection (Bankr. W.D.N.Y. Case No. 22-20611) on Dec. 22, 2022, with $100,000 to $500,000 in assets and $10 million to $50 million in liabilities. Donald H. Noble, chief financial officer, signed the petition. Judge Warren oversees the case. Jeffrey A. Dove, Esq., at Barclay Damon, LLP and Compass Advisory Partners, LLC serve as the Debtor's legal counsel and investment banker, respectively. IYS VENTURES: Wins Cash Collateral Access Thru July 13 ------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, granted IYS Ventures, LLC authority to use cash collateral, on an interim basis through July 13, 2023. The Court has set a hearing for July 12 to further consider the Debtor's request. The Debtor seeks cash collateral access to fund the payment of rent and gasoline and the various management companies which pay the necessary expenses associated with the operation of its business. These creditors may assert a security interest in and to the Collateral: Byzfunder NY LLC, Fox Capital Group, Inc., Itria Ventures, Samson Funding, and The Huntington National Bank. Investigation into the priority and security of the Lien Claimants is ongoing, however, the following represents the approximate claim and basis for the secured liens: a. Byzfunder may assert a security interest in the Collateral pursuant to a Revenue Purchase Agreement and Security Agreement dated October 25, 2022. Byzfunder's scheduled claim is in the amount of $153,986. b. Fox may assert a security interest in the Collateral pursuant to a Future Receivables Sale and Purchase Agreement dated November 23, 2022. Fox's scheduled claim is in the amount of $444,005. c. Itria asserts a security interest in the Collateral pursuant to an agreement. Itria's scheduled claim is in the amount of $1,492,109, which is disputed in part by the Debtor. d. Samson may assert a security interest in the Collateral by virtue of multiple Revenue Purchase Agreement and Security Agreement dated, inter alia, April 8, 2022, November 21, 2022, December 2, 2022, December 23, 2022, and March 2, 2023. Samson's scheduled claim is in the amount of $4,091,514. e. Huntington asserts a security interest in the Collateral by virtue of an Order on Motion for Prejudgment Attachment dated March 16, 2023, in the case more commonly known as The Huntington National Bank v. IYS Ventures, LLC, et al., Case No. 23- CV-01368 pending in the United States District Court for the Northern District of Illinois. As and for adequate protection for the interests of the Lien Claimants in the Collateral, the Debtor proposes that: a. The Lien Claimants will be granted valid and perfected replacement liens in and to post-petition cash collateral and all post-petition property of the Debtor of the same type or kind substantially equivalent to the pre-petition Collateral (excepting avoidance actions of the estate) to the same extent and with the same priority as held pre-petition; and b. Insurance will be maintained on the Collateral. A copy of the motion is available at https://urlcurt.com/u?l=Y7n7ul from PacerMonitor.com. About IYS Ventures IYS Ventures LLC leases, owns and operates gas stations located in Illinois, Minnesota, Michigan, Indiana, Ohio, South Dakota, Virginia, Wisconsin, and Louisiana. The Debtor filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-06782) on May 23, 2023. In the petition filed by Muwafak Rizek, as manager and member, the Debtor reported assets between $1 million and $10 million and liabilities between $10 million and $50 million. Honorable Bankruptcy Judge David D. Cleary oversees the case. The Debtor is represented by Gregory K Stern, Esq. at Gregory K. Stern, P.C., represents the Debtor as legal counsel. JB MONTGOMERY: Proposed Sale of Real Property in Lawnside Approved ------------------------------------------------------------------ Judge Andrew B. Altenburg, Jr., of the U.S. Bankruptcy Court for the District of New Jersey authorized JB Montgomery Township II, LLC, to sell the real property commonly known as 156 Warwick Road, in Lawnside, New Jersey. The sale is on the terms and conditions of the Contract of Sale. The following professional(s) may be paid at closing for listing and marketing the Property and negotiating the Contract of Sale: Edward Delley, Realtor, in the amount of $55,000 of which $22,000 will be paid by Nicholas Schram and $33,000 will be paid by the Buyer. Other closing fees payable by the Debtor may be satisfied from the proceeds of sale and adjustments to the price as provided for in the contract of sale may be made at closing. Other costs and adjustments to be paid at closing include the United States Trustee Quarterly fees in accordance with 28 USC 1930, in the amount of $9,314. The closing is to take place no later than June 30, 2023. About JB Montgomery Township II JB Montgomery Township II, LLC sought Chapter 11 protection (Bankr. D.N.J. Case No. 21-19426) on Dec. 7, 2021. The Debtor estimated assets and liabilities in the range of $500,001 to $1 million. The Debtor tapped Barry S. Miller, Esq. as cousnel. The Petition was signed by Joseph Will Birch, Managing Member. JSG II INC: Moody's Upgrades CFR to B3 & Secured Bank Loans to B2 ----------------------------------------------------------------- Moody's Investors Service upgraded JSG II, Inc.'s (dba "Justrite") corporate family rating to B3 from Caa1. Concurrently, Moody's upgraded the probability of default rating to B3-PD from Caa1-PD and the senior secured bank credit facilities to B2 from B3. The outlook is stable. The upgrade reflects augmented credit metrics resulting from a rebound in operating performance since the pandemic-induced lows of 2020 and improved liquidity. Moody's expects further, yet more modest, improvement in operating performance over the next several quarters, driven by sales growth and cost reductions. Liquidity remains adequate but is helped by the renewal of the revolving credit facility and extension of unsecured debt. Upgrades: Issuer: JSG II, Inc. Corporate Family Rating, Upgraded to B3 from Caa1 Probability of Default Rating, Upgraded to B3-PD from Caa1-PD Backed Senior Secured Bank Credit Facility, Upgraded to B2 from B3 Outlook Actions: Issuer: JSG II, Inc. Outlook, Remains Stable RATINGS RATIONALE The B3 CFR reflects Justrite's long operating history as a manufacturer of a broad range of essential safety products. Justrite's brands are well recognized and benefit from global safety standards specific to different countries that drive demand. The company also benefits from a diverse customer and vendor base with relatively reliable demand for its products. These products have a limited lifecycle (three to seven years on average) and are viewed as non-discretionary to maintain safety standards and avoid regulatory penalties. Justrite's ratings will remain limited by its relatively modest scale and limited aftermarket revenue. The company generated less than $600 million of revenue in 2022, which is well below many similarly rated manufacturing companies. The ratings are also constrained by Justrite's limited revenue visibility due to the book-and-ship nature of its business. Debt/EBITDA was high at 6.7 times as of April 2, 2023, down from 9.5 times at the end of 2021. Justrite's liquidity is adequate though improved. Moody's expects the company will generate positive free cash flow despite a rising interest rate environment due to ongoing sales growth and expense reductions. The company also recently extended its revolving credit facility and extended the maturity of unsecured subsidiary debt by consolidating it into the second lien term loan (unrated). The stable outlook reflects Moody's view that revenue will continue to grow, albeit at a slower pace, as pent-up demand from the pandemic abates. As a result, Moody's expects debt/EBITDA to decline to below 6.0 times over the next 12-18 months. Moody's also expects the company will maintain adequate liquidity supported by positive free cash flow with periodic draws on the revolver. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company sustains debt/EBITDA below 5.0 times and interest coverage (EBITDA less Capex/Interest) of at least 1.5 times while continuing to generate positive free cash flow. Alternatively, the ratings could be downgraded if liquidity deteriorates and the company increases its reliance on the revolving credit facility. Ratings could also be downgraded if debt/EBITDA is sustained above 7.0 times or if interest coverage falls below 1.0 time. Headquartered in Deerfield, IL, JSG II, Inc. (dba Justrite) is a leading global manufacturer and supplier of non-personal protective equipment (Non-PPE) safety solutions for industrial and compliance-oriented end markets. Justrite is private and does not publicly disclose its financials. The company has been majority owned by Audax Private Equity since 2015. The company generated sales of $559 million in 2022. The principal methodology used in these ratings was Manufacturing published in September 2021. KMS SHUTTLE: Gets OK to Hire Lentz Law PC as Counsel ---------------------------------------------------- KMS Shuttle Service, LLC received approval from the U.S. Bankruptcy Court for the District of Nebraska to employ Lentz Law, PC, LLO. The Debtor requires legal counsel to: a. give advice with respect to the powers and duties of the Debtor in the reorganization of its business; b. meet with and negotiate with creditors; c. take any necessary actions to set aside preferential transfers, which may qualify to be avoided or set aside under the Bankruptcy Code; d. take such other necessary and required actions which are deemed by such counsel as ordinary and necessary in the course of the Debtor's Chapter 11 proceedings; e. provide representation in connection with any adversary proceedings filed in court by creditors or adversary proceedings required to be filed for the protection and preservation of property of the estate; f. prepare legal papers; and g. perform other legal services. The firm will be paid based upon its normal and usual hourly billing rates and will be reimbursed for out-of-pocket expenses incurred. The retainer fee is $10,000. John Lentz, Esq., a partner at Lentz Law, PC, 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 through: John A. Lentz, Esq. Lentz Law, PC, LLO 650 J St Ste 215B Lincoln, NE 68508 Phone: (402) 421-9676 Email: john@johnlentz.com About KMS Shuttle Service KMS Shuttle Service, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Neb. Case No. 23-40439) on May 10, 2023, with $500,001 to $1 million in both assets and liabilities. James Overcash, Esq., has been appointed as Subchapter V trustee. Judge Thomas L. Saladino oversees the case. The Debtor is represented by John A. Lentz, Esq., at Lentz Law, PC, LLO. LAKELAND HOLDINGS: MetWest FRI Marks $634,811 Loan at 34% Off ------------------------------------------------------------- Metropolitan West Fund's Floating Rate Income Fund has marked its $634,811 loan extended to Lakeland Holdings LLC to market at $422,149 or 66% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Floating Rate Income Fund is a participant in a First Lien Term Loan (LIBOR plus 8%) to Lakeland Holdings LLC. The loan accrues interest at a rate of 7.17% per annum. The loan matures on September 25, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Lakeland Tours LLC provides educational student travel programs. The Company offers history, science, discoveries, onstage, sports, and career-focused travel opportunities. LAURA'S ORIGINAL: Unsecureds to Get 40 Cents on Dollar in Plan -------------------------------------------------------------- Laura's Original Boston Brownies, Inc., submitted an Amended Plan of Reorganization dated June 26, 2023. After filing for Chapter 11 bankruptcy, the Debtor moved immediately for authority to sell its manufacturing equipment, which was approved by the Bankruptcy Court on March 30, 2023. The auction sale was completed on April 5, 2023, with the approval of the Court sales proceeds have been distributed to creditors with liens on the equipment sold. Due to this sale and combined with a drastic reduction in overhead based upon the termination of its lease obligations for the manufacturing facility (and the reduction of all associated labor costs), Debtor will be able to repay its secured creditor in full and pay 40% of the amount owing to unsecured creditors within five years of confirmation of this Plan. The Plan Proponent's financial projections show that the Debtor will have projected disposable income of $4,329,836. This Plan of Reorganization proposes to pay creditors of the Debtor from the receipt of Earned Income Tax Credits, the sale of equipment, and income from operations. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 40 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 2a consists of the Secured Claims of Comerica Bank. Comerica's Class 2a secured claims will be paid through an Effective Date payment and 10 quarterly payments. Comerica will receive on or before the Effective Date payments of $968,0681,013,951 on its LOC Note and Installment Note, inclusive of the equipment paydown received pre-confirmation, and an Effective Date payment of an additional $550,000. The Effective Date payment will first be used to pay all reasonable pre- and post-petition interest, fees, and costs due and owing under Section 506(b) of the Bankruptcy Code. The remainder of the Effective Date payment will be paid on a prorata basis on the LOC and Installment Notes with 66.15% being paid on the LOC Note principal and 33.85% being paid on the Installment Note principal. Thereafter Comerica will receive 10 quarterly payments from Debtor's income and operations sufficient to principal owed on the LOC and Installment Notes in full by April 1, 2026. During the plan term, Comerica will also receive quarterly interest payments on its LOC Note at rate of 11.75% per annum and quarterly interest payments on its Installment Note at a rate of 7.2% per annum. Class 3a consists of non-priority unsecured creditors. The holders of allowed, non-priority, general, unsecured claims in Class 3a will receive their pro rata share of ten quarterly payments, after payment of senior classes, in a total amount of $920,708.87, beginning during the 2d quarter of 2026. Certain claims belonging to non-priority unsecured creditors are disputed. To the extent a non-priority, unsecured claim is disputed, the claim will only be paid upon entry of a final non appealable order allowing the claim. Debtor will contribute all of its projected disposable income and cash on hand, net of an appropriate operating capital reserve, for five years following the date that the first payment is due under the Plan—more than $4,283,219 in 20 quarterly payments. On the Effective Date, Debtor will (1) pay certain of Debtor's administrative and priority claims in full; (2) fund an administrative capital reserve; and (3) make a substantial payment to Debtor's secured creditor Comerica. Subsequent payments under the plan will be made on the first day of each fiscal quarter beginning January 1, 2024 and ending October 1, 2028 in the amounts set forth in the projections. A full-text copy of the Amended Plan dated June 26, 2023 is available at https://urlcurt.com/u?l=pavKqL from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Paul J. Leeds, Esq. Meredith King, Esq. Franklin Soto Leeds, LLP 444 West C Street, Suite 300 San Diego, CA 92101 Telephone: (619) 872-2520 Facsimile: (619) 566-0221 Email: pleeds@fsl.law mking@fsl.law About Laura's Original Boston Brownies Laura's Original Boston Brownies, Inc. offers low sugar, high fiber, and clean label products. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Calif. Case No. 23-00656) on March 13, 2023. In the petition signed by Laura Katleman, chief executive officer, the Debtor disclosed $6,651,309 in assets and $6,498,970 in liabilities. Judge Christopher B. Latham oversees the case. Paul Leeds, Esq., and Meredith King, Esq., at Franklin Soto Leeds LLP, is the Debtor's legal counsel. LIGHTSTONE HOLDCO: Moody's Rates New $34MM Revolver Loan 'B2' ------------------------------------------------------------- Moody's Investors Service affirmed Lightstone Holdco LLC's B2 rating on its senior secured credit facilities consisting of a $1.55 billion term loan B due 2027, $88 million term loan C due 2027, and $69 million revolving credit facility due 2023. Moody's also assigned a B2 rating to Lightstone's new $34 million revolving credit facility extension due 2026 that will be effective when the $69 million revolving credit facility matures in July 2023. The rating outlook has been revised to stable from negative. Assignments: Issuer: Lightstone Holdco LLC Senior Secured Bank Credit Facility, Assigned B2 Affirmations: Issuer: Lightstone Holdco LLC Senior Secured Bank Credit Facility, Affirmed B2 Outlook Actions: Issuer: Lightstone Holdco LLC Outlook, Changed to Stable from Negative RATINGS RATIONALE The rating action reflects the material progress made by the project to reduce leverage and address refinancing, operational, and environmental issues. In 2022, the project reduced its total term loan B and C debt by around $194 million, which is almost 2.5 times the amount of cumulative debt reduction achieved during the prior three years. Key factors supporting Lightstone's recent debt reduction was the combination of new, stricter covenants and stronger financial performance. As part of the extension of its term loans to January 2027 from January 2024, Lightstone agreed to more rigorous debt terms including annual limitations on deemed tax distributions. Furthermore, a strong energy market in the latter half of 2021 and all of 2022 resulted in improved financial performance leading to Project CFO to Debt averaging around 12% and debt service coverage ratio (DSCR) averaging almost 2.70 from 2021 to 2022 compared to an average of less than 5% Project CFO to Debt and 1.60x DSCR for 2019 and 2020. Additionally, the project completed in May 2023 a partial extension of its revolving credit facility to 2026 from 2023. On operational and environmental issues, the coal fired Gavin plant completed repairs on its limestone unit and completed the conversion to a bottom ash system to address coal ash disposal restrictions. The B2 rating is further supported by some asset diversity, strong operational performance by its combined cycle gas fired plants in most years, energy hedges for 2023 and 2024 that provide partial cash flow stability, and some project finance features. Key project finance protections include a six-month debt service reserve account (DSRA), the pledge of assets, and a cash flow waterfall. That said, the rating also considers continued high leverage given debt well above its original $1.3 billion target debt balance by the end of 2022, exposure to volatile merchant energy market, declining capacity revenue through May 2025, heightened environmental risk including carbon transition risk since approximately half of its generation is coal fired, and a meaningful deemed tax distribution provision that allows capped equity distributions ahead of the excess cash sweep. The ongoing environmental risks faced by the nearly 50-year-old Gavin plant was further demonstrated in 2023 when the US Environmental Protection Agency (EPA) proposed stricter rules on wastewater, mercury and air toxics (MATS), and greenhouse gas (GHG) emissions in addition to finalizing stricter NOx emissions limits. Moody's incorporate the assumption that the wastewater, MATS, and NOx rules will likely require capital spending or purchases of allowances over time. EPA's proposed GHG emissions rule, if adopted in its current form, would require coal plants to phase out by 2035 or install carbon sequestration technology by 2030. RATING OUTLOOK The stable outlook reflects Moody's expectations for adequate overall operations and continued debt reduction while maintaining Project CFO to Debt averaging at least 10% and DSCR averaging 1.80x. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade Lightstone's rating could be upgraded if the project is able to reduce debt substantial greater than Moody's current expectations while maintaining strong financial metrics with Project CFO to Debt in excess of 13%, DSCR above 2.75x and Debt to EBITDA of less than 3.0x on a sustained basis. Factors that could lead to a downgrade The project's rating could be downgraded if it does not continue to significantly reduce debt over time, if it experiences major operating issues on its key assets or financial metrics are lower than expected leading to Project CFO to Debt less than 8%, DSCR less than 1.50x or Debt to EBITDA exceeding 5.0x on a sustained basis. Corporate Profile Lightstone owns a 5,310 MW portfolio of power generation plants consisting of the 2,721 MW Gavin coal-fired plant in Ohio, the 1,211 MW Lawrenceburg combined-cycle gas fired plant in Indiana; the 894 MW Waterford combined-cycle gas fired plant in Ohio; and the 484 MW Darby simple cycle gas fired plant in Ohio. All four facilities sell power and capacity into the PJM market. The borrower is indirectly owned by affiliates of Blackstone Group LP (50%) (Blackstone) and ArcLight Capital Partners LLC (50%) (ArcLight). The principal methodology used in these ratings was Power Generation Projects published in June 2023. LOGMEIN INC: MetWest OHIC Marks $6,982 Loan at 42% Off ------------------------------------------------------ Metropolitan West Fund's Opportunistic High Income Credit Fund has marked its $6,982 loan extended to LogMeIn, Inc to market at $4,024 or 58% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Opportunistic High Income Credit Fund is a participant in a First Lien Term Loan B (LIBOR plus 4.75%) to LogMeIn, Inc. The loan accrues interest at a rate of 9.38% per annum. The loan matures on August 31, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. LogMeIn Inc is a flexible-work provider of software as a service and cloud-based remote work tools for collaboration and IT. MAGENTA BUYER: MetWest OHIC Marks $12,838 Loan at 17% Off --------------------------------------------------------- Metropolitan West Fund's Opportunistic High Income Credit Fund has marked its $12,838 loan extended to Magenta Buyer LLC to market at $10,632 or 83% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Opportunistic High Income Credit Fund is a participant in a First Lien Term Loan (LIBOR plus 4.75%) to Magenta Buyer LLC. The loan accrues interest at a rate of 7.17% per annum. The loan matures on August 31, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Magenta Buyer LLC is a provider of cyber security software that derives revenue from the sale of security products, subscriptions, SaaS, support and maintenance, and professional services. MALINKI SLONIK: Taps Joel M. Aresty as Legal Counsel ---------------------------------------------------- Malinki Slonik, LLC (DE) seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Joel M. Aresty, P.A. as counsel. The Debtor requires legal counsel to: a. give advice with respect to the powers and duties of the Debtor in 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 all matters pending before the court; e. represent the Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan. The firm will be paid at $440 per hour, plus costs against a retainer of $11,000. Joel Aresty, Esq., a partner at Joel M. Aresty, P.A., 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. The firm can be reached at: Joel M. Aresty, Esq. Joel M. Aresty, P.A. 309 1 St Ave S Tierra Verded FL 33715 Tel: (305) 904-1903 Fax: (800) 559-1870 Email: Aresty@Mac.com About Malinki Slonik, LLC (DE) Malinki Slonik, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-13235) on April 27, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Laurel M. Isicoff oversees the case. Joel M. Aresty, PA is the Debtor's legal counsel. MALLINCKRODT PLC: Readies Retention Bonuses for 2nd Ch. 11 Filing ----------------------------------------------------------------- Morningstar reports that generic-drug maker Mallinckrodt (MNK) on Wednesday, June 21, 2023, said it set aside more than $3.4 million in executive retention bonuses in the event of a possible filing for yet another bankruptcy. The move is the latest sign of difficulty for the company, which has struggled to pay its bills in the wake of a $1.7 billion opioid settlement following allegations it helped propel the nation's opioid crisis. The disclosure, made in a filing, comes after the company struck a deal to delay a $200 million opioid settlement payment originally due Friday, June 16, 2023, as it continues evaluating options to restructure its balance sheet. On June 15, the company signed a deal to extend the deadline to June 23, and then later signed another agreement to extend the deadline to June 30. About Mallinckrodt PLC Mallinckrodt -- http://www.mallinckrodt.com/-- is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins, LLP and Richards, Layton & Finger, P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray, LLP as litigation counsel; Torys, LLP as CCAA counsel; Guggenheim Securities, LLC as investment banker; and AlixPartners, LLP as restructuring advisor. Prime Clerk, LLC is the claims agent. The official committee of unsecured creditors retained Cooley, LLP, as its legal counsel; Robinson & Cole, LLP as co-counsel; and Dundon Advisers, LLC as financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid-related claimants. The OCC tapped Akin Gump Strauss Hauer & Feld, LLP as its lead counsel; Cole Schotz as Delaware co-counsel; Province, Inc. as financial advisor; and Jefferies, LLC as investment banker. * * * Mallinckrodt plc on June 16, 2022, announced that it has successfully completed its reorganization process, emerged from Chapter 11 and completed the Irish Examinership proceedings. Implementing the Plan and the Scheme strengthens the Company's balance sheet, reduces its total debt by approximately $1.3 billion and enables it to move forward with more than $250 million in cash and cash equivalents on hand. The Plan and Scheme include key legal settlements that resolve opioid claims brought against the Company and litigation matters involving Acthar Gel, among other claims, and provides for significant equitization of the Company's guaranteed unsecured notes. MATRIX HOLDINGS: S&P Places 'B-' ICR on CreditWatch Negative ------------------------------------------------------------ S&P Global Ratings placed all of its ratings on U.S. telecommunications analytical solutions provider Matrix Holdings Inc.'s (doing business as Mobileum), including its 'B-' issuer credit rating, on CreditWatch with negative implications. S&P expects to resolve the CreditWatch placement in the coming months. The CreditWatch placement reflects the heightened risk around the company's current financial situation. In addition, given Mobileum's elevated leverage and S&P's expectation it will generate negative free operating cash flow this year, S&P believes that any operational missteps could lead to further deterioration in its credit metrics. S&P expects to resolve the CreditWatch placement over the coming months after we review Mobileum's financial position and it transitions to a new permanent CFO. ESG credit indicators: E-2, S-2, G-3 MAVENIR SYSTEMS: MetWest FRI Marks $643,500 Loan at 30% Off ----------------------------------------------------------- Metropolitan West Fund's Floating Rate Income Fund has marked its $643,500 loan extended to Mavenir Systems, Inc to market at $452,863 or 70% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Floating Rate Income Fund is a participant in a First Lien Term Loan B (LIBOR plus 4.75%) to Mavenir Systems, Inc. The loan accrues interest at a rate of 9.65% per annum. The loan matures on August 18, 2028. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Mavenir Systems, Inc. provides software-based networking solutions. The Company offers internet protocol based voice, videos, communication, and messaging services, as well as multimedia subsystem, evolved packet core, and session border controller. MEGA-PHILADELPHIA LLC: Amends Centric Bank Secured Claims --------------------------------------------------------- Mega Philadelphia LLC and M.S. Acquisitions & Holdings, LLC, submitted a First Amended Joint Plan of Reorganization dated June 26, 2023. The Debtors filed the Bankruptcy Cases to settle certain financial obligations and reorganize their financial affairs, resolve contentious litigation, and to emerge from bankruptcy as a healthy, sufficiently capitalized company capable of continuing their operations and providing distributions to creditors greater than a liquidation outcome. The Plan Proponent's financial projections show that Mega will have projected disposable income of $1,470,236.00. The final Plan payment is expected to be paid on July 31, 2028. Class 3 consists of the Secured claim of Centric Bank (Claim 10) against MS. Cash payments totaling $1,813,000 from Plan Sponsors, paid as follows: (i) $50,000.00 within 30 days of the Effective Date; and (ii) commencing 120 days after the Confirmation Date, the balance of $1,763,000 paid in equal monthly installments amortized over a 10-year period with a balloon payment of the remaining balance due in full 5 years after the first payment is made, and other terms and conditions as are more specifically provided in the Settlement. The Amended Plan does not alter the proposed treatment for unsecured creditors: * Class 5 consists of General Unsecured Creditors against Mega. Pro rata payment of net disposable income of Mega on a monthly basis after payment of senior secured creditors in classes 1-2 and pro rata distribution of interests in Litigation Trust, in full and final satisfaction of all claims. Payments Begin on thirty days after the Effective Date through the 60th month after the Effective Date. Estimated percent of claim paid shall be 100%. * Class 6 consists of General Unsecured Creditors against MS. The class will receive a pro rata payment of net disposable income of MS on a quarterly basis and pro rata distribution of interests in Litigation Trust, in full and final satisfaction of all claims. Payments begin 30 days after the Effective Date and conclude after the 60th month after the Effective Date. Estimated percent of claim paid shall be 3%. Class 7 consists of Equity Interest Holders in Mega. MS shall retain its 100% interest in Mega. Class 8 consists of Equity Interest Holders in MS. Mr. Sciore shall retain his 100% interest in MS. The Debtors intend to implement the Plan by generating sufficient income from the Debtor's operations and receiving the funds from the Plan Sponsors to fund the required payments to creditors. * Plan Contribution: The Plan Sponsors will contribute $1,813,000.00 towards the Bank's claims, $10,000.00 to fund MS's Effective Date distributions and Mr. Sciore is willing to accept a discounted salary during the life of the Plan (discount valued at approximately $200,000.00), for the benefit of all creditors. In exchange for such contribution, except as otherwise provided in this Plan, the Plan Sponsors will be released by the Debtors and the Bank who will be permanently enjoined from any efforts to collect from the Plan Sponsors for any obligations, liabilities, claims or debts as more particularly described in the Settlement. * Net Disposable Income: Mega will commit disposable income to the fund the Plan in the total amount of $1,470,236.00 in accordance with the Projections. * Litigation: The Debtors will retain the right to pursue Litigation against potential litigation targets for the benefit of the two creditor classes: (i) Mega GUC claim holders; and (ii) MS GUC claim holders. All claims and causes of action of all kinds shall be pursued by the post confirmation Debtors for the benefit of the creditors. Distributions of net recoveries will be made to the Mega GUC claim holders and MS GUC claim holders pro rata with respect to each class of claim holders. Other than the litigation claims, all property of the Debtors, tangible and intangible, including, without limitation, licenses, accounts receivables, furniture, fixtures and equipment, will revert, free and clear of all Claims and Equitable Interests except as provided in the Plan, to the Debtors as they were held prior to the Petition Date. The Debtors expects to have sufficient cash on hand to make the payments required on the Effective Date. A full-text copy of the First Amended Joint Plan dated June 26, 2023 is available at https://urlcurt.com/u?l=Z0NZUF from PacerMonitor.com at no charge. Counsel for the Debtors: Brett D. Lieberman, Esq. Edelboim Lieberman Revah, PLLC 20200 W. Dixie Highway, Suite 905 Miami, FL 33180 Tel: (305) 768-9909 Fax: (305) 928-1114 Email: brett@elrolaw.com About Mega-Philadelphia and M.S. Acquisitions Mega-Philadelphia, LLC is a music and radio station business that provides radio broadcasting services in Philadelphia, South New Jersey, and Atlantic City, N.J. Based in Naples, Fla., Mega-Philadelphia generates advertisement revenue through broadcast radio and live promotional events. M.S. Acquisitions & Holdings, LLC is the 100% owner and sole member of Mega-Philadelphia. Mega-Philadelphia and M.S. Acquisitions filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 22-00340) on March 25, 2022. Amy Denton Harris serves as Subchapter V trustee. In the petitions signed by Michael Sciore, chief executive officer, Mega-Philadelphia listed $346,574 in assets and $2,285,961 in liabilities while M.S. Acquisitions listed $196,427 in assets and $5,526,926 in liabilities. Judge Caryl E. Delano oversees the Debtors' cases. Brett Lieberman, Esq., at Edelboim Lieberman Revah, PLLC and KapilaMukamal, LLP serve as the Debtors' legal counsel and financial advisor, respectively. MIRACLE CENTER: Court OKs Deal on Cash Collateral Use Thru Aug 23 ----------------------------------------------------------------- Miracle Center Church of Ventura County, Inc. and First Christian Church of Ventura County sought and obtained entry of an order from the U.S. Bankruptcy Court for the Central District of California, Northern Division, authorizing the Debtor's use of cash collateral on an interim basis in accordance with the budget. First Christian asserts a first priority security interest in the Debtor's property arising from a transaction on March 25, 2016, whereby the Debtor purchased the Property from First Christian. A promissory note and grant deed were executed between the Debtor and First Christian regarding the secured debt. The U.S. Small Business Administration asserts a security interest in all tangible and intangible personal property as evidenced by a Security Agreement executed on July 25, 2020 and a validly filed UCC-1 Financing Statement, filed on August 4, 2020 as Filing Number U20008484133. The Security Agreement arises from a Note between the Debtor and the SBA dated July 25, 2020. The parties agreed that the Debtor may continue to use cash collateral until August 23, 2023 for the payment of ordinary and necessary expenses. A copy of the stipulation is available at https://urlcurt.com/u?l=JUhiuY from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=7elVXP from PacerMonitor.com. About Miracle Center Church of Ventura County, Inc. Miracle Center Church of Ventura County, Inc. is a tax-exempt religious organization. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10664) on August 29, 2022. In the petition signed by Alonzo McCowan, its CEO and president, the Debtor disclosed $3,472,792 in assets and $3,387,733 in liabilities. Judge Ronald A. Clifford III oversees the case. John K. Rounds, Esq., at Rounds & Sutter LLP is the Debtor's counsel. MRUCKER INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Mrucker Industries, Inc. 237 Benelli Drive Hutto, TX 78634 Business Description: Mrucker offers residential remodeling, construction, cabinetry, countertops, and electrical & plumbing services. Chapter 11 Petition Date: June 29, 2023 Court: United States Bankruptcy Court Western District of Texas Case No.: 23-10458 Judge: Hon. Shad Robinson Debtor's Counsel: Robert C. Lane, Esq. THE LANE LAW FIRM 6200 Savoy Dr Ste 1150 Houston TX 77036-3369 Tel: (713) 595-8200 Fax: (713) 595-8201 Email: notifications@lanelaw.com Total Assets: $1,040,182 Total Debts: $1,687,047 The petition was signed by Maxwell Rucker 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/NLT4NWQ/MRUCKER_INDUSTRIES_INC__txwbke-23-10458__0001.0.pdf?mcid=tGE4TAMA MULTEC INDUSTRIAL: Court OKs Interim Cash Collateral Access ----------------------------------------------------------- The U.S. Bankruptcy Code for the Northern District of Georgia, Newnan Division, authorized Multec Industrial Packaging, 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 pay its labor force, purchase inventory and pay its other operating expenses. Idea 247, Inc., Porter Capital Corporation, and Universal Funding Corporation may assert an interest in the Debtor's cash collateral. As adequate protection, the lenders are granted a security interest in and lien upon all of Debtor's assets created or acquired by the Debtor post-petition of the same nature in which they held a pre-petition security interest. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=q1HycJ from PacerMonitor.com. The Debtor projects total operating expenses, on a monthly basis, as follows: $5,344 for July 2023; $5,344 for August 2023; $5,344 for September 2023; $5,344 for October 2023; $5,344 for November 2023; and $5,344 for December 2023. About Multec Industrial Packaging, Inc. Multec Industrial Packaging, Inc. provides products for packaging and industrial applications. Multec designs, fabricates, and delivers packaging for automobile industry parts and trim, water vehicles, golf carts, freezers, and refrigeration. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-10535) on May 8, 2023. In the petition signed by John E. Hughes, Sr., chief executive officer, the Debtor disclosed up to $50,000 in assets and up to$500,000 in liabilities. Judge Paul Baisier oversees the case. Leslie Pineyro, Esq., at Jones & Walden, LLC, represents the Debtor as legal counsel. NAKED JUICE: MetWest TRB Marks $374,515 Loan at 23% Off ------------------------------------------------------- Metropolitan West Fund's Total Return Bond Fund has marked its $374,515 loan extended to Naked Juice, LLC to market at $287,128 or 77% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Total Return Bond Fund is a participant in a Second Lien Term Loan (SOFR plus 6%) to Naked Juice, LLC. The loan accrues interest at a rate of 11% per annum. The loan matures on January 24, 2030. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Naked Juice LLC is the entity resulting from a spin-off from PepsiCo, with PAI Partners owning 61% and Pepsi retaining a 39% stake. Naked Juice, LLC owns the Tropicana, Naked Juice, KeVita and other select juice brands. NEW TROJAN: MetWest FRI Marks $1.09M Loan at 31% Off ---------------------------------------------------- Metropolitan West Fund's Floating Rate Income Fund has marked its $1,090,725 loan extended to New Trojan Parent, Inc to market at $747,152 or 69% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Floating Rate Income Fund is a participant in a First Lien Term Loan (LIBOR plus 3.25%) to New Trojan Parent. The loan accrues interest at 7.96%-8.09% per annum. The loan matures on January 6, 2028. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. New Trojan Parent, Inc. is the acquirer of Strategic Partners Acquisition Corp., an indirect parent company of branded medical apparel company Careismatic, Inc. OVERSEAS SHIPHOLDING: Egan-Jones Retains B- Sr. Unsecured Ratings ----------------------------------------------------------------- Egan-Jones Ratings Company, on June 13, 2023, maintained its 'B-' foreign currency and local currency senior unsecured ratings on debt issued by Overseas Shipholding Group, Inc. EJR also maintained its 'C' rating on commercial paper issued by the Company. Headquartered in Tampa, Florida, Overseas Shipholding Group, Inc. maintains a fleet of marine transport vessels. PARADOX RESOURCES: $13.9MM DIP Loan from Legalist OK'd ------------------------------------------------------ At the behest of Paradox Resources, LLC, et al., the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, entered an order authorizing the Debtors to use cash collateral and obtain senior secured postpetition financing. The Court scheduled a final hearing on the request for July 28 at 2:30 p.m. by telephone and video conference. Certain investment funds managed by Legalist, Inc. have committed to extend senior secured postpetition financing on a superpriority basis consisting of a $13.9 million term loan facility to be used to fund the working capital and liquidity needs of the Debtors and other uses as provided for in the DIP Credit Agreement, of which $4.5 million will be advanced to the Debtors upon the entry of the Interim Order. The maturity date of the DIP Facility will be the earlier to occur of: (a) the date that is six months after the Effective Date (provided that such date may be extended in writing by three months at the sole and absolute discretion of the DIP Lender); (b) the date which is 40 days after the Effective Date if the Final DIP Order has not been entered by the Bankruptcy Court on or prior to such date; (c) the effective date of a Plan of Reorganization; (d) the date on which the DIP Obligations become due and payable pursuant to this Agreement, whether by acceleration or otherwise; (e) the date of consummation of a sale of all or substantially all of the Debtors' assets under 11 U.S.C. section 363; (f) the date of conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code unless otherwise consented to in writing by the DIP Lender; and (h) the date of dismissal or closing of any of the Chapter 11 Cases. The Debtors are required to comply with certain milestones including: a. On or before 28 calendar days from the Effective Date of the DIP Facility, the Debtors must select a stalking horse bidder acceptable to the DIP Lender; b. On or before 35 days from the Effective Date of the DIP Facility, the Court must approve bid procedures and bid protections in a form and substance acceptable to the DIP Lender; c. On or before 60 days from the Effective Date of the DIP Facility will be the deadline for submission of bids to the Debtors; d. On or before 63 days from the Effective Date of the DIP Facility, the Debtors will conduct the auction for the sale of substantially all assets of the Debtors; e. On or before 67 days from the Effective Date of the DIP Facility, the Debtors will file the asset purchase agreement. The Debtors have incurred a substantial amount of debt with Washington Federal Bank, N.A. to fund their activities and sustain operations. Prior to the Petition Date, Debtors Paradox Upstream, LLC, Capital Commercial Development, Inc., Neuhaus Barrett Investments, LLC and Paradox Midstream, LLC executed the Second Amended and Restated Loan Agreement, dated July 19, 2019. The First Lien Debt is guaranteed by the Debtors' chief executive officer, Todd A. Brooks, and Debtors Four Corners Energy, LLC and Four Corners Pipeline, LLC. The PG is secured by an Assignment of Deposits for the benefit of Washington Federal dated November 19, 2020, thereby assigning, pledging, and granting to Washington Federal a security interest in a Money Market Account maintained by Todd A. Brooks with Washington Federal and holding a cash balance in the minimum amount of $1 million. On May 17, 2023, the Prepetition Lender sent a Notice of Default and Acceleration to the Debtors. As of the Petition Date, the outstanding balance owed to Washington Federal on account of the First Lien Debt under the Prepetition Loan Agreement was approximately $35 million. As adequate protection, the DIP Lender will be granted automatically and fully perfected security interests and first-priority liens. The DIP Lender will also be granted an allowed superpriority administrative expense claim pursuant to 11 U.S.C. section 364(c), having priority over all administrative expenses specified in or ordered pursuant to the Bankruptcy Code. A copy of the motion is available at https://urlcurt.com/u?l=Q3LIsx from PacerMonitor.com. A copy of the budget is available at https://urlcurt.com/u?l=PEnz7K from PacerMonitor.com. The Debtor project total operating disbursements, on a weekly basis, as follows: $233,141 for the week ending June 25, 2023; $659,250 for the week ending July 2, 2023; $125,675 for the week ending July 9, 2023; $779,907 for the week ending July 16, 2023; $168,241 for the week ending July 23, 2023; and $325,325 for the week ending July 30, 2023. About Paradox Resources, LLC Paradox Resources, LLC is an integrated energy company that now owns multiple producing oil and gas fields. Paradox Resources, LLC and certain affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90558) on May 22, 2023. In the petition signed by CEO Todd A. Brooks, Paradox Resources, LLC disclosed up to $100 million in both assets and liabilities. Judge David R. Jones oversees the case. The Debtor tapped Okin Adams Bartlett Curry LLP as legal counsel, Stout Risius Ross, LLC as restructuring advisor, and Donlin, Recano & Co., Inc. as notice, claims and balloting agent. PAXE LATITUDE: Seeks to Extend Plan Exclusivity to September 19 --------------------------------------------------------------- Paxe Latitude LP asks the U.S. Bankruptcy Court for the District of New Jersey to extend its exclusive period during which it may file a chapter 11 plan from June 21, 2023 to September 19, 2023, and its exclusive period to solicit votes thereon from August 19, 2023 to November 19, 2023. The Debtor stated that it is trying to finalize negotiations on a DIP financing facility and a tenant settlement, while at the same time, fighting various battles with its secured creditor. The Debtor also explained that it has been working to fix its claim with regard to insurance coverage which it intends to use for a baseline for plan funding. Paxe Latitude LP is represented by: Eric H. Horn, Esq. Heike M. Vogel, Esq. Maria A.G. Harper, Esq. A.Y. STRAUSS LLC 101 Eisenhower Parkway, STE 412 Roseland, New Jersey 07068 Tel: (973) 287-0966 About Paxe Latitude LP Paxe Latitude LP is a Single Asset Real Estate as defined in 11 U.S.C. Section 101(51B). Paxe Latitude LP filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 23-11337) on Feb. 21, 2023. In the petition filed by David Goldwasser, Member of Manager of General Partner, reported assets and liabilities between $10 million and $50 million. The Debtor is represented by: Eric H. Horn, Esq. A.Y. STRAUSS LLC 101 Eisenhower Parkway, Suite 412 Roseland, NJ 07068 Tel: 973-287-5006 Email: ehorn@aystrauss.com PENN ENTERTAINMENT: Egan-Jones Retains B- Senior Unsecured Ratings ------------------------------------------------------------------ Egan-Jones Ratings Company, on June 2, 2023 maintained its 'B-' foreign currency and local currency senior unsecured ratings on debt issued by PENN Entertainment, Inc. EJR also withdrew its 'B' rating on commercial paper issued by the Company. Headquartered in Wyomissing, Pennsylvania, PENN Entertainment, Inc. owns and operates casinos, hotels, and racetracks facilities. POLAR US BORROWER: MetWest Flex Marks $1M Loan at 16% Off --------------------------------------------------------- Metropolitan West Fund's Flexible Income Fund has marked its $1,000,000 loan extended to Polar U.S. Borrower LLC to market at $836,960 or 84% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Flexible Income Fund is a participant in a First Lien Term Loan, (SOFR plus 4.75%) to Polar U.S. Borrower LLC. The loan accrues interest at a rate of 9.02% per annum. The loan matures on October 15, 2025. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Polar US Borrower, LLC is the pass-through entity of ultimate parent, SK Blue Holdings, LP, an affiliate of private investment firm, SK Capital Partners. SI Group manufactures performance additives for use in polymer, rubber, lubricants, fuels, adhesives applications, surfactants in addition to some specialty chemicals. POLAR US BORROWER: MetWest OHIC Marks $5,500 Loan at 16% Off ------------------------------------------------------------ Metropolitan West Fund's Opportunistic High Income Credit Fund has marked its $5,500 loan extended to Polar U.S. Borrower LLC to market at $4,603 or 84% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Opportunistic High Income Credit Fund is a participant in a First Lien Term Loan, (SOFR plus 4.75%) to Polar U.S. Borrower LLC. The loan accrues interest at a rate of 9.02% per annum. The loan matures on October 15, 2025. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Polar US Borrower, LLC is the pass-through entity of ultimate parent, SK Blue Holdings, LP, an affiliate of private investment firm, SK Capital Partners. SI Group manufactures performance additives for use in polymer, rubber, lubricants, fuels, adhesives applications, surfactants in addition to some specialty chemicals. PROVECTUS PHARMACEUTICALS: All 6 Proposals Passed at Annual Meeting ------------------------------------------------------------------- Provectus Biopharmaceuticals, Inc. held its annual meeting of stockholders on June 21, 2023, at which the stockholders: (1) elected Webster Bailey, Bruce Horowitz, John Lacey, III, M.D., Ed Pershing, CPA, and Dominic Rodrigues as directors for a term of one-year, consistent with the recommendation of the Company's board of directors; (2) approved the advisory vote on the compensation of the Company's named executive officers, consistent with the Board's recommendation; (3) approved a one-year frequency of the advisory vote on the compensation of the Company's named executive officers; (4) ratified the selection of Marcum LLP as the Company's independent registered public accounting firm for 2023, consistent with the Board's recommendation; (5) authorized the Board to amend the Company's Certificate of Incorporation, as amended by the Certificate of Designation of Series D Convertible Preferred Stock and Certificate of Designation of Series D-1 Convertible Preferred Stock, to effect a reverse stock split of the Company's common stock, Series D Convertible Preferred Stock, and Series D-1 nvertible Preferred Stock at a ratio of between 1-for-10 and 1-for-50, where the ratio would be determined by the Board at its discretion, and to make corresponding amendments to the Certificates of Designation to provide for the proportional adjustment of certain terms upon a reverse stock split, consistent with the Board's recommendation; and (6) authorized the Board, given the Company's stockholders' approval of Proposal 5, to amend the Company's Certificate of Incorporation, as amended by the Certificates of Designation, to decrease the number of authorized shares of the Company's common stock and preferred stock by the same reverse stock split ratio determined by the Board, consistent with the Board's recommendation. About Provectus Provectus Biopharmaceuticals, Inc. is a clinical-stage biotechnology company developing immunotherapy medicines based on a family of small molecules called halogenated xanthenes. The Company's lead HX molecule is rose bengal sodium. Provectus reported a net loss of $3.55 million for the year ended Dec. 31, 2022, compared to a net loss of $5.54 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $2.04 million in total assets, $8.26 million in total liabilities, and a total stockholders' deficit of $6.23 million. Los Angeles, CA-based Marcum LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated March 29, 2023, citing that the Company has a significant working capital deficit, 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. PUERTO RICO: Oversight Board Plans to Cut PREPA Bond Offer by Half ------------------------------------------------------------------ Michelle Kaske of Bloomberg News reports that Puerto Rico's financial oversight board is considering slashing -- by about half -- the amount of new bonds it claims the island's bankrupt power utility can repay, a potential offering that bondholders will most likely reject. The federally appointed board calculates that Puerto Rico's Electric Power Authority, called Prepa, can only repay $2.5 billion to its creditors, less than half the $5.68 billion offered in its March debt-restructuring plan. It's far below the $10 billion it owes, including nearly $9 billion to bondholders and fuel-line lenders. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States. The chief of state is the President of the United States of America. The head of government is an elected Governor. There are two legislative chambers: the House of Representatives, 51 seats, and the Senate, 27 seats. The governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the son of former governor Pedro Rossello. In 2016, the U.S. Congress passed PROMESA, which, among other things, created the Financial Oversight and Management Board and imposed an automatic stay on creditor lawsuits against the government, which expired May 1, 2017. The members of the oversight board are: (i) Andrew G. Biggs, (ii) Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J. Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii) David A. Skeel Jr. On May 3, 2017, the Commonwealth of Puerto Rico filed a petition for relief under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The case is pending in the United States District Court for the District of Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's PROMESA petition is available at http://bankrupt.com/misc/17-01578-00001.pdf On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation (COFINA) commenced a case under Title III of PROMESA (D.P.R. Case No. 17-01599). Joint administration has been sought for the Title III cases. On May 21, 2017, two more agencies -- Employees Retirement System of the Government of the Commonwealth of Puerto Rico and Puerto Rico Highways and Transportation Authority (Case Nos. 17-01685 and 17-01686) -- commenced Title III cases. U.S. Chief Justice John Roberts named U.S. District Judge Laura Taylor Swain to preside over the Title III cases. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq., at O'Neill & Borges LLC are onboard as attorneys. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains the case web site https://cases.primeclerk.com/puertorico Jones Day is serving as counsel to certain ERS bondholders. Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General Obligation Bondholders. RANGE RESOURCES: Moody's Alters Outlook on 'Ba2' CFR to Positive ---------------------------------------------------------------- Moody's Investors Service changed Range Resources Corporation's rating outlook to positive from stable. Moody's concurrently affirmed Range's all other ratings, including the Ba2 corporate family rating, Ba2-PD probability of default rating, and Ba3 senior unsecured notes. The SGL-1 speculative grade liquidity rating remains unchanged. Affirmations: Issuer: Range Resources Corporation Corporate Family Rating, Affirmed Ba2 Probability of Default Rating, Affirmed Ba2-PD Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 Outlook Actions: Issuer: Range Resources Corporation Outlook, Changed To Positive From Stable RATINGS RATIONALE The positive outlook reflects over $1 billion of debt reduction since 2021 and Moody's expectation that Range will continue to delever in the coming quarters as management tries to achieve the publicly stated $1-$1.5 billion long term net debt target. Moody's expects Range to produce meaningful free cash flow through 2024 despite the high likelihood of natural gas prices remaining weak through 2023, thanks to the company's significant hedge book and large natural gas liquids (NGLs) exposure. Range's low-cost structure and continued capital discipline should also lend support to free cash flow generation. The company has a high degree of operational control over its acreage, enabling significant flexibility over the pace of future development. The Ba2 CFR is supported by Range's large natural gas resource base in Appalachia, significant exposure to natural gas liquids that improve overall price realization, lower base decline rate and reinvestment requirements given its long drilling history in the Marcellus Shale, and consistent track record of low cost and capital efficient operations. The CFR also reflects management's commitment to conservative financial policies, including maintaining a strong balance sheet and hedging consistently to minimize downside risks. Range's ratings are constrained by its sensitivity to volatile natural gas and NGLs prices with natural gas representing about 70% of production, exposure to Appalachian basin natural gas takeaway constraints given -20% of its gas is currently priced locally, and high geographic concentration. Range will continue to maintain very good liquidity, which is reflected in the SGL-1 rating. The company's substantial hedge book, efficient operations and relatively low level of maintenance capital spending should help generate over $500 million of free cash flow through 2024 even if benchmark Henry Hub gas prices average $3/MMBtu over the next eighteen months. As of March 31, 2023, Range had roughly $227 million of cash and no borrowings under its $1.5 billion committed revolving credit facility, which expires on April 14, 2027. The revolver had $1.2 billion in available borrowing capacity after accounting for $292 million of outstanding letters of credit, and the bank group reaffirmed the $3 billion borrowing base during the March 2023 redetermination. The credit agreement governing the revolver contains financial maintenance covenants requiring a minimum current ratio of 1x and maximum net leverage of 3.75x. Moody's expects Range to maintain ample cushion under its financial covenants. The company's next maturity is in May 2025 when the $750 million 4.875% senior notes will come due. The senior unsecured notes are rated Ba3, one notch below Range's Ba2 CFR, due to the priority claim of the company's $1.5 billion senior secured revolving credit facility, which has a first-lien claim over substantially all of Range's assets. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade could be considered if Range achieves its balance sheet net debt target and continues to produce free cash flow on a consistent basis, and if retained cash flow to debt is sustained above 40% and leveraged full cycle ratio (LFCR) approaches 2x under Moody's medium term price assumptions. Range's ratings could be downgraded if retained cash flow to debt and LFCR fell below 25% and toward 1.25x, respectively, or the company generated substantial negative free cash flow. Range Resources Corporation is a Fort Worth, Texas based publicly traded independent exploration and production company with primary operations in the Marcellus Shale in Pennsylvania. The principal methodology used in these ratings was Independent Exploration and Production published in December 2022. RESOURCE CONVERTING: Trustee's $15K Cash Sale of Equipment Granted ------------------------------------------------------------------ Judge Mark X. Mullin of the U.S. Bankruptcy Court for the Northern District of Texas authorized John Dee Spicer, the Chapter 7 Trustee of Resource Converting, LLC, to sell the estate's interest in Pulverizing & Drying System and miscellaneous equipment and parts, located at Central Valley Ag Group, 5509 Langworth Road, Oakdale, CA 95361, to Central Valley Ag Grinding LLC for the price of $15,000 cash. The Trustee is authorized to sign any documentation necessary to effectuate the sale of the Equipment. The bankruptcy case is In re: Resource Converting, LLC, Resource Converting LLC (Bankr. N.D. Tex.). RITE AID: Egan-Jones Retains CCC- Senior Unsecured Ratings ---------------------------------------------------------- Egan-Jones Ratings Company, on June 8, 2023, maintained its 'CCC-' foreign currency and local currency senior unsecured ratings on debt issued by Rite Aid Corporation. EJR also maintained its 'D' rating on commercial paper issued by the Company. Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation operates a retail drugstore chain in various states and the District of Columbia. RXO INC: S&P Alters Outlook to Stable, Affirms 'BB+' ICR -------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' issuer credit rating on RXO Inc. and revised its outlook to stable from positive. S&P also affirmed its 'BB+' issue-level rating on the company's unsecured notes. The '3' recovery rating (rounded estimate: 60%) is unchanged. The stable outlook reflects S&P's expectation that RXO will continue to outperform the broader truck brokerage market, which should support credit metrics commensurate with the rating. S&P said, "We no longer expect RXO's credit metrics will support an upgrade in 2023.RXO, like other truck brokers, faces a weaker freight transportation environment in 2023 following an extended period of strong pricing and demand. Lower overall macroeconomic activity, along with consumers spending more on services and less on goods, have reduced demand for truck transportation. Meanwhile, trucking companies have not meaningfully reduced capacity. This dynamic has contributed to spot market pricing falling approximately 40% in recent weeks from its peak in early 2022. Outside its core truck brokerage business, RXO also faces lower demand and pricing for its other services. The company's last-mile delivery business, where it arranges delivery of big and bulky items like furniture and appliances, faces shifting consumer spending patterns, and its ocean and air freight forwarding segment is subject to weaker market conditions on key import routes. As a result, we forecast total revenue, which includes the price of purchased transportation, will decline 8%-9% in 2023. "We anticipate freight market conditions will improve in 2024. While the timing of a freight market recovery is uncertain, our base case scenario currently assumes pricing will improve in 2024, as some carriers exit the market. Typically, profitability for truck brokers is counter-cyclical. Brokers generally purchase capacity on the spot market and bill customers under contracted rates on a portion of loads. Thus, margins tend to decline when spot market prices increase since brokers must purchase capacity above contracted prices. Then, when prices decline, margins improve since purchased capacity is cheaper than contracted prices. While we would typically expect RXO's business would exhibit similar characteristics, we forecast EBITDA margins will decline slightly in 2023 to about 5% from 6.1% in 2022, mainly due to one-time costs associated with the spin-off of the company from former parent XPO Inc. and restructuring initiatives. We then expect margins will improve in 2024 to the 6%-7% area since these costs will not recur. We also believe the company's pricing initiatives within its last-mile delivery business, in addition to its technology investments, should also support profitability. "We believe RXO will continue to outperform its peers and increase brokerage volumes.Despite unfavorable market conditions in the first quarter, RXO reported a 6% volume increase in truck brokerage from the same period the previous year while maintaining a gross margin above its peers. We attribute this performance to the company's proprietary technology, which we believe allows it to procure capacity more efficiently and improves the experience of its carriers and customers. We also believe this should support the company's operating performance when freight conditions improve. "The stable outlook reflects our expectation that, despite a weaker freight market in 2023, RXO will increase volumes in its truck brokerage segment, benefitting from its market position, investments in technology, and diversified end-market exposure. We also expect RXO will continue to pursue a conservative financial policy and fund shareholder returns with internally generated cash. We forecast credit metrics will improve in 2024, as restructuring and transaction expenses decrease and cash taxes return to normal, with funds from operations (FFO) to debt increasing to about 40% in 2024 from the high-20% area in 2023. We also expect debt to EBITDA will decrease to the high-1x area from the low-2x area in 2023. "We could lower our ratings on RXO over the next 12 months if credit metrics declined further, with FFO to debt approaching 30% on a sustained basis." This could occur if: -- Current freight market conditions persisted longer than we currently anticipate, or -- The company pursued significant debt-funded acquisitions or shareholder returns. S&P could raise its ratings on RXO over the next 12 months if FFO to debt increased above 60% on a sustained basis, and S&P believed the company's financial policy would support these metrics. This could occur if: -- The freight market improved more than we currently expect, leading to higher earnings; or -- The company's proprietary technology supported greater-than-expected volume growth and margin expansion. ESG credit indicators: E-2; S-2; G-2 S&P said, "ESG credit factors have a neutral influence on our credit analysis of RXO. The company does not operate a large fleet of vehicles since it mostly arranges for transportation operated by others. We believe this limits the company's direct exposure to costs related to required fleet investment amid tighter greenhouse gas emission regulations." SAFFIRE VAPOR: Continued Operations to Fund Plan ------------------------------------------------ Saffire Vapor Retail, LLC, and its affiliates filed with the U.S. Bankruptcy Court for the Middle District of Tennessee a Joint Plan of Reorganization dated June 26, 2023. The Debtors are affiliated entities that collectively comprise the business of Saffire Vapor. Founded in 2012 by Robert Arnold, Saffire Vapor grew to be the largest vapor retailer in Tennessee and the 6th largest privately-owned vape-shop chain in the United States. The business has contracted in recent years as a result of increased competition, regulatory constraints, pricing pressures, supply challenges, and financial difficulties related to the Covid-19 pandemic. These Chapter 11 Cases were filed for the purpose of closing certain underperforming locations and reorganizing the business around 11 go-forward locations. This Plan is the Debtors' comprehensive proposal to close certain underperforming locations, reorganize the business around 11 go forward locations, and pay creditors as much as the business can reasonably support. Class 9 consists of the Unsecured Claims of Saffire Vapor Holdings, LLC. No Distribution shall made on account of Class 9 Claims. Class 10 consists of the Unsecured Claims of Saffire Vapor Retail, LLC. Each Holder of an Allowed Class 10 Claim shall be paid its Pro Rata portion of Debtor Saffire Vapor Retail, LLC's Disposable Income in annual Distributions during the Commitment Period, with the first such payment due on first anniversary of the Effective Date. Class 11 consists of the Unsecured Claims of Saffire Vapor Distributions, LLC. No Distribution shall made on account of Class 11 Claims. Class 12 consists of the Unsecured Claims of Parapoint, LLC. No Distribution shall made on account of Class 12 Claims. Class 13 consists of the Unsecured Claims of VTC Delivery, LLC. No Distribution shall made on account of Class 13 Claims. Class 14 consists of the Unsecured Claims of Emperor Augustus, LLC. No Distribution shall made on account of Class 14 Claims. Class 15 consists of the Unsecured Claims of Ovid Ventures, LLC. No Distribution shall made on account of Class 15 Claims. Class 16 consists of the Unsecured Claims of Robert Arnold. Each Holder of an Allowed Class 16 Claim shall be paid its Pro Rata portion of Debtor Robert Arnold’s monthly net income reflected on his Schedule J in annual Distributions during the Commitment Period, with the first such payment due on first anniversary of the Effective Date. Class 17 consists of Interests. Except for any property to be sold, abandoned, or otherwise relinquished under this Plan, Interests in and ownership of Debtors Saffire Vapor Holdings, LLC, Saffire Vapor Retail, LLC, and Robert Arnold shall remain unaltered. Upon the latter of Confirmation or final disposition of assets under this Plan, Debtors Saffire Vapor Distributions, LLC, Parapoint, LLC, VTC Delivery, LLC, Emperor Augustus, LLC, and Ovid Ventures, LLC shall be deemed dissolved and may, but shall not be required to, in their discretion, file all necessary certificates of dissolution and take any other actions necessary or appropriate to reflect the dissolution under applicable state law. All applicable regulatory or governmental agencies shall accept any certificates of dissolution or other papers, including the Confirmation Order, submitted by such dissolving Debtors and shall take all steps necessary to allow and reflect the prompt dissolution without the payment of any fee, tax, or charge and without need for the filing of reports or certificates. The Debtors shall use proceeds from operations to pay all required payments on the Effective Date and all payments due under the Plan on an on-going basis. A full-text copy of the Joint Plan dated June 26, 2023 is available at https://urlcurt.com/u?l=pZ5tFl from PacerMonitor.com at no charge. Attorneys for Debtors: Robert J. Gonzales, Esq. Nancy B. King, Esq. EmergeLaw, PLC 4235 Hillsboro Pike, Suite 350 Nashville, Tennessee 37215 (615) 815-1535 About Saffire Vapor Saffire Vapor Retail, LLC, filed Chapter 11 Petition (Bankr. M.D. Tenn. Case No. 23-02264) on June 26, 2023. Hon. Randal S. Mashburn oversees the case. The Debtor is represented by Robert James Gonzales of Emergelaw, PLLC. At the time of filing, the Debtor disclosed $100,001 to $500,000 in assets and $1,000,001 to $10 million in liabilities. SILVER TRIDENT: Commences Subchapter V Bankruptcy Case ------------------------------------------------------ Silver Trident Distributions LLC filed for chapter 11 protection in the Southern District of Texas. The Debtor elected on its voluntary petition to proceed under Subchapter V of chapter 11 of the Bankruptcy Code. The Debtor was formed in January 2015 as a limited liability corporation in the State of Texas and operates as a wholesale reseller of custom blended soap. The Debtor's primary income is derived from merchants providing car washing services. The Debtor currently has four non-insider W-2 employees who are paid biweekly salaries. The Debtor's owner and managing member is the sole insider W-2 employee and manages the daily affairs of the business. According to court filings, Silver Trident estimates between $1 million and $10 million in debt to 1 to 49 creditors. The petition states that funds will not be available to unsecured creditors. About Silver Trident Distributions Silver Trident Distributions LLC owns a one-stop shop for all auto detailing chemicals including waxes, polishes, and sealants. Silver Trident Distributions sought protection under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-32141) on June 7, 2023. In the petition signed by Virendra A. Patel, owner, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Jeffrey P. Norman oversees the case. The Subchapter V trustee: Jarrod B. Martin 1200 Smith Street, Suite 1400 Houston, TX 77002 Tel: 713-356-1280 E-mail: JBM.Trustee@chamberlainlaw.com Michael L. Hardwick, Esq., at Michael Hardwick Law, PLLC, is the Debtor's legal counsel. SM ENERGY: Moody's Hikes CFR to Ba3 & Senior Unsecured Notes to B1 ------------------------------------------------------------------ Moody's Investors Service upgraded SM Energy Company's Corporate Family Rating to Ba3 from B1, Probability of Default Rating to Ba3-PD from B1-PD, and senior unsecured notes to B1 from B2. The Speculative Grade Liquidity Rating is maintained at SGL-1. The rating outlook is stable. The upgrade to a Ba3 CFR reflects the impact of SM's debt reduction efforts as well as the company's consistent free cash flow generation and maintenance of a competitive cost structure in the face of inflationary pressures. The company has also established a good inventory of drilling locations in both its primary plays with sufficient capital and financial flexibility to maintain its production and reserves through commodity price volatility. Upgrades: Issuer: SM Energy Company Corporate Family Rating, Upgraded to Ba3 from B1 Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Outlook Actions: Issuer: SM Energy Company Outlook, Changed To Stable From Positive RATINGS RATIONALE SM's Ba3 CFR reflects the meaningful improvement in the company's balance sheet, considerable scale, competitive cost structure, consistent free cash flow generation, and inventory of highly economic drilling locations. SM benefits from reasonable scale with production of 146 mboe/d (59% liquids) in the first quarter of 2023 and some geographic diversification with acreage in the Midland Basin and Eagle Ford Shale. The company has been successfully executing on capital and operating plans to drive flat to limited annual production growth in an effort to maximize free cash flow generation. The company has been aggressive in its debt reduction efforts, paying off nearly $600 million of debt in 2022, and has taken a measured approach to shareholder rewards since reaching its debt reduction target. SM's annual dividend totals -$70 million and Moody's estimates that the company can organically fund its dividend and -$1.0 billion annual capital budget to hold production flat in a $50/bbl environment. The company has maintained a conservative pace of share buybacks since implementing its $500 million share repurchase program last year. The company's SGL-1 credit rating reflects SM's very good liquidity, including its ability to generate free cash flow, cash on hand, and available revolver capacity. SM had $478 million of cash on hand and $1.2 billion of available borrowing capacity under it $1.25 billion revolving credit facility expiring in August 2027 (or 91 days prior to the maturity of any of SM's outstanding senior notes) at the end of the first quarter 2023. Moody's expects the company to be able to meet all its cash needs including capital spending and dividends through 2024, with sufficient excess cash flow to continue to execute share buybacks while maintaining its liquidity. SM's revolver includes financial covenants requiring maintenance of total debt to EBITDAX no greater than 3.5x of a current ratio no greater than 1x. Moody's expects SM to maintain ample compliance headroom under its covenants. SM's senior unsecured notes are rated B1, one notch below the Ba3 CFR, reflecting the notes' subordination to the company's senior secured credit facility. The stable outlook reflects Moody's expectation that SM will maintain its scale, continue to generate free cash flow, and continue to execute its shareholder rewards programs in a balanced manner. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS SM's credit ratings could be upgraded if the company continues to reduce debt, meaningfully increases scale, and maintains RCF/debt above 50%. Ratings could be downgraded if RCF/Debt falls below 30%. A leveraging acquisition or debt funded returns to shareholders could also lead to a downgrade in the ratings. SM Energy Company is a Denver, Colorado based publicly traded E&P company with primary production operations in the Eagle Ford Shale (Webb County) and the Midland Basin (Howard, Upton, Midland and Martin Counties) of Texas. The principal methodology used in these ratings was Independent Exploration and Production published in December 2022. SPECTRUM BRANDS: Moody's Confirms 'B1' CFR & Alters Outlook to Neg. ------------------------------------------------------------------- Moody's Investors Service confirmed Spectrum Brands, Inc.'s B1 Corporate Family Rating, B1-PD Probability of Default Rating, the B2 ratings on the company's senior unsecured global notes, and the Ba1 ratings on the company's senior secured revolving credit facilities and senior secured term loan. Moody's will also withdraw the rating on the term loan following the repayment of all debt outstanding under the facility and will withdraw the rating the incremental $500 million tranche of the revolving credit facility that was terminated. Moody's also intends to withdraw the ratings on the unsecured 5.75% notes due July 15, 2025, after their anticipated repayment. Moody's upgraded the speculative grade liquidity rating ("SGL") to SGL-1 from SGL-2. The outlook changed to negative from ratings under review. The rating actions concludes the review for upgrade commenced on September 9, 2021. Spectrum Brands closed the sale of its Hardware and Home Improvement("HHI") business to ASSA ABLOY AB for $4.3 billion in cash on June 20, 2023 after a lengthy regulatory review following the original announced sale in September 2021. The company will ultimately have approximately $3.6 billion of net proceeds from this sale that will be initially used for approximately $1.6 billion of debt repayment and a $500 million share repurchase. The company intends to utilize the remaining approximately $1.6 billion of net proceeds for reinvestment in existing business to improve operating performance, acquisitions and potential additional debt repayment. Spectrum repaid its term loan and revolving credit facilities, which had $392 million and $715 million outstanding, respectively, at time of close. Spectrum also plans to redeem its 5.75% Notes due July 15, 2025 (approximately $450 million outstanding) on July 20, 2023. Following these repayments, the company permanently terminated the $500 million of incremental revolving loan commitments under its $1.1 billion revolving credit facility and has $600 million of revolver capacity available under its credit agreement. The company's Board of Directors approved a new stock repurchase program authorizing the purchase of up to $1 billion of common stock, replacing the prior stock repurchase program. Spectrum entered into an accelerated share repurchase agreement to buy-back $500 million common stock. Spectrum expects to be in a net cash position after paying down debt and funding this ASR ("accelerated share repurchase"). Spectrum's remaining bonds have an asset sale covenant that will generally require the company to make a par offer to repurchase any outstanding bonds a year following close with net proceeds in excess of $50 million that have not been reinvested back into the business or used to repay debt. The confirmation of Spectrum's rating reflects that operating weakness in the retained businesses and less upfront debt repayment than initially expected will leave leverage elevated until there is greater clarity on how the remaining net proceeds from the HHI divestiture will be deployed. The confirmation also reflects Moody's expectation that the sizable approximate $1.8 billion cash balance (Moody's forecast) anticipated for the fiscal year-end September 2023 provides significant liquidity that the company can use to further reduce debt and invest in operational improvements and acquisitions that will facilitate EBITDA margin improvement and deleveraging from what is currently a very high 10.2x estimated debt-to-EBITDA ratio (pro forma including $1.6 billion of announced debt reduction and EBITDA for the retained businesses for the 12 months ended April 2, 2023). Despite material volume and margin headwinds that have affected Spectrum's Home and Personal Care ("HPC") and Home & Garden ("H&G") businesses since 2022, solid demand and consumer trends supporting the company's largely consumable pet products portfolio help alleviate some of these pressures. However, Moody's foresees weak sales of small kitchen appliances for the rest of this year and into 2024 due to economic headwinds and pulled-forward demand during the pandemic. Similarly, the weed and insecticide product categories are expected to suffer from oversupply and low replenishment at retailers. While Moody's expects potential stabilization in the garden category in 2024, the segment's innate weather sensitivity is a risk to recovery in this business segment. Nonetheless, moderating raw material and transportation costs as well as realized cost-savings from restructuring are expected to support EBITDA margin improvement. Moody's anticipates in the B1 CFR that Spectrum's debt-to-EBITDA will decline below 5.0x over the next 12 months through a combination of business investment, acquisitions and debt repayment. Spectrum continues to manage towards a long-term net leverage target of 2.0-2.5x as per the company's calculation. However, the company is initially well above that range on a gross debt basis (Moody's estimates approximately 6.6x gross leverage based on the company's calculation), and the amount and timing of deleveraging depends on a large number of factors that are uncertain. Moody's expects that management will look to deploy the remaining net proceeds towards acquisitions such as opportunities to increase scale in pet consumables, work on a long-term solution to exit the underperforming HPC business, reinvest in the other retained businesses, and repay debt. These actions are designed to improve the company's growth prospects, EBITDA margin, and leverage position, but will take time to implement. The composition and risk profile of the asset base upon completion of these initiatives is unknown, which creates uncertainty about the level of free cash flow given that the company is not changing the dividend in response to the HHI divestiture. Governance considerations were a factor in Moody's rating decision. Gross leverage pro forma at close of the HHI sale is significantly higher than previously anticipated, and Moody's see a higher risk and potentially longer timeline for the company to achieve its stated 2.0–2.5x net leverage target because there is uncertainty how the company will deploy the remaining net proceeds. Moody's also sees higher risk from the level of shareholder returns due to the maintenance of the dividend despite the reduction in EBITDA and free cash from the sale of HHI. As a result, Moody's revised Spectrum's credit impact score to CIS-4 from CIS-3 and governance issuer profile score to G-4 from G-3. The change captures financial strategy and risk management concerns relating to Spectrum's financial policy that Moody's believes is leading to more elevated leverage for a longer period than previously anticipated. The negative outlook reflects the risk that Spectrum's financial leverage may not improve as meaningfully as expected over the next 12-18 months considering that the HPC and H&G segments continue to face material pressure to profitability. Uncertainty around the deployment of proceeds from the HHI sale, together with the company's aggressive financial policy including an unchanged dividend, further contribute to this risk and uncertainty about the asset risk profile and free cash flow. While Moody's anticipates Spectrum to have approximately $1.8 billion in cash (Moody's forecast) at fiscal year-end 2023, providing ample capacity drive balance sheet and profitability improvement, deleveraging will depend on the extent of the debt reduction and improvement in the EBITDA margin due to stabilization of operating performance and accretion from new acquisitions. The upgrade of the speculative liquidity rating to SGL-1 from SGL-2 reflects Spectrum's large cash balance and undrawn revolving credit facility following the close of the HHI acquisition and initial use of proceeds to repay approximately $1.6 billion of debt. The SGL-1 indicates that liquidity is very good. Moody's expects that Spectrum will have $1.8 billion in cash on hand at fiscal year-end September 2023 with a largely undrawn $600 million revolver. Spectrum repaid borrowing on its revolver using proceeds from HHI and concurrently reduced the available revolver balance to $600 million, which remains substantial to cover seasonal uses of cash. The company also has ample current cushion on its net debt-to-EBITDA financial leverage covenant (steps-down to 6.0x from 7.0x 10 days after the close of the HHI transaction) due to its net cash position. Moody's also expects Spectrum will generate at least $60-70 million in free cash flow annually on an on-going basis following a higher $120 million range in fiscal September 2023 that is benefitting from a reduction in working capital. Upgrades: Issuer: Spectrum Brands, Inc. Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Confirmations: Issuer: Spectrum Brands, Inc. Corporate Family Rating, Confirmed at B1 Probability of Default Rating, Confirmed at B1-PD Senior Secured Bank Credit Facility, Confirmed at Ba1 Senior Unsecured Regular Bond/Debenture, Confirmed at B2 Outlook Actions: Issuer: Spectrum Brands, Inc. Outlook, Changed To Negative From Ratings Under Review RATINGS RATIONALE Spectrum Brand's B1 CFR reflects its position as a modestly sized and highly leveraged player in the very competitive consumer packaged goods and durables markets. Spectrum has meaningful sensitivity to downturns in the economic cycle from exposure to discretionary products particularly in the Home and Personal Care segment. Financial policy is aggressive including historically high financial leverage due to frequent debt funded acquisitions to support Spectrum's long-term growth strategy, maintenance of the dividend following the HHI sale, as well as history of share repurchases. The ratings also reflect Moody's expectation that Spectrum will deploy the sizable $1.6 billion of remaining net proceeds from the June 2023 HHI divestiture to reinvest organically, pursue acquisitions and repay debt such that the very high gross debt-to-EBITDA leverage (estimated 10.2x as of April 2, 2023 pro forma for the HHI sale) will be reduced to below 5.0x within the next 12-to-18 months. Moody's expects Spectrum to manage to its stated 2.0-2.5x net leverage target, but there is considerable uncertainty about the pace and timing of deleveraging, and on a gross basis, leverage is initially considerably higher (Moody's estimates approximately 6.6x gross leverage based on the company's calculation pro forma including $1.6 billion of announced debt reduction and EBITDA for the retained businesses for the 12 months ended April 2, 2023). Until the net proceeds are fully deployed and the company executes on its plans for the HPC segment, there is also uncertainty about the asset base composition and business risk. Spectrum's credit profile benefits from its very good liquidity and lack of near-term debt maturities. Further, the company's track record of product development and diversification across affordable consumer-orientated brands and consumables in the Global Pet Care and Home and Garden segments provide resiliency to earnings and cash flows during periods of economic weakness although the latter is partially reliant on weather patterns that introduces volatility to earnings. Moody's also anticipates modest improvement in the EBITDA margin in fiscal September 2024 from the currently depressed levels due to recent pricing actions, cost saving initiatives, and moderation in input costs, especially shipping. However, Moody's expects profitability to remain weak as HPC and H&G continue to suffer from weak consumer demand and lower retailer replenishment due to elevated inventory levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would require greater certainty about the asset mix and risk profile, sustained organic revenue growth and evidence that the company's new business structure could maintain a stable EBITDA margin across economic cycles. The company would also need to adhere to a more conservative financial policy and operate more consistently around 2.0-2.5x net leverage target such that debt-to-EBITDA (incorporating Moody's adjustments) is sustained below 3.5x. The company would also need to maintain at least good liquidity including ample coverage of seasonal cash uses through free cash flow, available cash on hand and capacity on its revolver as well as ample cushion on its financial leverage covenant. Ratings could be downgraded if Spectrum's revenue or earnings do not improve over the next 12 months or if Moody's expects that debt-to EBITDA will remain above 5.0x factoring in deployment of the remaining HHI net proceeds. The rating may also be downgraded if the company experience material loss of market share or if liquidity deteriorates. ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS Spectrum's CIS-4 indicates that the rating is lower than it would have been if ESG risk exposures did not exist. The CIS is driven by governance risks related to Financial Strategy and Risk Management stemming from the company's aggressive financial policy including frequent leveraging acquisitions, moderate levels of share repurchases and a large dividend relative to free cash flow generation, partially balanced by the company's 2.0-2.5x net leverage target and track record of reducing debt following an acquisition. As with most consumer durables companies, the company credit profile faces environmental risks related to carbon transition, natural capital and waste and pollution and social risks that relate to responsible production. The principal methodology used in these ratings was Consumer Packaged Goods published in June 2022. Headquartered in Middleton, Wisconsin, Spectrum Brands, Inc. is a global consumer product company with a diverse portfolio including small appliances, lawn and garden, electric shaving and grooming, pet supplies, and household insect control and cleaning. Spectrum completed the sale of its Hardware and Home Improvement (HHI) business on June 20, 2023, for $4.3 billion (estimated $3.6 billion net of taxes and fees). The company is publicly traded with annual revenue of approximately $3.0 billion upon completion of the HHI sale. SPIRIT AIRLINES: Egan-Jones Retains CCC+ Senior Unsecured Ratings ----------------------------------------------------------------- Egan-Jones Ratings Company, on June 13, 2023, maintained its 'CCC+' foreign currency and local currency senior unsecured ratings on debt issued by Spirit Airlines, Inc. EJR also maintained its 'B' rating on commercial paper issued by the Company. Headquartered in Miramar, Florida, Spirit Airlines, Inc. owns and operates airlines. SYSCO CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings ----------------------------------------------------------- Egan-Jones Ratings Company, on June 16, 2023, maintained its 'BB+' foreign currency and local currency senior unsecured ratings on debt issued by Sysco Corporation. Headquartered in Houston, Texas, Sysco Corporation distributes food and related products primarily to the foodservice industry. SYSTEM1 INC: S&P Downgrades ICR to 'CCC', Outlook Negative ---------------------------------------------------------- S&P Global Ratings lowered its issuer credit ratings on System1 Inc. and its financing subsidiary, Orchid Merger Sub II LLC, to 'CCC' from 'B-'. At the same time, S&P lowered our issue-level rating on Orchid Merger's senior secured term loan to 'CCC' from 'B-'. The negative outlook reflects the potential for a lower rating if a recovery in digital advertising does not materialize as S&P currently expect in the second half of 2023, thereby increasing the potential for a liquidity shortfall or debt restructuring over the next 12 months. S&P said, "In our view System1 will be dependent on favorable economic and business conditions over the next 12 months to meet its financial obligations. We expect System1's operating and financial performance will remain challenged for the rest of 2023 as advertisers continue to cut spending as elevated inflation and interest rates eat away at consumers' purchasing power. If performance continues to stagnate without recovering in the second half of 2023, we view it unlikely the company will be able to meets its financial obligations." Over the next 12 months, System1 will have about $40 million of cash interest payments, $20 million of debt amortization, $5 million of deferred cash compensation payments related to its merger with Protected.net (that could increase to $15 million, depending on certain performance obligations being met), and $5.6 million of deferred acquisition payments for CouponFollow. S&P said, "We expect the company's current cash on hand, which we estimate at $15 million to $20 million, $15 million of availability under its newly committed revolving note, and our free cash flow expectations of about $17 million in 2023 will be sufficient for the company to meet its obligations, but with a thin margin. Our base-case forecast assumes System1 will begin to see a rebound in performance in the second half of 2023 that carriers over into 2024, but we have little visibility into future performance given the very short lead times for digital advertising. "We assume the company will draw down the full $20 million under its new revolving note to bolster its liquidity in 2023. This provides short-term relief but would lead to another sizable cash outflow when the facility matures in July 2024, that absent sustained cash flow improvement we believe the company would have difficulty meeting." The company's senior secured term loan is trading at distressed levels, increasing the potential for a subpar debt exchange. The company's senior secured term loan is currently trading around 73 cents on the dollar with a yield of close to 20%. The significant discount associated with the value of the company's term loan increases the potential that the company could be able to negotiate some form of a subpar debt exchange or out-of-court restructuring in order to increase its financial flexibility. S&P would view any type of distressed exchange in which the lenders receive less than originally promised as a default. System1's subscription business provides some countercyclicality but not enough to offset declining advertising growth. System1's subscription antivirus software solutions segment (20% of revenue) provides some countercyclicality to the business, given it tends to be a more stable and predictable revenue stream than digital advertising. However, in periods of economic softness or decline, we believe it's likely attrition rates would increase and that the company would have to increase traffic acquisition costs to increase subscribers, which would put downward pressure on margins. The negative outlook reflects the potential for a lower rating if a recovery in digital advertising does not materialize as we currently expect in the second half of 2023, thereby increasing the potential for a liquidity shortfall or debt restructuring over the next 12 months. S&P could lower its rating on System1 if it expects a default will occur in the next six months due to a significant recovery in the company's business not materializing in the second half of 2023. This could occur if: -- Macroeconomic pressures persist, resulting in advertisers continuing to withhold marketing spending; or -- Google were to terminate its service contract with System1 or renegotiate it at less than favorable terms. S&P could raise its ratings on System1 if the company's cash flow and liquidity improve such that it has comfortable headroom to meet its upcoming financial obligations and cash requirements beyond the next 12 months. TALCOTT FINANCIAL: Moody's Assigns Ba2 Issuer Rating, Outlook Pos. ------------------------------------------------------------------ Moody's Investors Service has assigned a Ba2 issuer rating to Talcott Financial Group, Ltd. (TFG). TFG is the holding company of Talcott Resolution Life, Inc. (TLI; senior debt Ba2 positive) and rated insurance operating companies Talcott Resolution Life Insurance Company (TL; insurance financial strength (IFS) Baa2 positive) and Talcott Resolution Life and Annuity Insurance Company (TLA; IFS Baa2 positive). The rating outlook assigned to TFG is positive. RATINGS RATIONALE The Ba2 issuer rating of TFG is three notches below the Baa2 IFS ratings of TL and TLA and reflects Moody's typical notching for an insurance holding company relative to its insurance operating subsidiaries. This reflects Moody's expectation that existing debt from TLI, which functions as the intermediate holding company that owns the US insurance operating companies, will be paid down and future issuance out of the entity will be de minimus. Material issuance of debt securities or preferred stock from TLI or other TFG subsidiaries, which would subordinate TFG debtholders, could result in a downgrade of TFG's rating. According to Moody's, the Ba2 issuer rating of TFG and the Baa2 IFS ratings of its insurance company subsidiaries reflect the company's shift from a primarily runoff business, dominated by variable, fixed and institutional spread products, to an aggregator business. Talcott has stable cash flows from its mature inforce business as well as prudent risk management. However, it has significant exposure to earnings and capital volatility and must manage capital requirements that are sensitive to policyholder behavior, equity market returns, and interest rates. Recent large transactions and associated fast growth also present execution risks. The positive outlook reflects Moody's view that the recent transactions as well as potential future transactions, if successfully executed and integrated, will greatly enhance Talcott's business profile. The company is transforming from being solely a runoff operation of products sold internally to an ongoing aggregator of legacy blocks as well as providing capital to direct insurance counterparties through flow reinsurance. This is improving Talcott's market position and brand and is expanding and diversifying the company's liability base. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The following factors could lead to an upgrade of Talcott's ratings: 1) successful execution of growth strategy, including integration of recently acquired blocks, that enhances business and financial profile; 2) further minimizing the volatility associated with stress scenarios for the legacy block of variable annuities; and 3) effective management of the inforce business that results in consistent capital generation. Given the positive outlook, a downgrade over the near term is unlikely. However, the following could cause us to change the outlook back to stable: 1) sustained NAIC RBC ratio levels (company action level) below 350% or BSCR ratio below 175%; 2) material increase in investment risk or complexity; 3) financial leverage (excluding AOCI and retained earnings relating to unrealized investment losses on assumed reinsurance with funds withheld) at Talcott above 35%. The following rating has been assigned: Talcott Financial Group, Ltd. - long-term issuer rating of Ba2. The rating outlook assigned to TFG is positive. The principal methodology used in this rating was Life Insurers Methodology published in January 2023. As of March 31, 2023, Talcott Resolution Life Insurance Company reported total assets of $84.3 billion and total capital and surplus of $2.7 billion on a statutory basis. TD SYNNEX: Egan-Jones Retains BB+ Senior Unsecured Ratings ---------------------------------------------------------- Egan-Jones Ratings Company, on June 13, 2023, maintained its 'BB+' foreign currency and local currency senior unsecured ratings on debt issued by TD SYNNEX Corp. Headquartered in Fremont, California, TD SYNNEX Corp provides information technology supply chain services. TECTA AMERICA: S&P Upgrades ICR to 'B', Outlook Stable ------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on U.S.-based commercial roofing installer Tecta America Corp. one notch to 'B' from 'B-'. S&P also raised its issue-level ratings on its first-lien and second-lien credit facilities one notch to 'B' and 'CCC+', respectively, in line with the upgrade. The stable outlook reflects S&P's view that Tecta will grow revenue in the mid-teen percentage range and maintain EBITDA margins in the low-teens percentage over the next year, such that leverage will decline to the low-5x by the end of 2023. S&P said, "The upgrade reflects Tecta's strong revenue growth and backlog and our expectation of stable margins. Strong demand for roofing services fueled revenue and EBITDA growth for the 12 months ended March 31, 2023, and we expect continued growth through the year, supported by Tecta's large backlog, which is about $600 million at the end of the first quarter. Backlog has remained near this record level since last year, even as supply chain disruptions have eased and past backlog has become realized revenue. Annual revenue increased 47% to $1.2 billion during 2022, 24% of which we estimate to have been organic growth. We forecast revenue growth to be in the mid-teens percentage area during 2023. We also expect Tecta's EBITDA margins to remain in the low-teens percentage area and for leverage to ultimately improve to the low-5x area by the end of the year. We note that the majority of Tecta's annual revenue is non-discretionary services, such as re-roofing and service jobs. About a quarter of annual revenue is related to new construction, which can be more discretionary, especially during periods of economic declines." Financial sponsor ownership presents the risk of a future leveraging event. Tecta made a large debt-funded acquisition and dividend distribution in the first half of 2021, which increased pro forma leverage to 7.7x. The company has performed well since then both organically and while integrating tuck in acquisitions. At the current debt levels, we expect leverage to improve to the low-5x area by the end of 2023, driven by EBITDA growth. Still, S&P believes private equity financial sponsors tend to maintain elevated leverage to maximize investment returns, and the company may fund future acquisitions or dividends with debt--which makes longer-term deleveraging unlikely. Tecta benefits from its limited near-term debt maturities and good liquidity, which will enable it to manage through unexpected or short-term disruptions. S&P said, "We believe the company has adequate liquidity to manage through the current low-growth macroeconomic environment. As of the first quarter of 2023, Tecta had $98 million of accessible cash and $81 million of availability under its $125 million revolver ($30 million drawn and $14 million used for letters of credit). Tecta increased its revolver commitment by $40 million to $165 million in May 2023. Tecta's earliest debt maturity is its revolving credit facility, which comes due in 2026. In addition, we project the company to generate more FOCF during 2023 than 2022 (about $50 million projected)." Tecta remains exposed to the cyclical construction industry and is not diversified because its focus is only on roofing projects. We note that Tecta's revenue declined about 20% in 2009 during the Great Recession and that if there were to be a longer-lasting recession in the future, revenue and earnings could decline temporarily as customers cancel new construction and delay work on existing roofs. However, delaying maintenance work on roofs often leads to other issues (e.g., leaks, breaks, and wear and tear) that can result in more complex and pricier job orders from customers in the future. S&P said, "The stable outlook on Tecta America Corp. reflects our expectation that the company will be able to deleverage to the low-5x area by the end of 2023 while sustaining FOCF to debt in the mid-to-high single-digit percent area over the next 12 months. We believe the company's strong backlog supports its deleveraging prospects and gives revenue visibility through the end of the year." ESG credit indicators: E-2; S-2; G-3 Governance is a moderately negative consideration, as it is for most rated entities owned by private-equity sponsors. S&P believes the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects private-equity sponsors' generally finite holding periods and focus on maximizing shareholder returns. THEODORE FIORE, SR: $1.85MM Sale of Toms River Property Denied -------------------------------------------------------------- Judge Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey denies without prejudice Theodore Fiore, Sr.'s private sale of a real property to MT Venture Capital LLC, for $1.85 million. Theodore Fiore, Sr. sought Chapter 11 protection (Bankr. D.N.J. Case No. 22-18679) on Nov. 1, 2022. The Debtor tapped David Stevens, Esq., as counsel. THOMAS PETTERS: BMO Harris to Pay Over $1B in Ponzi Scheme Case --------------------------------------------------------------- A federal judge in St. Paul, Minn., on June 23, 2023, ordered BMO Harris Bank to pay pre- and post-judgment interest on the $564 million jury verdict awarded to Robins Kaplan client Douglas A. Kelley in one of the largest Ponzi scheme cases in U.S. history, bringing the award and BMO's total liability to over $1 billion. The case involved former Wayzata fraudster Tom Petters, who was convicted and sentenced to 50 years in prison for fraud using accounts held at M&I Bank, which was acquired in 2011 by BMO Harris Bank. In November 2022, a Minnesota jury found that BMO aided and abetted breaches of fiduciary duty by Petters and his cohorts in using an M&I checking account to launder nearly $74 billion in Ponzi scheme proceeds between 2002 and 2008. The jury awarded approximately $564 million in damages to Kelley in his capacity as trustee for the BMO Litigation Trust. The award was the largest-ever jury award in a Minnesota civil case. "We are thrilled with this outcome and Judge Wright's incredibly detailed Order on these issues. We can now move to our final step in finding justice for Mr. Kelley so he can compensate those folks who lost money because of BMO's actions," said Robins Kaplan partner Michael Collyard, who served as lead trial counsel for Kelley. The matter arises from a Ponzi scheme orchestrated by Petters and his associates, Deanna Coleman and Robert White, between 1994 and 2008. Petters, Coleman, and White used Petters Company, Inc., as the conduit for obtaining billions of dollars from investors through fraud, false pretenses and misrepresentations. These funds were wired into and out of PCI's depository account at BMO Harris' predecessor bank, M&I Marshall and Ilsley Bank, for whose conduct BMO Harris is legally responsible. The Trustee's claims relate to M&I's handling of PCI's account, contending that M&I was complicit in Petters's scheme because M&I did not alert authorities to irregularities in PCI's deposits and withdrawals that M&I knew or should have known about. The Trustee initially filed his claims against BMO Harris in PCI's bankruptcy proceeding in 2012. When the bankruptcy concluded, the claims were transferred to the District Court for trial. The jury heard evidence on four claims against BMO Harris: violation of the Minnesota Uniform Fiduciaries Act, breach of fiduciary duties to PCI, aiding and abetting fraud against PCI and aiding and abetting the breach of fiduciary duties owed to PCI. The jury found for BMO Harris on the first three claims. But the jury found in favor of the Trustee on the fourth claim, that BMO Harris aided and abetted the breach of fiduciary duties, and awarded the Trustee compensatory and punitive damages of more than $550 million. In the discovery process in the PCI bankruptcy case, BMO Harris destroyed email backup tapes containing tens of thousands of documents, despite knowing that those tapes were subject to a litigation hold. The bankruptcy court ultimately imposed spoliation sanctions on BMO Harris, including requiring an adverse-inference instruction that BMO Harris intentionally destroyed evidence that it knew was harmful to its case. The District Court later ruled that the adverse inference was permissive, not mandatory, and allowed the parties to present evidence to the jury regarding BMO Harris' conduct. The jury was instructed that it could, but was not required to, find that the spoliated evidence would have been detrimental to BMO Harris. With regard to post-judgment interest, the Trustee contends, and BMO Harris does not dispute, that the applicable rate is 4.74%. Accordingly, District Judge Wilhelmina M. Wright, therefore, directs the Clerk to add post-judgment interest of 4.74% to the judgment, calculated from the date of the verdict to the date of the Order. With regard to pre-judgment interest, Judge Wright held that the Trustee's fraud and breach-of-duty claims arise wholly under state law. That those claims were initially brought in PCI's federal bankruptcy matter as an adversary proceeding and are therefore properly subject to the Court's jurisdiction under 28 U.S.C. section 1334 does not change the claims' underlying state-law character. The claims are state-law causes of action, and Minnesota law, therefore, governs the award of prejudgment interest, Judge Wright said, citing Emmenegger v. Bull Moose Tube Co., 324 F.3d 616, 624 (8th Cir. 2003). According to Judge Wright, Minnesota requires the award of prejudgment interest without any equitable reduction, and the Trustee is entitled to prejudgment interest of 10% on the amount of the verdict from the date he filed the lawsuit until the date of the verdict. The case is, Douglas A. Kelley, in his capacity as the Trustee of the BMO Litigation Trust, Plaintiff, v. BMO Harris Bank N.A., as successor to M&I Marshall and Ilsley Bank, Defendant, Case No. 19-cv-1756 (D. Minn.). About Tom Petters Thomas Joseph Petters was the founder of Petters Group Worldwide LLC. Between 1998 and 2008, Petters created a series of investment funds, which included Arrowhead, Lancelot, Palm Beach and Stewardship, to raise in excess of $4 billion. Petters used the funds to finance the acquisitions of Petters Group Worldwide. Amid mounting criminal investigations of massive fraud, Petters resigned as his company's CEO in September 2008. In 2009, he was convicted of numerous federal crimes for operating Petters Group Worldwide as a $3.65 billion Ponzi scheme and received a 50-year federal sentence. Formed in 1988 and based in Minnetonka, Minn., Petters Group Worldwide was a collection of some 20 companies, most of which make and market consumer products. Holdings included Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters Group Worldwide, LLC, and capital raising unit Petters Company, Inc. filed Chapter 11 bankruptcy petitions (Bankr. D. Minn. Case Nos. 08-45257 and 08-45258) on Oct. 11, 2008. Douglas Kelley was named as the Chapter 11 Trustee to take charge of the bankruptcy process and what's left of the business. The Trustee tapped Lindquist & Vennum LLP, in Minneapolis, Minn., as bankruptcy counsel, Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Sun Country Airlines, Inc., and related entities filed for Chapter 11 bankruptcy protection (Bankr. D. Minn. Lead Case No. 08-45136) on Oct. 6, 2008. In July 2011, Sun Country Airlines was purchased out of bankruptcy for $34 million by the Davis family, owners of Cambria, a Minnesota-based countertop company. Polaroid Corp. filed its second voluntary petition for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-46617) on Dec. 18, 2008. PLR Acquisition LLC, a joint venture composed of Hilco Consumer Capital L.P. and Gordon Brothers Brands LLC, acquired most of Polaroid's assets -- including the Polaroid brand and trademarks -- in May 2009. They paid $87.6 million for the brand. Polaroid Corp. was renamed to PBE Corp. following the sale. The case was converted to Chapter 7 on Aug. 31, 2009, and John R. Stoebner was appointed as the Chapter 7 Trustee. TPC GROUP: Texas Justices Rule Investors Not Liable for Explosion ----------------------------------------------------------------- Peter McGuire of Law360 reports that the Texas high court on Friday, June 23, 2023, ruled private equity investors in TPC Group Inc.'s Port Neches chemical plant can't be held responsible for safety lapses that led to a massive explosion at the complex, but refused to force a lower court to dismiss claims against the firms. About TPC Group TPC Group, headquartered in Houston, is a producer of value-added products derived from petrochemical raw materials such as C4 hydrocarbons, and provider of critical infrastructure and logistics services along the Gulf Coast. The Company sells its products into a wide range of performance, specialty and intermediate markets, including synthetic rubber, fuels, lubricant additives, plastics and surfactants. With an operating history of more than 75 years, TPC Group has a manufacturing facility in the industrial corridor adjacent to the Houston Ship Channel and operates product terminals in Port Neches, Texas and Lake Charles, Louisiana. TPC Group Inc. and its subsidiaries sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group estimated assets and debt of $1 billion to $10 billion to $10 billion. The Hon. Craig T. Goldblatt is the case judge. Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arshtn & Tunnell LLP is the co-counsel; Moelis & Company LLC is the investment banker; and FTI Consulting is the financial advisor. Simpson Thacher & Bartlett LLP is the special finance counsel. Kroll Restructuring Administration is the claims agent. Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd. Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as counsel to the Ad Hoc Noteholder Group that supports the Debtors' restructuring. Evercore Group L.L.C., is the Group's financial advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to the Ad Hoc Noteholder Group. The Supporting Noteholders are funds controlled by FIG LLC and Fortress Capital Finance III(A) LLC, Monarch Alternative Capital LP., PGIM Inc., Redwood Capital Management LLC, and Strategic Value Partners LLC. Pachulski Stang Ziehl & Jones LLP, Proskauer Rose LLP, and Selendy Gay Elsberg PLLC are serving as counsel to an Ad Hoc Group of Non-Consenting Noteholders, led by Bayside Capital, Inc., and Cerberus Capital Management, L.P. Milbank LLP previously served as the group's counsel but was later replaced by Pachulski and SGE. * * * TPC Group Inc. emerged from bankruptcy protection on Dec. 16, 2022. The company's plan of reorganization was confirmed by the Court on Dec. 1, 2022. The reorganization plan eliminates more than $950 million of TPC's $1.3 billion in secured funded debt and other litigation liabilities stemming from an explosion at the company's chemical facility in Port Neches, Texas, in November 2019, TPC Group said Dec. 16, 2022. TPC Group also said the reorganization plan gives the petrochemical company new capital as it emerges from restructuring, including $350 million in exit notes and $165 million through an equity rights offering. TRANSCENDIA INC: MetWest FRI Marks $1.5M Loan at 24% Off -------------------------------------------------------- Metropolitan West Fund's Floating Rate Income Fund has marked its $1,594,096 loan extended to Transcendia Holdings, Inc to market at $1,594,096 or 76% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Floating Rate Income Fund is a participant in a First Lien Term Loan B (LIBOR plus 3.50%) to Transcendia Holdings, Inc. The loan accrues interest at a rate of 8.34% per annum. The loan matures on May 30, 2024. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Transcendia Holdings, Inc. is a provider of engineered specialty films materials across a range of end-markets. The company manufactures specialty films by extrusion of resin or converting film for specific customer applications. TRANSCENDIA INC: MetWest OHIC Marks $16,735 Loan at 24% Off ----------------------------------------------------------- Metropolitan West Fund's Opportunistic High Income Credit Fund has marked its $16,735 loan extended to Transcendia Holdings, Inc to market at $12,718 or 76% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Opportunistic High Income Credit Fund is a participant in a First Lien Term Loan B (LIBOR plus 3.50%) to Transcendia Holdings, Inc. The loan accrues interest at a rate of 8.34% per annum. The loan matures on May 30, 2024. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Transcendia Holdings, Inc. is a provider of engineered specialty films materials across a range of end-markets. The company manufactures specialty films by extrusion of resin or converting film for specific customer applications. CENTURYLINK INC: MetWest Marks $5,219 Loan at 34% Off TRUGREEN LP: MetWest FRI Marks $500,000 Loan at 32% Off ------------------------------------------------------- Metropolitan West Fund's Floating Rate Income Fund has marked its $500,000 loan extended to Trugreen LP to market at $337,500 or 68% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Floating Rate Income Fund is a participant in a Second Lien Term Loan b (SOFR plus 8.50%) to Trugreen LP. The loan accrues interest at a rate of 13.18% per annum. The loan matures on March 15, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. TruGreen Limited Partnership provides lawn care services. The Company offers healthy lawn analysis, fertilization, tree and shrub care, weed control, insect control, and other related services. TTM TECHNOLOGIES: Egan-Jones Retains B+ Senior Unsecured Ratings ---------------------------------------------------------------- Egan-Jones Ratings Company, on June 13, 2023, maintained its 'B+' foreign currency and local currency senior unsecured ratings on debt issued by TTM Technologies, Inc. Headquartered in Costa Mesa, California, TTM Technologies, Inc. is an independent provider of time-critical, one-stop manufacturing services for printed circuit boards. U.S. SILICA: Egan-Jones Hikes Senior Unsecured Ratings to B- ------------------------------------------------------------ Egan-Jones Ratings Company, on June 5, 2023, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by U.S. Silica Holdings, Inc. to B- from CCC+. EJR also maintained its 'B' rating on commercial paper issued by the Company. Headquartered in Katy, Texas, U.S. Silica Holdings, Inc. operates as a producer of industrial silica and sand proppants. UAL CORP: Egan-Jones Retains CCC+ Senior Unsecured Ratings ---------------------------------------------------------- Egan-Jones Ratings Company, on June 15, 2023, maintained its 'CCC+' foreign currency and local currency senior unsecured ratings on debt issued by UAL Corporation. EJR also maintained its 'B' rating on commercial paper issued by the Company. Headquartered in Chicago, ‎Illinois‎, UAL Corporation is a holding company. VAIL RESORTS: Egan-Jones Retains B+ Senior Unsecured Ratings ------------------------------------------------------------ Egan-Jones Ratings Company, on May 30, 2023 maintained its 'B+' foreign currency and local currency senior unsecured ratings on debt issued by Vail Resorts, Inc. Headquartered in Broomfield, Colorado, Vail Resorts, Inc. is a holding company, which engages in the operation of mountain resorts. VANTAGE TRAVEL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Vantage Travel Service, Inc. d/b/a Vantage Deluxe World Travel 90 Canal Street Boston, MA 02114 Business Description: Founded in 1983, Vantage Travel is a travel agency providing deluxe international tours. Its travel offerings include trips on river and ocean-going vessels owned by affiliated, non-debtor entities, as well as river, ocean-going and land-based tours booked with third-party operators. Chapter 11 Petition Date: June 29, 2023 Court: United States Bankruptcy Court District of Massachusetts Case No.: 23-11060 Judge: Hon. Janet E. Bostwick Debtor's Counsel: Michael J. Goldberg, Esq. CASNER & EDWARDS, LLP 303 Congress Street Boston, MA 02210 Tel: 617-426-5900 Fax: 617-426-8810 Email: goldberg@casneredwards.com Debtor's Financial Advisor: ARGUS MANAGEMENT CORPORATION Debtor's Claims & Noticing Agent: STRETTO, INC. Estimated Assets: $1 million to $10 million Estimated Liabilities: $100 million to $500 million The petition was signed by Gregory DelGreco as authorized officer. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VUHJRHY/Vantage_Travel_Service_Inc__mabke-23-11060__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Odyssey BBHP Owner Ltd. Business Debt $3,600,000 4770 Biscayne Blvd, PH-B Miami, FL 33137 Niels-Erik Lund Email: nlund@sunstoneships.com 2. Explorer BBHP Owner Ltd. Business Debt $3,204,683 4770 Biscayne Blvd, PH-B Miami, FL 33137 Niels-Erik Lund Email: nlund@sunstoneships.com 3. Apollo River Management AG Business Debt $2,235,573 Nauenstrasse 63a 4052 Basel Switzerland Daniel Buchmueller Email: daniel.buchmueller @riveradvice.com 4. Cruise Management Business Debt $1,806,193 International Inc 4770 Biscayne Blvd, Penthouse C Miami, FL 33137 Sanjay Sukhrani Phone: 305-441-9888 Email: sanjay.sukhrani@c mishipmanagement.com 5. Dan-Bunkering Business Debt $1,377,991 Tuborg Havnegade 15 Level 5 Hellerup 2900 Denmark Hans Lind Dollerup Email: hald@dan-bunkering.com 6. CMI Leisure Business Debt $1,075,456 Unipessoal SA Rua Ivens, 3-B, Edificio Dona Mecia, 5. Funchal 9000 046 Portugal Dietmar Wertanzl Tel: 786-522-7396 Email: dwertanzl@cmi-Leisure.com 7. Sakkara Tours Business Debt $985,855 Merghany St. 61. Heliopolis, Cairo Egypt Baher Ghabbour Email: baher@sgi.travel 8. Nicko Tours GmbH Business Debt $899,091 Mittlerer Pfad 2 Stuttgart D-70499 Germany Guido Laukamp Email: g.laukamp@nicko-cruises.de 9. ARC Business Debt $793,840 3000 Wilson Blvd Suite 300 Arlington, VA 22201 Lisa Dunson Phone: 703-816-8075 Email: ldunson@ARCCorp.com 10. Cambridge Business Debt $782,496 Mercantile Group 1359 Broadway Suite 801 New York, NY 10018 Carlo Lascialfare Phone: 212-594-2200 Email: carlo.lascialfare@corpay.com 11. Trip Mate Insurance Business Debt $632,926 Agency, Inc. 9225 Ward Parkway, 2FLR Kansas City, MO 64114 Kelly Sahner Phone: 816-905-3940 Email: kpsahner@tripmate.com 12. Japs-Olson Company Business Debt $627,026 7500 Excelsior Blvd St. Louis Park, MN 55426 June Perry Email: June.Perry@japsolson.com; Laura.Dekowski@japsolson.com 13. InterNile Business Debt $526,680 61 El Merghany Str Heliopolis, Cairo Egypt Baher Ghabbour Email: baher@sgi.travel 14. Bryde GMBH Business Debt $446,835 Waldstr. 3 Bad Salzuflen 32105 Germany Jan Bryde Email: jan@brydegmbh.com 15. Akorn Jordan Business Debt $401,616 101 St. Martin's Lane London WC2N 4AZ United Kingdom Jay Warren Email: jwarren@akorndmc.com 16. iCORPS Technologies, Inc. Business Debt $368,123 300 TradeCenter, Suite 6540 Woburn, MA 01801 Michael Plourde Phone: 617-868-2000 Email: mplourde@icorps.com 17. AGA Service Business Debt $340,142 Company 9950 Mayland Drive Richmond, VA 23233 Daniel Roth Phone: 804-673-7176 Email: Daniel.Roth@allianz.com 18. Africa Leisure Travel Business Debt $301,296 Intercontinental Trust Limited, Level 3, Alexander House, 35 Cybercity, Ebene 72201 Mauritius Tatenda Tracey Email: debtors@africaleisuretravel.mu; info@africaleisuretravel.mu Phone: 230-434-0738 19. Shorexplorations Business Debt $269,170 Treinta y tres 1334 Oficina 10 Montevideo 11000 Uruguay Dirk Bleeker Email: dbleeker@shorexplorations.com 20. PTP Business Debt $212,434 500 Capitol Mall, Suite 2350 Sacramento, CA 95814 Jeff Forderer Email: jeff.forderer@ptpinc.com VANTAGE TRAVEL: Files for Chapter 11 to Sell to Nordic Hamburg -------------------------------------------------------------- Vantage Travel Services, Inc., on June 29 disclosed that United Travel Pte. Ltd., an affiliate of Nordic Hamburg and Heritage Expeditions, has agreed to acquire Vantage's assets and provide customers with future opportunities for the travel experiences and the luxury service that they have come to expect. The proposed acquisition was being facilitated by a Chapter 11 filing on June 29, 2023, in the United States Bankruptcy Court for the District of Massachusetts by Vantage. Vantage has sought customary relief from the court to preserve the status quo pending completion of the sale. Vantage has sought approval to complete the sale promptly, subject to any higher and better offers that may be submitted through the court supervised sale process. Argus Management is serving as financial advisor and Casner & Edwards LLP as legal advisor to Vantage. Information on the Chapter 11 process can be accessed at https://cases.stretto.com/Vantage VEGASNAP LLC: Files Emergency Bid to Use Cash Collateral -------------------------------------------------------- VegasNAP, LLC, d/b/a Fiberhub, asks the U.S. Bankruptcy Court for the District of Nevada for authority to use cash collateral in accordance with the budget, with a 15% variance and provide adequate protection. The Debtor is only seeking to use cash collateral to preserve, maintain and operate its business in the ordinary course. The Debtor is seeking to restructure its operations principally with respect to at least 10 capital leases for various computer and related equipment in excess of an original principal sum of $750,000 used in its operations. Many of the Debtor's financed purchases of equipment, nearly all of which are with lease financing companies and not the original manufacturers or providers of the equipment, have proven to be very expensive, and the Debtor lacks the ability to continue paying the monthly costs at their current rates. In fact, the remaining monthly payments under many of the Debtor's finance leases are for substantially more than what the underlying equipment under those agreements is worth, especially given the expedited technological obsolescence of the equipment involved. Accordingly, the Debtor anticipates seeking to assume, reject and/or renegotiate the arrangements as necessary to allow it to streamline and economize its operations going forward. On July 22, 2020, the Debtor obtained an Economic Injury Disaster Loan Agreement from the U.S. Small Business Administration, as lender, pursuant to an original Loan Authorization Agreement, which was later amended on December 31, 2021, with the 2020 tranche in the amount of $33,200 and the 2021 tranche in the amount of $244,300, and thus in the aggregate amount of $277,500. The SBA Loan, as amended, was required to be repaid in a total monthly installment of $1,395 per month beginning in July 2023, and continuing each and every month thereafter for a period of 30 years. The loan would accrue interest at the rate of 3.75% per annum. The SBA perfected its security interest in the Collateral by filing a UCC-1 financing statement describing it with the Nevada Secretary of State on August 10, 2020. The Debtor proposes to make a monthly adequate protection payment to the SBA of $1,557. In 2020 and 2021, the Debtor also entered into a series of approximately 13 capital leases for various pieces of computer equipment used in the operation of its business, all or nearly all of which are with lease finance companies. Although ostensibly structured as "leases," many of these were actually financed purchases of the associated equipment, and thus many of these parties also filed protective UCC-1 financing statements with the Nevada Secretary of State. Although these parties apparently have no identifiable interest in and to the cash collateral, the Debtor intends on making required post-petition payments on a "go forward" basis, except to the extent it may seek to reject or modify such agreements. In 2022, the Debtor has also borrowed two loans from PayPal Working Capital, which are business loans offered by WebBank. Specifically, VegasNAP borrowed $100,000 on September 7, 2022, and VersaWeb borrowed $22,000 about the same time as more fully set forth in various Terms and Conditions for PayPal Working Capital Account. A copy of the motion is available at https://urlcurt.com/u?l=gaIXwQ from PacerMonitor.com. About VegasNAP, LLC VegasNAP, LLC is a family-owned internet infrastructure and cloud hosting provider headquartered in Las Vegas, Nevada, which also has co-location datacenter facilities in Seattle, Dallas, and Miami. The Debtor primarily provides business solutions for organizations, including colocation services, cloud hosting services, data backup, IP transit (Internet access) and data transport solutions, as well as network solutions to provide protection from disaster recovery for events like cyber-attacks, power outages, network and other system failures. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 23-12371-hlb) on June 12, 2023. In the petition signed by Don J. Reed, chief operating officer, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Matthew C. Zirzow, Esq., at Larson and Zirzow, LLC, represents the Debtor as legal counsel. VERINT SYSTEM: Egan-Jones Retains BB Senior Unsecured Ratings ------------------------------------------------------------- Egan-Jones Ratings Company, on May 30, 2023 maintained its 'BB' foreign currency and local currency senior unsecured ratings on debt issued by Verint Systems Inc. Headquartered in Huntington, New York, Verint Systems Inc. provides analytic solutions for communications, interception, digital video security and surveillance, and enterprise business intelligence. WICHITA HOOPS: Unsecureds to be Paid in Full in 5 Years ------------------------------------------------------- Wichita Hoops, LLC, filed with the U.S. Bankruptcy Court for the District of Kansas a Plan of Reorganization dated June 26, 2023. Debtor owns and operates a multi-purpose gymnasium specializing in youth basketball, volleyball, and sports training. Debtor was founded by Evan McCorry, Carlos Perez, Sr., and Jason Perez between 2013 and 2014. Debtor initially owned its facility, which was acquired at two different times using financing from Legacy Bank. After completing its second phase, Debtor began to have difficulty servicing its debt structure with Legacy. In or around September 2021, Legacy sold the facility to Webb Industrial, LLC, who leased the facility to the Debtor. After the Debtor fell behind on some of its rent payments, Webb filed an eviction action in Sedgwick County District Court on March 3, 2023. Except as hereinafter specified in the Plan, Confirmation of the Plan shall not vest the assets of the Estate in the Debtor. All assets of the Debtor shall remain property of the Estate until the Discharge has been entered. In the event that the Plan is a consensual Plan, the Confirmation of the Plan shall constitute such a Discharge, and the assets of the Estate shall vest in the Debtor at Confirmation. The Debtor intends to reorganize its business and restructure its liabilities. Class 4 consists of the General Unsecured Claims as of the filing date, including any nonpriority portions of the Class 2 Claims. The Allowed Class 4 Claims are estimated at $115,048.28 and shall be paid in full through five equal annual installments of $23,009.56 paid on or before June 1, 2024, and each year thereafter until paid in full, without interest. Distributions to the Class 4 Claims shall be made on a Pro Rata basis. All Allowed Class 4 Claims are impaired and entitled to vote on the Plan. Class 5 consists of the subordinated unsecured claims as of the filing date, which consist of member loans made by Evan McCorry and Carlos Perez, Sr. The Allowed Class 5 Claims shall not receive any distributions until the Class 5 Claims have been paid in full. Thereafter, the Class 5 Claims shall be paid in full out of the Debtor's disposable income, as and when available. All Allowed Class 5 Claims are impaired. Class 6 Equity Ownership Interests consist of the units of Debtor's membership interests held by its members. Debtor's members shall retain their units in the Debtor. Class 6 is unimpaired and not entitled to vote on the Plan. All allowed claims are proposed to be paid in full. This treatment depends upon Confirmation of the Plan in its existing form, and any changes thereto may dramatically alter the balance of the Plan. The Budget shows that the Debtor will have sufficient net income to fund the payments required by the Plan. They are based on past performance, contributions from Debtor's owners, changes to Debtor's operations, and reasonable expectations for the future. A full-text copy of the Plan of Reorganization dated June 26, 2023 is available at https://urlcurt.com/u?l=jZQ8to from PacerMonitor.com at no charge. Attorneys for Debtor: David Prelle Eron, Esq. Prelle Eron & Bailey, PA 301 N. Main St., Suite 2000 Wichita, KS 67202 Telephone: (316) 262-5500 Facsimile: (316) 262-5559 Email: david@eronlaw.net About Wichita Hoops Wichita Hoops, LLC, operator of an athletic facility, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 23-10255) on March 27, 2023. In the petition signed by Evan McCorry, member manager, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Mitchell L. Herren oversees the case. The Debtor tapped David Prelle Eron, Esq., at Prelle Eron and Bailey, PC as legal counsel and Pamela Nilhas at Smoll & Banning, CPA's, LLC as accountant. WIN WASTE: Moody's Lowers CFR & First Lien Sr. Secured Debt to B3 ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of WIN Waste Innovations Holdings Inc., including the corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and rating on the company's first-lien senior secured debt to B3 from B2. The outlook remains negative. The downgrades reflect WIN's weak liquidity with less external funding capacity than Moody's previously expected. The weak liquidity is characterized by very limited revolver availability and Moody's expectation for free cash flow to remain negative for some time. This will also result in sustained high leverage. Moody's believes this leaves limited cushion to absorb any emerging challenges as the company navigates through recent operating headwinds that will take time to improve. These headwinds, including unplanned outages/downtime at several waste-to-energy ("WtE") facilities, have led to weaker operating results, higher borrowings and increased capital spending. While WIN has made positive progress remediating the plant disruptions and recent labor issues tied to its rail partner (CSX) have abated, an improvement in credit metrics will be more protracted and a meaningful improvement is unlikely in the near term. Moody's expects adjusted debt-to-EBITDA to remain above 7x through 2023 (pro forma for acquisitions) and fall towards a still high 6.5x with moderate EBITDA growth over the next year. Governance risk was also a key driver in the rating outcome driven by aggressive financial policies, including a financial strategy that has resulted in the company's high leverage with a meaningful increase in debt and weak liquidity. Moody's took the following actions on WIN Waste Innovations Holdings Inc.: Downgrades: Issuer: WIN Waste Innovations Holdings Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured Bank Credit Facilities, Downgraded to B3 from B2 Outlook Actions: Issuer: WIN Waste Innovations Holdings Inc. Outlook, Remains Negative RATINGS RATIONALE WIN's ratings reflect its modest scale with a primary regional focus in the Northeast US, capital-intensive business model that constrains free cash flow and high financial leverage, sustained in part by an aggressive acquisition strategy. WIN is also exposed to earnings and cash flow volatility from fluctuating commodity prices and wholesale power markets in its energy business (nearly 20% of revenue), although that risk is partially mitigated by hedging. Cost inflation will continue to exert margin pressures. But Moody's anticipates that higher pricing on contract renewals and continued momentum with fixing recent operational issues will support a modest improvement in credit metrics over the next 12-18 months. WIN benefits from stable waste disposal demand, underpinned by long term contracts (averaging 8 years), and valuable infrastructure assets with high barriers to entry that support a recurring revenue base. With disposal capabilities supported by strategically located facilities and rail-connected transfer stations, the company is well-positioned to capture growing demand in the northeast US, a region with declining landfill disposal capacity and a supply-demand imbalance. This should continue to provide favorable pricing conditions and support stronger margins and cash flow over time. The negative outlook reflects continued uncertainty around the timing to improve disrupted plant operations and disposal volumes and meaningfully improve earnings and liquidity. Further, the limited availability of additional/external liquidity diminishes the ability to absorb a negative event at the current rating level. Moody's views WIN's liquidity as weak, despite some flexibility to reduce capital expenditures, given the expectation of negative free cash flow likely into 2024 and limited availability on the company's $477 million revolving credit facility. Considering the company's high capital spending and vulnerability to plant disruptions, and its constrained free cash flow, Moody's believes WIN will have to pursue a longer term external capital solution, which could further increase its cost of capital and leverage. The revolving facility, expiring in 2026, had approximately $26 million available at March 31, 2023, net of letters of credit. The company recently closed a $75 million accounts receivable facility for added liquidity though the majority is drawn, leaving modest availability. The revolving credit facility is subject to a springing maximum first-lien net leverage covenant of 7x, tested if borrowings exceed 35% of the revolver commitment and subject to certain carve-outs related to letters of credit. Moody's expects the company to maintain compliance though the level of headroom in complying with the covenant will tighten in the near term. The term loan has no financial maintenance covenants. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded with setbacks in improving operating results, including if Moody's expects declining organic revenue growth, weakening margins and/or debt-to-EBITDA remaining above 7x beyond 2023. Inability to improve liquidity in the near term, including restoring ample revolver availability, could lead to a downgrade especially given the company's negative free cash flow and liquidity needs. The ratings could also be downgraded if Moody's recovery expectations on the outstanding rated debt decline or if the ability to maintain compliance with covenants decreases. The ratings could be upgraded with profitable and prudent expansion of the company's operating footprint beyond its primary northeast US markets for greater scale. Debt-to-EBITDA sustained below 6x and EBITA-to-interest above 1.0x could also support a ratings upgrade. The maintenance of adequate liquidity, including sustained positive free cash flow, ample revolver availability and reduced reliance on external funding sources, would also be a prerequisite for an upgrade. The principal methodology used in these ratings was Environmental Services and Waste Management published in May 2023. WIN Waste Innovations Holdings Inc., is an indirect wholly-owned subsidiary of Wheelabrator Technologies, Inc. The company was formed in January 2021 from the combination of Wheelabrator and Tunnel Hill Partners, LP, a leading integrated waste-by-rail company in the US which owns and operates a network of collection and transfer assets in the Northeast US. WIN Waste and its subsidiaries, including the legacy Wheelabrator entities and Tunnel Hill Partners, LP, are owned by affiliates of Macquarie, a private equity firm. Revenue approached $1.2 billion for the twelve months ended March 31, 2023. WYNN RESORTS: Egan-Jones Retains CCC+ Senior Unsecured Ratings -------------------------------------------------------------- Egan-Jones Ratings Company, on June 13, 2023, maintained its 'CCC+' foreign currency and local currency senior unsecured ratings on debt issued by Wynn Resorts, Limited. EJR also maintained its 'B' rating on commercial paper issued by the Company. Headquartered in Las Vegas, Nevada, Wynn Resorts, Limited owns and operates hotels and casino resorts. XEROX CORP: Egan-Jones Retains B+ Senior Unsecured Ratings ---------------------------------------------------------- Egan-Jones Ratings Company, on June 14, 2023, maintained its 'B+' foreign currency and local currency senior unsecured ratings on debt issued by Xerox Corporation. EJR also withdraws rating on commercial paper issued by the Company. Headquartered in Norwalk, Connecticut, Xerox Corporation develops document management technology solutions. ZAPPELLI BODY SHOP: Fine-Tunes Plan Documents --------------------------------------------- Zappelli Body Shop, Inc., submitted a Third Amended Plan of Reorganization for Small Business. The Plan Proponent's financial projections show that the Debtor will have projected monthly disposable income of $14,704. The final Plan payment is expected to be paid within 60 months from the effective date of the Plan thus the final payment is expected to be on or before August 11, 2028. The Debtor's level of business has steadily increased since COVID restrictions have lessened and more people are back on the road commuting to and from work resulting in more accidents. The level of business is back to pre-pandemic levels. The company since filing bankruptcy to date (January 2022 through April 2023) averaged $114,487.00 in Monthly Revenue. Moreover, the company is replacing an underperforming technician with a new technician which will increase projected revenue to $116,100.00. Monthly Expenses can be brought to $101,396.00. In order to accomplish this, the company is reducing the amount of income it pays to its owners Samantha Zappelli and Quin Zappelli and Director Brooke Zappelli in order to fund the plan. In addition, the company is in the process of replacing and training a new technician who will take over for a highly unproductive technician that has recently departed the company. They will also negotiate better terms with vendors and suppliers or find more affordable supplies. This Plan of Reorganization proposes to pay creditors of the Debtor from Revenues received from autobody repair and painting services rendered to customers. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 5 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Like in the prior iteration of the Plan, payments to Class 3 non priority unsecured creditors totaling $516.00 will be made monthly and distributed on a pro-rata basis. The payments will total a 5% distribution to claim holders. Payments shall begin 30 days after the effective date of the plan and will be monthly for 60 months [five years] paid by the 20th of every month. The Equity Security Holders will each retain full ownership of the company at the same percentages and stock as they owned as of the petition date. They are unimpaired under this plan. The Debtor will continue to operate. Samantha Zappelli will remain the CEO in charge of the business operations and Quinn Zappelli will remain an officer in charge of the service operations. Brooke Zappelli will remain a director of the debtor. The revenues of the business are strong and have returned to pre-pandemic levels. In order to implement and fund the plan the salaries of Samantha Zappelli, Quin Zappelli, and Brooke Zappelli have been reduced. The debtor has decided to reduce certain expenses and will seek less costly supplies. Debtor is also replacing an underperforming technician which is expected to increase revenue. A full-text copy of the Third Amended Plan dated June 26, 2023 is available at https://urlcurt.com/u?l=IBDrye from PacerMonitor.com at no charge. About Zappelli Body Shop Zappelli Body Shop, Inc., a company based in Santa Rosa, Calif., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 21-10510) on Dec. 16, 2021, listing up to $500,000 in assets and up to $10 million in liabilities. Samantha Zappelli, chief executive officer, signed the petition. Judge Charles Novack oversees the case. Brian A. Barboza, Esq., at the Law Offices of Brian A. Barboza, serves as the Debtor's legal counsel. ZAYO GROUP: MetWest IB Marks $63,313 Loan at 20% Off ---------------------------------------------------- Metropolitan West Fund's Intermediate Bond Fund has marked its $63,313 loan extended to Zayo Group Holdings, Inc to market at $50,397 or 80% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Intermediate Bond Fund is a participant in a First Lien Term Loan B (SOFR plus 4.25%) to Zayo Group Holdings, Inc. The loan accrues interest at a rate of 9.06% per annum. The loan matures on March 9, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Zayo Group Holdings, Inc., is a privately held company headquartered in Boulder, Colorado, with European headquarters in London, England. The company provides communications infrastructure services. ZAYO GROUP: MetWest TRB Marks $1.04M Loan at 20% Off ---------------------------------------------------- Metropolitan West Fund's Total Return Bond Fund has marked its $1,027,674 loan extended to Zayo Group Holdings, Inc to market at $833,948 or 80% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Total Return Bond Fund is a participant in a First Lien Term Loan B (SOFR plus 4.25%) to Zayo Group Holdings, Inc. The loan accrues interest at a rate of 9.06% per annum. The loan matures on March 9, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Zayo Group Holdings, Inc., or Zayo Group, is a privately held company headquartered in Boulder, Colorado, with European headquarters in London, England. The company provides communications infrastructure services. ZAYO GROUP: MetWest TRB Marks $563,487 Loan at 18% Off ------------------------------------------------------ Metropolitan West Fund's Total Return Bond Fund has marked its $563,487 loan extended to Zayo Group Holdings, Inc to market at $460,907 or 82% of the outstanding amount, as of March 31, 2023, according to a disclosure contained in MetWest Fund's Form N-CSR for the Fiscal year ended March 31, 2023, filed with the Securities and Exchange Commission. Total Return Bond Fund is a participant in a First Lien Term Loan B (LIBOR plus 3%) to Zayo Group Holdings, Inc. The loan accrues interest at a rate of 7.84% per annum. The loan matures on March 9, 2027. The Metropolitan West Funds is an open-end management investment company organized as a Delaware statutory trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC, a federally registered investment adviser, provides the Funds with investment management services. The Trust currently consists of 14 separate portfolios. Zayo Group Holdings, Inc., or Zayo Group, is a privately held company headquartered in Boulder, Colorado, with European headquarters in London, England. The company provides communications infrastructure services. [^] BOOK REVIEW: The First Junk Bond ------------------------------------ Author: Harlan D. Platt Publisher: Beard Books Softcover: 236 pages List Price: $34.95 http://www.beardbooks.com/beardbooks/the_first_junk_bond.html Only one in ten failed businesses is equal to the task of reorganizing itself and satisfying its prior debts in some fashion. This engrossing book follows the extraordinary journey of Texas International, Inc. (known by its New York Stock Exchange stock symbol, TEI), through its corporate growth and decline, debt exchange offers, and corporate renaissance as Phoenix Resource Companies, Inc. As Harlan Platt puts it, TEI "flourished for a brief luminous moment but then crashed to earth and was consumed." TEI's story features attention-grabbing characters, petroleum exploration innovations, financial innovations, and lots of risk taking. The First Junk Bond was originally published in 1994 and received solidly favorable reviews. The then-managing director of High Yield Securities Research and Economics for Merrill Lynch said that the book "is a richly detailed case study. Platt integrates corporate history, industry fundamentals, financial analysis and bankruptcy law on a scale that has rarely, if ever, been attempted." A retired U.S. Bankruptcy Court judge noted, "[i]t should appeal as supplementary reading to students in both business schools and law schools. Even those who practice.in the areas of business law, accounting and investments can obtain a greater understanding and perspective of their professional expertise." "TEI's saga is noteworthy because of the company's resilience and ingenuity in coping with the changing environment of the 1980s, its execution of innovative corporate strategies that were widely imitated and its extraordinary trading history," says the author. TEI issued the first junk bond. In 1986 it achieved the largest percentage gain on the NYSE, and in 1987 suffered the largest percentage loss. It issued one of the first bonds secured by a physical commodity and then later issued one of the first PIK (payment in kind) bonds. It was one of the first vulture investors, to be targeted by vulture investors later on. Its president was involved in an insider trading scandal. It innovated strip financing. It engaged in several workouts to sell off operations and raise cash to reduce debt. It completed three exchange offers that converted debt in to equity. In 1977, TEI, primarily an oil production outfit, had had a reprieve from bankruptcy through Michael Milken's first ever junk bond. The fresh capital had allowed TEI to acquire a controlling interest of Phoenix Resources Company, a part of King Resources Company. TEI purchased creditors' claims against King that were subsequently converted into stock under the terms of King's reorganization plan. Only two years later, cash deficiencies forced Phoenix to sell off its non-energy businesses. Vulture investors tried to buy up outstanding TEI stock. TEI sold off its own non-energy businesses, and focused on oil and gas exploration. An enormous oil discovery in Egypt made the future look grand. The value of TEI stock soared. Somehow, however, less than two years later, TEI was in bankruptcy. What a ride! All told, the book has 63 tables and 32 figures on all aspects of TEI's rise, fall, and renaissance. Businesspeople will find especially absorbing the details of how the company's bankruptcy filing affected various stakeholders, the bankruptcy negotiation process, and the alternative post-bankruptcy financial structures that were considered. Those interested in the oil and gas industry will find the book a primer on the subject, with an appendix devoted to exploration and drilling, and another on oil and gas accounting. Dr. Harlan D. Platt is a professor of Finance at D'Amore-McKim School of Business at Northeastern University. He is a member of the Board of Directors of Millennium Chemicals Inc. and is on the advisory board of the Millennium Liquidating Trust. He served as the Associate Editor-Finance for the Journal of Business Research. He received a Ph.D. from the University of Michigan, and holds a B.A. degree from Northwestern University. This book may be ordered by calling 888-563-4573 or by visiting www.beardbooks.com or through your favorite Internet or local bookseller. ********* 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 ***