/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230726.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, July 26, 2023, Vol. 27, No. 206 Headlines 2CM LLC: Wins Cash Collateral Access Thru Aug 21 4924 S MARTIN: Court OKS Cash Collateral Access Thru Aug 31 ACCURIDE CORP: Moody's Ups CFR to Caa1 & Alters Outlook to Stable ACRO BIOMEDICAL: Incurs $15.9 Million Net Loss in 2022 ADVANCED INFRASTRUCTURE: Court OKs Interim Cash Collateral Access AEROSPACE ENGINEERING: Seeks Chapter 11 Bankruptcy AETIUS COMPANIES: Seeks Cash Collateral Access ALASKA LOGISTICS: Sinks in Chapter 11 Bankruptcy ARMATA PHARMACEUTICALS: Signs Separation Agreement With Former CEO ARSENAL AIC: Moody's Rates New $900MM Senior Secured Notes 'Ba3' ARSENAL AIC: S&P Rates New $900MM Senior Secured Notes 'B+' ATHENEX INC: Committee Taps Emerald Capital as Financial Advisor ATHENEX INC: Committee Taps McKool Smith as Co-Counsel ATHENEX INC: Committee Taps Porzio Bromberg & Newman as Counsel AULT ALLIANCE: Amends Loan Agreement With JGB AVENIR FAYETTEVILLE: Court OKs Cash Access to Pay for Insurance AVENIR KNOXVILLE: Court OKs Cash Access to Pay for Insurance BFR GRANITE: Court OKs Interim Cash Collateral Access BIO365 LLC: Taps Klausner Cook as Special IP Counsel BRIAN SMITH LAW OFFICES: Seeks Conditional Approval of Disclosure BRIAN SMITH LAW OFFICES: Unsecureds Will be Paid in Full CARVANA CO: Inks Agreement With Noteholders to Reduce Debt CARVANA CO: Posts $58 Million Net Loss in Second Quarter CCI HOLDINGS: Ruediger Mueller Named Subchapter V Trustee CHAPIN DAIRY: Case Summary & 20 Largest Unsecured Creditors CHF-COOK LLC: S&P Raises 2015A Bond Rating to 'B', Outlook Stable CLAUSEN OYSTERS: Court OKs Cash Access Extension Thru Aug 11 COMPREHENSIVE PAIN: Court OKs Cash Collateral Access on Final Basis CUBIC CORP: Fitch Alters Outlook on 'B' LongTerm IDR to Negative CYXTERA TECHNOLOGIES: $200MM DIP Loan From Wilmington OK'd DIEBOLD HOLDING: Court Approves Disclosures and Confirms Plan DIOCESE OF OGDENSBURG: Court OKs Interim Cash Collateral Access EAGLE PROPERTIES: Court OKs Cash Collateral Access Thru Nov. 3 EARTHSNAP INC: Unsecureds to Get Share of Income for 2 Years ENSONO INTERMEDIATE: S&P Affirms 'B-' ICR, Alters Outlook to Neg. ENVISION HEALTHCARE: Gets OK to Tap Deloitte as Independent Auditor ETHEMA HEALTH: CohnReznick Resigns as Auditor EXACTECH INC: S&P Downgrades ICR to 'CCC' on Limited Liquidity F & B NEGOTIATIONS: Available Cash and Income to Fund Plan FIELD OFFICE: Office Complex Owners Default on $73.8 Mil. Loan FIVE64 LLC: Asset Sale Proceeds to Fund Plan FOR PAWS BLUE: Court OKs Cash Collateral Access Thru Aug 18 FOR PAWS BLUE: M. Colette Gibbons Named Subchapter V Trustee GAUCHO GROUP: Issues 270,272 Shares to Non-Executive Directors GENESIS CARE: $800MM DIP Loan from Kroll Trustee OK'd GENESIS GLOBAL: SEC Balks at Plan's Exculpation Provisions GROWLIFE INC: Incurs $1 Million Net Loss in First Quarter HAMMOND ENTERPRISES: Wins Continued Cash Collateral Access HERITAGE SPECIALTY: Wins Cash Collateral Access on Final Basis HONX INC: To Seek Plan Confirmation on Oct. 10 I-LOGIC TECHNOLOGIES: S&P Affirms 'B' ICR, Outlook Stable INTERNAP HOLDING: Chapter 11 Debt Swap Plan Okayed INTERNATIONAL LAND: Posts $1.9 Million Net Loss in First Quarter IRONMAN LOGGING: Lucy Sikes Named Subchapter V Trustee JAFFAN INTERNATIONAL: Court OKs Interim Cash Collateral Access JONES DESLAURIERS: Moody's Rates USD350MM 1st Lien Term Loan 'B2' KAMAN CORP: S&P Downgrades ICR to 'B+', Outlook Stable KATANA ELECTRONICS: Court OKs Interim Cash Collateral Access KDC AGRIBUSINESS: Gets OK to Tap Jefferies LLC as Investment Banker KDC AGRIBUSINESS: Gets OK to Tap Kurtzman as Administrative Advisor KDC AGRIBUSINESS: Taps AlixPartners as Financial Advisor KDC AGRIBUSINESS: Taps Okin Hollander as Corporate Counsel KDC AGRIBUSINESS: Taps Richards Layton & Finger as Legal Counsel KDC/ONE DEVELOPMENT: Moody's Alters Outlook on 'B3' CFR to Stable KNOWLTON DEVELOPMENT: Fitch Alters Outlook on 'B-' IDRs to Stable KNOWLTON DEVELOPMENT: S&P Affirms 'B-' ICR on Refinancing LAKELAND TOURS: Saratoga Marks $1.05M Loan at 35% Off LEXARIA BIOSCIENCE: Receives New Patents for DehydraTECH Technology LHS BORROWER: Saratoga Marks $994,975 Loan at 23% Off LIFE TIME: Fitch Assigns First Time 'B+' LongTerm IDR LINDA SWARZMAN: U.S. Trustee Appoints Creditors' Committee LITTLE K'S LANDSCAPING: Unsecureds to Get 100% Under the Plan LOGMEIN INC: Saratoga Marks $3.9M Loan at 40% Off LOYALTY VENTURES: 91% Markdown for Saratoga $3.08M Loan MARCUSE COMPANIES: Wins Cash Collateral Access Thru Sept 30 MARINE WHOLESALE: Court OKs Cash Collateral Access Thru Jan 2024 MEDASSETS SOFTWARE: Saratoga Marks $495,000 Loan at 16% Off MEDIAMATH HOLDINGS: U.S. Trustee Appoints Creditors' Committee MEDICAL CONSTRUCTION: Unsecureds Will Get 2.6% of Claims in Plan MIDWEST VETERINARY: Moody's Alters Outlook on 'B3' CFR to Stable MLCJR LLC: Agrees to Formation of Ad Hoc Statutory Lien Committee MLCJR LLC: Committee Gets OK to Hire White & Case as Legal Counsel MLN US HOLDCO: abrdn Fund Marks $1.8M Loan at 45% off MLN US HOLDCO: abrdn Fund Marks $952,000 Loan at 52% Off MONEYGRAM INT'L: Saratoga Marks $2M Loan at 17% Off MPH ACQUISITION: Saratoga Marks $2.9M Loan at 16% Off MRUCKER INDUSTRIES: Seeks to Hire The Lane Law Firm as Counsel MULEHOUSE GROUP: Court OKs Interim Cash Collateral Access NAPA MANAGEMENT: Saratoga Marks $2.9M Loan at 27% Off NASHEF LLC: Court OKs Cash Collateral Access Thru Aug 11 NATIONAL MENTOR: Saratoga Marks $2.7M Loan at 26% Off NAVACORD CORP: S&P Rates New 350MM First-Lien Term Loan 'B-' NEW BEGINNING: Aug. 29 Plan Confirmation Hearing Set NEW INSIGHT: S&P Downgrades ICR to 'CCC-' on Tight Liquidity NOC INC: Court Approves Disclosure and Confirms Plan NOVAE LLC: Saratoga Marks $1.9M Loan at 15% Off NOVAN INC: Court OKs $12MM DIP Loan from Ligand Pharmaceuticals OFF-SPEC SOLUTIONS: Unsecureds Will Get 27% in 60 Months OKAYSOU CORP: Court OKs Deal on Cash Collateral Access ONH AFC CS: David Klauder Named Subchapter V Trustee PALMER DRIVES: Gets OK to Tap Wadsworth Garber as Legal Counsel PARADOX RESOURCES: Taps Pontem to Provide Management Services PASSERO LLC: Matthew Brash Named Subchapter V Trustee PATAGONIA HOLDCO: Saratoga Marks $1.9M Loan at 20% Off PATHWAY PARTNERS: Saratoga Marks $485,268 Loan at 16% Off PERFORMERS THEATRE: Wins Cash Collateral Access Thru Aug 22 PHUNWARE INC: Reduces Workforce by 33% to Cut Costs PUG LLC: Saratoga Marks $478,888 Loan at 15% Off QUEST BORROWER: Saratoga Marks $1.9M Loan at 16% Off RAIN CARBON: S&P Rates New First-Lien Sr Secured Term Loan B 'BB' REMARK HOLDINGS: Amends Purchase Agreement With Ionic Ventures S&S SENIOR: Centra Says Plan Confirmation Proceedings Premature SANUWAVE HEALTH: Expects Second Quarter Revenue of $4.5M to $4.7M SCHAFFNER PUBLICATIONS: Court OKs Cash Access Thru Oct 31 SELECT MEDICAL: Moody's Affirms 'B1' CFR & Alters Outlook to Stable SNOWSHOE MILLWORKS: Taps Coast to Coast Closings as Special Counsel SORRENTO THERAPEUTICS: DIP Lender Balks at Short-Selling Settlement SOUTHEAST ASSOCIATION: Seeks to Hire Bruner Wright as Legal Counsel SOUTHFIELD VENTURES: To Pay All Claims by June 2024 SPEED TRANS: Court OKs Cash Collateral Access STAPLES INC: Saratoga Marks $4.3M Loan at 15% Off SUPPLY CHAIN: Gets OK to Hire Williams and Haupt as Accountant TAHOE LAKE: Court OKs Cash Collateral Access on Final Basis TGL CAPITAL: Neema Varghese Named Subchapter V Trustee TRANSCENDIA HOLDINGS: Moody's Cuts CFR to Caa3, Outlook Negative TYSON FAMILY: Ordered to File Chapter 11 Plan by Sept. 21 UNIVISION COMMUNICATIONS: S&P Rates New Senior Secured Notes 'B+' VANTAGE TRAVEL: Gets OK to Tap Stretto as Claims and Noticing Agent VANTAGE TRAVEL: Taps Argus Management Corp. as Financial Advisor VANTAGE TRAVEL: Taps Casner & Edwards as Bankruptcy Counsel VAUGHN ENVIRONMENTAL: Kenneth Eiler Named Subchapter V Trustee VIEWRAY INC: Court OKs Interim Cash Collateral Access VTV THERAPEUTICS: Granted Until Dec. 18 to Regain Nasdaq Compliance WINDOW SELECT: Unsecureds to Get 5 Cents on Dollar in Plan ZAYO GROUP: Saratoga Marks $990,000 Loan at 22% Off ZEP INC: S&P Affirms 'CCC+' Issuer Credit Rating, Outlook Negative ********* 2CM LLC: Wins Cash Collateral Access Thru Aug 21 ------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, authorized 2CM, LLC to use cash collateral on an interim basis, until the hearing set for August 21, 2023. As previously reported by the Troubled Company Reporter, the Debtor has three pre-petition merchant cash advances/lenders that have a lien on the Debtor's cash and receivables. Those lenders are Expansion Capital Group, Fox Capital Group, Inc., and Rapid Finance. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Court, including payments to the United States Trustee for quarterly fees; and (b) the current and necessary expenses set forth in the budget. The Cash Collateral lenders will have a perfected postpetition lien against cash collateral to the same extent and with the same validity and priority as their respective prepetition lien(s), without the need to file or execute any document as may otherwise be required under applicable non-bankruptcy law. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=MRjnrO from PacerMonitor.com. The Debtor projects $46,300 in net revenue and $43,244 in total expenses. About 2CM, LLC 2CM, LLC is a Florida corporation based in Jacksonville, Florida. It sells pet supplies both online and at its brick-and-mortar store. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01569) on July 5, 2023. In the petition signed by Howland Russell, the owner, the Debtor disclosed up to $500,000 in both assets and liabilities. Judge Jason A. Burgess oversees the case. Thomas Adam, Esq., represents the Debtor as legal counsel. 4924 S MARTIN: Court OKS Cash Collateral Access Thru Aug 31 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized 4924 S. Martin Luther King LLC to use cash collateral on an interim basis in accordance with the budget, through August 31, 2023. As previously reported by the Troubled Company Reporter, the Debtor requires the use of cash collateral to pay its expenses. The Debtor believes there may be pre-petition liens on its real estate property in favor of U.S. Bank in a sum that exceeds the value of all assets at the time of the filing for relief pursuant to a foreclosure action filed in the Circuit Court of Cook County, Illinois. As adequate protection, U.S. Bank is granted a lien on the proceeds of the cash collateral subsequent to the filing of the Chapter 11 petition subject to the extent and validity of the lien. The Debtor is also directed to make an adequate protection payment to U.S. Bank in the amount of $7,500 on or before August 8 and each month thereafter. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=6NwnvT from PacerMonitor.com. The Debtor projects $10,100 in net sales and $2,600 in total expenses for one month. About 4924 S. Martin Luther King LLC 4924 S. Martin Luther King LLC is a Single Asset Real Estate. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-04726) on April 10, 2023. In the petition signed by Faris Faycurry, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Janet S. Baer oversees the case. Paul M. Bach, Esq., at Bach Law Offices, Inc., represents the Debtor as legal counsel. ACCURIDE CORP: Moody's Ups CFR to Caa1 & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Investors Service upgraded Accuride Corporation's ("Accuride") corporate family rating to Caa1 from Caa2. Moody's also upgraded the company's probability of default rating to Caa1-PD from Caa2-PD and appended a "/LD" designation reflecting the recent amendment to Accuride's first lien term loan which includes a portion of interest to be paid-in-kind ("PIK"). The "/LD" designation appended to the PDR will be removed in three business days. Moody's also assigned a Caa1 rating to the company's senior secured first lien term loan due May 2026 and upgraded the rating on the company's existing senior secured first lien term loan due November 2023 to Caa1 from Caa2. Moody's expects the non-extended term loan to be repaid prior to maturity. The outlook was changed to stable from negative. These rating actions follow the amendment and extension of Accuride's credit facilities, which was fully completed on July 7, 2023. The company extended its asset based lending facility ("ABL") to February 2026 (from August 2023) and 97% of its first lien term loan was extended to May 2026 (from November 2023). In addition, current owners, Crestview Partners, contributed $20 million of equity that was used to pay down the extended term loan at par. Moody's considers the amendment and extension to be a limited default based on the inclusion of PIK interest and the view that Accuride would not have the ability to refinance its debt in an arm's length transaction. The upgrade of the CFR to Caa1 and change in the outlook to stable reflects Accuride's reduced refinancing risk and expectations for declining financial leverage through debt paydown and earnings growth. Moody's expects Accuride's operating performance to benefit from steady commercial vehicle production through 2023 and into 2024. In addition, the completion of a multi-year restructuring effort in Europe and Asia should yield better operating leverage and reduce costs. However, Moody's expects Accuride's liquidity to remain weak with free cash flow remaining negative in 2023 before improving towards breakeven in 2024. Upgrades: Issuer: Accuride Corporation Corporate Family Rating, Upgraded to Caa1 from Caa2 Probability of Default Rating, Upgraded to Caa1-PD /LD from Caa2-PD Senior Secured 1st Lien Term Loan B, Upgraded to Caa1 from Caa2 Assignments: Issuer: Accuride Corporation Senior Secured 1st Lien Term Loan B, Assigned Caa1 Outlook Actions: Issuer: Accuride Corporation Outlook, Changed To Stable From Negative RATINGS RATIONALE Accuride's ratings reflect the company's high financial leverage, modest earnings margin with a history of operating losses and weak liquidity. Accuride does maintain a good competitive position as a global supplier of steel and aluminum wheels and wheel-ends for new commercial vehicle production as well as a supplier to the aftermarket. Moody's expects debt/EBITDA to improve to about 6x by the end of 2023 from around 7x at the end of March 2023. Moody's expects earnings growth in 2023 and into 2024 as production volumes remain steady and cost inflation subsides. Moody's forecasts Accuride's revenue growth to be in the low-single digit range for 2023 and 2024. Moody's expects Accuride's liquidity to remain weak over the next twelve months with a limited cash balance and expectations for free cash flow to be breakeven at best. Accuride heavily utilizes its $168 million ABL to support its operations, and Moody's expects the company to maintain modest availability on its ABL. The company's extended first lien term loan includes reset maximum net leverage and minimum interest coverage ratios, which Moody's expects Accuride to remain in compliance with. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Accuride is able to maintain adequate liquidity, including sustained positive free cash flow and increased revolver availability. Further, an improvement in earnings to support an EBITA margin of at least 5% and maintaining debt/EBITDA below 6x could result in a rating upgrade. The ratings could be downgraded if Accuride's liquidity does not improve. Further, the ratings could be downgraded if EBITA/interest expense is expected to remain below 1x, or expected improvement in earnings and reduction in leverage are not realized. Accuride Corporation, headquartered in Evansville, Indiana, is a North American, European and Asian manufacturer and supplier of commercial vehicle and light vehicle components including wheels and wheel-end components. Crestview Partners is the majority owner of Accuride since October 2016. Revenue for the twelve months ended March 2023 was approximately $1.3 billion. The principal methodology used in these ratings was Automotive Suppliers published in May 2021. ACRO BIOMEDICAL: Incurs $15.9 Million Net Loss in 2022 ------------------------------------------------------ Acro Biomedical Co., Ltd. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $15.87 million on $658,500 of revenues for the year ended Dec. 31, 2022, compared to a net loss of $7.70 million on $1.20 million of revenues for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $687,486 in total assets, $201,116 in total liabilities, and $486,370 in total stockholders' equity. Hackensack, New Jersey-based Prager Metis CPAs, LLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated July 21, 2023, citing that the Company had limited cash as of Dec. 31, 2022, had limited gross profit and incurred a loss from its operations for the year ended Dec. 31, 2022, and past few years. These circumstances, among others, raise substantial doubt about the Company's ability to continue as a going concern. Acro Biomedical said, "Although we propose to fund operations through sales of our products and equity financing arrangements, because of the lack of sales and the absence of any active trading market for our common stock, our financial condition and our lack of an operating history, we may not be able to raise funds for capital expenditures, working capital or other cash requirements and will have to rely on advances from a minority stockholder and our officer. If we cannot generate revenue from our products, we may not be able to continue in business." A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001622996/000164033423001347/acro_10k.htm About Acro Biomedical Acro Biomedical Co., Ltd. has been engaged in the business of developing and marketing nutritional products that promote wellness and a healthy lifestyle. The Company's business to date has involved the purchase of products from three suppliers in the Republic of China. The Company sells product in bulk to companies who may use its products as ingredients in their products or sell the products they purchase from the Company to their own customers. ADVANCED INFRASTRUCTURE: Court OKs Interim Cash Collateral Access ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maine authorized Advanced Infrastructure Technologies, LLC and affiliates to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of cash collateral to maintain their assets, sell or otherwise liquidate the assets, provide financial information, and pay other expenses necessary to maximize the value of the Debtors' estates in Chapter 11. As adequate protection, Commercial Metals Company is granted replacement liens against all assets of the Debtors, subject to any existing liens on such assets, and including all rents, issues, products, proceeds (including insurance policies), and profits thereof, without the necessity of the execution by the Debtors (or recordation or other filing) of security agreements, control agreements, pledge agreements, notation on motor vehicle titles, financing statements, mortgages, or other similar documents. These events constitute an "Event of Default": (a) the Interim Order is reversed, vacated, stayed, amended, supplemented or otherwise modified in a manner which will materially and adversely affect the rights of CMC; (b) the Chapter 11 cases of the Debtors are either dismissed or converted to Chapter 7 cases pursuant to a final order of the Court, the effect of which has not been stayed; or (c) a Chapter 11 trustee (other than the subchapter V trustee), or an examiner with expanded powers beyond those set forth in 11 U.S.C. Sections 1106(a)(3) and 1106(a)(4), is appointed by a final order of this Court, the effect of which has not been stayed, in the Chapter 11 cases of the Debtors. A final hearing on the matter is set for August 15, 2023 at 9 a.m. A copy of the order is available at https://urlcurt.com/u?l=2vdBmM from PacerMonitor.com. About Advanced Infrastructure Technologies, LLC Advanced Infrastructure Technologies, LLC is a provider of composite solutions for the infrastructure & construction industry. AIT designs and manufactures composite bridge systems designed with AASHTO LRFD bridge design specifications. AIT manufactures a variety of composite products for the infrastructure and construction industry including, AIT Wall and GPole. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Maine Lead Case No. 23-10128) on July 7, 2023. In the petition signed by Brit E. Svoboda, its chief executive officer, AIT disclosed $8.112 million in total assets and $18.865 in total liabilities. Judge Peter G. Cary oversees the case. Adam Prescott, Esq., at Bernstein Shur Sawyer and Nelson, P.A. AEROSPACE ENGINEERING: Seeks Chapter 11 Bankruptcy -------------------------------------------------- Aerospace Engineering & Support Inc. filed for chapter 11 protection in the District of Utah. According to court filings, Aerospace Engineering estimates $1 million to $10 million in debt to 50 to 99 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Aug. 18, 2023, via Chapter 11 341 Mtg Teleconference Line. Proofs of claim are due by Sept. 15, 2023. About Aerospace Engineering & Support Aerospace Engineering & Support, Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Utah Case No. 23-22868) on July 7, 2023. In the petition signed by Lacey Remkes, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Peggy Hunt oversees the case. The Debtor is represented by: M. Darin Hammond, Esq. Smith Knowles, P.C. 1307 W. 2550 S. Ogden, UT 84401 AETIUS COMPANIES: Seeks Cash Collateral Access ---------------------------------------------- Aetius Companies, LLC and affiliates ask the U.S. Bankruptcy Court for the Western District of North Carolina, Charlotte Division, for authority to use cash collateral and provide adequate protection. The Debtors require the use of cash collateral to pay certain post-petition obligations, which are critical for the continued operations of the Debtors over the second week of August 2023. Aetius Companies, LLC is obligated to HomeTrust Bank for a loan in the original principal amount of $12.5 million under the i) Loan Agreement dated December 2, 2020 between Aetius Companies, LLC and HomeTrust and the ii)Promissory Note in the principal amount of $12.5 million dated as of December 2, 2020. The HomeTrust Loan was made under the Main Street Lending Program, which was a loan program established by the Federal Reserve to make loans to small and medium sized business impacted by the Covid-19 pandemic. HomeTrust is a participant bank in the HomeTrust Loan to Aetius under the Main Street Lending Program, and is also the administrative agent for the HomeTrust Loan on behalf of the Main Street Lending Program. The HomeTrust Loan is set to mature on December 7, 2025. Additionally, principal paydowns of 15% of the principal balance are due and payable on December 7, 2023 and December 7, 2024. Prior the Petition Date, HomeTrust notified the Debtors that they were in default under the HomeTrust Loan Agreement and HomeTrust Note, and based upon such defaults, accelerated the balances due under the HomeTrust Loan. The Debtors dispute that certain defaults existed under the HomeTrust Loan. On June 27, 2023, HomeTrust commenced a lawsuit against the Debtors alleging a breach of the HomeTrust Loan Agreement and HomeTrust Note. The lawsuit seeks recovery of $14.3 million in principal and interest, and attorneys' fees in the amount of $2.1 million. Aetius is also obligated to the U.S. Small Business Administration for a loan in the original principal amount of $500,000 pursuant to i) the Loan Authorization and Agreement by and between Aetius and the SBA dated as of March 25, 2022, and ii) the Note in the principal amount of $500,000 dated as of March 25, 2022. The SBA Loan is secured by that Security Agreement dated March 25, 2022 by and between Aetius and the SBA, granting the SBA a blanket lien on all personal property of Aetius, which may include cash collateral. The SBA Loan matures and is due and payable on March 25, 2052. As of the Petition Date, the current balance of the SBA Loan was $500,000. The Debtors were unable to locate a UCC-1 Financing Statement filed in association with the SBA Loan. The Debtors assert that HomeTrust and the SBA are adequately protected against any diminution in value of their pre-petition collateral in the case. As an additional means of adequate protection, the Debtors propose to provide the Lenders with replacement liens in post-petition receivables to the same extent and priority as existed pre-petition, for all cash collateral actually expended during the duration of the interim order. A copy of the Debtor's motion and budget is available at https://urlcurt.com/u?l=33AOcZ from PacerMonitor.com. The Debtor projects total ending cash balance, on a weekly basis, as follows: $600,669 for the week starting July 24, 2023; $505,669 for the week starting July 31, 2023; $572,831 for the week starting August 7, 2023; $774,369 for the week starting August 14, 2023; $817,031 for the week starting August 21, 2023; and $697,031 for the week starting August 28, 2023. About Aetius Companies, LLC Aetius Companies, LLC and affiliates operate a restaurant chain. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. N.C. Lead Case No. 23-30470) on July 19, 2023. In the petition signed by Mark Cote, president, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Craig Whitley oversees the case. Robert A. Cox, Jr., Esq., at Hamilton Stephens Steele + Martin, PLLC, represents the Debtor as legal counsel. Blystone and Donaldon is the Debtor's financial advisor. ALASKA LOGISTICS: Sinks in Chapter 11 Bankruptcy ------------------------------------------------ Alaska Logistics LLC filed for chapter 11 protection in the Western District of Washington. Founded in 2003, the Debtor provides extensive transportation services from Seattle to Alaska. Specifically, the Debtor transports materials and equipment of all sizes and types --- anything from personal vehicles to oversized mobile homes and containers. The Debtor currently has 26 employees. Allyn Long, is the president, general manager and the sole owner of the company. For the past 20 years, Alaska Logistics has provided scheduled barge service from Seattle, Washington to various ports throughout Western Alaska. The success of the business enabled AL to expand its reach. While AL continues to provide regular transport service to the Western Alaska ports, it now offers services into surrounding villages, transport to Central Alaska, and charters its marine equipment. Notwithstanding the success and growth of the company, the transportation industry is extremely capital intensive, and AL has always operated with thin cash reserves. In October of 2021, AL's second biggest barge became immobilized in the ice in Western Alaska. As a result of weather and safety conditions, AL was unable to recover the barge until June of the following year. This incident caused a wide panoply of difficulties and cash flow struggles for AL. Not only did the incident cost AL hundreds of thousands of dollars in 2021, but it also hampered AL’s cash flow in 2022. Without this barge, AL did not have access to its largest barge that delivered its high revenue cargo. Moreover, even after recovering the barge, the barge was compelled to be dry docked (out of service and docked on dry land) in accordance with the regulations of the American Bureau of Shipping and United States Coast Guard. As a result, this barge missed the entire operational season for Western Alaska. While AL had insurance coverage for a portion of the damages caused by the barge incident, the insurance company was extremely slow to remit payment to AL. Ultimately AL was compelled to retain counsel to enforce its rights to the insurance payments. While AL was successful in obtaining payment, the payment was not received until 18 months after the incident. The cash challenges caused by the incident rendered AL unable to remit their monthly loan payments to its senior secured creditor, Banner Bank and made it very difficult for AL to operate productively. If AL is able to restructure its obligations to Banner and other creditors it will be able to survive and grow. On June 9, 2023, Banner Bank, as holder of preferred ship mortgages, began foreclosure proceedings in the United States District Court for the District of Alaska (Case No. 3:23-cv-00125-SLG) against seven AL marine vessels -- three barges, three landing crafts, and one barge to which Banner holds a security interest. The payoff amount for all loans is $4,378,300.23. AL was officially served with the Foreclosure Action on July 5, 2023. Absent the intervention of the bankruptcy court, the Marine Vessels are all at risk of being seized by the US Marshall. This seizure would cause the destruction of AL According to court filings, Alaska Logistics estimates between $1 million and $10 million in debt owed to 100 to 199 creditors. The petition states that funds will be available to unsecured creditors. A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is slated for August 1, 2023 at 1:00 a.m. About Alaska Logistics Alaska Logistics LLC transports materials and equipment of all sizes, shapes and types from Seattle to Western Alaska. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 23-11250) on July 7, 2023. In the petition signed by Allyn Long, general manager/president, the Debtor disclosed up to $50 million in both assets and liabilities. The Honorable Bankruptcy Judge Christopher M Alston oversees the case. The Debtor is represented by: Faye C. Rasch, Esq. Wenokur Riordan PLLC PO Box 3512 Seattle, WA 98124-3512 ARMATA PHARMACEUTICALS: Signs Separation Agreement With Former CEO ------------------------------------------------------------------ Armata Pharmaceuticals, Inc. and Dr. Brian Varnum, the Company's former chief executive officer, entered into a separation and release agreement. Pursuant to the Separation Agreement, Dr. Varnum is entitled to (i) continued payment of his base salary for 12 months following the date on which his employment with the Company terminated (which occurred on July 10, 2023) and (ii) subject to his timely election of COBRA coverage and continued enrollment in the Company's health plan, payment of his and his covered dependents' monthly COBRA premium cost for up to 12 months following the Separation Date. Additionally, all unvested options held by Dr. Varnum that would have vested had his employment continued through the first anniversary of the Separation Date will vest and become exercisable on the first anniversary of the Separation Date and Dr. Varnum will have until Sept. 30, 2024 (or the expiration date of the applicable option if earlier) to exercise any vested options. Dr. Varnum's receipt of the foregoing payments and benefits is subject to his compliance with the Separation Agreement, including, without limitation, continued compliance with his existing restrictive covenants and the non-disparagement covenant set forth in the Separation Agreement. About Armata Pharmaceuticals Marina del Rey, CA-based Armata is a clinical-stage biotechnology company focused on the development of pathogen-specific bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using its proprietary bacteriophage-based technology. Armata is developing and advancing a broad pipeline of natural and synthetic phage candidates, including clinical candidates for Pseudomonas aeruginosa, Staphylococcus aureus, and other pathogens. Armata is committed to advancing phage with drug development expertise that spans bench to clinic including in-house phage specific GMP manufacturing. Armata reported a net loss of $36.92 million in 2022, compared to a net loss of $23.16 million in 2021. As of Dec. 31, 2022, the Company had $95.83 million in total assets, $59.75 million in total liabilities, and $36.08 million in total stockholders' equity. San Diego, California-based Ernst & Young LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 16, 2023, citing that the Company has suffered recurring losses and negative cash flows from operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. ARSENAL AIC: Moody's Rates New $900MM Senior Secured Notes 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Arsenal AIC Parent LLC's proposed 7-year $900 million senior secured notes. Proceeds from the debt issuance along with the proceeds from other debt will be used to partially fund the acquisition of Arconic Corporation and to pay for the related transaction fees and expenses. The transaction is subject to the shareholder and regulatory approvals. Once the transaction closes and Arconic's debt is repaid, Moody's will withdraw the ratings assigned to Arconic. Ratings are subject to the review of the final documentation and any future changes to the capital structure could have an impact on the ratings of the debt instruments. Assignments: Issuer: Arsenal AIC Parent LLC Senior Secured Regular Bond/Debenture, Assigned Ba3 RATINGS RATIONALE The B1 corporate family rating of Arsenal reflects a material increase in gross debt, weaker credit metrics and the increased risk of a more aggressive financial policy as a result of the leveraged buyout by Apollo Global Management, Inc. ("Apollo") and Irenic Capital Management (collectively, Apollo Consortium). The rating also considers potential liabilities related to the Grenfell Tower litigation and class action suit, although to the lesser extent than previously given that Arconic reached settlements in numerous legal lawsuits. In May 2023, Arconic entered into a definitive agreement to be acquired by funds managed by Apollo in combination with a minority investment from funds managed by affiliates of Irenic Capital Management (Irenic) for an enterprise value of about $5 billion including Arconic's debt. Upon the completion of the deal, which is expected to trigger the "Change of Control" provision under the company's indentures, Arconic will become a privately held company. The $5 billion transaction will be funded with $2.3 billion of equity contribution and debt financing in the form of $725 million of senior unsecured notes provided by the Apollo Consortium. The rest will be financed by the new senior secured term loan B and the new senior secured notes. Pro forma for the acquisition, Moody's estimate that Moody's-adjusted debt will increase to about $3.4 billion from $2.36 billion as of March 31, 2023. Leverage, measured as Moody's-adjusted debt to EBITDA for the twelve months ended March 31, 2023, will rise to 4.6x, while interest coverage and (CFO-Dividends)/Debt will decline to about 1.5x and 14%, respectively, given higher debt and interest expense. The rating is supported by Arsenal's strong and leading market positions in the downstream aluminum industry with a broad operating footprint and diversified end market exposure that provides both market and geographic diversity. The rating also considers the company's long standing customer relationships with many blue-chip customers, including Boeing, Airbus and Ford and that a substantial portion of revenues is generated from long-term agreements. The rating also benefits from the company's margin-on-metal business construct that, combined with an effective hedging strategy, mitigates most of the aluminum price volatility. Moody's believe that the company's EBITDA, as adjusted by Moody's could exceed $800 million in 2023 driven by the continued rebound in the automotive and aerospace end-markets, incremental earnings from the recently completed expansion projects and the resolution of the outages at several facilities that impacted operating performance in 2022. The EBITDA growth in 2024 and in the longer term will depend on Apollo's and the company's ability to successfully execute planned productivity, procurement, other operating initiatives as well as incremental growth investments. Moody's 2024 Moody's-adjusted EBITDA forecast of $840-870 million partially incorporates the expected costs savings from these initiatives. Moody's estimate that this EBITDA growth coupled with the projected modest debt repayment could lead to leverage improving to 3.8x by the end 2024. CIS-4 indicates that the rating is lower than it would have been if ESG exposure did not exist. The score is driven by the change in financial policy as a result of the Arconic's acquisition by the Apollo Consortium (G-4 IPS). Starting pro forma leverage is consistent with a B rating category, the company is fully controlled by the Apollo Consortium and will no longer be releasing financials publicly. As a producer of flat-rolled aluminum products, Arsenal faces environmental risks (E-3) related to air emissions, wastewater discharges, site remediation amongst others. Arsenal is subject to many environmental laws and regulations in the regions in which it operates and the ongoing cost increases and increasing regulations are expected to continue to impact the company and the industry. These risks are balanced by its geographically diverse operations which reduce the risk of widespread operational disruptions, rising content of recycled aluminum in the company's products and the growing role of aluminum in clean energy transition. Arconic has exposure to social risks (S-4) and specifically, responsible production risks related to the ongoing Grenfell Tower litigation albeit to a lesser extent in light of the recently reached settlements. As proposed, the senior secured notes indenture is expected to contain similar covenant flexibility to the TLB Credit Agreement that if utilized could negatively impact creditors. Notable terms include the following: Incremental debt capacity up to the greater of 100% of LTM EBITDA and the corresponding dollar amount as of the closing date, plus unused capacity reallocated from the general debt basket (the greater of 0.50x of LTM EBITDA and the corresponding dollar amount), plus unlimited amounts subject to a 2.20x of Net First Lien Leverage Ratio, for pari passu secured debt (ratio calculation excludes the ABL Facility). Amounts up to the greater of 100% of LTM EBITDA and the corresponding dollar amount on the closing date, along with any refinancing indebtedness in an aggregate amount up to 100% of LTM EBITDA and the corresponding dollar amount may be incurred with an earlier maturity date than the initial term loans. The credit agreement is expected to permit the transfer of assets to unrestricted subsidiaries, up to the carve-out capacities, subject to "J. Crew" protective provision to be determined. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, subject to Chewy protective provisions to be determined. Amounts up to an aggregate amount of available restricted payments that could be made by the company at the time of such incurrence may be reallocated to incur additional debt. The credit agreement is expected to provide some limitations on up-tiering transactions, including "Serta" provisions to be determined. The company has the express ability to repurchase outstanding loans from any lender at individually negotiated prices, in a non-pro rata manner. The above are proposed terms and the final terms of the credit agreement may be materially different. The Ba3 rating on the senior secured TLB and senior secured notes, one notch above the CFR, reflect their secondary position in the capital structure behind the unrated $1.2 billion asset-based revolver and their priority position with respect to the new unrated senior unsecured notes that will be held by the Apollo Consortium. The senior secured TLB and the senior secured notes will have a first priority security interest in substantially all material assets of the borrower and each subsidiary guarantor (other than ABL priority collateral) and a second priority security interest on the ABL priority collateral. The immediate parent holding company ("Arsenal AIC Holdings II LLC"," Holdings") will guarantee the TLB and the ABL on a limited recourse basis. The Holdings will not guarantee the senior secured or unsecured notes. Additionally, TLB (first-priority basis) and the ABL (second-priority basis) will be secured by all equity interests in the borrower held by the Holdings. The company is expected to have very good liquidity. Pro forma for the transaction, the company will have $100 million of cash on hand and full availability under the new five-year $1.2 billion ABL facility. Moody's expect the company to remain free cash flow positive in 2023-2024. The new TLB will have amortization payments of 1% per year. They will not have any financial covenants. The ABL will have a springing fixed charge covenant of 1x if availability is less than the greater of 10% of the specified availability and $90 million. Moody's expect the company to remain in compliance with covenant. The majority of assets are encumbered by the secured credit facilities with guarantors accounting for more than two thirds of sales, EBITDA and assets. RATING OUTLOOK The stable ratings outlook reflects the view that Arsenal will maintain a very good liquidity profile, that the anticipated improvement in earnings and cash flows will support gross debt reduction and that credit metrics will remain commensurate with a B1 rating or better. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Moody's will consider an upgrade of Arsenal's credit ratings if the company reduces gross debt such that leverage (adjusted debt/EBITDA) is maintained below 4x in an adverse market environment, interest coverage (adjusted EBIT/Interest) increases to above 2.5x and (CFO - Dividends)/Debt is sustained above 15%. Expectations of sustainable positive Moody's adjusted free cash generation is also a prerequisite for the ratings upgrade. Arsenal's ratings could be downgraded if liquidity, measured as cash plus revolver availability, evidences a material deterioration, if the company undertakes a significant debt-financed acquisition or dividend recapitalization. Quantitatively, ratings could be downgraded if the adjusted EBIT margin is expected to sustain below 4%, interest coverage (adjusted EBIT/Interest) below 2x and leverage above 5x. Headquartered in Pittsburgh, PA, Arsenal AIC Parent LLC is a downstream aluminum producer active in a number of diverse end markets including ground transportation, aerospace, industrial, packaging and building & construction. Revenues for the LTM ended March 31, 2023, were about $8.7 billion. The principal methodology used in this rating was Steel published in November 2021. ARSENAL AIC: S&P Rates New $900MM Senior Secured Notes 'B+' ----------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue-level rating and '3' recovery rating to Arsenal AIC Parent LLC's proposed $900 million senior secured notes due 2030. The '3' recovery rating indicates S&P's expectation for average (50%-70%) recovery in a hypothetical default scenario. The company will use the proceeds from these notes to fund a portion of its proposed acquisition of Arconic Corp. S&P's 'B+' issuer credit rating on Arsenal reflects Arconic's business position as a large producer in the globally concentrated, but competitive, aluminum rolling industry and its large debt load following its 2023 leveraged acquisition. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P assigned its 'B+' issue-level rating and '3' recovery rating to Arsenal's proposed $900 million senior secured notes, indicating its expectation for average (50%-70%) recovery in the event of a default. -- S&P rates Arsenal's $1 billion senior secured term loan B 'B+' with a '3' recovery rating, which indicates its expectation for average (50%-70%) recovery in the event of a default. -- The company's $1.2 billion asset-based lending (ABL; not rated) revolver has a priority claim on its working capital assets. -- S&P's simulated default scenario incorporates a default occurring because of a rising debt load and a decline in earnings from market share losses or materials substitution. Its simulated default scenario also assumes Arconic's creditors would receive the greatest recovery if the company emerged from bankruptcy as a going concern. -- S&P estimates a distressed gross recovery value of approximately $2.4 billion based on emergence EBITDA of about $450 million (consistent with fixed charges) and a 5.5x EBITDA multiple. This multiple is in line with the multiples it uses for the company's downstream metals peers. -- S&P's emergence EBITDA assumption incorporates its recovery assumptions for minimum capital expenditure (2% based on historical evidence), its standard 15% cyclicality adjustment for metals processors, and a 10% operational adjustment to lower the emergence valuation in line with those of similarly rated issuers. Simulated default assumptions -- S&P assumes Arsenal defaults in 2027 after losing key customers because of competition or substitution that is potentially worsened by prolonged weakness in its core markets. -- EBITDA multiple: 5.5x -- EBITDA at emergence: $450 million -- Gross estimated enterprise value: $2.4 billion Simplified waterfall -- Net enterprise value after 5% administrative costs and $350 million of pension obligations: $2.0 billion -- Priority claims, including 60% drawn ABL: $735 million -- Estimated first-lien claims at default: $1.9 billion (excluding ABL) --Recovery expectations for first-lien claims: 50%-70% (rounded estimate: 65%) -- Remaining collateral value: $0 ATHENEX INC: Committee Taps Emerald Capital as Financial Advisor ---------------------------------------------------------------- The official committee of unsecured creditors of Athenex, Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Emerald Capital Advisors. The committee requires a financial advisor to: a) review and analyze the Debtors' operations, financial condition, business plan, strategy, and operating forecasts; b) assist in evaluating the terms, conditions, and impact of any proposed asset sale transactions; c) review and supplement where applicable the Debtors' advisors in any merger and acquisition (M&A) efforts; d) assist the committee in sale negotiations; e) advise the committee regarding the business and financial impact of various restructuring alternatives of the Debtors; f) advise the committee as it assesses the Debtors' executory contracts including assume versus reject considerations; g) assist the committee in connection with its identification, development, and implementation of strategies related to the potential recoveries for unsecured creditors as it relates to the Debtors' Chapter 11 plan; h) provide testimony, as necessary, in any proceeding before the bankruptcy court; and i) provide the committee with other appropriate general restructuring advice. The firm will be paid at these rates: Managing Partners $800 per hour Managing Directors $700 to $750 per hour Senior Advisors $600 to $650 per hour Vice Presidents $500 to $550 per hour Associates $400 to $450 per hour Analysts $300 to $350 per hour John Madden, a managing partner at Emerald Capital Advisors, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: John P. Madden Emerald Capital Advisors 150 East 52nd Street, 15th Floor New York, NY 10022 Telephone: (646) 968-4094 Facsimile: (212) 731-0307 Email: info@emeraldcapitaladvisors.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. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Porzio, Bromberg & Newman, P.C. as lead bankruptcy counsel; McKool Smith, PC as co-counsel with Porzio; and Emerald Capital Advisors as financial advisor. ATHENEX INC: Committee Taps McKool Smith as Co-Counsel ------------------------------------------------------ The official committee of unsecured creditors of Athenex, Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ McKool Smith, PC as co-counsel with Porzio, Bromberg & Newman, P.C. The firm's services include: a. assisting the committee in its consultations with the Debtors regarding the administration of their Chapter 11 cases; b. assisting the committee in analyzing the Debtors' assets and liabilities, including investigating the extent and validity of liens and participating in and reviewing any proposed asset sales, asset dispositions, financing arrangements, cash collateral stipulations or related proceedings; c. assisting the committee in reviewing and determining the Debtors' rights and obligations under leases and other executory contracts; d. assisting the committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the Debtors' operations and the desirability of the continuance of any portion of those operations, and any other matters relevant to those cases or to the formulation of a Chapter 11 plan; e. assisting the committee in the negotiation, formulation and drafting of a plan of liquidation or reorganization; f. advising the committee on issues concerning the appointment of a trustee or examiner under Section 1104 of the Bankruptcy Code; g. advising the committee of its powers and duties under the Bankruptcy Code and the Bankruptcy Rules; h. assisting, advising, and representing the Committee in the analysis and evaluation of claims and liens; and i. other necessary legal services. The firm will be paid at these rates: Principals $850 to $1,950 per hour Associates $515 to $995 per hour Paraprofessionals $210 to $500 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. In accordance with Section D.1 of the U.S. Trustee Guidelines, McKool provided the following information: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: Yes, a 15% reduction of the current hourly rates 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 post-petition, 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: Not applicable. John Sparacino, Esq., a principal at McKool Smith, disclosed in court filings that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: John J. Sparacino, Esq. McKool Smith, PC 600 Travis Street, Suite 7000 Houston, TX 77002 Tel: (713) 485-7300 Fax: (713) 485-7344 Email: jsparacino@mckoolsmith.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. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Porzio, Bromberg & Newman, P.C. as lead bankruptcy counsel; McKool Smith, PC as co-counsel with Porzio; and Emerald Capital Advisors as financial advisor. ATHENEX INC: Committee Taps Porzio Bromberg & Newman as Counsel --------------------------------------------------------------- The official committee of unsecured creditors of Athenex, Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Porzio, Bromberg & Newman, P.C. as lead counsel. The firm's services include: a. assisting the committee in its consultations with the Debtors regarding the administration of their Chapter 11 cases; b. assisting the committee in analyzing the Debtors' assets and liabilities, including investigating the extent and validity of liens and participating in and reviewing any proposed asset sales, asset dispositions, financing arrangements, cash collateral stipulations or related proceedings; c. assisting the committee in reviewing and determining the Debtors' rights and obligations under leases and other executory contracts; d. assisting the committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the Debtors' operations and the desirability of the continuance of any portion of those operations, and any other matters relevant to those cases or to the formulation of a Chapter 11 plan; e. representing the committee in the negotiation, formulation, and drafting of a plan of liquidation or reorganization; f. advising the committee on issues concerning the appointment of a trustee or examiner under Section 1104 of the Bankruptcy Code; g. advising the committee of its powers and duties under the Bankruptcy Code and the Bankruptcy Rules; h. assisting the committee in the analysis and evaluation of claims and liens; and i. other necessary legal services. The firm will be paid at these rates: Warren J. Martin Jr. Principal $1,095 per hour John S. Mairo Principal $875 per hour Brett S. Moore Principal $795 per hour Robert M. Schechter Principal $795 per hour Kelly D. Curtin Principal $735 per hour Cheryl A. Santaniello Principal $735 per hour Rachel A. Parisi Principal $735 per hour David E. Sklar Associate $595 per hour Christopher P. Mazza Associate $550 per hour Dean M. Oswald Associate $440 per hour Maria P. Dermatis Paralegal $350 per hour Jessica M. O'Connor Paralegal $315 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. In accordance with Section D.1 of the U.S. Trustee Guidelines, Porzio provided the following information: 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 post-petition, 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: To be provided. Warren Martin Jr., Esq., a partner at Porzio, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Warren J. Martin Jr., Esq. Porzio, Bromberg & Newman, P.C. 300 Delaware Avenue, Suite 1220 Wilmington, DE 19801 Tel: (302) 526-1235 Fax: (302) 416-6064 Email: wjmartin@pbnlaw.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. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Porzio, Bromberg & Newman, P.C. as lead bankruptcy counsel; McKool Smith, PC as co-counsel with Porzio; and Emerald Capital Advisors as financial advisor. AULT ALLIANCE: Amends Loan Agreement With JGB --------------------------------------------- Ault Alliance, Inc., along with its wholly owned subsidiaries BitNile, Inc., Third Avenue Apartments LLC, Alliance Cloud Services, LLC, Ault Aviation, LLC, and BNI Montana, LLC entered into a First Amendment and Joinder to Loan and Guarantee Agreement with JGB Capital, LP, JGB Partners, LP and JGB (Cayman) Buckeye Ltd. pursuant to which the (i) Loan and Guarantee Agreement, dated Nov. 7, 2022, entered into between the Existing Borrowers and the Investors and (ii) Security Agreement, dated Nov. 7, 2022, entered into between JGB Collateral LLC, as collateral agent for the Investors and BitNile was amended. Pursuant to the Loan Agreement, the Existing Borrowers initially borrowed $18,888,889 and issued secured promissory notes to the Investors in the aggregate amount of $18,888,889. Pursuant to the Amendment, the Borrowers, including BNI Montana who was added as a Borrower, borrowed an additional $8,833,333 and issued amended and restated secured promissory notes to the Investors in the aggregate amount of $24,326,222. The Amended Notes reflected the total amount outstanding under the Loan Agreement after the completion of the Additional Financing. Ault Lending, LLC, a subsidiary of the Company, Ault & Company, Inc., an affiliate of the Company, as well as Milton C. Ault, III, the Company's Executive Chairman and the Chief Executive Officer of A&C, who agreed to act as guarantors of the Initial Notes, continue to act as guarantors of the Amended Notes. In addition, the Borrowers and Ault Lending entered into various amended agreements as collateral for the repayment of the Amended Notes, including (i) the amended Loan Agreement, pursuant to which the Borrowers agreed to, within 30 days from the Closing Date, enter into deposit account control agreements granting the Agent a security interest in their deposit accounts, (ii) the amended Security Agreement, pursuant to which BitNile granted to the Investors a security interest in 19,389 Pro Antminers, (iii) a security agreement, pursuant to which BNI Montana granted to the Investors and the Agent a security interest in substantially all of the assets of BNI Montana, (iv) a pledge agreement by the Company and Circle 8 Holdco LLC, a majority owned subsidiary of the Company, pursuant to which the Company and Circle 8 Holdco pledged the membership interests of Circle 8 Holdco and Circle 8 Crane Services, LLC, a wholly owned subsidiary of Circle 8 Holdco, (v) an amendment to the mortgage and security agreement by Third Avenue on the real estate property owned by Third Avenue in St. Petersburg, Florida, and (vi) an amendment to the future advance mortgage by Alliance Cloud on the real estate property owned by Alliance Cloud in Dowagiac, Michigan. In addition, the Borrowers agreed to enter into an amendment to the aircraft mortgage and security agreement by Ault Aviation on a private aircraft owned by Ault Aviation within 15 days after the Closing Date. Description of the Amended and Restated Secured Promissory Notes The Amended Notes have a principal face amount of $24,326,222 and bear interest at 8.5% per annum, payable monthly in arrears, pursuant to the terms of the Amended Notes. The maturity date of the Amended Notes is May 7, 2024. The Amended Notes contain standard and customary events of default including, but not limited to, failure to make payments when due under the Amended Notes, failure to comply with certain covenants contained in the Amended Notes, or bankruptcy or insolvency of, or certain monetary judgments against, any the Borrowers, Ault Lending or A&C. The Investors have the right to require the Borrowers to make an aggregate monthly payment of $750,000, which will increase to $1,132,000 on Nov. 7, 2023 on the last business day of each month. The Borrowers may elect to pay a deferral fee of $165,000 to the Investors in lieu of a Monthly Payment, which Monthly Deferral would extend the maturity date of the Amended Notes by one month, provided that the Borrowers may not elect to make a Monthly Deferral in consecutive months and may not make more than six Monthly Deferrals in total. From and after the Closing Date, the Borrowers are obligated to pay the Agent a monthly monitoring fee equal to 0.21% of the lesser of (i) the original principal balance of the Amended Notes issued in the Additional Financing, which was $8,833,333 or (ii) the outstanding balance of the Amended Notes. The Borrowers may prepay all or a portion of the outstanding principal and accrued but unpaid interest at any time, provided that if the Borrowers prepay all or any portion of the Amended Notes before Nov. 7, 2023, the Borrowers are required to pay the Investors a prepayment premium equal to two percent (2.0%) of the amount being prepaid. The purchase price for the portion of the Amended and Restated Notes relating to the Additional Loan Amount was $7.5 million. About Ault Alliance Inc. Ault Alliance, Inc. (formerly, BitNile Holdings, Inc.) is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly and majority-owned subsidiaries and strategic investments, Ault Alliance owns and operates a data center at which it mines Bitcoin and provides mission-critical products that support a diverse range of industries, including oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma, consumer electronics, hotel operations and textiles. In addition, Ault Alliance extends credit to select entrepreneurial businesses through a licensed lending subsidiary. Ault Alliance's headquarters are located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141; www.Ault.com. Ault Alliance reported a net loss of $189.83 million for the year ended Dec. 31, 2022, compared to a net loss of $23.04 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $526.91 million in total assets, $336.56 million in total liabilities, and $190.34 million in total stockholders' equity. New York, New York-based Marcum LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has a working capital deficiency, has incurred net 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. AVENIR FAYETTEVILLE: Court OKs Cash Access to Pay for Insurance --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona authorized Avenir Memory Care @ Fayetteville LP to use cash collateral to pay the downpayment for insurance premiums and to enter into insurance premium financing agreements. As previously reported by the Troubled Company Reporter, the Debtor owns a memory care facility known as Avenir Memory Care @Fayetteville located at 1967 W. Truckers Drive in Fayetteville, Arkansas. The Facility is encumbered by an asserted first position lien favor of Merchant's Bank of Indiana. The Bank asserts a blanket lien in all of the Debtor's assets, including the Facility and any revenues generated by the Facility. The Debtor's business operations require that the Debtor have certain insurance policies in place, including General Liability, Professional Liability, Excess Coverage, Property and Wind/Hail policies. The Debtor's pre-petition Policies expired as of June 21, 2023 but the Debtor has bound insurance coverage under new Policies effective as of June 21, 2023. The Debtor worked with Commercial West Insurance to explore the market and identify the best rates for the new Policies. To that end, the Broker has been able to secure new Policies for the Debtor and the Debtor has bound coverage under the new Policies. The Broker has also located an insurance premium financing company, First Insurance Funding, which has agreed to finance the premiums for the new Policies. The Debtor's GL, Professional and Excess coverages are provided by MMIC Risk Retention Group, Inc. The total premium for the GL, Professional and Excess coverage, for both the Debtor and Avenir @ Little Rock, is $213,466. The Debtor's allocated share of the total premium is $106,483. The Debtor has not sought to finance the payment of this premium; rather, the premium is paid through a downpayment and monthly direct bills to MMIC to the Debtor. MMIC has required that the Debtor (and Avenir @ Little Rock) make a downpayment on the premium, in the total amount of $53,374, no later than July 28, 2023. As indicated in the Detail Statement, the Debtor's share of the Total MMIC Downpayment is $26,623. The total premiums (for both the Debtor and Avenir @ Knoxville but not Avenir @ Little Rock3) for (a) the Property coverage, is $65,162 plus taxes in the amount of $1,000 and fees in the amount of $2,646 and (b) the Wind/Hail coverage, is $17,231 plus taxes in the amount of $500 and fees in the amount of $709. The Finance Company has agreed to finance the payment of the Property Premiums pursuant to the terms of the Premium Finance Agreement. Pursuant to the Property Financing Agreement, the Finance Company has agreed to finance the Property Premiums in the total principal amount of $87,249. The Finance Company will charge interest on the total amount financed at the rate of 14.3% per annum for a total finance charge of $3,892. Pursuant to the Property Financing Agreement, this financing requires a total downpayment of $22,937 to be paid by July 21, 2021 and requires total monthly payments of $7,578 per month. The financing will be secured by a first priority lien on and security interest in the financed policies and any additional premium required under the financed policies listed in the Schedule of Policies. The Debtor's pro rata share of the downpayment is $11,216 and its share of the monthly payment is $3,706. A copy of the order is available at https://urlcurt.com/u?l=PN0E9N from PacerMonitor.com. About Avenir Memory Care @ Fayetteville LP Avenir Memory Care @ Fayetteville LP owns a memory care facility known as Avenir Memory Care @ Fayetteville located at 1967 W. Truckers Drive in Fayetteville, Arkansas. The facility consists of 59 private, furnished units, a full kitchen, dining areas, meeting rooms and lounging areas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02640) on April 25, 2023. In the petition signed by David L. Craik, president and director of the General and Limited Partners, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Brenda Moody Whinery oversees the case. Philip R. Rudd, Esq., at Sacks Tierney PA, represents the Debtor as legal counsel. AVENIR KNOXVILLE: Court OKs Cash Access to Pay for Insurance ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona authorized Avenir Memory Care @ Knoxville LP to use cash collateral to pay the downpayment for insurance premiums and to enter into insurance premium financing agreements. As previously reported by the Troubled Company Reporter, the Debtor owns a memory care facility known as Avenir Memory Care located at 901 Concord Rd. in Knoxville, Tennessee. The Facility is encumbered by an asserted first position lien favor of Merchant's Bank of Indiana. The Bank asserts a blanket lien in all of the Debtor's assets, including the Facility and any revenues generated by the Facility. The Debtor's business operations require that the Debtor have certain insurance policies in place, including General Liability, Professional Liability, Excess Coverage, Property and Wind/Hail policies. The Debtor's pre-petition Policies expired as of June 21 but the Debtor has bound insurance coverage under new Policies effective as of June 21. The Debtor worked with Commercial West Insurance to explore the market and identify the best rates for the new Policies. To that end, the Broker has been able to secure new Policies for the Debtor and the Debtor has bound coverage under the new Policies. The Broker has also located an insurance premium financing company, First Insurance Funding, which has agreed to finance the premiums for the new Policies. The premium for the GL and Excess coverage is $33,500 plus fees in the amount of $1,734, and the premium for the Professional coverage is $53,548 plus taxes in the amount of $750 and fees in the amount of $2,810. The Finance Company has agreed to finance the payment of the GL Premiums pursuant to the terms of the Premium Finance Agreement. Pursuant to the GL Financing Agreement, the Finance Company has agreed to finance the GL Premiums in the total principal amount of $92,341. The Finance Company will charge interest on the total amount financed at the rate of 14.3% per annum for a total finance charge of $4,158. Pursuant to the GL Financing Agreement, this financing requires a downpayment of $23,648 to be paid by July 21 and requires monthly payments of $8,095 per month. The financing will be secured by a first priority lien on and security interest in the financed policies and any additional premium required under the financed policies listed in the Schedule of Policies. The total premiums (for both the Debtor and Avenir @ Fayetteville but not Avenir @ Little Rock3) for (a) the Property coverage, is $65,162 plus taxes in the amount of $1,000 and fees in the amount of $2,646 and (b) the Wind/Hail coverage, is $17,231 plus taxes in the amount of $500 and fees in the amount of $709. The Finance Company has agreed to finance the payment of the Property Premiums pursuant to the terms of the Premium Finance Agreement. Pursuant to the Property Financing Agreement, the Finance Company has agreed to finance the Property Premiums in the total principal amount of $87,249. The Finance Company will charge interest on the total amount financed at the rate of 14.3% per annum for a total finance charge of $3,892. Pursuant to the Property Financing Agreement, this financing requires a total downpayment of $22,937 to be paid by July 21, 2021 and requires total monthly payments of $7,578 per month. The financing will be secured by a first priority lien on and security interest in the financed policies and any additional premium required under the financed policies listed in the Schedule of Policies. A copy of the order is available at https://urlcurt.com/u?l=uq0kTr from PacerMonitor.com. About Avenir Memory Care @ Knoxville LP Avenir Memory Care @ Knoxville, LP operates a memory care facility known as Avenir Memory Care located at 901 Concord Rd. in Knoxville, Tennessee. Avenir Memory Care @ Knoxville filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02047) on March 31, 2023, with $10 million to $50 million in both assets and liabilities. David L. Craik, president and director of the General and Limited Partners, signed the petition. Judge Brenda Moody Whinery oversees the case. Philip R. Rudd, Esq., at Sacks Tierney, P.A. represents the Debtor as counsel. BFR GRANITE: Court OKs Interim Cash Collateral Access ----------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas, Sherman Division, authorized BFR Granite Boardwalk, LLC 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 fund its store operations. The Debtor's right to use cash collateral under the Interim Order will commence on the date of entry of the Interim Order and expire on the earlier of: (a) the entry of a subsequent interim cash collateral order; or (b) the entry of a Final Order. As adequate protection of the U.S. Small Business Administration's interest, if any, in the cash collateral pursuant to 11 U.S.C. sections 361 and 363(e) to the extent of any diminution in value from the use of the Collateral the Court grants Secured Lender replacement security liens on and replacement liens on all of the Debtor's Equipment, Inventory and Accounts, whether such property was acquired before or after the Petition Date. The Replacement Liens will be equal to the aggregate diminution in value of the respective Collateral, if any, that occurs from and after the Petition Date. The Replacement Liens will be of the same validity and priority as the liens of Secured Lender on the respective prepetition Collateral. The Replacements Liens will be subject and subordinate to: (a) professional fees and expenses of the attorneys, financial advisors and other professionals retained by any statutory committee if and when one is appointed; and (b) any and all fees payable to the United States Trustee pursuant to 28 U.S.C. section 1930(a)(6), the Subchapter V Trustee, and the Clerk of the Bankruptcy Court. A final hearing on the matter is set for August 3, 2023 at 10 a.m. A copy of the order is available at https://urlcurt.com/u?l=YSuZkT from PacerMonitor.com. About BFR Granite Boardwalk, LLC BFR Granite Boardwalk, LLC is part of the food service industry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-41284) on July 18, 2023. In the petition signed by Jason Graman, authorized representative of the Debtor, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Brenda T. Rhoades oversees the case. Robert T. DeMarco, Esq., at Demarco Mitchell, PLLC, represents the Debtor as legal counsel. BIO365 LLC: Taps Klausner Cook as Special IP Counsel ---------------------------------------------------- BIO365, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Klausner Cook, PLLC. The Debtor requires a special counsel to provide legal advice with respect to its intellectual property and receive a patent grant in Israel on its behalf. Klausner charges an hourly fee of $350 for legal representation of the Debtor, with flat rates for the following: (a) PCT application, $5,500; (b) USPTO non-provisional application, $7,800; (c) annuity payments for European patent applications, $1,841.19; (d) annuity payments for an Indian patent, $355.44; and (e) annuity payments for an Israeli patent, $1,400.05. Aleksandar Nikolic, Esq., a member of Klausner, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Aleksandar Nikolic, Esq. Klausner Cook, PLLC 179 Graham Road Ithaca, NY 14850 Tel: (607) 272-0800 Email: aleks@klausnercook.com About BIO365 LLC Bio365, LLC produces biologically activated and nutrient dense biochar soils for professional cultivation. The company is based in Santa Rosa, Calif. Bio365 filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 23-10180) on April 12, 2023, with $1 million to $10 million in both assets and liabilities. Christopher Hayes has been appointed as Subchapter V trustee. Judge William J. Lafferty oversees the case. The Debtor tapped Kevin Harvey Morse, Esq., at Clark Hill, PLC as bankruptcy counsel; Klausner Cook, PLLC as special intellectual property counsel; and Kander, LLC as financial advisor. Robert Marcus, managing director at Kander, serves as the Debtor's chief restructuring officer. BRIAN SMITH LAW OFFICES: Seeks Conditional Approval of Disclosure ----------------------------------------------------------------- Law Offices of Brian Smith, LLC, sought and obtained an order conditionally approving the Disclosure Statement explaining its Small Business Plan. The Court will convene a hearing to consider final approval of the Disclosure Statement and confirmation of the Plan on August 15, 2023 at 10:30 AM at the Clement F. Haynsworth Federal Building and U.S. Courthouse, 300 East Washington Street Greenville, South Carolina. On or before Aug. 11, 2023, any creditor or party in interest that wishes to object to confirmation of the Plan must file and serve the objection. Ballots accepting or rejecting the Plan are also due Aug. 11, 2023. The Debtor filed its Disclosure Statement and Chapter 11 Plan on July 14, 2023. The Court also granted the Debtor's request to extend its deadline to confirm a Plan. Pursuant to 11 U.S.C. Section 1121(e)(3), the Debtor believes that it ils entitled to an extension of the 45-day period to confirm its Plan imposed by 11 U.S.C. section 1129(e) due to the fact that (A) the Debtor, has provided notice to all parties in interest (including the United States trustee), and has demonstrated through its Monthly Operating Reports and through its Disclosure Statement that it 1s more likely than not that it will be able to provide a Plan that the court can confirm within a reasonable period of time; (B) a new deadline shall be imposed at the time the extension is granted; and (C) the order extending the time will be signed before the existing deadline has expired. About Law Offices of Brian Smith The Law Offices of Brian Smith, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. S.C. Case No. 23-00235) on Jan. 25, 2023, with $1 million to $10 million in both assets and liabilities. Brian Smith, owner and managing member, signed the petition. Judge Helen E. Burris oversees the case. The Debtor tapped Robert H. Cooper, Esq., at Cooper Law Firm as bankruptcy counsel; Ballard & Watson as special counsel; and Ballard Forensics, LLC as accountant. Equal Justice Access Fund LP, as lender, is represented by Weyman C. Carter, Esq., at Burr & Forman, LLP. BRIAN SMITH LAW OFFICES: Unsecureds Will be Paid in Full -------------------------------------------------------- Law Offices of Brian Smith, LLC submitted a Chapter 11 Small Business Plan and a corresponding Disclosure Statement. The Debtor's main objective in the filing of this chapter 11 reorganization was to discuss, analyze and attempt to re-negotiate some of the terms of the $1.6 million loan, which it has partially done. The Debtor, through its principals and attorneys continue to have those discussions with the lender and its managers and attorneys. Thus far, the Debtor's principal and counsel believe it to be on the right course in that effort, and said counsel has developed a plan for the debtor to attempt to have this loan paid back in full within 60 months from the "effective date of the plan." The "effective date of the plan" is the 15th day after the Court enters its Order Confirming the Chapter 11 Plan. Likewise with other creditors to be paid through the plan, the debtor anticipates having those paid in full no later than 60 months from the "effective date of the plan." Under the Plan, Class 6 General Unsecured Creditors consist of: * AT&T: This creditor did not file a proof of claim in this case. However, the debtor scheduled a debt in the amount of $50,106. The debtor proposes to pay the sum of $918.43 per month, which includes no interest for 60 months, which should pay one hundred percent of this debt. * First Relance Bank: This creditor filed a proof of claim for $2,392.72. However, the debtor will file an objection to this claim as the principal, Brian Smith, paid this debt shortly after the commencement of the business chapter 11 case. * LG Funding: This creditor did not file a proof of claim. However, the debtor scheduled a debt in the amount of $40,000. The debtor will propose to pay the sum of $666.67 per month without interest for 60 months, which should pay one hundred percent of this debt. * South Carolina Department of Revenue: This creditor filed a proof of claim in the unsecured general class in the amount of $325.24. The debtor will propose to pay the sum of $27.10 per month, which includes no interest for 12 months, which should pay this claim in full at 100%. By December 31, 2023, the debtor expects to have made progress regarding commencement of repayment to creditors under what should by then be a confirmed chapter 11 plan of reorganization, and be on its way to Substantial Consummation of that plan with a Final Decree and related documents having been filed and the chapter 11 case soon to close. Additionally, by that date, the debtor will have made substantial progress in repaying the major lender's 1.7 million dollar "plus" loan, and it intends to aggressively pursue repayment of that debt in hopes of having it completely paid within 60 months of the "effective date of the plan." The projections reflected above do not include any larger than usual personal injury settlements such as a case that may bring punitive damages and/or a case of "Dram Shop Liability" that is always a potential when a case involves a defendant who was driving under the influence of drugs or alcohol. With the assistance of the debtor's counsel, the debtor's principal, attorney Brian Smith, intends to stay focused on building the business, getting the loans paid off in five years, and moving forward with ideas for the business that he had wanted to implement, but which were thwarted by the massive amount of debt owed by the business. Attorney Smith borrowed the 1.6 million dollars at a time when he was recovering from having been struck by a vehicle and having spent six months in a hospital recovering from serious bodily injuries. He looks forward to getting it paid back and moving forward with his life and his business. The debtor anticipates paying the creditors within a five-year period from the "effective date of the plan", and to be debt free of those obligations at that time. The projections anticipate the debtor paying approximately $30,000 per month to its major lender toward a 1.7 "plus" million-dollar debt. The debtor began payments under a settlement agreement starting June 1, 2023, and have paid a total of $84,000 in June and July, 2023, which places them ahead of their own schedules. Likewise, the debtor does not anticipate any problem paying the other few creditors the amounts set forth in the proposed plan, and may in fact be in a position later to pay them off early. The debtor sees no problem with feasibility of the proposed chapter 11 plan. Counsel for the Debtor: Robert H. Cooper, Esq. THE COOPER LAW FIRM 150 Milestone Way, Suite B Greenville, SC 29615 Tel: (864) 271-9911 Fax: (864) 232-5236 E-mail: theooper@thecooperlawfirm.com A copy of the Disclosure Statement dated July 14, 2023, is available at https://tinyurl.ph/Ihxhr from PacerMonitor.com. About Law Offices of Brian Smith The Law Offices of Brian Smith, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. S.C. Case No. 23-00235) on Jan. 25, 2023, with $1 million to $10 million in both assets and liabilities. Brian Smith, owner and managing member, signed the petition. Judge Helen E. Burris oversees the case. The Debtor tapped Robert H. Cooper, Esq., at Cooper Law Firm as bankruptcy counsel; Ballard & Watson as special counsel; and Ballard Forensics, LLC as accountant. Equal Justice Access Fund LP, as lender, is represented by Weyman C. Carter, Esq., at Burr & Forman, LLP. CARVANA CO: Inks Agreement With Noteholders to Reduce Debt ----------------------------------------------------------- Carvana Co. announced that it entered into a transaction support agreement with a group of noteholders representing over 90% of the aggregate principal amount outstanding of the Company's existing senior unsecured notes. The TSA Parties have engaged in good faith, arm's length negotiations and agreed to the following terms: * the new issuance through one or more equity offerings for aggregate gross proceeds of at least $350 million of the Company's Class A Common Stock, par value $0.001 per share, and/or Class A LLC Units of Carvana Group; * The exchange of the Existing Unsecured Notes for up to $4.376 billion of the following three tranches of senior secured notes: (A) up to $1.0 billion of new 9.0%/12.0% cash/payment-in-kind ("PIK") toggle senior secured notes due December 2028 (with interest per annum payable 12% in PIK in the first year, 12% in PIK and 9% in cash toggle in the second year, and 9% in cash thereafter); (B) up to $1.5 billion of new 11.0%/13.0% cash/PIK toggle senior secured second lien notes due June 2030 (with interest per annum payable 13% in PIK in the first year, 13% in PIK and 11% in cash toggle in the second year, and 9% in cash thereafter); and (C) up to $1.876 billion of new 9.0%/14.0% cash/PIK toggle senior secured notes due June 2031 (with interest per annum payable 14% in PIK in the first year, 14% in PIK in the second year, and 9% in cash thereafter) (tranches (A), (B), and (C) referred to collectively as the "New Senior Secured Notes"; * concurrently with, but separate from the Exchange Offers, the commencement by the Company of a cash tender offer to purchase certain 2025 Notes; * concurrently with the Exchange Offers and the cash tender offer, the solicitation by the Company of consents from holders of the Existing Unsecured Notes to amend certain provisions in the indentures governing the Existing Unsecured Notes; and * with respect to the Garcia Parties only, the purchase of their pro rata portion of any offering of New Equity (such commitment not to exceed $126 million); provided that such commitment shall automatically terminate on the date the Company raises $700 million of gross proceeds from the issuance of New Equity. "The strong performance of our business in 2023 presented an opportunity for an impactful and mutually beneficial for Carvana and its senior unsecured noteholders," said Mark Jenkins, Carvana's chief financial officer. "This transaction significantly increases our financial flexibility by reducing our total debt, extending maturities, and lowering near-term cash interest expense as we continue to execute our plan of driving significant profitability and returning to growth." "Apollo is pleased to support this debt exchange agreement, which stands to significantly strengthen Carvana's financial position while providing creditors with new first lien debt. Working with Carvana, PIMCO, Ares and the ad hoc group of noteholders, we believe this agreement demonstrates the types of win-win outcomes that companies can achieve with constructive and engaged financing partners," said John Zito, Apollo Deputy CIO of Credit. "We continue to have strong conviction in Carvana’s strategy and Ernie Garcia's vision to revolutionize the way consumers buy, sell, and finance their vehicles." Moelis & Company LLC served as exclusive financial advisor and Kirkland & Ellis LLP served as exclusive legal advisor to the Company. PJT Partners LP served as exclusive financial advisor and White & Case LLP served as exclusive legal advisor to the ad hoc group of holders of existing unsecured notes. About Carvana Founded in 2012 and based in Tempe, Arizona, Carvana Co. -- http://www.carvana.com-- is an e-commerce platform for buying and selling used cars. Carvana.com allows someone to purchase a vehicle from the comfort of their home, completing the entire process online, benefiting from a 7-day money back guarantee, home delivery, nationwide inventory selection and more. Customers also have the option to sell or trade-in their vehicle across all Carvana locations, including its patented Car Vending Machines, in more than 300 U.S. markets. Carvana Co. reported a net loss of $2.89 billion for the year ended Dec. 31, 2022, compared to a net loss of $287 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $8.70 billion in total assets, $9.75 billion in total liabilities, and a total stockholders' deficit of $1.05 billion. * * * As reported by TCR on June 8, 2023, S&P Global Ratings raised its issuer credit rating on Carvana Co. to 'CCC' from 'CC'. S&P said, "The rating action and 'CCC' rating reflects the expiration and termination of the exchange offers as well as our view that liquidity will continue to erode, creating the potential for another distressed exchange over the next 12 months." CARVANA CO: Posts $58 Million Net Loss in Second Quarter -------------------------------------------------------- Carvana Co. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to the company of $58 million on $2.97 billion of net sales and operating revenues for the three months ended June 30, 2023, compared to a net loss attributable to the Company of $238 million on $3.88 billion of net sales and operating revenues for the three months ended June 30, 2022. For the six months ended June 30, 2023, the Company reported a net loss attributable to the Company of $218 million on $5.57 billion of net sales and operating revenues compared to a net loss attributable to the Company of $498 million on $7.38 billion of net sales and operating revenues for the same period in 2022. As of June 30, 2023, the Company had $7.85 billion in total assets, $9.25 billion in total liabilities, and a total stockholders' deficit of $1.40 billion. "Carvana performed exceptionally well in the second quarter and set Company records for Adjusted EBITDA and gross profit per unit, which was up 94% year-over-year, all while continuing to lower expenses. Our strong execution has made the business fundamentally better, and combined with today's agreement with noteholders that reduces our cash interest expense and total debt outstanding, gives us great confidence that we are on the right path to complete our three-step plan and return to growth," said Ernie Garcia, Carvana's founder and chief executive officer. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1690820/000169082023000219/cvna-20230630.htm About Carvana Founded in 2012 and based in Tempe, Arizona, Carvana Co. -- http://www.carvana.com-- is an e-commerce platform for buying and selling used cars. Carvana.com allows someone to purchase a vehicle from the comfort of their home, completing the entire process online, benefiting from a 7-day money back guarantee, home delivery, nationwide inventory selection and more. Customers also have the option to sell or trade-in their vehicle across all Carvana locations, including its patented Car Vending Machines, in more than 300 U.S. markets. Carvana Co. reported a net loss of $2.89 billion for the year ended Dec. 31, 2022, compared to a net loss of $287 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $8.70 billion in total assets, $9.75 billion in total liabilities, and a total stockholders' deficit of $1.05 billion. * * * As reported by TCR on June 8, 2023, S&P Global Ratings raised its issuer credit rating on Carvana Co. to 'CCC' from 'CC'. S&P said, "The rating action and 'CCC' rating reflects the expiration and termination of the exchange offers as well as our view that liquidity will continue to erode, creating the potential for another distressed exchange over the next 12 months." CCI HOLDINGS: Ruediger Mueller Named Subchapter V Trustee --------------------------------------------------------- The U.S. Trustee for Region 21 appointed Ruediger Mueller of TCMI, Inc. as Subchapter V trustee for CCI Holdings Group, LLC. Mr. Mueller will be paid an hourly fee of $350 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Mueller declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Ruediger Mueller TCMI, Inc. 1112 Watson Court Reunion, FL 34747 Email: truste@tcmius.com About CCI Holdings CCI Holdings Group, LLC is a licensed and bonded concrete contractor in Clearwater, Fla. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02988) on July 14, 2023, with $786,813 in assets and $1,330,069 in liabilities. Petar J. Pitesa, authorized member, signed the petition. Buddy D. Ford, Esq., at Buddy D. Ford, P.A. is the Debtor's legal counsel. CHAPIN DAIRY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Chapin Dairy, LLC 8244 Highway 144 Weldona, CO 80653 Business Description: The Debtor owns five properties in Weldona, Colo. valued at $5.96 million. Chapter 11 Petition Date: July 24, 2023 Court: United States Bankruptcy Court District of Colorado Case No.: 23-13262 Judge: Hon. Thomas B. Mcnamara Debtor's Counsel: Jeffrey A. Weinman, Esq. ALLEN VELLONE WOLF HELFRICH & FACTOR, P.C. 1600 Stout Street 1900 Denver, CO 80202 Tel: 303-534-4499 Email: jweinman@allen-vellone.com Total Assets: $11,249,082 Total Liabilities: $19,303,237 The petition was signed by A. Foy Chapin as manager. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XHBMVBI/CHAPIN_DAIRY_LLC__cobke-23-13262__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Agfinity, Inc. Vendor $543,502 4065 St. Cloud Drive Suite 100 Loveland, CO 80538 2. Agricultural Vendor $79,605 Products Extension, LLC P.O. Box 74510 Cleveland, OH 44194 3. American AgCredit Mortgage Loan $5,981,717 4505 West 29th Street Greeley, CO 80634 4. Bank of the West Loan $63,157 P.O. Box 515274 Los Angeles, CA 90051 5. Bath, Keith Vendor $136,947 16134 MCR 22 Fort Morgan, CO 80701 6. Baugh, David Vendor $65,089 25192 County Road 4 Weldona, CO 80653 7. Castor, Todd Vendor $24,101 25450 MCR 10 Weldona, CO 80653 8. Dairy Specialists, LLC Vendor $328,440 3309 Empire Street Evans, CO 80620 9. Eagle Supply Vendor $110,246 Company, LLC P.O. Box 4844 Syracuse, NY 13221 10. Front Range Energy, LLC Vendor $22,849 31375 Great Western Drive Windsor, CO 80550 11. LL Stinton, LLC Vendor $33,333 22696 SW Kruger Rd. Sherwood, OR 97140 12. Lorenzini Farms Vendor $59,151 10222 MCR Y Weldona, CO 80653 13. Northern Feed & Vendor $317,459 Bean, Inc. P.O. Box 149 Lucerne, CO 80646 14. Nutrien AG Default Judgment $128,776 Solutions, Inc. 22282 Highway 34 Fort Morgan, CO 80701 15. Reconserve of Colorado Vendor $42,525 P.O. Box 101339 Pasadena, CA 91189 16. Schaffert, Terri Lynn Vendor $48,921 39137 CR 32 Otis, CO 80743 17. Simplot Grower Solutions Vendor $49,950 18626 CR 16 Fort Morgan, CO 80701 18. South Platte Vet Supply Vendor $383,242 136 Right-Of-Way Road Sterling, CO 80751 19. West Plains, LLC Vendor $84,372 P.O. Box 489 Johnstown, CO 80534 20. Western Hay Service Vendor $220,126 P.O. Box 665 Morrill, NE 69358 CHF-COOK LLC: S&P Raises 2015A Bond Rating to 'B', Outlook Stable ----------------------------------------------------------------- S&P Global Ratings raised its long-term rating' on Illinois Finance Authority's series 2015A student housing revenue bonds, issued for CHF Cook LLC, Ala., to 'B' from 'B-'. The outlook is stable. "The upgrade is based on improved occupancy the last two years, leading to a reduction in the occupancy contribution required from the university in fiscal 2022, as well as the proven and continued commitment from the university to provide break-even support payments to meet 1.0x coverage, which ensures timely payment of debt service," said S&P Global Ratings credit analyst Vicky Stavropoulos. The stable outlook reflects S&P's view of the commitment from NEIU to provide break-even contributions that will continue to support timely debt service payments. In addition, the project experienced a significant improvement in occupancy of 95% in fall 2022, up from 66% in 2021, and is anticipated stay near current levels for fall 2023. CLAUSEN OYSTERS: Court OKs Cash Access Extension Thru Aug 11 ------------------------------------------------------------ Clausen Oysters, LLC sought and obtained entry of an order from the U.S. Bankruptcy Court for the District of Oregon to continue using cash collateral in accordance with the budget, with a 20% variance. Specifically, the Debtor is permitted to use $72,690 of cash collateral for the period from July 19 to August 11, 2023. The Debtor and its creditors, David Clausen, Lilli Clausen, Steve Clausen, and Kimberly Stolz, have reached a compromise that has been presented to the Court for approval. The proposed settlement resolves the pending Motion for Relief from Stay. Pursuant to the settlement, the creditors have agreed to the Debtor's continued use of cash collateral pursuant to the Budget. As adequate protection, the secured creditors are granted a perfected lien on all of the post-petition property of the same nature and kind in which each of them has a pre-petition line or security interest. The replacement liens will have the same relative priority vis-a-vis one another as existed on the petition date with respect to the original liens. The Replacement Lien on the Replacement Collateral will be perfected and enforceable upon entry of the Order without regard to whether such Replacement Lien is perfected under applicable non-bankruptcy law. The Replacement Lien granted will be a valid, perfected and enforceable security interest and lien on the property of the Debtor and the Debtor's estate without further filing or recording of any document or instrument or any other action, but only to the extent of the enforceability of the Lien Creditors' security interests in the Prepetition Collateral. A copy of the Debtor's motion and budget is available at https://urlcurt.com/u?l=SY6qg8 from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=LIwJMN from PacerMonitor.com. The Debtor projects total operating expenses, on a weekly basis, as follows: $33,295 for the week ending July 21, 2023; $33,295 for the week ending July 28, 2023; $33,295 for the week ending August 4, 2023; $33,295 for the week ending August 11, 2023; $33,295 for the week ending August 18, 2023; and $33,295 for the week ending August 25, 2023. About Clausen Oysters, LLC Clausen Oysters, LLC owns an oyster farm in the State of Oregon. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ore. Case No. 23-60847) on May 18, 2023. In the petition signed by Seth Silverman, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Thomas M. Renn oversess the case. Nicholas J. Henderson, Esq., at MOTSCHENBACHER & BLATTNER, LLP, represents the Debtor as legal counsel. COMPREHENSIVE PAIN: Court OKs Cash Collateral Access on Final Basis ------------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, authorized Comprehensive Pain Solutions, PLLC, d/b/a Prizm Pain Specialists, PLLC and Horizon Integrated Therapies to use cash collateral on a final basis in accordance with the budget, with a 5% variance. The Debtor's ability to use cash collateral under will terminate on the earlier of October 1, 2023 or upon a default by Debtor, unless the Termination Date is extended by written stipulation of the Bank and the Debtor. First Merchants Bank asserts that the Debtor is indebted to Bank, under the Amended and Restated Promissory Note (Line of Credit-Prime) executed by Debtor to the order of Bank on February 12, 2014 in the original principal amount of $1.5 million and the indebtedness under the Prepetition Revolving Note as of the Petition Date includes principal of $1.1 million, interest of $1,264, plus accrued and accruing interest, costs, fees (including without limitation legal fees) and expenses of $14,095. The liabilities evidenced by the Prepetition Revolving Note and the other loan and collateral documents, including interest, costs, fees (including without limitation legal fees) and expenses, totals $1.2 million. Effective as of June 26, 2023, interest on the Prepetition Revolving Note is accruing at the non-default rate specified in the Prepetition Loan Documents plus an additional 1.5% per annum. As adequate protection, the Bank is granted a continuing and replacement security interest and lien in all of the property of Debtor. In the event that the adequate protection provided to the Bank is insufficient to protect Bank for the Debtor's use of cash collateral or for a diminution in value of the Bank's other collateral, then to the extent that the automatic stay of section 362 of the Code or the Debtor's use of cash collateral or Bank's other collateral results in any diminution in the value of the Bank's interest in the Bank's Prepetition Collateral, the Bank's claim will have priority under section 507(b) of the Code over all administrative expenses incurred in the Chapter 11 proceeding of the kind specified in section 503(b) of the Code, other than the U.S. Trustee quarterly fees incurred under 28 U.S.C. 1930(a). A copy of the order is available at https://urlcurt.com/u?l=wJo8H8 from PacerMonitor.com. About Comprehensive Pain Solutions, PLLC Comprehensive Pain Solutions, PLLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-45664) on June 26, 2023. In the petition signed by Jeffrey M. Rosenberg, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Maria L. Oxholm oversees the case. Daniel J. Weiner, Esq., at Schafer and Weiner, PLLC, represents the Debtor as legal counsel. CUBIC CORP: Fitch Alters Outlook on 'B' LongTerm IDR to Negative ---------------------------------------------------------------- Fitch Ratings has affirmed Cubic Corporation and Atlas CC Acquisition Corp.'s Long-Term Issuer Default Ratings (IDRs) at 'B'. Fitch has also affirmed the company's first-lien term loan B and revolver at 'BB'/'RR1', issued at Atlas CC Acquisition Corp. The Rating Outlook has been revised to Negative from Stable. The Negative Outlook reflects Fitch's view that EBITDA leverage and interest coverage metrics will remain weak, above 7x and below 1.75x respectively, through at least the end of 2023. These weaker metrics heighten the risk that unforeseen potential future operational disruption or contract loss could have a more pronounced negative effect on the company. Further risks to Cubic's ratings include execution on the company's remaining cost cutting initiatives, retaining contracts due for renewal, supply chain inefficiencies and maintaining a technological advantage over competitors. These risks are offset by Cubic's operating profile which includes strong EBITDA margins, neutral-to-positive and improving FCF, contract diversification, revenue stability, and significant intellectual property (IP), which differentiates it from its competition. The company has a strong backlog, which is expected to expand over the next few years given the potential increase in infrastructure spending on both state and federal levels. KEY RATING DRIVERS Leverage High, Improving Towards Mid-6x: Fitch expects that Cubic's EBITDA leverage (debt/EBITDA) will remain high for the 'B' rating level and above its negative sensitivity until the majority of cost savings actions are realized, which may last into early 2024. The Negative Rating Outlook reflects the risk that weaker metrics for a longer period could result in negative rating momentum in case of further disruptions, including loss of contract renewals or incremental supply chain disruption. Fitch forecasts steady improvement to the mid-6.0x range by the end of FY24 despite inclusion of the company's non-recourse variable interest entity (VIE) debt in the leverage calculation. Fitch views stability at the current rating level and future positive rating momentum as somewhat dependent on management's ability to execute on its growth plans and delever through either EBITDA improvement or debt paydown. Supply Chain Challenges: Cubic experienced material supply chain challenges in 2022 that resulted in delayed project execution and cash outflows related to working capital. Although overall conditions have stabilized since late 2022 and risk of further disruption is limited, Fitch does not believe the environment will improve towards 2019 levels until at least late 2024. The agency forecasts working capital, excluding JVs and VIEs, will be a source of cash over the next 24 months due to improved efficiency and drawdown of contract assets following the initial disruption, but 2024 and beyond will likely depend on potential new contract award wins and product vs service mix of revenue. Solid Cash Flow and Margins, Weak Coverage Below 1.75x: Fitch considers Cubic's profitability and cash generation, excluding recent onetime costs, to be strong for a government contractor, consistent with a higher-rated entity and heavily weighted factors when deriving the 'B' IDR. Fitch forecasts the company's EBITDA margins will improve and FCF will remain positive following the completion of cost saving initiatives executed over the past 24 months and along with dissipating supply chain concerns. Fitch forecasts EBITDA coverage will remain somewhat weak and below Fitch negative rating sensitivity of 1.75x during 2023, but should approach 2.0x in 2024 if the company executes on its objectives and avoids contract losses. Revenue Visibility: Cubic has a moderate amount of revenue visibility, which Fitch believes supports the 'B' rating despite temporarily higher leverage. Many of the contracts on both the transportation and defense side are several years in duration and sole-sourced, with only a very small percentage of revenue that is variable based on transportation traffic volumes. This provides some stability to the company's overall profile, while certain indefinite delivery, indefinite quantity (IDIQ) contracts can lead to additional upside. Innovative, Diversified Portfolio: Cubic has a highly diversified and complex product portfolio, which supports the company's credit profile. The company constantly innovates through R&D investment to provide highly unique offerings backed by IP. In some cases, the company partners with customers to become embedded in the decision loop and better meet customers' objectives. Further, a high percentage of the company's portfolio comprises sole-sourced contracts spanning several years, which creates an inherent barrier to entry for potential competitors. End-Market Tailwinds: Fitch believes there are several factors that could contribute to high single-digit to low double-digit percentage annual revenue growth over the next several years. Cubic Transportation Systems (CTS) provides urban revenue management systems, cashless tolling and advanced traffic management solutions that should benefit from the macro trend of urbanization and the increased use and scope of mass transit despite recent headwinds following the pandemic. Further digitization of those systems, coupled with the implementation of Internet of Things (IoT) technologies and support from infrastructure spending on both state and federal levels, would benefit Cubic in excess of Fitch's base forecasts. Cubic's defense portfolio should capture increased spending on data-driven training and communication platforms, which Cubic provides. The company also has partnered with various government agencies to invest substantially in next-generation technologies, which could provide long-term growth if the projects evolve. DERIVATION SUMMARY Fitch considers the company's leverage profile to be relatively weaker than 'B' rated peers in the broader Aerospace and Defense sector, though consistent with other private leveraging transactions such as Peraton (B/Stable), which was also purchased in 2021 by Veritas. Cash flow generation and profitability are projected to become more consistent with that of higher-rated companies over the rating horizon if the company can execute on its planned cost saving measures. Cubic's product portfolio is strong and well diversified by contract and customer with a high degree of revenue visibility and long-dated contracts that partially offset the company's weaker leverage. KEY ASSUMPTIONS Fitch's Key Assumptions Within The Rating Case for the Issuer Include: -- Low double-digit annual revenue growth (%) at CTS and Cubic Mission & Performance Solutions (CMPS) in 2023 and 2024 driven by an increased scope of urban revenue management systems, expansion of cashless tolling systems, utilization of more advanced traffic management solutions, increased use of IoT technologies and the greater importance of live virtual constructive training platforms and other emerging technologies; -- EBITDA margins in the high teens over the next few years as the company continues to execute on additional run-rate cost reduction; There could be upside beyond Fitch's forecast if the company successfully executes on planned synergies; -- Capex spending expected be less than 3% over the rating forecast; -- Cash outflows related to cost-reduction tapers off beyond 2023; -- Preferred shares are not considered debt; -- Term loan C is immunized by segregated cash collateral and is excluded from Fitch's leverage calculations; -- Non-recourse debt obligations related to JVs and VIEs are included in Fitch's calculations for debt and leverage. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Cubic would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated. A 10% administrative claim is assumed in the recovery analysis. Fitch assumes Cubic will receive a going-concern recovery multiple of 7.0x EBITDA under this scenario. Fitch considers this multiple to be toward the upper range of recovery multiples assigned to companies in the Aerospace and Defense sector. Fitch's recovery assumptions are based on Cubic's moderate and improving cash flow and margins, long dated and highly visible contracts, strong intellectual property and technology portfolio. Fitch also considered the company's contract diversification in determining a medium to high recovery multiple. Fitch assumes the going concern EBITDA in the analysis will be lower than 2022 EBITDA and in line with a downside scenario in which bankruptcy occurs as a result of materially low contract renewal rates coupled with modest contract losses, stemming from either reputational damage or severely increased competition. Fitch's bankruptcy case incorporates a scenario where the company could fail to replace lost EBITDA via new contract awards upon emergence. Fitch's recovery assumptions considers greater than 90% of enterprise value from subsidiaries guarantees the first lien debt. Fitch's analysis appropriates that value on a priority basis to the first lien holders, then distributing the remaining amount on a pro rata basis to the first and second lien debt holders. Most of the defaulters in the Aerospace and Defense sector observed by Fitch in recent bankruptcy case studies were significantly smaller in scale, had less diversified product lines or customer bases and were operating with highly leveraged capital structures. Fitch assumes a fully drawn first-lien revolver in its recovery analyses since credit revolvers are generally tapped as companies are under distress. The first-lien revolver and term loan B are based on Fitch's recovery analysis under a going concern scenario, and result in corresponding 'BB' rating and Recovery Rating of 'RR1', indicating outstanding recovery prospects. Fitch excluded the term loan C from its recovery waterfall analysis. In a bankruptcy scenario it is assumed that the cash collateralization segregated for this facility would be used to repay the debt associated with it. RATING SENSITIVITIES Fitch could stabilize the ratings if the company executes to win its recompete contracts, transitions to sustain positive FCF and maintains EBITDA leverage below 7.0x through either EBITDA growth or debt repayment. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Execution on cost saving measures leads to elevated margins and sustained leverage (debt/EBITDA) below 5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Leverage sustained greater than 7.0x beyond fiscal 2023; -- EBITDA interest coverage sustained below 1.75x; -- Material loss of contract(s) affects the company's diversification; -- Consistently neutral to negative FCF. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Fitch considers the company's liquidity to be solid at greater than $300 million, comprised of around $100 million of cash and full availability of its revolving credit facility as of YE 2022. Fitch believes this is adequate to cover the company's modest capital requirements such as capex and working capital fluctuations. Fitch does not expect the company to pay dividends going forward. Fitch consider the cash from issuing its $300 million term loan C to be restricted, as Fitch believe it cannot be used beyond collateralizing the term loan and associated letters of credit. ISSUER PROFILE Cubic Corporation is a technology driven, market leading provider of integrated solutions that increase situational awareness for transportation, defense C4ISR and training customers worldwide to decrease urban congestion and improve the militaries' effectiveness and operational readiness. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch excludes the Term Loan C from the debt balance in Fitch leverage calculations as Fitch view the debt as segregated for use to collateralize letters of credit, and effectively immunized by the cash held in restricted accounts. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. CYXTERA TECHNOLOGIES: $200MM DIP Loan From Wilmington OK'd ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey authorized Cyxtera Technologies, Inc. and its debtor-affiliates to use cash collateral and obtain postpetition financing, on a final basis. Cyxtera has received a commitment for $200.4 million in debtor-in-possession financing from certain of the term lenders. The DIP loan is convertible into an exit facility upon the Company's emergence from the court-supervised process. $200-Mil. Facility When they entered Chapter 11, the Debtors had $40.7 million in cash on hand, which is insufficient to support their global operations during the first 28 days of the cases. The DIP Facility provides the Debtors with $150 million of new liquidity for use during the pendency of these chapter 11 cases, of which $40 million was made available following entry of the Interim Order, with the remaining $110 million to be made available for withdrawal following entry of the Final Order. Additionally, the DIP Facility includes a "roll up" component of $36 million of bridge financing term loans issued to the Debtors shortly before the filing of the chapter 11 cases, plus $468,512 of accrued and unpaid interest on account of the Prepetition Priority Loans. Finally, the Company will have access to $14 million of funds to be released from escrow from the converted Bridge Facility. Wilmington Savings Fund Society, FSB serves as the agent under the DIP Facility. DIP Loan Terms The Debtors requires the DIP Facility to fund the administration of these chapter 11 cases and finalize their Marketing Process. The Debtors contended the DIP Facility provides invaluable certainty to the Debtors and their stakeholders at the outset of the chapter 11 cases that they will have the liquidity necessary to finalize the Marketing Process in a thorough, organized fashion, and to ultimately effectuate a reorganization of the Debtors' estates in an orderly and predictable manner. The DIP Facility matures through the earliest of: (i) The date that is 6 months after the Effective Date, as such date may be extended; (ii) The date on which all Loans are accelerated and all unfunded Commitments (if any) have been terminated in accordance with the Agreement, by operation of law or otherwise; (iii) The date the Bankruptcy Court orders a conversion of the Chapter 11 Cases to a chapter 7 liquidation or the dismissal or termination of the chapter 11 case or the Canadian Recognition Proceeding of any Debtor; (iv) The closing of any sale of assets pursuant to 11 U.S.C. Section 363, which when taken together with all other sales of assets since the Effective Date, constitutes a sale of substantially all of the assets of the Loan Parties; (v) The Plan Consummation Date; and (vi) Proceedings under or pursuant to the Bankruptcy and Insolvency Act have been commenced in respect of the Canadian-based affiliates of the Debtors, which serve as guarantors, unless otherwise consented to in writing by the Required Lenders (which consent may be communicated via an email from either of the Specified Lender Advisors). As of the Petition Date, the Debtors have approximately $1.02 billion in aggregate outstanding principal and accrued interest for funded debt obligations. The Prepetition Priority Secured Parties are granted a variety of adequate protection to protect against the postpetition diminution in value of the cash collateral resulting from the use, sale, or lease of the cash collateral by the Debtors and the imposition of the automatic stay. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=Ey1KaD from PacerMonitor.com. The Debtor projects total operating disbursements, on a weekly basis, as follows: $7,907,000 for the week starting July 24, 2023; $15,740,000 for the week starting July 31, 2023; $15,659,000 for the week starting August 7, 2023; $7,608,000 for the week starting August 14, 2023; $8,543,000 for the week starting August 21, 2023; and $22,390,000 for the week starting August 28, 2023. About Cyxtera Technologies Inc. Headquartered in Coral Gables, Fla., Cyxtera Technologies, Inc. -- https://www.cyxtera.com -- is a global data center company providing retail colocation and interconnection services. The Company provides a suite of connected and automated infrastructure and interconnection solutions to more than 2,300 enterprises, service providers and government agencies around the world -- enabling them to scale faster, meet rising consumer expectations and gain a competitive edge. Cyxtera and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case No. 23-14853) on June 4, 2023. In the petition signed by Eric Koza, chief restructuring officer, the Debtor disclosed up to $131 million in assets and up to $2.679 billion in liabilities. Judge John K. Sherwood oversees the case. The Debtors tapped Kirkland and Ellis LLP and Kirkland and Ellis International LLP as general bankruptcy counsel, Cole Schotz P.C. as co-bankruptcy counsel, Guggenheim Securities, LLC as investment banker, AlixPartners LLP as restructuring advisor, and Kurtzman Carson Consultants LLC as noticing and claims agent. An ad hoc group of first lien lenders is represented by Gibson, Dunn & Crutcher LLP as legal counsel and Houlihan Lokey, Inc. as financial advisor. DIEBOLD HOLDING: Court Approves Disclosures and Confirms Plan ------------------------------------------------------------- Judge David R. Jones has entered an order approving the Disclosure Statement and confirming the Second Amended Joint Prepackaged Chapter 11 Plan of Reorganization of Diebold Holding Company, LLC, et al. The forms of Ballots annexed to the Combined Order are in compliance with Bankruptcy Rule 3018(c) and are approved in all respects. All parties have had a fair opportunity to litigate all issues raised by the Objections, or which might have been raised, and the Objections have been fully and fairly litigated. All Objections, responses, statements, reservation of rights, and comments in opposition to the Plan, other than those withdrawn with prejudice in their entirety, waived, settled, or resolved prior to the Combined Hearing, or otherwise resolved on the record of the Combined Hearing and/or herein, are hereby overruled for the reasons stated on the record. The record of the Combined Hearing is closed. On the Effective Date, the Debtors and the Reorganized Debtors, as applicable, shall be authorized to execute and deliver, and to consummate all transactions contemplated by, the Exit Facility Documents, without further notice to or order of this Court, act or action under applicable law, regulation, order, or rule or the vote, consent, authorization or approval of any Entity (other than as expressly required by the Exit Facility Documents) and all actions to be taken, undertakings to be made, and obligations to be incurred by the Reorganized Debtors in connection therewith, including but not limited to the payment of any fees and indemnities, are hereby approved. The indebtedness and obligations in connection with the Exit Facility shall (a) be legal, binding and enforceable in accordance with the terms of the Exit Facility Documents and (b) not be deemed to be, enjoined or subject to discharge, impairment, release or avoidance under the Plan, this Order or on account of the Confirmation or Consummation of the Plan. The Debtors were not required to solicit votes from the Holders of Claims or Interests in Class 1 (Other Secured Claims), Class 2 (Other Priority Claims), Class 3 (ABL Facility Claims), Class 4 (Superpriority Term Loan Claims), Class 8 (General Unsecured Claims), Class 10 (Debtor Intercompany Claims), Class 11 (Non-Debtor Intercompany Claims), and Class 12 (Intercompany Interests), as such Classes are Unimpaired under the Plan and, therefore, deemed to accept the Plan. The Debtors also were not required to solicit votes from Holders of Claims or Interests in Class 9 (Section 510(b) Claims) or Class 13 (DNI Interests), as such Classes are deemed to reject the Plan. Although the Debtors were not required to solicit votes from Holders of Section 510(b) Claims or DNI Interests, which are not entitled to receive a distribution and deemed to reject the Plan, the Debtors served such Holders with the Combined Notice, which referenced the Plan and Disclosure Statement. As described in and as evidenced by the Tabulation Declaration and the Solicitation Affidavit, the transmittal and service of the Combined Notice was timely, adequate, and sufficient under the circumstances. As more fully set forth in the Tabulation Declaration, Class 5 (First Lien Claims) and Class 6 (Second Lien Notes Claims) voted to accept the Plan and Class 7 (2024 Stub Unsecured Notes Claims) voted to reject the Plan. The Plan meets the requirements of section 1123(a)(4) of the Bankruptcy Code because Holders of Allowed Claims or Interests will receive, on account of such Claims and Interests, the same rights and treatment as other Holders of Allowed Claims or Interests within such Holders' respective Classes. The Plan provides for an approximate 4.8% recovery to Holders of Claims in Class 6 (Second Lien Notes Claims) and Class 7 (2024 Stub Unsecured Noteholder Claims), both of which are unsecured as evidenced by the Debtors' Valuation Analysis attached as Exhibit 5 to the Disclosure Statement. Specifically, the Plan (x) provides for the equitization of the Second Lien Notes Claims such that Holders of Second Lien Notes Claims will receive their pro rata share of 2% of the New Common Stock (other than the Participation Premium (as defined in the DIP Term Sheet)) subject to dilution for the Additional New Common Stock and the New Management Incentive Plan and (y) provides that Holders of the 2024 Stub Unsecured Notes will receive Cash in an amount that will provide each Holder with the same percentage recovery that the Holders of Second Lien Claims will receive based on the midpoint equity value of the New Common Stock as set forth in the Disclosure Statement. Holders of Claims in Class 1 (Other Secured Claims), Class 2 (Other Priority Claims), Class 3 (ABL Facility Claims), Class 4 (Superpriority Term Loan Claims), Class 8 (General Unsecured Claims), Class 10 (Debtor Intercompany Claims), Class 11 (Non-Debtor Intercompany Claims) and Class 12 (Intercompany Interests) are Unimpaired and, pursuant to section 1126(f) of the Bankruptcy Code, are conclusively presumed to have accepted the Plan, thus meeting the requirements of section 1128(a)(8) of the Bankruptcy Code. The Plan has not been accepted by all Impaired Classes of Claims and Interests. As reflected in the Tabulation Declaration, more than the requisite number of Holders and Claim amounts in Class 5 (First Lien Claims) and Class 6 (Second Lien Claims), which are Impaired Classes of Claims under the Plan, entitled to vote to accept or reject the Plan have affirmatively voted to accept the Plan (i.e., Class 5 (First Lien Claims) voted 99.36% in number and 99.18% in amount to accept the Plan and Class 6 (Second Lien Claims) voted 94.02% in number and 87.45% in amount to accept the Plan). Holders of Claims in Class 7 (2024 Stub Notes Claims) voted to reject the Plan. Holders of Section 510(b) Claims (Class 9) and Holders of DNI Interests (Class 13) are Impaired and receive no recovery on account of their Claims or Interests pursuant to the Plan and are deemed to have rejected the Plan. Notwithstanding the foregoing, the Plan is confirmable because it satisfies sections 1129(a)(10) and 1129(b) of the Bankruptcy Code. About Diebold Diebold Nixdorf, Incorporated automates, digitizes and transforms the way people bank and shop. As a partner to the majority of the world's top 100 financial institutions and top 25 global retailers, its integrated solutions connect digital and physical channels conveniently, securely and efficiently for millions of consumers each day. Diebold Nixdorf and several affiliated entities sought protection under Chapter 11 of the U.S. Bankruptcy Code on June 1, 2023. The cases are jointly administered under the case of Diebold Holding Company, Inc., Bankr. S.D. Texas Lead Case No. 23-90602. In the petition signed by Jonathan B. Leiken, president, Diebold Holding disclosed $3.09 billion in assets and $2.57 billion in liabilities. Diebold Nixdorf Dutch Holding B.V. commenced voluntary reorganization proceedings pursuant to the Wet Homologatie Onderhands Akkoord under Netherlands law in the District Court of Amsterdam. Diebold Netherlands sought recognition of the Dutch Proceeding under Chapter 15 of the Bankruptcy Code. Judge David R. Jones oversees the Chapter 11 cases. The Chapter 11 Debtors tapped Jones Day and Jackson Walker LLP as legal counsels; Ducera Partners LLC as investment banker; FTI Consulting, Inc. as financial advisor; and Kroll Restructuring Administration, LLC as claims and noticing agent. DIOCESE OF OGDENSBURG: Court OKs Interim Cash Collateral Access --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York authorized the Roman Catholic Diocese of Ogdensburg, New York to use cash collateral and provide adequate protection, on an interim basis, through August 15, 2023. As previously reported by the Troubled Company Reporter, the Debtor requires the use of cash collateral to pay employee wages and other operating and administrative expenses incurred in the Chapter 11 Case, as well as other payments as may be authorized by the Court by separate order. NBT Bank, National Association, asserts an interest in the cash collateral. As of the Petition Date, the Diocese is indebted to NBT pursuant to these transactions and documents: (i) Letter of Credit Application and Agreement, together dated as of November 9, 2020, pursuant to which NBT made available to the Diocese a $1.95 million Letter of Credit issued by NBT to the New York State Worker's Compensation Board to secure the Diocese's obligations under its self-insured worker's compensation program; and (ii) Specific Security Agreement (Pledged Account) dated as of November 9, 2020, pursuant to which the Diocese pledged all of its property in the possession of, or subject to the control of NBT including, without limitation, its interest in approximately $2.3 million of securities held in a blocked investment account at NBT, to secure its obligations to repay NBT for any amounts drawn on the NBT Letter of Credit. The Debtor is permitted to use cash collateral to pay only (i) reasonable and necessary expenses to be incurred in the ordinary course in connection with the operation of its business and fulfilment of its religious mission, (ii) administrative expenses incurred in connection with the Chapter 11 Case, and (iii) such other payments as may be authorized by separate order of the Court. As adequate protection, NBT will receive perfected replacement security interests in, and valid, binding, enforceable and perfected liens, on all of the Diocese's cash, deposit accounts, and investment property and related proceeds. However, the Postpetition Collateral will not include, and the NBT Rollover Liens will not attach to, any funds or property held by the Diocese (i) for the purpose of administering its insurance programs, (ii) in trust for the benefit of parishes or other Catholic entities within the Diocese, (iii) which represent trust fund taxes or employee payroll deductions, or (iv) which are endowed funds or subject to donor restrictions on use. A further hearing on the matter is set for August 15 at 1 p.m. A copy of the court's order is available at https://urlcurt.com/u?l=pDK6kd from PacerMonitor.com. About The Roman Catholic Diocese of Ogdensburg The Roman Catholic Diocese of Ogdensburg is a religious organization in Ogdensburg, New York. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-60507) on July 17, 2023. In the petition signed by Mark Mashaw, diocesan fiscal officer, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Patrick G. Radel oversees the case. Charles J. Sullivan, Esq., at Bond, Schoeneck and King, PLLC, represents the Debtor as legal counsel. Stretto, Inc. is the Debtor's noticing and claims agent. EAGLE PROPERTIES: Court OKs Cash Collateral Access Thru Nov. 3 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia, Alexandria Division, authorized Eagle Properties and Investments, LLC to use cash collateral on an interim basis in accordance with the budget. Fulton Bank, Bank of Clarke County, Asset Based Lending, MainStreet Bank, Virginia Partners Bank, Community Bank of the Chesapeake, Orrstown Bank and Union Bank hold valid first Deeds of Trust and Assignment of Leases and Rents on certain parcels of the Debtor's real property and the resulting cash collateral. The right to the use of cash collateral will terminate at the earlier of (a) 5 p.m. on November 3, 2023, or (b) the occurrence of an uncured Event of Default under the Order. The Debtor is permitted to use cash collateral to: (1) post-petition real property taxes, property insurance, utilities, maintenance and appraisal of the Properties; (2) pay the mortgage payments to the first deed of trust holders in the amounts set forth in the Budget for that property (notwithstanding the fact that payments are not listed for 213 N. Port Street, Debtor may resume full payment of the Fulton Bank mortgage if it obtains a tenant who is paying sufficient rent each month to pay the mortgage amount on 213 N. Port or any portion of it after payment of the amounts in item B(1)); (3) payments on any first deed of trust where the Bank is cross-collateralized by income producing property, even if the specific property is not income producing, if the income producing property generates sufficient surplus capital to service the debt on the non income producing property after the amounts in item B(1); and (4) pay approved administrative expenses. The budgeted payments to the Banks and Bala Jain from the cash collateral will constitute the "Adequate Protection Payments." The Adequate Protection Payments will be in the amounts shown on the Budget, subject to minor fluctuations for changes in the Orrstown Bank adjustable-rate mortgage. The Debtor will make all Adequate Protection Payments as set forth in the Budget. Bala Jain holds a First Deed of Trust on three properties as set forth in the Motion, only one of which generates income, 71 Lucy Avenue, Hummelstown, Pennsylvania. Bala Jain has subordinate positions on additional properties and is undersecured in those positions. As adequate protection, the Banks are granted a first priority position security interest and lien in, to, and against all accounts receivable, inventory and other personal property which are or have been acquired, generated or received by the Debtor after the bankruptcy filing. The Debtor will timely pay all post-petition real property taxes and maintain and keep current insurance on all Real Property as set forth on the Budget. These events constitute an "Event of Default": 1. The Debtor, through and including November 3, 2023, fails to comply with any term, provision or condition of the Consent Order; 2. The Order, or any portion thereof, is vacated or reversed; or 3. The Debtor's bankruptcy case is converted to a case under Chapter 7 of the Bankruptcy Code or a trustee is appointed in the Debtor's bankruptcy case. A final hearing on the matter is set for October 13, 2023 at 11 a.m. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=RmIwah from PacerMonitor.com. The Debtor projects total disbursements, on weekly basis, as follows: $11,909 for the week ending August 11, 2023; $11,909 for the week ending August 18, 2023; $11,909 for the week ending August 25, 2023; $11,909 for the week ending September 1, 2023; $11,909 for the week ending September 8, 2023; $11,909 for the week ending September 15, 2023; $11,909 for the week ending September 22, 2023; and $11,909 for the week ending September 29, 2023. About Eagle Properties and Investments Eagle Properties and Investments, LLC, is a Vienna Va.-based company engaged in leasing real estate properties. It owns 26 properties valued at $9.37 million. Eagle Properties and Investments filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 23-10566) on April 6, 2023, with $9,429,800 in total assets and $14,716,136 in liabilities. Amit Jain, manager, signed the petition. Judge Klinette H. Kindred oversees the case. The Debtor tapped the Law Offices of Sris, P.C. and N D Greene, PC. as legal counsels and SC&H Group, Inc. as financial advisor and accountant. Bank of Clarke County, as lender, is represented by Hannah Hutman, Esq. at Hoover Penrod PLC. Orrstown Bank, as lender, is represented by Stephen Nichols, Esq. at Offit Kurman. Virginia Partners Bank , as lender, is represented by James R. Meizanis, Jr., Esq. at Blankingship & Keith, P.C. Gus Goldsmith, as lender, is represented by Justin P. Fasano, Esq. at McNamee Hosea, PA. EARTHSNAP INC: Unsecureds to Get Share of Income for 2 Years ------------------------------------------------------------ EarthSnap, Inc., filed with the U.S. Bankruptcy Court for the District of Colorado a Small Business Subchapter V Plan of Reorganization dated July 18, 2023. Debtor was formed in 2021 for the purpose of designing, owning, and operating the EarthSnap mobile application ("APP"). The App was developed by Eric Ralls. EarthSnap is wholly owned by Digital Earth Media, Inc. as of 2021. Mr. Ralls is the CEO of Digital Earth Media, Inc. ("DEM"), and an 84% interest holder of DEM. DEM also wholly owns Earth.com, Inc. The two entities independently operate, however, but EarthSnap, Inc. and Earth.com have mutual advertisers. Despite EarthSnap, Inc. and Earth.com, Inc.'s mutual goal to design and invent tools to create global awareness and appreciation about the environment, financial issues have caused significant delays in development and growth. One of the main delays was caused by pre-Petition Date litigation. As a result of the financial strain, Earth.com, Inc. and EarthSnap, Inc. could no longer afford representation in the pending state court litigation, its attorneys withdrew, and the companies faced default judgments because they no longer had an attorney to defend the claims. Both Earth.com, Inc. and EarthSnap, Inc. were forced to file separate voluntary petitions for relief pursuant to Chapter 11 of the Bankruptcy Code on April 19, 2023. This allowed the companies to obtain relief from the continued cost, time, and stress of the litigation. Class 2 consists of those unsecured creditors of the Debtor who hold Allowed Claims that were either scheduled by the Debtor as undisputed, or subject to timely proofs of claim to which the Debtor does not successfully object. There are a total of $13,012.388 in general unsecured claims. Of the total amount, approximately $11 million constitutes a disputed pre-petition litigation claim, $266,916 constitutes a reverse alter ego claim related to a judgment against Eric Ralls, and $1,246,000 constitutes another reverse alter ego claim for promissory notes in favor of DEM. Allowed Unsecured Claims shall be paid a percentage of the Debtor's gross income for a period of not more than two years. The Debtor shall market and sell its assets no more than two years after the Effective Date of the Plan, and proceeds of such sale shall be paid to creditors on a pro-rata basis. Class 3 Allowed Equity Interests. Digital Earth Media, Inc., which holds 100% of the equity interest in Debtor, will retain its interest in the Reorganized Debtor. The Debtor's post-Petition Date efforts have demonstrated the ability to first launch the App post-Petition Date, as well as generate income through subscriptions and advertising. This income will be used to fund the Debtor's operations, and will also be used to pay Class 2 funds on a post-confirmation basis for a period of approximately two years, or less if the Debtor is able to sell the App sooner. A full-text copy of the Plan of Reorganization dated July 18, 2023 is available at https://urlcurt.com/u?l=fexPIN from PacerMonitor.com at no charge. Attorneys for Debtor: Keri L. Riley, Esq. Kutner Brinen Dickey Riley, P.C. 1660 Lincoln Street, Suite 1720 Denver, CO 80264 Tel: (303) 832-2400 Email: klr@kutnerlaw.com About EarthSnap Inc. EarthSnap, Inc., a company in Telluride, Colo., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-11622) on April 19, 2023, with $10 million to $50 million in assets and $1 million to $10 million in liabilities. Joli Lofstedt, Esq., has been appointed as Subchapter V trustee. Judge Thomas B. Mcnamara oversees the case. Jeffrey S. Brinen, Esq., at Kutner Brinen Dickey Riley, P.C., is the Debtor's legal counsel. ENSONO INTERMEDIATE: S&P Affirms 'B-' ICR, Alters Outlook to Neg. ----------------------------------------------------------------- S&P Global Ratings affirmed the 'B-'issuer credit rating on Ensono Intermediate HoldCo Inc. and revised the outlook to negative from stable. The negative outlook reflects potential lower ratings if expected revenue growth and profitability improvements do not materialize or required spending on capital expenditure (capex), capital lease payments, and software license payments remain insufficient to support improving free cash flow, which S&P considers necessary to sustain its debt obligations and satisfy ongoing liquidity requirements. Despite good growth in bookings and expansion of its multiyear contractual order backlog, continued cash flow deficits overshadow near-term benefit. Ensono has invested heavily in brand positioning, sales team expansion, and its consulting business since the 2021 KKR & Co. Inc. acquisition. This strategy has accelerated bookings, with monthly recurring revenue bookings for the last 12 months ending in the first quarter of 2023 doubling year over year and revenue growth activity. This growth has necessitated higher cash outlays for capex and procuring software licenses and equipment to accommodate client growth and contract value size than expected. Due to these outlays and with added stress from rising interest rates on the company's significant debt burden, Ensono has not generated positive free operating cash flow. Cash balances have decreased significantly over the last year, however access to undrawn lines of credit offer a sufficient buffer to fund required cash outlays and continue to support our adequate liquidity assessment. Ensono's cash balance was $64.8 million at the end of the first quarter of fiscal 2023 (March 31, 2023), considerably less than the $145 million the previous year, even after borrowing roughly $50 million under the $100 million securitization facility it established in April 2022. S&P said, "We assume Ensono will exhaust the availability on its securitization facility by early 2024 and likely need a moderate draw on its $100 million revolving credit facility to cover outsize up-front customer acquisition expenses as well as ongoing obligations such as debt service costs, software lease payments, and equipment lease payments. Even with this utilization, we believe the company still has ample capacity under its facility. Additionally, we think it is unlikely Ensono would be subject to its springing covenant test." S&P expects demand for mainframe services to remain attractive, supporting good organic growth. S&P said, "Ensono offers enterprise customers a cost-effective mainframe outsourcing service that we believe will increase in value as the labor supply skilled in older mainframe software programming languages becomes increasingly scarce. Economies of scale allows the company to train a labor force with the right skills to keep mission-critical data secure for clients. As the cost of maintaining secure mainframe data storage systems in-house rise, large enterprise clients will continue to seek ways to minimize the high labor and capital investment costs related to in-house mainframe maintenance. We believe this trend underpins strong demand growth particularly in a global context in which information security and reliable data systems are critical assets to enterprise companies." Improved cost efficiency and roll-off of one-time expenses should drive higher margins in 2023, although we anticipate it will take a few quarters to result in free cash flow. S&P said, "We anticipate improved cost efficiency will increase S&P Global Ratings-adjusted margins about 200 basis points in 2023 with further expansion in 2024 as the company satisfies a greater degree of performance obligations on new contracts. Persistent cash flow deficits are possible if bookings fail to convert to revenue growth and the impact of cost savings and one-time cost roll-off is lower than expected. In 2023, Ensono faces significant pressure on cash flow due to high capital and operating expenditure, coupled with rising interest rates on obligations such as long-term debt, software lease payments, and equipment lease payments. Consequently, we expect it to burn over $100 million in 2023. However, we forecast cash burns will moderate in 2024 as Ensono's bookings convert to revenue and margins continue to improve with greater operating leverage. "The negative outlook reflects the potential for lower ratings if expected revenue growth and profitability improvements do not materialize or required spending on capex, capital lease payments, and software license payments remain insufficient to support improving free cash flow, which we consider necessary for the company to sustain its debt obligations and satisfy ongoing liquidity requirements." S&P could lower the rating if it comes to view Ensono's capital structure as unsustainable, indicated by: -- Negative free cash flow continues over the coming quarters and liquidity deteriorates; -- Based on its operating prospects, S&P does not expect positive free cash flow above debt amortization, which could occur from increased net cash interest expenses, failure to achieve anticipated EBITDA expansion, and margin improvements after the upfront capital investments; or -- Though unlikely, elevated customer churn leading to sustained revenue declines. S&P could revise the outlook to stable if: -- Ensono's cash burn moderates faster than expected; or -- S&P gains increased confidence in its ability to generate positive free cash flow after debt service and other mandatory payments on a sustained basis. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of Ensono, as is the case for most rated entities owned by private-equity sponsors. We believe Ensono's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of controlling owners. This also reflects the generally finite holding periods and a focus on maximizing shareholder returns." ENVISION HEALTHCARE: Gets OK to Tap Deloitte as Independent Auditor ------------------------------------------------------------------- Envision Healthcare Corporation and its affiliates received approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Deloitte & Touche, LLP as independent auditor. The firm's services include: (1) Compliance Audit Letter: The firm will perform audits in accordance with (i) auditing standards generally accepted in the United States of America and (ii) the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States to express an opinion on whether the Debtors' schedule of federal grant income of the U.S. Department of Health and Human Services (HHS) Awards for the HHS Provider Relief Fund and American Rescue Plan Rural Distribution periods of availability which ended December 31, 2022, is presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America and report on the Debtors' internal control over financial reporting and on its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters with respect to the schedule, based on the audits of the schedule performed in accordance with generally accepted government auditing standards. (2) 2022 Audit Letter and Addendum: The firm performed an audit in accordance with generally accepted auditing standards to express an opinion on whether the Debtors' financial statements for the year ended December 31, 2022, are presented fairly, in all material respects, in accordance with generally accepted accounting principles. Deloitte & Touche also performed reviews of the Debtors' consolidated interim financial information for each of the quarters in the year ended Dec. 31, 2022, in accordance with generally accepted auditing standards applicable to such interim reviews, to obtain a basis for reporting whether any material modifications should be made to the interim financial information for it to be in accordance with generally accepted accounting principles. The firm will be paid a fixed fee of $310,000 for base audit services. Lynn Friedrichs, a partner at Deloitte & Touche, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Lynn Friedrichs Deloitte & Touche LLP 1033 Demonbreun Street, Suite 400 Nashville, TN 37203 Phone: +1 615 259 1800 Fax: +1 615 259 1862 About Envision Healthcare Corporation Envision Healthcare Corporation -- http://www.EnvisionHealth.com/ -- is a national medical group that delivers physician and advanced practice provider services, primarily in the areas of emergency and hospitalist medicine, anesthesiology, radiology, teleradiology and neonatology. As a leader in ambulatory surgical care, AMSURG holds ownership in more than 250 surgery centers in 41 states and the District of Columbia, with medical specialties ranging from gastroenterology to ophthalmology and orthopedics. In total, the medical group offers a differentiated suite of clinical solutions on a national scale with a local understanding of communities, creating value for health systems, payers, providers and patients. On May 15, 2023, Envision and affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90342). Envision reported $1 billion to $10 billion in both assets and liabilities. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankruptcy counsels; Jackson Walker, LLP as conflict counsel and co-counsel with Kirkland & Ellis; Alvarez & Marsal North America, LLC as restructuring advisor; PJT Partners, LP as investment banker; KPMG, LLP as tax consultant; and Deloitte & Touche, LLP as independent auditor. Kroll Restructuring Administration, LLC is the claims, noticing and solicitation agent. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by White & Case, LLP. ETHEMA HEALTH: CohnReznick Resigns as Auditor --------------------------------------------- The Audit Committee of Ethema Health Corporation was notified by CohnReznick LLP, the Company's independent registered public accounting firm, of its decision to resign as the independent registered public accounting firm of the Company effective upon the filing of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. CohnReznick will remain engaged by the Company to complete its review of the Company's interim financial statements for the quarter ended June 30, 2023. The Company is in the process of selecting a new independent registered public accounting firm. The Company engaged CohnReznick as its independent registered public accounting firm on April 28, 2023, following the completion of a business combination agreement with CohnReznick and Daszkal Bolton LLP. Daszkal had served as the Company's auditor since 2018. The Company said that since the Engagement Date and through July 18, 2023, on Form 8-K, there were (i) no disagreements (as described in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and CohnReznick on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to CohnReznick's satisfaction, would have caused CohnReznick to make reference thereto in its reports on the financial statements for such period; and (ii) no "reportable events" within the meaning of Item 304(a)(1)(v) of Regulation S-K, except that CohnReznick advised the Company of material weaknesses in its internal control over financial reporting as of May 22, 2023. About Ethema Health Headquartered in West Palm Beach, Florida, Ethema Health Corporation -- http://www.ethemahealth.com-- operates in the behavioral healthcare space specifically in the treatment of substance use disorders. Ethema developed a unique style of treatment over the last eight years and has had much success with in-patient treatment for adults. Boca Raton, Florida-based Daszkal Bolton LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 31, 2023, citing that the Company has accumulated deficit of approximately $43.5 million and negative working capital of approximately $12.7 million at Dec. 31, 2022, which raises substantial doubt about its ability to continue as a going concern. EXACTECH INC: S&P Downgrades ICR to 'CCC' on Limited Liquidity -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based orthopedic implant manufacturer Exactech Inc. to 'CCC' from 'CCC+' and its issue-level rating on its senior secured debt to 'CCC' from 'CCC+'. The negative outlook reflects the potential that S&P will downgrade the company if its operating conditions do not improve and it is unable to shore up its liquidity position or it believes a distressed exchange is imminent. The downgrade reflects the company's tightening liquidity, due to persistent FOCF deficits, and the upcoming maturity of its revolving credit facility. Exactech had about $17 million of cash and about $24 million of availability under its revolving credit facility as of March 31, 2023. The company recorded an FOCF deficit of $10 million during the first quarter of 2023 and S&P expects it will burn through about $20 million of FOCF over the next couple quarters before breaking even in the fourth quarter of 2023. As such, there is limited cushion for a further deterioration in its near-term cash flow, given our projection of only about $20 million in available cash and revolver balances as of the end of the third quarter of 2023, absent additional funding. In addition, the company's entire capital structure comes due in less than two years, including its $50 million revolving credit facility (which had $26 million of outstanding borrowings as of March 31, 2023) that matures in November 2024 and becomes current later this year. S&P believes it is unclear whether Exactech will be able to successfully refinance and extend the maturity profile of its debt, given the challenging capital market conditions and its elevated financial leverage (annualized S&P Global Ratings-adjusted debt to EBITDA was 18x as of March 31, 2023). The company's elevated leverage and negative FOCF increase the refinancing risk associated with its upcoming maturities. The company's revolving credit facility and first-lien term loan mature in November 2024 and February 2025, respectively. In addition, its operating and financial performance have been adversely effected by its voluntary recall in 2022. Exactech reported negative EBITDA in 2022 due to lower sales and elevated costs, including poly bag remediation expenses related to the recall, legal and transition expenses, and other expenses associated with quality and regulatory projects. This contributed to negative FOCF of about $50 million in 2022. S&P said, "While we expect some of these costs will decline this year, the recall litigation is still in its early phases and we are uncertain of its overall severity, timing, and duration. Although the company has some insurance protection, its litigation expense may continue to negatively affect its credit metrics and liquidity. We believe this uncertainty, combined with its elevated leverage and negative FOCF, could make it challenging for Exactech to refinance amid a higher interest rate environment." S&P said, "We project Exactech's revenue will recover in 2023, though the ongoing litigation poses risks to its profitability and cash flow. Following the recall, we expect the company will increase its revenue by about 7% in 2023 on a continued rise in its extremities sales, as evidenced by its first-quarter revenue of $85 million (highest level in the past few years). While we expect Exactech will improve its EBITDA year over year in 2023 as its volumes increase, we expect its earnings will remain pressured by the various costs associated with its recall and regulatory projects, as well as legal fees. During the first quarter of 2023, the company continued to incur recall remediation, legal, and transition expenses, which depressed its cash flow. Although we expect the costs directly related to Exactech's recall remediation will decline, we expect its ongoing quality and regulatory projects and legal and management fees will burden its EBITDA in 2023." The company's first-lien loan is trading at distressed levels, which increases the likelihood of a subpar exchange. Exactech's first-lien term loan due 2025 is currently trading at 43 cents to the dollar. The significant discount associated with the value of the term loan could increase the probability the company will negotiate some form of subpar debt exchange absent a material improvement in its operating performance. S&P would view any type of distressed exchange whereby the lenders receive less than the face value of the original obligation as a selective default. The negative outlook reflects the potential that S&P will downgrade Exactech if its operating conditions do not improve and it is unable to shore up its liquidity position, or S&P believes a distressed exchange is imminent. S&P could lower its rating on Exactech if it believes a default or distressed exchange is likely in the next six months. This could occur if: -- Its litigation costs are higher than expected and the company cannot obtain alternative financing; -- The company is unable to refinance or repay the outstanding commitments on its revolving credit facility due 2024 before it becomes current; or -- Exactech pursues a subpar debt exchange that we view as tantamount to a default. We could raise our rating on Exactech if: The company improves its liquidity position such that we no longer view a default as likely in the next 12 months; and The company does not believe a subpar debt exchange is likely. ESG credit indicators: E-2, S-2, G-3 Governance factors are a moderately negative consideration in the credit rating analysis of Exactech. The highly leveraged assessment of the company's financial risk profile reflects that its corporate decision making prioritizes the interests of its controlling owners, which is in line with our view of the majority of rated entities owned by private-equity sponsors. The assessment also reflects private-equity owners' generally finite holding periods and focus on maximizing shareholder returns. F & B NEGOTIATIONS: Available Cash and Income to Fund Plan ---------------------------------------------------------- F & B Negotiations, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida a Plan of Reorganization for Small Business dated July 18, 2023. The Debtor's rental properties were heavily effected by Hurricane Ian. The storm caused extensive damage to two of its properties: one located in Bradenton and one in Venice. The Bradenton property had a collapsed roof along with significant water intrusion. Additional losses were incurred by the debtor as a result of extensive litigation it was engaged in related to its S. Palm Avenue property located in Sarasota. As a result of the litigation, debtor has been unable to sell that property while continuing to incur financial obligations for mortgage payments, insurance, property taxes, association dues, utilities and maintenance. The combined factors made this Chapter 11 filing necessary. The Debtor's financial projections show that the Debtor will have projected net operating income which is proposed to be 60 months. Distributions to unsecured creditors under the Plan will commence on the Distribution Date. The final Plan payment is expected to be paid on or about September 1, 2028. This Plan proposes to pay the creditors of the Debtor from the sale of several of its properties and from future income of the Debtor. This Plan provides for eleven classes of secured claims; one class of priority unsecured claims; one class of unsecured nonpriority claims; and one class for the equity interests of the Debtor. Non-priority unsecured creditors holding allowed claims will receive distributions from the Debtor's net cash flow from operations over the life of the Plan. This Plan also provides for the payment of administrative and priority claims in full. Class 3 consists of Non-Priority Unsecured Claims. Holders of allowed unsecured claims against the Debtor shall receive a pro-rata share of a fund created by the Debtor's payment of its net cash flow from operations for 60 months, with the first monthly payment commencing on the Distribution Date. The total amount of the claims in this class is expected to be $607,000.00. The monthly net cash flow from operations payment during the 60-month payment period is projected to fluctuate between a range of $3,000.00 a month to $5,000.00 a month depending on the net cash flow of the Debtor and, therefore, the monthly payments will range from $3,000.00 a month to $5,000.00 a month. All Class 4 interests, upon the effective date, shall be modified so as to deprive the holders thereof of any rights in respect of the Debtor to any distribution upon liquidation of the corporation, or upon sale of all or substantially all the Debtor's assets, and shall be further modified to provide that no dividends shall be paid by reason of such equity interests. Such modification or limitation of equity interests shall remain effective until such time as all the payments contemplated to be made by the terms of the Plan have been made, at which time such modification or limitations shall be removed, and the holders of Class 4 interests shall retain in full such interests without further limitation or restriction. The Debtor shall retain all of its property and operate its business, and the funds necessary for the satisfaction of creditors' claims shall be paid from cash on hand, from the future income of the Debtor, or from the sale of Debtor's assets as may be practical and necessary in order to make the payments required by the Plan. A full-text copy of the Plan of Reorganization dated July 18, 2023 is available at https://urlcurt.com/u?l=37Vpy7 from PacerMonitor.com at no charge. Debtor's Counsel: Benjamin G. Martin, Esq. Law Offices of Benjamin Martin 3131 S. Tamiami Trail, Suite 101 Sarasota, FL 34239-5101 Tel: (941) 951-6166 Fax: (941) 706-2411 Email: skipmartin@verzion.net About F & B Negotiations F & B Negotiations, LLC, a company in Lakewood Ranch, Fla., filed its voluntary petition for Chapter 11 protection (Bankr. M.D. Fla. Case No. 23-01532) on April 19, 2023, with as much as $1 million to $10 million in both assets and liabilities. David Fernandez, managing member, signed the petition. Judge Roberta A. Colton oversees the case. The Law Offices of Benjamin Martin serves as the Debtor's bankruptcy counsel. FIELD OFFICE: Office Complex Owners Default on $73.8 Mil. Loan -------------------------------------------------------------- Anthony Effinger of Willamette Week reports that the owners of Field Office, a 290,375-square-foot office complex near the Willamette River, have defaulted on their $73.8 million loan after being unable to find enough tenants, becoming the latest office owners to throw in the towel on Portland’s struggling office market. Field Office is owned by New York investment bank Goldman Sachs and Lincoln Property Co., a Dallas-based real estate firm with operations in Portland. The pair bought Field Office from local developer Project and National Real Estate Advisors, an investment firm based in Washington, D.C., for $118 million in April 2019, according to public records. In lieu of a foreclosure, the lender on the property hired real estate services company CBRE to sell the loan, according to an email obtained by WW that describes the sale. "CBRE's National Loan & Portfolio Sale Advisors have been retained as the exclusive advisor for the sale of a $73.8 million nonperforming senior loan secured by a Class 'A,' recently constructed office campus in Portland, Oregon," the email says. "The lender is in the process of finalizing a deed-in-lieu of foreclosure with the borrower affording investors the potential for an expedited path to title." A person familiar with the loan confirmed that the property in question is Field Office. Bids for the loan are due on Aug. 15, the email says. An executive at Lincoln Properties declined to comment on the sale, as did a spokesperson for Goldman Sachs. An executive at CBRE didn't respond to an email seeking comment. Field Office is a complex of two six-story buildings on Northwest Front Avenue just north of the Fremont Bridge. Geared toward technology firms with young workers, it has a rooftop deck, a gym, parking for 200 bicycles, and electric scooter charging stations. The property's market value is $62,700,490, according to property records, about $11 million less than the loan amount. Field Office is located in a Prosper Portland "enterprise zone," making certain businesses eligible for five-year tax abatements through the city's development agency. Like many cities, Portland has struggled to attract new office tenants since the pandemic, when companies let their employees work from home. A hybrid home-office model has persisted since then, slashing demand for office space. As of June 2023, the national office vacancy rate stood at 19.2%, up 6.6 percentage points from the first quarter of 2020, according to real estate firm Cushman & Wakefield, which pegged Portland's rate at 19.9%. Vacancy is Portland's downtown core is much higher, according to Colliers, another firm that does real estate research. In the central business district it stood at 26% in the first quarter of 2023, Colliers says. "Capital markets activity has reached a near standstill with a quarterly sales volume of $9.8 million in Q1 2023, representing an 82% year-on-year decline," Colliers said in its first-quarter report on Portland. Cell phone data gathered by the University of Toronto shows that Portland's downtown core has been slower than many in returning to pre-pandemic levels of activity. From March to May of 2023, the number of unique cell phone numbers detected in downtown Portland stood at 37% of the number detected in March to May of 2019, the university says, making it the third-weakest recovery after Cleveland and San Francisco. Owners of Portland office buildings and hotels say people have been unwilling to return to downtown because riots that plagued the city during the pandemic, and public drug use since then, have scared people off. In February, the real estate firm that owns Portland's Commonwealth Building, one of the first glass-box towers ever built, said it had defaulted on its $47.4 million mortgage and may lose the building to foreclosure. KBS Growth & Income REIT said in a regulatory filing earlier this month that the building is worth less than what remains of the loan because of poor business conditions in downtown Portland. "Given the depressed office rental rates and the continued social unrest and increased crime in downtown Portland where the property is located, the company does not anticipate any near-term recovery in value," KBS chief financial officer Jeffrey K. Waldvogel said in a regulatory filing Feb. 16. "The company may relinquish ownership of the property to the lender in a foreclosure transaction." Jackson Tower, a landmark building that overlooks Pioneer Square, defaulted on a loan from JPMorgan Chase earlier this year as well. Jackson Tower Partners LLC, the owner of the 12-story beaux arts office building in the 800 block of Southwest Broadway, borrowed $11.5 million from JPMorgan Chase in 2018, and missed a loan payment on Nov. 1, 2022, according to a complaint filed in Multnomah County Circuit Court on April 5. Cayla Wardenburg, executive vice president at Jones Lang LaSalle, says there are more defaults coming because many loans like the one on Field Office are going to be due soon, all of the country. "We have a record number of loans coming up nationally in the next two years, so we will see more of these in the near future," Wardenburg said in an email. FIVE64 LLC: Asset Sale Proceeds to Fund Plan -------------------------------------------- Five64, LLC and 64 IP Holdings, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Texas a Joint Consolidated Subchapter V Plan of Liquidation dated July 18, 2023. The Debtors were formed in August 2016 to provide title and registration services to buyers and dealers, and contract processing services to financial institutions, dealer organizations, and service providers, in the motor vehicle industry. To address the cash flow issues, the Debtors reached out to several parties to discuss potential strategic transactions. Following extensive negotiations, the Debtors entered into an asset purchase agreement with Tekion Digital Processing, Inc., f/k/a Cartwheel Acquisition Sub, Inc. ("Purchaser"), for the sale of substantially all of the Debtors' assets for total consideration of $3.2 million, consisting of cash and a credit bid of up to $650,000 in debtor-in-possession financing from Purchaser to finance ongoing operations. Due to interest expressed by other parties in a potential purchase transaction and in order to maximize value, the Debtors determined that the best way forward would be for the Debtors to commence a chapter 11 bankruptcy and conduct an open sale process with Purchaser to serve as a stalking horse bidder. On the Petition Date, the Debtors filed emergency motions to sell substantially all of their assets and to approve bid procedures to conduct an open sale process, including a potential auction in the event of multiple qualified bids. On April 24, 2023, the Bankruptcy Court approved the bid procedures, and on May 23, 2023, the Bankruptcy Court entered its order approving the sale of the Debtors' assets to Purchaser (the "Sale"). The Sale closed on June 1, 2023, and the Debtors received the $2.55 million in cash consideration (the "Sale Proceeds"). The Joint Consolidated Chapter 11 Subchapter V Plan of Liquidation is a liquidating chapter 11 plan that provides a path to confirmation and a successful exit from chapter 11 through the creation of a Creditor Trust, which will be vested with the Sale Proceeds, contest the liens and claims asserted by the Factors, and make distributions to creditors holding allowed claims. The Sale Proceeds are sufficient to pay all creditors in full, even before taking into account the Debtors' strong arguments and objections against the Factors' alleged liens and claims. Therefore, since all allowed claims will be paid in full under the Plan, the Debtors believe the Plan will have no impaired classes and is likely to be consensual pursuant to Section 1191 of the Bankruptcy Code. Class 5 consists of Unsecured Claims. Nothing in this Plan Allows any Unsecured Claim, unless expressly provided otherwise. In full and final satisfaction, release, and exchange of each Unsecured Claim, each Unsecured Claim, to the extent Allowed, shall be paid by the Creditor Trust no later than 10 Business Days after the Claims Objection Deadline, if no objection is then pending, or 10 Business Days after the Unsecured Claim becomes Allowed by Final Order. Class 5 is not impaired under this Plan. Class 6 consists of Equity Interests. At such time as the Creditor Trust Trustee determines appropriate, Class 6 Equity Interests will receive (a) the balance of the Creditor Trust Assets after the Creditor Trust Trustee determines the amount needed to be held in reserve to satisfy all potential Allowed Claims and to administer the Creditor Trust and (b) the balance of the Creditor Trust Assets after all distributions are made to holders of Allowed Claims and all costs of administering the Creditor Trust have been satisfied. As a condition of the Effective Date, and in addition to any other consideration provided in this Plan, the Debtors shall transfer to the Creditor Trust Trustee, for the benefit of the Creditor Trust, the Plan Funding, which, notwithstanding anything contained herein to the contrary, shall not be repayable in any way by the Creditor Trust. On the Effective Date, and without need for further order, action, or document, the "Five64 Creditor Trust" (the "Creditor Trust") shall be created, the purpose of which is to liquidate all Creditor Trust Assets (as determined by the Creditor Trust Trustee, including potential surrender or abandonment of assets) and to make distributions to the beneficiaries of the Creditor Trust. The Creditor Trust shall be a grantor trust under federal law and shall not have any liability to pay any income tax. A full-text copy of the Joint Subchapter V Plan dated July 18, 2023 is available at https://urlcurt.com/u?l=9Sv5Fs from PacerMonitor.com at no charge. Counsel to the Debtors: Thomas D. Berghman, Esq. Munsch Hardt Kopf & Harr, P.C. 500 N. Akard St., Ste. 3800 Dallas, TX 75201 Email: tberghman@munsch.com About Five64 LLC Five64, LLC, is a developer and provider of interstate and state vehicle registration solutions headquartered in Texas. Five64 and affiliate 64 IP Holdings, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 23-30767) on April 19, 2023. At the time of the filing, Five64 reported $1 million to $10 million in both assets and liabilities while 64 IP Holdings reported $1 million to $10 million in assets and $100,000 to $500,000 in liabilities. Judge Scott W. Everett oversees the cases. Thomas D. Berghman, Esq., at Munsch Hardt Kopf and Harr, P.C., represents the Debtors as legal counsel. FOR PAWS BLUE: Court OKs Cash Collateral Access Thru Aug 18 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio, Eastern Division, Canton, authorized For Paws Blue Cross Animal Hospital, LLC to use up to $100,000 of cash collateral on an interim basis, through August 18, 2023. Prior to the commencement of the Debtor's chapter 11 case: -- BHG Financial, serviced by Perpetual Federal Savings Bank; -- the U.S. Small Business Association; -- BHG Financial, serviced by The Ohio Valley Bank Company; -- Kapitus LLC; -- IDEA 247, Inc.; -- Forward Financing, LLC; and -- White Road Capital, LLC, d/b/a GFE Holdings made loans and advances to the Debtor, pursuant to the terms of several loan agreement and promissory notes. As adequate protection, the Lenders are granted valid, binding, enforceable and perfected postpetition replacement Hens in the same order of priority as the Lenders' prepetition security interests in all of the Debtor's assets. The Adequate Protection Liens will secure an amount of the Prepetition Indebtedness equal to the aggregate amount of cash collateral expended during the Interim Period. A further hearing on the matter is set for August 15 at 11 a.m. A copy of the order is available at https://urlcurt.com/u?l=U7H0u8 from PacerMonitor.com. About For Paws Blue Cross Animal Hospital, LLC For Paws Blue Cross Animal Hospital, LLC operates an animal hospital. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-60829) on July 14, 2023. In the petition signed by Jennifer D. Jellison, managing member, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Tiiara N.A. Patton oversees the case. Anthony J. DeGirolamo, Esq., represents the Debtor as legal counsel. FOR PAWS BLUE: M. Colette Gibbons Named Subchapter V Trustee ------------------------------------------------------------ The U.S. Trustee for Regions 3 and 9 appointed M. Colette Gibbons, Esq., a practicing attorney in Westlake, Ohio, as Subchapter V trustee for For Paws Blue Cross Animal Hospital, LLC. Ms. Gibbons will be paid an hourly fee of $375 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Gibbons declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: M. Colette Gibbons, Esq. Attorney at Law 28841 Weybridge Drive Westlake, OH 44145 Phone: (216) 798-6940 Email: colette@mcgibbonslaw.com About For Paws Blue Cross Animal Hospital For Paws Blue Cross Animal Hospital, LLC operates an animal hospital in North Canton, Ohio. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-60829) on July 14, 2023, with up to $1 million in assets and up to $10 million in liabilities. Jennifer D. Jellison, managing member, signed the petition. Judge Tiiara NA Patton oversees the case. Anthony J. DeGirolamo, Esq., represents the Debtor as legal counsel. GAUCHO GROUP: Issues 270,272 Shares to Non-Executive Directors -------------------------------------------------------------- Gaucho Group Holdings, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that it issued a total of 270,272 shares at $0.555 per share to the non-executive directors of the Company as compensation for service as members of the Board of Directors of the Company for the first half of 2023. For this sale of securities, no general solicitation was used, no commissions were paid, all persons were accredited investors, and the Company relied on the exemption from registration available under Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated under the Securities Act with respect to transactions by an issuer not involving any public offering. A Form D will be filed with the SEC within 15 days of the issuance of the shares. About Gaucho Group Headquartered in New York, NY, Gaucho Group Holdings, Inc. -- http://www.algodongroup.com-- was incorporated on April 5, 1999. Effective Oct. 1, 2018, the Company changed its name from Algodon Wines & Luxury Development, Inc. to Algodon Group, Inc., and effective March 11, 2019, the Company changed its name from Algodon Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly owned subsidiaries, GGH invests in, develops and operates real estate projects in Argentina. GGH operates a hotel, golf and tennis resort, vineyard and producing winery in addition to developing residential lots located near the resort. In 2016, GGH formed a new subsidiary and in 2018, established an e-commerce platform for the manufacture and sale of high-end fashion and accessories. The activities in Argentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its wines in Europe through its United Kingdom entity, Algodon Europe, LTD. Gaucho Group reported a net loss of $21.83 million for the year ended Dec. 31, 2022, compared to a net loss of $2.39 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $21.01 million in total assets, $8.60 million in total liabilities, and $12.40 million in total stockholders' equity. New York, NY-based Marcum LLP, the Company's auditor since 2013, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has a significant working capital deficiency, 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. GENESIS CARE: $800MM DIP Loan from Kroll Trustee OK'd ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Genesis Care Pty. Ltd. and affiliates to use cash collateral and obtain postpetition financing, on a final basis. Genesis Specialist Care Finance UK Limited and Genesis Care USA Holdings, Inc. is permitted to obtain a priming, senior secured, superpriority debtor-in-possession term loan facility in the aggregate principal amount of $800 million under a Senior Secured Superpriority Debtor-In-Possession Credit Agreement by and among the Borrowers, the Guarantors, and the DIP Secured Parties, comprised of: a. a "new money" multiple draw term loan facility in an aggregate principal amount (exclusive of capitalized DIP Fees and interest) of $200 million, of which (A) an initial draw amount of $90 million will be made available to be drawn in a single drawing upon entry of the Interim Order and satisfaction of the other applicable conditions to any Initial Term Loans set forth in the DIP Credit Agreement, and (B) an additional amount of $110 million will be made available to be drawn in a single drawing upon entry of the Final Order and satisfaction of the other applicable conditions to any Delayed Draw Term Loans set forth in the DIP Credit Agreement; plus b. "roll-up" term loans in an aggregate principal amount (exclusive of capitalized interest) of up to $600 million, consisting of (A) upon entry of the Interim Order and funding of the Initial Draw, up to $270 million which will be drawn down and immediately applied in repayment of an equivalent principal amount of Prepetition SFA Loans held by certain Prepetition Lenders, representing a 3:1 ratio of Prepetition SFA Loans to New Money DIP Term Loans as of the date of such draw down, subject to the limitations contained in the Interim Order, and (B) upon entry of the Final Order and funding of the Subsequent Draw, consistent with the Roll-Up Ratio, up to $330 million which will be drawn down and immediately applied in repayment of an equivalent principal amount of Prepetition SFA Loans held by the Prepetition Lenders or their affiliates or related funds, in each case on a cashless basis. The DIP Loans will be funded by certain Prepetition SFA Lenders or their affiliates or related funds, in their capacities as postpetition financing lenders pursuant to the terms and conditions set forth in (i) the DIP Credit Agreement, (ii) the DIP Term Sheet, (iii) the Senior Secured Superpriority Debtor-in-Possession Credit Facility Commitment Letter executed by the Prepetition SFA Secured Parties, and the Borrowers, and (iv) all agreements, documents, and instruments delivered or executed in connection with the DIP Credit Agreement, in each case, satisfactory in form and substance to the Debtors, Kroll Agency Services Limited, as administrative agent and escrow agent, and Kroll Trustee Services Limited, as collateral agent, and the DIP Lenders holding at least 50.1% of the outstanding commitments and/or exposure under the DIP Term. The Debtors are authorized, subject to the terms and conditions of the Final Order, the DIP Credit Agreement, and the other DIP Term Loan Documents, to borrow an aggregate principal amount of $200 million of New Money DIP Term Loans pursuant to the Initial Draw and Subsequent Draw, to repay Prepetition SFA Obligations using amounts borrowed by way of Roll-Up Loans in an aggregate principal amount of up to $600 million pursuant to the Roll-Up Ratio on a cashless basis (effective upon the Subsequent Draw) pursuant to the terms and provisions of the DIP Credit Agreement, the other DIP Term Loan Documents, and this Final Order, and to incur and pay the principal, interest, premium, fees, indemnities, expenses and other amounts provided for in the DIP Credit Agreement, the other DIP Term Loan Documents, and the Final Order. Pursuant to the Senior Facilities Agreement, dated October 23, 2018, among Genesis Care Finance Pty Ltd, a company incorporated under the laws of Victoria, Australia, as borrowers, the guarantors from time to time party thereto, the lenders from time to time party thereto, Kroll Agency Services Limited (formerly known as to Lucid Agency Services Limited), as Facility Agent, and Kroll Trustee Services Limited, as Security Agent, the Prepetition Lenders provided secured term loans and secured revolving loans to certain of the Debtors. The Company is party to hedging agreements with various counterparties pursuant to which the Company has entered into cross-currency interest rate swaps. The purpose of the Hedges is to hedge foreign exchange and interest rate risk arising in connection with the Term Loan B Facilities by exchanging EUR funds borrowed under the Term Loan B Facilities and effectively converting the interest payment obligations thereunder into AUD, USD, GBP to match the currency requirements in each of the regions in which the Company operates based on the Company's EBITDA mix by region. As of the Petition Date, the Company has Hedges outstanding that effectively convert a total of EUR 187.0 million into AUD 299.9 million, a total of EUR 75.0 million into GBP 64.7 million, and a total of EUR 408 million into USD 457.1 million. As a result of the Company's strained liquidity situation and to preserve critical cash in the lead-up to a chapter 11 filing, the Company did not make certain payments that were due under Hedges with Bank of America, Morgan Stanley, and Bank of China on May 25, 2023. As of the Petition Date, the Debtors are a party to Hedging Agreements with Bank of America, Morgan Stanley and Bank of China. All Hedges with HSBC were terminated prior to the Petition Date. The approximate mark-to-market value to the Company of all Hedges as of April 30, 2023 (including those with HSBC that have been terminated) was approximately negative USD 10.9 million. As of the Petition Date, certain of the Debtors were indebted to the Prepetition SFA Secured Parties under the Prepetition SFA and the Finance Documents in the aggregate amount of not less than $1.618 million of principal and accrued interest as of the Petition Date, and all other obligations (including Hedging Obligations) of whatever nature owing. As adequate protection, the Prepetition Secured Parties are granted valid, binding, enforceable, non-avoidable, effective, and automatically perfected additional and replacement liens on, and security interest in, the DIP Collateral. As further adequate protection, the Prepetition Secured Parties are granted an allowed Administrative Expense Claim in the Chapter 11 Cases of each of the Debtors to the extent of any postpetition Diminution in Value. A copy of the final order and the Debtor's budget is available at https://urlcurt.com/u?l=e2epMj from Kroll Restructuring Administration, LLC as claims agent. The Debtor projects total operating disbursements, on a weekly basis, as follows: $17.4 million for the week ending July 23, 2023; $17.4 million for the week ending July 30, 2023; $17.4 million for the week ending August 6, 2023; $17.4 million for the week ending August 13, 2023; $17.4 million for the week ending August 20, 2023; and $17.4 million for the week ending August 27, 2023. About GenesisCare One of the world's largest integrated oncology networks, GenesisCare -- http://www.genesiscare.com-- includes 300+ locations in the U.S., the UK, Australia, and Spain. With investments in advanced technology and expanded access to clinical trials, more than 5,500 highly trained GenesisCare physicians and support staff offer comprehensive, coordinated care in radiation oncology, medical oncology, hematology, urology, diagnostics, and surgical oncology. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90614) on June 1, 2023. In the petition signed by Richard Briggs, as authorized signatory, the Debtor disclosed up to $10 billion in both assets and liabilities. Judge David R. Jones oversees the case. The Debtors tapped Kirkland and Ellis, LLP, Kirkland and Ellis International, LLP and Jackson Walker, LLP as general bankruptcy counsels; PJT Partners, LP as investment banker; Alvarez and Marsal North America, LLC as restructuring advisor; Herbert Smith Freehills, LLP as foreign legal counsel; and Teneo as communications advisor. Kroll Restructuring Administration, LLC is the notice and claims agent. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. Kramer Levin serves as the committee's legal counsel. GENESIS GLOBAL: SEC Balks at Plan's Exculpation Provisions ---------------------------------------------------------- The U.S. Securities and Exchange Commission ("SEC") objects to the motion seeking approval of the Disclosure Statement for the Amended Joint Plan of Genesis Global Holdco, LLC, et al. The SEC points out that the Disclosure Statement fails to satisfy the Debtors' burden under Section 1125 because it lacks adequate information about various material matters, including the potential buyer of the Debtors' assets, and the nature of the Debtors' post-effective date business, to the extent they remain in business. Indeed, all options appear to be on the table, but none of them have been described in sufficient detail to enable creditors to make an informed decision about whether to vote in favor of the plan. Specifically, the Disclosure Statement omits relevant information regarding: (i) financial data and recoveries; (ii) the sale; (iii) the possible reorganization and any successor entity; (iv) contemplated securities transactions under the plan; and (v) the subordination of government claims. According to the SEC, the Disclosure Statement also describes a plan that violates the Bankruptcy Code by providing overly broad exculpation of non-estate fiduciaries, and a discharge for liquidating Debtors. The SEC says the Disclosure Statement, Amended Plan, and Confirmation Order should be amended to make clear that nothing therein impacts the SEC's police and regulatory powers or makes determinations under the securities laws. According to the SEC, "Article VIII.G. of the Amended Plan provides exculpation of any "Exculpated Party" -- including non-fiduciaries and any Related Party—for various postpetition and post-Effective Date conduct. The exculpation provision also improperly includes a finding of "good faith" for future conduct relating to "distributions" and relieves any Exculpated Party from all liability "at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan." In addition, the grant of immunity in the exculpation has no time limit, potentially immunizing illegal post-Effective Date conduct without providing an end date. As such, this provision exceeds the bounds allowed by the Bankruptcy Code. See, e.g., SEC v. Universal Exp., Inc., 475 F. Supp. 2d 412, 425 (S.D.N.Y. 2007) (Lynch, J.), aff'd sub nom. SEC v. Altomare, 300 F. App'x 70, 71 (2d Cir. 2008) ("The liability shield of § 1125(e) specifically applies to the disclosure and solicitation period prior to approval of a reorganization plan . . . ."); In re PWS Holding Corp., 228 F.3d 224, 246 (3d Cir. 2000) (limiting exculpations to actions by estate fiduciaries in the bankruptcy case)." About Genesis Global Genesis Global Holdco, LLC, through its subsidiaries, and Global Trading, Inc., provide lending and borrowing, spot trading, derivatives and custody services for digital assets and fiat currency. Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE. LTD. (GAP) provide lending and borrowing, spot trading, derivatives and custody services for digital assets and fiat currency. Genesis Global Holdco, LLC owns 100% of GGC and GAP. Genesis Global Holdco, LLC, GGC and GAP each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 23-10063) on Jan. 19, 2023. The cases are pending before the Honorable Sean H. Lane. At the time of the filing, Genesis Holdco reported $100 million to $500 million in both assets and liabilities. Genesis Holdco is a sister company of Genesis Global Trading, Inc. ("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG"). GGT, DCG and certain of the Holdco subsidiaries are not included in the Chapter 11 filings. The non-debtor subsidiaries include Genesis UK Holdco Limited, Genesis Global Assets, LLC, Genesis Asia (Hong Kong) Limited, Genesis Bermuda Holdco Limited, Genesis Custody Limited ("GCL"), GGC International Limited ("GGCI"), GGA International Limited, Genesis Global Markets Limited, GSB 2022 II LLC, GSB 2022 III LLC and GSB 2022 I LLC. The Debtors tapped Cleary Gottlieb Steen & Hamilton, LLP as bankruptcy counsel; Morrison Cohen, LLP as special counsel; Alvarez & Marsal Holdings, LLC as financial advisor; and Moelis & Company, LLC as investment banker. Kroll Restructuring Administration, LLC is the Debtors' claims and noticing agent and administrative advisor. The ad hoc group of creditors is represented by Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP. The ad hoc group of Genesis lenders is represented by Proskauer Rose, LLP. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped White & Case, LLP as bankruptcy counsel; Houlihan Lokey Capital, Inc. as investment banker; Berkeley Research Group, LLC as financial advisor; and Kroll as information agent. GROWLIFE INC: Incurs $1 Million Net Loss in First Quarter --------------------------------------------------------- Growlife, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.02 million on $79,259 of net revenue for the three months ended March 31, 2023, compared to a net loss of $609,077 on $0 of revenue for the three months ended March 31, 2022. As of March 31, 2023, the Company had $935,850 in total assets, $9.17 million in total current liabilities, and a total stockholders' deficit of $8.23 million. The Company anticipates that it will record losses from operations for the foreseeable future. As of March 31, 2023, the Company's accumulated deficit was $165,813,967. The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings. These conditions raise substantial doubt about the Company's ability to continue as a going concern. GrowLife said, "The Company believes that its cash on hand will be sufficient to fund our operations only until June 30, 2023. The Company needs additional financing to implement our business plan and to service our ongoing operations and pay our current debts. There can be no assurance that we will be able to secure any needed funding, or that if such funding is available, the terms or conditions would be acceptable to us. If we are unable to obtain additional financing when it is needed, we will need to restructure our operations, and divest all or a portion of our business. We may seek additional capital through a combination of private and public equity offerings, debt financings and strategic collaborations. Debt financing, if obtained, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, and could increase our expenses and require that our assets secure such debt. Equity financing, if obtained, could result in dilution to the Company's then-existing stockholders and/or require such stockholders to waive certain rights and preferences. If such financing is not available on satisfactory terms, or is not available at all, the Company may be required to delay, scale back, eliminate the development of business opportunities and our operations and financial condition may be materially adversely affected." A full-text copy of the Quarterly Report is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1161582/000165495423009418/phot_10q.htm About GrowLife Founded in 2012, GrowLife, Inc. (PHOT)-- http://www.shopgrowlife.com-- is the owner of Bridgetown Mushrooms, acting as its parent Company. Founded in 2018 in Portland Oregon, Bridgetown Mushrooms grows a variety of functional and gourmet mushrooms which are in turn sold through multiple commercial and consumer sales channels. The company also develops and markets mushroom based products nationwide as well as manufactures and sells Mycology supplies to meet the demand for commercial mushroom farmers across the United States. GrowLife reported a net loss of $4.48 million for the year ended Dec. 31, 2022, compared to a net loss of $5.47 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $254,208 in total assets, $8.66 million in total current liabilities, and a total stockholders' deficit of $8.41 million. Irvine, CA-based Macias Gini & O'Connell LLP, the Company's auditor since 2021, issued a "going concern" qualification in its report dated June 13, 2023, citing that the Company has suffered recurring losses from operations, incurred negative cash flows from operating activities, and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. HAMMOND ENTERPRISES: Wins Continued Cash Collateral Access ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California authorized Hammond Enterprises, Inc. to continue using cash collateral on an interim basis in accordance with the budget. The Court is scheduled to hold a hearing on the matter on August 16 at 10:30 a.m. As previously reported by the Troubled Company Reporter, as of the petition date, the Debtor has approximately $1,097 in its unencumbered account at Sunwest Bank and approximately $838,533 in outstanding accounts receivable. The Debtor's secured creditors hold claims totaling $322,017 with valid liens in the Debtor's cash collateral. The secured creditors are Alan and Sally Hammond Family Trust, Business Financial Solutions, LLC, Celtic Bank (Ondeck), CFP Merchant Solutions, LLC (FastCap360), and Swift Funding. The Debtor has non-insider, unsecured debt in the approximate amount of $300,000. There are priority claims in the amount of $19,154 in pre-petition wages which the Debtor is requesting to pay pursuant to its First Day Motions. A copy of the order is available at https://urlcurt.com/u?l=xZVsOq from PacerMonitor.com. About Hammond Enterprises Inc. Hammond Enterprises Inc. operates a machine shop in Pittsburg, Calif. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-40776) on June 29, 2023. In the petition signed by Melissa Kozar, chief executive officer, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge William J Lafferty oversees the case. Chris Kuhner, Esq., at Kornfield, Nyberg, Bendes, Kuhner and Little PC, represents the Debtor as legal counsel. HERITAGE SPECIALTY: Wins Cash Collateral Access on Final Basis -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized Heritage Specialty Foods, LLC to use cash collateral on a final basis in accordance with the budget, with a 10% variance. Zions Bancorporation, N.A., doing business as The Commerce Bank of Oregon, claims a security interest in the cash collateral. The Debtor requires the use of cash collateral to preserve the value of its business as a going concern and to preserve and maintain the assets of the bankruptcy estate. The Debtor's authority to use Cash Collateral runs through and including the earlier of October 29, 2023, or an uncured Event of Default. The events that constitute an uncured Event of Default are: (a) spending other than as allowed in the Budget, unless authorized by an Order of the court or by Commerce Bank in writing; (b) failure to comply with any of the obligations imposed by the Order; (c) conversion of the case to a case under chapter 7 of the Bankruptcy Code; or (d) dismissal of the case. As adequate protection for the use of cash collateral, Commerce Bank is granted a continued valid, binding, enforceable, and perfected postpetition lien on all property of the Debtor of the same type and category in which Commerce Bank held prepetition with the same priority as its prepetition lien had in such property to secure an amount of Commerce Bank's prepetition secured claim, up to the allowed amounts of such prepetition secured claim, equal to the extent of any diminution in the value of its prepetition collateral. The Replacement Lien has the same priority as Commerce Bank's prepetition lien, and will be subject to the same rights and defenses as that prepetition. As additional adequate protection, the Debtor will make monthly payments to Commerce Bank of interest only, calculated at the then applicable non-default rates, based upon the outstanding principal balance of Commerce Bank's secured claims. The final hearing on the matter is set for July 13, 2023 at 2 p.m. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=NxoLBq from PacerMonitor.com. The Debtor projects total cash expenditures, on a weekly basis, as follows: $265,067 for the week ending July 30, 2023; $659,085 for the week ending August 6, 2023; $293,916 for the week ending August 13, 2023; $571,581 for the week ending August 20, 2023; and $405,542 for the week ending August 27, 2023. About Heritage Specialty Foods, LLC Heritage Specialty Foods, LLC is a family-owned manufacturer of small-batch, kettle-cooked foods made from high-quality fresh ingredients. The company specializes in ready-to-eat products including soups, chilis, chowders, entrees, sauces, and marinades. The company's primary sales channels are local and regional retail markets, club stores, and foodservice outlets. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ore. Case No. 23-31368-pcm11) on June 23, 2023. In the petition signed by Shane Hendren, president and chief executive officer, the Debtor disclosed up to $10 million in both assets and liabilities. Stephen Raher, Esq., at Leonard Law Group LLC, represents the Debtor as legal counsel. HONX INC: To Seek Plan Confirmation on Oct. 10 ---------------------------------------------- Judge Marvin Isgur has entered an order approving the Disclosure Statement of HONX, Inc. as providing holders of claims entitled to vote on the Plan with adequate information to make an informed decision as to whether to vote to accept or reject the Plan in accordance with Section 1125(a)(1) of the Bankruptcy Code. The Disclosure Statement provides Holders of Claims, Holders of Interests, and other parties in interest with sufficient notice of the injunction, exculpation, and release provisions contained in Article VIII of the Plan, in satisfaction of the requirements of Bankruptcy Rules 2002(c)(3) and 3016(c). The Debtor is authorized to solicit, receive, and tabulate votes to accept the Plan in accordance with the Solicitation and Voting Procedures attached hereto as Schedule 2, which are approved in their entirety. The Solicitation Agent is authorized to send the Solicitation Directive to attorneys known to represent 4 or more Holders of Asbestos Claims in accordance with the Solicitation and Voting Procedures. The Plan Confirmation Schedule is approved as follows (subject to modification as necessary) with respect to the solicitation of votes to accept, and voting on, the Plan and confirming the Plan: * The Plan Supplement Filing Deadline will be on August 28, 2023. * The Voting Deadline will be on September 11, 2023, at 4:00 p.m., prevailing Central Time * The Plan Objection Deadline will be on September 11, 2023 at 4:00 p.m., prevailing Central Time * The Deadline to File Voting Report will be on September 18, 2023 * The PIQ Data Hearing will be on October 2, 2023 at 2:00 p.m., prevailing Central Time * The Supplemental Plan Objection Deadline is [TBD]. * The Plan confirmation hearing will be on Oct. 10, 2023 at 9:00 a.m., prevailing Central Time, or such other time as may be scheduled by the Court. Reorganization Plan HONX submitted a First Amended Chapter 11 Plan of Reorganization and a corresponding Disclosure Statement. The Plan follows arms'-length, extensive, and (many times) contentious formal mediation proceedings, as well as months of informal negotiations among the Debtor, Hess Corporation ("Hess") as parent company to the Debtor, the Official Committee of Unsecured Creditors (the "Committee") and Burns Charest LLP in its capacity as counsel to certain Holders of Asbestos Claims (as defined in the Plan and below) ("Burns Charest"), culminating in a comprehensive settlement between the Debtor, Hess, the Committee (collectively, the "Plan Parties"), and Burns Charest to resolve all present and future Asbestos Claims against the Debtor (the "Plan Settlement"). The Debtor is soliciting votes for acceptance of the Plan from Holders of Claims in Class 3 (as discussed further below). The Plan will result in a permanent resolution of all current and future asbestos personal injury claims (defined in the Plan as the "Asbestos Claims") against the Debtor and, to the maximum extent permitted under section 524(g) of the Bankruptcy Code, Hess. The centerpiece of the Plan is the establishment of a trust under section 524(g) of the Bankruptcy Code (defined in the Plan as the "Asbestos Trust") to process and pay Asbestos Claims pursuant to certain distribution procedures adopted by the Asbestos Trust (defined in the Plan as the "Asbestos Trust Distribution Procedures"), the form of which will be included in the Plan Supplement and is incorporated herein by reference. In exchange for funding the Asbestos Trust, HONX and Hess, as well as certain additional parties (defined collectively in the Plan as the "Protected Parties") will be protected by a permanent injunction (defined in the Plan as the "Asbestos Permanent Channeling Injunction") that will prohibit any party from asserting an Asbestos Claim against a Protected Party and will channel all Asbestos Claims to the Asbestos Trust. The scope of the injunction will cover all Asbestos Claims against the Protected Parties. The effect of "channeling" Asbestos Claims to the Asbestos Trust through the Asbestos Permanent Channeling Injunction is that the channeled Asbestos Claims may be pursued through, and paid from, the Asbestos Trust and may not be asserted against the Reorganized Debtor or any of the other Protected Parties. The Asbestos Trust will be funded with Cash totaling $106,000,000, with a commitment by Hess to fund up to an additional $10,000,000 if valid payments from the Asbestos Trust to Entities that may subsequently assert a Demand (as defined in section 524(g) of the Bankruptcy Code) after the Effective Date (each such demand holder, a "Future Demand Holder") exceed $15,000,000 in the first seven-year period following the Effective Date and there remain outstanding additional Allowed Asbestos Claims held by Future Demand Holders. The Asbestos Trust will be administered by one or more trustees (collectively, the "Asbestos Trustee"). The Asbestos Trust will assume sole responsibility for paying Allowed Asbestos Claims (including, for the avoidance of doubt, any Allowed Asbestos Claims held by Future Demand Holders) and the Asbestos Trust Expenses, with $1,000,000 of the total Cash funded to the Asbestos Trust for the costs of operating the Asbestos Trust in connection with Future Demand Holders. Holders of Asbestos Claims in Class 3 are the only claimants entitled to vote on the Plan; for the avoidance of doubt, neither the FCR nor any Future Demand Holder is entitled to vote on the Plan. The rights of all other Holders of Claims against and Interests in the Debtor are either not Impaired by the Plan and conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code or Impaired by the Plan and conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code, and, in each case, the Holders of such Claims and Interests are not entitled to vote on the Plan. The Holders of Claims and Interests that are not entitled to vote on the Plan are directed to other portions of this Disclosure Statement and the Plan for a more detailed discussion of the treatment of their respective Claims and Interests. For the reasons detailed in this Disclosure Statement, the Debtor and Hess believe that there will be substantially more assets available to resolve Asbestos Claims under the Plan than would be if the Plan is not confirmed because, among other reasons, Hess, on its own behalf and on behalf of the other Protected Parties, is contributing substantial assets to the Asbestos Trust, which would not be contributed in the absence of the Plan Settlement. Without the settlements and distribution procedures contemplated in the Plan and the Plan Settlement, there likely would be years of costly and time-consuming litigation that would delay recoveries to Holders of Asbestos Claims. Such further litigation will be avoided through the Plan's orderly administrative process and the establishment of the Asbestos Trust. Absent the Plan, distributions to Holders of Asbestos Claims would most likely be delayed and, due to, among other things, the costs of litigation and uncertainty regarding a contribution by Hess, the funds actually available for distribution to Holders of Asbestos Claims may be reduced substantially. Under the Plan, Class 4 General Unsecured Claims are impaired. Creditors will recover 0% of their claims. Co-Counsel to the Debtor: Matthew D. Cavenaugh, Esq. Jennifer F. Wertz, Esq. Veronica A. Polnick, Esq. JACKSON WALKER LLP 1401 McKinney Street, Suite 1900 Houston, TX 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 E- mail: mcavenaugh@jw.com jwertz@jw.com vpolnick@jw.com - and - Christopher T. Greco, Esq. Matthew C. Fagen, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, NY 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Email: christopher.greco@kirkland.com matthew.fagen@kirkland.com - and - Whitney C. Fogelberg, Esq. Jaimie Fedell, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 E-mail: whitney.fogelberg@kirkland.com jaimie.fedell@kirkland.com - and - Michael F. Williams, Esq. Daniel T. Donovan, Esq. Alexandra I. Russell, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 1301 Pennsylvania Ave., N.W. Washington, D.C. 20004 Telephone: (202) 389-5000 Facsimile: (202) 389-5200 E-mail: michael.williams@kirkland.com daniel.donovan@kirkland.com alexandra.russell@kirkland.com A copy of the Order dated July 14, 2023, is available at https://tinyurl.ph/yzFio from PacerMonitor.com. A copy of the First Amended Chapter 11 Plan of Reorganization dated July 14, 2023, is available at https://tinyurl.ph/tekyo from Stretto, the claims agent. About HONX Inc. HONX Inc. is a subsidiary of Hess Corporation, a publicly-traded global energy company. HONX is the corporate successor of Hess Oil Virgin Islands Corporation, which owned and operated an oil refinery in St. Croix, U.S. Virgin Islands from the beginning of its construction in 1965 until a non-operating entity with minimal assets consisting primarily of a 50% ownership in a joint venture from 1998 to 2016, and post-2016 it has continued its corporate existence solely to manage its alleged asbestos liabilities related to the refinery. HONX sought Chapter 11 bankruptcy protection (Bankr. S.D. Texas Case No. 22-90035) on April 28, 2022. In the petition signed by Todd R. Snyder, chief administrative officer, the Debtor disclosed $10 million to $50 million in assets and $500 million to $1 billion in liabilities. Judge Marvin Isgur oversees the case. The Debtor tapped Kirkland & Ellis and Jackson Walker, LLP as bankruptcy counsels; Piper Sandler Companies/TRS Advisors, LLC as investment banker and financial advisor; and Bates White, LLC as asbestos consultant. Stretto, Inc. is the claims, noticing and solicitation agent. The Honorable Barbara J. Houser (Ret.) was appointed as the legal representative for future asbestos claimants in this Chapter 11 case. Ms. Houser tapped Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel; O'ConnorWechsler, PLLC as local counsel; FTI Consulting, Inc., as financial advisor; and NERA Economic Consulting as consultant. I-LOGIC TECHNOLOGIES: S&P Affirms 'B' ICR, Outlook Stable --------------------------------------------------------- S&P Global Ratings affirmed all its ratings on U.K. based-capital markets data and software solutions provider, ION Analytics (I-Logic Technologies Bidco Ltd.; ION), including its 'B' issuer and first-lien issue-level ratings. The stable outlook reflects S&P's expectation that ION will continue to execute cost synergies and the roll-off of deferred consideration payments will result in leverage to decline from 11.8x in 2022 to mid-9 times area in 2023 with further improvement in 2024. S&P said, "Our ratings affirmation reflects our positive view of the ION business and its next generation integrated platform, despite the delayed path of deleveraging. ION's integrated platform, which combines its core products--notably Dealogic, Mergermarket, and Debtwire--provides significant insights to users, in a seamless fashion across multiple domains in the capital markets. While the business initially began as Dealogic, the acquisitions over the past years have allowed ION to enhance the offering combining key tools that remain core to its customer base. ION's go-to-market strategy is largely centered around its full-suite solution, which we believe should continue to underpin customer stickiness. This is reflected in its weighted-average contract term, which has grown 150% (from about 1.5 to about 2.5) over the past five years. We view the company's unique data sets, information technology development, and lean management technical know-how as an important factor in its future growth. "However, ION has underperformed revenue expectations. We believe the company was too optimistic in its previous revenue forecast and was unable to derive cross-selling as well as recurring revenue in line with our prior expectations as it simultaneously focused on integrating various products on the back-end. "As such, we lowered our 2023 and 2024 forecast. Despite the underperformance, the core business and stand-alone Backstop product continues to perform well. For the recent quarter ended March 31, 2023, annual contract value (ACV) increased 6% year over year through a combination of price escalators and new business partially offset from FX headwinds and churn. ION has executed its cost synergies well, and continues to highlight additional opportunities, realizing nearly 100% of its initial synergies outlined over the past few years through transformative acquisitions. While the lower revenue forecast and future deferred consideration payments related to Acuris have hampered the path of deleveraging, we expect the roll-off of those payments will allow for S&P Global Ratings-adjusted leverage to return to the historical 7x-8x range in 2024 despite being elevated in the mid-9x area in 2023." The relationship between ION Analytics and its parent, ION Investment Corp S.a.r.l. (ION Group), enhances its credit quality. ION Group is the parent entity of ION Analytics, which also owns sister entities such as ION Markets, ION Corporates, Cedacri Group, and Cerved. While all the businesses cater to the financial markets, each company either serves a different part of the industry, or offers a distinct solution. However, the sharing of the ION brand name, co-mingling of representation across the board of directors at the portfolio companies, and long-term buy-and-hold philosophy with a concentrated founder ownership at the parent level, lead us to believe ION Analytics's creditworthiness would be influenced by the entire group. S&P said, "We believe the parent entity would likely provide extraordinary support in most foreseeable circumstances if ION Analytics encountered financial distress. As a result, we view ION Analytics as a strategically important subsidiary to the group. More notably, we expect the group to support the payment of any outstanding deferred consideration, if needed." The EUR75 million incremental term loan to partially fund a shareholder dividend reflects the group's aggressive financial policy. While the absolute quantum of the dividend (EUR50 million) is modest, this reflects the parent entity's risk appetite and tolerance for elevated leverage. Although adjusted leverage of more than 7x is often indicative of excessive leverage, ION's solid revenue visibility and growth prospects, high EBITDA margins, and good free cash conversion provide it with sufficient payback credit measures--such as FOCF to debt of about 5% in 2024--to support the current rating. The stable outlook reflects our expectation that ION will continue to execute cost synergies and the roll-off of deferred consideration payments will result in leverage to decrease to the mid-9x area in 2023 from 11.8x in 2022, with further improvement in 2024. ESG credit indicators: E2-S2-G3 S&P said, "Governance is a moderately negative consideration in our analysis of ION. We believe the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of its controlling owners, and reflects the parent entity's aggressive financial policy. We also view the lack of independent directors on its board unfavorably." INTERNAP HOLDING: Chapter 11 Debt Swap Plan Okayed -------------------------------------------------- Vince Sullivan of Law360 reports that cloud-based data center operator Internap Holding LLC received bankruptcy court approval Monday, July 17, 2023, in Delaware for its Chapter 11 plan that will see $128 million of secured debt exchanged for the equity of a reorganized company. The Debtors commenced Chapter 11 Cases to deleverage their balance sheet and continue as a going concern. The Plan contemplates that the holders of Second Out Term Loans (the "SOTL Loans") will convert all of their SOTL Loans into equity, eliminating approximately $127.8 million of secured debt from INAP’s balance sheet. In addition, certain of the holders of SOTL Loans have agreed to provide the Debtors with an exit facility in an amount up to $30 million on the Effective Date of the Plan. Holders of approximately 67% of the SOTL Loans in dollar amount and more than 60% in number (collectively, the "Consenting Lenders") have executed a Restructuring Support Agreement (as it may be amended from time to time, the "RSA") in which they have agreed to, among other things, support the Plan. In addition to the debt-for-equity exchange with the holders of the Debtors' SOTL Loans, other key terms of the Plan include full payment of all administrative and priority claims, if any. Other unsecured creditors will not receive a distribution under the Plan. The Debtors submit that the proposed Plan meaningfully reduces the Debtors’ aggregate secured debt, maximizes recoveries, ensures the Debtors will continue as a going-concern preserving jobs for the Debtors' employees, and best positions the Debtors for future success. A copy of the Amended Plan dated July 12, 2023, is available at https://tinyurl.ph/HryoE from Stretto, the claims agent. About Internap Holding Internap Holding LLC and its affiliates provide compute resources (i.e., an IT industry term referring to the ability to process data) and storage services on demand via an integrated platform. Their services include: (a) bare metal which are dedicated, single-tenant servers utilizing Intel and AMD processors enabling high-performance compute with rapid deployment, increased control, enhanced security, and flexible configurations); (b) hosted private cloud environments; (c) cloud computing backup services; and (d) managed security to keep customer data secure and in alignment with compliance requirements. Internap Holding LLC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10529) on April 28, 2023. In the petition signed by Michael T. Sicoli, chief executive officer, the Debtor disclosed up to $500 million in both assets and liabilities. Judge Craig T. Goldblatt oversees the case. The Debtors tapped Saul Ewing LLP and Jenner and Block LLP, as legal counsel, FTI Consulting as financial advisor, and Stretto, Inc., as claims and noticing agent. INTERNATIONAL LAND: Posts $1.9 Million Net Loss in First Quarter ---------------------------------------------------------------- International Land Alliance, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.91 million on $240,932 of revenue for the three months ended March 31, 2023, compared to a net loss of $1.49 million on $0 of revenue for the three months ended March 31, 2022. As of March 31, 2023, the Company had $5.16 million in total assets, $32.57 million in total liabilities, $293,500 in preferred stock Series B, and a total stockholders' deficit of $27.71 million. Cash was $199,393 and $49,400 as of March 31, 2023, and Dec. 31, 2022, respectively. The Company recorded a loss for the three months ended March 31, 2023. The Company's working capital deficit as of March 31, 2023, was $30.7 million. The Company said these factors and its ability to raise additional capital to accomplish its objectives, raises substantial doubt about its ability to continue as a going concern. International Land said, "We expect our expenses will continue to increase during the foreseeable future as a result of increased operations, increased construction activity and the development of current and future projects which include our current business operations. "We anticipate generating revenues over the next twelve months, as we continue to market the sale of plots held for sale at our various projects, generate cash from the sale of house construction at our properties. "If the Company is not successful with its marketing efforts to increase sales, the Company will continue to experience a shortfall in cash, and it will be necessary to obtain funds through equity or debt financing in sufficient amounts or to further reduce its operating expenses in a manner to avoid the need to curtail its future operations." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1657214/000149315223024856/form10-q.htm About International Land Alliance International Land Alliance, Inc. -- https://ila.company -- is a residential land development company with target properties located in the Baja California, Northern region of Mexico and Southern California. The Company's principal activities are purchasing properties, obtaining zoning and other entitlements required to subdivide the properties into residential and commercial building lots, securing financing for the purchase of the lots, improving the properties infrastructure and amenities, and selling the plots to homebuyers, retirees, investors, and commercial developers. International Land reported a net loss of $10.42 million for the year ended Dec. 31, 2022, compared to a net loss of $5.06 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $1.17 million in total assets, $5.72 million in total liabilities, $293,500 in preferred stock series B, and a total stockholders' deficit of $4.84 million. Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since 2022, issued a "going concern" qualification in its report dated July 6, 2023, citing that the Company has suffered net losses from operations, which raises substantial doubt about its ability to continue as a going concern. IRONMAN LOGGING: Lucy Sikes Named Subchapter V Trustee ------------------------------------------------------ The Acting U.S. Trustee for Region 5 appointed Lucy Sikes as Subchapter V trustee for Ironman Logging, LLC. Ms. Sikes will be paid an hourly fee of $365 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Sikes declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Lucy G. Sikes P.O. Box 52545 Lafayette, LA 70505-2545 Telephone: 337-366-0214 Facsimile: 337-628-1319 Email: lucygsikes1@gmail.com About Ironman Logging Ironman Logging, LLC, a company in Georgetown, La., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. La. Case No. 23-80389) on July 12, 2023. In the petition signed by its managing member, Edward B. Holmes, Jr., the Debtor disclosed $1,255,500 in assets and $554,248 in liabilities. Judge Stephen D. Wheelis oversees the case. Thomas R. Willson, Esq., represents the Debtor as legal counsel. JAFFAN INTERNATIONAL: Court OKs Interim Cash Collateral Access -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, authorized Jaffan International, LLC to use the cash collateral of US Foods, Inc. and Syndimate 2017 LP retroactive to February 4, 2022. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Court; (b) one quarter of the current and necessary expenses set forth in the budget, plus an amount not to exceed 10% for each line item; and (c) additional amounts as may be expressly approved in writing by the Secured Creditors. The Debtor is further authorized to make monthly adequate protection payments to creditor, The Tamm Corporation, Inc., in the regular contractual amount of $1,633. The Tamm Corporation, Inc.'s claim is secured by a first position lien on the Debtor's 4COP liquor license. As adequate protection, the Secured Creditors will have perfected post-petition liens against cash collateral to the same extent and with the same validity and priority as their prepetition liens, without the need to file or execute any document as may otherwise be required under applicable non bankruptcy law. The Debtor will maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the Secured Creditors. A continued hearing on the matter is set for August 17, 2023 at 10 a.m. A copy of the order is available at https://urlcurt.com/u?l=8v8h3o from PacerMonitor.com. About Jaffan International, LLC Jaffan International, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00459) on February 4, 2022. In the petition signed by Ahmad Maher AlJaffan, managing member, the Debtor disclosed up to $500,000 in both assets and liabilities. Judge Roberta A. Colton oversees the case. Buddy D. Ford, Esq., at Buddy D. Ford, P.A. is the Debtor's counsel. JONES DESLAURIERS: Moody's Rates USD350MM 1st Lien Term Loan 'B2' ----------------------------------------------------------------- Moody's Investors Service has assigned a B2 rating to a USD350 million seven-year senior secured first-lien term loan being issued by Jones DesLauriers Insurance Management Inc. (Jones DesLauriers, corporate family rating B3), a wholly owned subsidiary of Navacord Corp., a leading Canadian insurance broker. The term loan will rank pari passu with existing senior secured credit facilities and senior secured notes. Net proceeds from the offering will be used to refinance the company's existing term loan and help fund acquisitions. Moody's also assigned a B2 rating to Jones DesLauriers' existing CAD125 million five-year senior secured first-lien revolving credit facility. The rating outlook for Jones DesLauriers is unchanged at stable. RATINGS RATIONALE According to Moody's, the company's ratings reflect Navacord's growing market presence as the fourth-largest commercial lines insurance broker in Canada generally serving middle market clients. The company has a good mix of business across commercial and personal property & casualty insurance and employee benefits, with specialties in construction and transportation. The company is diversified geographically across Canada, particularly in Ontario, Alberta and British Columbia. Navacord has produced strong organic growth in the low double digits in past years, supporting healthy EBITDA margins in the mid-to-low-30s (per Moody's calculations). The company maintains an active acquisition strategy and operates using a decentralized model that allows acquired entities to manage their business fairly autonomously while benefitting from Navacord's centralized services. These strengths are tempered by Navacord's aggressive financial leverage and low fixed charge coverage, execution risk associated with acquisitions, and limited scale relative to other rated insurance brokers. Navacord also faces potential liabilities arising from errors and omissions, a risk inherent in professional services. Giving effect to the proposed transaction, Moody's estimates that Navacord's pro forma debt-to-EBITDA ratio will be slightly above 7.5x., with (EBITDA-capex) coverage of interest of 1.0x-1.5x and a free-cash-flow-to-debt ratio in the low single digits. These pro forma metrics include Moody's adjustments for operating leases, certain other debt-like obligations, and run-rate earnings from acquisitions. Moody's expects the company to improve its coverage metrics in the next 12 to 18 months through growth in EBITDA. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade of Jones DesLauriers' ratings include: (i) increased scale and diversification, (ii) debt-to-EBITDA ratio below 6x, (iii) (EBITDA - capex) coverage of interest exceeding 2x, and (iv) free-cash-flow-to-debt ratio exceeding 5%. Factors that could lead to a downgrade of the ratings include: (i) debt-to-EBITDA ratio above 7.5x, (ii) (EBITDA - capex) coverage of interest below 1.2x, (iii) free-cash-flow-to-debt ratio below 2%, or (iv) disruptions to existing or newly acquired operations. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. Based in Toronto, Canada, Navacord Corp. offers a diversified mix of property & casualty insurance, employee benefits and specialized products mainly to middle market businesses across Canada. The company generated revenue of CAD522 million for the 12 months through April 2023. KAMAN CORP: S&P Downgrades ICR to 'B+', Outlook Stable ------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Kaman Corp. to 'B+' from 'BB-'. The outlook is stable. The stable outlook reflects S&P's expectation that debt to EBITDA is likely to be 4.5x-5x in 2023 before gradually improving in future years. Leverage is likely to remain high in the near term as Kaman recovers from earnings weakness in 2022. Challenges with suppliers as well as some internal difficulties with programs, particularly in the Structures segment, delayed an expected rebound in earnings. While commercial aviation continues to improve, decreases in sales on the Joint Programmable Fuze (JPF) program as well as the end of the K-MAX helicopter program have resulted in organic revenue declines. EBITDA margins have also been negatively affected due to inventory write-offs, cost increases on legacy programs, and some internal program delays that have pushed sales into the future. S&P expects leverage to remain above 4.5x through 2023 before improving to below 4x in 2024. However, Kaman has a number of hurdles to clear due to both internal and external factors, including internal costs and supplier relations, before it can significantly decrease leverage. Organic revenue growth is already under way. With JPF and K-MAX mostly behind Kaman, and the supply chain showing some improvement, the company is focused on growing the top line. Aircraft Wheel and Break (AWB) is providing revenue growth opportunities after being acquired in September 2022, and the company is working through its significant backlog, particularly in Engineered Products. While S&P expects Precision Products' revenue to decline due to the absence of JPF and K-MAX revenue, it believes the segment could return to growth in 2024. Kaman is focused on expanding EBITDA margins through a variety of efforts. Cost reductions are under way in the form of headcount reduction and some facility consolidation. Kaman may also look to increase prices to offset rising internal costs. These efforts--if successful--should lead to EBITDA margin expansion over the next few years. The stable outlook reflects that debt to EBITDA will be 4.5x-5x in 2023, likely improving gradually thereafter as margins expand while the company works through its backlog and reduces internal costs. S&P could lower the rating if debt to EBITDA remains above 5x for an extended period or liquidity becomes constrained. This could occur if: -- The company is unable to generate revenue growth in the absence of JPF and K-MAX helicopter sales; -- Investments in new programs are more significant than expected and further constrain margins; -- The company engages in aggressive financial policy through large acquisitions or significant shareholder returns; or -- The company's potential repayment of convertible notes tests its revolver availability. S&P could raise the rating if debt to EBITDA declined below 4x, and we expected it to remain there. This could occur if: -- Commercial build rates grow faster than expected; -- The company adds significant new business over the next 12 months; -- K-MAX sales result in unexpected cash inflows; or -- EBITDA margins expanded beyond our expectations. KATANA ELECTRONICS: Court OKs Interim Cash Collateral Access ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Utah authorized Katana Electronics, LLC to use cash collateral on an interim basis in accordance with the budget. The U.S. Small Business Administration and the Utah State Tax Commission assert an interest in the Debtor's cash collateral. The Debtor is obligated to Secured Creditors with respect to an All-Inclusive Promissory Note Secured by and All-Inclusive UCC-1 filed by the SBA and with respect to a valid and enforceable state tax lien filed by the USTC. As of the Petition Date, the amounts due and owing by the Debtor with respect to the Secured Creditors is approximately $150,000 to the SBA and $45,000 to the USTC together with accrued but unpaid interest, and unliquidated, accrued and unpaid fees and expenses of Secured Creditor and its professionals incurred through the Petition Date. The Debtor has granted to Secured Creditors first priority liens and security interests in all the personally property owned by the Debtor including cash collateral for its obligations associated with the Loan and with respect to the USTC, a valid and enforceable tax lien as been perfected. As adequate protection for any diminution in the value of cash collateral and other Pre-Petition Collateral resulting from the Debtor's use thereof after the Petition Date, Secured Creditors will continue to have a valid, perfected and enforceable continuing replacement lien and security interest in all assets of the Debtor existing on or after the Petition Date of the same type as the Pre-Petition Collateral, together with the proceeds, products and profits thereof, whether acquired or arising before or after the Petition Date, to the same extent, validity, perfection, enforceability and priority of the liens and security interests of Secured Creditor as of the Petition Date. The Rollover Lien will be subject to only prior valid and perfected liens, if any, existing as of the Petition Date with priority over Secured Creditor's liens, and to the Carve-Out. The Rollover Lien will be limited to the amount of any Diminution. The SBA's lien has priority of the USTC. As additional adequate protection for any Diminution, the SBA will have a valid, perfected and enforceable continuing supplemental lien and security interest in all of the assets of the Debtor. The Debtor's authority to use cash collateral, will terminate without any further action by the Court and a Termination Event will occur 10 business days after written notice sent by Secured Creditor to the Debtor, any Committee appointed in this case and the U.S. Trustee of the occurrence of any of the following: a. except for the Permitted Amendment, the payment or incurrence by the Debtor of expenses, or any other amounts, of a type not set forth in the Budget; b. the payment of any expenses of the type set forth in the Budget that would cause the any expenditure during a Measuring Period to exceed 120% of the amount budgeted thereunder in such Budget for the Budgeted Period; and c. the failure of the Debtor to pay, within 10 days of the applicable due date, all undisputed administrative expenses in full in accordance with their terms as provided for in the Budget and the Debtor fails to comply with, keep, observe or perform any of its agreements or undertakings under this Interim Order. A final hearing on the matter is set for August 23, 2023 at 2 p.m. A copy of the order is available at https://urlcurt.com/u?l=oj6ZIT from PacerMonitor.com. About Katana Electronics, LLC Katana Electronics, LLC is an electronics manufacturing company specializing in circuit boards and other electronic hardware. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Utah Case No. 23-22919) on July 11, 2023. In the petition signed by Shaher Hawatmeh, manager, the Debtor disclosed up to $100,000 in assets and up to $500,000 in liabilities. Judge Kevin R. Anderson oversees the case. Ted F. Stokes, Esq., at Stokes Law PLLC, represents the Debtor as legal counsel. KDC AGRIBUSINESS: Gets OK to Tap Jefferies LLC as Investment Banker ------------------------------------------------------------------- KDC Agribusiness, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Jefferies, LLC as investment banker. The firm's services include: (a) Restructuring. i. provide advice and assistance to the Debtors in connection with analyzing, structuring, negotiating, and effecting (including providing valuation analyses as appropriate), and acting as exclusive financial advisor to the Debtors in connection with, any restructuring, reorganization, recapitalization, repayment or material modification of the Debtors' outstanding indebtedness, however achieved, including, without limitation, through any offer by the Debtors with respect to any outstanding indebtedness, a solicitation of votes, approvals, or consents giving effect thereto (including with respect to a prepackaged or pre-negotiated plan of reorganization or other plan pursuant to chapter 11 of the Bankruptcy Code), the execution of any agreement giving effect thereto, an offer by any party to convert, exchange, or acquire any Debtors' indebtedness, or any similar balance sheet restructuring involving the Debtors; and ii. perform the following financial advisory services, among others, the Debtors in connection with a restructuring: (a) becoming familiar with, to the extent Jefferies deems appropriate, and analyzing, the business, operations, properties, financial condition, and prospects of the Debtors; (b) advising the Debtors on the current state of the "restructuring market"; (c) assisting and advising the Debtors in developing a general strategy for accomplishing a Restructuring; (d) assisting and advising the Debtors in implementing a restructuring; (e) assisting and advising the Debtors in evaluating and analyzing a restructuring, including the value of the securities or debt instruments, if any, that may be issued in any such restructuring; and (f) rendering such other financial advisory services as may from time to time be agreed upon by the Debtors and Jefferies. (b) Merger and Acquisition (M&A) Transaction. The firm will provide the Debtors with financial advice and assistance in connection with a possible sale, disposition or other business transaction, or series of transactions involving all or a material portion of the equity or assets of one or more entities comprising the Debtors, whether directly or indirectly and through any form of transaction, including, without limitation, merger, reverse merger, liquidation, stock sale, asset sale, asset swap, recapitalization, reorganization, consolidation, amalgamation, spin-off, split-off, joint venture, strategic partnership, license, a sale under section 363 of the Bankruptcy Code (including any "credit bid" made pursuant to section 363(k) of the Bankruptcy Code and including under a prepackaged or pre-negotiated plan of reorganization or other plan pursuant to the Bankruptcy Code) or other transaction. (c) Financing. The firm will act as sole and exclusive financial advisor in connection with any of the following): (i) the sale or placement, whether in one or more public or private transactions, of (A) common equity, preferred equity, or equity-linked securities of the Debtors (regardless of whether sold by the Debtors or its securityholders), including, without limitation, convertible debt securities or (B) notes, bonds, debentures or other debt securities of the Debtors, including, without limitation, mezzanine and asset-backed securities, or (ii) the arrangement or placement of any bank debt and other credit facility of the Debtors, including debtor-in-possession financing. The firm will be paid as follows: (a) A monthly fee of $100,000 until the termination of the Engagement Agreement. (b) A fee equal to $2,250,000 promptly upon the consummation of a restructuring or an M&A transaction. (c) Promptly upon the consummation of a financing, a fee equal to an amount to be determined according to the following schedule: i. 2 percent of the aggregate principal amount of any senior secured bank debt or senior secured debt securities of any financing; ii. 3.5 per cent of the aggregate principal amount of any junior secured or unsecured bank debt or junior secured or unsecured debt Securities of any financing; iii. 5 per cent of the aggregate gross proceeds received or to be received from the sale of equity securities, including, without limitation, aggregate amounts committed by investors to purchase equity securities in connection with any financing. Michael O'Hara, a managing director at Jefferies, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael O'Hara Jefferies LLC 520 Madison Avenue New York, NY 10022 Tel: (212) 284-2300 About KDC Agribusiness KDC Agribusiness, LLC is a food waste recycler company in Bedminster, N.J. KDC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10786) on June 16, 2023. In the petition signed by David Buffa, general counsel and corporate secretary, KDC disclosed $100 million to $500 million in both assets and liabilities. Judge Craig T. Goldblatt oversees the case. The Debtors tapped John H. Knight, Esq., at Richards, Layton and Finger, P.A. as bankruptcy counsel; Foley & Lardner, LLP and Okin Hollander, LLC as special counsels; AlixPartners, LLP as financial restructuring advisor; and Jefferies, LLC as investment banker. Kurtzman Carson Consultants, LLC is the Debtor's claims agent and administrative advisor. KDC AGRIBUSINESS: Gets OK to Tap Kurtzman as Administrative Advisor ------------------------------------------------------------------- KDC Agribusiness, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Kurtzman Carson Consultants, LLC as administrative advisor. The firm's services include: (a) assisting with, among other things, the preparation of the Debtors' schedules of assets and liabilities, schedules of executory contracts and unexpired leases and statements of financial affairs; (b) assisting with, among other things, solicitation, balloting, tabulation and calculation of votes, as well as preparing any appropriate reports required in furtherance of confirmation of any Chapter 11 plan; (c) generating an official ballot certification and testifying, if necessary, in support of the ballot tabulation results for any Chapter 11 plan; (d) assisting with claims reconciliation and the filing of claims objections and exhibits; and (e) other claims processing, noticing, solicitation, balloting, and administrative services. The firm received from the Debtor a retainer in the amount of $45,000. Evan Gershbein of Kurtzman disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Evan Gershbein Kurtzman Carson Consultants LLC 222 N. Pacific Coast Highway, 3rd Floor El Segundo, CA 90245 Tel: (310) 823-9000 About KDC Agribusiness KDC Agribusiness, LLC is a food waste recycler company in Bedminster, N.J. KDC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10786) on June 16, 2023. In the petition signed by David Buffa, general counsel and corporate secretary, KDC disclosed $100 million to $500 million in both assets and liabilities. Judge Craig T. Goldblatt oversees the case. The Debtors tapped John H. Knight, Esq., at Richards, Layton and Finger, P.A. as bankruptcy counsel; Foley & Lardner, LLP and Okin Hollander, LLC as special counsels; AlixPartners, LLP as financial restructuring advisor; and Jefferies, LLC as investment banker. Kurtzman Carson Consultants, LLC is the Debtor's claims agent and administrative advisor. KDC AGRIBUSINESS: Taps AlixPartners as Financial Advisor -------------------------------------------------------- KDC Agribusiness, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to employ AlixPartners, LLP as financial advisor. The Debtors require a financial advisor to: a. assist the Debtors with the development of bankruptcy contingency plans and related initiatives; b. assist the Debtors with the design and implementation of a restructuring strategy designed to maximize enterprise value, taking into account the unique interests of all constituencies; c. review or revise the Debtors' 13-week cash receipts and disbursements forecasting model; d. assist the Debtors with the development and implementation of cash management strategies, tactics and processes, including the development of a forecast to assist with the sizing of potential debtor-in-possession financing; e. assist the Debtors with the development of their business plan and such other related forecasts as may be required by stakeholders in connection with the restructuring process or by the Debtors for other corporate purposes; f. assist the Debtors in negotiating and implementing restructuring initiatives and the evaluation of strategic alternatives; g. assist the Debtors with their communications or negotiations with outside parties including the Debtors' stakeholders, creditors and potential acquirers of the Debtors' assets; h. assist with any bankruptcy proceeding, including supporting the Debtors in navigating the bankruptcy process, providing testimony on matters that fall within AlixPartners' expertise, preparing statements of financial affairs, schedules of assets and liabilities and operating reports, and assisting with claims reconciliation; and i. assist the Debtors with such other matters as may be requested that fall within AlixPartners' expertise and that are mutually agreeable. The firm will be paid at these rates: Partner & Managing Director $1,140 to $1,400 per hour Partner $1,115 per hour Director $880 to 1,070 per hour Senior Vice President $735 to $860 per hour Vice President $585 to $725 per hour Consultant $215 to $565 per hour Paraprofessional $360 to $380 per hour The firm received from the Debtor a retainer of $500,000. David Orlofsky, a partner and managing director at AlixPartners, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: David Orlofsky Alixpartners, LLP 909 Third Avenue, Floor 30 New York, NY 10022 Tel: (212) 490-2500 Fax: (212) 490-1344 Email: dorlofsky@alixpartners.com About KDC Agribusiness KDC Agribusiness, LLC is a food waste recycler company in Bedminster, N.J. KDC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10786) on June 16, 2023. In the petition signed by David Buffa, general counsel and corporate secretary, KDC disclosed $100 million to $500 million in both assets and liabilities. Judge Craig T. Goldblatt oversees the case. The Debtors tapped John H. Knight, Esq., at Richards, Layton and Finger, P.A. as bankruptcy counsel; Foley & Lardner, LLP and Okin Hollander, LLC as special counsels; AlixPartners, LLP as financial restructuring advisor; and Jefferies, LLC as investment banker. Kurtzman Carson Consultants, LLC is the Debtor's claims agent and administrative advisor. KDC AGRIBUSINESS: Taps Okin Hollander as Corporate Counsel ---------------------------------------------------------- KDC Agribusiness LLC and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Okin Hollander, LLC as special corporate counsel. The firm's services include: (i) negotiating, finalizing and obtaining court approval of debtor-in-possession financing; (ii) establishing procedures for, negotiating, and obtaining Court approval of a potential sale transaction for the Debtors' assets, including any litigation relating thereto; (iii) negotiating and obtaining court approval of any required exit financing; (iv) negotiating and obtaining confirmation of a Chapter 11 plan; (v) providing legal services that may be necessary to protect and preserve the Debtors' estates; and (vi) other necessary legal services required by the Debtors to carry out their statutory duties. Okin Hollander will be paid at these rates: Members $975 per hour Counsels $750 per hour Paraprofessionals $150 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The retainer fee is $410,000. Paul Hollander, Esq., a partner at Okin Hollander, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Paul S. Hollander, Esq. Okin Hollander LLC 500 Frank W. Burr Boulevard, Suite 40 Teaneck, NJ 07666 Tel: (201) 947-7500 Fax: (201) 947-2663 About KDC Agribusiness KDC Agribusiness, LLC is a food waste recycler company in Bedminster, N.J. KDC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10786) on June 16, 2023. In the petition signed by David Buffa, general counsel and corporate secretary, KDC disclosed $100 million to $500 million in both assets and liabilities. Judge Craig T. Goldblatt oversees the case. The Debtors tapped John H. Knight, Esq., at Richards, Layton and Finger, P.A. as bankruptcy counsel; Foley & Lardner, LLP and Okin Hollander, LLC as special counsels; AlixPartners, LLP as financial restructuring advisor; and Jefferies, LLC as investment banker. Kurtzman Carson Consultants, LLC is the Debtor's claims agent and administrative advisor. KDC AGRIBUSINESS: Taps Richards Layton & Finger as Legal Counsel ---------------------------------------------------------------- KDC Agribusiness LLC and its affiliates received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Richards Layton & Finger, P.A. as bankruptcy counsel. The firm's services include: a) advising the Debtors of their rights, powers and duties under Chapter 11 of the Bankruptcy Code; c) assisting in preparing legal papers; d) taking actions to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the estates; e) assisting the Debtors with any sale of their assets pursuant to Section 363 of the Bankruptcy Code; f) assisting in preparing a disclosure statement and any related documents and pleadings necessary to solicit votes on the Debtors' Chapter 11 plan; g) prosecuting any proposed Chapter 11 plan and seeking approval of all transactions contemplated therein and in any amendments thereto; and h) other necessary legal services in connection with the prosecution of the Debtors' Chapter 11 cases. The firm will be paid at these rates: Directors $995 to $1,325 per hour Counsel $850 to $875 per hour Associates $495 to $775 per hour Paraprofessionals $375 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The Debtor paid the firm an advance retainer of $1.05 million. In accordance with Section D.1 of the U.S. Trustee Guidelines, Richards Layton & Finger provided the following information: a) The firm did not agree to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement. b) None of the firm's professionals included in this engagement have varied their rate based on the geographic location for these Chapter 11 cases. c) The firm has represented the Debtors since May 2023. Other than the periodic adjustments described above, the billing rates and material financial terms of the firm's engagement have not changed post-petition from the pre-bankruptcy arrangement; and d) The firm, in conjunction with the Debtors, is developing a prospective budget and staffing plan for these Chapter 11 cases. John Knight, Esq., a partner at Richards, Layton & Finger, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: John H. Knight, Esq. Paul N. Heath, Esq. Brendan J. Schlauch, Esq. David T. Queroli, Esq. Huiqi Liu, Esq. Zachary J. Javorsky, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 Email: knight@rlf.com heath@rlf.com schlauch@rlf.com queroli@rlf.com liu@rlf.com javorsky@rlf.com About KDC Agribusiness KDC Agribusiness, LLC is a food waste recycler company in Bedminster, N.J. KDC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10786) on June 16, 2023. In the petition signed by David Buffa, general counsel and corporate secretary, KDC disclosed $100 million to $500 million in both assets and liabilities. Judge Craig T. Goldblatt oversees the case. The Debtors tapped John H. Knight, Esq., at Richards, Layton and Finger, P.A. as bankruptcy counsel; Foley & Lardner, LLP and Okin Hollander, LLC as special counsels; AlixPartners, LLP as financial restructuring advisor; and Jefferies, LLC as investment banker. Kurtzman Carson Consultants, LLC is the Debtor's claims agent and administrative advisor. KDC/ONE DEVELOPMENT: Moody's Alters Outlook on 'B3' CFR to Stable ----------------------------------------------------------------- Moody's Investors Service affirmed kdc/one Development Corporation, Inc.'s (KDC/ONE) B3 Corporate Family Rating, B3-PD Probability of Default Rating, and the B3 ratings of the existing first lien credit facility instruments. At the same time, Moody's assigned B3 ratings to the new senior secured credit facility, consisting of a revolver that expires in 2028, a first lien USD term loan due 2028, and a Euro-denominated first lien term loan due 2028. Moody's changed KDC/ONE's rating outlook to stable from positive and expects to withdraw the B3 ratings of the existing first lien revolver when the refinancing is completed. KDC/ONE plans to utilize the proceeds to refinance its capital structure. The transactions are credit positive because they will extend the maturity profile with only a modest expected increase in cash interest expense. KDC US Holdings, Inc. is a co-borrower of the proposed revolver and term loans with Zobelle Mexico, S.A. de C.V. also a permitted revolver borrower. The affirmation of the ratings reflects that KDC/ONE's leverage remains high, free cash flow is negative because of meaningful capital spending and other investments to support growth, and customer volume declines in a high inflation environment are pressuring revenue. Pro forma for the Aerofil acquisition and production facility consolidation, KDC/ONE's debt-to-EBITDA leverage rose to a mid 6x range as of April 30, 2023 despite factoring in meaningful add-backs to EBITDA. Moody's expects the company's debt-to-EBITDA leverage will decline to a low 6.0x range in fiscal 2024 (ending April 30, 2024), primarily as a result of additional EBITDA from new business wins and cost initiatives. The change in the rating outlook to stable from positive reflects Moody's view that it is unlikely that KDC/ONE will achieve and maintain Moody's upgrade factors over the next year, including sustaining debt-to EBITDA below 6.0x and generating meaningfully positive free cash flow. The company's operating performance continues to be negatively impacted by weak volume largely as a result of a temporary period of inventory destocking. Consumers are also being more selective in an inflationary environment. KDC/ONE's revenue declined in the fourth quarter and Moody's anticipates customer volume declines will continue into at least the first half of fiscal 2024. While new business wins are a positive development, there is uncertainty about the strength and timing of customer volume recovery until inflation slows more meaningfully. Moderating capital spending to support the new business wins and a reduction in working capital may lead to free cash free in fiscal 2024, though Moody's expects it will remain modest and partially hurt by higher interest costs in a raising interest rate environment. Moody's took the following rating actions: Affirmations: Issuer: kdc/one Development Corporation, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Backed Senior Secured 1st Lien Bank Credit Facility (Revolver and Term Loans), Affirmed B3 Assignments: Issuer: kdc/one Development Corporation, Inc. Backed Senior Secured Revolving Credit Facility, Assigned B3 Backed Senior Secured 1st Lien Term Loan, Assigned B3 Outlook Actions: Issuer: kdc/one Development Corporation, Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE The B3 CFR reflects KDC/ONE's good market position, high leverage and low free cash flow. Operating performance is being negatively affected by customer volume declines because of a temporary period inventory destocking as well as consumers being more selective amid higher prices. Moody's expects the company's credit metrics to improve, including a decline in debt-to-EBITDA leverage to a low 6.0x range by fiscal 2024 (ending April 30, 2024), supported by new business wins and cost reductions. The rating also reflects some degree of customer concentration, as well as revenue and earnings volatility because of shifts in customer volume and product development. Moreover, Moody's expects financial policies to be aggressive under private equity ownership including the potential for partially debt-funded acquisitions that may periodically increase leverage. KDC/ONE's aggressive growth plans are contributing to weak free cash flow due to a period of high capital spending to build capacity as well as research and development. Free cash flow was negative in fiscal 2023. Moody's expects improvement in fiscal 2024 due to lower capital spending and a reduction in working capital, but free cash flow is likely to remain low including headwinds from higher interest rates. Margins are thin on a reported basis, as compared to other consumer products companies, partially because of the large amount of materials costs that are passed through to customers but also because contract manufacturing is highly competitive and customers are cost-conscious. KDC/ONE's ratings are supported by its growing presence as a global manufacturer specializing in custom formulation, packaging and manufacturing solutions for beauty, personal care and home care brands, supported by solid innovation capabilities and long-standing customer relationships. The beneficial effect of raw material pass-through arrangements reduces the company's exposure to the volatility of input costs such as essential oils, alcohols and specialty chemicals. KDC/ONE is experiencing good demand for its expanded offerings of essential products across home, beauty and personal care segments. The capacity expansion provides good de-leveraging opportunity through earnings growth that should also lead to positive free cash flow as capital spending subsides. The company also has longstanding relationships with its top 10 customers with average tenure of 30 years, serving 135 brands cross multiple product categories and geographic locations. KDC/ONE has adequate liquidity. Support is provided by $81 million of cash and approximately $350 million availability from the revolving credit facilities as of April 30, 2023 (including the $60 million revolving credit facility that expires in December 2023). Moody's expects KDC/ONE to generate modest free cash flow in the next 12 months as capital spending gradually declines and working capital improves. The cash on balance sheet provides good coverage for the $10 million of required first lien term loans amortization payments. The revolver has a springing maximum net debt-to-EBITDA leverage covenant of 7.75x that becomes effective if usage exceeds 35%. Moody's does not expect the covenant to be tested. However, if the covenant is triggered, Moody's expects the company to meet the financial covenant with a good cushion in part because the EBITDA definition including numerous add-backs including pro forma cost savings. The term loans have no financial maintenance covenants. As proposed, the new credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: Incremental debt capacity is permitted up to the greater of (A) a dollar amount equal to 100% of Consolidated Adjusted EBITDA as of the Closing Date and (B) 100% of Consolidated Adjusted EBITDA, plus any unused portion of the general debt basket. There is also potential for unlimited incremental debt amounts if the pro forma First Lien Net Leverage does not exceed the greater of (x) First Lien Net Leverage Ratio on the Closing Date and (y) if such indebtedness is incurred in connection with a permitted acquisition or investment, the First Lien Net Leverage Ratio immediately prior to the incurrence of such indebtedness. Amounts not exceeding the greater of (x) a dollar amount equal to 50% of Closing Date EBITDA and (y) 50% of Consolidated Adjusted EBITDA may be incurred with an earlier maturity date than the initial term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries, up to the carve-out capacities, subject to asset transfer protective provisions to be determined. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, subject to protective provisions to be determined. The credit agreement provides some limitations on up-tiering transactions, though the provisions are not detailed in the term sheet. Consolidated EBITDA includes various add-backs subject to a 24 month look-forward period and a 25% cap, including add-backs projected from new contracts or customers, increased pricing or volume, or the renegotiation of contracts. The proposed terms and the final terms of the credit agreement may be materially different. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that volume declines will moderate as the April 2024 fiscal year progresses, KDC/ONE's revenue and EBITDA will improve in the next 12-18 months due to new business wins and cost reductions, and the company will maintain adequate liquidity including meaningful cash and modestly positive free cash flow. The ratings could be upgraded if the company is able to post consistent positive organic revenue growth with a stable to higher margin, generates comfortably positive free cash flow, demonstrates a track record of more conservative financial policies, and if it reduces and sustains debt/EBITDA below 6.0x. A rating upgrade would also require improved quality of earnings, including a reduction in the amount of other cash costs. Better earnings quality would translate to higher operating cash flow, which would better support the company's growth. The ratings could be downgraded in the case of operational difficulties including weakness in customer volumes, revenue or margins that prevents the company from generating positive free cash flow. A deterioration in liquidity, debt funded shareholder distributions, leveraging acquisitions, or EBITA-to-interest at or below 1.0x could also lead to a downgrade. The principal methodology used in these ratings was Consumer Packaged Goods published in June 2022. KDC/ONE is a global manufacturer specializing in custom formulation, packaging and manufacturing solutions for beauty, personal care and home care brands, supported by solid innovation capabilities, and long standing customer relationships. The company's customers are beauty, personal care and home care companies largely in North America, with growing presence in Europe and Asia. The company has been majority owned by Cornell Capital following a 2018 leveraged buyout. The company generated roughly $2.6 billion in revenue for the fiscal year ending April 30, 2023. KNOWLTON DEVELOPMENT: Fitch Alters Outlook on 'B-' IDRs to Stable ----------------------------------------------------------------- Fitch Ratings has affirmed all ratings including Knowlton Development Corporation, Inc.'s (KDC), KDC US Holdings, Inc. and kdc/one Development Corporation, Inc.'s Long-Term Issuer Default Ratings (IDRs) at 'B-'. The Outlook has been revised to Stable from Positive. Fitch has also assigned a 'B'/'RR3' rating to the company's new secured debt, including a five-year senior secured revolving facility and the five-year dollar tranche and euro tranche secured term loan facilities - which will be used to refinance its existing first lien credit facilities. KDC US Holdings, Inc. and kdc/one Development Corporation are co-borrowers on the revolver and term loan. Zobele Mexico, S.A. de C.V is a co-borrower on the revolver. KDC's 'B-' IDR reflects its position as a global leader in custom formulation, packaging and manufacturing solutions for beauty, personal care and home care brands, supported by a diverse product portfolio and long-term customer relationships. Fitch has revised the Outlook to Stable given Fitch defined EBITDA leverage remains above 7x, with leverage at 7.2x at the end of FY23 (ended April 30) compared to previous expectations for EBITDA leverage in the mid 6x range and the weakening in interest coverage metrics due to the increase in borrowing costs. While Fitch expects EBITDA leverage could improve in fiscal years 2024 and 2025 on margin recovery supported by cost initiatives, Fitch would require increased confidence in continued organic EBITDA growth, a commitment to sustaining leverage below 7x, and generating positive FCF to consider a positive rating action. KEY RATING DRIVERS Defensible Competitive Advantage: KDC is one of the largest players in the market for outsourced custom formulation, packaging and manufacturing solutions for beauty, personal care and home care brands operating 28 manufacturing facilities worldwide. Within the beauty and personal care segment, the company's customers range from indie brands to giants in consumer-packaged goods, providing a natural hedge to rapidly changing industry dynamics. Customer concentration is moderate with the company serving over 800 customers worldwide across over 1,000 brands. KDC's business model of partnering with its customers to create innovative products and rapidly bringing them to market fosters entrenched, long-tenured customer relationships with low churn and high switching costs. Significant investments in R&D and technology and a breadth of product expertise enables KDC to provide global turnkey solutions that solidify its competitive advantage. KDC's business model also enables raw material cost pass through that helps mitigate exposure to input volatility as roughly half of KDC's revenue derives from pass through costs. Acquisitions Support Growth but Elevate Leverage: KDC has acquired 10 companies since 2019 that has increased its global exposure with added scale in Europe and Asia and grown revenues from $1 billion to more than $2.6 billion in FY23. KDC's acquisition strategy supplements organic growth by adding capabilities in adjacent new markets to enable the company to capitalize on cross-selling opportunities in its customer base. Its most recent acquisition of Aerofil in March 2022 added to KDC's aerosol and liquid filling capabilities, complementing its portfolio of customers and adding significant technical expertise. KDC's highly acquisitive strategy has resulted in elevated leverage -- though equity contributions from sponsors, including the most recent strategic investment by KKR -- has been somewhat of an offset. EBITDA leverage for fiscal years 2022 and 2023 has been in the low 7x area. EBITDA leverage could trend toward the mid-6x area in fiscal years 2024 and 2025 on margin recovery supported by cost initiatives. Nevertheless, the company could also pursue opportunistic bolt-on acquisitions to grow its capabilities that could result in EBITDA leverage being sustained above 7x. Relatively Stable End Markets: KDC benefits from operating in end markets where demand is relatively stable, even during recessionary conditions. Fitch estimates that personal care sales remained flat to positive during the global financial crisis as the sector benefits from low price points and due to the everyday use nature of health and beauty products. The company's flexible manufacturing base allows it to redirect capacity from segments of weak demand to areas of strength. However, KDC experienced variability in customer orders during FY23, which weighed on revenue growth. Organic revenue growth declined by around 3% in FY23, largely due to volume declines from KDC's customers seeking to align inventory levels with consumer demand. Fitch projects organic revenue growth could be in the low-single digits in FY24 with new business wins supporting growth. EBITDA Margin Recovery Expected: Fitch-calculated EBITDA margins in FY23 declined modestly relative to margins in FY22, and are lower than the margins generated pre-pandemic. Margins in FY23 were impacted by higher material costs due to inflation and the delay in passing through pricing, as well as volume deleveraging and higher overhead costs that were partially offset by lower direct labor cost and company efficiency initiatives. EBITDA margins could benefit in FY24 from structural cost initiatives, price lag recovery and higher margin contribution from new business wins that could support organic EBITDA growth and margin improvement. A pullback in discretionary consumer spending that results from a recession, negatively affecting volume recovery during FY24, remains a risk. FCF Deficit Narrows: KDC sharply increased capex in FY22 to support the company's organic growth initiatives and new contract wins. When combined with higher working capital requirements, this resulted in significantly negative FCF in FY22. The FCF deficit declined materially in FY23 as working capital usage reversed and capex decreased meaningfully although investment levels remained higher than FY21. Barring a material benefit in working capital in FY24, Fitch expects a modest FCF deficit, similar to FY23 as further declines in growth capex and higher EBITDA are largely offset by higher interest costs and cash taxes. Parent Subsidiary Linkage: Fitch's analysis includes a weak parent/strong subsidiary approach between the parent and its subsidiaries kdc/one Development Corp. Inc. and KDC US Holdings, Inc. Fitch assesses the quality of the overall linkages as high which results in an equalization of IDRs across the corporate structure. DERIVATION SUMMARY KDC's 'B-' IDR reflects its position as a global leader in custom formulation, packaging and manufacturing solutions for beauty, personal care and home care brands, supported by a diverse product portfolio and long-term customer relationships. KDC's rating is similar to Sizzling Platter (B-/Stable). Sizzling Platter, LLC's 'B-' rating reflects the company's position as a leading franchisee in the Little Caesars, Jamba and Wingstop quick-serve restaurant chains; its high adjusted leverage in the 7x area, and its reliance on Little Caesars for around 65% of its revenue. The rating also considers recent strong same store sales growth and resilient operating performance despite high inflation. Fitch expects FCF to be low as the company uses cash flow to invest in new restaurants, but liquidity remains adequate. KDC's credit profile can also be compared against other rated consumer product companies such as ACCO Brands Corporation (BB/Stable), Central Garden & Pet Company (BB/Stable) and Newell Brands Inc. (BB/Negative). Compared to these three companies, KDC has higher financial leverage and has a smaller operating scale than Newell Brands, Inc and Central Garden & Pet Company. ACCO Brands Corporation's rating and Outlook reflect the company's historically consistent FCF and reasonable gross leverage, which trended at approximately 3.0x prior to operating challenges in 2020 related to the coronavirus pandemic. The rating and Outlook are constrained by secular challenges in the office products industry and channel shifts within the company's customer mix. ACCO's earnings have been pressured by supply chain challenges, inflation and a stronger dollar, which lifted leverage into the 4x range in 2022, above Fitch's negative sensitivity. Fitch expects margin recovery combined with debt paydown to drive leverage back toward 4.0x in 2023, but a prolonged downturn could be a rating concern. Central Garden & Pet Company's rating reflects strong market positions in the pet, lawn and garden segments and ample liquidity, including robust FCF and moderate leverage. This is offset by limited scale, with EBITDA at a low- to mid-$300 million. Fitch's expects Central Garden to manage gross debt/EBITDA within a target of 3.0x-3.5x. Leverage could reach the high 3x area in fiscal 2023 (September 2023) given a challenging operating environment. A longer or deeper economic slowdown that results in leverage exceeding 4.0x for an extended period could weigh on the rating. Newell's 'BB' rating and Negative Outlook reflects the material pressure on top line and EBITDA beginning in 2H22 that is likely to remain through 2023, given a significant pullback in retail orders and an overall slowdown in discretionary consumer spending. Beyond a weakening macro environment, execution risk is a concern as Newell continues to realign and restructure its business segments and realign its supply chain which could further disrupt operations. Newell's Outlook could be stabilized on increased visibility around management's ability to execute on its turnaround strategy, and drive top line and EBITDA recovery in 2024, which along with debt reduction would bring gross debt/EBITDAEBITDA Leverage to under 4.5x. KEY ASSUMPTIONS -- Fitch projects organic revenue growth in FY24 could be in the low-single digits with revenue from new business wins supporting offset by lower volumes reflecting inventory destocking that are expected to normalize and increase in the back half of FY24. Revenue growth in FY25 and beyond could be in the low-to-mid single digits supported by growth within the Home Care, Beauty and Personal Care categories which are expected to experience favorable growth trends with KDC expected to gain share. -- Fitch calculated EBITDA and EBITDA margins could benefit in FY24 from structural cost initiatives, price lag recovery and higher margin contribution from new business wins. Beyond FY24, Fitch expects EBITDA margins could further increase reflecting growth of the business, cost initiatives and increased leveraging of its asset base which the company has significantly invested in over the last few years. -- KDC's new secured term loans have a floating interest rate structure and Fitch assumes 3.2% to 5.2% annualized base rates for SOFR and 2.7% to 3.6% for EURIBOR over the forecast horizon, given the higher interest rate environment. -- Capex declining in FY24 as the company completes a period of elevated capex related to growth initiatives with some additional reductions in FY25. Barring a material benefit in working capital in FY24, Fitch expects a modest FCF deficit, similar to FY23 as further declines in growth capex and higher EBITDA are largely offset by higher interest costs and cash taxes. The key driver for medium-to-longer term positive FCF will be driven by EBITDA growth. -- EBITDA leverage could trend toward the mid-6x area on margin recovery supported by cost initiatives. Nevertheless, Fitch anticipates the company could also pursue opportunistic bolt-on acquisitions to grow its capabilities that support cross-selling and synergy opportunities that could result in EBITDA leverage above 7x. Interest coverage is expected to be in the mid 1x range over the forecast period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A positive rating action could be considered if KDC's operating trajectory, business investments along with acquisitions meets Fitch's expectations for continued revenue and EBITDA growth, sustained positive FCF and a commitment or demonstrated record that increases confidence with KDC sustaining EBITDA leverage under 7x and interest coverage above 2.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A negative rating action would be considered if a pullback in discretionary consumer spending leads to top-line weakness or EBITDA declines, persistent negative FCF, or if an acceleration of the company's acquisition strategy or any debt-financed transaction such as special shareholder distributions results in sustained EBITDA leverage over 8x and interest coverage approaching 1.0x, leading to concerns around the viability of the company's capital structure. LIQUIDITY AND DEBT STRUCTURE Ample Liquidity: KDC's liquidity as of April 30, 2023 exceeded $400 million, consisting of $80.8 million in cash, and $348.9 million availability on its revolving credit facilities, net of $63.8 million of borrowings and $2.3 million of letters of credit outstanding. The company has non-extending revolving facilities of $60.0 million maturing on Dec. 21, 2023 and $355 million extending revolving facilities expiring on Nov. 21, 2025. Current Capital Structure: As of April 30, 2023, the company had about $1.5 billion of term loan outstanding split between USD and EUR tranches. The term loan requires modest quarterly amortization and matures in December 2025. The company is subject to a single springing financial covenant (based on revolver utilization) requiring first lien leverage to be no greater than 7.75x. KDC had substantial headroom under this test as of April 2023. New Capital Structure: KDC is refinancing its existing credit facilities and term loan with new secured debt in a leverage neutral transaction that extends maturities. The new financing will include a senior secured revolving facility, a five-year dollar tranche and euro tranche secured term loan facilities and other secured debt. Financial covenants, term loan amortization and collateral security are the same as the existing agreements and all new secured debt will be parri passu. The security package includes a 1st priority lien on substantially all assets. Recovery Considerations For issuers with IDRs of 'B+' and below, Fitch performs a recovery analysis for each class of obligations of the issuer. The issue ratings are derived from the IDR, the relevant Recovery Rating and prescribed notching. The recovery analysis assumes that KDC would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch assumes a material loss in revenue from existing customers or some customer attrition resulting in a loss of revenue around 15% from projected fiscal 2024 levels with EBITDA margins in the 9% area. Fitch applies a 6.0x enterprise value/EBITDA multiple, modestly below the 6.3x median multiple for Food, Beverage and Consumer bankruptcy reorganizations analyzed by Fitch. The multiple reflects the company's leading position in its formulation, packaging and manufacturing businesses, its diverse and sticky customer relationships, modestly offset by its lack of consumer brand recognition. After deducting 10% for administrative claims, KDC's first lien secured debt is expected to have good recovery prospects (51%-70%) and is assigned 'B'/'RR3' ratings. The secured debt is secured by a first priority interest in substantially all assets of the borrowers (kdc/one Development Corporation, Inc and KDC US Holdings, Inc.) and the guarantors (material direct and indirect wholly-owned U.S. subsidiaries). ISSUER PROFILE KDC is a global leader in custom formulation and manufacturing solutions for beauty, personal care and home care brands. It provides services from product ideation and formulation to design, packaging and manufacturing. KDC serves over 700 customers globally across over 1,000 brands. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch adjusted historical EBITDA for stock-based compensation, acquisition related costs, litigation and other legal fees, severance related costs, business transformation costs and reorganizational and restructuring costs associated with the closure of Lynchburg facility. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. KNOWLTON DEVELOPMENT: S&P Affirms 'B-' ICR on Refinancing --------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on Longueil, Que.-based beauty, personal care, and household products manufacturer Knowlton Development Corp. Inc. (KDC). At the same time, S&P assigned its 'B-' issue-level rating and '3' recovery rating to its first-lien credit facilities. The 3 recovery rating indicates its view lenders can expect a meaningful recovery (50%-70%; rounded estimate 50%) of principal in the event of payment default. S&P said, "The stable outlook reflects our expectation for debt to EBITDA of 6.5x-7.0x and EBITDA interest coverage of about 1.8x in fiscal year 2024. Despite our forecast for volume headwinds over the next few months, we anticipate the company will still increase its EBITDA year over year spurred by its cost-savings initiatives. "We expect KDC will improve its debt to EBITDA and EBITDA interest coverage as market conditions normalize somewhat in 2024. "We view the refinancing transaction to be leverage neutral. Pro forma for the refinancing, we expect KDC's debt to EBITDA to be about 7.6x, based on its year-end April 2023 EBITDA. We forecast the company will improve its debt to EBITDA to about 6.5x-7.0x by the end of fiscal year 2024. "KDC's revenue and EBITDA for its fiscal year ended April 2023 was weaker than we forecast. Inventory rebalancing or destocking by its key customers, namely retailers and specialty retailers in the beauty and personal care segment, adversely affected the company's sales volumes. Inventory rebalancing has also affected its peers in the segment. While the situation has somewhat normalized, we believe some retailers will continue destocking amid efforts to prudently manage their finished goods inventory. "We expect KDC's volumes will return to normal in another six months, though unexpected headwinds could lead to a prolonged delay in the recovery in its sales volumes. To limit the effect of weaker volumes on its EBITDA, the company has initiated several cost-saving initiatives. These include initiatives to improve its manufacturing efficiencies and realize cost savings through automation, headcount reductions, and procurement savings. We expect the company will realize a sizeable savings in fiscal year 2024, crystalized progressively over each quarter. Furthermore, KDC incurred several additional one-time costs in fiscal year 2023, which we do not expect to recur in 2024. Finally, the company has secured new business wins, which will increase its revenue and EBITDA in the latter half of 2024. Therefore, we anticipate it will materially increase its S&P Global Ratings-adjusted EBITDA year over year. Assuming KDC's revenue recovers in the later half of 2024 and it successfully executes its cost savings, we forecast its metrics will materially improve." KDC's operating performance and credit metrics are susceptible to volume trends, foreign-exchange volatility and rising interest rates. Similar to other contract manufacturers, the company is dependent on increasing its volumes to expand its revenue. Furthermore, KDC has made significant investments to expand its manufacturing facilities. Given that a material proportion of its cost structure is fixed, a longer-than-expected shortfall in its volumes and a failure to onboard new customers could increase its operating leverage and weaken its EBITDA and margins. S&P said, "The company's cost-saving initiatives also entail some execution risk and we believe it may face additional costs that partially offset the benefits from its improved efficiency. Finally, we forecast interest rates will remain high for a prolonged period. Given the company's EBITDA base relative to its debt levels, its credit measures and coverage ratios are sensitive to even small changes in its operating performance." S&P forecasts KDC will maintain a sufficient liquidity cushion for the next 12 months. S&P said, "The company's business is working capital intensive. As it expands its customer base, we believe it will continue to invest in working capital over the next 12 months. That said, KDC will likely benefit modestly from several working capital initiatives--such as modest shifts in the timing of its payments and inventory management--in fiscal year 2024, which will lead to cash inflows. Furthermore, we expect it will moderate its capital expenditure in fiscal year 2024, which is lower than in the past two years. Therefore, expect the company's free cash flow will be break-even in fiscal year 2024. Finally, KDC has about $80 million of pro forma cash and availability under its revolving credit facility. We believe the company will likely maintain a sufficient liquidity cushion for the next 12 months to absorb any unexpected delays in the ramp-up of its revenue. "The stable outlook reflects our expectation for debt to EBITDA of 6.5x-7.0x and EBITDA interest coverage of about 1.8x in fiscal year 2024. Despite our forecast for volume headwinds over the next few months, we anticipate the company will still increase its EBITDA year over year spurred by its cost-savings initiatives. "We could lower our ratings if KDC's EBITDA cash interest deteriorates below 1.5x because of a poor operating performance, its volumes fail to recover, it faces capacity underutilization, or it adopts a more aggressive financial policy. We could also take a negative rating action if the company's free cash flow deficits persist such that its liquidity position deteriorates. "We could raise our ratings on KDC if its revenue and EBITDA improve and it sustains its current debt levels such that its debt to EBITDA improves sustainably below 6x. We would also have to believe it would maintain its debt to EBITDA at this level after including potential acquisitions and shareholder returns." ESG credit indicators: E-2, S-2, G-3 LAKELAND TOURS: Saratoga Marks $1.05M Loan at 35% Off ----------------------------------------------------- Saratoga Investment Corporation has marked its $1,056,778 loan extended to Lakeland Tours, LLC to market at $686,906 or 65% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Holdco Fixed Term Loan to Lakeland Tours, LLC. The loan accrues interest at 13.25% per annum. The loan matures on September 27, 2027. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Lakeland Tours LLC provides educational student travel programs. The Company offers history, science, discoveries, onstage, sports, and career-focused travel opportunities. LEXARIA BIOSCIENCE: Receives New Patents for DehydraTECH Technology ------------------------------------------------------------------- Lexaria Bioscience Corp. announced the grants of its most recent US patents for the use of its proprietary DehydraTECH technology for the treatment of hypertension and for use with nicotine molecules in sublingual delivery formats. A summary of these most recently issued US patents is as follows: US Patent #11,666,543 - Pharmaceutical Compositions and Methods for Treating Hypertension US Patent #11,666,544 - Compositions and Methods for Treating Hypertension Lexaria said, "These patents represent our first and second patents in our Patent Family #21 and the protection for both pharmaceutical compositions and non-pharmaceutical compositions, reinforce Lexaria's commercial opportunities in the separate pharmaceutical and consumer markets. With our expected upcoming filing with the FDA of our Investigational New Drug application for the use of DehydraTECH-CBD for the treatment of hypertensive patients, the issuance of these patents comes at an opportune time for the Company." US Patent #11,700,875 - Compositions and Methods For Sublingual Delivery of Nicotine "Lexaria's mission is to provide healthier delivery methods of different drugs and other active ingredients through the use of its proprietary drug delivery technology DehydraTECH. Accordingly, the grant of this patent, which includes claims for many types of nicotine for use in sublingual delivery formats, is of particular importance in light of Lexaria's current nicotine study, as detailed in our news release of May 8, 2023. Study NIC-H22-1 utilized a DehydraTECH enhanced nicotine oral pouch format which was compared against commercially available nicotine oral pouches, to validate our belief that DehydraTECH enhanced nicotine oral pouches will deliver nicotine to the user more effectively. Should our study results evidence this improved delivery, we believe that commercialized oral pouches with DehydraTECH enhanced nicotine could encourage current nicotine smokers and vapers to switch to this healthier format," Lexaria added. About Lexaria Lexaria Bioscience Corp. -- http://www.lexariabioscience.com-- is a biotechnology company developing the enhancement of the bioavailability of a broad range of fat-soluble active molecules and active pharmaceutical ingredients using its patented DehydraTECH drug delivery technology. DehydraTECH combines lipophilic molecules or APIs with specific long-chain fatty acids and carrier compounds that improve the way they enter the bloodstream, increasing their effectiveness and allowing for lower overall dosing while promoting healthier oral ingestion methods. Lexaria Bioscience reported a net loss and comprehensive loss of $7.38 million for the year ended Aug. 31, 2022, a net loss and comprehensive loss of $4.19 million for the year ended Aug. 31, 2021, a net loss and comprehensive loss of $4.08 million for the year ended Aug. 31, 2020, and a net loss and comprehensive loss of $4.16 million for the year ended Aug. 31, 2019. As of Feb. 28, 2023, the Company had $4.85 million in total assets, $223,131 in total liabilities, and $4.63 million in total stockholders' equity. Lexaria Bioscience received a letter from the listing qualifications department staff of The Nasdaq Stock Market on June 22, 2023, indicating that the Company is not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. LHS BORROWER: Saratoga Marks $994,975 Loan at 23% Off ----------------------------------------------------- Saratoga Investment Corporation has marked its $994,975 loan extended to LHS Borrower LLC to market at $766,131 or 77% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan (1M USD SOFR+ 4.8%, 0.5% Floor) to LHS Borrower LLC. The loan accrues interest at 10% per annum. The loan matures on February 16, 2029. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. LHS Borrower, LLC, a wholly owned subsidiary of Leaf Home Solutions, LLC, is a direct-to-consumer home solutions platform serving underserved markets with innovative home safety and improvement solutions throughout the United States and Canada. LIFE TIME: Fitch Assigns First Time 'B+' LongTerm IDR ----------------------------------------------------- Fitch Ratings has assigned first-time ratings to Life Time Group Holdings and Life Time Inc. (collectively, LTH or Life Time) including their Long-Term (LT) Issuer Default Ratings (IDR) of 'B+'. Fitch has also assigned at Life Time, Inc. the senior secured LT ratings of 'BB+'/'RR1', and senior unsecured LT ratings of 'B+'/'RR4'. The Rating Outlook is Stable. The ratings and Outlook reflect LTH's strong market position, financial flexibility, and improving financial structure offset by its aggressive growth strategy, low customer switching costs, and inherent cyclical risk in the sector. LTH has scaled and improved profitability via increased service offerings, price increases, cost efficiencies, and new openings in affluent areas. Fitch believes LTH's exposure to high-income markets and unique suite of services offers it some protection from macroeconomic headwinds relative to other fitness center operators in the space. KEY RATING DRIVERS Strong Center Economics: LTH has succeeded in attracting an affluent customer base to its centers resulting in high spend at its locations on services and relatively inelastic price sensitivity. Price increases have resulted in lower membership offset by higher revenue per center membership. As of Dec. 31, 2022, LTH members had a median household income of $143,000, 80% owned a home and approximately 60% of members are part of a couples or family membership, members that typically engage more with its centers. Location services that provide additional revenue include personal training, café, spa, aquatics, racquet, kids camp and chiropractic services. Sale-Lease Backs Support Growth: LTH's execution of its' asset-light real estate strategy with sale-lease backs (SLB) has enabled it to expedite growth in a more cost-effective manner. In 2015, the issuer owned most of the land it operated on. As of December 2022, approximately 65% of LTH centers were leased including approximately 90% of new centers opened within the last five years. In 2022, the issuer spent $409 million on growth capital expenditures and recouped $352 million in SLB proceeds. The asset-light strategy has also allowed LTH to expand to new markets where property values were a deterrent in the past. LTH's reputation as a reliable tenant relative to other fitness operators results in favorable lease terms often spanning over 25 years. While Fitch capitalizes higher rental costs, the increased financial flexibility provided from the SLBs is viewed as a credit positive. Near Full COVID-19 Recovery: LTH continues to recover from the negative impacts of COVID-19, which saw a complete shutdown of many of its locations and total memberships plummet to 750,000 from 944,000 in 2019. While membership has remained low at 776 ,000 as of December of 2022, the issuer has more than offset membership decreases with price increases. Total membership dues of centers opened prior to COVID are at 115% of 2019 dues as of May 2023. Fitch does not expect memberships to rebound fully to 2019 levels due to heightened membership costs as the issuer has prioritized increasing center revenues per membership. Rapid Deleveraging Potential: LTH's leverage profile continues to improve from pandemic levels with EBITDAR leverage improving to 7.3x in 2022 from 12.4x in 2021. Fitch forecasts EBITDAR leverage decreasing to 5.2x in FY23 due to significant revenue growth and EBITDA margin expansion. Thereafter, Fitch estimates EBITDAR leverage to decline between the 4.5x and 5.0x range over the forecast horizon. The de-levering is primarily driven by revenue growth and improved/sustained margins as opposed to meaningful debt paydown. Management has expressed a desire to maintain EBITDA leverage (rent not capitalized) below 3.0x in its earnings calls. Fitch forecasts LTH achieving 2.9x EBITDA leverage by 2025. Improved Profitability: Fitch forecasts EBITDA margins improving from 15% in 2022 to 23% in 2023. The margin improvement is driven by increased center operating efficiencies and significant General and Administrative (G&A) costs improvements. Center operation margins are expected to improve driven by increased membership spend at existing facilities with fixed costs. In G&A, LTH has made substantial cuts to labor in sales and other middle management roles. Management noted that sales has transitioned to a lower-cost concierge model, as most of its new memberships are done online. In 1Q23 G&A had decreased to $37 million from $46 million prior year. As a percent of revenue, G&A decreased to 7.3% from 11.8% in the prior year. Cyclical Industry: Gym, Health & Fitness Clubs are highly cyclical. Fitch believes Life Time's affluent member pool offers some protection from cyclical factors; however, recognizes that there remains the inevitable risk of membership fluctuations in the event of a recession. While Life Time's month to month membership plans are attractive for new and seasonal joiners, it also leaves the issuer exposed to sharp membership declines in the event of an economic shock. In the current economic environment, premium operators are expected to face difficulties as inflationary pressures erode consumer balance sheets resulting in reduced spending over time. Life Time will have to continue to offer unique services in the market (swimming pools, pickleball, etc.) and position themselves as the choice operator amongst affluent gym clients. DERIVATION SUMMARY A majority of U.S. fitness operators reflect 'CCC' to 'B' category credit risk, as membership attrition, slow rebound to pre-pandemic performance, and need to right size club/studio portfolios pressure cash flows to varying degrees. Longer term characteristics of the industry include volatile earnings, aggressive growth strategies, negative free cash flows, and high leverage. Life Time's scale and diversification as one of the largest fitness center operators separate it from smaller operators. The issuer also has a reputation as a reliable tenant obtaining favorable lease terms from SLB buyers. LTH did not miss any rent payments during COVID-19 while deferrals and conversion of interest to PIK were common in the space. LTH also benefits from a wealthy customer base with relatively inelastic price sensitivity when compared to other fitness center populations. Budget operators, which have seen an improvement in memberships, and are on a path to return to profitability in the medium term are more consistent with 'CCC+' and 'B-', with the former more reserved for operators geographically concentrated in major metro areas that are more affected by lingering changes in consumer habits from hybrid work and work from home persisting after the pandemic. Life Time's closest rated peer is Pure Gym (B-), a 'value-gym' operator operating with high EBITDAR leverage of about 9.0x and near-term maturities. Pure Gym is more aggressive than Life Time and anticipated to open over 250 gyms between 2022 and 2025. KEY ASSUMPTIONS -- Revenue growth of 22% in 2023, 11% in 2024, 8% in 2025 and 6.6% in 2026. Near-term growth is strong due to robust average center revenue per center membership growth and continued recovery in centers not fully recovered to 2019 levels. Growth slows as centers mature and increases in membership dues slow due to greater increased price sensitivity of members; -- Fitch assumes 10 new centers open per year; -- EBITDA margins increase materially to 23% in 2023 due to center level efficiencies and material selling, general and administrative (SG&A) costs. Thereafter, margins are forecasted to improve modestly to 23.5% as operating leverage efficiencies in SG&A are offset by higher lease expense as issuer continues asset-light expansion; -- Base interest rates applicable to the company's outstanding variable rate debt obligations reflects current SOFR forward curve; -- FFO margin increases from 11% in 2022 to 16% in 2023 and marginally thereafter; -- Capex spend declines as a % of revenue throughout the forecast but remains stable at just under $600 million per annum; -- Continued large, but tapering negative FCF throughout the forecast as issuer remains aggressive in spending on growth; -- SLBs steadily decline as issuer can finance a greater portion of growth capex with internal cash generation; -- EBITDAR leverage declines to 5.2x in 2023 and steadily declines to 4.6x in 2026. Concurrently, EBITDA leverage declines to 3.6x in 2023 and 2.8x by 2026; -- Fitch assumes successful refinancing of all 2026 maturities at market rates. Recovery Assumptions: Fitch assumes the issuer would be restructured as a going concern, with 10% administrative expenses and full draw on revolver assumed at time of default. Going Concern EBITDA: Fitch uses 2023 forecasted EBITDA as a reference point in its analysis, representing the business current run rate profitability and at near full recovery from COVID-19. $372 million GC EBITDA assumes 25% of its leases would be rejected and clubs closed from the 164 total number of clubs at March 31, 2023. Remaining profitable clubs increase revenue per center but decreased scale results in margins recovering to 20%, which is slightly below average forecasted margin for the base case forecast horizon. Debt: Other debt consisting of $116 million of mortgages and a $28 million secured construction loan are treated as senior to the Senior Secured tranche to reflect the claim on their properties from other creditors in the event of a bankruptcy. The Senior Secured tranche includes $310MM of outstanding term loan, $925MM secured notes, a fully drawn $475MM revolver, as well as the Senior Unsecured tranche which consists of the $475 million unsecured note due 2026. Multiple: Fitch assumes an EBITDA multiple of 6.0x reflecting Life Time's strong brand, scale, diversification, and its desirable locations and member demographics. Fitch views these characteristics as superior to the entities referenced below warranting a 6.0x multiple. For reference, LTH has about $2 billion in forecasted 2023 revenues and over $500 million in forecasted EBITDA compared to Pure Gym's approximately $500 million in revenues and $140 million in EBITDA and Gold's Gym's $18 million in EBITDA. Pure Gym, LFT's closest rated peer, assumes a bankruptcy multiple at 5.5x due to its leading share in the growing value-gym market, which justifies a 5.5x multiple, although Pure Gym currently does not have any unique characteristics that would allow for a higher multiple, such as a significant unique brand, material franchise revenue or undervalued real-estate assets. The multiple also references Fitness centers published in Fitch's Gaming, Leisure, Lodging and Restaurants Bankruptcy Enterprise Values and Creditor Recoveries: -- 24-hour Fitness Worldwide, Inc.: 3.5x; -- Bally Total Fitness World Wide, Inc. 3.5x; -- Gold's Gym (GGI Holding, LLC): 5.4x; -- Town Sports International, LLC: 3.1 -- YouFit Health Clubs, LLC: 2.1. Recovery: Fitch's going concern analysis results in a 'BB+'/'RR1'/100% recovery for its senior secured debt tranche and 'B+'/'RR4'/32%' recovery on its unsecured debt tranche. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- EBITDAR leverage sustaining below 4.5x; -- FCFs approaching neutral to positive excluding sale leasebacks; -- Successful execution of growth strategy resulting in increased scale and revenue diversification; -- Issuer successfully addresses 2026 maturities either by refinancing or repayment. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- EBITDAR leverage sustaining above 5.0x; -- Liquidity deterioration resulting in increased uncertainty over issuer's ability to successfully refinance 2026 maturities. LIQUIDITY AND DEBT STRUCTURE Liquidity Robust: LTH had $35 million in cash and $360 million available on its revolving credit facility as of March 31, 2023. The issuer's FFO was $196 million and FFO margin was 11% in 2022. Fitch expects continued strong cash generation as FFO margin is forecasted to increase to over 15% in 2023 and thereafter as the issuer scales and improves profitability. The majority of this cash generation is allocated towards growth capex, but the issuer can pay down debt when necessary and FCF before growth capex is consistently positive outside of COVID-19 impacted years. Fitch expects the issuer to pay down the $85 million outstanding on its revolver by YE23. The issuer also sits on a sizable real estate portfolio which it could use to pay down debt. Maturities Concentrated in 2026: LTH has $1.7 billion in debt maturing in 2026 including its $310 million secured term loan, $925 million secured bonds, and $475 million in unsecured bonds. The issuer has been able to access the capital markets while under stress from COVID-19 and is in a significantly stronger financial position today, however; access to capital may still prove difficult in the event of a liquidity crunch or stressed banking sector. ISSUER PROFILE Life Time Group Holdings, Inc. owns and operates upscale fitness clubs in the U.S. and Canada in affluent markets. As of March 31, 2023, Life Time operated 164 fitness centers in 29 states and one Canadian province and served over 1.4 million individual members comprised of more than 813,000 memberships. Life Time (LTH) completed an IPO on the NYSE in October 2021. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. LINDA SWARZMAN: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Linda Ezor Swarzman. The committee members are: 1. April Morris 1502 Bayou Shore Drive Galveston, TX 77551 Tel: (832) 258-8115 Email: aprilfox@me.com 2. Michelle Smith 704 4th Street League City, TX 77573 Tel: (713) 562-2789 Email: msmith77573@yahoo.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 Linda Ezor Swarzman Linda Ezor Swarzman sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10270) on March 6, 2023. The Debtor is represented by Susan Seflin, Esq. LITTLE K'S LANDSCAPING: Unsecureds to Get 100% Under the Plan ------------------------------------------------------------- Little K's Landscaping, LLC, filed with the U.S. Bankruptcy Court for the District of Connecticut a Plan of Reorganization for Small Business dated July 18, 2023. The Debtor is a landscaping company that was formed in January 26, 2017. The company is the owner of several pieces of large equipment and trucks. The Debtor believed it could satisfy the obligations under the note but was unable to maintain the payments, this Creditors state court action led to the filing of the Chapter 11. The Plan Proponent's financial projections show that the Debtor will have projected disposable income of $2,150.24. The final Plan payment is expected to be $1,827.52. This Plan of Reorganization proposes to pay creditors of the Debtor from cash assets and cash flow from operations. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 100 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 3 consists of all non-priority unsecured claims. Unsecured claims will be paid 100% account on a monthly basis over the life of the plan. Class 4 consists of equity interests of the Debtor. Debtor's member Karl H. Kieslich Jr. will retain his 100% interest in the Debtor. The Debtor intends to fund all plan payments through revenues generated through its normal business operations and funds in the DIP Accounts. A full-text copy of the Plan of Reorganization dated July 18, 2023 is available at https://urlcurt.com/u?l=ltHaGu from PacerMonitor.com at no charge. Attorney for the Debtor: Joseph J. D'Agostino, Jr., Esq. Joseph J. D'Agostino, Jr., LLC 1062 Barnes Road Wallingford, CT 06492 Telephone: (203) 265-5222 Facsimile: (203) 774-1269 Email: joseph@lawjjd.com About Little K's Landscaping Little K's Landscaping, LLC, owns and manages a Landscaping Company in Connecticut. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. D. Conn. Case No. 23-30267) on April 20, 2023, with as much as $1 million in both assets and liabilities. Judge Ann M. Nevins oversees the case. The Debtor is represented by the Law Office of Joseph J. D'Agostino, Jr. LOGMEIN INC: Saratoga Marks $3.9M Loan at 40% Off ------------------------------------------------- Saratoga Investment Corporation has marked its $3,910,000 loan extended to LogMeIn Inc to market at $2,364,651 or 60% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan (1 USD SOFR+ 4.8%, 1% Floor) to LogMeIn Inc. The loan accrues interest at 9.9% per annum. The loan matures on August 31, 2027. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. LogMeIn Inc is a flexible-work provider of software as a service and cloud-based remote work tools for collaboration and IT management. LOYALTY VENTURES: 91% Markdown for Saratoga $3.08M Loan ------------------------------------------------------- Saratoga Investment Corporation has marked its $3,089,630 loan extended to Loyalty Ventures Inc to market at $290,950 or 9% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan B, (Prime+ 5.5%, 0.5% Floor) to Loyalty Ventures Inc. The loan accrues interest at 13.75% per annum. The loan matures on November 3, 2027. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Loyalty Ventures Inc. provides tech-enabled, data-driven consumer loyalty solutions. MARCUSE COMPANIES: Wins Cash Collateral Access Thru Sept 30 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, authorized the Marcuse Companies, Inc., d/b/a Marcuse & Son, Inc. to continue using cash collateral on an interim basis in accordance with its agreement with Frost Bank, the U.S. Small Business Administration, and Westmark Finance and Funding Metrics, LLC. The Debtor is permitted to use cash collateral to pay its direct operating expenses in accordance with the budget, with a 10% variance, through September 30, 2023. The Interested Parties will receive, as adequate protection to the extent of the diminution in value of each of their perfected interests in the cash collateral, a replacement lien in post-petition assets of the same character as their respective prepetition collateral and proceeds of post-petition assets of the same character as their respective prepetition collateral. The Adequate Protection Liens will be: (i) supplemental to and in addition to the prepetition liens or interests of each respective Interested Party; (ii) accorded the same validity and priority as enjoyed by the prepetition liens or interests immediately prior to the Petition Date; and (iii) deemed to have been perfected automatically effective as of the entry of the Order without the necessity of filing of any UCC-1 financing statement, state or federal notice, mortgage or other similar instrument or document in any state or public record or office and without the necessity of taking possession or control of any collateral. As additional adequate protection for the interests of Frost Bank in the cash collateral, the Debtor will continue making adequate protection payments to Frost Bank on or before July 1, 2023, and on the first day of each month thereafter until otherwise directed by the Court or by operation of law, in the amount of $2,042. The adequate protection payments will be applied to accrued post-petition interest calculated at the contractual non-default rate. These events constitute an "Event of Default": (a) 10 days following either an Interested Party's delivery of a notice (either written or via email) of a breach by the Debtor of any obligation under the Order which breach remains uncured or otherwise continues to exist at the end of the 10-day notice period; (b) Conversion of the Debtor's Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code; (c) The appointment of a trustee pursuant to 11 U.S.C. section 1104; and (d) The entry of any order modifying, reversing, revoking, staying, rescinding, vacating or amending the Order without the express prior written consent of Interested Parties (and no such consent will be implied from any action, inaction, course of conduct or acquiescence by Interested Parties). A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=P9S8Ex from PacerMonitor.com. The Debtor projects total cash payments, on a monthly basis, as follows: $127,836 for July 2023; $127,836 for August 2023; and $132,681 for September 2023. About The Marcuse Companies The Marcuse Companies, Inc., d/b/a Marcuse & Son, Inc., is a distributor of air compressors and air compressor parts in North Texas. It also sells industrial sized blast and paint rooms and booths. The Marcuse Companies filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-43146) on Sept. 23, 2022, with $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Sydney A. English, president of The Marcuse Companies, signed the petition. Judge Edward L. Morris presides over the case. Rochelle McCullough, LLP, is the Debtor's legal counsel. MARINE WHOLESALE: Court OKs Cash Collateral Access Thru Jan 2024 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, authorized Marine Wholesale and Warehouse, Co. to use cash collateral on an interim basis during the period between entry of the order and January 2024, in accordance with the budget. As adequate protection from and against any diminution in the value of their interests in cash collateral, all persons and entities that hold perfected security interests in the Debtor's cash collateral are granted replacement liens in all of the Debtor's post-petition assets, other than recoveries from avoiding power actions, which liens will have the same validity, priority and extent as their prepetition liens. As additional adequate protection for the liens asserted by the U.S. Small Business Administration, the Debtor will make the monthly payments due the SBA under the parties' prepetition agreements in cash in the amount of $731 per month, commencing on August 1, 2022, and continuing on the first business day of each calendar month thereafter. As additional adequate protection for the liens asserted by the Alcohol and Tobacco Tax and Trade Bureau, pending the conclusion of the Final Hearing, the TTB may continue to hold without penalty the funds (in the amount of approximately $213,699 that were levied by the TTB prior to the commencement of the bankruptcy case. A copy of the order is available at https://urlcurt.com/u?l=aydp5N from PacerMonitor.com. About Marine Wholesale and Warehouse Co. Marine Wholesale and Warehouse Co. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-13785) on July 12, 2022. In the petition signed by Jennifer Hartry, vice president and secretary, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Sheri Bluebond oversees the case. David R. Haberbush, Esq., at Haberbush, LLP is the Debtor's counsel. MEDASSETS SOFTWARE: Saratoga Marks $495,000 Loan at 16% Off ----------------------------------------------------------- Saratoga Investment Corporation has marked its $495,000 loan extended to MedAssets Software Inter Hldg, Inc to market at $413,637 or 84% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan (3M USD LIBOR + 4%, 1% Floor) to MedAssets Software Inter Hldg, Inc. The loan accrues interest at 9.15% per annum. The loan matures on December 18, 2028. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Headquartered in Alpharetta, GA, MedAssets Software Intermediate Holdings, Inc. (dba nThrive) provides healthcare revenue cycle management software-as-a-service (Saas) solutions, including patient access, charge integrity, claims management, contract management, analytics and education. MEDIAMATH HOLDINGS: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------------- The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Chapter 11 case of MediaMath Holdings, Inc. The committee members are: 1. Magnite, Inc. Attn: Aaron Saltz 1250 Broadway, 15th Floor New York, NY 10001 Phone: 212-243-2769 Email: asaltz@magnite.com 2. PubMatic, Inc. Attn: Andrew Woods 601 Marshall Street Redwood City, CA 94063 Phone: 650-331-3485 Email: Andrew.woods@pubmatic.com 3. Equ Smart AdServer SAS Attn: Laurydana Mendes 66 Ruede la Chausse & Anhm Phone: +33 640 835478 Email: accounting@equativ.com 4. LiveRamp, Inc. Attn: Andrew Lucking 301 Main Street, 2nd Floor Little Rock, AR 72201 Phone: 845-325-4668 Email: Andrew.lucking@liveramp.com 5. Unruly Group US Holding, Inc. Attn: Amy Rothstein 3600 136th Place, SE Suite 400 Bellevue, WA 98006 Email: legal@unrulygroup.com 6. Presidio Network Solutions LLC Attn: Manny Korakis Attn: Jay Staples 1 Penn Plaza, Suite 2501 New York, NY 10119 Phone: 631-240-0659 Email: mkorakis@presidio.com jstaples@presidio.com 7. Justin Adler-Swanberg c/o Raisner Roupinian LLP Attn: Rene S. Roupinian 270 Madison Avenue, Suite 1801 New York, NY 10016 Phone: 212-221-1747 Fax: 212-221-1747 Email: rsr@raisnerroupinian.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 MediaMath Holdings MediaMath Holdings, Inc. develops and delivers digital advertising media and data management technology solutions to advertisers. The company is based in New York. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10882) on June 30, 2023. In the petition signed by Neil Nguyen, chief executive officer, the Debtor disclosed up to $500 million in both assets and liabilities. As of the petition date, the Debtor had about $95 million of first lien funded debt. Judge Laurie Selber Silverstein oversees the case. The Debtor tapped Young Conaway Stargatt & Taylor, LLP as legal counsel; FTI Consulting, Inc. as financial advisor; and Epiq Corporate Restructuring, LLC as claims and noticing agent and administrative advisor. MEDICAL CONSTRUCTION: Unsecureds Will Get 2.6% of Claims in Plan ---------------------------------------------------------------- Medical Construction Industrial Training Center, LLC, filed with the U.S. Bankruptcy Court for the District of New Jersey a Subchapter V Plan of Reorganization dated July 18, 2023. The Debtor is single member LLC in the business of providing training to individuals who wish to work in certain trades. The Debtor is owned and operated by its principal, Carol Johnston. The Debtor commenced operations in 1998 but became an LLC in 2016. The Debtor has the following debts: $81,251 owed to On Deck Capital (claimed to be secured); $25,023 owed to Caterpillar (secured); $416,919 claim by Earle Investments (claimed to be secured); $44,258 owed to Simmons Bank (secured); $1,200,000 owed to SBA for an EIDL loan (secured); and $162,571 Unsecured debt. The Debtor's operations were significantly affected by the COVID pandemic as the Debtor was unable to operate for a period of time during 2020. Additionally, State funding for the Debtor's students was cut dramatically during that time, resulting in a great amount of lost revenue. At the same time, the Debtor had to defend itself against the Receiver lawsuit and the Earle lawsuit, which drained its resources to an unsustainable degree, leading to the filing of this bankruptcy case. To make matters worse, the leased property occupied by the Debtor flooded in early 2023, which resulted in the Debtor being unable to operate for several months while the landlord made repairs to the leased premises. Class 6 consists of General Unsecured Claims, including any unsecured portion of secured claim of On Deck, Earle Investments, LLC and SBA. A total of $48,000 will be paid to general unsecured creditors, to be distributed pro-rata. The Debtor estimates this will result in a distribution of approximately 2.6%. This Class is impaired. Equity Interest holders shall retain ownership of Debtor/Reorganized Debtor. In addition to direct payments made to administrative claimants, Caterpillar, On Deck and Simmons Bank, the Debtor shall make monthly payments of $1,000 towards the Chapter 11 Plan obligations (general unsecured creditors). The payment will be made to the Disbursing Agent, every three months, commencing on the Effective Date. The Debtor must submit all or such portion of the future earnings or other future income of the Debtor to the supervision and control of the Trustee as is necessary for the execution of the Plan. A full-text copy of the Plan of Reorganization dated July 18, 2023 is available at https://urlcurt.com/u?l=dVO7tY from PacerMonitor.com at no charge. Debtor's Counsel: Ellen M. McDowell, Esq. MCDOWELL LAW, PC 46 West Main St. Maple Shade, NJ 08052 Tel: 856-482-5544 Fax: 856-482-5511 Email: emcdowell@mcdowelllegal.com About Medical Construction Medical Construction Industrial Training Center, LLC is single member LLC in the business of providing training to individuals who wish to work in certain trades. The Debtor filed Chapter 11 Petition (Bankr. D.N.J. Case No. 23-13260) on April 19, 2023, with $250,705 in assets and $1,585,269 in liabilities. Carol Johnston, owner/director, signed the petition. Ellen M. McDowell, Esq. of MCDOWELL LAW, PC serves as the Debtor's counsel. MIDWEST VETERINARY: Moody's Alters Outlook on 'B3' CFR to Stable ---------------------------------------------------------------- Moody's Investors Service revised Midwest Veterinary Partners, LLC's ("MVP") outlook to stable from negative. At the same time, Moody's affirmed MVP's B3 Corporate Family Rating, B3-PD Probability of Default Rating, and B3 ratings on the senior secured first lien credit facilities. The outlook revision to stable from negative reflects Moody's expectation that the company will maintain a good liquidity profile with credit metrics supportive of the rating over the next 12 to 18 months - including sustained positive free cash flow. There is greater clarity on the true underlying cash generating ability of the company as reported EBITDA and cash flows have rapidly improved as of June 30, 2023. To that end, the company generated $133 million of reported LTM EBITDA at June 30, 2023, in comparison to just $1 million at December 31, 2021. Moody's expects that leverage will remain high (7.2 times Moody's adjusted debt to EBITDA as of June 30, 2023), as Moody's believes MVP will resume its long-term roll-up, debt-funded acquisition strategy over time - if and when funding conditions are supportive. Governance risk is a factor in this rating action. In recent quarters, MVP has substantially moderated its pace of acquisition activity, driving improved liquidity and cash flows. In addition, MVP's private equity owners have contributed substantial equity to support growth. Moody's believes governance risks are relatively lower as compared to the company's previous period of rapid growth through mid-2022. Affirmations: Issuer: Midwest Veterinary Partners, LLC Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Backed Senior Secured 1st Lien Term Loan, Affirmed B3 Backed Senior Secured 1st Lien Revolving Credit Facility, Affirmed B3 Outlook Actions: Issuer: Midwest Veterinary Partners, LLC Outlook, Changed To Stable From Negative RATINGS RATIONALE Midwest Veterinary Partners, LLC's ("MVP") B3 Corporate Family Rating reflects its high financial leverage with Moody's-adjusted pro forma debt-to-EBITDA of 7.2x for the LTM period ending June 30, 2023. Moody's expects MVP's high leverage to persist, with the company continuing to pursue debt-funded acquisitions if and when funding conditions are supportive. The ratings reflect risks from the company's roll-up acquisition strategy, including possible integration challenges, as well as acquisition expenses that can constrain cash flow generation. That said, MVP has materially reduced its acquisition activity over the past few quarters, aiding in improved reported EBITDA conversion and positive free cash flow generation. MVP's rating is supported by favorable long-term trends in the pet care sector that underpin Moody's expectation for healthy same-store revenue in the mid-single-digit range over the next few years. Moody's believes that ongoing pricing actions and other cost saving measures will support margin expansion and earnings growth over the next 12-18 months. While the labor market for veterinarians and vet technicians remains challenging, MVP has benefitted from relatively modest employee turnover as it has continued to raise wages in tandem with customer pricing. MVP's good liquidity profile is supported by its cash balance of approximately $22 million as of June 30, 2023, and an undrawn $40mm revolver expiring in 2026. Moody's expects that MVP will generate positive free cash flow of around $20 million in FY2023. There are no financial maintenance covenants, although the revolver has a springing first lien net leverage ratio covenant (set at 7.93x with no step-downs), when the revolver draw exceeds 35% of the total commitment. Moody's believe that the company will have ample cushion under the covenant in the event that it is tested in forward periods. MVP's CIS-4 (previously CIS-5) indicates the rating is lower than it would have been if ESG risk exposures did not exist. The score reflects governance risks (G-4, previously G-5) driven by MVP's aggressive financial policies under private equity ownership, including its historical rapid pace of debt-funded acquisitions. That said, in recent quarters, MVP has substantially moderated its pace of acquisition activity, driving reduced EBITDA addbacks, lower leverage, and improved liquidity with positive free cash flow. In addition, MVP's private equity owners have contributed substantial equity to support growth. While Moody's expects MVP to resume its aggressive roll-up acquisition strategy over time as conditions dictate, Moody's believes governance risks are relatively lower as compared to the company's previous period of rapid growth from 2020 through the majority of 2022. The score also reflects MVP's exposure to social risks (S-4), primarily from human capital. MVP is reliant upon a highly specialized workforce (veterinarians and vet technicians) that exposes the company to elevated risks from labor supply and/or inflationary pressures. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company delivers sustained revenue and earnings growth and is successful in integrating acquisitions. Moderation of financial policies, partially evidenced by financial leverage sustained below 6.5 times, while maintaining good cash flows and solid liquidity could also support an upgrade. The ratings could be downgraded if operational performance deteriorates, or liquidity weakens. Inability to manage the company's rapid growth, or if EBITA-to-interest falls below one times, could also put downgrade pressure on the company's ratings. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Headquartered in Southfield, Michigan, Midwest Veterinary Partners, LLC (d/b/a "Mission Veterinary Partners" or "MVP") is a national veterinary hospital consolidator, offering a full range of medical products and services, and operating approximately 324 general practice locations across 35 states. The company generated pro forma revenues of approximately $986 million for the last twelve months ending March 31, 2023. MVP is a portfolio company of private equity firm Shore Capital Partners. MLCJR LLC: Agrees to Formation of Ad Hoc Statutory Lien Committee ----------------------------------------------------------------- MLCJR, LLC entered into a stipulation to resolve the motion filed by Cardinal Coil Tubing, LLC and Cardinal Slickline, LLC for appointment of an official committee of statutory lien creditors in the company's Chapter 11 case. Under the stipulation, MLCJR, the Cardinal creditors, the official committee of unsecured creditors and Amarillo National Bank, as agent for the debtor-in-possession lenders, agreed to the formation of an ad hoc committee of statutory lien creditors in exchange for the withdrawal of the motion. As representative of statutory lien creditors, the ad hoc committee shall be treated as a "party-in-interest" in MLCJR's Chapter 11 case that "may appear and be heard" and shall be consulted on matters related to the proposed sale of the company's assets. The ad hoc committee, however, shall not have the duty or authority to: (i) Investigate or prosecute any challenge rights against the "prepetition secured parties" or "DIP secured parties" under or in any way related to the final DIP order, and the ad hoc committee shall not have standing or capacity, either as a committee or on behalf of any lien claimant, to bring any action against or objection to any claim and lien right of the prepetition secured parties or DIP secured parties; (ii) Join or otherwise become a party in or to any action involving a challenge to the validity, priority or extent of any statutory lien, provided, however, that the ad hoc committee shall have the capacity and authority to represent statutory lien creditors in any contested proceeding related to the lien identification procedures motion; and (iii) File or prosecute any claims of a statutory lien creditor individually. The stipulation was approved by Judge Christopher Lopez of the U.S. Bankruptcy Court for the Southern District of Texas. A copy of the stipulation can be accessed for free at http://bankrupt.com/misc/MLCJR_CardinalStipulation.pdf Attorneys for Cardinal Coil Tubing, LLC, and Cardinal Slickline, LLC: David L. Curry, Esq. Christopher Adams, Esq. Edward A. Clarkson, Esq. 1113 Vine Street, Suite 240 Houston, TX 77002 Tel: (713) 228-4100 Fax: (346) 247-7158 Email: cadams@okinadams.com Email: dcurry@okinadams.com Email: eclarkson@okinadams.com Counsel for Amarillo National Bank: Louis M. Phillips, Esq. KELLY HART PITRE One American Place 301 Main Street, Suite 1600 Baton Rouge, LA 70801-1916 Tel: (225) 381-9643 Fax: (225) 336-9763 Email: louis.phillips@kellyhart.com - and - Erin K. Arnold, Esq. KELLY HART PITRE 400 Poydras Street, Suite 1812 New Orleans, LA 70130 Tel: (504) 522-1812 Fax: (504) 522-1813 Email: erin.arnold@kellyhart.com - and - Roger S. Cox, Esq. Mike Smiley, Esq. Samantha Espino, Esq. UNDERWOOD LAW FIRM P. O. Box 9158 Amarillo, TX 79105-9158 Tel: (806) 242-9651 Fax: (806) 379-0316 E-mail: roger.cox@uwlaw.com Proposed Counsel to the Official Committee of Unsecured Creditors: Charles R. Koster, Esq. WHITE & CASE LLP 609 Main Street, Suite 2900 Houston, TX 77002 Tel: (713) 496-9700 Email: charles.koster@whitecase.com - and - Gregory F. Pesce, Esq. William A. Guerrieri, Esq. Erin Rosenberg, Esq. WHITE & CASE LLP 111 South Wacker Drive, Suite 5100 Chicago, IL 60606 Tel: (312) 881-5400 Email: gregory.pesce@whitecase.com william.guerrieri@whitecase.com erin.rosenberg@whitecase.com - and - Philip Abelson, Esq. Camille M. Shepherd, Esq. WHITE & CASE LLP 1221 Avenue of the Americas New York, New York 10020 Tel: (212) 819-8200 Email: philip.abelson@whitecase.com camille.shepherd@whitecase.com About MLCJR LLC, Cox Operating et al. Cox Operating L.L.C. -- https://coxoperating.com/ -- and several affiliated entities including Cox Oil Offshore, L.L.C., Energy XXI GOM, LLC, Energy XXI Gulf Coast, LLC, EPL Oil & Gas, LLC, M21K, LLC, and MLCJR, LLC, a group of affiliated companies whose business involves the extraction of offshore oil and gas in the Gulf of Mexico. They are privately held entities indirectly owned by Cox Investment Partners, LP, through Phoenix Petro Services LLC. On May 12, 2023, certain trade creditors filed an involuntary petition under Chapter 7 of the Bankruptcy Code against Cox Operating (Bankr. E.D. La. Case No. 23-10734). The petitioning creditors -- Keystone Chemical, LLC, et al. -- are represented by the Slyvester Law Firm. Cox Operating and its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90328) on May 14, 2023. The cases are jointly administered under In re MLCJR LLC (Bankr. S.D. Tex. Lead Case No. 23-90324). In the petitions signed by Craig Sanders, authorized person, the Debtors disclosed up to $500 million in estimated assets and in liabilities. Judge Christopher Lopez oversees the Debtors' cases. Lawyers at Latham & Watkins, LLP and Jackson Walker LLP represent the Debtors as legal counsel. Moelis & Debtor LLC, led by its managing director Bassam J. Latif, is the Debtors' investment banker while Ryan Omohundro, a partner at Alvarez & Marsal North America, LLC, serves as the Debtors' chief restructuring officer. Kroll Restructuring is the claims and noticing agent. An official committee of unsecured creditors has retained White & Case LLP as counsel. Kelly Hart & Pitre LLP and Underwood Law Firm, P.C., serve as counsel to Amarillo National Bank, as Prepetition Lender and Prepetition Collateral Agent, and as DIP Agent for the Debtor-in-Possession Lenders. Haynes and Boone LLP serves as counsel to BP Energy Debtor as Prepetition Swap Party, and Houlihan Lokey, Inc. as its financial advisor, and Looper Goodwine P.C. as its regulatory counsel. On May 26, 2023, the Office of the United States Trustee appointed an official committee of unsecured creditors. The committee tapped White & Case as counsel and Huron Consulting LLC as its financial advisor. MLCJR LLC: Committee Gets OK to Hire White & Case as Legal Counsel ------------------------------------------------------------------ The official committee of unsecured creditors of MLCJR LLC and its affiliates received approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ White & Case, LLP. The committee requires legal counsel to: (a) give advice regarding the rights, powers and duties of the committee under the Bankruptcy Code and in connection with the Debtors' Chapter 11 cases; (b) assist the committee in its consultations and negotiations with the Debtors concerning the administration of the cases; (c) assist the committee in its examination, investigation, and analysis of the acts, conduct, assets, liabilities, and financial condition of the Debtors, including without limitation, reviewing and investigating pre-bankruptcy transactions, the operation of the Debtors' business, and the desirability of the continuance of such business; (d) assist the committee in the formulation, review, analysis and negotiation of any Chapter 11 plan that has been or may be filed, and assist the committee in the formulation, review, analysis, and negotiation of the disclosure statement accompanying the plan; (e) take all necessary action to protect and preserve the interests of the committee and creditors holding general unsecured claims against the Debtors' estates, including (i) the investigation and possible prosecution of actions enhancing the Debtors' estates, such as any potential challenges to the scope of the security interests of their pre-bankruptcy lenders, and (ii) review and analysis of claims filed against the estates; (f) review and analyze motions, applications, orders, statements of operations and schedules filed with the court and advise the committee as to their propriety; (g) prepare legal papers; (h) represent the committee at all court hearings, statutory meetings of creditors, and other court proceedings; (i) assist the committee in the review, analysis and negotiation of any financing agreements; (j) assist and advise the committee as to its communications with its constituents regarding significant matters in these Chapter 11 cases; and (k) perform other necessary legal services. White & Case will be paid at these rates: Partners $1,370 to $2,100 per hour Counsel $1,310 per hour Associates $740 to $1,270 per hour Paraprofessionals $215 to $640 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Gregory Pesce, Esq., a partner at White & Case, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Gregory F. Pesce, Esq. White & Case LLP 111 South Wacker Drive, Suite 5100 Chicago, IL 60606 Tel: (312) 881-5400 Email: gpesce@whitecase.com About MLCJR LLC, Cox Operating et al. Cox Operating L.L.C. -- https://coxoperating.com/ -- and several affiliated entities including Cox Oil Offshore, L.L.C., Energy XXI GOM, LLC, Energy XXI Gulf Coast, LLC, EPL Oil & Gas, LLC, M21K, LLC, and MLCJR, LLC, a group of affiliated companies whose business involves the extraction of offshore oil and gas in the Gulf of Mexico. They are privately held entities indirectly owned by Cox Investment Partners, LP, through Phoenix Petro Services LLC. On May 12, 2023, certain trade creditors filed an involuntary petition under Chapter 7 of the Bankruptcy Code against Cox Operating (Bankr. E.D. La. Case No. 23-10734). The petitioning creditors -- Keystone Chemical, LLC, et al. -- are represented by the Slyvester Law Firm. Cox Operating and its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90328) on May 14, 2023. The cases are jointly administered under In re MLCJR LLC (Bankr. S.D. Tex. Lead Case No. 23-90324). In the petitions signed by Craig Sanders, authorized person, the Debtors disclosed up to $500 million in estimated assets and in liabilities. Judge Christopher Lopez oversees the Debtors' cases. Lawyers at Latham & Watkins, LLP and Jackson Walker LLP represent the Debtors as legal counsel. Moelis & Debtor LLC, led by its managing director Bassam J. Latif, is the Debtors' investment banker while Ryan Omohundro, a partner at Alvarez & Marsal North America, LLC, serves as the Debtors' chief restructuring officer. Kroll Restructuring is the claims and noticing agent. Kelly Hart & Pitre LLP and Underwood Law Firm, P.C., serve as counsel to Amarillo National Bank as Prepetition Lender and Prepetition Collateral Agent. Haynes and Boone LLP serves as counsel to BP Energy Debtor as Prepetition Swap Party, and Houlihan Lokey, Inc. as its financial advisor, and Looper Goodwine P.C. as its regulatory counsel. On May 26, 2023, the U.S. Trustee for Region 7 appointed an official committee of unsecured creditors. The committee tapped White & Case as legal counsel, Huron Consulting LLC as financial advisor, and Fishman Haygood, LLP as special counsel. MLN US HOLDCO: abrdn Fund Marks $1.8M Loan at 45% off ----------------------------------------------------- abrdn Income Credit Strategies Fund has marked its $1,898,241 loan extended to MLN US Holdco LLC to market at $1,044,032 or 55% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in abrdn Fund's Form N-CSR report for the semi-annual period ended April 30, 2023, filed with the Securities and Exchange Commission. abrdn Fund is a participant in a Bank Loan to MLN US Holdco LLC. The loan accrues interest at 11.78% per annum. The loan matures on November 1, 2027. abrdn Income Credit Strategies Fund is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company. The Fund commenced operations on January 27, 2011. MLN US Holdco LLC, dba Mitel, headquartered in Ottawa, Canada, provides phone systems, collaboration applications (voice, video calling, audio and web conferencing, instant messaging etc.) and contact center solutions through on-site and cloud offerings. The company’s customer focus is on small and medium sized businesses. Mitel is majority-owned by private equity firm Searchlight Capital Partners. MLN US HOLDCO: abrdn Fund Marks $952,000 Loan at 52% Off -------------------------------------------------------- abrdn Income Credit Strategies Fund has marked its $952,345 loan extended to MLN US Holdco LLC to market at $457,126 or 48% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in abrdn Fund's Form N-CSR report for the semi-annual period ended April 30, 2023, filed with the Securities and Exchange Commission. abrdn Fund is a participant in a 2022 Third Out Term Loan to MLN US Holdco LLC. The loan accrues interest at 14.33% per annum. The loan matures on October 18, 2027. abrdn Income Credit Strategies Fund is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company. The Fund commenced operations on January 27, 2011. MLN US Holdco LLC, dba Mitel, headquartered in Ottawa, Canada, provides phone systems, collaboration applications (voice, video calling, audio and web conferencing, instant messaging etc.) and contact center solutions through on-site and cloud offerings. The company's customer focus is on small and medium sized businesses. Mitel is majority-owned by private equity firm Searchlight Capital Partners. MONEYGRAM INT'L: Saratoga Marks $2M Loan at 17% Off --------------------------------------------------- Saratoga Investment Corporation has marked its $2,000,000 loan extended to MoneyGram International, Inc to market at $1,660,000 or 83% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a MoneyGram Payment Term Loan (1M USD SOFR+ 5.5%, 0.5% Floor) to MoneyGram International, Inc. The loan accrues interest at 10.55% per annum. The loan matures on May 31, 2030. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. MoneyGram International, Inc. (New) is a global provider of consumer money transfer services. MPH ACQUISITION: Saratoga Marks $2.9M Loan at 16% Off ----------------------------------------------------- Saratoga Investment Corporation has marked its $2,984,848 loan extended to MPH Acquisition Holdings LLC to market at $2,501,064 or 84% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan B (3M USD LIBOR+ 4.3%, 0.5% Floor) to MPH Acquisition Holdings LLC. The loan accrues interest at 9.73% per annum. The loan matures on September 1, 2028. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. MPH Acquisition Holdings LLC, doing business as MultiPlan, provides health care solutions. The Company offers payment integrity, network, and analytics-based solutions. MultiPlan serves customers in the United States. MRUCKER INDUSTRIES: Seeks to Hire The Lane Law Firm as Counsel -------------------------------------------------------------- Mrucker Industries, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ The Lane Law Firm, PLLC. The Debtor requires legal counsel to: a. assist the Debtor relative to the administration of its Chapter 11 case; b. assist the Debtor in analyzing its assets and liabilities, investigating the extent and validity of lien and claims, and participating in and reviewing any proposed asset sales or dispositions; c. attend meetings and negotiate with representatives of secured creditors; d. assist the Debtor in the preparation, analysis and negotiation of any plan of reorganization and disclosure statement; e. take all necessary action to protect and preserve the interests of the Debtor; f. appear, as appropriate, before the bankruptcy court or any other courts and the Office of the U.S. Trustee; and g. perform all other necessary legal services. The firm will be paid at these rates: Robert C. Lane, Partner $550 per hour Joshua D. Gordon, Partner $500 per hour Associate Attorneys $375 to $425 per hour Bankruptcy Paralegals/Legal Assistants $150 to $190 per hour In addition, the firm will seek reimbursement for expenses incurred. The firm received payments for its retainer in the amount of $52,000 between April 5 and May 12, 2023, and $52,500 for financial advice and representation of the Debtor. Mr. Lane disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert C. Lane, Esq. Joshua D. Gordon, Esq. The Lane Law Firm, PLLC 6200 Savoy, Suite 1150 Houston, TX 77036 Telephone: (713) 595-8200 Facsimile: (713) 595-8201 Email: notifications@lanelaw.com joshua.gordon@lanelaw.com About Mrucker Industries Mrucker Industries, Inc. offers residential remodeling, construction, cabinetry, countertops, and electrical and plumbing services. The company is based in Hutto, Texas. Mrucker Industries filed its voluntary petition for Chapter 11 protection (Bankr. W.D. Texas Case No. 23-10458) on June 29, 2023, with $1,040,182 in assets and $1,687,047 in liabilities. Maxwell Rucker, chief executive officer, signed the petition. Judge Shad Robinson oversees the case. Robert C. Lane, Esq., at The Lane Law Firm serves as the Debtor's legal counsel. MULEHOUSE GROUP: Court OKs Interim Cash Collateral Access --------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee, Columbia Division, authorized Mulehouse Group, Inc. and Coalesce Media, LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of cash collateral for ordinary and necessary operating expenses of business operations. The Debtors are indebted to First Horizon pursuant to promissory notes executed by Debtor Coalesce and/or Debtor Mulehouse in favor of First Horizon and guaranteed by Debtor Mulehouse pursuant to guaranty agreements, which Notes are secured by property of both Debtors, as evidenced by the following documents, among others: 1. U.S. Small Business Administration Note, dated February 26, 2020, in the original principal amount of $4.319 million executed by Coalesce in favor of First Horizon, as modified by U.S. Small Business Administration Note, dated February 26, 2021, executed by Debtors Coalesce and Mulehouse; 2. Revolving Credit Note, dated September 14, 2022, executed by Coalesce in favor of First Horizon; 3. U.S. Small Business Administration Unconditional Guarantee agreement dated February 26, 2020, executed by Mulehouse guaranteeing to First Horizon the indebtedness of Coalesce under the SBA Note; 4. Guaranty and Suretyship Agreement dated September 14, 2022, executed by Mulehouse guaranteeing to First Horizon the indebtedness of Coalesce under the 2022 Note; 5. Deed of Trust dated February 26, 2020, executed by Debtor Coalesce and recorded with the Register's Office of Maury County, Tennessee, at Book R2615, Pages 1241-1261, as modified; 6. Assignment of Leases and Rents dated February 26, 2020, executed by Debtor Coalesce and recorded with the Register's Office of Maury County, Tennessee, at Book R2615, Pages 1262-1268; 7. Security Agreement - Commercial dated February 26, 2020, executed by Debtor Coalesce; 8. Tennessee Deed of Trust dated September 14, 2022, executed by Debtor Coalesce and recorded with the Register's Office of Maury County, Tennessee, at Book R2875, Pages 872-880, as modified; 9. Security Agreement - Commercial dated February 26, 2021, executed by Debtor Mulehouse; and 10. UCC Financing Statements filed with the Tennessee Secretary of State as to both Debtors. As adequate protection First Horizon is granted a post-petition replacement lien on property of Debtors pursuant to and in accordance with 11 U.S.C. sections 361(2) and 552(b) to the extent of cash collateral actually expended, on the same assets and in the same order of priority to the extent validly held as of the Petition Date. Subject to a final hearing in which First Horizon or the Debtors establish that First Horizon's collateral is depreciating at a rate of $10,000 per month, the Debtors will make adequate protection payments to First Horizon in the amount of $10,000 per month, commencing on August 1, 2023, and continuing on the first of each month thereafter until the Debtors' Chapter 11, Subchapter V, Plan is confirmed by the Court. The Debtors will continue to maintain, insure for its full value, and otherwise preserve and protect the Collateral as long as the Collateral serves as First Horizon's Collateral. A final hearing on the matter is set for August 8 at 9:30 a.m. The Debtors' right to use any cash collateral will immediately terminate upon the earlier of (i) 60 days from entry of the Order, or (ii) the occurrence of any one or more of the following: a trustee is appointed in the Chapter 11 case; the case is converted to a Chapter 7 proceeding under the Bankruptcy Code; an order is entered granting relief from the stay to any party other than First Horizon as to any of the Collateral securing Debtors' obligations to First Horizon; an order is entered in this case over the objection of First Horizon granting a lien on any collateral securing the Debtors' obligations to First Horizon; the Interim Order is modified without First Horizon's consent, is vacated, stayed or is for any reason not binding on Debtors; or the Debtors use cash collateral other than as expressly authorized in the Interim Order. A copy of the order is available at https://urlcurt.com/u?l=lUm022 from PacerMonitor.com. About Mulehouse Group Mulehouse Group, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-02258) on June 26, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Randal S. Mashburn oversees the case. Griffin S. Dunham, Esq., at Dunham Hildebrand, PLLC is the Debtor's legal counsel. NAPA MANAGEMENT: Saratoga Marks $2.9M Loan at 27% Off ----------------------------------------------------- Saratoga Investment Corporation has marked its $2,992,443 loan extended to Napa Management Services Corp to market at $2,179,995 or 73% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan B (1M USD SOFR+ 5.3%, 0.8% Floor) to Napa Management Services Corp. The loan accrues interest at 10.49% per annum. The loan matures on February 22, 2029. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. NAPA Management Services Corporation offers practice management services. The Company provides accounting, billing, consulting, medical personnel contracting, healthcare analyzes, financing, human resources, information technology, insurance, marketing, and operational support services. NASHEF LLC: Court OKs Cash Collateral Access Thru Aug 11 -------------------------------------------------------- Nashef LLC sought and obtained entry of an order from the U.S. Bankruptcy Court for the District of Massachusetts for authority to use cash collateral on an interim basis in accordance with the budget, through August 11, 2023. The Debtor requires the use of cash collateral to pay mortgages, insurance premiums and property taxes. The Debtor owns two pieces of real estate: (1) 338 Park Avenue in Worcester, Massachusetts. This property has a single commercial building on it. The sole tenant is Boston Donuts, Inc. (a donut and coffee shop); and (2) 342 West Boylston Street in Worcester, Massachusetts. This property is a commercial property with Munro Associates, LLC as the asserted sole tenant. Munro Associates, LLC and the Debtor are currently in litigation in Worcester Superior Court. Munro continues to pay $2,500 per month towards the rent. Hometown Bank asserts it is owed approximately $1.3 million by Nashef LLC. Hometown has a secured mortgage on both the 338 Park Avenue and 342 West Boylston properties, and may assert a cash collateral lien on rents and proceeds from those two properties. Harvard Funding LLC asserts it is owed approximately $100,000 by Nashef LLC. Harvard has a secured mortgage on both properties and may assert a cash collateral lien on rents and proceeds from those two properties. The Internal Revenue Service has a recorded tax lien on both properties. The tax lien is not against the Debtor but, rather, against the Debtor's principal and sole stockholder Eyad Nashef. The amount of the recorded tax lien is $100,255. It is not clear that the IRS may assert a cash collateral lien on rents and proceeds from those two properties. The Massachusetts Department of Revenue has recorded tax liens on both properties. The tax liens are not against the Debtor but, rather, against the Debtor's principal and sole stockholder Eyad Nashef and against Boston Donuts, Inc. Boston Donuts, Inc. is owned by the same individual who owns the Debtor. The total amount of the recorded tax liens are approximately $150,000. It is not clear that that the MDOR may assert a cash collateral lien on rents and proceeds from those two properties. The Massachusetts Department of Unemployment Assistance has a recorded lien on both properties. The lien is not against the Debtor but, rather, against Boston Donuts, Inc., which is also owned by Eyad Nashef. The amount of the recorded lien is $20,720. It is not clear that the MDUA may assert a cash collateral lien on rents and proceeds from those two properties. The Debtor had cash assets of approximately $2,500 at the time of the bankruptcy filing. Besides claims against Hometown and Munroe currently pending in lawsuits, the Debtor has no other non-real estate assets. A further hearing on the matter is set for August 31 at 11:30 a.m. A copy of the motion is available at https://urlcurt.com/u?l=OV2Cze from PacerMonitor.com. About Nashef LLC Nashef LLC is a real estate holding company that owns two pieces of real estate. Eyad Nashef is the Debtor's principal and sole stockholder. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-40418) on May 31, 2023. In the petition signed by Eyad Nashef, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Elizabeth D Katz oversees the case. James P. Ehrhard, Esq., at Ehrhard & Associates, PC, represents the Debtor as legal counsel. NATIONAL MENTOR: Saratoga Marks $2.7M Loan at 26% Off ----------------------------------------------------- Saratoga Investment Corporation has marked its $2,729,081 loan extended to National Mentor Holdings, Inc to market at $2,027,025 or 74% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan (3M USD LIBOR+ 3.8%, 0.8% Floor) to National Mentor Holdings, Inc. The loan accrues interest at 8.48% per annum. The loan matures on March 2, 2028. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. National Mentor Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides community-based services for people with injuries and disabilities. NAVACORD CORP: S&P Rates New 350MM First-Lien Term Loan 'B-' ------------------------------------------------------------ S&P Global Ratings assigned its 'B-' issue rating to Navacord Corp.'s proposed US$350 million (about C$460 million) first-lien term loan due 2030 (issued by financing subsidiary Jones DesLauriers Insurance Management Inc.). S&P also assigned a '3' recovery rating to the loan, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 55%) in the event of payment default. All existing ratings, including the 'B-' issuer credit rating on Navacord, are unchanged by the new debt issuance. Navacord is using the proceeds primarily to refinance its existing Canadian term loan B (C$383 million as of the second quarter ended April 2023), as well as to add cash to the balance sheet to fund its acquisition pipeline. Pro forma for this issuance, S&P estimates leverage in the low-9x area (including annualized earnings from deals closed through July, including the Home Hardware Financial acquisition) and EBITDA coverage (using current Canadian dollar offer rates) in the low-1x area for the 12 months ended April 30, 2023. These measures are relatively in line with those following the $125 million senior secured notes add-on in June, and remain weaker than those of similarly sized 'B'-rated peers. S&P expects leverage and EBITDA coverage to improve modestly in 2023 through continued robust organic growth (at 11.7% year to date through April 30, 2023) and as the company deploys balance-sheet cash toward acquisitions (currently under letters of intent and otherwise). NEW BEGINNING: Aug. 29 Plan Confirmation Hearing Set ---------------------------------------------------- Judge Robert A. Mark has entered an order conditionally approving the Disclosure Statement of New Beginning Missionary Baptist Church, Inc. The Court will conduct the confirmation hearing and consider final approval of the Disclosure Statement and any timely-filed fee applications will be on August 29, 2023 at 1:30 p.m. in 301 N Miami Ave. Courtroom #4, Miami FL 33128. All other interested parties may choose to attend the hearing remotely using the services of Zoom Video Communications, Inc., which permits remote participation by video or by telephone. These deadlines apply with respect to the confirmation hearing and hearing on fee applications: * The Deadline for Serving this Order, disclosure statement, plan, and ballots (30 days before the confirmation hearing) will be on August 1, 2023. * The Deadline for Objections to Claims (14 days before the confirmation hearing) will be on August 15, 2023. * The Deadline for Filing and Serving Fee Applications (24 days before the confirmation hearing) will be on August 5, 2023. * The Deadline for Filing and Serving Notice Summarizing All Fee Applications (21 days before the confirmation hearing) will be on August 8, 2023. * The Deadline for Filing Ballots Accepting or Rejecting the Plan (7 days before the confirmation hearing, per Local Rule 3018-1) will be on August 22, 2023. * The Deadline to File Motions Under Fed. R. Civ. P. 43(a) (7 business days before confirmation hearing) will be on August 22, 2023. * The Deadline for Objections to Confirmation (3 business days before the confirmation hearing) will be on August 24, 2023. * The Deadline for Objections to the Final Approval of the Disclosure Statement (3 business days before the confirmation hearing) will be on August 24, 2023. * The Deadline for Filing Proponent's Report and Confirmation Affidavit (3 business days before the confirmation hearing) will be on August 24, 2023. * The Deadline for Filing Local Form 71 "Individual Debtor Certificate for Confirmation Regarding Payment of Domestic Support Obligations and Filing of Required Tax Returns" (individual cases only) (3 business days before confirmation hearing) is N/A. * The Deadline for Filing the Exhibit Register and Uploading Any Exhibits a Party Intends to Introduce into Evidence at the confirmation hearing (3 business days before the confirmation hearing) will be on August 24, 2023. About New Beginning Missionary Baptist Church New Beginning Missionary Baptist Church, Inc., a religious organization in Miami Gardens, Fla., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11933) on March 13, 2023. In the petition signed by its chief executive officer, Eric Readon, the Debtor disclosed up to $10 million in assets and up to $1 million in liabilities. Judge Robert A. Mark oversees the case. Peter Spindel, Esq., at Peter Spindel, Esq., PA, serves as the Debtor's counsel. NEW INSIGHT: S&P Downgrades ICR to 'CCC-' on Tight Liquidity ------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on New Insight Holdings Inc. to 'CCC-' from 'CCC+', its issue-level rating on its first-lien debt to 'CCC' from 'B-', and its issue-level rating on its second-lien debt to 'CC' from 'CCC'. S&P's recovery ratings are unchanged. The negative outlook reflects the high likelihood of a debt restructuring conventional default over the next six months. The downgrade and weak liquidity assessment reflect the elevated risk New Insight will face a covenant breach or payment default due to its continued cash burn and thin covenant compliance. As of March 31, 2023, the company had about $50 million in cash and virtually no availability under its $84 million revolver maturing June 14, 2024, given its limited 4% covenant headroom, due to EBITDA declines. S&P said, "We believe New Insight could face a liquidity shortfall and find it difficult to fully repay or extend its revolver. We expect the company will burn about $30 million-$40 million of cash in 2023, largely due to revenue headwinds and rising interest expense from its variable-rate debt." The steep discounts on the company's rated obligations increase the likelihood of a selective default. New Insight has $930 million outstanding under its first-lien term loan and $250 million outstanding under its second-lien term loan as of March 31, 2023. The indicative prices on these securities represented about 72 cents and 53 cents to the dollar, respectively, in recent months. Such distressed trading level could present the company with an opportunity to restructure its debt below par. S&P expects the company's S&P Global Ratings-adjusted leverage will remain elevated at over 9x in 2023. The weakened market demand for New Insight's offerings, as well as its elevated debt from recent acquisitions, increased its leverage to the mid-9x area for the 12 months ended March 31, 2023. S&P said, "Recently, the company implemented a $40 million cost-cutting initiative that we expect will improve its EBITDA margins. However, given its declining revenue, we anticipate New Insight's EBITDA will remain flat. We believe this will cause its leverage to remain elevated above 9x for fiscal year 2023 despite its cost-cutting initiatives." S&P expects New Insight's operating performance will remain pressured due to lower demand amid the softening macroeconomic environment. S&P said, "We expect the company's operating performance will be weak for the next several quarters due to lower demand for its services amid a slowdown in the pace of mergers and acquisitions and private-equity transactions, as well as constrained advertising budgets and tightening client budgets for research data and analytics, due to weak macroeconomic conditions. New Insight's key customers, such as market research firms and branded companies, are becoming increasingly price-sensitive and will look to rationalize their research budgets through product cycles. We expect the company's revenue will decline by the mid-single digit percent area through fiscal year 2023." The negative outlook reflects the high likelihood that New Insight will face a debt restructuring or conventional default over the next six months. S&P could lower its rating on the company if: -- It breaches its covenant; -- It fails to make its interest or debt amortization payments; or -- It announces a debt exchange offer or debt restructuring transaction. It is unlikely S&P will raise its rating on New Insight over the next 12 months unless S&P no longer view a default as likely and are confident it will be able to refinance its debt at par. ESG credit indicators: E-2, S-2, G-3 S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of New Insight, as it is for most rated entities owned by private-equity sponsors. We believe the company's highly leveraged financial risk profile points to corporate decision making that prioritizes the interests of its controlling owners. This also reflects private-equity sponsors' generally finite holding periods and focus on maximizing shareholder returns." NOC INC: Court Approves Disclosure and Confirms Plan ---------------------------------------------------- The Bankruptcy Court has entered an order approving NOC, Inc.'s Disclosure Statement on a final basis and confirming and approving the Amended Plan, as modified. The Plan (including the Plan Supplement) and such other documents and instruments that may be necessary or appropriate to effectuate the transactions contemplated thereunder are approved. The Debtor is authorized to make non-material modifications to the Plan Supplement through and including the Effective Date. The Plan (including the Plan Supplement) has been proposed and negotiated in good faith at arm's length and shall, on and after the Effective Date, constitute legal, valid, binding, and authorized obligations of the respective parties thereto and will be enforceable in accordance with their terms. On and after the Effective Date, the terms and conditions of the Plan (including the Plan Supplement) shall be effective and enforceable as provided for therein. All objections to confirmation of the Plan not withdrawn or otherwise resolved at or before the confirmation hearing or pursuant to the terms of this Order are expressly overruled. There were no objections to final approval of the Disclosure Statement. Therefore, the Court's approval of the Disclosure Statement on a final basis is deemed uncontested and consensual. Classes 1, 3, and 4 are unimpaired by the Plan and, accordingly, holders of claims in such classes are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Code. Class 5 has voted to accept the Plan. Class 2 is Impaired but did not vote to accept the Plan, and Class 6 is deemed to reject the Plan pursuant to section 1126(g) of the Code (Classes 2 and 6 collectively referred to as the "Rejecting Classes"). Because the Rejecting Classes are Impaired and did not accept the Plan, the Plan does not satisfy the requirements of Section 1129(a)(8) of the Code. Notwithstanding the foregoing, the Plan is confirmable because it satisfies Section 1129(a)(10) of the Code, inasmuch as Class 5 has voted to accept the Plan, and Section 1129(b) of the Code in relation to the Rejecting Classes. Two holders of Class 5 claims -- Dustin Ganze (Randy's Electric) and Green Bay Packaging Inc. (collectively, the "Rejecting Class 5 Creditors") -- have voted to reject the Plan, thereby evidencing their non-consent to the release and exculpation provisions of Section 9.3 of the Plan. Separately, U.S. Pecans, Ltd. And U.S. Pecan Tracing Co. Ltd. (collectively, the "Objecting U.S. Pecan Creditors") have objected to the release and exculpation provisions of the Plan, thereby also evidencing their non-consent to the release and exculpation provisions of Section 9.3 of the Plan. As a result of the lack of consent of the Rejecting Class 5 Creditors and the Objecting U.S. Pecan Creditors (collectively, the "Non-Consenting Creditors") to Section 9.3 of the Plan, the Court finds that the applicability of such provisions of the Plan to the Non-Consenting Creditors must be limited. About NOC, Inc. NOC, Inc., was founded in 1977 in Corsicana, Texas, as a pecan shelling, marketing, packaging, and distribution operation. Its customer base consisted of large, well-known consumer and commercial brands that historically provided the Debtor with reliable operations and cash flow year to year. NOC provided a range of different services to its customers relating to the sale of pecans. These services include the sizing, grading, shelling, sorting, and distribution of raw in-shell and shelled pecan products. NOC, Inc., filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 23-40266) on Jan. 30, 2023. The Debtor filed the Case to preserve the value of its estate and to restructure its financial and legal affairs. The Debtor is represented by BONDS ELLIS EPPICH SCHAFER JONES LLP. NOVAE LLC: Saratoga Marks $1.9M Loan at 15% Off ----------------------------------------------- Saratoga Investment Corporation has marked its $1,980,000 loan extended to Altisource Novae LLC to market at $1,679,693 or 85% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan B, (6M USD SOFR+ 5%, 0.8% Floor) to Novae LLC. The loan accrues interest at 10.34% per annum. The loan matures on December 22, 2028. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Novae LLC, based in Markle, Indiana, is a manufacturer of professional grade trailers and operates 15 manufacturing facilities in Indiana, Iowa, Pennsylvania, Missouri and Minnesota. The company is majority-owned by private equity sponsor Brightstar Capital Partners. NOVAN INC: Court OKs $12MM DIP Loan from Ligand Pharmaceuticals --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Novan, Inc. and EPI Health, LLC to use cash collateral and obtain postpetition financing, on an interim basis. The Debtor is permitted to obtain postpetition financing pursuant to a senior, secured, superpriority, debtor-in-possession multi-draw term loan facility, subject to the terms and conditions set forth in the Interim Order and the Superpriority Debtor in Possession Loan and Security Agreement, by and among the Borrowers, and one or more affiliates of Ligand Pharmaceuticals, Incorporated or its designee. The Ligand DIP facility consists of: (i) new money term loans in an aggregate principal amount of up to $12 million, of which $1 million will be available upon entry of the Interim Order, subject to the Initial DIP Budget, of which up to $3.5 million in the aggregate will be available prior to the entry of the Final Order, and the remainder will be available upon the entry of the Final Order; and (ii) a roll-up of prepetition obligations to Ligand, which will be deemed rolled up and converted into DIP Obligations. The Debtors are required to comply with these Chapter 11 milestones: (a) No later than five days after the Petition Date, entry by the Bankruptcy Court of the Interim Order. (b) No later than 25 days after the Petition Date, entry by the Bankruptcy Court of an order approving the Asset Purchase Agreement and bidding procedures for the sale of all or substantially all the Debtors' assets. (c) No later than 25 days after the Petition Date, entry by the Bankruptcy Court of the Final Order. (d) No later than 42 days after the Petition Date, the submission deadline for all bids for the sale of the Debtors' assets as set forth in the Bidding Procedures. (e) No later than 45 days after the Petition Date, holding of an auction (if necessary) for the sale of the Debtors' assets as set forth in the Bidding Procedures. (f) No later than 55 days after the Petition Date, entry by the Bankruptcy Court of an order approving the sale of all or substantially all the Debtors' assets. (g) No later than 70 days after the Petition Date, consummation of the sale of the Debtors' assets. In early December 2022, EPI Health entered into an accounts receivable-backed factoring agreement with Bay View Funding, a wholly owned subsidiary of Heritage Bank of Commerce. Pursuant to the Factoring Agreement, EPI Health sells certain trade accounts receivable to Bay View from time to time, with recourse. The factoring facility provides for EPI Health to have access to the lesser of (i) $15 million, or (ii) the sum of all undisputed receivables purchased by Bay View multiplied by 70% (which percentages may be adjusted by Bay View in its sole discretion), less any reserved funds. Upon receipt of any advance, EPI Health will have sold and assigned all of its rights in such receivables and all proceeds thereof. EPI Health factors the accounts receivable on a recourse basis. The proceeds were used to fund general working capital needs. As of the Petition Date, approximately $2.6 million of advances were outstanding under the Factoring Agreement. The Debtors believe that Bay View has been paid in full for the current loans under the Factoring Agreement and are in negotiations concerning an appropriate termination that should release the remaining cash to the Debtors' estates. Pursuant to the Loan and Security Agreement dated as of July 14, 2023 by and among (a) Novan, Inc., as borrower, (b) EPI Health, as borrower and (c) Ligand, the borrowers incurred "Obligations" to the Prepetition Secured Lender on a joint and several basis. As of the Petition Date, the borrowers were indebted and liable to Ligand in the aggregate principal amount of not less than $3 million, plus accrued and unpaid interest, fees and expenses. As adequate protection, Ligand is granted a valid, perfected replacement security interest in and lien on account of the Prepetition Secured Lender's Diminution in Value upon all of the DIP Collateral. The Prepetition Secured Lender is granted an allowed superpriority administrative expense claim against the DIP Loan Parties on a joint and several basis (without the need to file any proof of claim) on account of the Prepetition Secured Lender's Diminution in Value under 11 U.S.C. section 507(b) of the Bankruptcy Code, which Adequate Protection Superpriority Claim will be payable from and have recourse to all DIP Collateral and all proceeds thereof. As adequate protection to Bay View Funding, Bay View is granted a valid, perfected replacement security interest in and lien on account of Bay View's Diminution in Value upon the same property of Debtor EPI Health on which Bay View had a perfected, first-priority security interest and lien prior to the Petition Date. Until the DIP Obligations are indefeasibly paid in full and all commitments thereunder are terminated, the occurrence of any of the following events, will constitute an event of default: (i) The Debtors' failure to perform, in any material respect, any of the terms, provisions, conditions, covenants or obligations under the Interim Order, including, without limitation, failure to make any payment under the Interim Order when due or comply with any Milestones; (ii) The occurrence and continuation of any Events of Default under, and as defined in, the DIP Credit Agreement or any other DIP Documents; and (iii) The Debtors' failure to comply with the terms of the Interim Order will constitute Events of Default. As a condition to the DIP Facility and the use of cash collateral, the Debtors have agreed to these milestones: (i) No later than five business days after the Petition Date, entry by the Court of the Interim Order; (ii) Subject to entry of a Final Order that so provides, no later than 35 calendar days after the Petition Date, entry by the court of an order approving the Asset Purchase Agreement and the Bidding Procedures for the Purchased Assets; (iii) No later than 35 calendar days after the Petition Date, entry by the Court of the Final Order; (iv) All subsequent Milestones set forth in the DIP Credit Agreement will be subject to entry of a Final Order. A final hearing on the matter is set for August 21 at 10 a.m. A copy of the order is available at https://urlcurt.com/u?l=t1MIDW from PacerMonitor.com. About Novan Inc. Based in Durham, North Carolina, Novan Inc. (Nasdaq: NOVN) is a clinical development-stage biotechnology company focused on leveraging nitric oxide's naturally occurring anti-viral, anti-bacterial, anti-fungal and immunomodulatory mechanisms of action to treat a range of diseases with significant unmet needs. Nitric oxide plays a vital role in the natural immune system response against microbial pathogens and is a critical regulator of inflammation. Novan Inc. and affiliate EPI Health, LLC, sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10937) on July 17, 2023. As of March 31, 2023, Novan disclosed $79,793,000 in assets against $7,922,000 in liabilities. Judge Laurie Selber Silverstein oversees the case. The Debtors tapped MORRIS, NICHOLS, ARSHT & TUNNELL LLP as counsel, SIERRA CONSTELLATION PARTNERS, LLC, as financial advisor, and RAYMOND JAMES AND ASSOCIATES as investment banker. SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P., is special counsel. KURTZMAN CARSON CONSULTANTS, LLC, is the claims agent. OFF-SPEC SOLUTIONS: Unsecureds Will Get 27% in 60 Months -------------------------------------------------------- Off-Spec Solutions, LLC, d/b/a Cool Mountain Transport, submitted a Second Amended Subchapter V Plan of Reorganization dated July 18, 2023. This Second Amended Plan of Reorganization under Chapter 11 of the Code proposes to pay the Debtor's creditors from cash flow from Cool Mountain's trucking operations. This Second Amended Plan includes two categories of claims held by CVF III. For the first category, the Second Amended Plan includes and provides treatment for the secured claims that CVF III acquired post-petition by assignment from Fifth Third Bank as scheduled in Class 2. For the second category this the Second Amended Plan includes and provides treatment for amounts loaned to the Debtor by The Central Valley Fund II and CVF III pursuant to certain pre-petition loans. While the Debtor granted CVF II and CVF III security interests in all of its assets pre-petition, CVF II and CVF III did not perfect their liens by filing UCC-1 financing statements. Accordingly, this Second Amended Plan treats the prepetition debts owed to CVF II and CVF III as general unsecured claims in Class 14 notwithstanding any liens or security interests granted by the Debtor to CVF II and CVF III pre-petition. The Debtor's financial projections are based on projected sales of the Debtor's trucking operations and show that the Debtor will have projected disposable income of approximately $1,700,000 for payment to unsecured creditors, depending on the allowed nature of unsecured creditor claims. Based on the anticipated class of unsecured creditors, the Debtor projects general unsecured creditors will receive approximately 27% of their allowed claim amount, provided all claim objections are resolved, the estimates for lease rejection claims are not exceeded, and the disputed claims disallowed. Non-priority unsecured creditors holding allowed claims will receive pro rata distributions of funds totaling approximately $1,700,000 to the class. This Second Amended Plan also provides for the payment of allowed administrative and priority claims. The Second Amended Plan also provides for payment of allowed lower level non-priority unsecured claims (i.e., tardy unsecured claims), if any. Class 14 shall consist of all timely-filed (or not required to be filed) unsecured claims. Class 14 includes the undisputed scheduled claims for CVF II and CVF III for amounts loaned to the Debtor by CVF II and CVF III pursuant to certain pre-petition loans, notwithstanding any liens or security interests granted by the Debtor to CVF II and CVF III. Thus, pursuant to this Plan CVF II and CVF III shall lose their liens on the Debtor's assets that secure the Debtor’s pre-petition loans from CVF II and CVF III. The projected disposable income of the Debtor shall be paid during the life of this Second Amended Plan (60 months) to creditors holding allowed claims in this class, and on a pro rata basis, until such allowed claims are paid in full. Depending on the outcome of various claim objection proceedings, the Debtor projects payment of approximately 27% of the allowed claims in this class provided that the disputed claims are disallowed. Class 16 shall consist of the interests of the equity security holders of the Debtor. The Equity Security Holders (owners) of the Debtor shall retain all ownership rights in the Debtor. To the extent there is sufficient disposable income from the operation of the Debtor's business to pay all allowed claims in the other classes, the balance of such disposable income shall be paid to this Class. The Debtor will continue to operate as a trucking company. The income from operating the Debtor's trucking company will be used to fund this Second Amended Plan. The funding for the Effective Date payments and certain operating expenses will be paid from a loan from Transportation Investors in an amount up to $1.4 million. Pursuant to the Loan Agreement, Transportation Investors has agreed to make up to $840,000 of a Credit Facility available to the Debtor as necessary to pay the Effective Date payments and certain operating expenses pursuant to the Second Amended Plan Budget, but only if the Court enters an order confirming the Second Amended Plan and if the Debtor continues to operate materially consistent with the Second Amended Plan Budget. A full-text copy of the Second Amended Plan dated July 18, 2023 is available at https://urlcurt.com/u?l=lrefvA from PacerMonitor.com at no charge. Attorneys for Debtor: Matthew T. Christensen, Esq. Chad R. Moody, Esq. Johnson May 199 N. Capitol Blvd., Suite 200 Boise, ID 83702 Phone: (208) 384-8588 Fax: (208) 629-2157 Email: mtc@johnsonmaylaw.com crm@johnsonmaylaw.com - and - Jason E. Rios, Esq. Jennifer E. Niemann, Esq. Felderstein Fitzgerald Willoughby Pascuzzi & Rios LLP 500 Capitol Mall, Suite 2250 Sacramento, CA 95814 Telephone: (916) 329-7400 Facsimile: (916) 329-7435 Email: jrios@ffwplaw.com jniemann@ffwplaw.com About Off-Spec Solutions Off-Spec Solutions LLC, doing business as Cool Mountain Transport, is a trucking company located in Nampa, Idaho. Off-Spec Solutions filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code on (Bankr. D. Idaho Case No. 22-00346) on Aug. 5, 2022, with between $1 million and $10 million in both assets and liabilities. Matthew W. Grimshaw of Grimshaw Law Group, P.C., has been appointed as Subchapter V trustee. Judge Noah G. Hillen oversees the case. The Debtor tapped Matthew Todd Christensen, Esq., at Johnson May, PLLC, as legal counsel, and CFO Solutions, LLC, doing business as Ampleo, as consultant. OKAYSOU CORP: Court OKs Deal on Cash Collateral Access ------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California, Riverside Division, authorized Okaysou Corporation to use cash collateral on an interim basis in accordance with its agreement with Amazon Capital Services, Inc. and Amazon.com Services, LLC. The Debtor is permitted to use the cash collateral on interim basis until September 29, 2023, on the terms set forth in the Stipulation and the budget, with a 15% variance, to pay its ordinary business expenses on a monthly basis. As adequate protection to ACS, Amazon is granted valid, attached, choate, enforceable, perfected, and continuing security interests in, and liens upon, all postpetition assets of the Debtor of the same character and type, to the same nature, extent, and validity as the items and encumbrances of Amazon attached to the Debtor's assets prior to the petition date. ACS will be entitled to deduct $80,381 as adequate protection payments for its loan from the proceeds of sales conducted through Amazon. Any sales proceeds in excess of the $80,381 paid to ACS as adequate protection, and the amounts used as cash collateral, will be paid to the Debtor by ACS and otherwise segregated by the Debtor subsequent to further Court order. After the ACS Loan is paid in full, Amazon will distribute the proceeds of sales net of fees, expenses and reimbursements and other charges due under the BSA to the Debtor's bank account as registered in the Debtor's Seller Account. A final hearing on the matter is set for August 15 at 2 p.m. A copy of the order is available at https://urlcurt.com/u?l=QsF5l3 from PacerMonitor.com. About Okaysou Corporation Okaysou Corporation is engaged in e-commerce sale of air purifiers and accessories. Most of Okaysou's sales are through Amazon.com and its websites that are managed though Shopify.com. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-11535) on April 17, 2023. In the petition signed by Chief Executive Officer Hao Ma, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Mark Houle oversees the case. Vahe Khojayan, Esq., at YK LAW, LLP, represents the Debtor as legal counsel. ONH AFC CS: David Klauder Named Subchapter V Trustee ---------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed David Klauder, Esq., at Bielli & Klauder, LLC as Subchapter V trustee for ONH AFC CS Investors, LLC. Mr. Klauder will be paid an hourly fee of $400 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Klauder declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: David M. Klauder, Esq. Bielli & Klauder, LLC 1204 N. King Street Wilmington, DE 19801 Phone: (302) 803-4600 Fax: (302) 397-2557 Email: dklauder@bk-legal.com About ONH AFC CS ONH AFC CS Investors, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Del. Case No. 10931) on July 14, 2023, with $100,001 to $500,000 in assets and liabilities. Judge Craig T. Goldblatt oversees the case. Matthew B. McGuire, Esq., at Landis Rath & Cobb, LLP is the Debtor's legal counsel. PALMER DRIVES: Gets OK to Tap Wadsworth Garber as Legal Counsel --------------------------------------------------------------- Palmer Drives Controls & Systems, Inc. received approval from the U.S. Bankruptcy Court for the District of Colorado to employ Wadsworth Garber Warner Conrardy, PC as its counsel. The firm will render these services: (a) prepare legal papers; (b) perform all legal services for the Debtor which may become necessary herein; and (c) represent the Debtor in any litigation which is in the best interest of the estate. The firm received a retainer in the amount of $17,107.50 from the Debtor. The hourly rates of the firm's counsel and staff are as follows: David V. Wadsworth $475 Aaron A. Garber $475 David J. Warner $400 Aaron J. Conrardy $400 Lindsay S. Riley $325 Justin Carpenter $225 Paralegals $125 Aaron Garber, Esq., an attorney at Wadsworth Garber Warner Conrardy, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Aaron A. Garber, Esq. David J. Warner, Esq. Wadsworth Garber Warner Conrardy, PC 2580 West Main Street, Suite 200 Littleton, CO 80120 Telephone: (303) 296-1999 Facsimile: (303) 296-7600 Email: agarber@wgwc-law.com dwarner@wgwc-law.com About Palmer Drives Controls & Systems Palmer Drives Controls and Systems, Inc. is a nationally recognized manufacturer of industrial electrical control equipment, including magnetic motors starters and industrial controls panels. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 23-13002) on July 10, 2023, with $3,328,915 in assets and $3,118,969 in liabilities. Lynn Weberg, president, signed the petition. Judge Joseph G Rosania, Jr. oversees the case. Aaron A. Garber, Esq., at Wadsworth Garber Warner Conrardy, P.C., represents the Debtor as legal counsel. PARADOX RESOURCES: Taps Pontem to Provide Management Services ------------------------------------------------------------- Paradox Resources, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Pontem Energy Advisors, LLC. The firm will render several services to the Debtors which include, but are not limited to, the following: management, support service, financial, accounting, marketing, and sale process. The firm will be compensated as follows: (i) a flat monthly fee of $60,000, and (ii) a success fee. Pontem was paid $215,482 in fees and expenses by the Debtors prior to the petition date. Jeffrey Bartlett, a managing partner at Pontem, 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: Jeffrey Bartlett Pontem Energy Advisors LLC 500 Dallas Street Houston, TX 77002 About Paradox Resources Paradox Resources, LLC is a Houston-based integrated energy company that now owns multiple producing oil and gas fields. Paradox Resources sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texsa Lead Case No. 23-90558) on May 22, 2023. In the petition signed by its chief executive officer, Todd A. Brooks, the Debtor disclosed $50 million 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 Evercore Group, LLC as investment banker. Donlin, Recano & Co., Inc. is the notice, claims and balloting agent. PASSERO LLC: Matthew Brash Named Subchapter V Trustee ----------------------------------------------------- The U.S. Trustee for Region 11 appointed Matthew Brash of Newpoint Advisors Corporation as Subchapter V trustee for Passero, LLC. Mr. Brash will be paid an hourly fee of $395 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Brash declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Matthew Brash Newpoint Advisors Corporation 655 Deerfield Road, Suite 100-311 Deerfield, IL 60015 Tel. (847) 404-7845 Email: mbrash@newpointadvisors.us About Passero LLC Passero, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-09011) on July 11, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge A. Benjamin Goldgar oversees the case. Joel A Schechter, Esq., at the Law Offices of Joel Schechter is the Debtor's bankruptcy counsel. PATAGONIA HOLDCO: Saratoga Marks $1.9M Loan at 20% Off ------------------------------------------------------ Saratoga Investment Corporation has marked its $1,990,000 loan extended to Patagonia Holdco LLC to market at $1,592,000 or 80% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan B, (3M USD SOFR+ 5.8%, 0.5% Floor) to Patagonia Holdco LLC. The loan accrues interest at 10.79% per annum. The loan matures on August 1, 2029. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Patagonia Holdco LLC is a holding company fully owned and established by Stonepeak Partners LP, a private equity firm specializing in infrastructure and real estate investments, to hold the Latin American assets acquired from Lumen Technologies, Inc. PATHWAY PARTNERS: Saratoga Marks $485,268 Loan at 16% Off --------------------------------------------------------- Saratoga Investment Corporation has marked its $485,268 loan extended to Pathway Partners Vet Management Company LLC to market at $407,324 or 84% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan (1M USD SOFR+ 3.8%) to Pathway Partners Vet Management Company LLC. The loan accrues interest at 8.9% per annum. The loan matures on March 30, 2027. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Pathway Partners Vet Management Company LLC provides veterinary services. PERFORMERS THEATRE: Wins Cash Collateral Access Thru Aug 22 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey authorized Performance Theatre Workshop, Inc. to use cash collateral on an interim basis in accordance with the budget, through August 22, 2023. As previously reported by the Troubled Company Reporter, the Debtor is a party to several conventional financing facilities: Lender Original Principal Amount ------ ------------------------- PNC Bank $50,000 TD Bank $100,000 On Deck Capital $27,000 US Small Business Administration $2,000,000 On Deck Capital $75,000 The amounts owed under each of the Conventional Financing Facilities are alleged to be secured, by security interests in, among other things, the Debtor's prepetition accounts receivable, and proceeds thereof. In addition to the Conventional Financing Facilities, the Debtor is a party to several "merchant cash advance" agreements, pursuant to which counterparties purported to purchase a portion of the Debtor's future revenues at a discount: Counterparty Amount Received ------------ --------------- ROC Funding $200,000 Everest Business Funding $30,000 Cloudfund LLC $40,000 Amsterdam Capital Solutions $40,000 The Money Store $18,000 Phantom Advance $30,000 Amerifi Capital $12,000 Kash Advance $20,000 Kash Advance $20,000 Epic Advance $20,000 Mayfair Business Capital $15,000 The Debtor disputes the claims under the "merchant cash advance" agreements. Further, the Debtor intends to commence an adversary proceeding seeking a declaration that the MCAs are in fact disguised loans, rather than true sales of receivables. The court said as adequate protection for the use of cash collateral, all parties asserting an interest in cash collateral are granted replacement liens on the Debtor's post-petition receivables, to the extent and with the same priority of their respective prepetition security interests. A copy of the court's order is available at https://urlcurt.com/u?l=L3qLpq from PacerMoniotor.com. About Performers Theatre Workshop, Inc. Performers Theatre Workshop, Inc. provides performing arts education to students of all ages and abilities. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 23-15772) on July 5, 2023. In the petition signed by Dean Kravitz, its president, the Debtor disclosed $46,207 in assets and $2,645,103 in liabilities. Judge Vincent F. Papalia oversees the case. Douglas J. McGill, Esq., at Webber McGill LLC, represents the Debtor as legal counsel. PHUNWARE INC: Reduces Workforce by 33% to Cut Costs --------------------------------------------------- Phunware, Inc. announced a series of strategic cost saving measures designed to improve its financial performance and to position it for sustainable, long-term success. The Company expects to realize annual run-rate cost savings upwards of $5.0 million. As part of its strategic cost optimization efforts, the Company has made the difficult but necessary decision to implement a reduction in force, impacting approximately 33% of Phunware's workforce across all departments. According to the Company, this decision is not a reflection on the dedication or performance of these team members, but rather a strategic action to refocus the Company's efforts on its most promising revenue generating opportunities and ensure Phunware's continued success in the rapidly evolving mobile technology landscape. "We deeply appreciate the contributions of all our employees to get Phunware to where it is today, and this decision was not taken lightly," said Russ Buyse, chief executive officer of Phunware. "We are providing support to those affected during this transition period and we remain committed to treating everyone with respect and dignity. Our focus now is to maximize growth opportunities by concentrating our resources on speeding adoption of our location based-platform in healthcare, hospitality, and beyond." In addition to the workforce reduction, Phunware is implementing several other cost-cutting measures to become a leaner and more efficient company. These include streamlining operations, reducing non-essential expenses, and optimizing use of existing resources to further enhance efficiencies. "We believe these strategic actions will significantly lower our operating costs, improve our financial performance and ultimately enhance shareholder value," said Troy Reisner, chief financial officer of Phunware. "While these decisions are challenging, they are critical steps on our path to profitability and long-term corporate success." Phunware said it remains committed to its mission of helping enterprises create category-defining mobile experiences and will continue to serve its global customers with the same level of quality, innovation, and dedication. The Company will provide more detailed information about these cost reduction measures on its upcoming Q2 2023 earnings call. About Phunware Headquartered in Austin, Texas, Phunware, Inc. -- http://www.phunware.com-- offers a fully integrated software platform that equips companies with the products, solutions and services necessary to engage, manage and monetize their mobile application portfolios globally at scale. Phunware reported a net loss of $50.89 million for the year ended Dec. 31, 2022, compared to a net loss of $53.52 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $45.46 million in total assets, $23.55 million in total liabilities, and $21.90 million in total stockholders' equity. Houston, Texas-based Marcum LLP, Phunware Inc.'s auditor since 2018, issued a "going concern" qualification in its report dated March 31, 2023, citing that the Company has a significant working capital deficiency, 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. PUG LLC: Saratoga Marks $478,888 Loan at 15% Off ------------------------------------------------ Saratoga Investment Corporation has marked its $478,888 loan extended to Pug LLC to market at $407,654 or 85% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan B (1M USD LIBOR+ 3.5%) to Pug LLC. The loan accrues interest at 8.65% per annum. The loan matures on February 12, 2027. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. PUG LLC provides an online marketplace for secondary tickets along with payment support, logistics, and customer service. It acquired the StubHub business of eBay Inc. QUEST BORROWER: Saratoga Marks $1.9M Loan at 16% Off ---------------------------------------------------- Saratoga Investment Corporation has marked its $1,985,000 loan extended to Quest Borrower Limited to market at $1,676,868 or 84% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan (3M USD SOFR+ 4.3%, 0.5% Floor) to Quest Borrower Limited. The loan accrues interest at 9.45% per annum. The loan matures on February 1, 2029. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Quest Borrower Limited is part of High Tech Industries. RAIN CARBON: S&P Rates New First-Lien Sr Secured Term Loan B 'BB' ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '1' recovery rating to Rain Carbon Inc.'s (RCI) proposed EUR390 million amend and extend first-lien senior secured term loan B. The '1' recovery rating indicates our expectation for a very high recovery (90%-100%) in a hypothetical default scenario. The 'BB' issue rating on the proposed loan assumes the proportion of the first-lien debt will remain the same as in the current capital structure. As such, this issue rating is two notches higher than the issuer credit rating on RCI (B+/Stable/--). The proposed transaction would extend the maturity of the existing first-lien senior secured term loan B to October 2028 from January 2025. The company is also planning to simultaneously issue second-lien debt to refinance most of its outstanding US$530 million second-lien senior secured notes due in April 2025. The company has maturities totaling about US$1 billion in January and April 2025. The current stable outlook assumes that the company will proactively address these maturities by the end of 2023. A successful amend-and-extend of the first-lien debt and second-lien debt issuance would alleviate the company's refinancing risks, as it would then not have any significant debt maturities until 2028. On the other hand, an unsuccessful transaction would increase pressure on the company's capital structure and credit profile. The 'B+' issuer credit rating on RCI reflects its good standing in the global carbon products industry and stable earnings given its ability to pass on the movements in input costs to its customers. REMARK HOLDINGS: Amends Purchase Agreement With Ionic Ventures -------------------------------------------------------------- Remark Holdings, Inc. and Ionic Ventures, LLC entered into a letter agreement on July 12, 2023, which amends the Purchase Agreement, dated as of Oct. 6, 2022, by and between Remark and Ionic, and as previously amended on Jan. 5, 2023. Under the Letter Agreement, the parties agreed, among other things, to (i) allow Remark to deliver one or more irrevocable written notices to Ionic in a total aggregate amount not to exceed $20.0 million, which total aggregate amount shall be reduced by the aggregate amount of previous Exemption Purchase Notices, (ii) amend the per share purchase price for purchases under an Exemption Purchase Notice to 80% of the average of the two lowest daily volume-weighted average prices ("VWAPs") over a specified measurement period, (iii) amend the definition of the specified measurement period to stipulate that, for purposes of calculating the final purchase price, such measurement period begins the trading day after Ionic pays Remark the amount requested in the purchase notice, while the calculation of the dollar volume of Remark common stock traded on the principal market to determine the length of the measurement period shall begin on the trading day after the previous measurement period ends, and (iv) that any additional Exemption Purchase Notices that are not in accordance with the terms and provisions of the Purchase Agreement shall be subject to Ionic's approval. About Remark Holdings Remark Holdings, Inc. (NASDAQ: MARK) -- http://www.remarkholdings.com-- delivers an integrated suite of AI solutions that help organizations monitor, understand, and act on threats in real-time. Remark consists of an international team of sector-experienced professionals that have created video analytics. The Company's GDPR-compliant and CCPA-compliant solutions focus on market sectors including retail, federal and state governmental entities, public safety, hospitality, and transportation. The company's headquarters are in Las Vegas, Nevada, USA, with operational offices in New York and international offices in London, England. Los Angeles, California-based Weinberg & Company, P.A., the Company's auditor since 2020, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has suffered recurring losses from operations and negative cash flows from operating activities and has a negative working capital and a stockholders' deficit that raise substantial doubt about its ability to continue as a going concern. S&S SENIOR: Centra Says Plan Confirmation Proceedings Premature --------------------------------------------------------------- Centra NCFL Properties LLC ("Centra"), and as the senior secured creditor of S&S Senior Housing of Burnsville LLC (the "Debtor"), responds to the Debtor's Application Requesting Entry of Order Conditionally Approving Disclosure Statement and Establishing Certain Deadlines. For the reasons set forth herein, the Court should not grant the relief requested in the Application at this time. Centra points out that the Debtor's confirmation proceedings are premature and may prove to be unnecessary, and the court should instead rule first on the motion to dismiss: * The relief sought by the Debtor in the Application is premature at this time. As set forth more fully in the Motion to Dismiss, the Plan proposed by the Debtor cannot and will not be confirmed because (1) it cannot be confirmed over Centra's objection; and (2) the Debtor cannot demonstrate that the Plan is feasible. * The Debtor cannot confirm the Plan in its current form over the objection of Centra, which is both the Debtor's only secured creditor in Class 1 and holds a majority in amount of all unsecured claims in Class 3, giving it veto power over Class 3's vote. Moreover, Class 1 and Class 3 are the only impaired classes entitled to vote for the Plan, and without the support of a single impaired class the Plan is unconfirmable. * Additionally, the Plan, as proposed, cannot be confirmed because it is not feasible under 11 U.S.C. s 1129(a)(11). The proposed Funding Transaction (as defined in the Plan) presumably2 contemplates the sale of three properties owned by the Debtor and two related entities that are subject to Centra's first priority security interest in connection with the Loan.3 As set forth in the Motion to Dismiss, the Debtor has already failed to meet numerous deadlines in connection with the sale of the Property, including representations regarding anticipated closing dates that have been made to the Yancey County Superior Court during the Foreclosure Proceeding and in the Asset Purchase Agreement attached to the Debtor's Disclosure Statement (the "Purchase Agreement"). Moreover, the information provided by the Debtor to Centra regarding the Funding Transaction has been inconsistent and frequently raised more questions than answers – including having two separate potential purchasers, both of whom were partially owned by Simons, and filing a Purchase Agreement that contained numerous deficiencies that had already been raised by Centra. Finally, the escrow agent identified by the Debtor has refused to provide bank account statements reflecting its receipt of the $25,000 escrow payment for the sale of the Property, was not incorporated until after the purported escrow transaction had occurred, and provided a phone number and address that appear to be illegitimate. Identical questions exist concerning the sale of a second property owned by S&S Senior Housing of Louisburg LLC ("S&S Louisburg"), which have been raised in a motion to dismiss filed in its bankruptcy case. * Given the substantial questions regarding the proposed Funding Transaction and Centra's unwillingness to support the Plan based upon the information currently available to it, there is simply no possibility that the Plan will be confirmed. Given that confirmation of the Plan is futile, requiring all parties in interest to go through the process of casting ballots, filing comprehensive objections to the Plan and Disclosure Statement, and then preparing for a contested confirmation hearing would be a colossal waste of time and resources for the Court, the Debtor, Centra, and all other parties in interest. Centra further points out that to the extent approved, the ballots should explicitly state that they may be filed electronically. If the Court decides to grant the relief sought in the Application, Centra respectfully requests that the proposed ballot attached as Exhibit A to the Application (the "Ballot") be modified on pages 1 and 2 to explicitly permit creditors to file their ballots with the Clerk of Court electronically through the CM/ECF system. Given the substantial delays that have been experienced by the United States Postal Service in recent years and the prospect of a strike by employees of United Parcel Service (UPS) in early August,4 parties should be given the explicit option to submit their ballots electronically. Counsel for Centra NCFL Properties LLC: Harris B. Winsberg, Esq. Matthew M. Weiss, Esq. PARKER, HUDSON, RAINER & DOBBS LLP 303 Peachtree Street N.E., Suite 3600 Atlanta, GA 30308 Telephone: (404) 523-5300 Facsimile: (404) 522-8409 E-mail: mweiss@phrd.com About S&S Senior Housing of Burnsville S&S Senior Housing of Burnsville LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). S&S Senior Housing of Burnsville filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-40495) on April 4, 2023. In the petition filed by Kenneth Mark Simons, as manager, the Debtor reported assets between $500,000 and $1 million and liabilities between $1 million and $10 million. The Debtor is represented by: Cameron M. McCord, Esq. Jones & Walden, LLC 302 W.I. Parkway Dallas, GA 30132 Tel: 404-564-9300 Email: info@joneswalden.com SANUWAVE HEALTH: Expects Second Quarter Revenue of $4.5M to $4.7M ----------------------------------------------------------------- SANUWAVE Health, Inc. announced that revenues for the second quarter of 2023 (ending June 30) are expected to be in the range of $4.5 to $4.7 million, which is consistent with guidance provided in the Q1 2023 earnings release. "Despite ongoing production constraints discussed on the last earnings call, we are pleased to have been able to achieve our revenue growth guidance previously announced for Q2 and look forward to being able to accelerate our growth rate in coming quarters," said Morgan Frank, CEO. "The Company plans to release its full quarterly numbers for Q2 in mid-August, and we look forward to speaking with you then to give you a more complete update on our quarterly performance and our future plans." The preliminary revenue results are based on management's initial analysis for the second quarter ended June 30, 2023 and may be subject to adjustments based on the Company's completion of its quarter-end financial close process. About SANUWAVE Health Headquartered in Suwanee, Georgia, SANUWAVE Health, Inc. (OTCQB:SNWV) -- http://www.SANUWAVE.com-- is focused on the research, development, and commercialization of its patented, non-invasive and biological response-activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures. SANUWAVE's end-to-end wound care portfolio of regenerative medicine products and product candidates help restore the body's normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, aesthetic/cosmetic, and cardiac/endovascular conditions. SANUWAVE reported a net loss of $10.29 million for the year ended Dec. 31, 2022, compared to a net loss of $27.26 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $19.87 million in total assets, $60.88 million in total liabilities, and a total stockholders' deficit of $41.01 million. New York, NY-based Marcum LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 31, 2023, citing that the Company has incurred recurring losses and needs to raise additional funds to meet its obligations and sustain its operations and the occurrence of the events of default on the Company's debt. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SCHAFFNER PUBLICATIONS: Court OKs Cash Access Thru Oct 31 --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio authorized Schaffner Publications Inc. to use cash collateral on an interim basis in accordance with the budget, with a 20% variance. The Debtor requires the use of cash collateral to continue its business operations. The entities that may hold an interest in the Debtor's property, including an interest in cash collateral as that term is defined under 11 U.S.C. Section 363 are: Croghan Colonial Bank; United States Small Business Administration; Ogden News Publishing of Ohio, Inc.; OnDeck; Kalamata Capital Group; and Rapid Finance. The Debtor is directed to commence making monthly payments of $300 per month to the Chapter 11 Trustee, as provided in the Budget, and such amounts will be held in escrow by the Trustee pending application and approval by the Court. As adequate protection to Croghan: (a) The Debtor will continue to make to Croghan payment in the monthly amount of $500, or such other amount as required under the Croghan Loan Documents. (b) In addition to any security interests preserved by section 552(b) of the Bankruptcy Code and, to the extent the stay or the Debtor's use, sale, or lease of Croghan's collateral results in a decrease in the value of Croghan's interest in its collateral, Croghan will be granted a post-petition perfected security interest under section 361(2) to the same extent and with the same priority as Croghan held on a prepetition basis in the Debtor's property. As adequate protection to the SBA: (a) The Debtor will continue to make to the SBA the SBA Payment in the monthly amount of $448. (b) In addition to any security interests preserved by section 552(b) and, to the extent the stay or the Debtor's use, sale, or lease of the SBA's collateral results in a decrease in the value of the SBA's interest in its Collateral, the SBA will be granted a post-petition perfected security interest under section 361(2) to the same extent and with the same priority as the SBA held on a prepetition basis in the Debtor's property. As adequate protection to Ogden: (a) The Debtor will continue to make to Ogden the Ogden Payment in the monthly amount of $2,500, or such other amount as required under the Ogden Loan Documents. (b) In addition to any security interests preserved by Section 552(b) and, to the extent the stay or the Debtor's use, sale, or lease of Ogden collateral results in a decrease in the value of Ogden's interest in its Collateral, Ogden will be granted a post-petition perfected security interest under section 361(2) to the same extent and with the same priority as Ogden held on a prepetition basis in the Debtor's property. OnDeck, Kalamata and Rapid Finance are granted a postpetition perfected security interest under section 361(2) to the same extent and with the same priority as such creditors held on a prepetition basis in the Debtor's property. The Debtor will maintain insurance on all its Property in an amount which is customarily appropriate for the nature of the Property. The Debtor is use of cash collateral will terminate upon the earlier of: (a) the confirmation, conversion or dismissal of the Chapter 11 case; (b) the Debtor's unauthorized use of the cash collateral; (c) the Debtor ceasing operation of its business as a Debtor-In-Possession under the Bankruptcy Code; (d) the date of entry of a Court Order terminating the Order for cause; (e) entry of an order granting to either Croghan, the SBA or Ogden relief from the automatic stay; (f) a specific order of the Court terminating the Order and/or the entry of a court order superseding the Order, including a final order entered by the Court; or (g) October 31, 2023. A further hearing on the matter is set for October 18 at 1:30 p.m. A copy of the Court's order and the Debtor's 90-day budget is available at https://urlcurt.com/u?l=U81gI9 from PacerMonitor.com. The Debtor projects total expenses, on a monthly basis, as follows: $34,958 for Month 1; $35,158 for Month 2; and $33,959 for Month 3. About Schaffner Publications Inc. Schaffner Publications Inc. is the publisher of a local newspaper, The Beacon. The Beacon began publishing in February of 1983. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-30489) on March 27, 2023. In the petition signed by John Schaffner, president, the Debtor disclosed up to $10 million in assets and up to $500 in liabilities. Judge Mary Ann Whipple oversees the case. Eric Neuman, Esq., at Diller and Rice, LLC, represents the Debtor as legal counsel. SELECT MEDICAL: Moody's Affirms 'B1' CFR & Alters Outlook to Stable ------------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Select Medical Holdings Corporation ("Select Medical"), including the B1 corporate family rating and B1-PD Probability of Default Rating. Moody's also affirmed the ratings of Select Medical Corporation (a wholly owned subsidiary of Select Medical Holdings Corporation), including the Ba2 senior secured rating on the term loan and the revolving credit facility and B3 unsecured rating. At the same time, Moody's assigned Ba2 ratings to the new senior secured term loan and revolving credit facility. The Speculative Grade Liquidity Rating ("SGL") was upgraded to an SGL-1 (very good) from SGL-2 (good). The outlook was revised to stable from negative. The Ba2 on the company's existing credit facilities will be withdrawn upon close of the transaction. The rating actions follow the company's proposed transaction to amend and extend its existing $2.1 billion senior secured term loan due 2025 by 2 years to 2027, and to extend its $650 million revolving credit facility to 2027. The affirmation of the ratings reflects Moody's view that Select Medical's leverage will decrease as volumes improve and labor pressures subside. Moody's calculates leverage to be 5.4x as of March 31, 2023, forecasting leverage to decline below 5.0x by the end of 2023. Moody's anticipates margins will slowly improve resulting from a lower use of contract labor in 2023, lower rates for contract labor as well as improvements in reimbursement from Medicare. Further, Select Medical has a diverse business profile that should allow it to offset the critical illness recovery hospital segment which has been the weaker performing segment. The stable outlook reflects Moody's expectation that profitability and leverage will improve as labor pressures and inflation subside. Additionally, with this transaction, liquidity has improved, as Select Medical pushed out the maturities on its revolving credit facility and term loan. Upgrades: Issuer: Select Medical Holdings Corporation Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Affirmations: Issuer: Select Medical Holdings Corporation Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Issuer: Select Medical Corporation Senior Secured Bank Credit Facility, Affirmed Ba2 Senior Unsecured Regular Bond/Debenture, Affirmed B3 Assignments: Issuer: Select Medical Corporation Senior Secured 1st Lien Term Loan, Assigned Ba2 Senior Secured 1st Lien Revolving Credit Facility, Assigned Ba2 Outlook Actions: Issuer: Select Medical Corporation Outlook, Changed To Stable From Negative Issuer: Select Medical Holdings Corporation Outlook, Changed To Stable From Negative RATINGS RATIONALE The B1 CFR is constrained by Select Medical's high leverage that Moody's expects to remain elevated but improve below 5.0x by the end of 2023 as labor pressures subside. Moody's anticipates margins will slowly improve resulting from a lower use of contract labor in 2023, lower rates for contract labor as well as improvements in reimbursement from Medicare. The company's critical illness recovery hospital (LTCH) and rehabilitation hospital segments, which comprise about 35% of revenue, rely on the Medicare program as a source of revenue, also face longer-term reimbursement risks. That said, Medicare reimbursement rate for 2023 will have a 2.3% increase as compared to a 3% decline in 2022. Supporting the rating is Select Medical's significant scale, good business diversity, and leading market positions in each of its business segments. The company's outpatient rehabilitation and occupational medicine (Concentra) businesses provide both payor and geographic diversity, with limited exposure to government payors. Moody's anticipates that earnings growth over the next 12-18 months will come from tuck-in acquisitions, the maturation of recently opened critical illness recovery hospitals, and an enhanced referral network. The credit profile also benefits from Select Medical's solid free cash flow generation. The SGL-1 reflects Moody's view that Select Medical's liquidity will be very good over the next 12 months. Moody's notes that $32 million of the revolver expires in March of 2024, but Moody's anticipates that Select Medical will be able to successfully extend that portion or repay it. Select Medical had about $84 million of cash as of March 31, 2023, and about $190 million of availability on its existing $650 million revolving credit facility. Rising interest rates may modestly impact free cash flow but Select Medical has hedges in place that protect it from paying higher interest expense. As such, Moody's believes that the company's operating cash flow will be more than sufficient to cover basic cash requirements and that the company will generate roughly $150 million of positive free cash flow in 2023. Moody's anticipates that Select Medical will maintain good cushion under its financial covenant. Select Medical Corporation's senior secured term loan and revolving credit facility are each rated Ba2, two notches above Select Medical corporate family rating. The Ba2 ratings reflect the benefit of a significant amount of unsecured notes in the capital structure that will absorb losses prior to the senior secured debt. The unsecured notes are rated B3, reflecting the significant amount of secured debt that would recover ahead of the unsecured noteholders. Select Medical's CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. This reflects Select Medical's exposure to social risk considerations (S-4) and governance risk considerations (G-4). Select Medical faces social risks related to demographic and societal trends such as the rising concerns around the access and affordability of healthcare services. Select Medical has high exposure to government payors. Any changes to reimbursement rates of Medicare or Medicaid directly impact revenue and profitability. Regarding responsible production, while there is no disclosed litigation or other contingencies, as a healthcare service provider, the company remains at risk of government investigations or liability related to patient care. Select Medical is also exposed to labor pressures and human capital constraints as the company relies on highly specialized labor to provide its services. The company's reliance on highly specialized clinical labor makes it vulnerable to worsening supply-demand imbalance of such labor and the resultant spike in labor costs. Labor pressure contributed to margin contraction in 2022 and increased leverage. Governance risk considerations reflect Select Medical's exposure to aggressive financial strategy that includes dividends and share repurchases. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Select Medical sustains debt/EBITDA below 4.0 times while maintaining sufficient financial flexibility and diversification that allow the company to absorb potential future negative regulatory developments at the higher rating level. The ratings could be downgraded if liquidity weakens or if Select Medical experiences adverse developments in Medicare regulations or reimbursement that result in deterioration in margins or cash flow coverage metrics. A downgrade could also occur if the company makes a material debt-funded acquisition or shareholder initiative, or if debt/EBITDA is sustained above 5.0 times. Select Medical Corporation, headquartered in Mechanicsburg, PA, provides long-term acute care services and inpatient acute rehabilitative care through its critical illness recovery and rehabilitation hospital segments. Select also provides physical, occupational, and speech rehabilitation services through its outpatient rehabilitation segment. As of March 31, 2023, Select Medical operated 105 critical illness recovery hospitals in 28 states, 32 rehabilitation hospitals in 12 states, 1,936 outpatient rehabilitation clinics in 39 states and the District of Columbia, and 539 occupational health centers in 41 states. At March 31, 2023, Select Medical had operations in 46 states and the District of Columbia. Concentra is a provider of occupational and consumer healthcare services, including workers' compensation injury care, physical exams and drug testing for employers, and wellness and preventative care. Consolidated revenue is approximately $6.3 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. SNOWSHOE MILLWORKS: Taps Coast to Coast Closings as Special Counsel ------------------------------------------------------------------- Snowshoe Millworks LLC seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to employ Coast to Coast Closings as special counsel. The firm will represent the Debtor in the drafting of any Purchase & Sale Agreements and closing documents for its properties and otherwise facilitate any closings for such properties. The firm will receive a fixed fee of $1,500 for each property sold. Cheryl Dukeman, Esq., an attorney at Coast to Coast Closings, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Cheryl L. Dukeman, Esq. Coast to Coast Closings 411 MA 28 West Yarmouth, MA 02673 Telephone: (978) 649-8342 Facsimile: (978) 383-8000 Email: cheryl@ctcclosings.com About Snowshoe Millworks Snowshoe Milworks LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Mass. Case No. 23-10887) on June 5, 2023, with $1 million to $10 million in both assets and liabilities. Sheila Coffin Harshman, sole manager and member, signed the petition. Judge Janet E. Bostwick oversees the case. The Debtor tapped Adam Ruttenberg, Esq., at Beacon Law Group, LLC as bankruptcy counsel and Cheryl L. Dukeman, Esq., at Coast to Coast Closings as special counsel. SORRENTO THERAPEUTICS: DIP Lender Balks at Short-Selling Settlement ------------------------------------------------------------------- Sorrento Therapeutics' debtor-in-possession lender is asking a Texas bankruptcy court Friday to reject Sorrento's request to settle an investor adversary action with a stock offering, saying both the lawsuit and the stock are its collateral. Brokerage Litigation The Debtors and the Equity Committee have been investigating naked short-selling involving the Scilex Common Stock since it was dividended to the Debtors' shareholders in January 2023. These efforts culminated in the filing of the Equity Committee's adversary proceeding against various brokerage firms (the "Brokerage Litigation") and the Court's issuance of a temporary restraining order prohibiting naked short-selling (the "TRO"). While informal discovery continues in the Brokerage Litigation, the Equity Committee has been working collaboratively with the Debtors to find a consensual resolution of any claims and causes of action that the estates may have relating to naked short-selling practices. The Debtors and the Equity Committee have also explored potential direct claims against the customers of the Brokerage Firms that have engaged in naked short-selling. Given the status of the Chapter 11 Cases and the cost, complexity, and delay of filing litigation against these parties, the Debtors and the Equity Committee have determined to pursue a "win-win" resolution of these disputes directly with the Dividend Short Sellers. Accordingly, the Debtors and the Equity Committee are proposing the Offering for the sole purpose of allowing any and all short-sellers of the Dividended Scilex Stock to cover their short positions. The material terms of the Offering are as follows: a. Open Market Purchases. The Dividend Short Sellers can purchase shares in the open market. b. Private Purchases. The Dividend Short Sellers can purchase unrestricted shares in private, secondary transactions from Sorrento. c. Pricing. The pricing of all sales by Sorrento to the Dividend Short Sellers described in the Offering shall be determined by the Debtors' Chief Restructuring Officer in consultation with the Creditors Committee and the Equity Committee. d. Continuation of Share Restrictions. To the extent required, the Restrictions Order and/or the TRO shall be lifted for the sole purpose of allowing the Dividend Short Sellers to purchase shares in the Offering and permitting the transfer of Restricted Scilex Stock from Dividend Short Sellers to their counterparty Scilex Share Lenders. All Scilex shares purchased by the Dividend Short Sellers shall be (i) delivered immediately to the applicable Scilex Share Lender(s) and (ii) immediately denominated as restricted shares subject to the Restrictions Order. e. Deadline to Participate. The deadline to participate shall be seven business days after the commencement of the Offering, subject to extensions in the sole discretion of the Equity Committee and Sorrento. In exchange for participating in the Offering, the Dividend Short Sellers shall receive releases for any claims and causes of action that the Debtors or Scilex may have relating to naked short-selling of the shares that are purchased by the Dividend Short Sellers (but only to the extent of such purchases) in the Offering. This settlement will provide the Debtors with effective relief for any claims the Debtors may have for naked short-selling against the Dividend Short Sellers, and will allow the Dividend Short Sellers to cover their short positions and avoid any continuing fees, interest and other expenses associated with their short positions. DIP Lender's Objection The DIP Lender, JMB Capital Partners Lending, LLC, filed a preliminary objection and reservation of rights to the Joint Emergency Motion of the Debtors and the Equity Committee for entry of an order authorizing entry into the Settlement Agreement with Participating Record Holders of Scilex Stock. After learning of the Debtors' intent to default under the terms of the Final DIP Order and the DIP Credit Agreement by filing and seeking approval of the Nant Settlement Motion on June 6, 2023, the DIP Lender has continued to comply with its obligations under the DIP Credit Agreement. Indeed, the DIP Lender funded the remaining $15 million available under the DIP Facility in three installments on June 5th, 16th, and 27th. As of today, the Debtors have drawn upon the entire $75 million commitment. Further, at the request of the Debtors, the DIP Lender consented to the incurrence of additional debt through the implementation of a junior DIP facility in the amount of $20 million and permitted the Debtors to grant both junior liens on all of their assets and senior liens on certain assets. Despite the efforts made by the DIP Lender to provide the Debtors with sufficient liquidity and a runway to restructure, to date, the Debtors have failed to file an Acceptable Plan, propose an Acceptable 363 Sale, or secure a commitment for exit financing sufficient to provide for the indefeasible Payment in Full of the DIP Obligations. The DIP Facility matures in just over two weeks. Notwithstanding the impending maturity of the DIP Facility, the Debtors for the second time, are seeking authority to sell and settle the DIP Lender's Collateral without the DIP Lender’s consent. Such action violates the express terms of the Final DIP Order and the DIP Credit Agreement. According to the DIP Lender, the current Settlement Motion was filed on an emergency basis and without any prior notice to the DIP Lender. The Settlement Motion seeks to settle the Adversary Proceeding commenced by the Equity Committee through the consummation of an Offering for the purpose of allowing holders of short positions in the Dividend Scilex Stock to cover their short positions either through the purchase of shares in the open market or in private secondary transactions from Debtor, Sorrento. The DIP Lender asserts that the Settlement Agreement violates the terms of the Final DIP Order and the DIP Credit Agreement and should not be approved absent modification and express written consent of the DIP Lender. The DIP Lender asserts that: * the Adversary Proceeding which the parties are seeking to settle constitutes DIP Collateral. The definition of DIP Collateral includes commercial tort claims. The DIP Lender has not consented to settlement of the Adversary Proceeding. * the Scilex Common Stock is also DIP Collateral. The Offering procedures outlined in the Settlement Motion fail to provide -- as required by the Final DIP Order and the DIP Credit Agreement -- the DIP Lender's prior written consent to the Debtors' sale of the Scilex Common Stock. Therefore, as proposed, the sale of the Scilex Common Stock by Sorrento is impermissible under both the Final DIP Order and the DIP Credit Agreement and will result in an immediate Event of Default under the DIP Credit Agreement. According to the DIP Lender, approval of the Settlement Motion, as currently proposed, will result in an immediate Event of Default under the DIP Credit Agreement giving rise to the DIP Lender's rights and remedies thereunder and under the Final DIP Order and applicable law. The Settlement Motion should not be approved absent modification to comply with the terms of the DIP Credit Agreement, the DIP Lender tells the Court. About Sorrento Therapeutics Sorrento Therapeutics, Inc. -- http://www.sorrentotherapeutics.com/ -- is a clinical and commercial stage biopharmaceutical company developing new therapies to treat cancer, pain (non-opioid treatments), autoimmune disease and COVID-19. Sorrento's multimodal, multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as next-generation tyrosine kinase inhibitors ("TKIs"), fully human antibodies ("G-MAB(TM) library"), immuno-cellular therapies ("DAR-T(TM)"), antibody-drug conjugates ("ADCs"), and oncolytic virus ("Seprehvec(TM)"). Sorrento is also developing potential antiviral therapies and vaccines against coronaviruses, including STI-1558, COVISHIELD(TM) and COVIDROPS(TM), COVI-MSCTM; and diagnostic test solutions, including COVIMARK(TM). Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc., sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 23-90085) on Feb. 13, 2023. Sorrento disclosed assets in excess of $1 billion and liabilities of about $235 million as of Feb. 10, 2023. Judge David R. Jones oversees the cases. The Debtors tapped Latham & Watkins, LLP as bankruptcy counsel; Jackson Walker, LLP as local counsel; Tran Singh, LLP as conflicts counsel; and M3 Advisory Partners, LP as financial advisor. Mohsin Y. Meghji, managing partner at M3, serves as the Debtors' chief restructuring officer. Stretto Inc. is the claims, noticing and solicitation agent. Norton Rose Fulbright US, LLP and Milbank, LLP represent the official committee of unsecured creditors appointed in the Debtors' Chapter 11 cases. On April 10, 2023, the U.S. Trustee for Region 7 appointed an official committee to represent the Debtors' equity security holders. On April 10, 2023, the U.S. Trustee for Region 7 appointed an official committee to represent the Debtors' equity security holders. Glenn Agre Bergman & Fuentes, LLP and Greenberg Traurig, LLP serve as the equity committee's bankruptcy counsels. SOUTHEAST ASSOCIATION: Seeks to Hire Bruner Wright as Legal Counsel ------------------------------------------------------------------- Southeast Association of Healthcare Providers, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Florida to employ Bruner Wright, PA as counsel. The Debtor requires a counsel to give legal advice with respect to its powers and duties in this Chapter 11 case. The hourly rates of the firm's counsel and staff are as follows: Robert C. Bruner $450 Byron Wright III $375 Samantha A. Kelley $350 Paralegal $150 The firm received a retainer of $12,000 from the Debtor. Byron Wright III, Esq., a member at Bruner Wright, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert C. Bruner, Esq. Byron Wright III, Esq. Samantha A. Kelley, Esq. Bruner Wright, PA 2810 Remington Green Circle Tallahassee, FL 32308 Telephone: (850) 385-0342 Facsimile: (850) 270-2441 Email: rbruner@brunerwright.com twright@brunerwright.com skelley@brunerwright.com About Southeast Association of Healthcare Providers Southeast Association of Healthcare Providers Inc. operates two wellness centers in the Florida panhandle. The Debtor's principal, Dr. Philip Renfroe, is a chiropractor. Southeast Association of Healthcare Providers sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-30455) on July 6, 2023. In the petition filed by Dr. Philip E. Renfroe as president, the Debtor reported assets between $500,000 and $1 million and estimated liabilities between $1 million and $10 million. Bruner Wright, PA serves as the Debtor's counsel. SOUTHFIELD VENTURES: To Pay All Claims by June 2024 --------------------------------------------------- Southfield Ventures, LLC submitted a First Amended Combined Disclosure Statement and Plan of Reorganization. Debtor Southfield Ventures, LLC is a Michigan limited liability company which owns real property located in the City of Southfield at which the former Embassy Suites operated. The property is located at 28100 Franklin Road, Southfield, MI 48034 (the "Property"). Class Private Equity Fund is owed $3,000,000 in seller financing. Private Equity Fund shall retain its lien, and shall be paid a prepetition payment per 11 U.S.C. section 362(d)(3) in the amount of $20,000, and post-confirmation payments of $20,000 in October, 2023, and January and April, 2024. Private Equity Fund will be paid its remaining claim in June 2024. The claim shall accrue interest at 10% post-confirmation. This class is impaired and may vote on the Plan. Class Farmers Merchant Capital LLC is owed $385,000.00, and will be paid by a third-party payment from The Private Equity Fund no later than June 2024. Farmers Merchant Capital LLC has agreed to forbear from collection remedies through April 2024 so long as Mr. Barreca remains in control of the Debtor and the Property. The claimant will retain its lien until its claim is paid in full. This class is impaired and may vote on the Plan. The Debtor reasonably believes that contributions to capital made by its principal will be sufficient to fund expenses. The Debtor is in the process of securing funding to develop the Property and pay off all prepetition claims in full by June 2024. If Debtor is unable to secure third party funding for that, ResortAmerica has agreed to provide the necessary financing to pay off all prepetition claims by June 2024, by making a loan to the Debtor at prevailing market rates. ResortAmerica has common ownership with The Private Equity Fund. The Debtor anticipates developing the Property as multi-family housing, unless HC Southfield or Orix cures the prepetition default under the Lease. If they do cure the defaults, Debtor will use that money to pay the plan payments in full. Other sources of cash may be explored and utilized by the Debtor to the extent that cash infusions are necessary to meet the obligations of the Plan. Debtor may also sell all of its assets or a portion of its assets to fund its obligations under the Plan. To the extent additional monies are needed, it is contemplated that funds will come from Debtor's principal, which shall be treated as a new value contribution to the extent new value is required, and as a capital contribution otherwise. Attorneys for the Debtor: Robert N. Bassel, Esq. P.O. Box T Clinton, MI 49236 Tel: (248) 677-1234 A copy of the Disclosure Statement dated July 14, 2023, is available at https://tinyurl.ph/VnfiR from PacerMonitor.com. About Southfield Ventures Southfield Ventures, LLC is a single asset real estate (as defined in 11 U.S.C. Sec. 101(51B)). The company is based in Southfield, Mich. Southfield Ventures filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-42948) on March 31, 2023, with $1 million to $10 million in both assets and liabilities. Ernest Charles Barreca, principal at Southfield Ventures, signed the petition. Judge Thomas J. Tucker oversees the case. The Debtor is represented by Robert N. Bassel, Esq., a practicing attorney in Clinton, Mich. SPEED TRANS: Court OKs Cash Collateral Access --------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington authorized Speed Trans, LLC to use cash collateral on an interim basis in accordance with the budget, with a 15% variance. The Debtor is permitted to use cash collateral to pay post-petition operating expenses including post-petition payroll and related taxes that come due prior to the final hearing on cash collateral. As adequate protection for the Debtor's use of the cash collateral on an interim basis, the Court grants Subvenio Trust/RTS, Commercial Credit Group replacement liens in the Debtor's post-petition cash, accounts receivable and inventory, and the proceeds of each of the foregoing, to the same extent and priority as any duly perfected and unavoidable liens in cash collateral held by the secured creditors as of the petition date, to the extent that any cash collateral of the Secured Creditors are actually used by the Debtor. The final hearing on the matter is set for August 4, 2023 at 10 a.m. A copy of the order is available at https://urlcurt.com/u?l=bGjAGu from PacerMonitor.com. About Speed Trans, LLC Speed Trans, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 23-41110) on July 10, 2023. In the petition signed by Arashdeep Singh, owner, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Mary Jo Heston oversees the case. Jennifer L. Neeleman, Esq., at Neeleman Law Group, PC, represents the Debtor as legal counsel. STAPLES INC: Saratoga Marks $4.3M Loan at 15% Off ------------------------------------------------- Saratoga Investment Corporation has marked its $4,330,081 loan extended to Staples, Inc. to market at $3,680,569 or 85% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan (3M USD LIBOR+ 5%) to Staples, Inc. The loan accrues interest at 10.3% per annum. The loan matures on April 16, 2026. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Headquartered in Framingham, Mass., Staples, Inc. is a provider of contract office supplies to corporations. The company was acquired and taken private by affiliates of Sycamore Partners, a private equity company. SUPPLY CHAIN: Gets OK to Hire Williams and Haupt as Accountant -------------------------------------------------------------- Supply Chain Warehouses Savannah LLC received approval from the U.S. Bankruptcy Court for the Southern District of Georgia to employ Williams and Haupt, PC as accountant. The firm will render these services: (a) examine and maintain the Debtor's books and records; and (b) prepare all necessary forms, reports, and returns. John Haupt, CPA, a member of Williams and Haupt, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: John D. Haupt, CPA Williams and Haupt, PC 9B1 Chatham Center South Drive Savannah, GA 31405 Telephone: (912) 236-5796 About Supply Chain Warehouses Savannah Supply Chain Warehouses Savannah, LLC operates warehousing and storage facility in Port Wentworth, Ga. Supply Chain Warehouses Savannah filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Ga. Case No. 23-40540) on June 23, 2023, with $1 million to $10 million in both assets and liabilities. Tiffany Caron has been appointed as Subchapter V trustee. Judge Edward J. Coleman, III oversees the case. The Debtor tapped Jon Levis, Esq., at Levis Law Firm, LLC as bankruptcy counsel; John D. Haupt, CPA, at Williams and Haupt, PC as accountant; and Ryan W. Schmidt, Esq., at The Bowen Law Group, as corporate counsel. TAHOE LAKE: Court OKs Cash Collateral Access on Final Basis ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division, authorized Tahoe Lake Love to use cash collateral on a final basis in accordance with the budget. The Debtor is permitted to use the cash collateral of Employment Development Department, Vox Funding, and Sofia Grey LLC dba E Financial Tree on interim bases, subject to adequate protection payments proposed by the Debtor, as supplemented by the revised cash collateral budget. The Debtor will continue to make monthly adequate protection payments in the amount of $1,852 to Vox Funding, with the first payments due on the 1st day of each month. The Debtor will continue to make monthly adequate protection payments in the amount of $2,360 to E Financial, with the first payments due on the 1st day of each month. As additional adequate protection for the Debtor's use of cash collateral, the Secured Creditors will have replacement liens in the Debtor's pre-petition and post-petition assets of the same type and validity as are subject to valid pre-petition liens and security interest, with the same priority as the pre-petition liens and security interests, and only to the extent of diminution in value of the collateral, as a result of the Debtor's use of cash collateral on a post-petition bases. The Secured Creditors' liens upon, and security interests in, the replacement collateral will be perfected without any other act or filing upon entry of the Order. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=hVK8sq from PacerMonitor.com. The Debtor projects total expenses, on a monthly basis, as follows: $66,564 for July 2023; $71,654 for August 2023; $46,844 for September 2023; $51,844 for October 2023; and $37,314 for November 2023. About Tahoe Lake Love Tahoe Lake Love sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Cal. Case No. 23-21903) on June 9, 2023. In the petition filed by Alison Lee, chief executive officer, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Christopher D. Jaime oversees the case. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger, represents the Debtor as legal counsel. TGL CAPITAL: Neema Varghese Named Subchapter V Trustee ------------------------------------------------------ The U.S. Trustee for Region 11 appointed Neema Varghese of NV Consulting Services as Subchapter V trustee for TGL Capital Holdings, LLC. Ms. Varghese will be paid an hourly fee of $400 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Varghese declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Neema T. Varghese NV Consulting Services 701 Potomac, Ste. 100 Naperville, IL 60565 Tel. (630) 697-4402 Email: nvarghese@nvconsultingservices.com About TGL Capital TGL Capital Holdings, LLC is the fee simple owner of a condominium apartment building located at 2212 W. Lawrence Ave., Chicago, Ill. The property is valued at $6.7 million. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-09284) on July 18, 2023, with $6,701,000 in assets and $5,789,339 in liabilities. Joe Zivkovic, manager, signed the petition. Judge Jacqueline P. Cox oversees the case. David P. Leibowitz, Esq., at the Law Offices of David P. Leibowitz, LLC is the Debtor's bankruptcy counsel. TRANSCENDIA HOLDINGS: Moody's Cuts CFR to Caa3, Outlook Negative ---------------------------------------------------------------- Moody's Investors Service downgraded Transcendia Holdings, Inc.'s corporate family rating to Caa3 from Caa1 and probability of default rating to Caa3-PD from Caa1-PD. Moody's also downgraded the ratings on the company's first lien senior secured credit facilities due 2023 and 2024 to Caa2 from B3, and the rating on the second lien senior secured credit facility due 2025 to Ca from Caa3. The outlook has been changed to negative from stable. "The downgrade reflects significant refinancing risk, with Transcendia's revolving credit facility expiring in November 2023 and its first lien term loan maturing May 2024. The company's financial results are challenged, resulting in high debt leverage and minimal liquidity, which raises the risk of a debt restructuring," said Scott Manduca, Vice President at Moody's. Downgrades: Issuer: Transcendia Holdings, Inc. Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD Backed Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa2 from B3 Backed Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Ca from Caa3 Outlook Actions: Issuer: Transcendia Holdings, Inc. Outlook, Changed To Negative From Stable The negative outlook reflects the high probability of a restructuring, including the possibility of a distressed exchange, as financial results are weak and a considerable amount of the company's debt matures in less than one year. RATINGS RATIONALE The Caa3 CFR reflects Transcendia's very high refinancing risk. The company's $51 million revolving credit facility expires in November 2023. In addition, a $295 million first lien term loan (of which $278 million is outstanding) is considered current debt and matures in May 2024. Following is a $110 million second lien term loan maturing in May 2025. Furthermore, debt leverage (Moody's adjusted) at about 10x for the last twelve months ended March 31, 2023 is high. The company's financial results are challenged, as the ramp up continues of two additional lines at a new manufacturing facility. This new facility should enhance the company's operating profile by increasing its exposure to the more stable and higher margin healthcare and food and beverage markets. However, given the challenges of refinancing the capital structure, in addition to expected weak financial results and cash flow, Moody's view the risk of a restructuring of the capital structure as high. Transcendia is expected to complete all lines of its new manufacturing facility in 2023 and is in need of a sustainable capital structure, as operations fully ramp up and perform to their potential. ESG CONSIDERATIONS Governance is a key consideration to the company's rating and is a driver of this rating action. The lack of refinancing announcement ahead of a November 2023 revolver expiration and less than a year prior to a term loan maturity in May 2024, is reflected in Transcendia's governance issuer profile score (IPS) of G-5. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Transcendia is unable to improve its financial results and debt maturity profile. Extension of maturities, redemption of debt at a discount or conversion of debt for equity could be considered a distressed exchange and a default per Moody's methodology. The ratings could be upgraded if Transcendia provides a long-term solution to its debt maturities and demonstrates improvement in financial performance. Headquartered in Franklin Park, IL, Transcendia Holdings, Inc. is a provider of engineered specialty films materials across a range of end-markets. Transcendia is a portfolio company of West Street Capital Partners VII, a family of funds, advised by Goldman Sachs' merchant banking division. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers published in December 2021. TYSON FAMILY: Ordered to File Chapter 11 Plan by Sept. 21 --------------------------------------------------------- Judge Pamela W Mcafee reviewed Tyson Family Farms, Inc.'s case file and has determined that to ensure that the case is handled expeditiously and economically, the debtor(s) must file a plan and disclosure statement on or before Sept. 21, 2023. The court will review the disclosure statement when it is filed and, if acceptable, the disclosure statement will be conditionally approved. Additionally, the hearing on approval of the disclosure statement will be combined with the hearing on confirmation of the plan. If the court determines that the debtor's plan provides adequate information under 11 U.S.C. Sec. 1125(a) and 1125(f)(1) and that a separate disclosure statement is not necessary, the court may treat the plan as the disclosure statement for the purpose of conditional approval pursuant to Bankruptcy Rule 3017.1. The debtor(s) may use Official Form B25A, "Plan of Reorganization in Small Business Case Under Chapter 11," and Official Form B25B, "Disclosure Statement in Small Business Case Under Chapter 11. The Court ordered that a status conference will be held on August 3, 2023 at 1:00 PM in Randy D. Doub United States Courthouse, 2nd Floor Courtroom, 150 Reade Circle, Greenville, NC 27858. The U.S. Bankruptcy Administrator for the Eastern District of North Carolina appointed Jennifer Bennington as Subchapter V trustee for Tyson Family Farms. About Tyson Family Farms Tyson Family Farms, Inc., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-01738) on June 23, 2023, with $1 million to $10 million in both assets and liabilities. Jeffery V. Tyson, president, signed the petition. Judge Pamela W Mcafee oversees the case. David J. Haidt, Esq., at Ayers & Haidt, PA, is the Debtor's legal counsel. UNIVISION COMMUNICATIONS: S&P Rates New Senior Secured Notes 'B+' ----------------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue-level rating and '3' recovery rating to Univision Communications Inc.'s proposed $500 million senior secured notes due 2028. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%; rounded estimate: 65%) recovery for lenders in the event of a payment default. The company plans to use the proceeds from these notes to repay the approximately $261 million outstanding on its term loan maturing in 2024 and a portion of its 5.125% senior secured notes due in 2025 ($1.5 billion outstanding). S&P's 'B+' issuer credit rating and stable outlook on Univision remain unchanged because the proposed transaction will not affect its net leverage. VANTAGE TRAVEL: Gets OK to Tap Stretto as Claims and Noticing Agent ------------------------------------------------------------------- Vantage Travel Service, Inc. received approval from the U.S. Bankruptcy Court for the District of Massachusetts to employ Stretto, Inc. The Debtor requires a claims and noticing agent and administrative advisor to serve notices to creditors, equity security holders and other concerned parties, and provide computerized claims-related services. Sheryl Betance, a senior managing director at Stretto, disclosed in a court filing that her firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Sheryl Betance Stretto, Inc. 410 Exchange, Ste. 100 Irvine, CA 92602 Telephone: (714) 716-1872 Email: sheryl.betance@stretto.com About Vantage Travel Service Vantage Travel Service, Inc. 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. The agency is based in Boston, Mass. Vantage Travel Service sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-11060) on June 29, 2023, with $1 million to $10 million in assets and $100 million to $500 million in liabilities. Gregory DelGreco signed the petition as the authorized officer. Judge Janet E. Bostwick oversees the case. The Debtor tapped Michael J. Goldberg, Esq., at Casner & Edwards, LLP as legal counsel and Argus Management Corporation as financial advisor. Stretto, Inc. is the Debtor's claims and noticing agent and administrative advisor. VANTAGE TRAVEL: Taps Argus Management Corp. as Financial Advisor ---------------------------------------------------------------- Vantage Travel Service, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to employ Argus Management Corporation. The Debtor requires a financial advisor to: (a) assist with the preparation of financial projections and analysis of alternative operating scenarios; (b) assess and monitor operations and recommend changes as appropriate; (c) support the Debtor's Section 363 sale process efforts; (d) assist with the analysis and reconciliation of claims against the Debtor and potential bankruptcy avoidance actions; (e) assist with the preparation of court motions as requested by the Debtors' legal counsel; (f) assist as requested with compliance with the reporting requirements of the Bankruptcy Code, Bankruptcy Rules, and local rules, including monthly operating reports, statements and schedules; (g) consult with other interested parties including the Debtor's secured creditors and any creditors' committee; (h) participate in court hearings and, if necessary, provide testimony in connection with any hearings before the court; and (i) perform such other tasks as may reasonably be requested by the Debtor's management or legal counsel. The firm will be paid at these rates: Lawton Bloom $500 per hour Thomas Doherty $550 per hour Staff $225 to $450 per hour The firm holds a retainer of $3,523.54. Lawton Bloom, a partner at Argus Management Corporation, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Lawton Bloom Argus Management Corporation 2 Rosenfeld Drive, Suite F Hopedale, MA 01747 Tel: (508) 381-1902 Email: lbloom@arguscorp.net About Vantage Travel Service Vantage Travel Service, Inc. 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. The agency is based in Boston, Mass. Vantage Travel Service sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-11060) on June 29, 2023, with $1 million to $10 million in assets and $100 million to $500 million in liabilities. Gregory DelGreco signed the petition as the authorized officer. Judge Janet E. Bostwick oversees the case. The Debtor tapped Michael J. Goldberg, Esq., at Casner & Edwards, LLP as legal counsel and Argus Management Corporation as financial advisor. Stretto, Inc. is the Debtor's claims and noticing agent and administrative advisor. VANTAGE TRAVEL: Taps Casner & Edwards as Bankruptcy Counsel ----------------------------------------------------------- Vantage Travel Service, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to employ Casner & Edwards, LLP to serve as legal counsel in its Chapter 11 case. The Debtor requires legal counsel to: (a) give advice regarding the powers and duties of the Debtor in the continued operation of its business and management of its properties; (b) prepare legal papers; (c) appear in, and protect the interests of the Debtor before this bankruptcy court; (d) pursue court approval of and consummation of the proposed sale; (e) represent the Debtor in litigation matters before this court; and (f) perform all other legal services for the Debtor, which may be necessary and proper in its Chapter 11 case. The firm will be paid at these rates: Partners $450 to $705 per hour Associates $350 to $475 per hour Paralegals $250 per hour In addition, the firm will seek reimbursement for expenses incurred. During the year prior to the petition date, the firm received $225,000 from the Debtor for services rendered or to be rendered in connection with its Chapter 11 case, of which $208,072.52 was applied in payment of the firm's invoice. After such payment, the balance of the firm's retainer is $16,927.48 as of the petition date. Michael Goldberg, Esq., a partner at Casner & Edwards, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael J. Goldberg, Esq. Casner & Edwards, LLP 303 Congress Street Boston, MA 02210 Telephone: (617) 426-5900 Email: goldberg@casneredwards.com About Vantage Travel Service Vantage Travel Service, Inc. 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. The agency is based in Boston, Mass. Vantage Travel Service sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-11060) on June 29, 2023, with $1 million to $10 million in assets and $100 million to $500 million in liabilities. Gregory DelGreco signed the petition as the authorized officer. Judge Janet E. Bostwick oversees the case. The Debtor tapped Michael J. Goldberg, Esq., at Casner & Edwards, LLP as legal counsel and Argus Management Corporation as financial advisor. Stretto, Inc. is the Debtor's claims and noticing agent and administrative advisor. VAUGHN ENVIRONMENTAL: Kenneth Eiler Named Subchapter V Trustee -------------------------------------------------------------- The Acting U.S. Trustee for Region 18 appointed Kenneth Eiler as Subchapter V trustee for Vaughn Environmental, Inc. Mr. Eiler will be paid an hourly fee of $450 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Eiler declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Kenneth S. Eiler 515 NW Saltzman RD., PMB 810 Portland, OR 97201 PH: 503-292-6020 Email: kenneth.eiler7@gmail.com About Vaughn Environmental Vaughn Environmental, Inc. filed Chapter 11 petition (Bankr. D. Ore. Case No. 23-31549) on July 17, 2023, with $1 million to $10 million in both assets and liabilities. Raegan Vaughn, president, signed the petition. Judge Peter C. Mckittrick oversees the case. Ted A. Troutman, Esq., at Troutman Law Firm, P.C. is the Debtors' bankruptcy counsel. VIEWRAY INC: Court OKs Interim Cash Collateral Access ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized ViewRay, Inc. and its affiliate ViewRay Technologies, Inc. to use cash collateral on an interim basis in accordance with the budget. The Debtors have an immediate and critical need to use cash collateral to, among other things, maintain, administer and preserve their business and maximize the value of their assets, including through a marketing and sale process. On November 14, 2022, the Debtors, as borrowers, entered into the Credit, Security and Guaranty Agreement with MidCap Funding IV Trust, as agent, MidCap Financial Trust, as term loan servicer, and the financial institutions and other entities from time to time parties thereto as lenders, which provided the Debtors with a credit facility comprising (i) a $75 million tranche I term loan; (ii) a $25 million tranche II term loan;5 and (iii) a $15 million revolving loan. The Prepetition Credit Agreement and the other Security Documents provide continuing, legal, valid, binding, properly perfected, enforceable, nonavoidable first priority liens on and security interests in the Debtors' right, title, and interest in, to and under the "Collateral" and all other collateral or assets of the Borrowers subject to any other Security Document. The Prepetition Agent, the Term Loan Servicer, the Prepetition Lenders, and Silicon Valley Bank, a division of First-Citizens Bank, in its capacity as a provider of bank services, also entered into Intercreditor Agreement, dated as of November 14, 2022, which governs certain rights, interests, obligations, priorities and positions as between the Prepetition Secured Parties and SVB with respect to the assets and properties of the Debtors. As of May 2, 2023, multiple events of default had occurred and were continuing under the Prepetition Credit Agreement. On May 10, 2023, the Prepetition Secured Parties agreed to enter into the Standstill Agreement with the Debtors, whereby the Prepetition Secured Parties agreed to forbear from exercising certain of their rights and remedies against the Debtors with respect to the continuing events of default under the Prepetition Credit Agreement. As of June 30, 2023, there had occurred multiple Standstill Defaults giving the Prepetition Secured Parties the right to terminate the Standstill Period. As of the Petition Date, the principal amounts outstanding under the Prepetition Term Loan and Prepetition Revolver are $57.5 million and $0, respectively, plus accrued and unpaid interest with respect thereto and any additional fees, costs, and expenses owing under or in connection Prepetition Credit Agreement. As adequate protection against any diminution in value of the Prepetition Collateral, including cash collateral, effective as of the Petition Date and perfected without the need for execution by the Borrowers or the recordation or other filing by the Prepetition Secured Parties. The Adequate Protection Liens will be junior only to the DIP Liens, the Carve-Out and any Permitted Encumbrance. The Adequate Protection Liens will otherwise be senior to all other security interests in, liens on, or claims against any of the Adequate Protection Collateral. The Adequate Protection Amount due to the Prepetition Secured Parties will constitute allowed superpriority administrative expense claims against the Borrowers and their estates in the amount of any diminution in value of the Prepetition Collateral, including cash collateral, with priority in payment over any and all claims and administrative expense claims (except amounts due under the DIP Facility and the Carve-Out) against the Borrowers, now existing or hereafter arising, of any kind or nature whatsoever. A final hearing on the matter is set for August 11, 2023 at 9:30 a.m. A copy of the order is available at https://urlcurt.com/u?l=uENo9H from PacerMonitor.com. About ViewRay, Inc. ViewRay, Inc. designs, manufactures, and markets the MRIdian MRI-guided Radiation Therapy System. MRIdian is built upon a proprietary high-definition magnetic resonance imaging system designed from the ground up to address the unique challenges, and clinical workflow for advanced radiation oncology. The MRIdian MRI-guided Radiation Therapy System integrates diagnostic-quality MR imaging with radiation therapy delivery to enable on-table adaptive treatments with real-time tissue tracking and automatic beam gating. ViewRay, Inc. and its affiliate ViewRay Technologies, Inc. sought protection under the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10935) on July 16, 2023. In the petition signed by Paul Zieglerm chief executive officer, the Debtors disclosed $233 million assets and $75 million in liabilities. The Debtors tapped Cravath, Swane and Moore LLP as special corporate counsel, Berkeley Research Group, LLC as restructuring advisor, and B. Riley Securities, Inc. as investment banker. Stretto, Inc. is the notice, claims, balloting and administrative agent. VTV THERAPEUTICS: Granted Until Dec. 18 to Regain Nasdaq Compliance ------------------------------------------------------------------- vTv Therapeutics, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that it received notice from Nasdaq Stock Market, LLC that, based upon the completed questionnaire and the expedited review process, it had approved the Company's request to extend the period for the Company to regain compliance with the Minimum Bid Requirement until Dec. 18, 2023. Nasdaq noted that the extension was based upon the Company's representation that it would complete a reverse stock split no later than Nov. 22, 2023, at a ratio between 1:10 and 1:20, and that it would obtain stockholder approval for such a reverse stock split on or before Oct. 30, 2023. The Company said there can be no assurance that effecting a reverse stock split will ensure compliance with the Minimum Bid Requirement and the Company cannot predict the effect that a reverse stock split would have on the market price for shares of its common stock. As previously disclosed, on Dec. 22, 2022, vTv Therapeutics received a deficiency letter from the Listing Qualifications Department of the Nasdaq Stock Market, LLC notifying the Company that, for 30 consecutive business days, the bid price for the Company's common stock had closed below $1.00 per share and that the Company had 180 calendar days to regain compliance with the Minimum Bid Requirement. On June 21, 2023, Nasdaq notified the Company that because it had not satisfied the Minimum Bid Requirement within the initial 180-day compliance period the Company's common stock would be delisted from the Nasdaq Capital Market at the opening of business on June 30, 2023, unless the Company requested a hearing before the Nasdaq Hearings Panel. On June 22, 2023, the Company requested a hearing to appeal the delisting determination. In response, Nasdaq set a hearing date of Aug. 17, 2023, and offered the Company an expedited review process, which required the Company to complete a questionnaire regarding the Company's plan to regain compliance with the Minimum Bid Requirement. The Company submitted the questionnaire on June 28, 2023, which included the representation that, if necessary, the Company will effect a reverse stock split on or before Nov. 22, 2023, to regain compliance with the Minimum Bid Requirement. About vTv Therapeutics vTv Therapeutics Inc. is a clinical-stage biopharmaceutical company focused on developing oral small molecule drug candidates. vTv has a pipeline of clinical drug candidates led by programs for the treatment of type 1 diabetes, Alzheimer's disease, and inflammatory disorders. vTv's development partners are pursuing additional indications in type 2 diabetes, chronic obstructive pulmonary disease (COPD), and genetic mitochondrial diseases. vTv Therapeutics reported a net loss attributable to the Company of $19.16 million for the year ended Dec. 31, 2022, compared to a net loss attributable to the Company of $12.98 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $28.83 million in total assets, $28.42 million in total liabilities, $19.60 million in redeemable noncontrolling interest, and a total stockholders' deficit of $19.19 million. Raleigh, North Carolina-based Ernst & Young LLP, the Company's auditor since 2000, issued a "going concern" qualification in its report dated March 6, 2023, citing that the Company has not generated any product revenue, has not achieved profitable operations, has insufficient liquidity to sustain operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. WINDOW SELECT: Unsecureds to Get 5 Cents on Dollar in Plan ---------------------------------------------------------- Window Select LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Wisconsin a Subchapter V Plan of Liquidation dated July 18, 2023. The Debtor is in the home improvement industry. It sells windows, siding, doors and other home improvement products, and arranges for their installation and servicing. Justin Kiswardy started the Debtor's business in 2019. By early 2022, the Debtor's business faced increased financial issues that delayed installation of products. Mr. Kiswardy hired Cogent Analytics Inc. to assist the Debtor in resolving its financial issues. The Debtor's financial problems caused installation delays due to the inability to purchase materials. The delays led to customer complaints to the Better Business Bureau and the Wisconsin Department of Trade and Consumer Protection. Lawsuits followed. By October 2022, Mr. Kiswardy and Cogent decided that a chapter 11 proceeding was necessary. The Debtor had already stopped taking new customer orders. This Plan is being proposed under subchapter V of chapter 11 of the Code. It proposes to pay creditors of the Debtor from the liquidation of its assets and the recovery of preferential and fraudulent transfers by a Liquidating Trustee under a Liquidating Trust. The Debtor will no longer conduct any business after confirmation of the Plan. Non-priority unsecured creditors holding allowed claims will receive distributions from the liquidation of assets and collection of preference and fraudulent transfer avoidance actions. The Debtor has valued distributions to non-priority claims at approximately 5 cents on the dollar. Class 7 consists of all priority unsecured claims allowed under Section 507(a)(7) of the Code as deposits of individuals shall be limited to $3,350, as limited by the Code, and shall be paid 100% up to $3,350 from the sale of assets and collection of preferential transfers and fraudulent transfers by the Liquidating Trustee under the Liquidating Trust under the priority applicable under the Code. Under the Plan, that priority of distribution is first costs of the Liquidating Trustee to administer the Liquidating Trust and then priority unsecured claims in this Class 7. The total amount of Class 7 claims is estimated to be $87,992. Class 8 consists of all non-priority unsecured claims will be paid from the sale of assets and collection of preferential transfers and fraudulent transfers by the Liquidating Trustee under the Liquidating Trust under the priority applicable under the Code. Under the Plan, that priority is (a) first, costs of the Liquidating Trustee to administer the Liquidating Trust, (b) second, priority unsecured claims in Class 7, and (c) third, priority tax claims and then unsecured claims in Class 8. The interests of the equity security holder are not impaired by the Plan. Mr. Kiswardy shall retain them after the Effective Date. On the Effective Date, Phoenix shall fund the Liquidating Trust with $25,000 for the Liquidating Trustee to administer the Liquidating Trust and investigate causes of action. However, the total amount paid by Phoenix before and under the Plan, including the $25,000, shall not exceed the amount authorized for debtor-in possession financing. The $25,000 paid from the loan will be forgiven by Phoenix as of the Effective Date and not be a claim or administrative expense. A full-text copy of the Liquidating Plan dated July 18, 2023 is available at https://urlcurt.com/u?l=sshVhd from PacerMonitor.com at no charge. Attorneys for the Debtor: Jerome R. Kerkman, Esq. Evan P. Schmit, Esq. Gregory Schrieber, Esq. Kerkman & Dunn 839 N. Jefferson St., Suite 400 Milwaukee, WI 53202-3744 Telephone: (414) 277-8200 Facsimile: (414) 277-0100 Email: jkerkman@kerkmandunn.com About Window Select Window Select, LLC is a window installation service provider in Menomonee Falls, Wis. Window Select filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wis. Case No. 23-20646) on Feb. 17, 2023, with $100,001 to $500,000 in assets and $1,000,001 to $10 million in liabilities. Andrew Parson, chief executive officer of Window Select, signed the petition. Judge G. Michael Halfenger oversees the case. Jerome R. Kerkman, Esq., at Kerkman & Dunn represents the Debtor as counsel. ZAYO GROUP: Saratoga Marks $990,000 Loan at 22% Off --------------------------------------------------- Saratoga Investment Corporation has marked its $990,000 loan extended to Zayo Group, LLCto market at $775,635 or 78% of the outstanding amount, as of May 31, 2023, according to a disclosure contained in Saratoga's Form 10-Q for the Quarterly Period ended May 31, 2023, filed with the Securities and Exchange Commission. Saratoga is a participant in a Term Loan (1M USD SOFR+ 4.3%, 0.5% Floor) to Zayo Group, LLC. The loan accrues interest at 9.4% per annum. The loan matures on March 9, 2027. Saratoga Investment Corp is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company under the Investment Company Act of 1940, as amended. The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Zayo Group is a privately held company headquartered in Boulder, Colorado, with European headquarters in London, England. The company provides communications infrastructure services. ZEP INC: S&P Affirms 'CCC+' Issuer Credit Rating, Outlook Negative ------------------------------------------------------------------ S&P Global Ratings affirmed its 'CCC+' issuer credit rating on U.S.-based producer, distributor, and service provider of cleaning and maintenance products Zep Inc. S&P said, "At the same time, we affirmed our 'CCC+' issue-level rating on the company's secured cash flow revolver and first-lien term loan and our 'CCC-' rating on its secured second-lien term loan. Our '3' (rounded estimate: 50%) recovery rating on the cash flow revolver and first-lien term loan and '6' (rounded estimate: 0%) recovery rating on the secured second-lien term loan are unchanged. "The negative outlook reflects the risk that there is little cushion for unexpected slip-ups in operating performance, and risks associated with an upcoming debt maturity. Furthermore, we believe that given our expectation for negative to minimal free cash flow and high leverage, credit risks remain elevated. "The ratings affirmation reflects Zep's improved operating performance over the last fiscal quarter. The company has taken proactive measures to cut costs and increase prices to strengthen performance. We now expect leverage of 10x-12x over the next 12 months, down from 18x in fiscal 2022." However, Zep has an upcoming term loan maturity in August 2024 that has yet to be addressed. The company continues to struggle with high inflation and supply chain disruption. However, some of these issues subsided in the third quarter of fiscal 2023. Furthermore, Zep can partly mitigate increased costs with positive pricing actions. Volume and demand for the company's products are improving. However, with global demand remaining soft, these trends may reverse if end markets weaken. Zep's credit quality also leaves it dependent on favorable business, financial, and economic conditions to meet its long-term financial commitments. S&P said, "Our assessment of Zep's business risk incorporates its weaknesses. These include its small size in the end markets it serves, niche products, relatively low EBITDA margins, and limited geographic diversity with most of its sales made in the U.S. Also, the company's chemical products compete in highly competitive and fragmented markets such as food processing, auto maintenance, and maintenance and cleaning chemicals. Its competitors include larger, financially stronger companies and focused operators in niche markets that compete on quality, price, brand name, and customer service. However, Zep's sizable product and customer base somewhat offset these weaknesses. "We expect the company's financial-sponsor ownership to continue to contribute to our view of its financial risk as highly leveraged. We anticipate Zep's financial risk will remain highly leveraged during the next 12 months. We view the private-equity-owned company's financial policy as aggressive and believe financial sponsor New Mountain Capital LLC may lead it to sustain high leverage over the long run, including potential debt-funded dividends similar to the one it completed in 2017. The negative outlook reflects risks to credit quality arising from Zep's diminished ability to absorb unexpected operating or economic setbacks. Management faces challenges in achieving stated initiatives to increase revenue and EBITDA and generate positive free cash flow on a sustained basis. Furthermore, Zep has yet to address an upcoming term loan maturity in August 2024. The rating on Zep also considers persistently high leverage and strained cash flow generation. Specifically, S&P anticipates Zep's weighted-average debt to EBITDA to be 10x-12x over the next 12 months. S&P could lower the rating if: -- Zep's recent improvement in performance falters over the next quarter. This would likely be caused by lower-than-expected demand for Zep's products, an inability to meet its covenant requirements, or continued commodity cost inflation; or -- The company fails to address its upcoming maturity in a timely manner, does a restructuring transaction, or engages in a debt exchange that S&P views as distressed. S&P could revise the outlook to stable over the next 12 months if: -- Improved business or economic conditions reduce leverage to a more sustainable level such that debt to EBITDA approaches 10x; and -- Zep addresses the upcoming maturity of its 2024 term loan. In such a scenario, S&P would expect EBITDA margins to expand at least 200 basis points and revenue to increase 2% beyond our base case without any additional debt. ESG credit indicators: E-2, S-2, G-3 Governance is a moderately negative consideration for Zep, as is the case for most rated entities owned by private-equity sponsors. We believe the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of controlling owners, typically with finite holding periods, and a focus on maximizing shareholder returns. Environmental and social factors have an overall neutral influence on our credit rating analysis for Zep, which produces mainly specialty chemicals, but also a relatively smaller proportion of commodity chemicals. ********* 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. 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