/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/230818.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, August 18, 2023, Vol. 27, No. 229 Headlines 1457 REALTY: Seeks Cash Collateral Access 15 HUMBOLDT: Voluntary Chapter 11 Case Summary 1ST CAPITAL FINANCE: Seeks to Hire Tortina Bunton as Accountant 34 SUMNER: Bid to Use Cash Collateral Denied 634 WILSON AVE: Court OKs Cash Collateral Access Thru Aug 31 860 VESTAL EMPIRE: Case Summary & One Unsecured Creditor A&P PINTO: Wins Cash Collateral Access Thru Sept 6 AEROFARMS INC: Committee Taps Dundon Advisers as Financial Advisor AFTERSHOCK COMICS: Taps BHC Capital Partners as Financial Advisor ALIERA COS: Gets Court Confirmation of Liquidating Plan ALROD LOGISTICS: Robert Altman Named Subchapter V Trustee AMERICANAS SA: Former Directors Ink Plea Bargain Deals AMERICANN INC: Incurs $56K Net Loss in Third Quarter AMYRIS INC: August 21 Deadline Set for Panel Questionnaires AMYRIS INC: Court OKs $190MM DIP Loan from Euagore ANCHOR GLASS: S&P Upgrades ICR to 'CCC+', Outlook Negative ARK LABORATORY: Sept. 9 Deadline on Filing Plan & Disclosures BAY AREA COMMERCIAL: Court Confirms Reorganization Plan BIO365 LLC: Taps Husch Blackwell as Special Counsel BJL EXPRESS: Taps Jeffery Taylor, CPA as Accountant BRUNK INDUSTRIES: Taps David C. Johnston as Legal Counsel BW HAMPTON: Taps NAI Capital Commercial as Real Estate Broker CAIR HEATING: Interim Cash Collateral Access OK'd CANO HEALTH: Davis Polk Advises Rubicon on Amendment, Waiver CASH CLOUD: Buyer Objects to Case Remaining on Indefinite Hold CELSIUS NETWORK: Okayed to Poll Account Holders on Plan CELSIUS NETWORK: Says Disclosure Statement Already Adequate CELSIUS NETWORK: Unsecureds Owed $50M Get 38%-67% in Plan CENTERPOINT PRODUCTIONS: Files Emergency Bid to Use Cash Collateral CENTURY AIR: Case Summary & 18 Unsecured Creditors CHAPIN DAIRY: U.S. Trustee Appoints Creditors' Committee CHESANING MFG: Seeks Cash Collateral Access CHINA EVERGRANDE: Seeks Chapter 15 Creditor Protection in the US CHIPLEY'S FAMILY: Court OKs Interim Cash Collateral Access CHRISTMAS TREE SHOPS: Closes Remaining 8 Stores CNG HOLDINGS: S&P Downgraded To 'SD' on Distressed Debt Exchange CORNER OYSTER: Wins Interim Cash Collateral Access CREATING SCHOLARS: Seeks Interim Cash Collateral Access CREDITO REAL: Payroll Lender to Stop Deal If Cases Aren't Dropped CRESTWOOD EQUITY: S&P Places 'BB' ICR on CreditWatch Positive DELPHI BEHAVIORAL: PCO Taps Grassi Healthcare as Consultant DELPHI BEHAVIORAL: PCO Taps SilvermanAcampora as Legal Counsel DELTA WHOLESALE: Seeks Cash Collateral Access DENBURY INC: Bosses Get $122 Million Post-Bankruptcy DIVISION SEVEN: Gets OK to Hire Spence Law Office as Counsel DNP EATS: Court OKs Deal on Cash Collateral Access DUCKWORTH LLC: Files Emergency Bid to Use Cash Collateral DURO LEGACY: Seeks Cash Collateral Access E.W. SCRIPPS: S&P Raises Unsecured Debt Rating to 'B+' EARLY BIRD: Unsecureds Will Get 44% of Claims over 5 Years EMPOWER CENTRAL: Deborah Fish Named Subchapter V Trustee ESCALON LIVESTOCK: Taps David C. Johnston as Legal Counsel ESJ TOWERS: Bid to Prohibit Cash Collateral Access Denied ESJ TOWERS: Ordered to File Amended Disclosures by Sept. 10 EVERYTHING BLOCKCHAIN: T. Amon Quits as Director; Replacement Named FEDNAT HOLDING: Seeks to Continue Hearing to Aug. 21 FRANKO CATH: No Known Priority or General Unsecured Debt FUSION GALAXY: Wins Interim Cash Collateral Access FUTURE PRESENT: Court OKs Cash Collateral Access Thru Sep 15 GENESIS CARE: Committee Taps Kramer Levin Naftalis as Counsel GENESIS CARE: PCO Taps Ross Smith & Binford as Legal Counsel GENESIS GLOBAL: NYAG Joins in Objection of SEC GIRARDI & KEESE: Trustee Countersued by Ex-Attorney GUARDIAN BASEBALL: Court OKs Cash Collateral Thru Aug 31 H2O INVESTMENT: Secured Creditor Objects to Plan Approval HAWAIIAN HOLDINGS: Moody's Cuts CFR to B2 & Alters Outlook to Neg. HAWKEYE ENTERPRISES: Court OKs Cash Collateral Access HEARING ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors HEART HEATING: Court OKs Deal on Cash Collateral Access HELLO LIVINGSTON: Lacks Authority for Filing Case, Says Weiss HILLSDALE UNITED: Patricia Fugee Named Subchapter V Trustee HITSON CABINET: Fine-Tunes Plan Documents HOVNANIAN ENTERPRISES: S&P Affirms 'CCC-' Issuer Credit Rating HUB DUB: Gets OK to Tap Law Offices of Joel A. Schechter as Counsel IMEDIA BRANDS: Completes Asset Acquisition Deal with IV Media IMEDIA BRANDS: Court Okays Bankruptcy Sale to IV Media IVCINYA COMPANY: Wins Interim Cash Collateral Access KEN FARRINGTON: Court OKs Cash Collateral Access Thru Sept 27 LAKEVILLE FARMS: Case Summary & 20 Largest Unsecured Creditors LIFESIZE INC: Committee Taps Ross Smith as Special Counsel LUMEN TECHNOLOGIES: S&P Downgrades ICR to 'CCC+', Outlook Negative MADISON CLINIC: Asset Sale Proceeds to Fund Plan MALLINCKRODT PLC: To Pay 50% Interest, Extends Opioid Cash Payment MBE GROUP: Case Summary & 20 Largest Unsecured Creditors MERCY HOSPITAL: U.S. Trustee Appoints Creditors' Committee MIKU INC: Seeks Cash Collateral Access, $1MM DIP Loan from W67 MINSHEW BROTHERS: Seeks Cash Collateral Access MIRACLE CENTER: Seeks Confirmation of Plan MOKELUMNE INVESTMENTS: Voluntary Chapter 11 Case Summary MONTANA TUNNELS: Plans to Pay Creditors in Full N.F. INTERNATIONAL: Seeks to Hire Robert Ward, Esq., as IP Counsel N.F. INTERNATIONAL: Taps Jeffery Taylor, CPA as Accountant NOB HILL INN: Court OKs Cash Collateral Access on Final Basis OPEN COURT SPORTS: Court OKs Cash Collateral Access Thru Aug 23 OUTFRONT MEDIA: S&P Alters Outlook to Stable, Affirms 'B+' ICR PARLEE CYCLES: Wins Interim Cash Collateral Access PERIMETER ORTHOPAEDICS: Taps Durrett Firm as Special Counsel PHUNWARE INC: Incurs $6.5 Million Net Loss in Second Quarter PROTERRA INC: Court OKs Interim Cash Collateral Access PURDUE PHARMA: Still Fully Operating Despite Bankruptcy Dispute R.B. DWYER: Wins Cash Collateral Access Thru Aug. 24 RAGING BULL: November 7 Hearing on Disclosure Statement REMARK HOLDINGS: Amends Purchase Agreement With Ionic Ventures REMARK HOLDINGS: Incurs $5.9 Million Net Loss in Second Quarter RIBA FOODS: Lender Seeks to Prohibit Cash Collateral Access RIBA FOODS: Taps Corporate Strategies as Accounting Consultant RIGHT CHOICE: Court OKs Cash Collateral Access ROCK RIDGE: Nutrien Says Plan is Neither Fair Nor Equitable ROCKING M MEDIA: Lenders Seek to Terminate Cash Collateral Access SALE LLC: Court OKs Interim Cash Collateral Access SHERMAN/GRAYSON: Taps Rosner Law Group as Delaware Counsel SHERMAN/GRAYSON: Taps Shulman as Bankruptcy Counsel ST. CHARLES MEMORY: Wins Interim Cash Collateral Access STRATEGIC MATERIALS: S&P Downgrades ICR to 'D' on Delayed Payments SVB FINANCIAL GROUP: Loses $9 Million in FDIC Fight SVB FINANCIAL: FDIC Wants to Toss $2-Bil. Bankruptcy Suit SYNIVERSE CORP: S&P Downgrades ICR to 'CCC+', Outlook Negative TEAMHEALTH INC: Gets $1.23B Funding From Bridgade-Led Consortium TREETOP DEVELOPMENT: Taps Coldwell as Real Estate Broker TRITEK INTERNATIONAL: Committee Taps Saul Ewing as Co-Counsel VOYAGER AVIATION: U.S. Trustee Unable to Appoint Committee WALNUT SYCAMORE: S&P Downgrades ICR to 'BB-', Outlook Negative WYCKOFF EQUITIES: Court OKs Interim Cash Collateral Access WYTHE BERRY: Has Deal on Cash Collateral Access YS GARMENTS: S&P Downgrades ICR to 'CCC', Outlook Negative ZIPRECRUITER INC: S&P Alters Outlook to Neg., Affirms 'BB-' ICR ********* 1457 REALTY: Seeks Cash Collateral Access ----------------------------------------- 1457 REALTY asks the U.S. Bankruptcy Court for the Eastern District of New York for authority to use cash collateral and provide adequate protection. The Debtor has significant and immediate cash needs to continue paying its ongoing obligations as a debtor in possession and propose a plan of reorganization and emerge from bankruptcy. Wilmington Trust, National Association, not in its individual capacity but solely as trustee of MFRA Trust 2016-1 is the Debtor's prepetition secured lender. Wilmington holds a security interest in the rents, issues and profits from the real property commonly known as 1457 58th Street, Brooklyn, New York 11219, identified under Block 5699, Lot 51, in the Borough of Brooklyn. The Debtor's only source of income is the collection of rents received from the Property. As adequate protection for any diminution in the value of Wilmington's interest in its collateral resulting from (a) the Debtor's use of cash collateral; (b) the use, sale or lease of Wilmington's collateral; or (c) the imposition of the automatic stay under Section 362(a) of the Bankruptcy Code, Wilmington will receive the following adequate protection: (i) replacement liens pursuant to Section 361(2) of the Bankruptcy Code on all property of the Debtor and its estate, whether now owned or hereafter acquired; (ii) to the extent required by the pre-petition loan documents to the same extent and validity as its pre-petition liens; and (iii) adequate protection equal to the pre-petition monthly interest-only mortgage payments at the non-default contract rate made to Wilmington in accordance with the pre-petition Loan Documents. The Adequate Protection Liens will be subject to the following: (i) payments of those fees due to the Office of the United States Trustee pursuant to 28 U.S.C. Section 1930 and any applicable interest thereon under 31 U.S.C. Section 3717; (ii) the payment of allowed professional fees and disbursements incurred by the Debtor's professionals retained by an Order of the Bankruptcy Court, and any statutory committee appointed in the case pursuant to fee orders or any Monthly Compensation Order, and in the event of a default that results in the termination of the Debtor's authorization to use cash collateral, unpaid Professional Fees and Disbursements incurred prior to delivery of a carve out trigger notice in accordance with the Budget not to exceed the sum of $25,000; (iii) any recoveries in favor of the estate pursuant to Chapter 5 of the Bankruptcy Code; and (iv) any amounts allowed by the Court as fees and expenses of a trustee appointed under Section 726(b) of the Bankruptcy Code in an amount not to exceed $10,000. The Debtor's authorization to use cash collateral will commence as of the entry of the Interim Order and terminate upon the earliest of (i) the date that is 91 days after the Petition Date; (ii) entry of a Final Order or a further interim order authorizing the Debtor's use of cash collateral; or (iii) the occurrence of a Termination Event. These events constitute a "Termination Event": (i) the Chapter 11 case will have been dismissed or converted to a case under Chapter 7 of the Bankruptcy Code, or there will have been appointed in the Chapter 11 case, a trustee or examiner with expanded powers beyond the authority to investigate particular activities of the Debtor; (ii) the Interim Order is modified, vacated, stayed, reversed, or is for any reason not binding on the Debtor; (iii) the failure of the Debtor to perform, in any material respect, any of the terms, provisions, conditions, covenants, or obligations under the Interim Order; (iv) a default by the Debtor in reporting financial information as and when required under the Interim Order, continued uncured for a 15 day period; or (v) a variance, resulting from the Debtor's expenditures as set forth in the Budget that exceeds 10% per line item in the Budget, unless caused by an increase in the Debtor's business. A copy of the motion is available at https://urlcurt.com/u?l=xszijY from PacerMonitor.com. About 1457 Realty LLC 1457 Realty LLC owns real estate located at 1457 58th Street Brooklyn, NY valued at $2.2 million. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.Y. Case No. 23-42852) on August 9, 2023. In the petition signed by Jacob Tauber, managing member, the Debtor disclosed $2,204,475 in assets and $2,523,347 in liabilities. Judge Elizabeth S. Stong oversees the case. Avrum J. Rosen, Esq., at Law Offices of Avrum J. Rosen, PLLC, represents the Debtor as legal counsel. 15 HUMBOLDT: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: 15 Humboldt LLC c/o Park Avenue Management 886 Dahill Road, Suite 503 Brooklyn, NY 11204 Chapter 11 Petition Date: August 17, 2023 Court: United States Bankruptcy Court Eastern District of New York Case No.: 23-42940 Judge: Hon. Jil Mazer-Marino Debtor's Counsel: Isaac Nutovic, Esq. LAW OFFICES OF ISAAC NUTOVIC 261 Madison Avenue, 26th Floor New York, NY 10016 Tel: 917-922-7963 Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by David Kenner as manager. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/N3OGETI/15_Humboldt_LLC__nyebke-23-42940__0001.0.pdf?mcid=tGE4TAMA 1ST CAPITAL FINANCE: Seeks to Hire Tortina Bunton as Accountant --------------------------------------------------------------- 1st Capital Finance of South Carolina, Inc. seeks approval from the U.S. Bankruptcy Court for the District of South Carolina to employ Tortina Bunton, an accountant practicing in Arizona. The Debtor requires an accountant to assist in preparing its annual corporate tax returns, 1099-S, business personal property tax returns, and monthly operating reports. Ms. Bunton will be paid $550 per week. As disclosed in court filings, Ms. Bunton is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Ms. Bunton can be reached at: Tortina Bunton 5010 E. Warner Road, Suite 115 Phoenix, AZ 85044 Tel: (480) 899-9212 About 1st Capital Finance of South Carolina 1st Capital Finance of South Carolina, Inc. offers commercial car title loan, motorcycle title loan, semi-truck title loan and a box truck title loan. It is based in Clover, S.C. The Debtor filed Chapter 11 petition (Bankr. D. S.C. Case No. 23-01938) on June 30, 2023, with $4,025,187 in assets and $131,064 in liabilities. Christine Brimm, Esq., a practicing attorney in Myrtle Beach, S.C., has been appointed as Subchapter V trustee. Judge Helen E. Burris oversees the case. The Debtor tapped Jane H. Downey, Esq., at Baker Donelson as legal counsel and Tortina Bunton as accountant. 34 SUMNER: Bid to Use Cash Collateral Denied -------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Western Division, denied the motion to use cash collateral filed by 34 Sumner Realty LLC. As previously reported by the Troubled Company Reporter, the Debtor is attempting to operate its businesses and manage its affairs and properties, although its efforts are being thwarted by the first mortgagee on its properties, Mooring NC IV, LLC. The first mortgage on the Debtor's property located in 34 Sumner Avenue, Springfield, Massachusetts -- save perhaps one condominium and certain parking places -- was originally held by Security Mutual Insurance Company of New York, and was transferred to Mooring in May or June 2022. Security Mutual took possession of the 34 Sumner Avenue Property approximately three years ago, and Mooring has continued to possess the property, receiving rents. There is a second mortgage held by Belvidere Capital LLC. The Debtor said it needs to use the cash collateral assets generated by the rentals to continue paying condominium fees, utilities, insurance, real estate taxes, maintenance, and related items. The Debtor proposed to retain any balance in its debtor-in-possession account. These creditors assert security interests in the Debtors' properties: -- Mooring NC IV, LLC, with a principal place of business at 100 Court Street, P.O. Box 1625, Binghamton, New York, 13902. Mooring claims a first mortgage on the real properties of the Debtor, securing a loan of approximately $3,500,000; this loan was a refinance of the original mortgage obligation incurred in the purchase of the Debtor's real properties. -- Belvidere Capital, LLC, 396 Andover Street, Lowell, MA 01852, claims a second mortgage on the real properties of the Debtor, securing a loan of approximately $3,000,000. The Debtor did not receive the benefits of this loan, but rather an affiliate of the Debtor did. A copy of the order is available at https://urlcurt.com/u?l=gYmJIc from PacerMonitor.com. About 34 Sumner Realty LLC 34 Sumner Realty LLC owns various condominium units, garage units, retail unit, and storage unit, at 34 Sumner Avenue, Springfield, MA, with an aggregate value of $4 million. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-30073) on March 2, 2023. In the petition signed by Louis Masaschi, as manager, the Debtor disclosed $4,000,000 in assets and $7,000,000 in debts. Judge Elizabeth D. Katz oversees the case. The Law Offices of Louis S. Robin serves as counsel to the Debtor. 634 WILSON AVE: Court OKs Cash Collateral Access Thru Aug 31 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of New York authorized 634 Wilson Ave LLC and its affiliates to use cash collateral on an interim basis in accordance with the budget and its agreement with Fannie Mae, through August 31, 2023. The court said to the extent that the terms of the Stipulation and Order conflict with the terms of any of the Loan Documents, the terms of the Interim Order, as modified by the Stipulation and Order, will govern. The final hearing on the matter is set for August 30, 2023 at 10 a.m. As previously reported by the Troubled Company Reporter, Fannie Mae has consented to the use by the Debtors of cash collateral during the period from and including the Petition Date to and including the Termination Date to pay the Debtors' ordinary and necessary administrative expenses on the terms and subject to the conditions contained in the Order. On December 4, 2018, the Debtors each entered into an Amended and Restated Multifamily Note with Greystone Servicing Corporation, Inc. In order to secure the obligations due to Fannie Mae under the Amended Notes, the Debtors on December 4, 2018, each granted Greystone a senior lien in its respective Property pursuant to a Consolidation, Extension and Modification Agreement. As additional security, on December 4, 2018, the Debtors each granted Greystone a security interest in all of its non-real property assets pursuant to a Multifamily Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing. Each ALR was duly recorded in the Office of the City Register and perfected by the filing of UCC1 financing statements with the State of New York and the City of New York. The Debtors' obligations under the Loan Documents are secured by, among other things, first priority liens on substantially all of the Debtors' property. On December 4, 2018, Greystone has assigned all of its right, title and interest in and to the Loan Documents and the liens and security interests conveyed thereunder to Fannie Mae, which assignments have been memorialized by allonges and Assignments of Mortgages. Fannie Mae holds valid, binding, and perfected liens on and security interests in all of the Collateral. The Debtors are indebted to Fannie Mae in the aggregate amount of $3.874 million. Fannie Mae asserts that all rents, issues, or profits received from each Property are property of Fannie Mae pursuant to the Loan Documents. The Debtors specifically dispute Fannie Mae's assertions that the rents, issues, or profits received from each Property are property of Fannie Mae, and the Debtors reserve their right to object to same. Before the Petition Date, the Debtors defaulted under their respective Loan Documents, including by failing to pay monthly installments of debt service commencing in April and May 2020, as applicable. On August 10, 2021, Fannie Mae caused a Notice of Default, Acceleration, and Demand for Payment to be delivered to each Debtor. Fannie Mae commenced actions against each of the Debtors in the Supreme Court of the State of New York, Kings County, to foreclose the CEMAs and related Loan Documents encumbering the Properties. Receivers were appointed in the Debtors' foreclosure cases, who took possession of the respective Properties and collected rents therefrom. A copy of the order is available at https://urlcurt.com/u?l=sqRNf4 from PacerMonitor.com. About 634 Wilson Ave LLC 634 Wilson Ave LLC, et al., own multi-family properties in Brooklyn, New York. 634 Wilson Ave LLC, along with affiliates 221 Himrod ST LLC, 867-871 Knickerbocker LLC, 299 Throop Ave LLC, 1427 43 ST LLC, sought Chapter 11 protection (Bankr. E.D.N.Y. Lead Case No. 23-41156) on April 4, 2023. In the petition filed by Zalmen Wagschal, as sole member, the Debtor reported assets and liabilities between $1 million and $10 million each. The Honorable Bankruptcy Judge Jil Mazer-Marino handles the cases. The Debtors are represented by Erica Feynman Aisner, Esq. at KirbyAisner & Curley LLP. 860 VESTAL EMPIRE: Case Summary & One Unsecured Creditor -------------------------------------------------------- Debtor: 860 Vestal Empire LLC 1090 East 4th Street Brooklyn, NY 11230 Business Description: The Debtor is engaged in activities related to real estate. The Debtor owns real estate located at 860 Vestal Road, Vestal, NY 13850 valued at $2.75 million. Chapter 11 Petition Date: August 16, 2023 Court: United States Bankruptcy Court Eastern District of New York Case No.: 23-42927 Debtor's Counsel: Jonathan S. Pasternak, Esq. DAVIDOFF HUTCHER & CITRON LLP 605 Third Avenue 34th Floor New York, NY 10158 Tel: 212 557 7200 Fax: 212 286 1884 Total Assets: $2,750,000 Total Liabilities: $4,487,161 The petition was signed by David Goldwasser as manager. The Debtor listed U.S. Small Business Admin as its sole unsecured creditor. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ZCGNBXI/860_Vestal_Empire_LLC__nyebke-23-42927__0001.0.pdf?mcid=tGE4TAMA A&P PINTO: Wins Cash Collateral Access Thru Sept 6 -------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, authorized A&P Pinto Truck Express, LLC to use cash collateral on an interim basis in accordance with the budget, through September 6, 2023. The Debtor is permitted to pay: (a) amounts expressly authorized by the Court, including payments to the Subchapter V Trustee and payroll obligations incurred post-petition in the ordinary course of business; (b) the current and necessary expenses set forth in the budget, plus an amount not to exceed 10% for each line item; and (c) additional amounts as may be expressly approved in writing by Bankers Healthcare Group. First Corporate Solutions, Internet Truckstop Payments LLC, and Operation Finance, Inc. assert interests in the Debtor's cash collateral, inferior to Bankers Healthcare. As adequate protection, the Secured Creditors will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as t he prepetition lien, without the need to file or execute any documents as may otherwise be required under applicable non-bankruptcy law. The Debtor will maintain insurance coverage for its property in accordance with the obligations under all applicable loan and security documents. A continued hearing on the matter is set for September 6, 2023 at 2 p.m. A copy of the motion and budget is available at https://urlcurt.com/u?l=aw5CzS from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $28,567 for the week of August 21, 2023; $29,017 for the week of August 28, 2023; and $28,017 for the week of September 4, 2023. About A&P Pinto Truck A&P Pinto Truck Express, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-03044) on July 28, 2023, with $100,001 to $500,000 in assets and liabilities. Judge Tiffany P. Geyer oversees the case. Daniel A. Velasquez, Esq. of Latham, Luna, Eden & Beaudine, LLP represents the Debtor as legal counsel. AEROFARMS INC: Committee Taps Dundon Advisers as Financial Advisor ------------------------------------------------------------------ The official committee of unsecured creditors of Aerofarms, Inc. received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Dundon Advisers, LLC as financial advisor. The committee requires a financial advisor to: a. assist in the analysis, review and monitoring of the restructuring process, including, but not limited to, an assessment of the unsecured claims pool and potential recoveries for unsecured creditors; b. develop a complete understanding of the businesses of Aerofarms and its affiliates and their valuations; c. determine whether there are viable alternative paths for the disposition of the Debtors' assets from those currently or in the future proposed by the Debtors; d. monitor and, to the extent appropriate, assist the Debtors in efforts to develop and solicit transactions that would support unsecured creditor recovery; e. assist the committee in identifying, valuing, and pursuing estate causes of action, including, but not limited to, relating to pre-bankruptcy transactions, control person liability, and lender liability; f. assist the committee in analyzing, classifying and addressing claims against the Debtors and participate effectively in any effort in these Chapter 11 cases to estimate (in any formal or informal sense) contingent, unliquidated, and disputed claims; g. assist the committee in identifying, preserving, valuing, and monetizing tax assets of the Debtors, if any; h. advise the committee in negotiations with the Debtors, lenders and third parties; i. assist the committee in reviewing the Debtors' financial reports; j. assist the committee in reviewing the Debtors' cost/benefit analysis with respect to the assumption or rejection of various executory contracts and leases; k. review and provide analysis of the present and any subsequently proposed debtor-in-possession financing or use of cash collateral; l. assist the committee in evaluating and analyzing avoidance actions, including fraudulent conveyances and preferential transfers; m. assist the committee in investigating whether any unencumbered assets at AeroFarms exist; n. review and provide analysis of any proposed disclosure statement and Chapter 11 plan and, if appropriate, assist the committee in developing an alternative Chapter 11 plan; o. attend meetings and assist in discussions with the committee, the Debtors, the secured lenders, the U.S. trustee and other concerned parties; p. present at meetings of the committee as well as meetings with other key stakeholders and parties; q. provide testimony; and r. perform other financial advisory services for the committee. The firm will be paid at these rates: Principal $850 per hour Managing Director and Senior Adviser $760 per hour Senior Director $700 per hour Director $625 per hour Associate Director $550 per hour Senior Associate $475 per hour Associate $370 per hour For services rendered from and after July 1 (Dundon Advisers' regularly scheduled annual fee revision date), the firm's professionals will be billed as follows: Principal $890 per hour Managing Director and Senior Adviser $790 per hour Senior Director $700 per hour Director $650 per hour Associate Director $550 per hour Senior Associate $475 per hour Associate $350 per hour Eric Reubel, a partner at Dundon Advisers, 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: Eric Reubel Dundon Advisers, LLC Ten Bank Street, Suite 1100 White Plains, NY 10606 Tel: (917) 838-1930 Email: ER@dundon.com About AeroFarms Inc. AeroFarms, Inc. is engaged in large-scale commercial indoor vertical farming, using proprietary aeroponic technology to grow differentiated leafy greens products while using up to 95 percent less water and zero pesticides. AeroFarms operates two commercial farms, which are located in Danville, Virginia and Newark, New Jersey, where they also have their Company headquarters. AeroFarms and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10737) on June 8, 2023. In the petition signed by Guy Blanchard, president and CEO, the Debtor disclosed up to $500 million in assets and up to $100 million in liabilities. Judge Mary F. Walrath oversees the case. The Debtors tapped DLA Piper LLP (US) as general bankruptcy counsel, CloudPoint Capital LLC as investment banker, ICR, LLC as communications and consulting services provider, Omni Agent Solutions as notice and claims agent. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. Fox Rothschild, LLP and Dundon Advisers, LLC serve as the committee's legal counsel and financial advisor, respectively. AFTERSHOCK COMICS: Taps BHC Capital Partners as Financial Advisor ----------------------------------------------------------------- Aftershock Comics, LLC and Rive Gauche Television seek approval from the U.S. Bankruptcy Court for the Central District of California to employ BHC Capital Partners, LLC as their financial advisor. The Debtors require a financial advisor to assist in their efforts to identify third party lenders or investors that would provide the necessary funding to repay their lender, fund a reorganization, and provide sufficient working capital to maintain their operations. The firm's services include: a. introducing the Debtors to, contacting, and obtaining indications of interest from strategic institutional lenders and investors that are interested in consummating a transaction with the Debtors; b. analyzing available transaction options; c. counseling the Debtors as to strategies and tactics for effecting a potential transaction; d. advising the Debtors as to the objectives, structure, and form of a possible transaction, including the form of any agreements related thereto; e. advising the Debtors regarding due diligence presentations related to a potential transaction; f. assisting in negotiations related to a potential transaction, as may be appropriate; g. coordinating with the Debtors' legal counsel regarding matters related to the closing of a transaction; and h. other necessary services. If any of the work contemplated requires the services of a registered broker-dealer, such work will be handled via referral to BHC's FINRA registered affiliate, Brooks, Houghton Securities, Inc. ("Brooks") at no additional cost. If during the term of the agreement or within 12 months thereafter the Debtors complete a transaction with an investor, the Debtors will pay BHC, at the closing of the transaction, a placement fee equivalent to 3 percent of the debt committed amount, plus 5 percent of the junior capital committed amount. The Debtors will also reimburse BHC monthly for work-related expenses incurred. George Psomas, a partner at BHC, 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: George Psomas BHC Capital Partners, LLC 757 3rd Ave. Fl 24 New York, NY 10017 Tel: (212) 753-1991 About AfterShock Comics AfterShock Comics, LLC -- https://Aftershockcomics.com/ -- is an American comic book publisher launched in 2015. The company is based in Sherman Oaks, Calif. AfterShock Comics and affiliate Rive Gauche Television filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. Lead C.D. Calif. Case No. 22-11456) on Dec. 19, 2022. At the time of the filing, AfterShock Comics reported $10 million to $50 million in both assets and liabilities while Rive Gauche reported $50 million to $100 million in assets and $10 million to $50 million in liabilities. Judge Martin R. Barash oversees the cases. David L. Neale, Esq., at Levene, Neale, Bender, Yoo & Golubchik, LLP is the Debtors' bankruptcy counsel. The U.S. Trustee for Region 16 appointed two separate committees to represent unsecured creditors in the Debtors' Chapter 11 cases. Both committees are represented by Sklar Kirsh, LLP. ALIERA COS: Gets Court Confirmation of Liquidating Plan ------------------------------------------------------- Jeff Montgomery of Law360 reports that bankrupt remnants of the health insurance provider Aliera secured a Delaware bankruptcy judge's confirmation of its liquidating Chapter 11 plan Monday, August 14, 2023, with limited or no recoveries expected from more than $900 million in claims. About Aliera Cos. Inc. Aliera Cos. Inc. is focused on providing a full spectrum of revolutionary options and services to a multitude of industries that fit every need and budget. The company provides services to support its subsidiaries which focus on the unique aspects of the health care industry. Plaintiffs in a case -- docketed as Hanna Albina and Austin Willard, individually and on behalf of others similarly situated, Plaintiffs, v. The Aliera Companies, Inc., Trinity Healthshare, Inc. and Oneshare Health, LLC Unity Healthshare, LLC, Case No. 20-CV-00496, (E.D. Ky., Dec. 11, 2020) -- filed an involuntary petition under Chapter 11 of the Bankruptcy Code against Aliera (Bankr. D. Del. Case No. 21-11548) on Dec. 5, 2021. Joseph H. Huston, Jr., Esq., of Stevens & Lee, P.C., is the petitioners and plaintiffs' counsel. On Dec. 21, 2021, Aliera filed a voluntary Chapter 11 petition (Bankr. N.D. Ga. Case No. 21-59493), disclosing assets of $1 million to $10 million and liabilities of $500 million to $1 billion. Advevo LLC and three other Aliera affiliates -- Ensurian Agency LLC, Tactic Edge Solutions LLC and USA Benefits & Administrators LLC -- also filed voluntary Chapter 11 petitions on Dec. 21, 2021. On Jan. 25, 2022, the petitioning creditors obtained an order granting their motion to transfer the voluntary Chapter 11 cases to the Delaware Bankruptcy Court, which has been overseeing the liquidation of Aliera's affiliated corporation, Trinity Healthshare, Inc., now known as Sharity Ministries, Inc. On Feb. 16, 2022, Judge John T. Dorsey of the Delaware Bankruptcy Court ordered the consolidation of Aliera's voluntary Chapter 11 proceeding with the involuntary case filed by the petitioning creditors (with Case No. 21-11548 being the surviving case number) and terminated the company's voluntary proceeding. Meanwhile, Judge Dorsey ordered the joint administration of the involuntary proceeding and the four other voluntary cases filed by the Aliera affiliates, with Case No. 21-11548 as the lead bankruptcy case. The Debtors tapped J. Robert Williamson, Esq., at Scroggins & Williamson, P.C. and Monzack Mersky and Browder, PA as bankruptcy counsels; SeatonHill Partners, LP as financial advisor; and Katie Goodman, managing member of GGG Partners, LLC, as chief liquidation officer. Epiq Corporate Restructuring, LLC is the claims and noticing agent and administrative advisor. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on Feb. 21, 2022. The committee is represented by Greenberg Traurig, LLP. ALROD LOGISTICS: Robert Altman Named Subchapter V Trustee --------------------------------------------------------- The U.S. Trustee for Region 21 appointed Robert Altman as Subchapter V trustee for Alrod Logistics, Inc. Mr. Altman will be paid an hourly fee of $275 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Altman declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Robert Altman P.O. Box 922 Palatka, FL 32178-0922 Phone: 386-325-4691 Email: robertaltman@bellsouth.net About Alrod Logistics Alrod Logistics, Inc. is a company in Jacksonville, Fla., which offers pipe lining services. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01820) on Aug. 3, 2023, with $922,927 in assets and $3,732,863 in liabilities. Alejandro Echeverria, president, signed the petition. Judge Jason A. Burgess oversees the case. Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler, LLP represents the Debtor as legal counsel. AMERICANAS SA: Former Directors Ink Plea Bargain Deals ------------------------------------------------------ Daniel Cancel of Bloomberg News reports that two former directors of embattled Brazilian retailer Americanas SA are collaborating with authorities and have provided "explosive" revelations about their former colleagues in return for leniency, O Globo columnist Lauro Jardim reported. Flavia Carneiro, who worked in the controller department, and Marcelo Nunes of the finance group have signed plea bargain agreements with the Public Prosecutor's Office in Rio de Janeiro, Jardim said, without saying how he obtained the information. The two former executives were sidelined in early February after the company entered bankruptcy protection. About Americanas SA Americanas was one of the largest diversified retail chains in Brazil, with a wide platform of physical stores, robust e-commerce, fintech, and has just entered into the niche food retail. It is listed on B3, being indirectly controlled by billionaire Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles. The retailer nosedived in January 2023 after becoming mired in an accounting scandal. The firm filed for bankruptcy at a court in Rio de Janeiro on Jan. 19, 2023. Americanas sought protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25, 2023. White & Case LLP, led by John K. Cunningham, is the U.S. counsel. AMERICANN INC: Incurs $56K Net Loss in Third Quarter ---------------------------------------------------- Americann, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $55,925 on $582,881 of rental income for the three months ended June 30, 2023, compared to net income of $162,734 on $797,734 of rental income for the three months ended June 30, 2022. For the nine months ended June 30, 2023, the Company reported net income of $53,442 on $2.07 million of rental income compared to a net loss of $346,054 on $1.71 million of rental income for the nine months ended June 30, 2022. As of June 30, 2023, the Company had $15.27 million in total assets, $9.41 million in total liabilities, and $5.85 million in total stockholders' equity. "The Company had an accumulated deficit of $19,705,247 and $19,758,689 at June 30, 2023 and September 30, 2022, respectively. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management may raise additional funds through the sale of its securities or borrowings from third parties," AmeriCann said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1508348/000143774923023496/acan20230630_10q.htm About AmeriCann Americann, Inc. (OTCQB:ACAN) is a specialized cannabis company that is developing state-of-the-art product manufacturing and greenhouse cultivation facilities. Its business plan is based on the continued growth of the regulated marijuana market in the United States. Americann, Inc. reported a net loss of $173,244 for the year ended Sept. 30, 2022, compared to a net loss of $862,893 for the year ended Sept. 30, 2021. Houston, Texas-based MaloneBailey, LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Dec. 29, 2022, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. AMYRIS INC: August 21 Deadline Set for Panel Questionnaires ----------------------------------------------------------- The United States Trustee is soliciting members for committee of unsecured creditors in the bankruptcy case of Amyris, Inc, et al. If a party wishes to be considered for membership on any official committee that is appointed, it must complete a questionnaire available at https://tinyurl.com/j5hm7j8v and return by email it to John Schanne -- John.Schanne@usdoj.gov -- at the Office of the United States Trustee so that it is received no later than 4:00 p.m., on Aug. 21, 2023. If the U.S. Trustee receives sufficient creditor interest in the solicitation, it may schedule a meeting or telephone conference for the purpose of forming a committee. About Amyris Amyris (Nasdaq: AMRS) -- http://www.amyris.com/-- is a leading synthetic biotechnology company, transitioning the Clean Health & Beauty and Flavors & Fragrances markets to sustainable ingredients through fermentation and the company's proprietary Lab-to-Market(TM) technology platform. This Amyris platform leverages state-of-the-art machine learning, robotics and artificial intelligence, enabling the company to rapidly bring new innovation to market at commercial scale. Amyris ingredients are included in over 20,000 products from the world's top brands, reaching more than 300 million consumers. Amyris also owns and operates a family of consumer brands that is constantly evolving to meet the growing demand for sustainable, effective and accessible products. Amyris, Inc, et al. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11131) on Aug. 9, 2023. The petitions were signed by Han Kieftenbeld as interim chief executive officer & chief financial officer. In the petition, Amyris disclosed $679,679,000 in assets and $1,327,747,000 in liabilities. Pachulski Stang Ziehl & Jones LLP serves as the Debtors' bankruptcy counsel. Fenwick & West, LLP is the Debtor's corporate counsel. The Debtors tapped PricewaterhouseCoopers LLP as their financial advisor, while Intrepid Investment Bankers LLC serves as the Debtors' investment banker. Stretto, Inc. is the Debtors' claims, noticing, solicitation agent and administrative adviser. AMYRIS INC: Court OKs $190MM DIP Loan from Euagore -------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Amyris, Inc. and affiliates to use cash collateral and obtain postpetition financing, on an interim basis. Amyris, Inc., Amyris Clean Beauty, Inc., and Aprinnova, LLC have obtained a senior secured superpriority multiple-draw term loan facility in the aggregate principal amount of up to $190 million from Euagore, LLC as administrative agent. The Debtors are permitted to obtain an aggregate principal amount of up to $70 million on an interim basis. The DIP facility is due and payable on December 31, 2023. The Debtors are required to comply with several milestones including: (a) The Petition Date will occur no later than August 9, 2023; (b) The Bankruptcy Court will enter the Interim Order no later than three Business Days following the Petition Date; and (c) The Bankruptcy Court will enter the Final Order no later than 36 calendar days following the Petition Date. The Debtors have an immediate and critical need to obtain the DIP Facility and access cash collateral to, among other things, (a) permit the orderly continuation of their businesses; (b) maintain business relationships with vendors, suppliers, and customers; (c) make payroll; (d) fund expenses of the Chapter 11 Cases; and (e) satisfy other working capital, operational, and general corporate needs. Pursuant to various loan and security agreements, Amyris, Inc. and its subsidiaries (Clean Beauty and Amyris Fuels) have borrowed funds from multiple lenders including Ventures, LLC. As of the Petition Date, Amyris and its subsidiaries owe the lenders a principal amount of at least $295 million, along with accrued interest, fees, expenses, and other obligations. These obligations are guaranteed by the subsidiaries. After the Petition Date, Amyris and its subsidiaries continue to owe the lenders default interest, and other obligations without any defense or offset. As adequate protection, the Prepetition Secured Lenders are granted a valid, perfected replacement security interest in and lien upon all of the DIP Collateral. The Prepetition Secured Lenders are also granted, subject to the Carve-Out, an allowed superpriority administrative expense claim to the fullest extent provided by sections 503(b) and 507(b) of the Bankruptcy Code in each of the Chapter 11 Cases in an amount equal to the Adequate Protection Obligations that are not secured by the Adequate Protection Liens. The Adequate Protection Superpriority Claims will be ahead of and senior to any and all other administrative expense claims of any kind specified or ordered pursuant to any provision of the Bankruptcy Code, but junior to the DIP Superpriority Claims and subject to and subordinate to the Carve-Out and will have recourse to and be payable from all prepetition or postpetition DIP Collateral, including, subject to entry of the Final Order, to the extent provided therein, any Avoidance Action Proceeds. These events constitute an "Event of Default:" (a) The failure of the Debtors to perform, in any material respect, any of the terms, provisions, conditions, covenants, or obligations under the Interim Order; (b) The failure of the Debtors to comply with the Milestones; or (c) The occurrence of an "Event of Default" under the DIP Credit Agreement. A final hearing on the matter is set for September 14, 2023 at 2 p.m. A copy of the order is available at https://urlcurt.com/u?l=syudwq from PacerMonitor.com. About Amyris Amyris -- http://www.amyris.com/-- is a synthetic biotechnology company, transitioning the Clean Health & Beauty and Flavors & Fragrances markets to sustainable ingredients through fermentation and the company's proprietary Lab-to-Market(TM) technology platform. This Amyris platform leverages state-of-the-art machine learning, robotics and artificial intelligence, enabling the company to rapidly bring new innovation to market at commercial scale. Amyris ingredients are included in over 20,000 products from the world's top brands, reaching more than 300 million consumers. Amyris also owns and operates a family of consumer brands that is constantly evolving to meet the growing demand for sustainable, effective and accessible products. Amyris, Inc., and several affiliated companies sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11131) on August 9, 2023. In the petition signed by Han Kieftenbeld, interim chief executive officer and chief financial officer, Amyris disclosed $679,679,000 in assets and $1,327,747,000 in liabilities. Judge Thomas M. Horan oversees the consolidated cases. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as bankruptcy counsel, PricewaterhouseCoopers LLP as financial advisor, Intrepid Investment Bankers LLC as investment banker, Fenwick & West, LLP as corporate counsel, and Stretto, Inc. as claims, noticing, solicitation agent and administrative advisor. Counsel to Euagore, LLC as administrative agent to the DIP Lenders, and the Foris Prepetition Secured Lenders: Michael H. Goldstein, Esq. Alexander Nicas, Esq. Goodwin Procter LLP 620 Eighth Avenue New York, NY 10018 E-mail: mgoldstein@goodwinlaw.com anicas@goodwinlaw.com Co-counsel to the DIP Lenders, the DIP Agent and the Foris Prepetition Secured Lenders: David M. Fournier, Esq. Troutman Pepper Hamilton Sanders LLP Hercules Plaza, Suite 5100 1313 N. Market Street, P.O. Box 1709 Wilmington, DE 19899 E-mail: david.fournier@troutman.com ANCHOR GLASS: S&P Upgrades ICR to 'CCC+', Outlook Negative ---------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based glass packaging manufacturer Anchor Glass Container Corp. to 'CCC+' from 'SD'. S&P raised its rating on the company's first-lien term loan to 'CCC+' from 'D'. S&P also raised its rating on the company's second-lien term loan to 'CCC-' from 'D'. The negative outlook on Anchor reflects S&P's expectation for negative free operating cash flow (FOCF) over the near term due to ongoing destocking trends and an elevated interest expense following the amend and extend of their capital structure. Additionally, the negative outlook reflects the need for Anchor to refinance its first-lien term loan over the next 18 months to avoid the debt becoming current. The amend and extend agreement has reduced near-term refinancing risk The company extended the first- and second lien-term loans to December 2025 and June 2026, respectively. As part of the agreement, the first-lien payment was amended to allow for a company option of SOFR + 5% in cash or SOFR + 2.75% paid in cash with a 3.75% PIK fee. The second-lien term loan was amended to SOFR (cash) + 9% PIK. Both loans have a six-month extension option at the company's discretion for a 75-basis-point (bp) PIK fee for the first lien, and 50 bp PIK fee for the second lien. In addition, the company has extended the ABL facility to March 2026 from September 2023. The transaction provides a near-term solution to the upcoming refinancing risk, but the company will need to address the first-lien term loan maturity over the next 18 months. S&P said, "We expect the company's operating performance will improve through the back end of 2023 as destocking challenges ease. We are forecasting lower top-line revenue through 2023 as tons shipped and packed remains challenged through the second quarter with destocking trends continuing to weigh on the sector. Anchor's specialty liquor and beverage segments have been resilient, which has helped offset some of the volume declines within the ready-to-drink (RTD) and beer segments. Anchor has shifted its product mix away from mass beer and has been focused on growing its specialty liquor and food segments, which we believe can support higher margins and are not as susceptible to material conversion. We are forecasting margin expansion year over year as cost pressures continue to subside and Anchor focuses on operational efficiencies, which included the idling of an underperforming asset in December 2022, which could become permanent." Liquidity should improve given recent equity injection and amended PIK options on the term loans, offset by continued operating pressures and elevated interest expense. While the A&E is leverage neutral, the additional equity should provide headroom to offset the increase in interest expense. S&P said, "We are forecasting leverage below 8x in 2023. S&P Global Ratings'-adjusted FOCF through the first quarter was breakeven, and we are forecasting slightly negative FOCF through year end as destocking trends continue to weigh on operations. Capital spending should be in line with 2022 spending between $30 million and $35 million. We expect Anchor will have roughly $52 million available under its ABL post transaction." S&P said, "The negative outlook on Anchor reflects our expectation for negative FOCF over the near term due to ongoing destocking trends and an elevated interest expense following the amend and extend of its capital structure. Additionally, the negative outlook reflects the need for Anchor to refinance its first-lien term loan over the next 18 months to avoid the debt becoming current." S&P could lower the rating if it believes the company will face a default scenario within the next 12-18 months. This could occur if: -- Operating performance worsens such that its liquidity position and free cash flow generation causes further draws on the ABL facility, pressuring the ABL covenant. -- Anchor's term loans become current with no firm plans in place to refinance the debt structure. S&P could revise its outlook to stable if: -- The company is able to generate positive free cash flow on a sustained basis such that they are able to meet ongoing financial obligations, capital spending, and fund working capital needs; and -- The company addresses the 2025 first-lien term loan maturity in a timely manner. Anchor is the third-largest manufacturer of glass containers in the U.S. and is a leading North American manufacturer of glass containers for the beer, beverage, food, liquor, and ready-to-drink end markets. Anchor operates six glass container manufacturing plants located in Elmira, N.Y.; Henryetta, Okla.; Jacksonville, Fla.; Lawrenceburg, Ind.; Shakopee, Minn.; and Warner Robins, Ga.; and the company's corporate headquarters is in Tampa, Fla. Anchor is an indirect wholly owned subsidiary of Ocelot Acquisition Inc., which is ultimately owned and managed by CVC Capital Partners L.P. The company generated $621 million in revenues in 2022. Assumptions -- U.S. GDP expands 1.7% in 2023 and 1.3% in 2024; -- U.S. consumption increases 2.0% in 2023 and 1.2% in 2024; -- Low- to mid-single digit revenue decline in 2023 due to destocking trends leading to lower volumes followed by low- to mid-single-digit revenue growth in 2024. -- EBITDA margin between 17% and 20% in 2023 and 2024 supported by fall in raw material prices and cost efficiencies. -- Interest expense of around $75 million annually in 2023 to 2024. -- No acquisitions or dividends forecasted; and -- Capital expenditures of around $30 million-$40 million in 2023 and 2024. S&P views Anchor's liquidity as less than adequate. S&P estimates the company's liquidity sources to be around 1.1x over the next 12 months. Pro forma liquidity sources and uses post transaction as of June 20, 2023: Principal liquidity sources: -- Post refinancing availability of $52 million on the revolver; -- Cash FFO of around $25 million-$35 million over the next 12 months; and -- Equity infusion from sponsor CVC Capital of $50 million. Principal liquidity uses: -- Refinancing of current debt and scheduled debt amortization of around $7 million annually; -- Capital expenditures of around $30 million-$35 million annually; and -- Modest intrayear working capital requirements. The company's ABL facility has a springing minimum fixed coverage charge ratio of 1.0x. It is triggered when specified excess availability is less than the greater of $8.0 million or 10% of the line cap for five consecutive business days. S&P expects the company to be in compliance with financial covenants over the next 12 months. S&P's simulated default scenario contemplates a default occurring in 2025 due to sharp revenue and margin declines arising from a combination of an economic contraction, declining demand for glass packaging, and increasing price competition. -- Simulated year of default: 2025 -- EBITDA at emergence: $73.7 million -- EBITDA multiple: 5.0x -- Jurisdiction: U.S. -- Net enterprise value (after 5% administrative costs): $350 million -- Priority claims: $88.3 million -- Collateral value available to first lien claims: $307.7 million -- Estimated first-lien debt claims: $694.0 million -- Recovery rating: 4 -- Recovery range: 30%-50%; rounded estimate: 35% -- Collateral value available to second lien claims: $0 million -- Estimated 2nd priority debt claims: $87.3 million -- Recovery rating: 6 -- Recovery range: 0%-10%; rounded estimate: 0% Note: Debt amounts include six months of accrued interest that S&P assumes will be owed at default. Collateral value includes asset pledges from obligors plus equity pledges in nonobligors. S&P generally assumes usage of 85% for cash flow revolvers at default. ARK LABORATORY: Sept. 9 Deadline on Filing Plan & Disclosures ------------------------------------------------------------- Judge Maria L. Oxholm has approved a stipulation among debtor Ark Laboratory, LLC, the Office of the United States Trustee, and the Unsecured Creditors Committee. At the parties' behest, the Court ordered that these deadlines and hearing dates are modified as follows for Ark Laboratory: * File Combined Disclosure Statement and Plan by Sept. 18, 2023. * Return Ballots and File Objections to Final Approval of Disclosure Statement or Confirmation by Oct. 26, 2023. * The hearing on objections to final approval of the disclosure statement and confirmation of the plan shall be on Nov. 2, 2023 at 11:00 a.m. in Room 1875, 211 W. Fort Street, Detroit, Michigan. About Ark Laboratory Ark Laboratory, LLC, owns and operates a medical laboratory. Ark Laboratory sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-43403) on April 12, 2023. The petition was signed by James Grossi, its principal. In its schedules, the Debtor disclosed $11,096,191 in total assets and $32,057,267 in total liabilities. Judge Maria L. Oxholm oversees the case. Robert N. Bassel, Esq., is the Debtor's legal counsel. BAY AREA COMMERCIAL: Court Confirms Reorganization Plan ------------------------------------------------------- Judge Stephen L. Johnson has entered an order confirming Bay Area Commercial Sweeping Inc.'s Plan of Reorganization for Small Business Under Chapter 11 dated June 21, 2023. The Objection to Confirmation of Debtor's Chapter 11 Plan of Reorganization filed by the Trust Fund is overruled to the extent that any of the objections set forth therein have not previously been overruled by the Court or were otherwise asserted as an objection to confirmation of the Plan. Article 9: Discharge of the Plan shall be modified and replaced in its entirety as follows: "If the Debtor's Plan is confirmed under s 1191(a), on the effective date of the Plan, the Debtor will be discharged from any debt that arose before confirmation of this Plan, to the extent specified in s 1141(d)(1)(A) of the Code, except that the Debtor will not be discharged of any debt to the extent provided in s 1141(d)(6) of the Code. If the Debtor's Plan is confirmed under s 1191(b), confirmation of this Plan does not discharge any debt provided for in this Plan until the court grants a discharge on completion of all payments due within the term of the Plan, which could range from 3-5 years pursuant to s 1191(c)(2) of the Code, or as otherwise provided in s 1192 of the Code. The Debtor will not be discharged from any debt on which the last payment is due after the term of the Plan, which could range from 3-5 years pursuant to s 1191(c)(2) of the Code, or as otherwise provided in § 1192 of the Code." The Debtor will be required to make all payments to creditors as required by the terms of the Plan, and not the Sub-Chapter V Trustee. The Sub-Chapter V Trustee shall remain as trustee and continue with all duties required by 11 U.S.C. Sec. 1183(b) and the provisions of the Plan. Within 14 days after the Plan is substantially consummated, the Debtor must file a notice of substantial consummation of the Plan and serve such notice on the Sub-Chapter V Trustee, the U.S. Trustee, and all parties in interest. Attorneys for the Debtor: Brent D. Meyer, Esq. MEYER LAW GROUP LLP A Limited Liability Partnership 268 Bush Street #3639 San Francisco, CA 94104 Telephone: (415) 765-1588 Facsimile: (415) 762-5277 E-mail: brent@meyerllp.com About Bay Area Commercial Sweeping Bay Area Commercial Sweeping, Inc. -- https://www.bacsweeping.com/ -- filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-50590) on July 8, 2022, listing $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Timothy Nelson has been appointed as Subchapter V trustee. Judge Stephen L. Johnson oversees the case. Brent D. Meyer, Esq., at Meyer Law Group, LLP, is the Debtor's counsel. BIO365 LLC: Taps Husch Blackwell as Special Counsel --------------------------------------------------- Bio365 LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Husch Blackwell, LLP as special food and safety counsel. The firm's services include: (a) Phase 1. Evaluation of laboratory and validated test methods available for testing any molds in the soil, which the Debtor manufactures. (b) Phase 2. Assistance with the submission of soil and raw material tests to determine the risk profiles of the Debtor's products and their ingredients, provide written legal evaluation of test results, and develop product and workplace safety measures for the Debtor's facilities. (b) Phase 3. Assistance with developing talking points and communications for customers as well as associated follow-ups. The firm will be paid at these rates: Emily R. Lyons $645 per hour Paula Pastuskovas $495 per hour Additionally, the following flat rates and project cost limits apply: (a) Phase 1 shall not exceed $8,000; (b) Phase 2 will include a flat fee of $25,000, not including costs associated with laboratory testing; and (c) Phase 3 is estimated to cost $10,000 or less, subject to revisions, volume, and staffing. Emily Lyons, Esq., a partner at Husch Blackwell, disclosed in a court filing that her firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Emily R. Lyons, Esq. Husch Blackwell, LLP 1801 Pennsylvania Avenue, NW Suite 1000 Washington D.C., 20006 Tel: (202) 378-2300/(202) 378-2315 Fax: (202) 378-2319 Email: emily.lyons@huschblackwell.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 and Husch Blackwell, LLP as special counsels; KRD, Ltd. as accountant; and Kander, LLC as financial advisor. Robert Marcus, managing director at Kander, serves as the Debtor's chief restructuring officer. BJL EXPRESS: Taps Jeffery Taylor, CPA as Accountant --------------------------------------------------- BJL Express, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Jeffery Taylor, CPA as accountant. Mr. Taylor's services include organization of business transactions; posting of transactions and bank reconciliations; preparation of monthly operating reports; and any other requests to carry out accounting functions. The accountant will be paid at the rate of $750 per month. Mr. Taylor disclosed in a court filing that he is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Mr. Taylor can be reached at: Jeffery Taylor, CPA Tel: (770) 593-1500 Fax: (404) 591-5930 Email: jefftaylorcpa@att.net About BJL Express BJL Express, LLC, a company in Jonesboro, Ga., operates in the general freight trucking industry. BJL Express filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-54963) on May 29, 2023, with $81,128 in assets and $1,004,297 in liabilities. Gary Murphey has been appointed as Subchapter V trustee. Judge Sage M. Sigler oversees the case. The Debtor tapped Milton Jones, Esq., a practicing attorney in Lovejoy, Ga., as bankruptcy counsel and Jeffery Taylor, CPA as accountant. BRUNK INDUSTRIES: Taps David C. Johnston as Legal Counsel --------------------------------------------------------- Brunk Industries received approval from the U.S. Bankruptcy Court for the Eastern District of California to employ David C. Johnston, Attorney at Law. The Debtor requires legal counsel to: (a) Give advice about the rights, powers and obligations of the Debtor in its Chapter 11 case and in the management of its estate; (b) Take necessary action to enforce the automatic stay and oppose motions for relief from the automatic stay; (c) Take necessary action to recover and avoid any preferential or fraudulent transfers; (d) Appear with the Debtor's president at the meeting of creditors, initial interview with the U.S. trustee, status conference and other hearings held before the court; (e) Review and object to proofs of claim; (f) Take steps to obtain court authority for the sale or refinancing of assets; (g) Prepare a plan of reorganization and take all steps necessary to bring the plan to confirmation; and (h) Represent the Debtor in all adversary proceedings in the bankruptcy court where it is a party. The firm will be compensated at $400 per hour and will be reimbursed for out-of-pocket expenses incurred. James Brunk, the Debtor's president and sole shareholder, paid the firm a retainer of $3,000. David Johnston, Esq., 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 C. Johnston, Esq. David C. Johnston, Attorney at Law 1600 G Street, Suite 102 Modesto, CA 95354 Tel: (209) 579-1150 Fax: (209) 579-9420 Email: david@johnstonbusinesslaw.com About Brunk Industries Brunk Industries filed a Chapter 11 bankruptcy petition (Bankr. E.D. Calif. Case No. 23-90283) on June 26, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Ronald H. Sargis oversees the case. David C. Johnston, Attorney at Law is the Debtor's bankruptcy counsel. BW HAMPTON: Taps NAI Capital Commercial as Real Estate Broker ------------------------------------------------------------- BW Hampton Group, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ NAI Capital Commercial, Inc. The Debtor requires a real estate broker to market for sale its property located at 1210-1212 South Brand Blvd., Glendale, Calif. NAI will get a commission of 4.5 percent of the gross sales price. Guillermo Olaiz, a partner at NAI, 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: Guillermo Olaiz Nai Capital Commercial, Inc. 225 South Lake Avenue, #1170 Pasadena, CA 91101 Tele: (626) 204-1531 Mobile: (626) 945-0305 Email: golaiz@naicapital.com About BW Hampton Group The BW Hampton Group, Inc., a company in Glendale, Calif., filed its voluntary petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 23-13518) on June 7, 2023, with $1 million to $10 million in both assets and liabilities. Judge Sandra R. Klein oversees the case. Laura Portillo, Esq., at Portillo Ronk Legal Team serves as the Debtor's bankruptcy counsel. CAIR HEATING: Interim Cash Collateral Access OK'd ------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Kentucky, Louisville Division, authorized Cair Heating and Cooling, LLC to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. Daikin Comfort Technologies Distribution, Inc. has asserted an interest in all inventory and equipment acquired by the Debtor from Daikin or its affiliates. Daikin also asserts statutory lien rights and/or construction trust fund claims pursuant to various mechanics and materialman's liens in jurisdictions where equipment manufactured or supplied by Daikin has been delivered or installed. As adequate protection, the creditors are granted liens upon the revenues from operations of the Debtor and all other property which is of the same type of collateral and priority as existed as of the Petition Date. The Replacement Liens granted will be deemed effective, valid, and perfected as of the Petition Date without the necessity of the filing or lodging by or with any entity of any documents or instruments otherwise required to be filed or lodged under applicable nonbankruptcy law. The Replacement liens is subject and inferior to the Debtor's obligation to pay U.S. Trustee fees pursuant to 28 U.S.C. section 1930 and the payment of professional fees as set forth in the Budget. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=p2aBw0 from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $325,422 for the week ending August 25; $309,674 for the week ending September 1; and $307,715 for the week ending September 8. About Cair Heating and Cooling Cair Heating and Cooling, LLC has historically been engaged in both commercial and residential HVAC installations, and currently maintains warehouses and offices in Louisville, Kentucky, Cincinnati, Ohio; Columbus, Ohio; and Indianapolis, Indiana. The majority of the Debtor's work consists of installing HVAC systems in multi-family residential projects. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr W.D. Ky. Case No. 23-31622) on July 14, 203. In the petition signed by Kevin Clapp, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Charles R. Merrill oversees the case. Dean A. Langdon, Esq., at Delcotto Law Group PLLC, represents the Debtor as legal counsel. CANO HEALTH: Davis Polk Advises Rubicon on Amendment, Waiver ------------------------------------------------------------ Davis Polk advised Rubicon Founders LLC, as lender, in connection with an amendment and covenant waiver with respect to Cano Health's $150 million term loan side-car credit facility. Among other things, the amendment provided for (i) a one-year waiver of the facility's financial covenant, (ii) sale covenants requiring the company to formally launch, announce and pursue a comprehensive process to sell the company, (iii) participation rights for the lenders in certain new debt financings, (iv) a premium payment, interest rate increases and other enhanced credit protections and (v) reporting requirements under the amended credit agreement. Cano Health is a primary-care-centric, technology-powered healthcare delivery and population health management platform and is one of the largest independent primary care physicians groups in the United States. It employs approximately 400 providers across 172 owned medical centers and is primarily focused on Medicare-eligible beneficiaries. The Davis Polk restructuring team included partner Brian M. Resnick and associates Stephanie Massman and Audrey Youn. The finance team included counsel Bernard Tsepelman. The corporate team included partners Thomas J. Malone and Lee Hochbaum. Partner Corey M. Goodman and associate Dmitry Dobrovolskiy provided tax advice. Partner Howard Shelanski and counsel Gregory S. Morrison provided antitrust and competition advice. Members of the Davis Polk team are based in the New York and Washington DC offices. Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited liability partnership, and its associated entities. About Cano Health Cano Health, Inc. (NYSE: CANO) -- canohealth.com -- is a primary care-centric, technology-powered healthcare delivery and population health management platform. Cano Health reported a net loss of $428.39 million in 2022, a net loss of $116.74 million in 2021, a net loss of $71.06 million in 2020, and a net loss of $19.78 million in 2019. CASH CLOUD: Buyer Objects to Case Remaining on Indefinite Hold -------------------------------------------------------------- Christopher McAlary filed an objection to the First Amended Chapter 11 Plan of Reorganization dated Aug. 1, 2023, filed by Cash Cloud, Inc. d/b/a Coin Cloud. On June 5, 2023, Debtor filed its Notice Of Auction Results Regarding Sale Of Substantially All Of The Debtor's Assets, reflecting that: * The Debtor held an auction for the purchase of substantially all of the Debtor's assets (the "Sale") on June 2, 2023. Heller Capital, LLC and Genesis Coin, Inc., was the Successful Bidder, with a Successful Bid of $5,700,000, subject to the terms and conditions of its bid. Additionally, Christopher McAlary was the Successful Bidder for the purchase of the equity interests and assets of Coin Cloud Brasil Ativos Digitais Ltda ("Coin Cloud Brazil"), with a Successful Bid of $50,000 and repayment of the receivable (the "Brazil Receivable") owed to Debtor from Coin Cloud Brazil in the approximate amount of $600,000. * The Stalking-Horse Bidder, RockItCoin, LLC, was designated as the Back-Up Bidder with a Qualified Bid in the amount of $3,237,000. At the outset, McAlary makes clear he does not object to the professed liquidation goals of the original Plan being adopted. McAlary does object to this case remaining on indefinite hold as the case professionals continue to incur fees without having or being willing to sell remaining estate assets to realize enough cash to pay the existing administrative expenses, not to mention the ones accruing during the time between confirmation, should it occur, and the ephemeral "Effective Date" sometime in the future when the Debtor has obtained enough fees from litigation to pay all administrative expenses in full. Currently, the Debtor is not able to demonstrate that it will ever be able to pay administrative expenses in full such that an "Effective Date" will ever occur. In fact, all evidence is to the contrary. While amending the Amended Plan to, inter alia, provide for the delayed (and probably never-occurring) effective date, the Debtor has not complied with the disclosure and solicitation requirements accompanying its amendment. In addition to not knowing when or if an "Effective Date" will ever occur, no creditor was able to ascertain by yesterday, the ballot deadline, whether such creditor would be better off in a Chapter 7 liquidation. Since the Debtor is not up to date on Monthly Operating Reports, it is impossible to know how much the estate owes post-petition. With respect to professional fees, counsel for the Committee has not filed a fee statement for June, the financial advisor to the Committee, FTI has not filed ANY fee statements and no professionals have filed fee statements for July. The requirement (as a condition to approval of interim fee payment procedures) that the professionals file interim fee applications at least every 120 days has been ignored. As set forth in McAlary's Motion to Convert Case to Chapter 7, the Amended Plan reflects that the Debtor plans to liquidate. The Debtor has already stated that it is no longer doing business, and it is clear that the Debtor has no ability to reopen its business. Debtor has sold substantially all of its assets, and rejected substantially all remaining contracts. As such the Amended Plan is a liquidating plan. While the concept of a liquidating plan overseen by a neutral third party is not inappropriate in this case, here the inability to fund the professional fees and other accrued administrative expenses demonstrate that confirmation would only extend indefinitely the period during which the six groups of professionals will continue to incur administrative fees. That result is unacceptable, says McAlary. Counsel for Christopher McAlary: Dawn M. Cica, Esq. CARLYON CICA CHTD. 265 E. Warm Springs Road, Suite 107 Las Vegas, NV 89119 Tel: (702) 685-4444 Fax: (725) 386-4979 E-mail: dcica@carlyoncica.com About Cash Cloud Cash Cloud Inc., doing business as Coin Cloud, operates automated teller machines for buying and selling Bitcoin, Ethereum, Dogecoin, and more than 40 other digital currencies with cash, card and more. Cash Cloud sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 23-10423) on Feb. 7, 2023, with $50 million to $100 million in assets and 100 million to $500 million in liabilities. Chris McAlary, president of Cash Cloud, signed the petition. Judge Mike K. Nakagawa oversees the case. The Debtor tapped Fox Rothschild, LLP as bankruptcy counsel; Baker & Hostetler, LLP as regulatory counsel; and Province, LLC as financial advisor. Stretto is the claims agent. The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Debtor's case. The committee tapped McDonald Carano, LLP and Seward & Kissel, LLP, as legal counsel; and FTI Consulting, Inc., as financial advisor. CELSIUS NETWORK: Okayed to Poll Account Holders on Plan ------------------------------------------------------- Jonathan Randles of Bloomberg Law reports that Bankrupt crypto lender Celsius Network LLC won court permission to start polling account holders on its proposal to restart as a new user-owned company and distribute an estimated $2 billion of Bitcoin and Ether. US Bankruptcy Judge Martin Glenn said Monday he'd allow Celsius to begin sending ballots to account holders alongside other voting materials meant to provide a plain-language explanation of the company's plan to repay customers. Judge Glenn said his approval is contingent upon company advisers providing additional information about the volatility of the crypto industry and challenges that could hinder Celsius' crypto mining operation. The Bankruptcy Court on Aug. 17, 2023, entered an order (I) Approving the Adequacy of the Debtors' Disclosure Statement, (II) Approving the Solicitation and Voting Procedures with Respect to the Confirmation of the Debtors' Joint Plan of Reorganization, (III) Approving the Form of Ballots and Notices in Connection Therewith, (IV) Scheduling Certain Dates with Respect Thereto, (V) Authorizing and Approving Reimbursement of Certain of the Plan Sponsor's Fees and Expenses, and (VI) Granting Related Relief Related. The Plan confirmation hearing will be held on Oct. 2, 2023, at 2:00 p.m. at Courtroom 523 (MG) and Zoom. About Celsius Network Celsius Network LLC -- http://www.celsius.network/-- is a financial services company that generates revenue through cryptocurrency trading, lending, and borrowing, as well as by engaging in proprietary trading. Celsius helps over a million customers worldwide to find the path towards financial independence through a compounding yield service and instant low-cost loans accessible via a web and mobile app. Celsius has a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. The Celsius Wallet claims to be one of the only online crypto wallets designed to allow members to use coins as collateral to get a loan in dollars, and in the future, to lend their crypto to earn interest on deposited coins (when they're lent out). Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. But the lenders' business model came under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May 2022. New Jersey-based Celsius froze withdrawals in June 2022, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market. The list of major crypto firms that have filed for bankruptcy protection in 2022 now includes Celsius Network, Three Arrows Capital and Voyager Digital. Celsius Network, LLC and its subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex Mashinsky, the Debtors estimated assets and liabilities between $1 billion and $10 billion. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankrupty counsels; Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. Stretto is the claims agent and administrative advisor. On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. The committee tapped White & Case, LLP as its bankruptcy counsel; Elementus Inc. as its blockchain forensics advisor; M3 Advisory Partners, LP as its financial advisor; and Perella Weinberg Partners, LP as its investment banker. Shoba Pillay, Esq., is the examiner appointed in the Debtors' Chapter 11 cases. Jenner & Block, LLP and Huron Consulting Services, LLC, serve as the examiner's legal counsel and financial advisor, respectively. CELSIUS NETWORK: Says Disclosure Statement Already Adequate ----------------------------------------------------------- Celsius Network LLC, et al., filed an omnibus reply in support of the Disclosure Statement for their Joint Chapter 11 Plan of Reorganization and the Debtors' Motion for Entry of an Order Approving the Adequacy of the Debtors' Disclosure Statement, and in response to certain of the objections, limited objections, letters in response to, and reservations of right with respect to the Disclosure Statement. More than a year since the Petition Date, the Chapter 11 Cases have reached their final stages. The Debtors have worked hand-in-glove with the Committee to identify and develop the Fahrenheit Plan to maximize the value of the Debtors' liquid and illiquid assets for the benefit of their creditors. The Plan is the culmination of a months'-long competitive auction process that generated hundreds of millions of dollars of additional value for creditors. Following the auction, the Debtors worked tirelessly to build additional consensus for the Plan. The amount of support that the Plan has garnered is remarkable, particularly given the unique nature of these Chapter 11 Cases and the significant failings of Celsius' prepetition business practices. The Court has already approved settlements with the Custody and Withhold ad hoc groups that resolved contentious litigation and formed the basis for the Plan treatment of those groups. The Debtors and the Committee also settled the multi-faceted litigation with the Series B Preferred Holders, perhaps the most significant hurdle to confirmation, allowing the Debtors to return the value of CNL, Mining, and GK8 to Account Holders. In addition, following a three-day mediation with Judge Wiles, the Debtors, the Committee, the Earn Ad Hoc Group, and the Retail Borrower Ad Hoc Group signed a term sheet that resolved key intercreditor issues between the Earn and Borrow customers. The Debtors and the Committee have also resolved the Class Claim Settlement Motion as part of that mediation term sheet, which will greatly streamline the claims reconciliation process and allow distributions to be made to creditors promptly upon the Effective Date of the Plan, as well as increase Claims by Account Holders (other than Custody Claims) who do not opt out of the class settlement by 5% on account of Celsius' prepetition fraud, misrepresentations, and other noncontractual claims. The Debtors now seek approval of their Disclosure Statement -- a tome of over 300 pages even prior to the lengthy exhibits -- which provides significant and adequate disclosure regarding the Plan. The Chapter 11 Cases are unique and complex, the transactions contemplated by the Debtors' Plan are similarly unique and complex, and the Debtors' diverse creditor body has varying levels of familiarity with the bankruptcy law process. Accordingly, the Debtors have worked diligently to tailor their Disclosure Statement to their creditor body -- to explain the Plan and what it means for creditors in "plain English" wherever possible to ensure that Account Holders understand the proposed transactions and are provided with adequate information to make an informed decision regarding whether to vote to accept or reject the Plan, as required by Section 1125 of the Bankruptcy Code. Put simply, there can be no serious dispute that the Disclosure Statement provides adequate information regarding the Plan and should be approved. The Disclosure Statement begins with an executive summary of over twenty pages that straightforwardly explains the key terms of the Plan, with detailed charts for each type of Account Holder Claims detailing the treatment being provided to Earn, Borrow, Custody and Withhold, and the elections open to each Account Holder. The Disclosure Statement also includes nearly ninety pages of "frequently asked questions" and answers to streamline the most sought-after information regarding the Plan and what it means for creditors. Finally, the Disclosure Statement includes detailed financial projections and valuations, as well as a presentation from Fahrenheit which is tailored to explain their vision for NewCo to the Debtors' creditors, who will be the equity owners of NewCo. As is typical in large Chapter 11 Cases, although over a dozen Objections were filed, the vast majority of which do not actually argue that the Disclosure Statement does not provide adequate information. Instead, these Objections are premature confirmation objections that are not properly considered at a Disclosure Statement. To the extent the Court entertains these premature confirmation objections at the Disclosure Statement hearing, it is not even a close call: the Plan is not patently unconfirmable, and the Court should overrule the confirmation-related objections at this stage. The Debtors recognize that certain creditors, particularly the vocal holders of CEL Token who are objecting to the proposed valuation of the CEL Token contained in the Plan, may not presently support the Plan. That does not, however, render the disclosure about the Plan, the proposed CEL Token Settlement, the treatment of CEL Token Claims, and the valuation of CEL Token, among other issues, inadequate. These creditors will "have their day in court" and be able to object to the Plan at the appropriate time—the confirmation hearing. Likewise, the U.S. Trustee's objection is premature, and the issues raised therein are better suited for the confirmation hearing. While the U.S. Trustee asserts that the Disclosure Statement does not include adequate disclosure regarding the proposed releases, that is simply not credible -- the Disclosure Statement includes a section explaining the proposed releases and exculpations in plain English for approximately ten pages. The Debtors intended this disclosure to be the most robust and understandable explanation of releases given that most of the Debtors' creditors are retail holders. The substantive objections to the Plan in the U.S. Trustee's objection are similarly fatally flawed. The objection includes a significant misunderstanding of the applicable standards in this Circuit for exculpations and consensual third-party releases. Large chapter 11 cases in this District routinely include consensual third-party releases, and this Court routinely approves them. This case is not Purdue, where the Sackler family was seeking a nonconsensual release, which is a plan provision that must demonstrate that the heightened Metromedia factors have been satisfied to justify such extraordinary relief. The Plan, by contrast, merely includes a typical consensual release, which is mutual -- each Releasing Party is also a Released Party, and all parties have the opportunity to opt out of the releases. As a settlement with the SEC, the Debtors agreed to revise the Plan to have the release be "opt in" for classes deemed to reject the Plan. As to the exculpation provisions, the U.S. Trustee curiously argues that the exculpation must have an opt out option for creditors, without providing any precedent or legal authority for that proposition. But these are all issues that the Court can decide at confirmation and need not reach at the Disclosure Statement hearing. The remaining "patently unconfirmable" objections are of the same vein. Perplexingly, the Earn Ad Hoc Group filed a reservation of rights regarding, among other issues, governance concerns, despite the fact that they signed a term sheet following mediation that included a resolution of these same governance issues -- including the right of the Earn Ad Hoc Group to appoint a member of the Litigation Oversight Committee as the result of that mediated agreement. But putting that peculiarity to the side, the governance of the NewCo is simply not before the Court at the Disclosure Statement hearing. Additionally, Mr. Kieser, a member of the Retail Borrower Ad Hoc Group, argues that all of the Earn creditors should be subordinated to the retail borrowers' claims because the Earn claims arise from the purchase or sale of a security pursuant to section 510(b) of the Bankruptcy Code. This transparently self-serving argument (that over 90% of the Debtors' creditors should be subordinated to claims of the type held by Mr. Kieser) is as preliminary as it is legally incorrect. Certain of the reservations of rights also bear mentioning. The Debtors have worked constructively with federal and state regulators to ensure that the Plan (and NewCo's business) is fully regulatorily compliant. The SEC filed a reservation of rights noting its concerns regarding the potential tokenization of the Illiquid Recovery Rights under the Plan. In response, the Debtors removed that potential outcome from the Plan and Disclosure Statement. Notably, the SEC noted that the Debtors "cooperated with the staff in addressing other concerns regarding the Disclosure Statement and Plan." Likewise, the state regulators filed reservations of rights noting that constructive dialogues were ongoing regarding the treatment of state regulatory claims, and the Debtors believe that they have now resolved all of such concerns for purposes of the Disclosure Statement. Put simply, the Debtors' 300-plus-page Disclosure Statement addresses all of the disclosure-related Objections and otherwise contains adequate information to satisfy the requirements of section 1125 of the Bankruptcy Code. Accordingly, the Disclosure Statement Motion should be granted, and the Disclosure Statement should be approved. The Debtors look forward to commencing solicitation on the Plan and working towards their ultimate goal of confirming the Plan and commencing distributions to creditors by the end of 2023. The Debtors received approximately 40 total objections, two of which are formal reservations of rights, and approximately twenty-three of which are letters that the Debtors are treating as Objections, as well as a number of informal comments. The objections generally fall into one or more of the following two categories: (a) Objections arguing that the Disclosure Statement does not provide adequate information as required under Section 1125 of the Bankruptcy Code; and (b) objections arguing that the Disclosure Statement cannot be approved because the Plan is patently unconfirmable (which are more accurately objections to the Plan and are therefore premature and must be addressed during the confirmation process). The Disclosure Statement was either revised to address the disclosure-related objections, or these objections should be overruled, and the Disclosure Statement should be approved. Counsel to the Debtors: Joshua A. Sussberg, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, NY 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 - and - Patrick J. Nash, Jr., Esq. Ross M. Kwasteniet, Esq. Christopher S. Koenig, Esq. Dan Latona, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 About Celsius Network Celsius Network LLC -- http://www.celsius.network/-- is a financial services company that generates revenue through cryptocurrency trading, lending, and borrowing, as well as by engaging in proprietary trading. Celsius helps over a million customers worldwide to find the path towards financial independence through a compounding yield service and instant low-cost loans accessible via a web and mobile app. Celsius has a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. The Celsius Wallet claims to be one of the only online crypto wallets designed to allow members to use coins as collateral to get a loan in dollars, and in the future, to lend their crypto to earn interest on deposited coins (when they're lent out). Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. But the lenders' business model came under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May 2022. New Jersey-based Celsius froze withdrawals in June 2022, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market. The list of major crypto firms that have filed for bankruptcy protection in 2022 now includes Celsius Network, Three Arrows Capital and Voyager Digital. Celsius Network, LLC and its subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex Mashinsky, the Debtors estimated assets and liabilities between $1 billion and $10 billion. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankrupty counsels; Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. Stretto is the claims agent and administrative advisor. On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. The committee tapped White & Case, LLP as its bankruptcy counsel; Elementus Inc. as its blockchain forensics advisor; M3 Advisory Partners, LP as its financial advisor; and Perella Weinberg Partners, LP as its investment banker. Shoba Pillay, Esq., is the examiner appointed in the Debtors' Chapter 11 cases. Jenner & Block, LLP and Huron Consulting Services, LLC, serve as the examiner's legal counsel and financial advisor, respectively. CELSIUS NETWORK: Unsecureds Owed $50M Get 38%-67% in Plan --------------------------------------------------------- Celsius Network LLC, et al., submitted a Revised Joint Chapter 11 Plan of Reorganization and a Revised Disclosure Statement to, among other things, incorporate an offer by Fahrenheit Group. The Plan provides for an allocation of the entire value of the Debtors' Estates among their creditors and other stakeholders. This introduction is meant to provide a succinct summary of the Plan. The Plan includes many compromises that are meant to create the most equitable, efficient, and economical outcome for all creditors and stakeholders. In October 2022, the Debtors commenced a marketing and sale process for all of the Debtors' assets. The Debtors and their advisors contacted over 130 parties that they believed would be interested in a potential transaction. This marketing process resulted in six non-binding bids for their Retail Platform Assets (or portions thereof), three non‑binding bids for their mining business, and other bids for individual assets. On Feb. 15, 2023, the Debtors announced that, in consultation with the Committee, they had reached an agreement in principle with NovaWulf for NovaWulf to sponsor the Debtors' reorganization. On March 1, 2023, NovaWulf was designated as the Stalking Horse Bidder. On March 31, 2023, the Debtors filed a chapter 11 plan for the NovaWulf Transaction. Prior to the Final Bid Deadline, the Debtors and the Committee identified two additional Qualified Bidders -- (a) the Fahrenheit Group; and (b) the Blockchain Recovery Investment Consortium, which includes Van Eck Absolute Return Advisers Corporation and GXD Labs LLC (collectively, the "BRIC"). As a result, the Debtors and the Committee determined to hold an Auction to determine the highest and best bid. Starting on April 25, 2023, and ending on May 24, 2023, the Debtors conducted multiple rounds of bidding ending in the selection of Fahrenheit as the Successful Bidder and the BRIC as the Backup Bidder. The revised Plan incorporates both of these bids and provides the Debtors with the ability to toggle to the backup bid if Fahrenheit's NewCo proposal cannot be completed. No matter what transaction is ultimately pursued, the Debtors' creditors will receive significant value. The Plan contemplates that the Debtors will first pursue the NewCo Transaction (a reorganization) and that, if the NewCo Transaction cannot be pursued, the Debtors can pivot to the Orderly Wind Down (a standalone reorganization of the Debtors' mining business and an orderly liquidation of the Debtors' other assets). Under either transaction, the Debtors will promptly distribute at least $2.03 billion of Cryptocurrency to their creditors, subject to the fluctuations in Cryptocurrency prices. The NewCo Transaction sponsored by the Fahrenheit Group recognizes and seizes on the long-term promise and potential of Cryptocurrency, particularly with respect to the two primary consensus mechanisms for verifying Cryptocurrency transactions on the blockchain—mining and staking. The NewCo Transaction results in the creation of a new, ambitious Cryptocurrency company that will be owned by customers, file public reports with the SEC to ensure transparency, and importantly, fully comply with all applicable regulations. NewCo will have no funded debt and will be equipped to capitalize on an industry that is poised for significant future growth. Moreover, the Fahrenheit Group intends to list NewCo Common Stock on NASDAQ, which is intended to maximize liquidity for creditors and better position NewCo to potentially access the capital markets in the future at the discretion of the NewCo board of directors, a majority of whom will be appointed by customers. Upon emergence, NewCo will be managed by Fahrenheit, which is comprised of experienced crypto-native operators, each of whom have industry-leading experience in various facets of the Cryptocurrency space and are well positioned to lead NewCo for the benefit of the Debtors' creditors. Fahrenheit has committed to buy (with $50 million in Cash) a meaningful equity stake in NewCo, and Fahrenheit's management team will receive a portion of their compensation in NewCo Common Stock, thereby aligning the interests of the Fahrenheit Group and the holders of NewCo Common Stock (i.e., the Debtors' creditors) and incentivizing Fahrenheit to grow NewCo for the benefit of NewCo's stakeholders. The Orderly Wind Down is an alternative to the NewCo Transaction and operates as a failsafe "Plan B" alternative if the NewCo Transaction cannot be completed for any reason. The Orderly Wind Down avoids a fire-sale liquidation that would result in significantly lower recoveries to creditors. This alternative is contemplated by the Plan because the Cryptocurrency landscape has proven to be dynamic and unpredictable. The Debtors and the Committee believe it is important for the Debtors to be able to pivot quickly to an alternative, without the need to restart the plan process and propose and solicit a new chapter 11 plan, and incur additional administrative expense, in the event the NewCo Transaction cannot be consummated for any reason. The NewCo Transaction The NewCo Transaction provides stakeholders with the opportunity to own NewCo and realize the potential upside value of a new Cryptocurrency company that will emerge from chapter 11 with a fresh start and will be ready to operate responsibly and transparently for the benefit of creditors. At its core, the NewCo Transaction provides for (a) the distribution of a significant amount of the Debtors' Liquid Cryptocurrency to creditors on or around the Effective Date of the Plan, and (b) the creation of NewCo -- a new public-reporting, compliant entity, which will be owned by the Debtors' customers when the Debtors exit bankruptcy. NewCo will be predicated on transparency and governed by a board of directors, a majority of which will be appointed by the Debtors' creditors. Fahrenheit will form NewCo prior to the Effective Date. On the Effective Date, NewCo will be vested with the NewCo Assets (including the mining business, institutional loan portfolio, and other alternative investments), which Fahrenheit will manage for the benefit of NewCo's stakeholders. As equity owners of NewCo, the value of Fahrenheit's efforts will ultimately be realized by the Debtors' Account Holders. Fahrenheit intends to list the equity of NewCo on NASDAQ. An equity listing on a public exchange such as NASDAQ is intended to provide creditors with maximum flexibility to decide for themselves whether they want to (a) hold their shares in NewCo and remain investors in NewCo's long-term vision, or (b) sell their shares in NewCo and thereby immediately monetize their share of the Debtors' illiquid assets and the other assets held by NewCo. As further described in the Fahrenheit Business Plan, NewCo will have two main operating business lines: Bitcoin mining and staking. Mining. U.S. Data Mining Group, Inc. (d/b/a US Bitcoin Corp.) ("US Bitcoin") will run NewCo's mining operations. US Bitcoin is one of the largest and most successful Bitcoin mining operators in the country, and has included a variety of potential partnerships, options, and guarantees for NewCo's mining operations that provides a clear path to energize NewCo's entire existing fleet of miners, de-risk the build out of additional mining capacity, and grow or replenish NewCo's mining rigs in a cost-controlled and efficient manner. Staking. Proof Group Capital Management ("Proof Group") will lead NewCo's staking efforts. Proof Group has substantial experience staking Cryptocurrency worth hundreds of millions of dollars for its own clients. Through the NewCo Transaction, Proof Group will contribute its staking intellectual property to NewCo and assist NewCo in developing and growing its staking infrastructure. NewCo will, therefore, be set up with a significant and sophisticated staking platform, which could be utilized to create more value for NewCo to the extent that any new, regulatorily-compliant staking opportunities develop. NewCo will be seeded with up to $450 million of the Debtors' Cryptocurrency. Subject to the direction of the NewCo board of directors, the Fahrenheit Group intends to utilize much of NewCo's balance sheet to invest in and grow the NewCo staking and mining businesses, and to develop and execute on the partnerships that Fahrenheit is bringing to NewCo. While the Debtors have significant mining operations today, Fahrenheit will optimize, improve, and grow the mining business. The Debtors and the Committee believe the investment in NewCo creates the opportunity to generate significant value for Celsius creditors. As demonstrated by the charts below, the value generated by NewCo is expected to be significantly higher than liquidating the Debtors' assets and distributing that value to creditors. To the extent NewCo is successful in its new business development endeavors or if the Cryptocurrency markets continue to improve, NewCo offers additional upside, and the value of NewCo Common Stock could ultimately be multiples of the projections contained in this Disclosure Statement. Under the NewCo Transaction, creditors will receive: (a) BTC and ETH; (b) NewCo Common Stock; and/or (c) Litigation Proceeds (collectively, the "Unsecured Claim Distribution Consideration"). The recoveries provided to creditors under the NewCo Transaction are significant: * 85.6% for Holders of Retail Borrower Deposit Claims, which represents a midpoint recovery based on the average loan to value ("LTV") ratio of the total Retail Borrower Advance Obligations against the Retail Borrower Deposit Claims; * 70% for Holders of Convenience Claims; * 67.0% for Holders of General Earn Claims; * 72.5% of the Cryptocurrency transferred to the Debtors for Holders of General Custody Claims who accept the Custody Settlement; and * 72.0% for Holders of Withhold Claims. Distributions to creditors under the NewCo Transaction will occur quicker than in the Orderly Wind Down. If the Plan is confirmed in the fall of 2023 as currently contemplated, creditors will likely start receiving distributions before the end of 2023. The Debtors and the Committee also believe that NewCo Common Stock will provide greater liquidity and value to creditors who wish to sell their equity compared to liquidation trust interests, which historically trade for a fraction of the value of the assets that make up the liquidation trust. Finally, Holders of Claims that vote to accept the Plan will have the option to elect to receive more NewCo Common Stock or more Liquid Cryptocurrency at a discount (the "Unsecured Claim Distribution Mix Election"). Account Holders will get to make that election when they vote on the Plan, which will not occur until after the Bankruptcy Court approves this Disclosure Statement. The Debtors' ability to honor such elections will depend on whether other creditors make the opposite election. The Debtors are aware that there are risks to implementing the NewCo Transaction. Those potential risks are described in detail in this Disclosure Statement. The Debtors and the Committee believe that it is in the best interests of all stakeholders to prepare for a scenario where the NewCo Transaction cannot be completed. The Plan contemplates an option for the Debtors to "toggle" to the Orderly Wind Down at any time if they determine in good faith that, an Orderly Wind Down is in the best interests of the Debtors' Estates due to complications or delays in implementing the NewCo Transaction. If the Debtors pivot to the Orderly Wind Down, they will do so on the terms set forth in the Backup Plan Sponsor Agreement that they have negotiated with the Backup Plan Sponsor, the BRIC —or on terms that provide a better recovery to the Debtors' creditors than the Backup Plan Sponsor Agreement, which terms may be with a different Backup Plan Sponsor than the BRIC. The current Backup Plan Sponsor Transaction contemplates providing recoveries to creditors in the following ways: (a) 100 percent of the equity interests in a pure play, publicly traded mining business with a potential management contract with GXD Labs LLC; (b) a Liquid Cryptocurrency distribution on or as soon as practicable after the Effective Date; and (c) a timely monetization of the remaining assets of the Debtors' Estates and subsequent Liquid Cryptocurrency distributions to creditors from the proceeds thereof, likely through the creation of a liquidating trust. Unlike the NewCo Transaction, the Orderly Wind Down is expected to take up to five years to complete and offers limited upside as compared to the equity in NewCo. Moreover, none of the partnership and other strategic opportunities contained in the NewCo Transaction, which are intended to position NewCo to grow its mining business responsibly and significantly, would be available under the Orderly Wind Down. The Orderly Wind Down, however, will provide creditors with better recoveries than a straightforward chapter 7 liquidation. Under the Plan, Class 8 Unsecured Loan Claims total $88M. The estimated NewCo transaction recovery under the Plan is 67.0%. The projected Orderly Wind Down recovery under the Plan is 61.2%. The estimated recovery under Chapter 7 Liquidation is 47.4%. Each Holder of an Allowed Unsecured Loan Claim shall receive its Pro Rata share of the Unsecured Claim Distribution Consideration (i.e., Liquid Cryptocurrency, Litigation Proceeds, and NewCo Common Stock). In the event that the Debtors pursue the Orderly Wind Down, each Holder of an Allowed Unsecured Loan Claim shall receive its Pro Rata share of (a) the Liquid Cryptocurrency Distribution Amount, (b) the Backup MiningCo Common Stock, (c) Litigation Proceeds, and (d) the Illiquid Recovery Rights, without regard to Unsecured Claim Distribution Mix Elections. Class 8 is impaired. Class 9 General Unsecured Claims total $50M. The estimated NewCo transaction recovery under the Plan is 67.0%. The projected Orderly Wind Down recovery under the Plan is 61.2%. The estimated recovery under Chapter 7 Liquidation is 37.6%. Each Holder of an Allowed General Unsecured Claim shall receive a combination of (a) Liquid Cryptocurrency or Cash, (b) Litigation Proceeds, and (c) NewCo Common Stock sufficient to provide a recovery of the same percentage as the Class 5 (General Earn Claim) recovery set forth in this Disclosure Statement. In the event that the Debtors pursue the Orderly Wind Down, each Holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of (a) the Liquid Cryptocurrency Distribution Amount (or an equivalent amount of Cash), (b) the Backup MiningCo Common Stock, (c) the Litigation Proceeds, and (d) the Illiquid Recovery Rights. Class 9 is impaired. The Debtors and the Post-Effective Date Debtors, as applicable, shall fund distributions under the Plan with: (1) Cash on hand as of the Effective Date, including from the Plan Sponsor Contribution and net proceeds from the sale of GK8; (2) Liquid Cryptocurrency (in the Liquid Cryptocurrency Distribution Amount); (3) NewCo Common Stock; and (4) Litigation Proceeds. For the vote to be counted to accept or reject the Plan, the Ballot must be actually received before the Voting Deadline (4:00 p.m., prevailing Eastern Time, on [September 20], 2023). Counsel for the Debtors: Joshua A. Sussberg, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, NY 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 - and - Patrick J. Nash, Jr., Esq. Ross M. Kwasteniet, Esq. Christopher S. Koenig, Esq. Dan Latona, Esq. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 A copy of the Disclosure Statement dated August 9, 2023, is available at bit.ly/45501Ir from Stretto, the claims agent. About Celsius Network Celsius Network LLC -- http://www.celsius.network/-- is a financial services company that generates revenue through cryptocurrency trading, lending, and borrowing, as well as by engaging in proprietary trading. Celsius helps over a million customers worldwide to find the path towards financial independence through a compounding yield service and instant low-cost loans accessible via a web and mobile app. Celsius has a blockchain-based fee-free platform where membership provides access to curated financial services that are not available through traditional financial institutions. The Celsius Wallet claims to be one of the only online crypto wallets designed to allow members to use coins as collateral to get a loan in dollars, and in the future, to lend their crypto to earn interest on deposited coins (when they're lent out). Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. But the lenders' business model came under scrutiny after a sharp sell-off in the crypto market spurred by the collapse of major tokens terraUSD and luna in May 2022. New Jersey-based Celsius froze withdrawals in June 2022, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market. The list of major crypto firms that have filed for bankruptcy protection in 2022 now includes Celsius Network, Three Arrows Capital and Voyager Digital. Celsius Network, LLC and its subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex Mashinsky, the Debtors estimated assets and liabilities between $1 billion and $10 billion. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankrupty counsels; Fischer (FBC & Co.) as special counsel; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. Stretto is the claims agent and administrative advisor. On July 27, 2022, the U.S. Trustee appointed an official committee of unsecured creditors. The committee tapped White & Case, LLP as its bankruptcy counsel; Elementus Inc. as its blockchain forensics advisor; M3 Advisory Partners, LP as its financial advisor; and Perella Weinberg Partners, LP as its investment banker. Shoba Pillay, Esq., is the examiner appointed in the Debtors' Chapter 11 cases. Jenner & Block, LLP and Huron Consulting Services, LLC, serve as the examiner's legal counsel and financial advisor, respectively. CENTERPOINT PRODUCTIONS: Files Emergency Bid to Use Cash Collateral ------------------------------------------------------------------- Centerpoint Productions, Inc. asks the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, for authority to use cash collateral to make payroll and to pay other immediate expenses. A number of potential creditors have filed UCC-1's claiming a lien on the Debtor's accounts receivable and or inventory. According to the Secretary of State of Texas the following UCC-1's have been filed: 1. The First National Bank of tom Beam file number 14-0040174900 filed December 24, 2014 with continuation at 19-00455811 filed December 4, 2019. 2. CHTD Company file number 20-00600299836 filed on December 7, 2020. 3. Global Merchant Cash, Inc. file number 22-0054056438 filed November 4, 2022. 4. CSC file number 22-0056522923 filed November 19, 2022. 5. Highland Hill Capital, LLC filed number 23-0021015115 filed May 12, 2023 6. Merk Funding file number 23-0029987989 filed July 10, 2023. An emergency exists in that the entire chance of the Debtor's reorganizing depends on the Debtor’s ability to immediately obtain use the alleged Collateral of Secured Creditors to continue operations of the company while effectuating a plan of reorganization. The Debtor is willing to provide Secured Creditors with replacement liens pursuant to 11U.S.C. section 552 in accordance with their existing priority without making any determination at this time as to the validity or priority of the claims asserted by the Secured Creditors. A copy of the motion is available at https://urlcurt.com/u?l=TkBZdA from PacerMonitor.com. About Centerpoint Productions, Inc. Centerpoint Productions, Inc. is a manufacturer of commercial cabinetry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-31716-sgj11) on August 10, 2023. In the petition signed by David Horowitz, president, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Eric A. Liepins, Esq. represents the Debtor as legal counsel. CENTURY AIR: Case Summary & 18 Unsecured Creditors -------------------------------------------------- Debtor: Century Air Solutions, LLC 11709 Boudreaux Road Ste. 630 Tomball, TX 77375 Business Description: The Debtor provides heating, air condition installation, repair and maintenance services. Chapter 11 Petition Date: August 17, 2023 Court: United States Bankruptcy Court Southern District of Texas Case No.: 23-33123 Judge: Hon. Eduardo V. Rodriguez Debtor's Counsel: Robert C. Lane, Esq. THE LANE LAW FIRM 6200 Savoy Dr Ste 1150 Houston, TX 77036-3369 Tel: (713) 595-8200 Fax: (713) 595-8201 Email: notifications@lanelaw.com Total Assets: $523,162 Total Liabilities: $1,119,313 The petition was signed by Phat Bui as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 18 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2WKSXYI/Century_Air_Solutions_LLC__txsbke-23-33123__0001.0.pdf?mcid=tGE4TAMA CHAPIN DAIRY: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------- The U.S. Trustee for Region 19 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Chapin Dairy, LLC. The committee members are: 1. Keith Bath Farms 16134 CR 23 Fort Morgan, CO 80701 Contact: Andy Edson Phone: 970-867-6882 2. Northern Feed + Bean, Inc. P.O. Box 149 Lucerne, CO 80646 Contact: Robert W. Pemberton Phone: 970-302-0066 3. Dairy Specialists, LLC* 3309 Empire Street Evans, CO 80620 Contact: Jed Brown Phone: 402-548-5749 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 Chapin Dairy Chapin Dairy, LLC, a company in Weldona, Colo., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-13262) on July 24, 2023, with $11,249,082 in assets and $19,303,237 in liabilities. A. Foy Chapin, manager, signed the petition. Judge Thomas B. Mcnamara oversees the case. Allen Vellone Wolf Helfrich & Factor P.C. represents the Debtor as legal counsel. CHESANING MFG: Seeks Cash Collateral Access ------------------------------------------- Chesaning Mfg. Co., Inc. asks the U.S. Bankruptcy Court for the Eastern District of Michigan, Northern Division, for authority to use cash collateral and provide adequate protection. The Debtor requires immediate access to its bank accounts and receivables in order to pay essential expenses, including but not limited to payroll. As a part of the request for interim relief, the Debtor requests authority to expend $10,000 in order to retain a financial advisor. The financial advisor will assist in creating a 13-week cash flow analysis, which the Debtor intends to offer in support of its request for a final cash collateral order. The entities which may claim an interest in the cash collateral are Citizens Bank, N.A. and NewLane Finance Co. In addition, General Electric Capital Corporation, GE Capital Trade Payables Services, LLC, MUFG Union Bank, N.A., and MUFG Bank, Ltd filed financing statements. The Debtor does not owe any money to these entities and does not believe that these financing statements relate to any debt owed by the Debtor. The first to file creditor which has an interest in cash collateral is Citizens Bank, N.A. While Citizens Bank, N.A. appears to hold a perfected lien as a result of their financing statement, the Debtor asserts that Citizens Bank N.A. does not hold a lien on the funds in the Debtor's bank account at PNC bank as Citizens Bank lacks custody and control of the funds therein. A secured claim will be asserted by NewLane Finance Company. NewLane Finance Company holds a claim relative to certain equipment purchased by the Debtor. NewLane Finance Company has filed a financing statement which also asserts an interest in the proceeds and accounts from the financed equipment. These proceeds and accounts are not identifiable, as such the Debtor asserts that NewLane Finance Company does not have an interest in cash collateral. However, NewLane Finance Company may claim to be the holder of an interest in cash collateral as a result of their financing statement. A secured claim will, on information and belief, be asserted by CNC Associates, Inc. CNC Associates, Inc. holds a claim relative to certain equipment purchased by the Debtor. CNC Associates, Inc. may claim an interest in cash collateral, but the financing statement does not identify proceeds or accounts related to the subject equipment. As such, any alleged interest in cash collateral would be unperfected and avoidable. The Debtor previously entered into agreements with several lenders which provided financing at an extremely high rate of interest. One of these lenders is Funding Metrics, LLC. This lender did provide identifying information in its financing statement, however Funding Metrics, LLC was the last to file a financing statement and as such holds an entirely unsecured claim. The Debtor also entered into similar high interest loan agreements with Family Business Funding, LLC, FundKite, LIV Funding, LLC, Ondeck and Rapid Finance. Some of these lenders may attempt to characterize the loans as purchases. These entities likely caused the filing of the financing statements which do not identify the secured party. These entities may also claim an interest in cash collateral based on these agreements. Any such claim would be disputed, but more importantly as of the Petition Date and long before the Petition Date there was no unencumbered equity in the Debtor's assets, leaving the vast majority of these claims unsecured. The US Small Business Administration, Daniel Brettrager, Ron Brettrager, and Janet Stroll may assert a secured claim in the case based on information available to the Debtor. However, these parties, on information and belief, did not file financing statements. As such they do not have a perfected interest in the Debtor's property. The Debtor estimates that the total value of its cash, negotiable instruments, documents of title, securities, deposit accounts, or other cash equivalents as of the Petition Date is approximately $275,000. This is inclusive of unpaid accounts receivable owed to the Debtor and the Debtor's work in progress. The Debtor proposes that the perfected lienholders be granted a post-filing lien on the Debtor's cash collateral arising post-petition, but only to the extent of any actual diminution in the value of a creditor's pre-petition lien which has been proven in terms of validity, priority, and extent. The purpose of any replacement lien granted is solely to replace the lienholder's pre-petition interest in cash collateral used post-petition. As set forth in the declaration of Christophor Soule, the Debtor expects to generate approximately $40,000 per week of new receivables post-petition. As a result, the proposed replacement liens will adequately protect the perfected lienholders. A copy of the motion is available at https://urlcurt.com/u?l=DqBGSy from PacerMonitor.com. A copy of the budget is available at https://urlcurt.com/u?l=47gBWe from PacerMonitor.com. The Debtor projects $14,630 in gross profit and $14,17 in total expenses for one week. About Chesaning Mfg. Co., Inc. Chesaning Mfg. Co., Inc. is a custom machining, fabrication and assembly partner that works with aerospace, defense, and niche manufacturers. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-20898) on August 8, 2023. In the petition signed by Christophor M. Soule, sole shareholder and president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Daniel S. Opperman oversees the case. Zachary R. Tucker, Esq., at Winegarden, Haley, Lindholm, Tucker and Himelhoch PLC, represents the Debtor as legal counsel. CHINA EVERGRANDE: Seeks Chapter 15 Creditor Protection in the US ---------------------------------------------------------------- China Evergrande Group, the second largest real estate developer in China, and certain of its affiliates sought creditor protection in the United States under Chapter 15 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 23-11332) on Thursday, Aug. 17. Evergrande, widely known as the most leveraged company in the world, and its affiliates are asking the U.S. Bankruptcy Court for the Southern District of New York for recognition of foreign proceedings as "foreign main" proceeding under Chapter 15. Evergrande is in the midst of a highly complex restructuring of around $20 billion in offshore debt. In total, the Company has more than $300 billion in liabilities. Evergrande is incorporated in the Cayman Islands as an exempted company with limited liability, with its principal place of business located at 15th Floor, YF Life Centre, 38 Gloucester Road, Wanchai, Hong Kong. It is subject to a restructuring proceeding entitled In the Matter of China Evergrande Group, concerning a scheme of arrangement between Evergrande and certain Scheme Creditors pursuant to the relevant provisions of the Hong Kong Companies Ordinance (Chapter 622 of the Laws of Hong Kong), currently pending before the High Court of Hong Kong (Case Number HCMP 1091/2023. Affiliate Tianji Holding Limited is incorporated in Hong Kong as a limited liability company, with its principal place of business located at 17th Floor, One Island East, Taikoo Place, 18 Westlands Road, Quarry Bay, Hong Kong. Tianji is subject to a restructuring proceeding entitled In the Matter of Tianji Holding Limited, concerning a scheme of arrangement between Tianji and certain Scheme Creditors, pursuant to the relevant provisions of the Hong Kong Companies Ordinance and currently pending before the Hong Kong Court (Case Number HCMP 1090/2023). Affiliate Scenery Journey Limited is incorporated in the British Virgin Islands as a limited liability company, with its principal place of business located at 2nd Floor Water's Edge Building, Wickham's Cay II, Road Town, Tortola, BVI. Scenery Journey is subject to a restructuring proceeding entitled In the Matter of Scenery Journey Limited, concerning a scheme of arrangement between Scenery Journey and certain Scheme Creditors, pursuant to section 179A of the BVI Business Companies Act, 2004, and currently pending before the High Court of the Eastern Caribbean Supreme Court (Case Number BVIHCOM 2023/0076). U.S. Bankruptcy Judge Michael E Wiles presides over the Chapter 15 proceedings. Sidley Austin is the Hong Kong Counsel to Evergrande and Tianji. Maples BVI is the British Virgin Island Counsel to Scenery Journey. The Foreign Courts have entered respective orders: -- scheduling the Scheme Meetings for: (a) August 23, 2023 with respect to the Evergrande Hong Kong Scheme; (b) August 22, 2023 with respect to the Tianji Hong Kong Scheme; and (c) August 22, 2023 with respect to the Scenery Journey BVI Scheme; and -- scheduling the hearings to sanction the respective Schemes for September 5-6, 2023 at 10:00 a.m. (prevailing Hong Kong Time) with respect to the Hong Kong Schemes and for September 4, 2023 at 10:00 a.m. (prevailing BVI Time) with respect to the Scenery Journey BVI Scheme. CHIPLEY'S FAMILY: Court OKs Interim Cash Collateral Access ---------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Georgia authorized Chipley's Family Restaurant, LLC to use cash collateral on an interim basis in accordance with the budget. Corporation Service Company, as representative, and US Foods, Inc. may claim an interest in the Debtor's restaurant revenues. The restaurant revenues derive from a service provided and, therefore, such revenues are not cash collateral, as defined in 11 U.S.C. Section 363. However, revenues are derived, in part, from inventory used. If the restaurant revenues, or any part thereof, are deemed cash collateral, then pursuant to 11 U.S.C. Section 552, the restaurant revenues will be limited to the inventory used, based on the equities of the case. The value of inventory at any one time would be approximately $6,000. The Debtor will use the revenues of operations to pay operating expenses incurred in the normal course of its business. As adequate protection, the Debtor will grant creditors a post-petition security interest in post-petition inventory and proceeds to the same extent and priority that it held a prepetition security interest in such inventory and proceeds, and to provide adequate protection payments to creditors in exchange for the Debtor's continued use of cash collateral postpetition. A copy of the order is available at https://urlcurt.com/u?l=TUfTXF from PacerMonitor.com. About Chipley's Family Restaurant, LLC Chipley's Family Restaurant, LLC owns and operates restaurants known as Eddie Mae's Country Kitchen and Louise's Cafeteria. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Ga. Case No. 23-40451) on August 4, 2023. In the petition filed by Peter Brochu, the Debtor disclosed up to $100,000 in assets and up to $500,000 in liabilities. Judge John T. Laney, III oversees the case. Fife M Whiteside, Esq., at Fife M. Whiteside PC, represents the Debtor as legal counsel. CHRISTMAS TREE SHOPS: Closes Remaining 8 Stores ----------------------------------------------- Jill Konopka and Natalie Khait of 25 News reported that Saturday, August 12, 2023, was the last day to shop at Christmas Tree Shops as the remaining stores were slated to close that day. Many Christmas Tree Shops locations in Massachusetts and New Hampshire have closed in recent weeks as the home-goods retailer's going-out-of-business sale continues. The chain recently filed for Chapter 11 bankruptcy protection and then announced liquidation sales at all of its stores after defaulting on a loan that funds its bankruptcy. Prior to August 12, there were eight remaining Christmas Tree Shops locations in Massachusetts: Avon, Foxborough, Holyoke, Hyannis, Lynnfield, North Attleborough, Shrewsbury, and Somerville. The store at the base of Cape Cod's Sagamore Bridge will turn into a Spirit Halloween. All sales are final and gift cards and coupons may not be used. About Christmas Tree Shops Christmas Tree Shops is a home-decor retailer that was spun off from Bed Bath & Beyond in 2020. Christmas Tree Shops Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10576) on May 5, 2023. In its petition, the Debtor reports between $50 million and $100 million in assets and between $100 million and $500 million in debt. The Debtor's counsel: Evelyn J. Meltzer Troutman Pepper Hamilton Sanders, LLP 302-777-6500 evelyn.meltzer@troutman.com CNG HOLDINGS: S&P Downgraded To 'SD' on Distressed Debt Exchange ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on CNG Holdings Inc. to 'SD' from 'CC' and its issue rating on the senior secured notes to 'D' from 'C'. S&P said, "The downgrade follows CNG's completion of a transaction that we view as distressed and tantamount to a default. The company exchanged its 12.5% senior secured notes due June 2024 with consenting noteholders for a combination of new 14.5% senior secured notes due June 2026, an upfront paydown of the existing notes, and a payment-in-kind (PIK) consent fee. "We view the transaction as distressed and tantamount to a default because we believe lenders received less value than what was originally promised. Specifically, we do not believe the upfront paydown, PIK consent fee, and higher coupon provide adequate compensation for the two-year maturity extension, given that CNG's capital structure is unsustainable over the long term because of the company's limited options to reduce its debt burden. "We expect to reevaluate our issuer credit and debt ratings on CNG. We acknowledge that the transaction offers CNG some financial flexibility by extending the maturity by two years. We intend to review our ratings to incorporate the debt exchange, the new debt issuance, other recent events, and our forward-looking opinion of its creditworthiness." CORNER OYSTER: Wins Interim Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Georgia authorized Corner Oyster House, LLC to use cash collateral on an interim basis in accordance with the budget. Corporation Service Company, as representative, Vend Lease Company, Inc., TimePayment Corp. Funding Metrics, LLC, and U.S. Small Business Administration may claim an interest in restaurant revenues. The Debtors will use the revenues of operations to pay operating expenses incurred in the normal course of its business. As adequate protection, the Debtor will grant creditors a post-petition security interest in post-petition inventory and proceeds to the same extent and priority that it held a prepetition security interest in such inventory and proceeds, and to provide adequate protection payments to creditors in exchange for the Debtor's continued use of cash collateral postpetition. A copy of the order is available at https://urlcurt.com/u?l=TYd0jh from PacerMonitor.com. About Corner Oyster House, LLC Corner Oyster House, LLC owns and operates a restaurant known as Oyster House. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Ga. Case No. 23-40452) on August 4, 2023. In the petition signed by Peter Brochu, the Debtor disclosed up to $100,000 in assets and up to $1 million in liabilities. Judge John T. Laney, III, Esq., at represents the Debtor as legal counsel. Fife M Whiteside, Esq., at Fife M. Whiteside PC, represents the Debtor as legal counsel. CREATING SCHOLARS: Seeks Interim Cash Collateral Access ------------------------------------------------------- Creating Scholars Through Therapy Corporation asks the U.S. Bankruptcy Court for the Eastern District of Virginia, Newport News Division, for authority to use cash collateral on an interim basis for the next 30 days. CSTT has an immediate need to authorize the use of cash collateral to (i) provide adequate protection to the U.S. Small Business Administration; (ii) meet its August 15, 2023 payroll; and (iii) operate in the near term while it stabilizes its operations and formulates a plan of reorganization. The Debtor's available cash in its deposit accounts at Wells Fargo Bank, N.A. and Navy Federal Credit Union total approximately $101,170. Accounts receivable in the form of nsurance claims being processed total approximately $190,046 as of the filing of the case. CSTT's cash, accounts receivable, and proceeds are subject to a lien in favor of the SBA, perfected by a UCC-1 financing statement filed June 27, 2020, securing repayment of a note dated June 15, 2020, in the original principal amount of $150,000, increased to $300,000 by a loan modification dated October 1, 2021, evidencing loans to CSTT in that amount. Prosperum Capital Partners, LLC d/b/a Arsenal Funding obtained a judgment against the debtor in state court in Ontario County, New York on May 17, 2023, in the amount of $49,113. Prosperum caused the issuance of a Restraining Order and Information Subpoena in an attempt to collect on its judgment which was served upon Wells Fargo Bank, N.A., resulting in the "freezing" of two CSTT demand deposit accounts at that bank. Service of a similar restraining order froze CSTT’s access to two demand deposit accounts at Navy Federal Credit Union. Wellen Capital, LLC asserted a security interest in the debtor's receivables being processed by Anthem to recover a debt owing Wellen in the amount of $59,554 by a letter to Anthem dated July 6, 2023. Wellen demand the turnover of such receivables to it rather than to the debtor. Fox Capital Group, Inc. asserted a security interest in CSTT's accounts receivable to secure purported purchase of future CSTT accounts receivable in the amount of $53,639 in an April 3, 2023, letter to Optima Healthcare. As a result, Optima froze CSTT claims it was processing in the approximate amount of $57,523. Aetna Better Health of Virginia is holding claims owed CSTT in the approximate amount of $25,268 as a result of creditor activity. Likewise, Virginia Premier is holding some $17,379 in claims owed to CSTT on account of creditor activity. Adequate protection for the debtor's postpetition use of cash collateral encumbered by the SBA's lien may be in the form of a replacement lien or periodic cash payments. section 361(1), (2). A postpetition replacement lien on the debtor's assets and continuation of regular monthly payments beginning September 1, 2023 are sufficient to adequately protect the SBA's lien. A copy of the motion is available at https://urlcurt.com/u?l=wZ4GYz from PacerMonitor.com. About Creating Scholars Through Therapy Corporation Creating Scholars Through Therapy Corporation is a community based behavioral health provider dedicated to reshaping individuals' mental state through mental health services in the form of individual, group, family, and outpatient counseling. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 23-50562) on August 10, 2023. In the petition signed by Nabila S. White, president and chief executive officer, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Paul Driscoll, Esq., at Zemanian Law Group, represents the Debtor as legal counsel. CREDITO REAL: Payroll Lender to Stop Deal If Cases Aren't Dropped ----------------------------------------------------------------- Michael O'Boyle of Bloomberg News reports that Credito Real warned the payroll lender plans to terminate an agreement with creditors to file a prepackaged bankruptcy in Mexican courts unless other legal challenges are withdrawn, according to court documents. The company told creditors it would only consider a 30-day extension of a deadline that expired August 10, 2023 if the proceedings are dropped, according to a filing by creditors in Delaware on Monday. Last week, people familiar said the company and a group of creditors were planning an extension to get a majority of bondholders to sign on to the bankruptcy proposal. About Credito Real SAB Credito Real SAB de CV SOFOM ENR is a Mexico-based company that provides consumer financing. Credito is Mexico's biggest payroll lender and second largest non-bank lender after Real Unifin. Credito Real provides loans, either by providing direct financing to consumers or by establishing financing programs with consumer financing dealers that sell to Credito Real the collection rights from consumer financing products. It also provides financing directly to individuals that are employed by corporations with payroll deduction agreements with consumer financing dealers authorized by Credito Real. Credito Real operates through a number of subsidiaries, including AFS Acceptance LLC. Three alleged creditors signed a petition to send Credito Real to Chapter 11 bankruptcy on June 22, 2022 (Bankr. S.D.N.Y. Case No. 22-10842). Institutional Multiple Investment Fund LLC, of Boston, Massachusetts; Banco Monex, S.A., of Mexico, and Solitaire Fund, of Liechtenstein, who claim to own an aggregate $8 million of unsecured bond debt, signed the involuntary Chapter 11 petition. David H. Botter, Esq., at Akin Gump Strauss Hauer & Feld LLP is advising the three bondholders. Despite efforts by bondholders to force the company to pursue a Chapter 11 restructuring in the U.S., the Debtor opted to pursue proceedings in Mexico instead. On June 28, 2022, Angel Francisco Romanos Berrondo, one of the Debtor's shareholders and the former CEO of Credito Real, filed a petition, in his capacity as a shareholder, with the Mexican Court seeking to commence the Mexican Liquidation Proceeding. On June 30, 2022, the Mexican Court entered an order commencing the dissolution and liquidation proceedings for the Company and appointing Mr. Fernando Alonso-de-Florida Rivero as the Mexican Liquidator. The liquidator for Credito Real filed a Chapter 15 bankruptcy petition (Bankr. D. Del. Case No. 22-10630) on July 14, 2022, to seek U.S. recognition of the Mexican proceedings. The petition was signed by Robert Wagstaff, the foreign representative of the liquidator. Richards, Layton & Finger, P.A., led by John Henry Knight, is counsel in the U.S. case. CRESTWOOD EQUITY: S&P Places 'BB' ICR on CreditWatch Positive ------------------------------------------------------------- S&P Global Ratings placed all of its ratings on Crestwood Equity Partners LP (CEQP), including its 'BB' issuer credit rating, 'BB' issue-level rating on senior notes, and 'B' issue-level rating on preferred stock on CreditWatch with positive implications. S&P placed its ratings on CEQP, its debt, and preferred shares on CreditWatch with positive implications to reflect the likelihood that S&P will raise its ratings after the company's acquisition by Energy Transfer L.P. closes.” Dallas-based diversified midstream energy master limited partnership Energy Transfer L.P. (ET) has executed a definitive agreement to acquire CEQP in an all-equity transaction. S&P said, "We expect to resolve the CreditWatch at or near the close of the transaction, which we anticipate will occur in the fourth quarter of 2023. We expect Energy Transfer will fully integrate the company into its business following the acquisition." DELPHI BEHAVIORAL: PCO Taps Grassi Healthcare as Consultant ----------------------------------------------------------- Joseph Tomaino, the patient care ombudsman appointed in the Chapter 11 cases of Delphi Behavioral Health PDR Group, LLC and its affiliates, seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to tap his own firm, Grassi Healthcare Advisors, LLC, as consultant. The firm's services include interim management responsibilities, compliance reviews, billing and operational reviews, advisory roles, and other services deemed necessary by the PCO. Grassi will be paid at these rates: Chief Executive Officer $575 per hour Directors $450 per hour Para-professionals $225 per hour As disclosed in court filings, Grassi is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Joseph J. Tomaino, Esq. Grassi Healthcare Advisors, LLC 488 Madison Avenue, 21st Floor New York, NY 10022 Tel: (212) 661-6166 Email: jtomaino@grassihealthcareadvisors.com About Delphi Behavioral Health PDR Group Delphi Behavioral Health Group, LLC and several affiliated entities sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 23-10945) on Feb. 6, 2023. In the petition signed by Edward A. Phillips, interim chief executive officer, the Debtors disclosed up to $10 million in assets and up to $10 million in liabilities. Delphi Behavioral Health Group provides a range of inpatient and outpatient behavioral healthcare services in the substance use disorder, addiction, and mental health treatment space. Headquartered in Fort Lauderdale, Florida, Delphi and its affiliates operated 12 clinical facilities and two recovery residences prior to the Petition Date, throughout California, Florida, Maryland, Massachusetts, and New Jersey. The levels of care provided at the clinical facilities range from inpatient and residential to outpatient (partial hospitalization), intensive outpatient programming and outpatient programming. Judge Peter D. Russin oversees the cases. The Debtors tapped Berger Singerman LLP as legal counsel, Getzler Henrich and Associates as restructuring services provider, and Epiq Corporate Restructuring, LLC as notice and claims agent. Brightwood Loan Services, LLC, the Administrative Agent for the Prepetition Lenders and the Administrative Agent for the DIP Lenders, is represented by Roger Schwartz, Esq., Pete Montori, Esq., and Robert Nussbaum, Esq. at King & Spalding LLP. Joseph J. Tomaino was appointed as patient care ombudsman (PCO) in these Chapter 11 cases. SilvermanAcampora, LLP and Grassi Healthcare Advisors, LLC serve as the PCO's legal counsel and consultant, respectively. On May 16, 2023, the court entered an order confirming the amended joint plan of liquidation for the Debtors. DELPHI BEHAVIORAL: PCO Taps SilvermanAcampora as Legal Counsel -------------------------------------------------------------- Joseph Tomaino, the patient care ombudsman appointed in the Chapter 11 cases of Delphi Behavioral Health PDR Group, LLC and its affiliates, seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ SilvermanAcampora, LLP. Mr. Tomaino requires legal counsel to represent him in any proceedings in the Debtors' bankruptcy cases, which could affect his rights as well as the rights of those patients residing in the Debtors' facilities. SilvermanAcampora will be paid based upon its normal and usual hourly billing rates and will be reimbursed for out-of-pocket expenses incurred. As disclosed in court filings, SilvermanAcampora is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Haley L. Trust, Esq. SilvermanAcampora LLP 100 Jericho Quadrangle, Suite 300 Jericho, NY 11753 Tel: (516) 479-6300 Email: TheFirm@SilvermanAcampora.com About Delphi Behavioral Health PDR Group Delphi Behavioral Health Group, LLC and several affiliated entities sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 23-10945) on Feb. 6, 2023. In the petition signed by Edward A. Phillips, interim chief executive officer, the Debtors disclosed up to $10 million in assets and up to $10 million in liabilities. Delphi Behavioral Health Group provides a range of inpatient and outpatient behavioral healthcare services in the substance use disorder, addiction, and mental health treatment space. Headquartered in Fort Lauderdale, Florida, Delphi and its affiliates operated 12 clinical facilities and two recovery residences prior to the Petition Date, throughout California, Florida, Maryland, Massachusetts, and New Jersey. The levels of care provided at the clinical facilities range from inpatient and residential to outpatient (partial hospitalization), intensive outpatient programming and outpatient programming. Judge Peter D. Russin oversees the cases. The Debtors tapped Berger Singerman LLP as legal counsel, Getzler Henrich and Associates as restructuring services provider, and Epiq Corporate Restructuring, LLC as notice and claims agent. Brightwood Loan Services, LLC, the Administrative Agent for the Prepetition Lenders and the Administrative Agent for the DIP Lenders, is represented by Roger Schwartz, Esq., Pete Montori, Esq., and Robert Nussbaum, Esq. at King & Spalding LLP. Joseph J. Tomaino was appointed as patient care ombudsman (PCO) in these Chapter 11 cases. SilvermanAcampora, LLP and Grassi Healthcare Advisors, LLC serve as the PCO's legal counsel and consultant, respectively. On May 16, 2023, the court entered an order confirming the amended joint plan of liquidation for the Debtors. DELTA WHOLESALE: Seeks Cash Collateral Access --------------------------------------------- Delta Wholesale Tire Center, Inc. asks the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, for authority to use cash collateral and provide adequate protection. An immediate need exits for the Debtor to obtain approval of the use of cash collateral in order to meet key expenses amounting to $172,278. Without the immediate use of the cash collateral for an interim period, the Debtors will not be able to resume operations and risks the loss of significant assets. Clearly this would have a severe negative impact upon the Debtor's going concern value and ability to successfully create value for all creditors. The following creditors may claim an interest in cash collateral. It is the position of the Debtor that only Huntington Bank has a lien that has value in the assets of the Debtor to secure its lien. The balance of alleged lien holders have totally unsecured deficiency claims for purposes of their order: A. Huntington Bank $429,508 B. Small Business Administration $150,000 C. Kapitus Servicing $370,142 D. Advance America Inc. $282,282 The Debtor intends to provide adequate protection, to the extent of the aggregate diminution in value of cash collateral from and after the Petition Date, to the Lenders for the use of the cash collateral by: a. Maintaining the going concern value of the Debtor's business by using the cash collateral to continue to operate the business and administer the Chapter 11 Case; and b. Providing to Huntington Bank, the SBA , Kapitus Servicing Inc. and Advance America Inc. a post petition replacement lien pursuant to 11 U.S.C. section 363 (p) (2) in the accounts receivable of the Debtor, including cash generated or received by Debtor subsequent to the Petition Date but only lo the extent of the dtmunition in value of lenders interest. c. Monthly payments of $3855 to Huntington Bank only. The Debtor believes that Lenders are adequately protected for the use of the cash collateral in that the orderly operation of the Debtor's business generates sufficient revenues to protect any diminution in value of the cash collateral. The continuation of the Debtor's operations presents the best opportunity for the Lenders to receive the greatest recovery on account of their claims. Accordingly, the Debtor submits that use of cash collateral will allow the Debtor to continue its operations and thereby protect the Lenders interests. A copy of the Debtor's motion and budget is available at https://urlcurt.com/u?l=8Aa3SQ from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $46,726 for week 1; $49,947 for week 2; $27,812 for week 3; and $47,793 for week 4. About Delta Wholesale Delta Wholesale Tire Center, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-31065) on June 29, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Joel D. Applebaum oversees the case. The Debtor is represented by George E. Jacobs, Esq., at Bankruptcy Law Offices. DENBURY INC: Bosses Get $122 Million Post-Bankruptcy ---------------------------------------------------- Kevin Crowley, Mitchell Ferman, and Devon Pendleton of Bloomberg News report that about three years after Texas oil producer Denbury Inc. emerged from bankruptcy, four top executives are set to collect the final installment of a $121.5 million post-reorganization pay deal that rivals some of the industry's most generous compensation packages. Chief Executive Officer Chris Kendall will receive the final portion of equity awards valued in total at $68.7 million by year end, according to this year's proxy statement. His three top lieutenants will also split the remainder of their $52.8 million package, just as the company looks to close a $4.9 billion takeover by Exxon Mobil Corp. About Denbury Resources Headquartered in Plano, Texas, Denbury Resources Inc. -- http://www.denbury.com/--is an independent oil and natural gas company with onshore production and development activities in the Gulf Coast and Rocky Mountains regions. The Company's goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to carbon dioxide enhanced oil recovery (CO2 EOR) operations. Denbury filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 20-33801) on July 30, 2020. The Hon. David R. Jones oversees the case. At the time of filing, the Debtors have $4,607,091,000 Total Assets as of March 31, 2020 and $3,117,646,000 Total Debts as of March 31, 2020. The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; JACKSON WALKER L.L.P. as local bankruptcy counsel; EVERCORE GROUP L.L.C. as financial advisor; and ALVAREZ & MARSAL NORTH AMERICA, LLC as restructuring advisor. EPIQ CORPORATE RESTRUCTURING, LLC, is the claims agent. * * * Denbury Resources emerged from bankruptcy in September 2020 and changed its corporate name to Denbury Inc. Denbury then listed its its new common stock in the reorganized company to trade on the New York Stock Exchange under the ticker symbol DEN. DIVISION SEVEN: Gets OK to Hire Spence Law Office as Counsel ------------------------------------------------------------ Division Seven Contracting Inc. received approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Spence Law Office, P.C. The Debtor requires legal counsel to: (a) give advice with respect to the powers and responsibility of the Debtor in the continued management of its property; (b) attend Section 341 hearings; (c) negotiate with creditors of the Debtor in formulating a Chapter 11 plan of reorganization and take the necessary legal steps in order to institute a plan of reorganization; (d) prepare legal papers; (e) appear before the court; and (f) perform all legal services that may be necessary and appropriate. The firm will be paid at these rates: Partners $475 per hour Associates/Of Counsel $325 to $475 per hour Paralegals $125 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. The Debtor paid the firm a retainer of $40,000. Robert Spence, Esq., a partner at Spence Law Office, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Robert J. Spence, Esq. Spence Law Office, P.C. 55 Lumber Road, Suite 5 Roslyn, NY 11576 Tel: (516) 336-2060 Fax: 516-605-2084 Email: rspence@spencelawpc.com About Division Seven Division Seven Contracting, Inc. is a foundation, structure, and building exterior contractor in Ridge, N.Y. Division Seven Contracting filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y Case No. 23-71998) on June 5, 2023, with $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Salvatore LaMonica, Esq., at LaMonica Herbst & Maniscalco, LLP, has been appointed as Subchapter V trustee. Judge Louis A. Scarcella oversees the case. Robert J. Spence, Esq., at Spence Law Office, P.C. is the Debtor's counsel. DNP EATS: Court OKs Deal on Cash Collateral Access -------------------------------------------------- DNP Eats, LLC sought and obtained entry of an order from the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, authorizing the use of cash collateral in accordance with the budget and its agreement with the U.S. Small Business Administration. Pre-petition, on March 11, 2022, the Debtor executed an SBA Note, pursuant to which the Debtor obtained a COVID Economic Injury Disaster Loan in the amount of $500,000. The terms of the Note require the Debtor to pay principal and interest payments of $2,575 every month beginning 24 months from the date of the Note over the 30 year term of the SBA Loan, with a maturity date of on or about March 11, 2052. The SBA Loan has an annual rate of interest of 3.75% and may be prepaid at any time without notice or penalty. As of the Petition Date, the amount due on the SBA Loan was $514.679. Pursuant to the SBA Loan Authorization and Agreement executed on June 23, 2020, the Debtor is required to "use all the proceeds of this Loan solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter and to pay Uniform Commercial Code lien filing fees and a third-party UCC handling charge of $100 which will be deducted from the Loan amount." As evidenced by a Security Agreement executed on or about March 11, 2022, and a valid UCC-1 filing on March 25, 2022 as Filing Number U220178291736, the SBA Loan is secured by all tangible and intangible personal property. Subject to the terms and conditions of the Stipulation, the Parties agree that portions of the Personal Property Collateral constitute the cash collateral of the SBA, pursuant to 11 U.S.C. Sections 361, 362, 363(a), (c)(2), and (e). The SBA consents to the Debtor's continued use of cash collateral through and including October 31, 2023 for payment of the ordinary and necessary expenses as set forth in the budget. As adequate protection, retroactive to the Petition Date, SBA will receive a replacement lien(s) that is deemed valid, binding, enforceable, non-avoidable, and automatically perfected, effective as of the Petition Date, on all post-petition revenues of the Debtor to the same extent, priority and validity that its lien attached to the Personal Property Collateral. The scope of the Replacement Lien is limited to the amount (if any) that the cash collateral diminishes post-petition as a result of the Debtor's post-petition use of the cash collateral. Notwithstanding any of the foregoing, the Replacement Lien will not include any liens or claims for relief arising under the U.S. Bankruptcy code. The Debtor will remit adequate protection payments to the SBA in the amounts and terms as set forth in the applicable SBA Loan documents, with the first payment to be paid on or before May 15, 2023 in the amount of $1,500, and continuing until further order of the Court regarding interim and/or final use of cash collateral, or the entry of an order confirming the Debtor’s plan of reorganization, whichever occurs earlier. Adequate protection payments will include the Debtor's SBA Loan number and be sent to the payment address on the SBA Proof of Claim or may be paid by wire transfer or pay.gov. The Debtor agrees that any SBA mailing of monthly billing statements to the Debtor will be for informational purposes only and will not be deemed a violation of the automatic stay. Since no payments are due under the SBA Loan documents until March, 2024, it is understood that the $1,500 will be applied to reduce the principal balance of the SBA Loan. The Debtor agrees to maintain insurance on the Personal Property Collateral and to designate SBA as a loss payee or additional insured in accordance with the SBA Loan and related loan documents and agrees to provide proof of insurance within seven days upon written request of SBA. A hearing on the matter is set for October 26, 2023 at 11:30 a.m. A copy of the motion is available at https://urlcurt.com/u?l=iC4NJW from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=PSZzdP from PacerMonitor.com. About DNP Eats, LLC DNP Eats, LLC is part of the food service industry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12093) on April 6, 2023. In the petition signed by Dan Pham, managing member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Deborah J. Saltzman oversees the case. Blake J. Lindemann, Esq., at Lindemann Law, APC, represents the Debtor as legal counsel. DUCKWORTH LLC: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------- Duckworth LLC asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for authority to use cash collateral. There are six UCC Financing Statements filed with the State of Pennsylvania with respect to the assets of the Debtor that have not been terminated. The recorded UCC Financing Statements are as follows: a) File Number 2020070300978 filed on July 3, 2020 by the U.S. Small Business Administration, which purports to establish blanket security interest on all lienable assets of the Debtor. b) File Number 2021120102345 filed on December 1, 2021 by C T Corporate System, as representative. The Debtor's counsel believes that C T Corporate System, as representative is an agent for one of the Debtor's creditors but no actual creditor is listed on the UCC Financing Statement and it is impossible to determine which creditor this UCC Financing Statement refers to. c) File Number 2022072001239 filed on July 20, 2022 by Corporation Service Company, as Representative. The Debtor's counsel believes that Corporation Service Company, as Representative is an agent for one of the Debtor's creditors but no actual creditor is listed on the UCC Financing Statement and it is impossible to determine which creditor this UCC Financing Statement refers to. d) File Number 2022082400689 filed on August 24, 2022 by CHTD Company. The Debtor's counsel believes that CHTD Company is an agent for one of the Debtor's creditors but no actual creditor is listed on the UCC Financing Statement and it is impossible to determine which creditor this UCC Financing Statement refers to. e) File Number 20221117060371 filed on October 24, 2022 by The Huntington National Bank, which purports to establish blanket security interest on all lienable assets of the Debtor. f) File Number 20221129067559 filed on November 29, 2022 by C T Corporate System, as representative. The Debtor's counsel believes that C T Corporate System, as representative is an agent for one of the Debtor's creditors but no actual creditor is listed on the UCC Financing Statement and it is impossible to determine which creditor this UCC Financing Statement refers to. The SBA is owed approximately $60,000 by the Debtor and further believes that the assets of the Debtor subject to any valid security interest are over encumbered by the amount due to the U.S. Small Business Administration. A copy of the motion is available at https://urlcurt.com/u?l=iyegi5 from PacerMonitor.com. About Duckworth LLC Duckworth LLC is an S-corporation that does business as a Minuteman Press franchise in Western Pennsylvania. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-21692) on August 9, 2023. In the petition signed by Steven E. Duckworth, president, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Christopher M. Frye, Esq., at Steidl & Steinberg, P.C., represents the Debtor as legal counsel. DURO LEGACY: Seeks Cash Collateral Access ----------------------------------------- HVAC, LLC asks the U.S. Bankruptcy Court for the Western District of Texas, Austin Division, for authority to use cash collateral to pay expenses of its business operations and the Chapter 11 case. HomeTrust Bank/U.S. Small Business Administration holds a first lien on all of the Debtor's assets and the proceeds thereof. Such funds are the cash collateral of the SBA. The debt owing to the SBA exceeds the value of the Collateral. A search of Texas Secretary of State's records found only UCC1's filed by HomeTrust Bank/SBA. In the course of its business, the Debtor incurs expenses for payroll, utilities, advertising, insurance and supplies. The Debtor receives revenue from its customers for work on their HVAC systems. In addition, the Debtor has expenses of this case that it must pay -- specifically, the Debtor has employed Frank B. Lyon as its attorney. The Debtor must also employ an accountant in the case. The Debtor requests, in order to provide adequate protection to HomeTrust/SBA, that HomeTrust Bank/SBA be granted replacement security interests in and liens upon all categories of property of the Debtor and its estate, upon which it held valid, perfected and enforceable pre-petition liens and security interests in the same priority as pre-petition to the extent and only to the extent that such pre-petition lien and security interests are valid, perfected, enforceable and nonavoidable. A copy of the Debtor's motion and budget is available at https://urlcurt.com/u?l=nk50q9 from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $4,588 for the week ending August 19, 2023; $32,948 for the week ending August 26, 2023; $6,678 for the week ending September 2, 2023; $35,609 for the week ending September 9, 2023; and $4,588 for the week ending September 16, 2023. About Duro Legacy HVAC, Inc. Duro Legacy HVAC, Inc. offers commercial HVAC Testing Adjustment and Balancing in the Austin and San Antonio areas for all size projects. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-10615) on August 9, 2023. In the petition signed by Victor Olowu, president, the Debtor disclosed $205,552 in assets and $1,792,280 in liabilities. Frank B. Lyon, Esq. represents the Debtor as legal counsel. E.W. SCRIPPS: S&P Raises Unsecured Debt Rating to 'B+' ------------------------------------------------------ S&P Global Ratings raised the issue-level rating on E.W. Scripps' unsecured debt to 'B+' from 'B' and revised the recovery rating to '4' from '5'. The '4' recovery rating indicates S&P's expectation for average (30%-50%; rounded estimate: 35%) recovery for lenders in the event of a payment default. E.W. Scripps recently increased the size of its revolving credit facility by $185 million to $585 million and subsequently borrowed $283 million on the facility to pay off the $283 million balance on its term loan maturing in 2024. S&P said, "While the current amount of total debt outstanding remains unchanged, these actions reduce the estimated amount of secured debt outstanding in our hypothetical default scenario and as a result, increases recovery prospects for unsecured debtholders. This is because we assume the revolving credit facility is 85% drawn in our recovery analysis." S&P's 'B+' issuer credit rating and negative outlook on E.W. Scripps remain unchanged because its net leverage remains unchanged. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- The senior secured debt includes a $585 million revolving credit facility maturing in 2026 ($353 million outstanding), a $761 million term loan B maturing in 2026 ($733 million outstanding), a $800 million term loan B maturing in 2028 ($555 million outstanding), and $550 million ($523 million outstanding) of 3.875% senior secured notes due in 2029. -- The senior unsecured debt includes $500 million ($426 million outstanding) of 5.875% senior notes maturing in 2027 and $500 million ($392 million outstanding) of 5.375% senior notes maturing in 2031. Simulated default assumptions -- S&P's simulated default scenario contemplates a default occurring in 2027 due to a combination of factors, including a declining share of political revenue, increased competition from alternative media, a prolonged decline in advertising revenue due to economic weakness, a failure to generate retransmission revenue commensurate with its local market and relevant television networks, and pressure from affiliated networks to remit a significant portion of its retransmission fees. -- Other default assumptions include an 85% draw on the revolving credit facility, the spread on the revolving credit facility rises to 5% as covenant amendments are obtained, and all debt includes six months of prepetition interest. -- S&P values Scripps on a going-concern basis using a 6.5x multiple of its projected emergence EBITDA, which is 0.5x lower than the multiple S&P uses for the larger television broadcasters it rates that typically have a higher percentage of No. 1- and No. 2-ranked stations, more market duopolies, and less reliance on advertising revenue. Simplified waterfall -- EBITDA at emergence: $425 million -- EBITDA multiple: 6.5x -- Gross recovery value: $2.8 billion -- Net enterprise value (after 5% administrative costs): $2.6 billion -- Estimated senior secured debt claims: $2.3 billion --Recovery expectations: 90%-100% (rounded estimate: 95%) -- Value available for senior unsecured debt: $306 million -- Estimated senior unsecured debt claims: $841 million --Recovery expectations: 30%-50% (rounded estimate: 35%) EARLY BIRD: Unsecureds Will Get 44% of Claims over 5 Years ---------------------------------------------------------- Early Bird Pediatric Therapy Clinic, Inc., filed with the U.S. Bankruptcy Court for the Western District of Texas a First Amended Plan of Reorganization dated August 10, 2023. The Debtor started operations in January 2016. The Debtor manages and operates multiple clinics offering Occupational, Speech, Physical Therapy and ABA services for children and young adults. The Debtor is currently owned 50% by Michael Williams and 50% by Jane Concha, who are both managing members. Both will remain managing members and retain their 50% ownership interests going forward. The Debtor elected to file a chapter 11 reorganization as the best means to resolve the current liabilities of the company and determine the secured portions of those creditors. The Debtor will continue operating its business. The Debtor's Plan will break the existing claims into six classes of Claimants. These claimants will receive cash repayments over a period of time beginning on or after the Effective Date. Class 4 consists of Allowed Impaired Unsecured Claims. All allowed unsecured creditors shall receive a pro rata distribution at zero percent per annum over the next 5 years beginning not later than the 1st day of the next calendar month following 30 days after the effective date of the plan and continuing every year thereafter. Creditors shall receive either monthly, or quarterly disbursements based on the projection distributions of each 12-month period. Debtor will distribute up to $560,000 to the general allowed unsecured creditor pool over the 5-year term of the plan, includes the under-secured claim portions. The Debtor's General Allowed Unsecured Claimants will receive 44% of their allowed claims under this plan. These payments may be made monthly or quarterly but at the very minimum Class 4 claimants shall receive the yearly distribution of one-fifth their payment amount each year. The allowed unsecured claims total $1,269,383. Class 5 consists of Equity Interest Holders. The current owners will receive no payments under the Plan; however, they will be allowed to retain ownership in the Debtor. Class 5 Claimants are not impaired under the Plan. The Debtor anticipates the continued operations of the business to fund the Plan. A full-text copy of the First Amended Plan dated August 10, 2023 is available at https://urlcurt.com/u?l=oQBlxO from PacerMonitor.com at no charge. Debtor's Counsel: Robert C. Lane, Esq. Joshua D. Gordon, Esq. The Lane Law Firm, PLLC 6200 Savoy, Suite 1150 Houston, TX 77036 Telephone: (713) 595-8200 Facsimile: (713) 595-8201 Email: notifications@lanelaw.com Joshua.gordon@lanelaw.com About Early Bird Pediatric Therapy Clinic Early Bird Pediatric Therapy Clinic, Inc. is a comprehensive facility offering physical therapy, occupational therapy, speech therapy, and applied behavior analysis for children from birth to 20 years old. Early Bird Pediatric Therapy Clinic sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 23 30315) on March 31, 2023. In the petition signed by Jane Concha, director, the Debtor disclosed $508,403 in total assets and $2,495,804 in total debts. Judge Christopher Mott oversees the case. Robert C. Lane, Esq., at the Lane Law Firm, PLLC, serves as the Debtor's counsel. EMPOWER CENTRAL: Deborah Fish Named Subchapter V Trustee -------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed Deborah Fish, Esq., managing partner at Allard & Fish, P.C., as Subchapter V trustee for Empower Central Michigan, Inc. Ms. Fish 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. Fish declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Deborah L. Fish, Esq. Allard & Fish, P.C. 1001 Woodward Ave., Ste. 850 Detroit, MI 48226 Phone: (313) 961-6141 Email: dfish@allardfishpc.com About Empower Central Empower Central Michigan, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-31281) on Aug. 4, 2023, with as much as $50,000 in assets and $500,001 to $1 million in liabilities. Judge Joel D. Applebaum oversees the case. Zachary R. Tucker, Esq., at Winegarden, Haley, Lindholm, Tucker & Himelhoch, PLC represents the Debtor as legal counsel. ESCALON LIVESTOCK: Taps David C. Johnston as Legal Counsel ---------------------------------------------------------- Escalon Livestock Market, Inc. received approval from the U.S. Bankruptcy Court for the Eastern District of California to employ David C. Johnston, Attorney at Law. The Debtor requires legal counsel to: (a) Give advice about the rights, powers and obligations of the Debtor in its Chapter 11 case and in the management of its estate; (b) Take necessary action to enforce the automatic stay and oppose motions for relief from the automatic stay; (c) Take necessary action to recover and avoid any preferential or fraudulent transfers; (d) Appear with the Debtor's president at the meeting of creditors, initial interview with the U.S. trustee, status conference and other hearings held before the court; (e) Review and object to proofs of claim; (f) Take steps to obtain court authority for the sale or refinancing of assets; (g) Prepare a plan of reorganization and take all steps necessary to bring the plan to confirmation; and (h) Represent the Debtor in all adversary proceedings in the bankruptcy court where it is a party. The firm will be compensated at $400 per hour and will be reimbursed for out-of-pocket expenses incurred. The Debtor paid the firm a retainer of $13,262. David Johnston, Esq., 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 C. Johnston, Esq. David C. Johnston, Attorney at Law 1600 G Street, Suite 102 Modesto, CA 95354 Tel: (209) 579-1150 Fax: (209) 579-9420 Email: david@johnstonbusinesslaw.com About Escalon Livestock Market Escalon Livestock Market, Inc. filed Chapter 11 petition (Bankr. E.D. Calif. Case No. 23-22125) on June 28, 2023, with $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Lisa Holder, Esq., a practicing attorney in Bakersfield, Calif., has been appointed as Subchapter V trustee. Judge Fredrick E. Clement oversees the case. David C. Johnston, Attorney at Law is the Debtor's bankruptcy counsel. ESJ TOWERS: Bid to Prohibit Cash Collateral Access Denied --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico denied the Motion to Prohibit the Use of the Council's Property and Cash Collateral and for the Entry of an Order to Segregate Such Property and/or Cash Collateral as Adequate Protection filed by the Council of Co-Owners of ESJ Towers Condominium, also known as the ESJ Towers Condominium Association. ESJ HOA is the unincorporated association of all the owners of all units or premises interests in the ESJ Towers Condominium and it includes the owners of all of the intervals in all of the units in the ESJ Towers Condominium, which has the powers and duties set forth in the Act and the Condominium Documents. The court said the key issue that needs to be addressed first is whether the ESJ HOA has a validly perfected security interest over the Debtor's real estate property and, consequently, whether the proceeds from the maintenance and resort fees and the insurance proceeds constitute "cash collateral" under 11 Section 363(a). Both the Debtor and Oriental contend that the ESJ HOA does not have a validly perfected security interest over the Debtor's real estate property and thus, is an unsecured creditor. The court notes that the ESJ HOA did not argue that its alleged security interest in the postpetition monthly maintenance fees, resort fees, and the insurance proceeds falls under the enumerated exceptions of Section 552(b). The ESJ HOA filed amended proof of claim number 98-2 in the secured amount of $4.4 million, on account of maintenance fees and insurance assessment. The basis for perfection of proof of claim number 98-2 is disclosed as a statutory lien pursuant to Article 60 of the Puerto Rico Condominium Act, 31 L.P.R.A. section 1923e. It is the only secured claim filed by the ESJ HOA. A creditor must have properly perfected its security interest in the debtor's property and its proceeds to have an interest in the cash collateral pursuant to 11 U.S.C section 363. If a creditor has a properly perfected interest in property, then it is entitled to request adequate protection under 11 U.S.C. section 361 to protect its property interest. The court finds that the ESJ HOA failed to evince that it has a perfected security interest in the subject collateral pursuant to 11 U.S.C. section 363(p). Therefore, the court holds that the ESJ HOA does not have an 'interest' within the meaning of 11 U.S.C. section 363(a), and thus is not entitled to adequate protection pursuant to 11 U.S.C. section 361. The court concludes that the ESJ HOA is an unsecured claimant as to the monthly maintenance fees, resort fees and insurance proceeds. A copy of the order is available at https://urlcurt.com/u?l=Sd9TVc from PacerMonitor.com. About ESJ Towers ESJ Towers, Inc. owns the ESJ Towers in Carolina, P.R. The luxury apartments and condo units at ESJ Towers have direct access to Isla Verde Beach, widely considered one of the best in Puerto Rico. ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as 50 million in both assets and liabilities. ESJ President Keith St. Clair signed the petition. Judge Enrique S. Lamoutte Inclan oversees the case. The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill, PSC Law Offices as bankruptcy counsel; Ramon Luis Nieves, Esq., at RL Legal Consulting Services, LLC and Luis Daniel Muniz, Esq., as special counsels; Dage Consulting CPAS, PSC as financial advisor; CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and De Angel & Compania, PA, LLC as auditor. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on Sept. 12, 2022. MRO Attorneys at Law, LLC and Dage Consulting CPAS, PSC serve as the committee's legal counsel and financial advisor, respectively. ESJ TOWERS: Ordered to File Amended Disclosures by Sept. 10 ----------------------------------------------------------- Judge Enrique S. Lamoutte has entered an order that ESJ Towers Inc.'s motion requesting continuance of the hearing on the approval of the adequacy of the Disclosure Statement scheduled for August 22, 2023 is granted. The hearing on the approval of the Disclosure Statement is continued without a date. The Debtor must file an amended Disclosure Statement and Chapter 11 Plan on or before September 10, 2023. About ESJ Towers ESJ Towers, Inc., owns the ESJ Towers in Carolina, P.R. The luxury apartments and condo units at ESJ Towers have direct access to Isla Verde Beach, widely considered one of the best in Puerto Rico. ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as 50 million in both assets and liabilities. ESJ President Keith St. Clair signed the petition. Judge Enrique S. Lamoutte Inclan oversees the case. The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill, PSC Law Offices as bankruptcy counsel; Ramon Luis Nieves, Esq., at RL Legal Consulting Services, LLC and Luis Daniel Muniz, Esq., as special counsels; Dage Consulting CPAS, PSC as financial advisor; CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and De Angel & Compania, PA, LLC as auditor. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on Sept. 12, 2022. MRO Attorneys at Law, LLC and Dage Consulting CPAS, PSC serve as the committee's legal counsel and financial advisor, respectively. EVERYTHING BLOCKCHAIN: T. Amon Quits as Director; Replacement Named ------------------------------------------------------------------- Thomas G. Amon resigned as director of Everything Blockchain Inc., effective on July 31, 2023. Mr. Amon's resignation was not the result of any disagreement between him and the Company, Board of Directors or any committee of the Board of Directors of the Company on any matter, as disclosed by the Company in a Form 8-K filed with the Securities and Exchange Commission. On Aug. 9, 2023, the majority of shareholders of Everything Blockchain, Inc., elected to appoint Ms. Najwa Aaraj as the Company's Director to fulfill the vacant Director of the Board following the resignation of Thomas Amon. Since May 2019, Dr. Najwa Aaraj has been the Chief Researcher of the Cryptography Research Center and the Autonomous Robotics Center at the Technology Innovation Institute (TII), United Arab Emirates (UAE) where she leads the research and development of cryptographic and quantum communication technologies, as well as the advancement of autonomous robotics and self-navigating vehicles. She has over 15 years of experience with global firms, working in multiple geographies from Australia to the United States. Before joining TII, Dr. Aaraj was senior vice president of Products & Cryptography Development at DarkMatter. She was also formerly at Booz & Company, where she led consulting engagements in the communication and technology industry. She also held a Research Fellow position with the Embedded Systems Security Group at IBM T.J. Watson Security Research in New York State, and with the Intel Security Research Group in Portland, Oregon, where she worked on trusted platform modules and contributed to an early protype of a TPM 2.0 based firmware. She was also a Research Staff Member at NEC Laboratories in Princeton, New Jersey. Dr. Aaraj is on the advisory board of New York-based Neutigers. She is also Advisor within the Strategic Advisory Group at Paladin Capital Group (Cyber Venture Capital) and Adjunct Professor at the Mohamed Bin Zayed University of Artificial Intelligence. In addition, she is an adviser to multiple security and machine learning start-ups, including Okinawa Institute of Science and Technology Graduate University. Dr. Aaraj has written multiple conference papers, Institute of Electrical and Electronics Engineers and Association for Computing Machinery journal papers and book chapters, and received patents on applied cryptography, embedded system security, and machine learning-based protection of IoT systems. She received a Special Recognition award at the Arab Woman Awards 2021, held in partnership with the United Nations to recognize the notable achievements of the region's women. Dr. Aaraj earned a PhD with Highest Distinction in Applied Cryptography and Embedded Systems Security from Princeton University. She has extensive expertise in applied cryptography, trusted platforms, security architecture for embedded systems, software exploit detection and prevention systems, and biometrics. She also specializes in shaping the robotics and self-organized autonomous vehicles ecosystem in the UAE and beyond – exploring their application across air, land, on-sea and underwater. About Everything Blockchain Headquartered in Fleming Island, Florida, Everything Blockchain, Inc. (fka OBITX, Inc.) is primarily engaged in the business of consulting and developing blockchain and cybersecurity related solutions. Everything Blockchain is a technology company that is blending blockchain, zero-trust, and database management technology to create a platform to solve real world, practical business problems. Mitzpe Netofa, Israel-based Elkana Amitai CPA, the Company's auditor since 2022, issued a "going concern" qualification in its report dated May 1, 2023, citing that the Company suffered losses from operations in all years since inception, except for the year ended Jan. 31, 2022. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. FEDNAT HOLDING: Seeks to Continue Hearing to Aug. 21 ---------------------------------------------------- FedNat Holding Company ("FNHC"), FedNat Underwriters, Inc. ("FNU"), ClaimCor, LLC ("ClaimCor"), Century Risk Insurance Services, Inc. ("CRIS"), and Insure-Link, Inc., jointly with the Official Committee of Unsecured Creditors, filed a motion seeking entry of an order continuing the August 10, 2023 Hearing on the Joint Motion of the Debtors and the Committee for an order approving the filing of a Combined Disclosure Statement and Chapter 11 Plan Of Liquidation and scheduling a combined hearing on the Plan and Disclosure Statement. The Settlement Motion seeks the approval of a Settlement Agreement between the Debtors, the Committee, and the Hale Related Parties, which among other things, provides for mutual general releases among the Settling Parties, and obtains the Hale Related Parties' support of the Combined Disclosure Statement and Plan (to the extent it is consistent with the terms of the Settlement Agreement). The Movants have been actively working to reach an agreement with various constituencies regarding acceptable language to include in the Combined Disclosure Statement and Plan, and are still in the process of working through potential plan issues with these parties. Accordingly, the Movants would like to continue the hearing on the Approval Motion to the week of August 21, 2023, or as soon thereafter as is practicable for the Court. Co-Counsel to The Official Unsecured Creditors Committee: Jeffrey P. Bast, Esq. Hayley G. Harrison, Esq. Hunter J. Grasso, Esq. BAST AMRON LLP One Southeast Third Avenue, Suite 2410 Miami, FL 33131 Telephone: (305) 379-7904 Facsimile: (786) 206-8740 E-mail: jbast@bastamron.com hharrison@bastamron.com hgrasso@bastamron.com - and - Bradford J. Sandler, Esq. Paul Labov, Esq. Cia H. Mackle, Esq. PACHULSKI STANG ZIEHL & JONES LLP 780 Third Avenue, 34th Floor New York, NY 10017-2024 Telephone: (302) 652-4100 E-mail: bsandler@pszjlaw.com plabov@pszjlaw.com cmackle@pszjlaw.com Counsel for the Debtors and Debtors-in-Possession: Shane G. Ramsey, Esq. 100 S.E. 3rd Avenue, Suite 2700 NELSON MULLINS RILEY & SCARBOROUGH LLP Ft. Lauderdale, FL 33394 Telephone: (954) 764-7060 150 Fourth Avenue, North, Suite 1100 Nashville, TN 37219 Telephone: (615) 664-5300 E-mail: shane.ramsey@nelsonmullins.com - and - Frank B.B. Knowlton, Esq. 1320 Main Street, 17th Floor Post Office Box 11070 (29211-1070) Columbia, SC 29201 Telephone: (803) 799-2000 E-mail: frank.knowlton@nelsonmullins.com About Fednat Holding Company FedNat Holding Co. -- https://www.fednat.com -- is a regional insurance holding company in Sunrise, Fla., which controls substantially all aspects of the insurance underwriting, distribution and claims processes through subsidiaries and contractual relationships with independent and general agents. It is not an insurance carrier and does not issue insurance policies. Rather, FedNat provides agency, underwriting and policy holder services to its insurance carrier clients. Its business is comprised of two primary components: underwriting and claims processing. FedNat and its affiliates filed petitions for relief under Chapter11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 22-19451) on Dec. 11, 2022. In the petition filed by its manager, Mark Allen, FedNat reported assets between $10 million and $50 million and liabilities between $100 million and $500 million. Judge Peter D. Russin oversees the cases. The Debtors tapped Shane G. Ramsey, Esq., at Nelson Mullins Riley & Scarborough, LLP as legal counsel and Aprio, LLP as tax preparer. The U.S. Trustee for Region 21 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Pachulski Stang Ziehl & Jones, LLP as lead bankruptcy counsel; Bast Amron, LLP as local counsel; and AlixPartners, LLP as financial advisor. FRANKO CATH: No Known Priority or General Unsecured Debt -------------------------------------------------------- Franko Cath LLC submitted a Second Amended Chapter 11 Plan and a Second Amended Disclosure Statement. The Debtor is New York corporation formed on April 3, 2007. The Debtor is the current owner in fee of a mixed-use building, comprised of a store and two apartments, located at 118-09 Liberty Avenue, South Richmond Hill, New York (the "Property"). The debtor had no known priority or General Unsecured debt as of the Petition Date. It is not anticipated that any priority or general unsecured claims shall be filed in this case. Under the Plan, Class 1 consists of the secured claim of Wilmington Savings Fund Society. Wilmington is the holder of the first mortgage of record encumbering Debtor's Property. The outstanding balance on this obligation as of the petition date was $851,844, inclusive of mortgage arrears of $212,604. The Debtor will repay its mortgage arrears to Wilmington, with interest thereon at the rate of 6 percent per annum, over a term of 96 months commencing on the Effective Date of the Plan. Class 1 is impaired. Class 2 consists of the secured claim of the NYC Water Board. The outstanding balance on this obligation as of the petition date was $9,632. The secured claim of the NYC Water Board will be paid with statutory interest of 4% percent per annum over a term of 53 months, commencing on the Effective Date of the Plan. Class 2 is impaired. The Debtor estimates that the cash required to confirm the Plan will total approximately $10,500. The monies needed on confirmation consist of the professional fees, estimated administrative fees which may be owed to either the Office of the Unites States Trustee or to the Clerk of the Court at the time of confirmation, any taxing authority relating to a post-petition tax obligation, and initial plan payments to Class 1 and Class 2 creditors. The plan shall be funded from the ongoing collection of rental income generated from the Debtor's Property located at 118-09 Liberty Avenue, South Richmond Hill, New York. The Debtor has prepared projections for the first 12 months after confirmation on a cash basis based upon (a) its forecast of the collection of its rental income consistent with the terms of its respective lease agreements, and (b) a forecasted increase of 5% percent per annum in operating expenses over those incurred during the 12 month period prior to the Petition Date. In addition, the Debtor does not anticipate the necessity of any large maintenance or repair expense during the first 12 months after confirmation as the Debtor incurred expenses with respect to boiler repair and roof maintenance in June 2023. This expense is reflected in the Debtor's operating report for June, 2023. Attorney for the Debtor: Richard S. Feinsilver, Esq. One Old Country Road, Suite 347 Carle Place, NY 11514 Tel: (516) 873-6330 A copy of the Second Amended Disclosure Statement dated August 9, 2023, is available at bit.ly/3KBwkGD from PacerMonitor.com. About Franko Cath Franko Cath LLC owns in fee simple title a mixed-use property (store/apartments) located at 118-09 Liberty Avenue, South Richmond Hill NY valued at $1.50 million. Franko Cath LLC filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40484) on Jan. 13, 2023. In the petition filed by Franklin Oquendo, as managing member, the Debtor reported assets between $500,000 and $1 million and liabilities between $1 million and $10 million. The case is overseen by Honorable Bankruptcy Judge Nancy Hershey Lord. The Debtor is represented by Richard S. Feinsilver, Esq. FUSION GALAXY: Wins Interim Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona authorized Fusion Galaxy LLC to use cash collateral on an interim basis in accordance with the budget, with a 20% variance. The Debtor is permitted to use cash collateral to pay for its immediate needs and its post-petition operating expenses in the ordinary course of its business as set forth in the budget. As previously reported by the Troubled Company Reporter, the Debtor believes the following Lenders may claim an interest in the Debtor's cash collateral: a. First Savings Bank - perfected by a UCC Financing Statement secured in the Debtor's assets filed on January 29, 2018; b. Galaxy-Surprise LLC - perfected by a Leasehold Deed of Trust, Security Agreement and Fixture Filing dated November 30, 2018, and secured in the Debtor's assets; c. Stearns Bank - perfected by a UCC Financing Statement secured in certain equipment owned by the Debtor filed on July 12, 2019; d. U.S. Small Business Administration - EIDL perfected by a UCC Financing Statement secured in the Debtor's assets filed on May 29, 2020; e. NCMIC - secured in 1 BioCharger NG Subtle Energy Revitalization Platform (not in Debtor's possession) pursuant to an Equipment Finance Agreement dated October 15, 2021; and f. Stearns Bank - perfected by a UCC Financing Statement secured in additional certain equipment owned by the Debtor filed on September 12, 2022. The court said any creditor holding a valid and enforceable prepetition security interest in any prepetition cash collateral, will have a post-petition replacement lien on the same type of post-petition assets acquired by the Debtor after the Petition Date, if any, and in the same validity, priority, and extent as such creditor possessed a lien on cash collateral on the Petition Date, and will have all the rights and remedies of a secured creditor in connection with the replacement liens granted. A backup hearing on the matter is set for November 7 at 10:30 a.m. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=pnLP4r from PacerMonitor.com. The Debtor projects $46,500 in total income and $38,922 in total expenses for the period from July 25 to August 15, 2023. About Fusion Galaxy LLC Fusion Galaxy LLC is a full service, eco-friendly dry cleaner that has two locations: one in Surprise, Arizona, and one in Goodyear, Arizona. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-05010) on July 26, 2023. In the petition signed by Robert Lyle Agnew, manager, the Debtor disclosed $342,116 in assets and $1,686,283 in liabilities. Judge Madeleine C Wanslee oversees the case. D. Lamar Hawkins, Esq., at Guidant Law, PLC, represents the Debtor as legal counsel. FUTURE PRESENT: Court OKs Cash Collateral Access Thru Sep 15 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of New York authorized Future Present Productions, LLC dba GUM Studios to use cash collateral on an interim basis in accordance with the budget, through September 15, 2023. The U.S. Small Business Administration, Grow America Fund, Inc., and Pursuit Lending are the Debtor's pre-petition secured lenders. The Debtor requires the use of cash collateral to continue paying its obligations and preserve the assets of the estate as a going concern. The Debtor's authorization to use the cash collateral will commence as of entry of the Interim Order by the Court and terminate upon the earliest of: (i) the date that is 105 days after the Petition Date; (ii) entry of a Final Order or a further interim order granting the Debtor's authorization to use the cash collateral; or (iii) the occurrence of a Termination Event. As adequate protection, the Secured Lenders will receive: (i) replacement liens pursuant to Bankruptcy Code section 361(2) on all property of Debtor and its estate, whether now owned or hereafter acquired; (ii) to the extent required by the pre-petition loan documents to the same extent and validity as its pre-petition liens; and (iii) adequate protection equal to the monthly payments at the non-default contract rates that were being made to the Secured Lenders in the months prior to the Petition Date, namely, $9,832 per month to the SBA; $6,276 per month to Grow America; and $1,389 per month to Pursuit. The Adequate Protection Liens will be subject to the following: (i) the payment of allowed professional fees and disbursements incurred by the Debtor's professionals retained by an Order of the Bankruptcy Court, or the Subchapter V Trustee, and in the event of a default that results in the termination of the Debtor's authorization to use cash collateral, unpaid Professional Fees and Disbursements (including any fees or expenses of the Subchapter V Trustee) incurred prior to delivery of a carve out trigger notice in accordance with the Budget not to exceed the sum of $75,000; (ii) any recoveries in favor of the estate pursuant to Chapter 5 of the Bankruptcy Code; and (iii) any amounts allowed by the Court as fees and expenses of a trustee appointed under 11 U.S.C. section 726(b) of the Bankruptcy Code in an amount not to exceed $10,000. The Replacement Liens granted to each of the Secured Lenders will become valid, enforceable and fully perfected liens without any action by Debtor or the Secured Party, and no filing or recordation or other act that otherwise may be required under federal or state law in any jurisdiction will be necessary to create or perfect such liens and security interests. The occurrence of any of these events, will constitute a Termination Event: (a) the Chapter 11 case will have been dismissed or converted to a case under Chapter 7 of the Bankruptcy Code, or there will have been appointed in the Chapter 11 case, a trustee (other than the Subchapter V Trustee) or examiner with expanded powers beyond the authority to investigate particular activities of the Debtor; (b) the Debtor files a motion seeking to modify, vacate, stay, supplement or amend the terms of the Interim Order without the prior written consent of the affected Secured Party. (c) the Interim Order is modified, vacated, stayed, supplemented, reversed, or is for any reason not binding on the Debtor, without the prior written consent of the affected Secured Party. (d) the Debtor fails to perform, in any material respect, any of the terms, provisions, conditions, covenants, or obligation under the Interim Order. (e) Debtor expends more than 110% of the Budget, unless caused by an increase in business by the Debtor. (f) There is at any time a material inaccuracy in any financial report or certification provided by the Debtor to the Secured Lenders. A final hearing on the matter is set for September 13, 2023 at 11:45 a.m. A copy of the order is available at https://urlcurt.com/u?l=WRijwi from PacerMonitor.com. About Future Present Productions, LLC Future Present Productions, LLC d/b/a GUM Studios is a multi-location film stage & equipment rental facility with production capabilities in the New York Metropolitan - Tri State area. GUM Studios caters to production companies, advertising agencies, video-photographers, designers, and large tv/film productions. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.Y. Case No. 23-42510 on July 18, 2023. In the petition signed by Carrie White, CEO, the Debtor disclosed $6,065,879 in assets and $5,760,994 in liabilities. Judge Elizabeth S. Stong oversees the case. Lewis W. Siegel, Esq. represents the Debtor as legal counsel. GENESIS CARE: Committee Taps Kramer Levin Naftalis as Counsel ------------------------------------------------------------- The official committee of unsecured creditors of Genesis Care Pty Limited and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Kramer Levin Naftalis & Frankel, LLP as counsel. The firm's services include: a. administration of the Debtors' Chapter 11 cases and the exercise of oversight with respect to the Debtors' affairs, including all issues in connection with the Debtors, the committee and the cases; b. preparation of legal papers; c. appearances in court and participation in litigation as a party-in-interest and at statutory meetings of creditors; d. evaluation of terms related to the proposed debtor-in-possession financing and filing any possible objections related thereto; e. negotiation, formulation, drafting and confirmation of a Chapter 11 plan of reorganization and matters related thereto; f. evaluating, negotiating, and at the direction of the committee, responding to any bidding procedures; g. negotiation and formulation of any proposed sale or sales of the Debtors' business operations or assets, including under Section 363 of the Bankruptcy Code; h. evaluating and negotiating modifications to the Debtors' proposed second day relief, and at the direction of the committee, responding to the Debtors' proposed second day relief; i. evaluating and investigating, as directed by the committee, among other things, unencumbered assets, liabilities, financial condition of the Debtors, pre-bankruptcy transactions, and operational issues concerning the Debtors that may be relevant to the cases; j. communications with the committee's constituents in furtherance of its responsibilities, including, but not limited to, communications required under Section 1102 of the Bankruptcy Code; and k. performance of all of the committee's duties and powers under the Bankruptcy Code and the Bankruptcy Rules. The firm will be paid at these rates: Partners $1,300 to $1,800 per hour Counsel $1,300 to $1,775 per hour Special Counsel $1,155 to $1,435 per hour Associates $720 to $1,280 per hour Paraprofessionals $365 to $555 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Rachael Ringer, Esq., a partner at Kramer, 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: Rachael L. Ringer, Esq. Kramer Levin Naftalis & Frankel, LLP 1177 Avenue of the Americas New York, New York 10036 Telephone: (212) 715-9285 Facsimile: (212) 715-8265 Email: rringer@kramerlevin.com About Genesis Care One of the world's largest integrated oncology networks, Genesis Care -- 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 Genesis Care physicians and support staff offer comprehensive, coordinated care in radiation oncology, medical oncology, hematology, urology, diagnostics, and surgical oncology. Genesis Care Pty Ltd. and its affiliated debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90614) on June 1, 2023. In the petition signed by Richard Briggs, as authorized signatory, Genesis Care disclosed $1 billion to $10 billion in both assets and liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland and Ellis, LLP, Kirkland and Ellis International, LLP and Jackson Walker, LLP as general bankruptcy counsel; 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. On June 15, 2023, the U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel, LLP as bankruptcy counsel; Locke Lord, LLP as local counsel; and Berkeley Research Group, LLC as financial advisor. GENESIS CARE: PCO Taps Ross Smith & Binford as Legal Counsel ------------------------------------------------------------ Susan Goodman, the patient care ombudsman appointed in the Chapter 11 cases of Genesis Care Pty Limited and its affiliates, seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Ross Smith & Binford, PC. The PCO requires legal counsel to: a. give advice regarding the powers and duties under applicable law with respect to the PCO's role in the Debtors' bankruptcy cases, including topics associate with patient notice and records; b. serve as counsel of record for the PCO in all legal aspects of the bankruptcy cases, including without limitation, the prosecution of actions on behalf of the PCO; and c. prepare pleadings and appearing before the court. The firm will be paid at these rates: Shareholders $650 per hour Associates and Counsel $400 to $500 per hour Paraprofessionals $150 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Jason Binford, Esq., a partner at Ross Smith & Binford, 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: Jason Binford, Esq. Ross Smith & Binford, PC 2003 N. Lamar Blvd., Suite 100 Austin, TX 78705 Tel: (512) 351-4778 Fax: (214) 377-9409 Email: jason.binford@rsbfirm.com About Genesis Care One of the world's largest integrated oncology networks, Genesis Care -- 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 Genesis Care physicians and support staff offer comprehensive, coordinated care in radiation oncology, medical oncology, hematology, urology, diagnostics, and surgical oncology. Genesis Care Pty Ltd. and its affiliated debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90614) on June 1, 2023. In the petition signed by Richard Briggs, as authorized signatory, Genesis Care disclosed $1 billion to $10 billion in both assets and liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland and Ellis, LLP, Kirkland and Ellis International, LLP and Jackson Walker, LLP as general bankruptcy counsel; 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. On June 15, 2023, the U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel, LLP as bankruptcy counsel; Locke Lord, LLP as local counsel; and Berkeley Research Group, LLC as financial advisor. GENESIS GLOBAL: NYAG Joins in Objection of SEC ---------------------------------------------- The New York State Office of the Attorney General (the "OAG"), files this Limited Objection to Genesis Global Holdco, LLC, et al.'s Motion to Approve the Adequacy of Information in the Disclosure Statement and Joinder to the Objection of the U.S. Securities and Exchange Commission to Debtors' Motion for Entry of an Order Approving the Adequacy of the Disclosure Statement and respectfully states: The OAG is the New York State agency responsible for enforcing New York General Business Law Article 23-A, ss 352 et seq. (the "Martin Act") and New York Executive Law s 63(12). These statutes authorize the OAG to bring an action in the name and on behalf of the People of the State of New York against any person, partnership, corporation, company, trust, or association, and any other person or persons theretofore concerned in or in any way participates in or is about to participate in fraudulent practices, as defined under the Martin Act, within or from New York, or whenever any person engages in repeated fraudulent or illegal acts or otherwise demonstrates persistent fraud or illegality in the carrying on, conducting or transacting of business in New York, respectively. The OAG joins in the Objection of the U.S. Securities and Exchange Commission to Debtors' Motion for Entry of an Order Approving the Adequacy of the Disclosure Statement (the "SEC Objection"). The SEC Objection states that "the Disclosure Statement, Amended Plan, and any confirmation order should expressly state that nothing therein impairs the SEC's police and regulatory powers or limits the SEC from commencing or continuing any proceeding or investigation." The Disclosure Statement, Amended Plan, or confirmation order should also state that nothing therein impairs other governmental units' (including the OAG's) police and regulatory powers or limits other governmental units (including the OAG) from commencing or continuing any proceeding or investigation. The SEC objects that the "Disclosure Statement, Amended Plan, and any confirmation order should be amended to include a provision … explicitly stating that those documents do not contain or constitute findings under the securities laws as to whether crypto assets or transactions involving crypto assets are securities." However, the language proposed by the SEC references only "federal securities law." That provision should state that the documents referenced do not contain or constitute such findings under either federal or state (including New York State) securities laws. Counsel for OAG: Letitia James Attorney General of the State of New York Gabriel Tapalaga, Esq. Assistant Attorney General 28 Liberty St., 21st Floor New York, NY 10005 Telephone: (212) 416-6177 E-mail: gabriel.tapalaga@ag.ny.gov 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. GIRARDI & KEESE: Trustee Countersued by Ex-Attorney --------------------------------------------------- Joyce E. Cutler of Bloomberg Law reports that a former California State Bar president countersued the trustee for the Girardi Keese LLP bankruptcy estate in a fight over recovering fees for creditors of the defunct firm. Howard Miller, an intellectual property attorney, countersued Chapter 7 trustee Elissa Miller claiming indemnity, including reimbursement for costs incurred under California Labor Code Section 2802. The law requires California employers pay for "all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful." "All of the conduct for which the Complaint seeks to impose liability upon Howard Miller is conduct which occurred in the course and scope of his work at Girardi Keese and which was done exclusively to benefit Girardi Keese and with the express agreement and oftentimes at the express request of Girardi Keese," the countersuit filed Aug. 11, 2023 said. Howard Miller was brought into Girardi Keese in 2002 and left at age 80 in January 2018, the filing said. The bankruptcy trustee sued Miller last January amid a slew of adversary proceedings filed against former attorneys, relatives, and others. A status conference is scheduled Tuesday before Judge Barry Russell, US Bankruptcy Court for the Central District of California, who is overseeing the bankruptcies of the firm and Thomas Girardi. The case is Miller v. Miller, Bankr. C.D. Cal., No. 2:23-ap-01041, 8/11/23. About Girardi & Keese Girardi and Keese or Girardi & Keese was a Los Angeles-based law firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It served clients in California in a variety of legal areas. It was known for representing plaintiffs against major corporations. An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No. 20-21022) was filed in December 2020 against GIRARDI KEESE by alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian, Erika Saldana, Virginia Antonio, and Kimberly Archie. The petitioners' attorneys: Andrew Goodman Goodman Law Offices, Apc Tel: 818-802-5044 E-mail: agoodman@andyglaw.com Elissa D. Miller, a member of the firm SulmeyerKupetz, has been appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7 trustee can be reached at: Elissa D. Miller 333 South Grand Ave., Suite 3400 Los Angeles, California 90071-1406 Telephone: (213) 626-2311 Facsimile: (213) 629-4520 E-mail: emiller@sulmeyerlaw.com An involuntary Chapter 7 petition was also filed against Thomas Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7 trustee can be reached at: Jason M. Rund Email: trustee@srlawyers.com 840 Apollo Street, Suite 351 El Segundo, CA 90245 GUARDIAN BASEBALL: Court OKs Cash Collateral Thru Aug 31 -------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Kentucky, Louisville Division, authorized Guardian Baseball, LLC to use cash collateral on an interim basis in accordance with the budget, through the week of August 31, 2023. As adequate protection, the United States Small Business Administration and Amazon Capital Services, Inc. are granted valid, attached, choate, enforceable, perfected, and continuing security interests in, and replacement liens upon, all of the post-petition property of Guardian that is similar to its interests in pre-petition collateral. The post-petition security interests, liens, and other rights granted to the SBA and Amazon Capital will be deemed to be effective, valid, perfected, and enforceable as of the Petition Date without the necessity of taking any other act or recording any security agreements, financing statements, or any other instruments or documents, and no further notice, filing, recordation, or order will be required to effect such validity, perfection, and enforceability. As additional adequate protection to Amazon Capital, and in accordance with the Debtor's cash collateral budget, Amazon Capital is entitled to adequate protection payments in the amount of $6,250 per week commencing August 11, 2023, which Amazon Capital or its affiliates will be entitled to deduct from the Debtor's Amazon seller account on an ongoing basis. In addition, Amazon Capital and SBA will hold allowed administrative claims under 11 U.S.C. Section 507(b) with respect to the adequate protection obligations of the Debtor to the extent that the replacement liens on postpetition collateral do not adequately protect the diminution in value of the interests of Amazon Capital and SBA in their pre-petition collateral. Such administrative claims will be junior and subordinate only to any superpriority claim of the kind ordered by the Court and specified in 11 U.S.C. Section 364. The administrative claims will be payable from and have recourse to all prepetition and post-petition property of the Debtor and all proceeds thereof. The liens on post-petition collateral will be in addition to any pre-petition liens held by SBA and Amazon Capital and will remain in full force and effect notwithstanding any subsequent conversion or dismissal of the case. A final hearing on the matter is set for September 12, 2023 at 3 p.m. A copy of the order is available at https://urlcurt.com/u?l=iD8WGx from PacerMonitor.com. About Guardian Baseball, LLC Guardian Baseball, LLC is a manufacturer and retailer of sporting goods and equipment. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Ky. Case No. 23-31813) on August 3, 2023. In the petition signed by Zev Bernard, chief operating officer, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Charles R. Merrill oversees the case. Charity S. Bird, Esq., at Kaplan Johnson Abate & Bird LLP, represents the Debtor as legal counsel. H2O INVESTMENT: Secured Creditor Objects to Plan Approval --------------------------------------------------------- Secured Creditor BCMB1 Trust, its successors and/or assignees, objects to confirmation of the H2O Investment Properties LLC's ("Debtor") proposed Chapter 11 Plan filed on July 3, 2023, and states: Secured Creditor points out that Class 13 treatment is not permissible. 11 U.S.C section 506 does not allow the Debtor to "strip" BCMB1's lien for the reasons indicated in Secured Creditor's Objection to Debtor's Second Amended Motion to Determine Secured Status of Claim. Secured Creditor further points out that the Plan violates the best interests of Creditors Test of 11 U.S.C. 1129(a)(7)(A). Under the Plan, Secured Creditor would receive a total of $0.00. The Debtor's Liquidation Analysis includes a property value of $850,000. However, the actual value is closer to the value listed on Debtor's Schedules, $1,400,000.00. Consequently, a Chapter 7 liquidation would result in a distribution on Secured Creditor's claim well above $0.00. Hence, the Plan violates the Bests Interests of Creditors Test and cannot be confirmed pursuant to 11 U.S.C. section 1129(a)(7)(A). Secured Creditor complains that the Plan is not fair and equitable under 11 U.S.C. section 1129(b)(2). Pursuant to 11 U.S.C. s 506(a), an allowed claim of a creditor secured by a lien on property in which the estate has an interest is a secured claim to the extent of the value of such creditor's interest in the estate’s interest in such property. Therefore, the allowed claim is the full amount of the Claim as filed. Thus, in order for the Plan to be fair and equitable pursuant to 11 U.S.C. s 1129(b)(2), the Plan must provide to Secured Creditor deferred cash payments totaling at least $402,987.00. Hence, the plan is not fair and equitable and cannot be crammed down over Secured Creditor's objection and thus, cannot be confirmed as a matter of law. According to Secured Creditor, Non-Recourse provisions are not permissible pursuant to 11 U.S.C. section 1111(b)(1). By operation of 11 U.S.C. section 1111(b)(1)(A), the Debtor's Plan proposing nonrecourse from the Debtor after stripping of Secured Creditor's lien is impermissible. If the Debtor is successful in stripping Secured Creditor's lien, pursuant to, Secured Creditor is entitled to an unsecured claim and distribution on said claim. Therefore, the Plan that fails to address the unsecured claim cannot be confirmed. Secured Creditor asserts that the Plan does not support a finding of good faith under 11 U.S.C section 1129(a)(3). In light of the Debtor being created a few days prior to the transfer of the property from Brilliant Homes LLC to the Debtor and Debtor's acknowledgment that the transfer was made for the purpose of filing bankruptcy, it is clear that the Debtor does not intend to properly use the bankruptcy process. It is clear that the equitable interest in the property is still held by Brilliant Homes LLC. However, for whatever reason, Brilliant Homes LLC is seeking to take advantage of the bankruptcy process while avoiding exposing the Brilliant Home's financial records and making statements under penalty of perjury. Attorneys for Secured Creditor Melbalynn Fisher, Esq. GHIDOTTI | BERGER, LLP 1031 North Miami Beach Blvd. North Miami Beach, FL 33162 Telephone: (305) 501-2808 Facsimile: (954) 780-5578 E-mail: bknotifications@ghidottiberger.com About H2O Investment Properties H2O Investment Properties LLC is in the business of purchasing, improving, and disposing of distressed property. H2O Investment filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00373) on April 3, 2023. In the petition filed by Ronald G. Sapp, manager, the Debtor reported assets and liabilities between $1 million and $10 million. The petition states that funds will be available to unsecured creditors. Michael C. Markham has been appointed as Subchapter V trustee. Judge Caryl E. Delano oversees the case. Michael R. Dal Lago, Esq., at Dal Lago Law, serves as the Debtor's counsel. HAWAIIAN HOLDINGS: Moody's Cuts CFR to B2 & Alters Outlook to Neg. ------------------------------------------------------------------ Moody's Investors Service downgraded its ratings of Hawaiian Holdings, Inc. ("Hawaiian"), including the corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD. Moody's also downgraded the rating on subsidiary Hawaiian Airlines, Inc.'s Series 2013-1 Class A Enhanced Equipment Trust Certificates ("EETC") to B1 from Ba3. Moody's affirmed the Ba3 rating assigned to HawaiianMiles Loyalty, Ltd.'s $1.2 billion of senior notes secured by the company's HawaiianMiles loyalty program and its brand intellectual property ("Notes"). The speculative grade liquidity rating was lowered to SGL-2 from SGL-1. The ratings outlook was changed to negative from stable. "The ratings downgrades reflect the inability to restore operating margins and cash flow to near their respective pre-pandemic levels," said Moody's Senior Vice President, Jonathan Root. Moody's expects an operating margin near negative two percent in 2023, which compares to 12.5% in 2019. Cash flow from operations will reach about $100 million in 2023, well below almost $500 million in 2019. "The shortfall in cash generation will weigh on Hawaiian's liquidity if it is unable to achieve a strong positive inflection in 2024," said Root. Moody's believes that recovery of Hawaiian's cash generation is being hampered by Southwest Airlines' lower pricing on inter-island flights. Hawaiian is likely booking materially lower fares on its inter-island services as compared to before Southwest's entry. Moody's estimates the annual impact to Hawaiian's operating cash generation is about $200 million. The destruction from the Maui fires this past week may prove to be another barrier to improving cash generation in upcoming months. However, vacationers continuing to choose Hawaii, though possibly foregoing a visit to Maui on their next trip, would help mitigate such pressure on cash generation. Moody's lowered its speculative grade liquidity rating to SGL-2 because it projects free cash flow near negative $550 million in 2024, about $330 million weaker than in 2023. Investment in new Boeing 787-9 wide-body aircraft combined with Moody's current tepid assumptions for growth in earnings and operating cash flows account for the bulk of the decline. The $1.2 billion of cash on hand at the end of the second quarter provides a large cushion to absorb the weak cash flow profile and mitigates further declines in the speculative grade liquidity rating, for now. The affirmation of the Ba3 rating assigned to the loyalty program notes reflects an increase in the first loss position in Moody's Loss Given Default claims waterfall (e.g., trade payables and other unsecured claims) compared to when Moody's first assigned ratings to the loyalty financing. The increase mitigates some of the increase in the modeled expected loss for senior secured obligations with a B2 corporate family rating, leaving the senior secured rating outcome per the LGD model at B1 notwithstanding the lower corporate family rating. The downgrade of the EETC rating by one notch is in lockstep with the one notch downgrade of the corporate family rating. The B1 rating on the EETC reflects a loan-to-value in excess of 100%, mitigated by the importance of the collateral (six A330-200 widebody aircraft) to Hawaiian's route system over the transaction's remaining term through January 15, 2026. The one notch uplift from the corporate family rating reflects Moody's opinion that Hawaiian would affirm the financing in the event of a bankruptcy filing. The negative outlook reflects the potential for persistently weak earnings and cash flow. Under such a scenario, excess cash on hand would fund operations and investment, rather than be used to retire debt, and further constrain credit metrics. Downgrades: Issuer: Hawaiian Airlines, Inc. Backed Senior Secured Enhanced Equipment Trust, Downgraded to B1 from Ba3 Issuer: Hawaiian Holdings, Inc. Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2-PD from B1-PD Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Affirmations: Issuer: HawaiianMiles Loyalty, Ltd. Backed Senior Secured Regular Bond/Debenture, Affirmed Ba3 Outlook Actions: Issuer: Hawaiian Airlines, Inc. Outlook, Changed To Negative From Stable Issuer: Hawaiian Holdings, Inc. Outlook, Changed To Negative From Stable Issuer: HawaiianMiles Loyalty, Ltd. Outlook, Changed To Negative From Stable RATINGS RATIONALE The B2 corporate family rating reflects Hawaiian's competitive positions across its continental US to Hawaii; Japan, South Korea and a few countries in Oceania to Hawaii and inter-island route networks. The B2 rating also reflects the company's good liquidity that for now mitigates the strain on its operating cash flow generation, which is tied mostly to Southwest Airlines' pricing strategy for inter-island flights. Moody's believes that the effects of the August 2023 fires on Maui and Hawaii will be temporary, rather than leading to a sustained decline in demand for travel to Hawaii. Credit metrics are weak but should strengthen as 2024 progresses. Debt/EBITDA could decline to about 7x and FFO + interest to interest could approach 3x. Hawaiian has a record of solid operating performance and a relatively conservative financial policy, demonstrated by debt/EBITDA sustained below 2.6x between 2016 and 2019. Moody's believes Hawaiian would like to restore its historical balance sheet strength; however, the pace of restoration of operating cash flow to near 2019 levels will dictate the pace. The undrawn $235 million revolver and unencumbered assets that could bring in about $500 million of new debt also support the liquidity profile. Interest income earned on the company's cash is substantial, lowering annual interest expense by about half, to about $40 million in 2023 and 2024. The Ba3 rating on the notes reflects the essentiality of the Hawaiian Airlines' brand and related intellectual property for it to operate its business and the importance of its loyalty program to its day-to-day operations and cash flows. This is balanced by relatively low recovery prospects if the collateral ever needed to be monetized to pay off the notes under an airline liquidation scenario. The notes rating is one notch above the rating Moody's would assign to other senior secured obligations based on its LGD waterfall. Moody's applies a one notch positive override of the LGD model rating to the loyalty program notes because it expects a lower loss given default compared to other of the company's senior secured debt obligations, which are unrated. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Moody's expects that operating cash flow will not materially increase or if Moody's expects a material reduction in the company's liquidity. No demonstrated improvement in debt/EBITDA towards 7x nor retained cash flow-to-debt approaching 8% through 2024 would also pressure the ratings. There will be no upwards pressure on the ratings until after a sustained material recovery of operating cash flow. EBITDA margin approaching 15%, debt/EBITDA sustained below 5x and retained cash flow-to-debt approaching 13% while the company takes delivery of the 787s in upcoming years could support a ratings upgrade. Changes in the EETC ratings can result from any combination of changes in the underlying credit quality or ratings of the company, Moody's opinion of the importance of the aircraft collateral to the company's operations and/or its estimates of current and projected aircraft market values, which will affect estimates of loan-to-value. The principal methodology used in rating Hawaiian Holdings, Inc. and HawaiianMiles Loyalty, Ltd. was Passenger Airlines published in August 2021. Headquartered in Honolulu, Hawaii, Hawaiian Holdings, Inc. is the holding company parent of Hawaiian Airlines, Inc., Hawaii's biggest and longest-serving airline. Hawaiian offers nonstop service to Hawaii from 15 US gateway cities, and serves American Samoa, Australia, Cook Islands, Japan, New Zealand, South Korea and Tahiti. Hawaiian also provides approximately 150 jet flights daily between the Hawaiian Islands. The company reported revenue of $2.6 billion in 2022. HAWKEYE ENTERPRISES: Court OKs Cash Collateral Access ----------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, authorized Hawkeye Enterprises, LLC to use cash collateral on an interim basis in accordance with the budget. The Debtor is indebted to Berkshire Bank, in the approximate amount of $957,000. The Debtor is also indebted to Rocket Capital NY, LLC in the approximate amount of $44,200, QFS Capital LLC in the approximate amount of $18,000, and Funding Metrics, LLC in the approximate amount of $35,000. Additionally, the Debtor may be indebted on a secured basis to EBF Holdings, LLC in the approximate amount of $21,000, American Express in the approximate amount of $18,31, Black Olive Capital LLC in the approximate amount of $96,000, Celtic Bank Corporation in the approximate amount of $94,000, PNC Bank in the approximate amount of $100,000, Forward Financing in the approximate amount of $13,000, and Cucumber Capital, LLC in the approximate amount of $30,000. Berkshire Bank, pre-petition lender to the Debtor, asserts various interests in (including, without limitation, security interests in and liens upon) substantially all of the Debtor's personal property including, without limitation, inventory and accounts receivable, as more particularly described in its loan documents. Further, Berkshire asserts interests in cash collateral including, without limitation, that such cash constitutes proceeds of the Collateral and, therefore, constitutes cash collateral within the meaning of 11 U.S.C. Code section 363(a). The Debtor is permitted to use cash collateral without approval of the Prepetition Creditors to the extent that such use is necessary to protect the welfare of any animals that are kept on the premises of the Debtor's facilities. The cash collateral will not be used to make payments to (i) professionals, whether or not retained by the bankruptcy estates, including any attorneys' fees and expenses; (ii) other secured creditors; or (iii) pre-petition claims, debts or obligations, except to the extent such claims are contemplated by the Budget and allowed by the Court. As adequate protection, the Prepetition Creditors are granted replacement security interests in, and liens on, all post-Petition Date acquired property of the Debtor's bankruptcy estates that is the same type of property that Prepetition Creditors held a pre-petition interest, lien or security interest to the extent of the validity and priority of such interests, liens, or security interests, if any. To the extent that the Replacement Liens prove inadequate to protect the Prepetition Creditors from a demonstrated diminution in the value of their Collateral positions from the Petition Date, then the Prepetition Creditors will be granted an administrative expense claim under Code section 503(b) with priority in payment under Code section 507(b). The Lender Super Priority Claims will be afforded the same priority within the class of Prepetition Creditors as the prepetition liens and security interests of those Prepetition Creditors. In addition to the Replacement Liens and Lender Super Priority Claim, to the extent that the Replacement Liens prove inadequate to protect the Prepetition Creditors from a demonstrated diminution in the value of their Collateral positions from the Petition Date, then Prepetition Creditors will be granted additional liens on all of the Debtor's assets for any diminution in its collateral position from the Petition Date not protected by the Replacement Liens. A further interim hearing on the matter is set for August 16. 2023 at 1:30 p.m. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=iXryhj from PacerMonitor.com. The Debtor projects total expense of $40,800 for the week ending August 20, 2023. About Hawkeye Enterprises Hawkeye Enterprises, LLC filed Chapter 11 petition (Bankr. E.D. Mo. Case No. 23-42494) on July 17, 2023, with $328,232 in assets and $1,488,755 in liabilities. Robert Moellering, owner, signed the petition. Judge Brian C. Walsh oversees the case. Robert E. Eggmann, Esq., at Carmody MacDonald P.C. is the Debtor's legal counsel. HEARING ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Hearing Associates LLC 502 Sheppard Rd Voorhees NJ 08043 Business Description: The Debtor specializes in hearing loss treatment, hearing aids, hearing loss services, tinnitus treatment, & cochlear implants for its clients in Voorhees, NJ. Chapter 11 Petition Date: August 15, 2023 Court: United States Bankruptcy Court District of New Jersey Case No.: 23-17056 Debtor's Counsel: Robert Johnson, Esq. ROBERT H JOHNSON LLC 1818 Old Cuthbert Road Suite 107 Cherry Hill NJ 08034 Tel: (856) 298-9328 Email: rjohnson@rhjlaw.com Total Assets: $563,790 Total Liabilities: $5,203,637 The petition was signed by Jonathan S. Ayes as owner. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MGTRATQ/Hearing_Associates_LLC__njbke-23-17056__0001.0.pdf?mcid=tGE4TAMA HEART HEATING: Court OKs Deal on Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Heart Heating & Cooling, LLC to use cash collateral in accordance with its agreement with the Colorado Department of Revenue. As previously reported by the Troubled Company Reporter, the Debtor requires the use of cash collateral to fund its post-petition operations in accordance with the budget projections set forth in budget. The Debtor's budget projections accounted for among other things: a. Monthly adequate protection payments to the CDOR in the amount of $3,244; b. Monthly adequate protection payments to merchant cash advance lenders in the total amount of $1,000; and c. Monthly adequate protection payments to the lenders on the Debtor's vehicles in the approximate total amount of $30,000. Pre-petition, the Debtor incurred unpaid state payroll tax liabilities, interest, and penalties to the CDOR in the approximate amount of $162,000. The CDOR asserts payment of the State Payroll Tax Liability is secured first and prior lien under C.R.S. Sections 39-26-117(1) and/or 39-22-604(7)(a), on the Debtor's cash on hand, accounts receivable, inventory, equipment, and other assets. The Debtor and the CDOR agree that the Debtor's cash on hand, accounts receivable, equipment, inventory, and any proceeds from the foregoing constitute collateral securing the State Payroll Tax Liability. Beginning on the first day of the month following entry of an order approving the Stipulation and continuing upon the first day of every succeeding month thereafter until confirmation of a plan, appointment of a Chapter 7 trustee, dismissal, or conversion, the Debtor will pay the CDOR an adequate protection payment in the sum of $3,244 on a monthly basis. The payments will include August 2023 and all months thereafter. All payments will be applied to the State Payroll Tax Liability. CDOR will have a first priority replacement lien on all property of the Debtor and the estate, including without limitation, on all post-petition accounts and accounts receivable, in and securing such amounts as lawfully set forth as secured claims in the proof of claim filed by Colorado Department of Revenue and any amendments thereto. The Debtor will maintain adequate insurance coverage on all personal property assets to insure adequately against any potential loss and provide proof of such insurance at least annually starting on December 1, 2023. The Debtor will expend cash collateral only for the purpose of ordinary business expenses, including the purchase of replacement inventory, payment of employee wages, and regular overhead expenses, including fees under 28 U.S.C. Section 1930, and will provide CDOR with a budget by August 1, 2023. No later than September 1, 2023, the Debtor will file any delinquent reports and returns for pre- and post-petition periods. The Debtor shall cure and fully pay to CDOR any delinquent taxes for post-petition periods by that date. Thereafter, the Debtor will timely file all reports and returns with CDOR and timely pay all post-petition taxes due thereunder. The Debtor will preserve and maintain in good condition all collateral in which CDOR has an interest. The Stipulation will terminate and the Debtor will cease using the cash collateral upon an uncured default; 30 days written notice provided by the CDOR in its sole discretion; or the confirmation of a plan of reorganization, appointment of a Chapter 11 trustee, or the conversion or dismissal of the Debtor's Bankruptcy Case. A copy of the order is available at https://urlcurt.com/u?l=CDvWBU from PacerMonitor.com. About Heart Heating & Cooling, LLC Heart Heating & Cooling, LLC is a HVAC contractor in Colorado Springs, Colorado. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 23-13019) on July 11, 2023. In the petition signed by Robert M. Townsend, chief executive officer, the Debtor disclosed $2,676,312 in assets and $11,173,434 in liabilities. Judge Thomas B. McNamara oversees the case. K. Jamie Buechler, Esq., at Buechler Law Office, LLC, represents the Debtor as legal counsel. HELLO LIVINGSTON: Lacks Authority for Filing Case, Says Weiss ------------------------------------------------------------- Eugene Weiss objects to the pending motions filed by Hello Livingston Extended LLC to: (i) Sell Property Free and Clear of Liens Under Section 363(f) and for Entry of An Order Approving Bid Procedures and Scheduling of Auction Sale and (ii) Approve Disclosure Statement. Weiss is a member of GWK Livingston LLC, which is a Class A member of 291 Perigrove 1001 LLC, which is a member of 291 Livingston Holdings LLC (managed by David Gefner) and Perigrove 1001 LLC (whose members are Gefner and Abraham Leifer), which are the members of the Debtor. Weiss' objection is based on the lack of proper authority and necessary consents for the filing of the Debtor's Chapter 11 case. The Debtor was without the requisite consent and authority from members of the relevant entities who own membership interests in the Debtor to commence this bankruptcy proceeding and therefore, the Court is without subject matter jurisdiction over the Debtor and all proceedings herein. Weiss' efforts to obtain relevant documents and information from the Debtor have been ignored and therefore, Weiss has been left without any alternative to filing the instant objection and to seek dismissal of this bankruptcy case. Attorneys for Eugene Weiss: Kenneth J. Rubinstein, Esq. Joseph M. Vann, Esq. COHEN TAUBER SPIEVACK & WAGNER P.C. 420 Lexington Avenue, Suite 2400 New York, NY 10170 Tel: (212) 586-5800 Fax: (212) 586-5095 E-mail: krubinstein@ctswlaw.com jvann@ctswlaw.com About Hello Livingston Extended Hello Livingston Extended, LLC, is the fee owner of a property located at 291 Livingston St., Brooklyn, N.Y., valued at $29.5 million. Hello Livingston Extended filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22422) on June 2, 2023. In the petition filed by its chief restructuring officer, David Goldwasser, the Debtor disclosed $29,500,000 in total assets and $37,034,732 in liabilities. Judge Sean H. Lane oversees the case. The Debtor tapped Robert L. Rattet, Esq., and Jonathan S. Pasternak, Esq., at Davidoff Hutcher & Citron, LLP, as bankruptcy attorneys. HILLSDALE UNITED: Patricia Fugee Named Subchapter V Trustee ----------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed Patricia Fugee of FisherBroyles, LLP as Subchapter V trustee for Hillsdale United Brethren in Christ Church. Ms. Fugee 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. Fugee declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Patricia B. Fugee FisherBroyles, LLP 27100 Oakmead Drive #306 Perrysburg, OH 43551 Phone: (419) 874-6859 Email: Patricia.Fugee@FisherBroyles.com About Hillsdale United Brethren in Christ Church Hillsdale United Brethren in Christ Church filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-31382) on Aug. 3, 2023, with $100,001 to $500,000 in both assets and liabilities. Judge Mary Ann Whipple oversees the case. Eric R. Neuman, Esq., at Diller and Rice, LLC represents the Debtor as legal counsel. HITSON CABINET: Fine-Tunes Plan Documents ----------------------------------------- Hitson Cabinet Design, Inc., submitted a Second Amended Small Business Plan of Liquidation dated August 10, 2023. This is a Plan to sell all of the Debtor's assets pursuant to Motion and Notice of Sale. The Debtor has entered into an Asset Purchase Agreement provides for a $600,000.00 purchase price which Debtor believes to be the fair market value of its Assets. Authorized representatives of the Purchaser negotiated with the Debtor at arms-length and reached an agreement to purchase the Business in exchange for $600,000.00 to be paid in cash at closing. The APA also provides for a mechanism for customers (creditors) of the Debtor who have paid deposits for some or all of their cabinet work can have their cabinets finished without repaying a third party for the entire cost of their project. Those creditors will be allowed to have their job finished by the Purchaser for the payment of any unpaid balance currently owed, plus 30% of the entire job charge. If there is no unpaid balance, those creditors can have the job finished in its entirety with the payment of 30% of the entire job charge. Class 1 consists of the Secured claim of Builtwell Bank. Paid an agreed upon claim out of the proceeds of the sale of the Business Equipment pursuant to the Court's Order entered on July 11, 2023. This Class is impaired as to any claim amount over $450,000 by agreement. Class 2 consists of the Secured claim of Southeast Bank. Secured Amount paid on the Effective Date. Estimated deficiency in the amount of $102,715.67 to be classified and treated as a general unsecured Claim. Class 5 consists of Priority unsecured claim. These creditors may select one of two options for treatment: * Option A: Elect Priority Treatment under Section 507(a)(7) of the Bankruptcy Code and have an allowed Priority Claim of $3,350.00, with the balance of their claim to be classified and treated as a general unsecured claim. To elect Option A and participate in the distribution of the Plan, these creditors must file a proof of claim by the bar date set forth in the Confirmation Order. If a creditor in this class files a proof of claim and does not elect Option B, they will be deemed to have elected Option A. * Option B: Elect for the new owner of Hitson Cabinet Designs, Inc. to complete their job for the payment of any unpaid balance currently owed, plus 30% of the entire job charge. If there is no unpaid balance, those creditors can have the job finished in its entirety with the payment of 30% of the entire job charge. When electing this option, these creditors will still be entitled to a priority claim under Section 507(a)(7) of the Bankruptcy Code and must file a proof of claim by the bar date set forth in the Confirmation Order. Class 6 consists of General Unsecured Claims. Paid Pro-rata share of proceeds from sale of Debtor's assets, funds obtained from the pursuit of avoidance actions by the Subchapter V Trustee on behalf of the Debtor, or any other funds that the Debtor may be entitled to after the payment of priority and administrative claims. The Debtor intends to sell all of the assets of the company pursuant to the terms of the Asset Purchase Agreement. The proceeds from the sale will be divided pursuant to the terms of this Plan. On Confirmation of the Plan, all property of the Debtor, tangible and intangible, including, without limitation, licenses, furniture, fixtures and equipment, will revert, free and clear of all Claims and Equitable Interests except as provided in the Plan, to the Debtor. The Debtor expects to have sufficient cash on hand to make the payments required on the Effective Date. A full-text copy of the Second Amended Plan dated August 10, 2023 is available at https://urlcurt.com/u?l=aETMCE from PacerMonitor.com at no charge. About Hitson Cabinet Hitson Cabinet Design, Inc., is a business that designs and builds custom cabinetry and interior trim. The Debtor filed a Chapter 11 petition (Bankr. E.D. Tenn. Case No. 23-10860) on April 14, 2023. The Hon. Shelley D. Rucker oversees the case. Attorney for the Debtor: FARINASH & STOFAN Amanda M. Stofan, Esq. 100 West M L King Blvd., Suite 816 Chattanooga, TN 37402 Phone: (423) 805-3100 Email: Amanda@8053100.com HOVNANIAN ENTERPRISES: S&P Affirms 'CCC-' Issuer Credit Rating -------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on the Hovnanian Enterprises Inc. (HOV). S&P said, "At the same time, we raised our rating on its series A preferred debt to 'CCC-' from 'CC', commensurate with our expectation that the company will maintain a fixed-coverage ratio above 2.0x and secured debt leverage ratio below 4.0x, which are required for HOV to pay the dividend, for the foreseeable future. "The stable outlook reflects our expectation that HOV's leverage at this point in the U.S. housing cycle provides a good buffer to maintain EBITDA to interest coverage of approximately 3x-3.5x over the next 12 months. "We expect demand to be stronger through the remainder of HOV's fiscal 2023, with a positive turn in macroeconomic trends. Mortgage rates are stabilizing after the significant jump through the first half of 2023 as buyers acclimate to higher interest rates. Additionally, S&P Global Ratings analysts expect housing starts of about 1.4 million in 2023 and 1.3 million in 2024 (compared with 1.2 million we previously forecast), as recessionary fears in the U.S. economy dissipate. Homebuilders have also moderated their incentive programs leading to more normal cancellation rates. Strong demand pick-up since the start of 2023 coupled with a limited resale market will likely enable more sales and home constructions in 2023. We expect the 30-year conventional fixed-rate mortgage to be in the mid- to high-6% range for 2023, before declining to the high-5% area for 2024. "We believe HOV will maintain a debt-to-EBITDA ratio of 4x-5x over the next 12 to 24 months. We forecast EBITDA interest coverage of 3x to 3.5x the end of fiscal 2024 through the company's commitment to reduce its elevated debt levels. We forecast the company will generate EBITDA of roughly $325 million-$350 million in fiscal 2023 and 2024. We expect margins to decline compared to fiscal 2022 due to softening housing demand in the first half of 2023. However, HOV has retained the ability to generate leverage metrics commensurate with a 'B-' rating. As macroeconomic uncertainty subsides and demand for housing maintains a reasonable pace, we expect the company to maintain its current operating performance, which will decrease its S&P Global Ratings'-adjusted debt to EBITDA ratio toward the 4x area in fiscal year 2024 from our expectations of 4.6x at the end of fiscal 2023. "We anticipate HOV will finish fiscal 2023 with slightly more than 5,500 home closings, inclusive of its joint ventures. As the company has managed to significantly decrease average construction cycle times, we expect gross margins to fall slightly due to softer demand, resulting in 13% fewer homes closed than in fiscal 2022. We don't anticipate significant increases in home prices, which when combined with lower closings, will reduce revenue by approximately 10%. As a result, we expect its S&P Global Ratings'-adjusted EBITDA margin to decrease to the 12%-13% range in fiscal 2023 and 2024 and adjusted EBITDA decreasing to roughly $325 million-$350 million. However, we expect demand to increase while home prices depreciate going into fiscal 2024 along with improved cycle times, resulting in roughly flat revenue growth through 2024. "The stable outlook on HOV reflects our expectation that debt to EBITDA will remain between 4x and 5x through fiscal-year 2024, its EBITDA interest coverage will remain comfortable above 2x, and it will fund its operations with internally generated cash flows." S&P could lower its rating on HOV to 'CCC+' if; -- EBITDA to interest coverage declines to 2x. This could occur, for example, if its EBITDA falls to about $250 million, which represents nearly a 25% decline from our forecast; or -- Cash funds from operations falls below 12% due to deteriorating cash flow generation; or -- If the company is unable to refinance the upcoming maturities in 2026 such that liquidity becomes constrained, or the weighted average maturity declines below 2 years. S&P could raise its issuer credit rating on HOV to 'B' over the next 12-18 months if: -- It refinances a material portion of its mostly secured capital structure; -- Sustains debt to EBITDA of well below 4x; and -- Maintains EBITDA interest coverage comfortably above 3x with no sign of degradation. HUB DUB: Gets OK to Tap Law Offices of Joel A. Schechter as Counsel ------------------------------------------------------------------- Hub Dub, Ltd. received approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ the Law Offices of Joel A. Schechter to handle its Chapter 11 case. The firm will be compensated at $500 per hour for its services and will be reimbursed for out-of-pocket expenses incurred. The Debtor paid the firm a retainer of $20,000. Joel Schechter, Esq., a partner at the Law Offices of Joel A. Schechter, 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: Joel A. Schechter, Esq. Law Offices of Joel A. Schechter 53 W. Jackson Blvd., Suite 1522 Chicago, IL 60604 Telephone: (312) 332-0267 Email: joel@jasbklaw.com About Hub Dub Ltd. Hub Dub, Ltd. is a full-service e-commerce brand management and warehousing solution. It offers customers the importing, warehousing, brand enforcement and distribution of products through diverse online global sales channels. Hub Dub filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-08058) on June 20,2023, with $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. Ken Novak has been appointed as Subchapter V trustee. Judge A. Benjamin Goldgar oversees the case. Joel A. Schechter, Esq., at the Law Offices of Joel A. Schechter is the Debtor's counsel. IMEDIA BRANDS: Completes Asset Acquisition Deal with IV Media ------------------------------------------------------------- Global media company iMedia Brands, Inc. (OTC: IMBIQ) on Aug. 16, 2023, disclosed that it has successfully closed its Asset and Equity Purchase Agreement ("AEPA") with IV Media, LLC ("IV Media"), a subsidiary of Innovation Ventures, LLC, the producer and distributor of 5-hour ENERGY(R) shots. Through the AEPA, IV Media has acquired substantially all assets of iMedia Brands on a going-concern basis, including its ShopHQ Networks, 1-2-3.tv, iMDS, J.W. Hulme, and Christopher & Banks businesses for approximately $55 million of transaction value, plus the assumption of certain liabilities, contracts, and ongoing expenses. "On behalf of iMedia, I am pleased to announce the purchase of iMedia's operating assets by IV Media," said James Alt, Chief Transformation Officer, iMedia. "Under new ownership, both companies will be well positioned to grow and achieve great success together well into the future. With IV Media's partnership, iMedia will continue delivering customers the diverse range of brands they desire through captivating content. [Wednes]day's announcement is a great outcome for iMedia, and I thank our valued team and partners for their continued support during this process." "We are pleased with the outcome and the process and are looking forward to working closely with iMedia going forward," said Vince Bodiford, Head of Communications, Innovation Ventures, LLC and 5-hour ENERGY(R). Following completion of the court-approved auction process on August 10, 2023, and in consultation with lenders and the Official Committee of Unsecured Creditors, the Company selected IV Media, LLC as the winning bidder. At the Sale Hearing on August 14, 2023, the U.S. Bankruptcy Court for the District of Delaware approved iMedia's entry into the AEPA pursuant to Section 363 of the U.S. Bankruptcy Code. Additional information regarding the Company's Chapter 11 process is available at cases.stretto.com/iMediaBrands. Stakeholders with questions may call the Company's Claims agent Stretto at (855) 794 -- 3801 (U.S.) or (949) 340 -- 0398 (outside the U.S. or Canada), or email at iMediaInquiries@stretto.com. Ropes & Gray LLP and Pachulski Stang Ziehl & Jones LLP are serving as legal counsel, Lincoln International LLC is serving as investment banker, Huron Consulting Group is serving as financial advisor, and C Street Advisory Group is serving as strategy and communications advisor to the Company. Greenberg Traurig, LLP and Oakland Law Group, PLLC are serving as legal counsel to IV Media. About iMedia Brands iMedia Brands, Inc. is an interactive, global media company that offers, manages, and markets merchandise, including men's and women's accessories and apparel, under owned and third-party brands through various entertainment, e-commerce, and digital service platforms. iMedia Brands and 11 of its affiliates filed for bankruptcy protection on June 28, 2023 (Bankr. D. Del., Lead Case No. 23-10852). The petitions were signed by James Alt as chief transformation officer. The Debtors reported total assets of $272,596,462 and total liabilities of $373,713,748 as of April 29, 2023. Ropes & Gray LLP serves as the Debtor's general bankruptcy counsel and Pachulski Stang Ziehl & Jones LLP serves as co-bankruptcy counsel. Huron Consulting Services LLC acts as the Debtors' financial advisor; Lincoln Partners Advisors LLC is the Debtors' investment banker; and Stretto Inc. is the Debtors' notice and claims agent. IMEDIA BRANDS: Court Okays Bankruptcy Sale to IV Media ------------------------------------------------------ Evan Ochsner of Bloomberg Law reports that iMedia Brands Inc. secured bankruptcy court approval to sell substantially all its assets to IV Media LLC, a Michigan firm affiliated with the maker of 5-Hour Energy, in a deal that includes $40 million in cash. The owner of television shopping channels including ShopHQ had previously agreed to sell the assets to an affiliate of RNN National Media Group, but IV Media offered a higher bid at an Aug. 10 auction, according to court papers. RNN’s proposal included about $27 million in cash. About iMedia Brands iMedia Brands, Inc. is an interactive, global media company that offers, manages, and markets merchandise, including men's and women's accessories and apparel, under owned and third-party brands through various entertainment, e-commerce, and digital service platforms. iMedia Brands and 11 of its affiliates filed for bankruptcy protection on June 28, 2023 (Bankr. D. Del., Lead Case No. 23-10852). The petitions were signed by James Alt as chief transformation officer. The Debtors reported total assets of $272,596,462 and total liabilities of $373,713,748 as of April 29, 2023. Ropes & Gray LLP serves as the Debtor's general bankruptcy counsel and Pachulski Stang Ziehl & Jones LLP serves as co-bankruptcy counsel. Huron Consulting Services LLC acts as the Debtors' financial advisor; Lincoln Partners Advisors LLC is the Debtors' investment banker; and Stretto Inc. is the Debtors' notice and claims agent. IVCINYA COMPANY: Wins Interim Cash Collateral Access ---------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, authorized Ivcinya Company, LLC to use cash collateral on an interim basis in accordance with the budget. As previously reported by the Troubled Company Reporter, the Debtor requires $17,976 of cash collateral to pay necessary expenses for the period from July 11 to 21, 2023. The Debtor's business was drastically impacted by the COVID-19 pandemic. Shipping of goods slowed down, and this trickled down to trucking businesses. Additionally, in June 2022, port workers requested raises and shippers refused. The port workers have since been threatening to strike. For fear of a strike, shippers have reduced routing to the Port of Los Angeles and routed instead to the East Coast rather than risk having cargo get stuck in the Port of Los Angeles. The Debtor previously did 100 loads per week, which has been reduced to the current 10-20 loads weekly. The case was filed so that the Debtor could obtain a breathing spell from collection efforts of its creditors and complete a financial reorganization via a structured payment plan that addresses each of its debts. The Debtor has determined to immediately reduce expenses by returning four vehicles (four will remain). Additionally, the Debtor has diversified its business by purchasing a 2022 Chevy Suburban and is working on obtaining requisite licensing to be able to provide high-end "black car" chauffeur services. The Debtor has a factoring agreement with TAFS, Inc. The Debtor also entered into an Economic Injury Disaster Loan with the U.S. Small Business Administration for $74,000 on July 22, 2020. The Debtor entered into a receivable purchase agreement with Specialty Capital LLC for $39,900 on April 28, 2023. Although the agreement is allegedly for the purchase of future receivables, the Debtor is investigating whether this transaction is a disguised loan. However, the UCC-1 Financing Statement was filed within the preference period and will be voided pursuant to 11 U.S.C. section 547(b). The Debtor does not know the name of entity that holds the UCC-1 Financing Statement filed on June 29, 2023. The Debtor believes the continued and uninterrupted operation of the business is in the best interest of the estate and all its creditors. As adequate protection, any creditors holding secured claims were granted replacement liens, but the liens will be limited to the same validity, priority, and amount as used by the parties. A further hearing on the matter is set for September 12, 2023 at 1 p.m. A copy of the order is available at https://urlcurt.com/u?l=7ly6O5 from PacerMonitor.com. About Ivcinya Company, LLC Ivcinya Company, LLC is a trucking company. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-14313) on July 11, 2023. In the petition signed by Randy Johnson, managing member, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Neil W. Bason oversees the case. Matthew D. Resnik, Esq., at RHM LAW, LLP., represents the Debtor as legal counsel. KEN FARRINGTON: Court OKs Cash Collateral Access Thru Sept 27 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, authorized Ken Farrington Tractor & Landclearing, Inc. to use cash collateral on an interim basis in accordance with the budget, through September 27, 2023. The Debtor requires the use of cash collateral to fund ordinary business operations and necessary expenses. The Debtor is permitted to use cash collateral to pay amounts expressly authorized by the Court, including payments to the Subchapter V Trustee and the current and necessary expenses as set forth in the budget, plus an amount not to exceed 10% for each line item; and additional amounts as may be expressly approved in writing by the U.S. Small Business Administration. As adequate protection, the SBA is granted valid, attached, choate, enforceable, perfected, and continuing security interests in, and liens upon, all post-petition assets of the Debtor of the same character and type, to the same nature, extent, and validity as the items and encumbrances of the SBA attached to the Debtor's assets prior to the petition date. The SBA will hold allowed administrative claims under 11 U.S.C. Section 507(b) with respect to the adequate protection obligations of the Debtor to the extent that the replacement liens on Post-Petition Collateral do not adequately protect the diminution in value of the interests of the SBA in its pre-petition collateral. The administrative claims will be junior and subordinate only to any superpriority claim of the kind ordered by the Court, and will be subject to Court approval. The Debtor will maintain insurance coverage for its property in accordance with the obligations under all applicable loan and security documents. A final hearing on the matter is set for September 27 at 2 p.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=IGDFzE from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $12,275 for the week of August 21, 2023; and $14,277 for the week of August 28, 2023. About Ken Farrington Tractor & Landclearing, Inc. Ken Farrington Tractor & Landclearing, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Banker M.D. Fla. Case No. 23-01935) on May 22, 2023. In the petition signed by Kenneth J. Farrington, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Tiffany P. Geyer oversees the case. Daniel A. Velasquez, Esq., at the Latham Luna E den and Beaudine, LLP, represents the Debtor as legal counsel. LAKEVILLE FARMS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Lakeville Farms, LLC 143 Cadycentre #300 Northville, MI 48167 Chapter 11 Petition Date: August 17, 2023 Court: United States Bankruptcy Court Eastern District of Michigan Case No.: 23-47202 Judge: Hon. Thomas J. Tucker Debtor's Counsel: Aaron J. Scheinfield, Esq. GOLDSTEIN BERSHAD & FRIED PC 4000 Town Center Suite 1200 Southfield, MI 48075 Tel: 248-355-5300 Email: aaron@bk-lawyer.net Total Assets: $538,000 Total Liabilities: $1,893,064 The petition was signed by Todd Jagiello as member. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BJERMLA/Lakeville_Farms_LLC__miebke-23-47202__0003.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6IAULVQ/Lakeville_Farms_LLC__miebke-23-47202__0001.0.pdf?mcid=tGE4TAMA LIFESIZE INC: Committee Taps Ross Smith as Special Counsel ---------------------------------------------------------- The official committee of unsecured creditors of Lifesize, Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Ross Smith & Binford, PC as special counsel. The firm's services include: a) Advising the committee with respect to matters related to, or arising from disputes with Piper Sandler & Co. or other bankruptcy professionals hired by the Debtors; b) Taking necessary and appropriate actions to protect and preserve the Debtors' estates, including prosecuting actions on behalf of the committee, and representing the committee in negotiations with the Debtors and their professionals, including objecting to the terms of Piper Sandler's proposed employment as investment banker by the Debtors; c) Preparing pleadings; and d) Appearing before the bankruptcy court and any appellate courts. The firm will be paid at these rates: Shareholders $650 per hour Associates and Counsel $400 to $500 per hour Paraprofessionals $150 per hour In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Ross Smith & Binford disclosed the following: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Not applicable. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: The committee and the firm expect to develop a prospective budget and staffing plan, recognizing that in the course of large Chapter 11 cases, complex and unexpected issues may arise that may in turn result in unforeseeable fees and expenses. Jason Binford, Esq., a partner at Ross Smith & Binford, 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: Jason Binford, Esq. Ross Smith & Binford, PC Plaza of the Americas 700 N. Pearl Street, Suite 1610 Dallas, TX 75201 Tel: (214) 377-7879 Mobile: (214) 437-6650 Email: jason.binford@rsbfirm.com About Lifesize Inc. Lifesize, Inc. is a cloud communications company in Laredo, Texas, which offers contact center and video meeting solutions for businesses. Lifesize and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-50038) on May 16, 2023. At the time of the filing, Lifesize reported $10 million to $50 million in assets and $100 million to $500 million in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped Pachulski Stang Ziehl & Jones, LLP as legal counsel; FTI Consulting, Inc. as financial advisor; and Piper Sandler & Co. as investment banker. Kurtzman Carson Consultants, LLC is the claims, noticing and solicitation agent and administrative advisor. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped McDermott Will & Emery, LLP as bankruptcy counsel; Ross Smith & Binford, PC as special counsel; and Dundon Advisers, LLC as financial advisor. LUMEN TECHNOLOGIES: S&P Downgrades ICR to 'CCC+', Outlook Negative ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.S.-based telecommunications service provider Lumen Technologies Inc. to two notches to 'CCC+' from 'B'. S&P also lowered the issue-level rating on Lumen's senior unsecured debt to 'CCC-', two notches below the issuer-credit rating, from 'CCC+'. S&P said, "In addition, we lowered the issue-level ratings on Lumen's senior secured debt, Level 3's senior secured debt, and Qwest Corp.'s senior unsecured debt to 'B' from 'BB-', the issue-level rating on the unsecured debt at Qwest Capital Funding Inc. to 'B-' from 'B+', and the issue-level rating on Level 3's unsecured debt to 'CCC+' from 'B'. "The negative outlook reflects our view that EBITDA will remain pressured and cash flow generation will be low as the company navigates a strategic turnaround that will be challenging to execute successfully, in our view. We could lower our ratings if we believe a default, which could include a subpar debt exchange, is likely within the next 12 months. "The two-notch downgrade reflects our view that Lumen's capital structure is unsustainable longer term. We expect the company's operating and financial performance will remain challenged for the next couple of years as its turnaround plan faces significant challenges. Unlike many of its peers that are building out fiber-to-the-home (FTTH) to better compete in the residential market and grow revenue, Lumen derives about 80% of its revenue from business customers, a segment that is in secular decline given the ongoing migration to less expensive, newer technologies from legacy services. While Lumen is also building out FTTH across a portion of its footprint, the mass market segment only accounts for 21% of the company's revenue. At the same time, we expect that capital expenditures (capex) will remain elevated over the next couple of years as the pace of its FTTH builds increase, leading to very low levels of free operating cash flow (FOCF) relative to its debt of less than 2% during our forecast period. Excluding the one-time $938 million tax payment associated with its 2022 asset sales, we now forecast the company to generate a modest FOCF deficit of about $30 million and for break-even to positive FOCF of about $50 million in 2024 and 2025 because of elevated capex and higher interest expense, coupled with lower EBITDA." Addressing the 2025 maturities are the immediate hurdle but the sizeable 2027 maturities will be the most difficult to refinance. Including revolver borrowings, Lumen has about $1.9 billion of debt that comes due in 2025, the majority of which consists of secured bank loans at Lumen, and it expects to receive $1.5 billion in net proceeds from the sale of its Europe, the Middle East, and Africa (EMEA) assets, which is expected to close by the end of 2023 to early 2024. However, the company stated in its recent 10Q that it received a letter from representatives of the holders of about 37% of Lumen's funded debt and 56% of Level 3's debt requesting a meeting to address these upcoming debt maturities as well as an apparent event of default relating to the use of proceeds from the divesture of its Latin American business in 2022. At issue was that Lumen used about $1.6 billion of proceeds from that sale to repay the unsecured debt at Level 3, which could constitute a breach of the Level 3 secured debt asset sale covenant. However, there is some flexibility in the documentation to use proceeds for reinvestment over a 540-day period. S&P said, "Since the EMEA assets also reside under the Level 3 silo, we believe that Level 3 secured lenders want proceeds from the pending sale to repay the secured debt at that entity. However, about $1.6 billion of its 2025 maturities are at Lumen, with the remaining $250 million at Qwest Corp. Included in the 2025 debt obligations are $1.2 billion of its term loan A and $200 million outstanding under its $2.2 billion senior secured revolving credit facility that matures in January 2025. The revolver, in particular, needs to be refinanced or extended to support its longer-term liquidity position. It is uncertain how any negotiation among the different creditor groups and Lumen will resolve itself, but we believe it will be challenging to navigate the covenant issues and address the 2025 maturities in a manner that we would not view as distressed. Additionally, any outcome will likely result in higher interest expense that ultimately exacerbate FOCF pressures." The company also has about $9.4 billion of debt maturing in 2027, which is almost half of its total debt. Lumen will likely need to significantly reduce the amount of debt outstanding to extend this debt at terms that the company can afford longer term given the much higher cost of borrowing under the current environment. This is indicated by Lumen's distressed trading levels. S&P said, "Reducing debt obligations may entail a comprehensive restructuring of the company's obligations, which we may view as tantamount to a default. While the company has some time to demonstrate that it is executing on its strategy, which would require sustained earnings growth and improving FOCF, we believe achieving sufficient growth will be extremely difficult in the current interest rate environment." S&P said, "Lumen's operating and financial results were weak in the second quarter of 2023 and are unlikely to materially improve over the next couple of years, in our view. During the quarter, the company's pro forma revenue and EBITDA declined about 7% and 9%, respectively, year over year with revenue declines across all segments. Pro forma large and mid-market enterprise declined 4% and 6%, respectively, while public sector revenue fell 12%. Further, the company expects spending to ramp in the second half of the year to drive top-line improvements, which will likely pressure earnings and cash flow. While the company has made progress in its "Grow" revenue category with new innovations such as Network as a Service (NaaS), we expect revenue losses from legacy products will take some time to bottom out. "The negative outlook reflects our view that EBITDA will remain pressured and cash flow generation will be low as the company navigates a strategic turnaround that will be challenging to execute successfully, in our view. Since we view the capital structure as unsustainable, we believe a restructuring is likely to occur as Lumen tries to execute on its plan. We could lower our ratings if we believe a default, which could include a subpar debt exchange, is likely within the next 12 months." S&P could lower the rating on Lumen if: -- The company engages in a restructuring transaction or pursues a subpar debt exchange; -- Negative FOCF pressures liquidity; or -- It appears that the company could breach its 4.75x total leverage covenant with no expectation of an amendment. S&P could take a positive rating action if: -- The company improves earning trends in the second half of 2023 with prospects for better operating results in 2024 such that S&P expects sustained leverage improvement from the 5x area; or -- It extends or refinances a large portion of its 2025 to 2027 debt maturities at interest rates it can absorb. This assumes that existing lenders receive repayment in the amount that was originally promised with no reduction in principal. S&P views this as unlikely given the current distressed trading levels on the company's debt. ESG factors do not have any impact on S&P's ratings analysis. MADISON CLINIC: Asset Sale Proceeds to Fund Plan ------------------------------------------------ The Madison Clinic for Applied Behavior Analysis, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Alabama a Second Amended Plan of Liquidation under Subchapter V dated August 10, 2023. The Debtor was formed in August 0f 2013 by Lindsay Chapman. She opened the first clinic in Madison, Alabama in 2013 and provided ABA therapy to children with autism spectrum disorder. The Debtor, through its former counsel, found a prospective purchaser, Wellstone, Inc., who was interested in purchasing certain assets of the Debtor and agreed to provide post-petition financing to help fund the Debtor's business operation until a sale could be consummated. The Debtor filed a motion to approve sale of assets. The final hearing to approve the sale was held on June 21, 2023. The sale closed on June 30, 2023 and, pursuant to the terms of the Sale Order, Wellstone, Inc. obtained title to the Acquired Assets free and clear of all Lens, Claims, and/or Interests. Debtor sold the Acquired Assets of the company to Wellstone, Inc. for $425,000. Wellstone, Inc. credit bid $78,449.45 representing all amounts due and owing by the Debtor under the post-petitio loan to the Debtor resulting in net cash proceeds of $346,550.55 (the "Sale Proceeds") being held in Debtor's counsel's trust account. The remaining $169,551 will be distributed to Administrative, Priority and Unsecured claims. The assets excluded from the sale, consisting of the Employee Retention Tax Credit estimated to be $97,000, will also be available for distribution. Class 2 consists of General Unsecured Claims. The total of Misclassified Secured Claims and Unsecured Claims filed in the case is $495,160.63, which includes the claim for pre-petition debt filed by the Small Business Administration ("SBA") in the sum of $162,243.33. Each holder of a Class 2 Allowed Claim shall receive a cash payment equal to a pro rata share from the balance of net proceeds and any remaining cash assets, unless otherwise provided for in this Plan. No interest accrued after the date of filing of the Petition shall be allowed on any unsecured claim. The SBA debt shall be partially paid by the United States (IRS/SBA) offsetting any Employee Retention Tax Credits ("ERTC") that remain after the ERTC funds are offset by the IRS against the unsecured priority portion of the IRS claim in the sum of $4,189.75 and the unsecured general portion of the IRS claim in the sum of $11,810.88 and applying the remaining balance to the SBA claim. The balance of the SBA claim that remains after the offset of the ERTC against the claim amount shall be treated as an unsecured general claim. Class 3 is comprised of all equity interests in the Debtor, which are owned by Lindsay Chapman. All equity interests in the Debtor will be terminated on the effective date, and no holder of an equity interest shall receive a distribution unless there are funds remaining after payment in full of all Unclassified Claims and Classes 1 and 2. The Debtor will fund this Plan with the net proceeds it has received from the sale of its assets as well as any cash it has available from its Employee Retention Credit that has not been used to pay the IRS. This Plan contemplates 100% disbursement to Administrative Claims, Priority Claims, the Secured Claim of US Med and a Pro Rata distribution to Allowed Unsecured Claims. A full-text copy of the Second Amended Plan dated August 10, 2023 is available at https://urlcurt.com/u?l=G91KdN from PacerMonitor.com at no charge. Attorney for Debtor: Steven D. Altmann, Esq. Altmann Law Firm, LLC The Nomberg Law Firm 3940 Montclair Road, Suite 401 Birmingham, AL 35213 Telephone: (205) 882-5005 Email: steve@nomberglaw.com About the Madison Clinic The Madison Clinic for Applied Behavior Analysis, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-80259-CRJ11) on Feb. 14, 2023. In the petition signed by Lindsay Chapman, owner, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Clifton R. Jessup, Jr oversees the case. Stuart M. Maples, Esq., at Maples Law Firm, PC, is the Debtor's legal counsel. MALLINCKRODT PLC: To Pay 50% Interest, Extends Opioid Cash Payment ------------------------------------------------------------------ Mallinckrodt plc said it agreed to pay $19 million, or 50% of the interest payment originally due on June 15, 2023, on its 2028 First Lien Notes. As previously disclosed, on July 16, 2023, Mallinckrodt plc and/or certain of its subsidiaries entered into certain forbearance agreements with (a) the holders of more than 75% in principal amount of the outstanding 11.50% first lien senior secured notes due 2028 issued by certain of its subsidiaries ("2028 First Lien Notes"), (b) the holders of a majority in principal amount of each of (i) the outstanding 10.00% second lien senior secured notes due 2029 issued by certain of its subsidiaries ("2029 Second Lien Notes") and (ii) the first lien senior secured term loans due 2027 ("Term Loans") (and the administrative agent in respect of the Term Loans) borrowed by certain of its subsidiaries pursuant to the credit agreement, dated as of June 16, 2022, by and among the Company, certain of its subsidiaries, the lenders party thereto, Acquiom Agency Services LLC and Seaport Loan Products LLC, as co-administrative agents, and Deutsche Bank AG New York Branch, as collateral agent ("Term Loan Credit Agreement"), and (c) the lenders and agents under the ABL Credit Agreement, dated as of June 16, 2022, by and among ST US AR Finance LLC, the lenders party thereto, the L/C Issuers (as defined in the ABL Credit Agreement) party thereto and Barclays Bank plc, as administrative agent and collateral agent ("ABL Credit Agreement") (collectively, the "Forbearance Agreement Counterparties"), pursuant to which the applicable creditors and agents, as applicable, have agreed to forbear from exercising any rights or remedies until August 15, 2023 with respect to the events of default arising from the Company's failure to make interest payments on the 2028 First Lien Notes and 2029 Second Lien Notes, unless such forbearance agreements (which contain customary termination events) are earlier terminated in accordance with the terms thereof. On August 15, 2023, the Company entered into certain extensions to the aforementioned forbearance agreements ("Forbearance Extension Agreements") with each of the Forbearance Agreement Counterparties, pursuant to which the applicable creditors and agents thereunder, as applicable, have agreed to forbear from exercising any rights or remedies with respect to the events of default arising from the Company's failure to make interest payments on the 2028 First Lien Senior Notes and the 2029 Second Lien Senior Notes that were due on June 15, 2023 until August 22, 2023, unless such forbearance agreements (which contain customary termination events), as amended, are earlier terminated in accordance with the terms thereof. Pursuant to the Forbearance Extension Agreement entered into with holders of the 2028 First Lien Notes, the Company has agreed to pay approximately $19 million, plus accrued interest thereon, representing 50% of the interest payment originally due on June 15, 2023 on the 2028 First Lien Notes (the "First Installment of the 2028 First Lien Notes Interest Payment"). The Company expects to pay the remaining amount of such interest payment, including accrued interest thereon, in connection with signing a potential restructuring support agreement. Failure by the Company to the pay the First Installment of the 2028 First Lien Notes Interest Payment to the applicable paying agent on or before August 16, 2023 is an event of termination for the related forbearance agreement under the terms of the applicable Forbearance Extension Agreement. The Board of Directors continues to actively evaluate the Company's financial situation and consider options, and the Company is actively engaged in advanced discussions with various stakeholders. These discussions contemplate entering into a restructuring support agreement with various stakeholders that would include, among other things, the Company's initiating Chapter 11 proceedings under the U.S. Bankruptcy Code or analogous foreign bankruptcy or insolvency laws. The contemplated Chapter 11 proceedings would cause the Company’s ordinary shares to be canceled, which would result in no recovery for holders of its ordinary shares. There can be no assurance the Company will reach an agreement in a timely manner, or at all, on terms of a restructuring support agreement that the Board of Directors would support. The Company expects to continue its current operations without material interruption and work with its business partners as usual during the course of these discussions and any potential restructuring. Opioid Deferred Cash Payment On August 15, 2023, the Opioid Master Disbursement Trust II ("Trust") provided written notice that it was further extending the due date of the $200.0 million installment payment originally due on June 16, 2023 ("Opioid Deferred Cash Payment") pursuant to the opioid deferred cash payments agreement from August 15, 2023 to August 22, 2023. The Company recognizes the important role of the Trust in helping to address the nation's opioid crisis and fund addiction treatment and related efforts. Under the opioid deferred cash payments agreement, which was originally entered into by the Company and the Trust upon the Company's emergence from bankruptcy on June 16, 2022 ("Effective Date"), the Company and certain of its subsidiaries agreed to make certain deferred payments to the Trust, including a $450 million payment that was paid on the Effective Date. About Mallinckrodt PLC Mallinckrodt -- http://www.mallinckrodt.com/-- is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins, LLP and Richards, Layton & Finger, P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray, LLP as litigation counsel; Torys, LLP as CCAA counsel; Guggenheim Securities, LLC as investment banker; and AlixPartners, LLP, as restructuring advisor. Prime Clerk, LLC is the claims agent. The official committee of unsecured creditors retained Cooley, LLP, as its legal counsel; Robinson & Cole, LLP as co-counsel; and Dundon Advisers, LLC as financial advisor. The official committee of opioid-related claimants tapped Akin Gump Strauss Hauer & Feld, LLP as its lead counsel; Cole Schotz as Delaware co-counsel; Province, Inc. as financial advisor; and Jefferies, LLC as investment banker. * * * Mallinckrodt in mid-June 2022 successfully completed its reorganization process, emerged from Chapter 11 and completed the Irish Examinership proceedings. The company said the restructuring strengthens the Company's balance sheet, reduces its total debt by approximately $1.3 billion and enables it to move forward with more than $250 million in cash and cash equivalents on hand. The Plan and Scheme include key legal settlements that resolve opioid claims brought against the Company and litigation matters involving Acthar Gel, among other claims, and provides for significant equitization of the Company's guaranteed unsecured notes. Mallinckrodt Plc said in a regulatory filing in early June 2023 that it was considering a second bankruptcy filing and other options after its lenders raised concerns over an upcoming $200 million payment related to opioid-related litigation. MBE GROUP: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: MBE Group, LLC DBA MBE Midas 7198 Mission St Daly City, CA 94014-2201 Business Description: MBE is a retailer of automotive parts, accessories, and tire. Chapter 11 Petition Date: August 16, 2023 Court: United States Bankruptcy Court Northern District of California Case No.: 23-30556 Judge: Hon. Hannah L Blumenstiel Debtor's Counsel: Lars Fuller, Esq. THE FULLER LAW FIRM PC 60 N Keeble Ave San Jose, CA 95126-2723 Tel: (408) 295-5595 Email: admin@fullerlawfirm.net Total Assets: $323,872 Total Liabilities: $2,134,971 The petition was signed by Rhen Morales as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/JQYUZ4A/MBE_Group_LLC__canbke-23-30556__0001.0.pdf?mcid=tGE4TAMA MERCY HOSPITAL: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- Mary Jensen, Acting U.S. Trustee for Region 12, appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Mercy Hospital Iowa City, Iowa and its affiliates. 1. Altera Digital Health, Inc. 222 W Merchandise Mart Plaza #2024 Chicago, IL 60654 Contact Person: Kristin Steinkamp, Corporate Counsel Phone: (816) 500-9650 Email: Kristin.steinkamp@alterahealth.com 2. J&K PMS, Inc. 6737 Brentwood Stair Road, Suite 200 Fort Worth, TX 76112 Contact Person: Kelly Mitchek, Vice President Phone: (817)563-4306 Email: kmitchek@p-m-s.com 3. Medifis 2999 Olympus Blvd. Dallas, TX 75019 Contact Person: Jackie Dumbrowski, Corporate Counsel Phone: (866) 871-8519 Email: Jacqueline.dombrowski@amnhealthcare.com 4. Steindler Orthopedic Clinic 2751 Northgate Drive Iowa City, IA 52245 Contact Person: Edward Patrick Magallanes President, CEO Phone: (210) 410-2470 Email: pmagallanes@steindler.com 5. Cardinal Health 7000 Cardinal Pl Dublin, OH 43017 Contact Person: Tyronza Walton, Credit Manager Phone: (614)553-3154 Email: tyronza.walton@cardinalhealth.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 Mercy Hospital, Iowa City, Iowa Mercy Hospital, Iowa City, Iowa is a Catholic-based Iowa nonprofit corporation and a tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code of 1986 (as amended) that operates an acute care community hospital and clinics located in Iowa City, Iowa and surrounding communities. Mercy Hospital and affiliates, Mercy Iowa City ACO, LLC and Mercy Services Iowa City, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Iowa Lead Case No. 23-00623) on Aug. 7, 2023. In its petition signed by Mark E. Toney, chief restructuring officer, Mercy Hospital disclosed up to $500 million in both assets and liabilities. Judge Thad J. Collins oversees the cases. The Debtors tapped Nyemaster Goode, P.C and McDermott Will & Emery LLP as bankruptcy co-counsel; Toneykorf Partners, LLC to provide interim management services; H2C Securities Inc. as investment banker; and Epiq Corporate Restructuring, LLC as notice and claims agent. MIKU INC: Seeks Cash Collateral Access, $1MM DIP Loan from W67 -------------------------------------------------------------- Miku, Inc. asks the U.S. Bankruptcy Court for the District of New Jersey for authority to use cash collateral and obtain up to $1 million in postpetition financing. The Debtor seeks to obtain secured, superpriority postpetition financing from W67, LLC, which will be available in one or more advances. The advances under a promissory note will be available no more frequently than every two weeks, and will be used by the Borrower solely to fund disbursements in amounts and for purposes consistent with the budget. Unless otherwise agreed by the Lender in its sole discretion, each Advance thereunder will be in a minimum amount of $100,000 for the succeeding two week period -- or, in the case of the final Advance thereunder, to fund the Wind-Down Reserve in connection with the closing of a sale of the Borrower's assets approved by the Sale Order. The DIP facility is due and payable through the earliest to occur of: (i) the Termination Date; (ii) the occurrence of an Event of Default; (iii) the date upon which a plan of reorganization or liquidation is confirmed in the Bankruptcy Case; (iv) the date upon which a sale transaction has been consummated pursuant to a Sale Order entered in the Bankruptcy Case approving the sale of all or a substantial portion of the Borrower's assets and (v) September 18, 2023. These events constitute an "Event of Default": (a) If Borrower fails to perform any obligations or violates any of the covenants of the Note; or (b) If for any bi-weekly testing period of the Budget, (i) Borrower fails to achieve actual receipts of at least 90% of projected receipts for such time period as set forth in the Budget, or (ii) Borrower's actual disbursements exceed 115% of the projected disbursements in accordance with the Budget for any one week period or 110% in the aggregate for any consecutive three week period; (c) If Borrower fails or neglects to perform, keep, or observe any deadline related to a Case Milestone; or (d) If Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in the Note, in any of the Loan Documents, or in any other present or future agreement between Borrower and Lender, and, as to any such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the same within 10 days after the occurrence thereof. As of the Petition Date, the Debtor had outstanding secured debt pursuant to an Amended and Restated Promissory Note and Security Agreement, dated as of August 11, 2023, between the Debtor, as borrower, and W67 LLC, as lender. As of August 14, 2023, the aggregate outstanding principal and interest owed by the Debtor under the Prepetition Lender Documents was approximately $3.031 million. The Prepetition Obligations are secured by a security interest in substantially all of the Debtor's assets. The Debtor requires the use of cash collateral and the DIP Facility to finance its operations, maintain business relationships, to pay its employees, protect the value of its assets. As adequate protection, the Prepetition Lender will be granted valid and perfected replacement and additional security interests in, and liens on all of the Debtor's right, title and interest in, to and under all DIP Collateral. The Adequate Protection Liens are valid, binding enforceable and fully perfected as of the date thereof and subordinate and subject to (i) the DIP Liens, and (ii) the Carve Out. As further adequate protection of the Prepetition Lender's interests with respect to outstanding obligations, the Prepetition Lender is granted administrative claims against the Debtor's estate under 11 U.S.C. sections 503 and 507(b) to the extent that the Adequate Protection Liens do not adequately protect against any diminution in the value of the Prepetition Lender's interests in the Prepetition Lender Collateral. The Carve Out means, collectively, the following fees and expenses: (i) All statutory fees required to be paid to the Clerk of the Bankruptcy Court pursuant to 28 U.S.C. section 1930(a); (ii) (A) prior to the occurrence of the Maturity Date, the aggregate amount of accrued and unpaid professional fees and expenses of the Debtor retained by final order of the Court under 11 U.S.C. sections 327, 328, or 1103(a), to the extent such fees and expenses are allowed and payable pursuant to a Court order and the reimbursement of out-of-pocket expenses allowed by the Bankruptcy Court incurred by the Subchapter V Trustee in the performance of his or her duties, not to exceed the amounts set forth in the Budget for the Case Professional or Subchapter V Trustee Fees, plus (B) after the occurrence of the Maturity Date, an amount not to exceed: (I) $30,000 in the aggregate for the Debtor's professionals, and (II) $10,000 in the aggregate for the Subchapter V Trustee, less (C) unapplied pre-petition retainers. A copy of the motion is available at https://urlcurt.com/u?l=rtms65 from PacerMonitor.com. A copy of the DIP Credit Agreement is available at https://urlcurt.com/u?l=wPDpIp from PacerMonitor.com. A copy of the proposed order is available at https://urlcurt.com/u?l=ONxEt9 from PacerMonitor.com. A copy of the budget is available at https://urlcurt.com/u?l=eURFzM from PacerMonitor.com. The Debtor projects total disbursements, on a weekly basis, as follows: $178,811 for the week beginning August 21, 2023; $196,214 for the week beginning August 28, 2023; $125,000 for the week beginning September 4, 2023; $63,500 for the week beginning September 11, 2023; $53,811 for the week beginning September 18, 2023; and $12,500 for the week beginning September 25, 2023. About Miku, Inc. Miku, Inc. is engaged in the manufacturing of audio and video equipment. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 23-17005) on August 14, 2023. In the petition signed by Johann Fernando, chief executive officer, the Debtor disclosed $3,696,093 in assets and $5,100,016 in liabilities. Judge Christine M. Gravelle oversees the case. Morris S. Bauer, Esq., Duanne Morris LLP, represents the Debtor as legal counsel. The DIP Lender may be reached at: W67 LLC North Audley Street LLC 44 Skymeadow Drive Stamford, CT 06903 Robert Wexler, Esq. E-mail: rwexler@northaudley.com The DIP Lender is represented by: Jeff M. Wolf, Esq. Ari Newman, Esq. Greenberg Traurig, LLP One International Place, Suite 2000 Boston, MA 02110 E-mail: wolfj@gtlaw.com newmanar@gtlaw.com MINSHEW BROTHERS: Seeks Cash Collateral Access ---------------------------------------------- Minshew Brothers Steel Construction, Inc. asks the U.S. Bankruptcy Court for the Southern District of California for authority to use cash collateral on an interim basis in accordance with the budget, with a 15% variance. The Debtor requires the use of cash collateral to use cash collateral to pay the Use of Cash expenses identified in the Budget. The Debtor's business generated between $12. 2 million $16 million in sales. In 2020, the Debtor continued to be profitable and had sales of approximately $16.5 million. In 2021, due to the Covid-19 pandemic, although demand did not decrease, the cost of steel as a raw material increased by approximately 40% thus making the Debtor's existing construction contracts not profitable, resulting in total reduced sales of approximately $9.915 million and a net operating loss of approximately $6,million. In 2022, Debtor was able to adjust its new construction contracts to the 10 increased cost of steel, but was unable to meet its debt and tax obligations resulting in the Internal Revenue Service levying the Debtor's bank accounts. The entities with interest in the cash collateral are the Internal Revenue Service, Penske Truck Leasing Co., Konica with Interest in Cash Minolta; Fox Capital Group LLC, National Funding, Suncoast Collateral: Post-Tension, CA Department of Tax and Fee Administration, Employment Development Department, Velocity Capital Group, Forward Financial LLC, and Ford Motor Credit. The Debtor believes the Secured Creditors are adequately protected by the ongoing business operations and the income to be generated throughout the pendency of Debtor's bankruptcy case, and the granting of a replacement lien to the extent of any diminution in value of collateral as a result of the Debtor's use of cash collateral. The replacement lien would be on all post- petition assets in the same priority and to the same extent and validity as the Secured Creditors asserted their pre-petition security interests. A copy of the motion is available at https://urlcurt.com/u?l=G1XTUU from PacerMonitor.com. About Minshew Brothers Steel Construction Minshew Brothers Steel Construction, Inc. is a steel construction company in California. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Cal. Case No. 23-02343) on August 8, 2023. In the petition signed by Brian Johnson, chief financial officer, the Debtor disclosed $2,338,022 in assets and $7,335,511 in liabilities. Michael Jay Berger, Esq., at LAW OFFICES OF MICHAEL JAY BERGER, represents the Debtor as legal counsel. MIRACLE CENTER: Seeks Confirmation of Plan ------------------------------------------ Miracle Center Church of Ventura County, Inc., moves the Court for an order confirming Debtor's Third Amended Chapter 11 Plan of Reorganization. This request is made on the grounds that the Plan meets the requirements of U.S. Bankruptcy Code Sections 1129 and 1191. On June 30, 2023, the Debtor filed and served a Notice of Hearing on Confirmation of Debtor's Third Amended Chapter 11 Plan of Reorganization. The hearing on confirmation of the Plan will be held on August 23, 2023 at 2:00 p.m. No opposition to confirmation of the Plan has been filed and served with the Court nor served on Debtor's bankruptcy counsel. Pursuant to Section 1129(a)(3) of the Bankruptcy Code, the Plan Has Been Proposed In Good Faith And Not By Any Means Forbidden By Law. The overriding objective of the Debtor in the herein bankruptcy case is to continue its business operations while reorganizing its financial affairs. Through a confirmed plan of reorganization, the Debtor will be able to continue its operations to satisfy creditors' claims, provide jobs, retain property and restructure its obligations to pay over time. Moreover, no creditor or party in interest has objected to the Debtor's Plan so that the Court may presume and determine that the plan has been proposed in good faith. The Debtor submits that the record of this case shows that the Plan is proposed in good faith and not by any means forbidden by law. Pursuant to Section 1129(a)(7), the Plan is in the best interests of all creditors and interest holders. As detailed in the Ballot Summary, all impaired class of claims or interests have voted to accept the Plan. These impaired classes consisted of Class 2 Secured Creditor The First Christian Church of Ventura and Class 3 Unsecured, Non-Priority, Non-Claim Filing Creditors Dan Covarrubias and Toni Gooden. A copy of the Motion dated August 9, 2023, is available at https://tinyurl.ph/lzhDu from PacerMonitor.com. A copy of the exhibit containing the Plan dated August 9, 2023, is available at https://tinyurl.ph/BZEzR from PacerMonitor.com. About Miracle Center Church Miracle Center Church of Ventura County, Inc., is a tax-exempt religious organization. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10664) on August 29, 2022. In the petition signed by Alonzo McCowan, its CEO and president, the Debtor disclosed $3,472,792 in assets and $3,387,733 in liabilities. Judge Ronald A. Clifford III oversees the case. John K. Rounds, Esq., at Rounds & Sutter LLP, is the Debtor's counsel. MOKELUMNE INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Mokelumne Investments LLC 11035 Lavender Hill Dr Ste 160332 Las Vegas, NV 89135 Business Description: The Debtor is the owner of real property located at 4045 Abernethy Forest Pl, Las Vegas, NV valued at $1.1 million. Chapter 11 Petition Date: August 17, 2023 Court: United States Bankruptcy Court District of Nevada Case No.: 23-13439 Judge: Hon. Natalie M. Cox Debtor's Counsel: David J. Winterton, Esq. DAVID WINTERTON & ASSOCIATES, LTD 7881 W. Charleston Blvd. Suite 220 Las Vegas, NV 89117 Tel: 702-363-0317 Fax: 702-363-1630 Email: autumn@davidwinterton.com Total Assets: $1,105,527 Total Liabilities: $895,000 The petition was signed by David Tortia as authorized representative of the Debtor. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6FFFETA/MOKELUMNE_INVESTMENTS_LLC__nvbke-23-13439__0001.0.pdf?mcid=tGE4TAMA MONTANA TUNNELS: Plans to Pay Creditors in Full ----------------------------------------------- Montana Tunnels Mining, Inc., submitted an Amended Disclosure Statement dated August 9, 2023. The proposed Plan of Reorganization is based upon the Debtor's desire to pay its creditors in full. If the Debtor is liquidated pursuant to the provisions of Chapter 7 of the Bankruptcy Code, it appears from the analysis of distributions in a hypothetic liquidation of MTMI, the "Liquidation Analysis," that the holders of allowed secured claims on all real property will be paid in full, the priority claims will be paid in full, and the holders of general unsecured claims will be paid in full. This calculation is based upon current market value of the Debtor's property reflecting the opinions of the Debtor. The Debtor believes that its Plan will provide the best and appropriate payments to its creditors. The Class VI claimants are holders of priority unsecured tax claims; the members of this class are Internal Revenue Service and the Montana Department of Labor & Industry, Unemployment Insurance Bureau. The Class VI claims will be paid, with interest at 8.5%, through 48 monthly payments commencing January 2, 2024: * Internal Revenue Service - $2,458.64 * Montana Department of Labor & Industry - $885.98 The Class VII claimants hold General Unsecured Claims; the members of this class and will be commencing 90 days following the Confirmation Date paid through 60 monthly payments, with interest at the Federal Judgment Rate, commencing January 2, 2024 in the following amounts: * Talex Commodities - $4,111.70 * LD Construction - $7,313.13 * NorthWestern Energy - $1,356.45 * Energy West Resources - $31.37 * Crowley Fleck - $409.06 * Environmental Protection Agency - $13,483.14 * Tetratek - $460.57 * Lloyd Mining Services - $3,044.88 * DEQ - $50.45 Class VIII claimants are holders of general unsecured claims who are affiliates with the Debtor. The members of this class are (i) Black Diamond Acquisition Partners; (ii) Black Diamond Holdings; (iii) Elkhorn Goldfields, Inc.; and (iv) Patrick Imeson. The Class VIII claimants will be paid through the conversion of their claims, into shares of Montana Goldfields upon confirmation of the initial public offering. The source of funds for the Plan payments will be through from an initial borrowing by Montana Goldfields, Inc. to be completed by the Chapter 11 Plan's Effective Date, in combination with the completion of an initial public offering or further borrowing by Montana Goldfields Inc. to be completed by the Chapter 11 Plan's Effective Date, along with funds generated from the lease of the Diamond Hill Mill, a part of the MTMI Concentration Facility at the MTMI Mill Complex, and from loan funds received by the Debtor or its parent, Montana Goldfields, Inc., or a combination of the foregoing. Attorney for the Debtor: James A. Patten, Esq. Molly S. Considine, Esq. PATTEN, PETERMAN, BEKKEDAHL & GREEN, P.L.L.C. 2817 2nd Avenue North, Ste. 300 P.O. Box 1239 Billings, MT 59103-1239 Telephone: (406) 252-8500 Facsimile: (406) 295-9500 E-mail: apatten@ppbglaw.com mconsidine@ppbelaw.com A copy of the Amended Disclosure Statement dated August 9, 2023, is available at bit.ly/43ZIkIZ from PacerMonitor.com. About Montana Tunnels Mining Montana Tunnels Mining, Inc., a company in Jefferson City, Mont., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mont. Case No. 22-20132) on Dec. 2, 2022. In the petition signed by its chief executive officer, Patrick Imeson, the Debtor disclosed $10 million to $50 million in assets and $50 million to $100 million in liabilities. Judge Benjamin P. Hursh oversees the case. Patten, Peterman, Bekkedahl & Green, PLLC and Crowley Fleck, PLLP serve as the Debtor's bankruptcy counsel and special counsel, respectively. N.F. INTERNATIONAL: Seeks to Hire Robert Ward, Esq., as IP Counsel ------------------------------------------------------------------ N.F. International, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Robert Ward, Esq., a practicing attorney in Georgia. The Debtor requires the services of an intellectual property counsel in the litigation entitled Noorani Trading, Inc, v. Amit F. Bijani, Nafisa Bijani, AB International, LLC, NF International, Inc., Civil Action No 1:17-cv01344-LMM, which is pending before the U.S. District Court for the Northern District of Georgia. A judgment in the amount of $1.9 million was entered in the intellectual property litigation against the Debtor. The attorney will be compensated at $495 per hour. Mr. Ward disclosed in a court filing that he is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Mr. Ward holds office at: Robert M. Ward, Esq. 3455 Peachtree Road NE, 5th Floor Atlanta, GA 30326 Tel: (404) 606-6480 Email: rward@bmwiplaw.com About N.F. International N.F. International Inc., a company in Lawrenceville, Ga., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-54962) on May 28, 2023, with $97,900 in assets and $3,297,730 in liabilities. Tamara Miles Ogier, Esq., at Ogier, Rothschild & Rosenfeld, PC has been appointed as Subchapter V trustee. Judge Sage M. Sigler oversees the case. The Debtor tapped Milton Jones, Esq., a practicing attorney in Lovejoy, Ga., as bankruptcy counsel; Robert M. Ward, Esq., as intellectual property counsel; and Jeffery Taylor, CPA as accountant. N.F. INTERNATIONAL: Taps Jeffery Taylor, CPA as Accountant ---------------------------------------------------------- N.F. International seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Jeffery Taylor, CPA as accountant. Mr. Taylor's services include organization of business transactions; posting of transactions and bank reconciliations; preparation of monthly operating reports; and any other reasonably requests to carry out accounting functions. The accountant will be paid at the rate of $750 per month. Mr. Taylor disclosed in a court filing that he is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Mr. Taylor can be reached at: Jeffery Taylor, CPA Tel: (770) 593-1500 Fax: (404) 591-5930 Email: jefftaylorcpa@att.net About N.F. International N.F. International Inc., a company in Lawrenceville, Ga., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-54962) on May 28, 2023, with $97,900 in assets and $3,297,730 in liabilities. Tamara Miles Ogier, Esq., at Ogier, Rothschild & Rosenfeld, PC has been appointed as Subchapter V trustee. Judge Sage M. Sigler oversees the case. The Debtor tapped Milton Jones, Esq., a practicing attorney in Lovejoy, Ga., as bankruptcy counsel; Robert M. Ward, Esq., as intellectual property counsel; and Jeffery Taylor, CPA as accountant. NOB HILL INN: Court OKs Cash Collateral Access on Final Basis ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California, San Francisco Division, authorized Nob Hill Inn City Plan Owners Association to use cash collateral on a final basis in accordance with the budget, in the ordinary course of its business. As previously reported by the Troubled Company Reporter, the Debtor's sole potentially secured creditor is the U.S. Small Business Administration with respect to a $150,000 Emergency Injury Disaster Loan. The SBA holds a perfected blanket security interest in the Debtor's personal property assets, securing the debt. As a result of its blanket lien, the SBA arguably has cash collateral rights. The Debtor contends the tremendous equity cushion enjoyed by the SBA coupled with the imminence of a sale of the Debtor's principal asset, provides the lender with adequate protection for the use of its cash collateral. The Debtor does not propose to make any payments or provide any other relief to the SBA prior to the sale of property. The Debtor's principal asset is the Nob Hill Inn, which is a 21-unit hotel and timeshare. The owners of the timeshare intervals voted, by a 75% super-majority, to sell the Property and dissolve the Debtor. The Property has a value of approximately $7 million to $9 million. Aggregate debt, inclusive of the EIDL loan, is less than $500,000. The Debtor is permitted to use its cash in the ordinary course of its business, without further accounting therefor except in the form of Monthly Operating Reports. A copy of the order is available at https://urlcurt.com/u?l=2ave64 from PacerMonitor.com. About Nob Hill Inn City Plan Owners Association Nob Hill Inn City Plan Owners Association is the owner of the Nob Hill Inn, which is a 21-unit hotel and timeshare, located at 1000 Pine Street, San Francisco, CA valued $8.25 million. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-30368) on June 10, 2023. In the petition signed by Alfredo Terraza, chief financial officer, the Debtor disclosed $8,537,769 in assets and $222,858 in liabilities. Judge Dennis Montali oversees the case. Michael St. James, Esq., at St. James Law, P.C., represents the Debtor as legal counsel. OPEN COURT SPORTS: Court OKs Cash Collateral Access Thru Aug 23 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Open Court Sports Complex, LLC to use cash collateral on a interim basis in accordance with the budget, through August 23, 2023. Susser Bank, N.A. is granted a senior post-petition replacement lien on all new accounts, contract rights, and general intangibles, from and after the date of filing of the case, as further security for the use of cash collateral, but only to the extent of the Debtor's post-Petition use of the cash collateral. Susser Bank, N.A. will be granted the liens and protections of a good faith lender under 11 U.S.C sections 364(c),(e). To the extent of any diminution in value of the cash collateral, Susser Bank, N.A. will have an administrative expense pursuant to 11 U.S.C. section 507(b) in the Debtor's Chapter 11 Case and against the Debtor's bankruptcy estates for the Debtor's use of cash collateral to the extent of any diminution in the value of the cash collateral and these administrative claims shall have priority over and above all other costs and expenses of the kind specified in, or ordered pursuant to, 11 U.S.C. sections 503(b) or 507(a). Capital Certified Development Corporation will be granted a post-petition replacement lien junior to Susser Bank, N.A. on all new accounts, from and after the date of filing of the case, as security for the use of cash collateral, but only to the extent of the Debtor's post-Petition use of the cash collateral. To the extent of any diminution in value of the cash collateral, Capital Certified Development Corporation will have an administrative expense pursuant to 11 U.S.C. section 507(b) in the Debtor's Chapter 11 Case and against the Debtor's bankruptcy estates for the Debtor's use of cash collateral to the extent of any diminution in the value of the cash collateral and these administrative claims will have priority over and above all other costs and expenses of the kind specified in, or ordered pursuant to, 11 U.S.C. sections 503(b) or 507(a). Capital Certified Development Corporation will be granted the liens and protections of a good faith lender under 11 U.S.C sections 364(c),(e). A hearing to consider the entry of a final order for the use of cash collateral will be set for August 22 at 1:30 p.m. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=qEA1Kl from PacerMonitor.com. The Debtor projects $32,268 in total deposits and $30,661 in total expenses for the period from August 7 to 18, 2023. About Open Court Sports Complex Open Court Sports Complex, LLC is an indoor basketball, volleyball, pickleball, and floor sports facility in Katy, Texas. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-32826) on July 28, 2023, with $8,281,574 in assets and $6,208,520 in liabilities. Angela Smith-Duncan, manager, signed the petition. Judge Jeffrey P. Norman oversees the case. Kimberly A. Bartley, Esq., at Waldron & Schneider, LLP represents the Debtor as legal counsel. OUTFRONT MEDIA: S&P Alters Outlook to Stable, Affirms 'B+' ICR -------------------------------------------------------------- S&P Global Ratings revised the outlook on Outfront Media Inc. to stable from positive and affirmed its 'B+' issuer credit rating. The stable outlook reflects our expectation that Outfront's leverage will decline to 5.5x–6.0x over the next 12 months from 6.1x currently as the company's revenue and EBITDA growth improve, with a rebound in advertising spending from better macroeconomic conditions. S&P said, "We expect Outfront's leverage to remain about 6x in 2023. We lowered our previous revenue and EBITDA expectations for 2023 by 2% and 7%, respectively, and now believe the company will not reduce leverage below our 5.5x upgrade threshold until the end of 2024. We expect advertising trends to remain depressed through the remainder of 2023 as economic growth slows, which will limit the company's revenue growth. Additionally, higher lease expenses driven by new boards acquired in 2022 and better performance in the first half of 2023 in large markets (that typically have revenue share agreements) will weigh on the company's EBITDA margins in 2023. Outfront's S&P Global Ratings-adjusted net leverage was 6.1x for the last 12 months ending June 30, 2023, and we expect S&P Global Ratings-adjusted net leverage of about 6x in 2023 and in the mid-5x area by the end of 2024. "Outfront's advertising revenue is exposed to economic cyclicality. We expect a prolonged period of slow economic growth through the rest of 2023 and into 2024 will soften revenue growth for the outdoor advertising industry. While national outdoor advertising grew in the first half of 2023, we expect it will be relatively flat in the second half, while local outdoor advertising will continue to grow. Outfront has greater exposure to more volatile national advertising (58% of revenue as of June 30, 2023) relative to its peers given its exposure to large U.S. markets. "Despite this, we continue to view the outdoor industry favorably because it faces less pressure from online advertising than other traditional media sectors such as television and radio. This is because outdoor advertising is relatively inexpensive and primarily targets a stable demographic of drivers, commuters, and pedestrians. We expect outdoor advertising industry revenue growth of 3.5% in 2023 before improving to 4.5% in 2024 as advertising spending improves, driven by stronger macroeconomic conditions." The company's transit business remains a slight drag on EBITDA. About 15% of Outfront's prepandemic U.S. revenue came from the New York MTA, where the recovery in ridership has stalled at about 70% of prepandemic levels. As a result of lower revenue expectations, the company now no longer expects to recoup its investment through the remaining duration of the contract ending in 2030. However, the company expects the MTA contract will become cash flow neutral at some point in 2024 as it completes its initial deployment requirements. S&P said, "We now expect a low-single-digit percent decline in U.S. transit revenue in 2023, followed by 5% growth in 2024. Despite our revised expectations for the transit business, we believe Outfront can still reduce leverage through continued growth in its billboard business. Management has said they are having conversations with the MTA to hopefully address the significant changes in the New York City transit environment since the initial agreement was signed in 2017, although the outcome of such discussions is uncertain. "The stable outlook reflects our expectation that Outfront's leverage will decline to 5.5x–6.0x over the next 12 months from 6.1x currently as the company's revenue and EBITDA growth improve, with a rebound in advertising spending from better macroeconomic conditions." S&P could lower the rating on Outfront if it expects leverage will increase and remain above 6.5x on a sustained basis. This could occur if: -- A prolonged or severe economic downturn causes steep declines in advertising revenue; or -- The company pursues substantial debt-funded acquisitions. S&P could raise the rating on Outfront if: -- The company reduces leverage to below 5.5x, including the potential for acquisitions, and we expect it to remain there; -- S&P expects improved profitability on the company's transit business such that it is no longer a drag on profitability; and -- Macroeconomic pressures subside, resulting in an improvement in spending on outdoor advertising. S&P said, "Social factors are a moderately negative consideration in our credit rating analysis of Outfront. Ridership on public transportation significantly declined during the COVID-19 pandemic due to social-distancing requirements. The company somewhat depends on ridership, with about one-third of its prepandemic revenue from transit advertising. We expect it will take several years for Outfront's transit advertising revenue to fully recover to prepandemic levels." PARLEE CYCLES: Wins Interim Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, authorized Parlee Cycles, Inc. to continue using cash collateral in accordance with the budget. The Debtor is permitted to collect and use those prepetition assets in which Bank Gloucester, Mass Growth Capital Corp. and the U.S. Small Business Administration claim a security interests, including any proceeds of prepetition accounts receivable and cash on hand, for the purposes and on the terms proposed in the Motion in the operation of its business as debtor-in-possession. As adequate protection, Bank Gloucester, MGCC and the SBA are granted continuing replacement liens and security interests to the same validity, extent and priority that each would have had in the absence of the bankruptcy filing. The Debtor will make monthly adequate protection payments on account of its obligations to Bank Gloucester in the amount of $7,309, MGCC in the amounts of $533 for the August 2023 payment $543 for the September 2023 payment and $525 for the October 2023 payment with further payments to be in the amount of monthly interest accruing on the Debtor's note in favor of MGCC; and the SBA in the amount of $3,372 in accordance with the terms of the Budget. A further hearing on the matter is set for October 5 at 10 a.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=17Kfjj from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $50,833 for the week ending August 25, 2023; $5,369 for the week ending September 1, 2023; $47,811 $ for the week ending September 8, 2023; $8,534 for the week ending September 15, 2023; $36,607 for the week ending September 22, 2023; and $37,833 for the week ending September 29, 2023. About Parlee Cycles, Inc. Parlee Cycles, Inc. was founded in 2000 by its principal, Bob Parlee. Parlee Cycles, a manufacturer of high-performance bikes located in Beverly, Massachusetts, pioneered a unique process to create the first fully customizable carbon-fiber road racing frames. Parlee prides itself on leading the industry with breakthrough designs and innovations to improve the ride quality and performance of road bicycles. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Banker. D. Mass. Case No. 23-10161) on February 6, 2023. In the petition signed by Robert K. Parlee, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Christopher J. Panos oversees the case. David B. Madoff, Esq., at Madoff & Khoury LLP, represents the Debtor as legal counsel. PERIMETER ORTHOPAEDICS: Taps Durrett Firm as Special Counsel ------------------------------------------------------------ Perimeter Orthopaedics, P.C. received approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Durrett Firm as special counsel. The firm will provide legal representation to the Debtor in connection with the negotiation of the sale of the Practice and Surgery Center and any other related matters in the Debtor's Chapter 11 bankruptcy case. The firm will be paid at these rates: Dana S. Durrett $450 per hour Lee Earnest $350 per hour Michael Gay $350 per hour Paralegals $175 per hour Dana Durrett, Esq., a partner at Durrett Firm, 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: Dana S. Durrett, Esq. The Durrett Firm, LLC 1845 Peeler Road, Suite D Atlanta, GA 30338 Telephone: (770) 685-1041 Email: ddurrett@thedurrettfirm.com About Perimeter Orthopaedics Perimeter Orthopaedics, P.C. and Perimeter Outpatient Surgery Associates, Inc. are a physician practice that specializes in orthopedics. The Debtors filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Lead Case No. 23-20554) on May 17,2023. At the time of filing, Perimeter Orthopaedics reported as much as $50,000 in assets and $1 million to $10 million in liabilities. Perimeter Outpatient reported as much as $50,000 in assets and $500,001 to $1 million in liabilities. Judge James R. Sacca oversees the cases. The Debtors tapped William A. Rountree, Esq., at Rountree Leitman Klein & Geer, LLC as bankruptcy counsel and Durrett Firm as special counsel. PHUNWARE INC: Incurs $6.5 Million Net Loss in Second Quarter ------------------------------------------------------------ Phunware, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $6.52 million on $3.49 million of net revenues for the three months ended June 30, 2023, compared to a net loss of $17.07 million on $5.48 million of net revenues for the three months ended June 30, 2022. For the six months ended June 30, 2023, the Company reported a net loss of $10.79 million on $8.23 million of net revenues compared to a net loss of $31.99 million on $12.26 million of net revenues for the six months ended June 30, 2022. As of June 30, 2023, the Company had $40.79 million in total assets, $22.88 million in total liabilities, and $17.91 million in total stockholders' equity. The Company has a history of net losses since its inception. For the six months ended June 30, 2023, the Company used $12,560,000 in cash for operations and have a working capital deficiency of $14,417,000. According to the Company, the foregoing conditions raise substantial doubt about its ability to meet our financial obligations as they become due. Commentary "This past quarter was a pivotal period for Phunware, as we right sized our workforce to an optimal amount, reduced our corporate cash burn, and have refined our sales & marketing strategy to capitalize on opportunities across the multitude of industries where our Location-Based Platform solution can make a significant impact," said Russ Buyse, CEO of Phunware. "Spearheaded by our newly appointed CFO Troy Reisner, we are working on restructuring our existing debt and negotiating with prospective investors on more favorable terms, in tandem with reducing our cash burn to accelerate our organization toward a path of growth and profitability. As we activate our revamped sales and marketing strategy, we continue to have productive conversations with prospective clients. One of the more recent deals we executed was with Thumper Pond, a resort that is representative of the entire category of mid-market hospitality brands that can affordably and effectively use our Location-Based Platform to offer guests the best and most personalized experience. Looking ahead, we remain laser focused on commercializing our Location-Based Platform across all verticals, with a heavy emphasis on hospitality and healthcare." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1665300/000162828023029388/phun-20230630.htm 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. PROTERRA INC: Court OKs Interim Cash Collateral Access ------------------------------------------------------ Proterra, Inc. and affiliates sought and obtained entry of an order from the U.S. Bankruptcy Court for the District of Delaware authorizing the use cash collateral on an interim basis, in accordance with the budget. The parties with an interest in the cash collateral are: (i) Bank of America, N.A. as administrative agent under the Senior Credit Agreement; and (ii)CSI GP I LLC, as collateral agent under the Notes Purchase Agreement. The Debtor requires the use of cash collateral for general corporate and working capital purposes, to pay costs in connection with the administration of the Chapter 11 Cases, to make adequate protection payments as contemplated by the Interim Order and to pay other amounts approved by the Court or as required under the Bankruptcy Code. The Debtors' authorization to use cash collateral will terminate on the earliest to occur of: (i) 5 p.m. (prevailing Eastern Time) on the day after the date of the Final Hearing (unless a Final Order has been entered prior thereto); (ii) the dismissal of the Chapter 11 Cases or the conversion of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code; (iii) the appointment of a trustee or examiner with expanded powers in the Chapter 11 Cases; and (iv) the Debtors' failure to perform, in any material respect, any of their obligations under the Interim Order and such failure continues beyond the Cure Period. As of the Petition Date, the Debtors have funded debt obligations in the aggregate principal amount of approximately $199.1 million, consisting of (a) $21.9 million in face amount of letters of credit issued under the First Lien Credit Facility and (b) $177.2 million in principal amount of Second Lien Convertible Notes. As of the Petition Date, other than the Prepetition Letters of Credit, there is nothing outstanding under the Loan, Guaranty and Security Agreement dated as of May 8, 2019, by and among Debtor Proterra Operating Company, Inc. (f/k/a Proterra Inc.) (OpCo), the lenders from time to time party thereto, the issuing bank party thereto, and Bank of America, N.A., as administrative agent. The borrowing capacity of the First Lien Credit Facility is up to $75 million, including a letter of credit sub-facility. In the absence of an Event of Default under and as defined in the Senior Credit Agreement, the Prepetition First Lien Lenders' loan commitments under the First Lien Credit Facility were available to OpCo on a revolving basis through the earlier of May 9, 2024 or 91 days prior to the stated maturity of any subordinated debt in the aggregate amount of $7.5 million or more. The maximum availability under the First Lien Credit Facility is subject to a borrowing base based on certain specified percentages of eligible accounts receivable and inventory, subject to certain reserves. The First Lien Credit Facility includes a $25 million letter of credit sub-line as of March 31, 2023. As of the Petition Date, no amounts are outstanding under the revolver, and there are approximately $21.9 million in face amount of letters of credit issued under the First Lien Credit Agreement. As of the Petition Date, there are approximately $177.2 million of convertible notes issued by OpCo under a convertibles notes facility documented pursuant that certain Note Purchase Agreement, dated as of August 4, 2020, by and among OpCo, the investors from time to time party thereto, the guarantors from time to time party thereto and CSI GP I LLC, as collateral agent. The Second Lien Convertible Notes bear interest of 12.0% per year, consisting of 5% in cash and 7% PIK. 98% of the Second Lien Convertible Notes are owned by the Cowen Parties. The Prepetition Secured Parties are adequately protected by a substantial equity cushion far in excess of 20% that exists, and will exist, throughout the pendency of the Chapter 11 Cases. As further adequate protection, the Prepetition Secured Parties, will receive the following adequate protection including: (i) the First Lien Agent will receive senior adequate protection liens, junior only to the Prepetition First Liens and Permitted Liens which are perfected as of the Petition Date and senior in priority to the Prepetition Liens and the Carve-Out, and the Second Lien Agent will receive junior adequate protection liens junior only to the Prepetition First Liens, Senior Adequate Protections Liens, Prepetition Second Liens, Senior Permitted Liens which are senior in priority to the Prepetition Second Liens, and the Carve-Out; (ii) the First Lien Agent will receive an Allowed Senior Adequate Protection Superpriority Claim and the Second Lien Agent will receive a Junior Adequate Protection Superpriority Claim pursuant to sections 503(b) and 507(b) of the Bankruptcy Code, having priority over all other administrative claims (other than the Carve-Out) and will otherwise be subject to the Intercreditor Agreement; and (iii) payment of (a) reasonable fees and expenses incurred by the First Lien Agent and (b) reasonable fees and expenses to the Second Lien Agent, subject to a cap of $200,000 per calendar month, and in each case, subject to certain conditions. The Carve-out means: (i) fees owing to the U.S. Trustee incurred in connection with the Chapter 11 Case, (ii) fees and expenses of a chapter 7 trustee in an amount not to exceed $25,000, (iii) professional fees, expenses and disbursements incurred by professional persons employed by the Debtors or any Committee (including any fees and expenses of the members of any Committee) at any time prior to the Termination Date and (iv) Professional Fees incurred after the Termination Date in an amount not to exceed $10 million. A copy of the order is available at https://urlcurt.com/u?l=WSEhNX from PacerMonitor.com. About Proterra Inc. Proterra Inc. business involves designing, manufacturing, and selling electric transit buses and components, batteries, and electric drive trains, and providing and selling related products and services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11120). In the petition signed by $818,773,679 in total assets and $609,498,207 in total liabilities. Judge Brendan Linehan Shannon oversees the case. YOUNG CONAWAY STARGATT & TAYLOR, LLP represents the Debtor as legal counsel. The Debtors also tapped FTI CONSULTING, INC. as financial advisor, MOELIS & COMPANY, LLC as investment banker, and KURTZMAN CARSON CONSULTANTS LLC as claims, noticing and administrative agent. PURDUE PHARMA: Still Fully Operating Despite Bankruptcy Dispute --------------------------------------------------------------- Brad Witter of Bustle reports that Purdue Pharma is still fully operational despite bankruptcy and lawsuits. In 1996, Purdue Pharma made about $44 million in OxyContin sales, a number that escalated to $3 billion (with over 14 million prescriptions dispensed) in 2001 and 2002 combined. The Sackler family-owned company spent roughly $200 million in 2001 alone, aggressively marketing the highly addictive opioid drug to physicians, claiming that a delayed-release mechanism could limit the risk of addiction. A fictionalized retelling of events, Netflix's Painkiller portrays the origins and aftermath of America's opioid crisis -- which Purdue Pharma has been widely blamed for creating. Per the series, the crisis has resulted in over 300,000 overdose deaths over the past two decades. Despite several investigations and lawsuits, however, the company still exists in 2023 -- though not in the same form as the Netflix limited series showed. No member of the Sackler family has been criminally charged in connection with the marketing of OxyContin or any overdose deaths involving the drug. In March 2019, New York Attorney General Letitia James filed a lawsuit against opioid manufacturers, including Purdue Pharma and members of the Sackler family. With more than 2,600 federal and state lawsuits mounting, Purdue Pharma filed for Chapter 11 bankruptcy in September 2019. James announced the suit's resolution in July 2021, touting that the agreement will, "first and foremost, shut down Purdue Pharma and end the Sackler family's ability to manufacture opioids ever again." The lawsuit's resolution also requires the Sacklers to pay $4.5 billion, which primarily will go toward addiction treatment and prevention programs, over the next nine years. Critics of the settlement disputed against the condition that largely absolves the Sacklers of Purdue's opioid-related liability, according to The New York Times. U.S. Bankruptcy Court Judge Robert Drain approved the settlement in White Plains, N.Y. in September 2021, effectively ending thousands of lawsuits brought against the company by state and local governments, tribes, hospitals, and individuals in the wake of the deadly public health crisis. The Sacklers will remain one of the United States' wealthiest families, per the NYT, with the Netflix series noting the family "is believed" to be worth over 11 billion dollars. Though a lower court ruled in December 2021 that it was improper for Purdue Pharma's bankruptcy deal to block future opioid-related lawsuits against the Sackler family, they filed an appeal. In May 2023, a federal appeals court in New York ruled in favor of Purdue Pharma's bankruptcy plan, shielding the Sackler family from future lawsuits. In August 2023, Purdue Pharma's website noted that they "continue to operate fully," offering prescription opioids, as well as laxatives, antiseptics, and dietary supplements through a subsidiary called Avrio Health. However, there are major changes ahead -- including a new company name -- as part of a post-bankruptcy restructuring plan. Per the company, once the plan, which delivers "billions of dollars of value for victim compensation, opioid crisis abatement, and overdose rescue medicines," is complete, "Purdue Pharma will cease to exist and substantially all of Purdue's assets will be transferred to a new company called Knoa Pharma." While the company doesn't have a specific timetable of when the change will take effect, the Sackler families will have no involvement in Knoa Pharma. The bankruptcy case hit another roadblock on August 10, 2023 when the United States Supreme Court blocked the reported $6 billion settlement that would have given the Sackler family immunity, per CNN. "We are confident in the legality of our nearly universally supported Plan of Reorganization, and optimistic that the Supreme Court will agree," a Purdue Pharma rep said in a statement to the outlet. "Even so, we are disappointed that the US Trustee, despite having no concrete interest in the outcome of this process, has been able to single-handedly delay billions of dollars in value that should be put to use for victim compensation, opioid crisis abatement for communities across the country, and overdose rescue medicines." Solicitor General Elizabeth Prelogar argued in court papers that the Purdue settlement is "exceptional and unprecedented," noting that the release "absolutely, unconditionally, irrevocably, fully, finally, forever and permanently releases the Sacklers from every conceivable type of opioid-related civil claim – even claims based on fraud and other forms of willful misconduct that could not be discharged if the Sacklers filed for bankruptcy in their individual capacities." In agreeing to pause the settlement, the court also said it would take up the case and hear arguments in December 2023. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP, as legal counsels; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk, LLC, is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rhode Island and Washington state, plus some Canadian local governments and other Canadian entities. In early March 2022, Purdue Pharma reached a nationwide settlement over its role in the opioid crisis, with the Sackler family members boosting their cash contribution to as much as $6 billion. The settlement was hammered out with attorneys general from the eight states -- California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont and Washington -- and D.C. who had opposed the previous settlement. R.B. DWYER: Wins Cash Collateral Access Thru Aug. 24 ---------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Pennsylvania authorized R.B. Dwyer Co., Inc. and affiliates to use cash collateral on an interim basis in accordance with the budget, through the conclusion of the hearing scheduled for August 24, 2023, at 3 p.m. The Debtor needs to access cash collateral to pay all reasonable and necessary expenses related to the operation of its business and avoid immediate and irreparable harm including, all trust fund payroll taxes, in accordance with the budget, limited to the amount of cash collateral actually collected. To the extent of any diminution in value of the respective pre-petition cash collateral of Pathward, National Association and the U.S. Small Business Administration, the Lenders are granted valid, binding, enforceable and perfected post-petition replacement liens on collateral which is created, acquired, or arises after the Petition Date, but limited to only those types and descriptions of collateral in which the Lenders hold a pre-petition lien or security interest. The Replacement Liens will have the same priority and validity as the Lenders' respective pre-petition liens and security interests. The Debtors will maintain adequate insurance coverage on all collateral subject to the Lenders' liens and security interests and will designate the Lenders as loss payees to the extent and priority of their respective liens and security interests. A copy of the order is available at https://urlcurt.com/u?l=wdl0hd from PacerMonitor.com. About R.B. Dwyer Co., Inc. R.B. Dwyer Co., Inc. and affiliates comprise an integrated commercial packaging business with facilities located in Pennsylvania, California and Tennessee. R.B. Dwyer Co. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 23-01420) on June 26, 2023. In the petition signed by James B. Dwyer, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Mark J. Conway oversees the case. Jeffrey Kurtzman, Esq., at Kurtzman | Steady, LLC, represents the Debtor as legal counsel. RAGING BULL: November 7 Hearing on Disclosure Statement ------------------------------------------------------- Judge Mindy A. Mora has entered an order that the Court will conduct a hearing to consider approval of the Disclosure Statement of Raging Bull Investments Limited on Nov. 7, 2023 at 1:30 P.M. in 1515 N. Flagler Drive, 8th Floor, Courtroom A, West Palm Beach, FL 33401. The following deadlines apply with respect to the disclosure hearing: * Sept. 30, 2023, is the Proponent's deadline for serving this order, the disclosure statement, and the plan (38 days before the disclosure hearing). * Oct. 31, 2023, is the Proponent's deadline for filing a motion under 11 U.S.C. section 1121(e)(3) (7 days before the disclosure hearing). * Oct.31, 2023, is the Deadline for filing objections to Disclosure Statement (7 days before the disclosure hearing). Attorney for the Debtor: Craig I. Kelley, Esq. KELLEY, FULTON, KAPLAN & ELLER, P.L. 1665 Palm Beach Lakes Blvd. The Forum - Suite 1000 West Palm Beach, FL 33401 Tel: (561) 491-1200 Fax: (561) 684-3773 E-mail: bankruptcy@kelleylawoffice.com About Raging Bull Investments Limited Raging Bull Investments Limited is a limited partnership organized under the laws of the State of Florida that owns a 1.5% working interest in and to an oil & gas lease in Loving County, Texas. The Debtor filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-17916) on October 12, 2022. In the petition filed by Mark S. Croft, as manager and partner, the Debtor reported assets between $500,000 and $1 million and liabilities between $10 million and $50 million. The Debtor is represented by Craig I Kelley of Kelley, Fulton & Kaplan, P.L. REMARK HOLDINGS: Amends Purchase Agreement With Ionic Ventures -------------------------------------------------------------- Remark Holdings, Inc. and Ionic Ventures, LLC entered into a letter agreement on Aug. 10, 2023, which amends the Purchase Agreement, dated as of Oct. 6, 2022, by and between Remark and Ionic, as previously amended on Jan. 5, 2023, and which supersedes the letter agreement entered into by Remark and Ionic on July 12, 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, (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, and (v) that no later than 21 calendar days after the date of the Letter Agreement the parties will amend the Debenture Transaction Documents to include a so-called Most Favored Nation provision that will provide Ionic with necessary protection against any future financing, settlement, exchange or other transaction whether with an existing or new lender, investor or counterparty. A full-text copy of the Letter Agreement is available for free at: https://www.sec.gov/Archives/edgar/data/1368365/000136836523000067/letteragreementdatedaugust.htm 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. Remark Holdings reported a net loss of $55.48 million for the year ended Dec. 31, 2022, compared to net income of $27.47 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $14.17 million in total assets, $39.95 million in total liabilities, and a total stockholders' deficit of $25.78 million. 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. REMARK HOLDINGS: Incurs $5.9 Million Net Loss in Second Quarter --------------------------------------------------------------- Remark Holdings, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $5.87 million on $3.17 million of revenue for the three months ended June 30, 2023, compared to a net loss of $12.53 million on $2.56 million of revenue for the three months ended June 30, 2022. For the six months ended June 30, 2023, the Company reported a net loss of $14.04 million on $3.99 million of revenue compared to a net loss of $37.96 million on $7.22 million of revenue for the six months ended June 30, 2022. As of June 30, 2023, the Company had $12.86 million in total assets, $41.28 million in total liabilities, and a total stockholders' deficit of $28.43 million. Remark said, "Our history of recurring operating losses, working capital deficiencies and negative cash flows from operating activities give rise to, and management has concluded that there is, substantial doubt regarding our ability to continue as a going concern. Our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2022, has also expressed substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. "We intend to fund our future operations and meet our financial obligations through revenue growth from our AI and data analytics offerings. We cannot, however, provide assurance that revenue, income and cash flows generated from our businesses will be sufficient to sustain our operations in the twelve months following the filing of this Form 10-Q. As a result, we are actively evaluating strategic alternatives including debt and equity financings." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001368365/000136836523000065/mark-20230630.htm 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. Remark Holdings reported a net loss of $55.48 million for the year ended Dec. 31, 2022, compared to net income of $27.47 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $14.17 million in total assets, $39.95 million in total liabilities, and a total stockholders' deficit of $25.78 million. 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. RIBA FOODS: Lender Seeks to Prohibit Cash Collateral Access ----------------------------------------------------------- Gulf Coast Bank and Trust Company asks the U.S. Bankruptcy Court for the Southern District of Texas, Victoria Division, to prohibit Riba Foods, Inc. from using cash collateral. Gulf Coast is a secured creditor of Riba Foods, Inc. holding first and prior security interest in substantially all of the Debtor's personal property. On February 15, 2011, the Debtor and Gulf Coast executed the Receivables Purchase Agreement pursuant to which the Debtor factored certain of its accounts receivable with Gulf Coast. In connection with and as security for the RPA, the Debtor granted a security interest in all of the Debtor's "now owned and hereafter acquired (i) accounts, chattel paper, other Receivables, instruments (including promissory notes), investment property, documents, and general intangibles; including without limitation all reserve accounts, Residual Payments, credits and reserves, and letter-of credit rights, (ii) all deposit accounts; (iii) all equipment and inventory, and (iv) all proceeds from any of the foregoing." Gulf Coast's security interest in the RPA Collateral was perfected by the filing of a UCC-1 financing statement on March 24, 2011. There is no valid UCC financing statement encumbering the assets of the Debtor that was filed prior to the filing of the GCBT Financing Statement. On June 21, 2023, Debtor filed its Petition under Chapter 11, Title 11 of the United States Code. As of the petition date, Debtor owed Gulf Coast the sum of $1.919 million (the balance due of $2.4 million less the reserve account balance of $472,244). As of August 9, 2023, Debtor owes Gulf Coast the sum of $1.3 million. Pursuant to the RPA and the GCBT Financing Statement, the indebtedness owed to Gulf Coast is secured by a perfected security interest in, among other things, the Debtor's accounts receivable and general intangibles, and any cash collected by Debtor in connection therewith. Gulf believes that the Debtor has collected payments from account debtors since the petition date, and has used such payments to operate its business and manage its properties as debtor-in-possession. Gulf Coast has repeatedly requested an accounting of these collections as well as adequate protection with nothing forthcoming from the Debtor. The Debtor's counsel informed Gulf that the Debtor recently received one or more payments totaling approximately $300,000 on account of an Employee Retention Credit relating to time periods prior to the petition date. The receivable created under the Employee Retention Credit program is part of Gulf's collateral base. Gulf believes that the Debtor expects to receive additional payments that could be as much as $1 million on account of an Employee Retention Credit relating to time periods prior to the petition date. By reason of the obligations due Gulf Coast by the Debtor, Gulf Coast holds a legally enforceable interest in the Debtor's personal property and the cash derived from that personal property, including without limitation, the Account Collateral and the ERTC Collateral. These legally enforceable interests entitle Gulf Coast to adequate protection of its Collateral. 11 U.S.C. section 363 provides that a debtor may only use cash collateral under two circumstances: (A) each entity that has an interest in such collateral consents; or (B) the court, after notice and hearing, authorizes such use, sale, or lease in accordance with the provisions of this section. 11 U.S.C. Section 363(c)(2)(A)-(B). The Debtor has not moved for authority to use the cash collateral. Accordingly, the Debtor has not met its burden of proving that use of the cash collateral derived from the personal property will not reduce Gulf Coast's interest in the property. Additionally, the Collateral is in danger of being lost or materially impaired. As such, the value of the property is depreciating, and Gulf Coast is not adequately protected. Gulf Coast has not consented and does not consent to use of the Account Collateral and respectfully requests that the Court enter an order prohibiting such use and/or conditioning such use as is necessary to provide adequate protection to Gulf Coast. Gulf Coast has not consented and does not consent to use of the ERTC Collateral and respectfully requests that the Court enter an order prohibiting such use. Gulf Coast, as the first-priority secured creditor with respect to the ERTC Collateral, also respectfully requests that the Court enter an order requiring the Debtor to segregate all ERTC Collateral into a separate account under the control of Gulf Coast as adequate protection of Gulf Coast's interests. A copy of the motion is available at https://urlcurt.com/u?l=Mgerhf from PacerMonitor.com. About Riba Foods Riba Foods, Inc. manufactures and markets a variety of salsas, dips and quesos under the Arriba! Salsa and Texas Pepper Works brand names. The company is based in Houston, Texas. Riba Foods filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Texas Case No. 23-60028) on June 21, 2023, with $3,665,293 in assets and $9,476,352 in liabilities. Miguel A. Barrios, chief executive officer, signed the petition. Judge Christopher M. Lopez oversees the case. Richard L. Fuqua, Esq., at Fuqua & Associates, P.C. serves as the Debtor's legal counsel. Gulf Coast Bank and Trust Company, as creditor, is represented by: Chad P. Morrow, Esq. SHER GARNER CAHILL RICHTER KLEIN & HILBERT, L.L.C. 909 Poydras Street, Suite 2800 New Orleans, LA 70112 Tel: (504) 299-2100 Fax: (504) 299-2300 Email: cmorrow@shergarner.com RIBA FOODS: Taps Corporate Strategies as Accounting Consultant -------------------------------------------------------------- Riba Foods Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Corporate Strategies, LLC as accounting consultant. The firm will analyze the material and historical data of the Debtor to determine eligibility for Employee Retention Tax Credits from the U.S. Department of the Treasury. The firm will be paid a contingency fee of 15 percent of any recovery. As disclosed in court filings, Corporate Strategies is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached at: Tim Connoly Corporate Strategies, LLC 123 North Post Oak Ln #440 Houston, TX 77024 Tel: (713) 621-2737 Email: Tim@CSBankers.com About Riba Foods Riba Foods, Inc. manufactures and markets a variety of salsas, dips and quesos under the Arriba! Salsa and Texas Pepper Works brand names. The company is based in Houston, Texas. Riba Foods filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Texas Case No. 23-60028) on June 21, 2023, with $3,665,293 in assets and $9,476,352 in liabilities. Miguel A. Barrios, chief executive officer, signed the petition. Judge Christopher M. Lopez oversees the case. The Debtor tapped Richard L. Fuqua, Esq., at Fuqua & Associates, P.C. as legal counsel and Corporate Strategies, LLC as accounting consultant. RIGHT CHOICE: Court OKs Cash Collateral Access ---------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, authorized Maria Yip, the Chapter 11 trustee of Right Choice Vending/Coffee, LLC, 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 fund ordinary business expenses to maintain the Debtor's business operations. As previously reported by the Troubled Company Reporter, on April 28, 2022, Spartan Capital and the Debtor entered into a Standard Merchant Cash Advance Agreement for the purchase of the Debtor's (and other non-debtor entities) $195,000 worth of receivables. On May 19, 2022, Spartan Capital and the Debtor (and other non-debtor entities) entered into the Standard Merchant Cash Advance Agreement for the purchase of the Debtor's (and other non-debtor entities) $195,000 worth of receivables. On June 3, 2022, Spartan Capital and the Debtor (and other non-debtor entities) entered into the Standard Merchant Cash Advance Agreement for the purchase of the Debtor's (and other non-debtor entities) $195,000 worth of receivables. According to the Debtor's records, approximately $102,000 remains due and owing to Spartan Capital. On June 30, 2022, Unique Funding Solutions LLC and the Debtor (and other non-debtor entities) entered into the Standard Merchant Cash Advance Agreement for the purchase of the Debtor's (and other non-debtor entities) $469,000 worth of receivables. About $227,000 remains due and owing to Unique Funding. On August 5, 2022, Fox Capital Group, Inc. d/b/a Fox Business Funding and the Debtor (and other non-debtor entities) entered into the Future Receivables Sale and Purchase Agreement for the purchase of the Debtor's (and other non-debtor entities) $125,000 worth of receivables. Roughly $63,000 remains due and owing to Fox Capital. A copy of the Court's order is available at https://urlcurt.com/u?l=6b6oUM from PacerMonitor.com. About Right Choice Vending/Coffee, LLC Right Choice Vending/Coffee, LLC operates a vending machine business with machines located throughout the State of Florida. Right Choice Vending/Coffee is in the business of providing drinks, snacks and food to various businesses, industries, schools, universities, hospital systems and governmental agencies. This is accomplished by providing and servicing vending machines, micro self-service markets, various coffee makers and direct delivery of products to its clients. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11331) on February 19, 2023. In the petition signed by Nicholas Depasquale, the Debtor disclosed up to $50,000 in both assets and liabilities. Judge Scott M. Grossman oversees the case. Mark S. Roher, Esq., at the Law Office of Mark S. Roher, P.A., represents the Debtor as legal counsel. ROCK RIDGE: Nutrien Says Plan is Neither Fair Nor Equitable ----------------------------------------------------------- Nutrien AG Solutions, Inc. ("NAS"), objects to confirmation of the Chapter 11 Plan of Reorganization and approval of the Disclosure Statement of Rock Ridge Farms Partnership. NAS, a secured creditor of the Debtor, claims that the Disclosure Statement, in the instant case, does not provide adequate information and, as a result, should not be approved by the Court pursuant to Section 1125 of the Bankruptcy Court. The Disclosure Statement does not provide any information, indication, or valuation of any claim by the Debtor against its general partners, and other property necessary to satisfy the liabilities and claims of partnership creditors of the Debtor. Moreover, the Disclosure Statement does not indicate why, for whatever reason, the Debtor does not seek contribution from its general partners, notwithstanding the fact that the assets and property of the Debtor, a general partnership under North Carolina law, are insufficient to satisfy its claims, liabilities, and obligations. Without this information, creditors, including NAS cannot make a fully-informed decision concerning acceptance or rejection of the Plan, including the risks associated therewith. NAS points out that the Debtor has failed to demonstrate, by a preponderance of the evidence, that the Plan currently before the Court complies with all of the requirements of Section 1129(a) of the Bankruptcy Code. Moreover, the Plan currently before the Court cannot be confirmed because is not fair and equitable with respect to the NAS POCs arising from the Judgments in accordance with Section 1129(b) of the Bankruptcy Code. NAS objects to, and requests denial of confirmation of the Plan, proposed by the Debtor and currently before the Court, based upon the following: * The Plan was not proposed by the Debtor in good faith, as required by Section 1129(a)(3) of the Bankruptcy Code. * The Plan does not comply with Section 1129(a)(7) of the Bankruptcy Code because NAS, as an impaired creditor under the Plan, will not receive or retain under the Plan, on account of the NAS POCs, property of a value that is not less than it would receive under a hypothetical liquidation under chapter 7 of the Bankruptcy Code on the Effective Date. * The Plan does not comply with Section 1129(a)(11) of the Bankruptcy Code because it is not feasible and, even if confirmed, will likely be followed by further reorganization and/or liquidation. * The treatment provided to NAS, in Classes X and XI, is not fair and equitable to NAS, as required by Section 1129(b) of the Bankruptcy Code. A full-text copy of Nutrien's objection dated August 10, 2023 is available at https://urlcurt.com/u?l=7ltJQ7 from PacerMonitor.com at no charge. Counsel for Nutrien Ag Solutions: BUCKMILLER, BOYETTE & FROST, PLLC Joseph Z. Frost, Esq. 4700 Six Forks Road Suite 150 Raleigh, North Carolina 27609 Telephone: (919) 296-5040 Telefax: (919) 977-7101 About Rock Ridge Farms Partnership Rock Ridge Farms Partnership is in the business of farming sweet potatoes, soybeans, corn, and peanuts in and around Wilson County, N.C. Rock Ridge Farms sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-00291) on Feb. 2, 2023, with up to $10 million in both assets and liabilities. Robert C. Boyette, partner at Rock Ridge Farms, signed the petition. Judge Joseph N. Callaway oversees the case. David F. Mills, Esq., at Narron Wenzel, P.A., is the Debtor's legal counsel. ROCKING M MEDIA: Lenders Seek to Terminate Cash Collateral Access ----------------------------------------------------------------- Secured creditors KS StateBank and Belate, LLC asks the U.S. Bankruptcy Court for the District of Kansas to enter an order terminating the use of cash collateral by Rocking M Media LLC and affiliates. The creditors seek entry of an order (a) terminating the Debtors' use of cash collateral due to a lack of adequate protection of the Movants' interests in the Collateral, or, alternatively, (b) granting additional adequate protection of the Movants' interests in the Collateral on conditions agreed to by the Movants. On August 31, 2022, the Court entered the Final Cash Collateral Order. In the Final Cash Collateral Order, the Court ordered the Debtors to provide additional adequate protection to the creditors: -- the Debtors will pay KSB $10,000 per month beginning July 15, 2022, and the 15th day of each month thereafter until further Order of the Court. -- the Debtors will pay Belate $5,000 per month beginning July 15, 2022, and the 15th day of each month thereafter until further Order of the Court. KSB timely filed proofs of claim in Debtor Rocking M Media, LLC's case and Debtor Rocking M Radio, Inc.'s case based on (a) a certain Promissory Note dated September 23, 2016 by RMM and RMR in favor of KSB in the original principal amount of $2.160 million; and (b) a certain Promissory Noted dated September 23, 2016 by RMM and RMR in favor of KSB in the original principal amount of $5.216 million. Throughout the Chapter 11 Cases, the creditors have been working in earnest with the Debtors to reach agreement on a value-maximizing path for exiting Chapter 11. In furtherance thereof, the creditors have allowed the Debtors to continue using their cash collateral while the Debtors sold certain of their assets and prepared and filed a Chapter 11 plan. On March 9, 2023, nearly a year after the Petition Date, the Debtors filed the Debtors' Combined Joint Chapter 11 Plan of Reorganization and Disclosure Statement. The Movants contend that the Plan could never be confirmed because, among other things, it is not feasible, proposes the substantive consolidation of the Debtors contrary to applicable law, violates the absolute priority rule, and contains a disguised discharge in favor of the Debtors' non-Debtor principals. In an effort to better understand the Plan and the issues therewith, pursuant to rule 2004 of the Federal Rules of Bankruptcy Procedure, KSB, Belate and the UCC jointly requested documents from, and sought the examination of, the Debtors. The Debtors provided documents and produced Monte Miller (one of the Debtors' two principals), Quinn Miller (Monte Miller's son and the head of Operations, Facilities, and Marketing for the Debtors), Shelly Wilson (the Debtors' bookkeeper), and Gregory Guy (the Debtors' liquidation expert). The documents produced by the Debtors and depositions of the Debtors' representatives and expert further underscored to the Movants that the Plan is unconfirmable; however, in an effort to avoid a costly contested confirmation hearing and reach a resolution on a value-maximizing path for the Debtors to exit Chapter 11, KSB, Belate, and the UCC requested that the Debtors participate in mediation. The Debtors agreed, and the mediation took place on June 27, 2023 before the Honorable Bankruptcy Judge Michael E. Romero. Unfortunately, the parties did not reach a resolution during the Mediation but agreed to continue discussions. However, those discussions following the Mediation made clear the Debtors' objective for these Chapter 11 Cases: find a mechanism for releasing the Debtors' non-Debtor principals—Doris and Monte Miller—from their personal obligations to the creditors. Given the Debtors' singular focus on this objective, negotiations between the Debtors and each of the creditors quickly became unproductive and continuing such would be a further drain of the creditors' time and resources without any corresponding benefits. Although the Debtors have advised the Court that they intend to file an amended version of the Plan by August 18, 2023, the creditors have no reason to believe that the problematic and self-serving provisions proposed by the Debtors in the Plan will be revised or removed. More troubling is the more recent position of the Debtors that, in the absence of an agreement with creditors, the Debtors intend to destroy any remaining value for the Debtors' estates, creditors, employees, and contract counterparties by shutting down operations and returning the largely valueless hard assets of dirt and unused radio towers back to the creditors, eliminating any chance of a distribution to creditors, terminating all of the Debtors' employees, and rejecting a sale process that would likely generate several million dollars for the Debtors' estates. The Debtors have used the creditors' cash collateral for more than 16 months and have made very little progress toward exiting Chapter 11 or addressing the issues that led to the filing of the Chapter 11 Cases. Instead of progress toward a value-maximizing conclusion for the Chapter 11 Cases, and, the last 16 months have shown the Debtors' principals' willingness to flout the Court's orders, threaten the Debtors' creditors, and disregard their fiduciary duties. The creditors are gravely concerned that the Debtors will languish in Chapter 11 indefinitely if the Debtors' principals remain in control of the Chapter 11 Cases or, even worse, the Debtors' principals will intentionally destroy the value of the Collateral in an effort to coerce the creditors to provide personal releases. Given the Debtors' principals' nothing to lose attitude, the creditors are compelled to take drastic measures and file the Motion to terminate the Debtors' use of cash collateral. The Court approved adequate protection for the creditors in the form of, among other things, periodic cash payments and regular reporting requirements. The Debtors have failed to comply with the terms of the Final Cash Collateral Order and the adequate protection therein has proven to be insufficient to protect the creditors interests in the Collateral. The Final Cash Collateral Order directs the Debtors to provide KSB with adequate protection in the form of monthly payments of $10,000 on the fifteenth day of each month. The amount of the monthly payment is significantly less than the post-petition interest due to KSB each month—$33,659—and does not cover KSB's attorneys’ fees. Therefore, KSB's interests in the Collateral are not adequately protected and, on this basis alone, cause exists to terminate the Debtors' use of cash collateral. The Debtors have further failed to adequately protect KSB's Collateral and its interest in cash collateral through the diminution in value of the Debtors' estates throughout the pendency of the Chapter 11 Cases. While the Debtors' operations have benefitted from reduced adequate protection payments to KSB and Belate, the rejection of burdensome executory contracts, and, most critically, the sale of several radio stations the Debtors contended were a drag on operations, this has resulted in a cumulative net profit of $61,768. In the almost 18 months since the Debtors filed these bankruptcy cases, they have failed to generate a cumulative profit sufficient to cover even two months of interest owed to KSB at the non-default rate. Moreover, the Debtors' operations are declining, with the most recent report showing a monthly operating loss of $126,101. Belate remains focused on the development of a value-maximizing path for the Debtors to exit chapter 11. In furtherance thereof, Belate consented to the Debtors' use of its cash collateral on the terms set forth in the Final Cash Collateral Order. The Final Cash Collateral Order directs the Debtors, among other things, to provide Belate with adequate protection in the form of monthly payments of $5,000 on the 15th day of each month "until further Order of the Court." The Debtors, however, in violation of the Final Cash Collateral Order decided to stop making adequate protection payments to Belate for five months. While the Debtors ultimately made the five missed adequate protection payments to Belate, such actions were in violation of the Court's order and illustrate the Debtors' cavalier attitude with respect to their obligations to their creditors and the chapter 11 process. Critically, KSB has been made aware that the Debtors have received a preliminary offer to acquire the remaining radio stations for more than $3 million, an offer the Debtors appear to have ignored in favor of threatening to shut down operations in an effort to preserve the personal assets of Doris and Monte Miller. The creditors assert that the Debtors and their principals either do not understand or have no respect for the Court and the Chapter 11 process. Simply put, the Debtors' principals are abusing their role within the Chapter 11 Cases by violating the Court's orders and ignoring the parts of the Chapter 11 process that do not suit them personally. A copy of the motion is available at https://urlcurt.com/u?l=qOoWHa from PacerMonitor.com. About Rocking M Media, LLC Rocking M Media, LLC and its affiliates own and operate radio stations, radio networks, and digital media platforms that provide music, news, sports, and weather to its listeners and viewers. Rocking M Media supports local, regional, and national businesses and organizations across the State of Kansas as well as Nebraska, Colorado, Oklahoma, and Texas. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 22-20242) on March 26, 2022. In the petition signed by Monte M. Miller, chief executive officer, the Debtors disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Dale L. Somers oversees the case. Sharon L. Stolte, Esq., at Sandberg Phoenix & von Gontard PC is the Debtors' counsel. Kansas State Bank of Manhattan, as creditor, is represented by Nicholas J. Zluticky, Esq., at Stinson LLP. Belate, LLC, as creditor, is represented by Andrea Chase, Esq., at Spencer Fane LLP. Farmers and Merchants Bank of Colby, as creditor, is represented by Scott M. Hill, Esq. at Hite, Fanning & Honeyman L.L.P. SALE LLC: Court OKs Interim Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts authorized Sale, LLC, d/b/a As Good as it Gets Cafe, to use cash collateral on an interim basis in accordance with the budget. The Massachusetts Department of Revenue asserts an interest in the Debtor's cash collateral. As adequate protection, the parties that assert a secured interest in the Debtor's assets are granted replacement liens to the same extent, priority and perfection and only to the extent unavoidable, that those parties would have had in the absence of the bankruptcy filing. On or before the 30th day of each month in which the Order remains in effect, the Debtor will make an adequate protection payment to the Massachusetts Department of Revenue in the amount of $5,400, in addition to its replacement lien. A further telephonic hearing on the matter is set for October 19, 2023 at 10:30 a.m. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=ywvERu from PacerMonitor.com. The Debtor projects total expenses, on a monthly basis, as follows: $80,771 for August 2023; $78,853 for September 2023; and $77,736 for October 2023. About Sale, LLC Sale, LLC is a family-owned cafe with homestyle breakfasts & classic lunch eats, such as sandwiches, hamburgers, muffins, and pancakes. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-10545) on April 10, 2023. In the petition signed by Abderrahim Hmina, manager, the Debtor disclosed $7,500 in assets and $3.2 million in liabilities. Judge Christopher J. Panos oversees the case. Marques C. Lipton, Esq., at Lipton Law Group, LLC, represents the Debtor as legal counsel. SHERMAN/GRAYSON: Taps Rosner Law Group as Delaware Counsel ---------------------------------------------------------- Sherman/Grayson Hospital, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Rosner Law Group as Delaware counsel. The firm's services include: (a) Providing legal advice with respect to the Debtor's powers and duties in the continued operation of its business, management of its properties and related matters; (b) Prepare legal papers and ensure that they comply with the Local Rules; (c) Appearing in court; (d) Advising the Debtor on matters of Delaware practice and procedures and Delaware law; and (e) Other legal services that are necessary for the efficient and economic administration of the Debtor's Chapter 11 case. The firm will be paid at these rates: Frederick Rosner $425 per hour Scott J. Leonhardt, Attorney $400 per hour Ruby Liu, Attorney $375 per hour Paralegals, Paralegal $250 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Prior to the petition date, the Debtor paid the firm a retainer in the total amount of $25,000. Prior to the commencement of the bankruptcy case, the firm incurred total fees and costs of $11,053, leaving a pre-bankruptcy balance of $13,947 remaining in the firm's trust account. Frederick Rosner, Esq., a partner at The Rosner Law Group, 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: Frederick B. Rosner, Esq. The Rosner Law Group, LLC 824 N. Market St. Wilmington, DE 19801 Tel: (302) 777-1111/(302) 319-6300 Email: rosner@teamrosner.com About Sherman/Grayson Hospital Sherman/Grayson Hospital, LLC is the operator of Wilson N. Jones Regional Medical Center, a 207-bed acute care hospital in Sherman, Texas. Sherman/Grayson Hospital sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 23-10810) on June 23,2023, with $1 million to $10 million in assets and $50 million to$100 million in liabilities. Judge J. Kate Stickles oversees the case. Leonard M. Shulman, Esq., at Shulman Bastian Friedman & Bui, LLP and Rosner Law Group, LLC serve as the Debtor's bankruptcy counsel and Delaware counsel, respectively. SHERMAN/GRAYSON: Taps Shulman as Bankruptcy Counsel --------------------------------------------------- Sherman/Grayson Hospital, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Shulman Bastian Friedman & Bui, LLP as bankruptcy counsel. The Debtor requires legal counsel to: a. Give advice with respect to the rights, powers, duties and obligations of the Debtor in the administration of the case, the management of its business affairs and the management of its property; b. Advise the Debtor regarding its legal rights and responsibilities under the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; c. Prepare legal papers; d. Advise and assist the Debtor with respect to compliance with the requirements of the Office of the U.S. Trustee; e. Advise the Debtor regarding matters of bankruptcy law, including the rights and remedies of the Debtor with respect to its assets and with respect to the claims of creditors; f. Take all necessary or appropriate actions in connection with a Chapter 11 plan and all related documents, and such further actions as maybe required in connection with the administration of the Debtor's estate; g. Appear at court hearings; and h. perform all other necessary legal services for the efficient and economic administration of the Debtor's Chapter 11 bankruptcy case. The firm will be paid at these rates: Leonard M. Shulman, Partner $725 per hour Alan J. Friedman, Partner $725 per hour Max Casal, Associate $350 per hour Lorre Clapp, Paralegal $250 per hour Lori Gauthier, Paralegal $250 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Prior to the petition date, the Debtor paid the firm retainers totaling $315,000. The firm incurred total fees and costs of $107,737.50, leaving a pre-bankruptcy balance of $207,262.50 remaining in the firm's trust account. Leonard Shulman, Esq., a partner at Shulman, 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: Leonard M. Shulman, Esq. Shulman Bastian Friedman & Bui, LLP 100 Spectrum Center Drive, Suite 600 Irvine, CA 92618 Tel: (949) 427-1654 Fax: (949) 340-3000 Email: lshulman@shulmanbastian.com About Sherman/Grayson Hospital Sherman/Grayson Hospital, LLC is the operator of Wilson N. Jones Regional Medical Center, a 207-bed acute care hospital in Sherman, Texas. Sherman/Grayson Hospital sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 23-10810) on June 23,2023, with $1 million to $10 million in assets and $50 million to$100 million in liabilities. Judge J. Kate Stickles oversees the case. Leonard M. Shulman, Esq., at Shulman Bastian Friedman & Bui, LLP and Rosner Law Group, LLC serve as the Debtor's bankruptcy counsel and Delaware counsel, respectively. ST. CHARLES MEMORY: Wins Interim Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, authorized St. Charles Memory Care, LLC to use cash collateral on an interim basis in accordance with the budget, with a 15% variance. An immediate and critical need exists for the Debtor to use cash collateral for the continued operation of its existing business. BMO Harris Bank is the Debtor's secured creditor claiming liens on the Debtor's personal property including rents. As of the Petition Date, the Secured Lender claims the Debtor owes approximately $7.506 million in principal with respect to loans made by the Secured Lender to the Debtor pursuant to, and in accordance with the pre-petition loan agreement. As adequate protection, the Secured Lender is granted a post-petition claim against the Debtor's estate. To secure the Adequate Protection Claim, the Secured Lender is granted valid, binding, enforceable, and perfected liens co-extensive with the Secured Lender's pre-petition liens in the Debtor's assets. The occurrence of any of the following will constitute a Termination Event: (a) The Chapter 11 Case is either dismissed or converted to a case under Chapter 7 of the Bankruptcy Code; (b) A trustee or an examiner with the expanded powers of a trustee is appointed in the Case; (c) Without the prior written consent of the Secured Lender, (i) the Debtor takes any action or ceases operations of its present businesses or takes any material action -- which is inconsistent with the Budget -- for the purpose of effecting the foregoing, or (ii) or there will occur a dissolution or termination of the existence of the Debtor or any subsidiary of the Debtor; (d) Non-compliance or default by the Debtor with any of the terms and provisions of this Order after a seven-day notice of default and opportunity to cure the default; (e) Any other super-priority claim or lien equal or superior in priority to that granted pursuant to or permitted thereunder will be granted except on motion filed with the Court for such approval; or (f) The automatic stay of 11 U.S.C. Section 362 is lifted so as to allow a Secured Lender or a third party to proceed against any asset of the Debtor valued at $75,000 or more. A final hearing on the matter is set for September 14 at 3 p.m. A copy of the Court's order and the Debtor's budget is available at https://urlcurt.com/u?l=us8wV3 from PacerMonitor.com. The Debtor projects $271,298 in total operating revenue and $270,739 in total operating expenses in August 2023. About St. Charles Memory Care, LLC St. Charles Memory Care, LLC operates a continuing care retirement community and assisted living facility for the elderly. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-40253) on January 27, 2023. In the petition signed by Tracy Bazzell, agent, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Mark X. Mullin oversees the case. Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC, represents the Debtor as legal counsel. STRATEGIC MATERIALS: S&P Downgrades ICR to 'D' on Delayed Payments ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on U.S.-based niche plastic and glass recycling company, Strategic Materials Holding Corp. (SMI) to 'D' from 'CC'. S&P said, "At the same time, we lowered our issue-level rating on SMI's first-lien credit facilities to 'D' from 'CC' and our issue-level rating on its second-lien term loan to 'D' from 'C'. The recovery rating on the first-lien credit facilities is '4', indicating our expectation for average (30%-50%; rounded estimate: 45%) recovery in the event of a payment default. The recovery rating on the second-lien loan is '6', indicating our expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default." SMI entered into a forbearance agreement with first-lien, 1.5-lien and second-lien credit facility lenders for various existing and anticipated defaults, including missing interest payments due July 31, 2023, and Aug. 1, 2023. The downgrade reflects SMI's announcement that it executed a forbearance agreement on its debt service payments (both principal and interest) due July and August 2023, with respect to all tranches of debt (first lien, 1.5 lien, and second lien), including term loans and revolving credit facility. In S&P's view, this represents a default on the term loan and revolving credit facility because SMI will not meet its contractual obligation to pay principal and interest in a timely manner or within a 30-day grace period. As of June 30, 2023, SMI did not comply with its $8 million minimum U.S. liquidity requirement under its first-lien credit agreement (amended in September 2022) and had minimal availability on its $40 million revolving credit facility. SVB FINANCIAL GROUP: Loses $9 Million in FDIC Fight --------------------------------------------------- Steven Church of Bloomberg News reports that SVB Financial Group, the bankrupt former parent of Silicon Valley Bank, is losing $9 million a month in interest on deposits that were trapped when federal regulators took over the failed bank, a lawyer said in court Tuesday, August 15, 2023. SVB Financial wants nearly $2 billion in deposits put into a court-controlled account while the holding company fights over the cash with the Federal Deposit Insurance Corp., according to court papers. The agency hasn't provided a good reason for refusing to make payment on the deposits, SVB argues. About SVB Financial Group SVB Financial Group is a financial services company focusing on the innovation economy, offering financial products and services to clients across the United States and in key international markets. Prior to March 10, 2023, SVB Financial Group owned and operated Silicon Valley Bank, a state-chartered bank. During the week of March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a severe "run-on-the-bank." On the morning of March 10, the California Department of Financial Protection and Innovation seized SVB and placed it under the receivership of the Federal Deposit Insurance Corporation. SVB was the nation's 16th largest bank and the biggest to fail since the 2008 financial meltdown. On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had assets of $19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31, 2022. The Hon. Martin Glenn is the bankruptcy judge. The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as restructuring advisor. William Kosturos, a partner at Alvarez & Marsal, serves as the Debtor's chief restructuring officer. Kroll Restructuring Administration, LLC, is the claims and noticing agent and administrative advisor. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee tapped Akin Gump Strauss Hauer & Feld, LLP as bankruptcy counsel; Cole Schotz P.C. as conflict counsel; Lazard Freres & Co., LLC as investment banker; and Berkeley Research Group, LLC as financial advisor. SVB FINANCIAL: FDIC Wants to Toss $2-Bil. Bankruptcy Suit --------------------------------------------------------- James Nani of Bloomberg Law reports that the Federal Deposit Insurance Corp.'s receiver asked to toss most of a lawsuit brought by Silicon Valley Bank's bankrupt former parent that aims to recover nearly $2 billion seized by the agency when the bank collapsed in March 2023. SVB Financial Group's complaint is an attempt to "usurp" the FDIC's own process to claim the bank funds under the Financial Institutions Reform, Recovery, and Enforcement Act, or FIRREA, the FDIC receiver said in a dismissal motion filed Friday, August 11, 2023, with the US Bankruptcy Court for the Southern District of New York. About SVB Financial Group SVB Financial Group is a financial services company focusing on the innovation economy, offering financial products and services to clients across the United States and in key international markets. Prior to March 10, 2023, SVB Financial Group owned and operated Silicon Valley Bank, a state-chartered bank. During the week of March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a severe "run-on-the-bank." On the morning of March 10, the California Department of Financial Protection and Innovation seized SVB and placed it under the receivership of the Federal Deposit Insurance Corporation. SVB was the nation's 16th largest bank and the biggest to fail since the 2008 financial meltdown. On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had assets of $19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31, 2022. The Hon. Martin Glenn is the bankruptcy judge. The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as restructuring advisor. William Kosturos, a partner at Alvarez & Marsal, serves as the Debtor's chief restructuring officer. Kroll Restructuring Administration, LLC, is the claims and noticing agent and administrative advisor. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee tapped Akin Gump Strauss Hauer & Feld, LLP as bankruptcy counsel; Cole Schotz P.C. as conflict counsel; Lazard Freres & Co., LLC as investment banker; and Berkeley Research Group, LLC, as financial advisor. SYNIVERSE CORP: S&P Downgrades ICR to 'CCC+', Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based Syniverse Corp. to 'CCC+' from 'B-'. At the same time, S&P lowered its issue-level rating on the company's first-lien term loan to 'CCC+' from 'B-'. The recovery rating remains '3', reflecting its expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a default. The negative outlook reflects the potential for a downgrade of the company if S&P believes a default scenario within the next 12 months is likely or if FOCF deficits are greater than anticipated. S&P Global Ratings-adjusted leverage for Syniverse Corp. remains elevated and the company continues to report negative free operating cash flow (FOCF). S&P said, "The downgrade of the company reflects our view that its capital structure is currently unsustainable given its high leverage. We expect Syniverse's adjusted leverage will exceed 9x in both 2023 and 2024. We had previously expected 2024 leverage to decline to the high-6x area, but that appears increasingly unlikely since we expect its EBITDA growth to remain weak through 2024. The company continues to record FOCF deficits while its adjusted debt increases due to borrowings under the revolving credit facility and the elevated payment-in-kind (PIK) rate on its preferred instrument, which we include in our adjusted debt calculation." The company's operating performance will be challenged during the outlook period. In the Enterprise segment, Syniverse experienced operating challenges earlier this year amidst volume declines on recession fears, resulting in direct profit growth that underperformed our expectations. In roaming, despite direct profit outperformance, top-line trends are weak due to continued regulatory issues from one APAC country that reduced its use of third-party messaging apps by about two-thirds of its previous annual volume. S&P does not expect this issue to resolve itself in the near term and as such, believe that messaging volumes will remain weak throughout 2023 and 2024. S&P said, "We expect Syniverse will maintain sufficient liquidity over the next 12-18 months, but cash flow generation will be negative. Our base case forecast assumes that FOCF will be negative in both 2023 and 2024, with about $40 million of outflows each year because of low earnings growth and modest working capital outflows. That said, we do not expect a liquidity shortfall over the next 12 months given the company's current cash balance of about $50 million and about $95 million of availability under the senior secured revolving credit facility due 2027. However, we still believe a prolonged period of low economic growth in the U.S. is likely through 2024. As such, absent favorable business and economic conditions, we view it unlikely that Syniverse will be able to generate positive free cash flow. We believe Syniverse could have difficulty refinancing its 2027 first-lien term loan if it is unable to consistently generate positive free cash flow. "The negative outlook reflects the potential for a downgrade if we believe a default scenario within the next 12 months is likely or if FOCF deficits are greater than anticipated." S&P could lower the rating if: -- Top line and margin improvement in the enterprise segment do not come to fruition; -- FOCF deficits are greater than our expectations; -- Liquidity deteriorates and the company is unable to raise additional capital to cover its FOCF deficits; or -- S&P believes the company is likely to default within 12 months. S&P could take a positive rating action if Syniverse: -- Generated positive FOCF; -- Is able to demonstrate a path to longer-term leverage reduction; and -- Significantly exceeds our performance projections. S&P said, "Social factors are having a prolonged negative effect on our credit rating analysis of Syniverse. While much of the world's air travel demand is back to pre-pandemic levels, the APAC region, from which Syniverse derives 16% of its revenue, remains weak. As much as 40% of Syniverse's revenue is derived from roaming and is heavily affected by changes in air travel demand globally. Air travel trends continue to drive Syniverse's profitability out of those segments. "Governance is also a moderately negative consideration. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of controlling owners, in line with our view of most rated entities owned by private equity sponsors. Our assessment also reflects the company's generally finite holding periods and focus on maximizing shareholder returns." TEAMHEALTH INC: Gets $1.23B Funding From Bridgade-Led Consortium ---------------------------------------------------------------- Reshmi Basu, Rachel Butt and Erin Hudson of Bloomberg News report that physician staffing firm TeamHealth Inc. told investors that it received fresh financing commitments from a consortium led by Brigade Capital Management LP and King Street Capital Management LP, according to people with knowledge of the situation. The proposed debt package -- which will help the firm tackle near-term maturities -- is split between $750 million in new first-lien notes and a $475 million accounts receivable facility, backed by separate collateral, said the people, who asked not to be named because the matter is private. About TeamHealth Inc. TeamHealth, Inc. provides outsourced staffing and administrative services. The Company places personnel in emergency medicine, radiology, anesthesiology, inpatient care, pediatrics, and other hospital departments. TeamHealth serves the healthcare sector in the United States. TREETOP DEVELOPMENT: Taps Coldwell as Real Estate Broker -------------------------------------------------------- Treetop Development, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Coldwell Banker Realty. The Debtor requires a real estate broker to market and sell its residential real property development project located at 9650 Cedarbrook Drive, Beverly Hills, Calif. The property consists of six parcels of land totaling approximately 27.73 acres. Coldwell will be paid a commission of 5 percent of the gross sales proceeds. Gene Bush, a partner at Coldwell, 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: Gene Bush Coldwell Banker Realty 301 N. Canon Drive, Suite E Beverly Hills, CA 90210 Mobile: (310) 657-5050 Office: (310) 777-6200 Direct: (310) 657-5050 Email: genebush@gmail.com About Treetop Development Mohamed Anwar Hadid is a Jordanian-American real estate developer. He is known for building luxury hotels and mansions, mainly in the Bel Air neighborhood of Los Angeles and the city of Beverly Hills, Calif. Hadid's 901 Strada, LLC, based in Los Angeles, Calif, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-23962) on Nov. 27, 2019. Strada was entity formed for the purpose of developing and ultimately selling the real property perched on a hillside, and with views to the ocean, located at 901 Strada Vecchia Road, Bel Air, California. 901 Strada sought bankruptcy after the City of Los Angeles revoked the building permits and a court ordered the partially finished structures to be torn down. Hadid's Coldwater Development, LLC, and Lydda Lud, LLC, filed for Chapter 11 bankruptcy in January 2021 (Bankr. C.D. Cal. Lead Case No. 21-10335). Coldwater and Lydda Lud owned six highly prized, vacant, residential estate lots, totaling 65.63 acres located in the Santa Monica Mountains above Beverly Hills, California. The debtors said the property was worth $130 million but was embroiled in a dispute with the activist group "Friends of the Hastain Trail", which has pushed for a recreational trail easement through the property. The cases have since been converted to Chapter 7 liquidation and the property sold by the bankruptcy trustee for just $1.7 million in April 2022. Hadid's Treetop Development LLC, owner of a 9650 Cedarbrook Drive in Beverly Hills, California, which is a planned 78,000-square-foot home that's currently on the market for $250 million, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-14165) on August 2, 2022. In the petition filed by its manager, Mr. Hadid, the Debtor reported assets between $100 million and $500 million and liabilities between $10million and $50 million. Judge Sheri Bluebond oversees Treetop's Chapter 11 case. Treetop tapped Bryan Cave Leighton Paisner, LLP as bankruptcy counsel and Jeffer Mangels Butler & Mitchell, LLP as special counsel. TRITEK INTERNATIONAL: Committee Taps Saul Ewing as Co-Counsel ------------------------------------------------------------- The official committee of unsecured creditors of Tritek International, Inc. received approval from the U.S. Bankruptcy Court for the District of Delaware to employ Saul Ewing, LLP as co-counsel with Dechert, LLP. The firm's services include: a. providing legal advice to the committee with respect to its rights, duties, and powers in the Chapter 11 cases of Tritek and its affiliates; b. assisting the committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to the bankruptcy cases; c. assisting the committee in preparing pleadings and applications pursuant to local rules, practices and procedures; d. reviewing and analyzing applications, orders, statements of operations and schedules filed with the court, and advising the committee as to their propriety; e. assisting the committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and of the operation of the Debtors' businesses; f. assisting the committee in its investigation of the liens and claims of the Debtors' pre-bankruptcy lender, if any, and the prosecution of any claims or causes of action revealed by such investigation; g. assisting and advising the committee as to its communications to unsecured creditors regarding significant matters in these Chapter11 cases; h. representing the committee at hearings and other proceedings; and i. other necessary legal services. The firm will be paid at these rates: Partners $470 to $1,200 per hour Counsel $475 to $950 per hour Associates $300 to $495 per hour Paraprofessionals $200 to $410 per hour In addition, the firm will receive reimbursement for out-of-pocket expenses incurred. Lucian Murley, Esq., a partner at Saul Ewing disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Saul Ewing disclosed the following: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Not applicable. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: The firm expects to work with the committee to develop a prospective budget and staffing plan to comply reasonably with the U.S. trustee's request for information and additional disclosures, as to which the firm reserves all rights. The committee has approved the firm's proposed hourly billing rates. Saul Ewing can be reached at: Lucian B. Murley, Esq. Saul Ewing Arnstein & Lehr LLP 1201 N. Market Street, Suite 2300 Wilmington, DE 19899 Tel: (302) 421-6840 Email: luke.murley@saul.com About Tritek International Inc. Tritek International Inc., HyLife Foods Windom, LLC, Canwin Farms, LLC are entities that are part of the HyLife vertically integrated operation for the raising, production and sale of pork products. The companies'r operations involve all aspects and stages of the pork production process, including the farming and sourcing of hogs, the packaging of pork at their processing facility, and the marketing and sale of such products throughout premium domestic and international end markets, primarily in the United States, Canada, Japan, Korea, and China. Tritek International and its affiliates sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 23-10520) on April 27, 2023. The petitions were signed by Grant Lazaruk, chief executive officer. At the time of the filing, Tritek International and HyLife Foods Windom reported as much as $50,000 in both assets and liabilities while Canwin Farms reported $1 million to $10 million in both assets and liabilities. Judge Thomas M. Horan presides over the Debtors' cases. The Debtors tapped Katten Muchin Rosenman, LLP and Potter Anderson & Corroon, LLP as bankruptcy counsel; PricewaterhouseCoopers, LLP as financial advisor; Intrepid Investment Bankers as investment banker; and Donlin Recano & Company, Inc. as claims and noticing agent. The U.S. Trustee for Regions 3 and 9 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by the law firms of Dechert, LLP and Saul Ewing, LLP. VOYAGER AVIATION: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The U.S. Trustee for Region 2 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 cases of Voyager Aviation Holdings, LLC and its affiliates. About Voyager Aviation Holdings Voyager Aviation Holdings, LLC, is a privately held aviation investment firm and commercial aircraft leasing company. The Company's main leasing operations are led out of Dublin, Ireland, and the Company has corporate offices in Stamford, CT. It currently has a small team of 13 full-time employees split between Europe and the U.S. As of the Petition Date, the Company owned 18 aircraft, most of which are widebody aircraft and 16 of which are currently on lease to 7 airline customers. Voyager Aviation Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 23-11177) on July 27, 2023. In the petition signed by Michael Sean Ewing, chief financial officer, Voyager disclosed up to $10 billion in both assets and liabilities. Debtors Aetios Aviation Leasing 1 Limited, Aetios Aviation Leasing 2 Limited, Panamera Aviation Leasing XII Designated Activity Company, and Panamera Aviation Leasing XIII Designated Activity Company are designated as the "Participation Debtors" in court filings. Judge John P. Mastando III oversees the cases. The Debtors tapped Milbank LLP as counsel, FTI Consulting Inc. as financial advisor, Greenhill & Co., LLC as investment banker and financial advisor, Kurtzman Carson Consultants LLC as claims and noticing agent, KPMG LLP as tax restructuring advisor, and Vedder Price LLP as special merger and acquisition and aircraft level financing counsel. WALNUT SYCAMORE: S&P Downgrades ICR to 'BB-', Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S. poultry producer Walnut Sycamore Holdings LLC's (doing business as Wayne Sanderson Farms or WSF) to 'BB-' from 'BB'. S&P said, "We also lowered our issue-level ratings on the company's senior secured credit facilities to 'BB' from 'BB+'. The recovery rating remains '2', reflecting our expectations for substantial recovery (rounded estimate: 70%) in the event of a payment default. "The negative outlook reflects the potential for a lower rating if we do not believe it will be on track to restore leverage below 5x over the next 12 months." The downgrade reflects WSF's sharp profit decline and significant credit measure deterioration resulting from the extraordinarily challenging operating conditions in the poultry industry. WSF's EBITDA margins have declined well over 20% since last summer (before the merger closed), when industry supply constraints and healthy consumer demand supported strong chicken prices. The company's EBITDA margins turned negative in the second half of fiscal 2023 (ended March) after chicken prices dropped significantly since the summer of 2022 while input costs (particularly chicken feed) remained very high. The drop in commodity chicken prices was attributable in part to an unexpected broad oversupply of proteins in the market and softer demand. Demand has been negatively affected by inflationary impacts on consumer spending, declining restaurant traffic (in part because restaurant prices have stayed high), competitive beef and pork prices that have stayed lower for longer than expected, and retailers' lack of chicken promotions. These factors resulted in a buildup of excess chicken inventories. S&P said, "We previously expected commodity chicken prices would increase over the course of 2023, with support from tightening industry production and shifting consumer demand to chicken from beef (for which higher prices were expected given very tight cattle supplies). However, weak market conditions have persisted--supply remains high and retail beef prices are more competitive than we expected. Commodity chicken pricing largely weakened during peak grilling season, when we would have expected higher demand to support better pricing. As a result, we now expect conditions will remain difficult in the near term and WSF's EBITDA margins will remain below 5% in fiscal 2024. In turn, we forecast leverage will exceed 7x. "We expect a more constructive operating environment and accommodative financial policies will support material deleveraging in fiscal 2025. There are signals that conditions could improve in fiscal 2025. This includes a better outlook for corn and soymeal prices, and potentially tightening industry supply of chicken because of weaker egg hatch rates and some industry production capacity being shut down. In addition, cases of the highly pathogenic avian influenza have moderated and if the trend continues, fewer trade restrictions could support better export markets and better pricing, particularly for dark meat. Furthermore, cattle supply remains very tight and we expect this will eventually translate to a widening gap between retail chicken and beef prices." Chicken prices could also benefit from tightening production in the pork industry as well as the fallout of Proposition 12 (the California law that bans the sale of pork from farms that do not meet minimum space requirements for its pigs), which could eventually lead to higher retail pork prices. S&P forecasts these factors, combined with continued synergy realization from the merger, will help WSF restore EBITDA margins to the 10% area in fiscal 2025, and leverage closer to or below 3x. Importantly, S&P continues to believe the company will maintain a low-2x target leverage ratio and assume it will distribute about 40% of its prior year's free operating cash flow (FOCF), after considering tax distributions. Because we forecast negative FOCF in fiscal 2024, S&P expects a more modest dividend in fiscal 2025 will further support deleveraging. Nevertheless, credit measure improvement depends in part on market factors out of the company's control and the negative outlook reflects the risk that market conditions remain materially weaker than we expect. S&P said, "WSF's significant exposure to commodity chicken markets has magnified the volatility of its earnings. While all of our rated protein processors have suffered margin degradation over the last year, most have been able to modestly soften the impact through their geographic diversity, product diversity, or larger portfolios of value-added offerings that tend to be more resistant to commodity price volatility. WSF operates only in the U.S. and is highly indexed toward fresh and big bird chicken offerings, which are subject to wider price fluctuations than value-added products, making the company more vulnerable than its peers to significant declines in commodity chicken prices. This has been demonstrated over the last year, with its EBITDA margins declining from well over 20% a year ago (based on pro forma estimates), to negative margins in second half of fiscal 2023. While we expected the company's EBITDA would materially decline in weak earnings cycles, the magnitude of volatility has been greater than expected. We recognize this has been in part because of currently extraordinary conditions that may not recur in future cycles and that the company is still executing its integration and synergy plan. However, our view of the company's business risk profile could become less favorable if its profit margins do not significantly improve or if we believe they will weaken to similar levels in future cycles." The negative outlook on WSF reflects sustained challenging industry conditions that have severely weakened WSF's profitability and will continue to pressure credit measures over the next year. WYCKOFF EQUITIES: Court OKs Interim Cash Collateral Access ---------------------------------------------------------- Wyckoff Equities, LLC sought and obtained entry of an order from the U.S. Bankruptcy Court for the District of New Jersey authorizing the use cash collateral on an interim basis in accordance with the budget, with a 15% variance. The Debtor requires the use of cash collateral to pay its ordinary and necessary expenses such as payroll, rent, taxes, utilities, insurance, maintenance, inventory costs, and other basic operating expenses. On June 24, 2020, Debtor obtained a disaster loan of $150,000 from the U.S. Small Business Administration as working capital to alleviate economic injury caused by the pandemic. Effective July 24, 2021, the amount of the SBA loan was increased to $500,000. Effective March 3, 2022, the amount of the SBA loan was increased to $2 million. To secure payment of the loan, the Debtor granted SBA a security interest on most, if not all, of its personal property. The SBA contends that it is the Debtor's senior secured lender. SBA filed a UCC-1 Financing Statement on July 5, 2020 with the State of New Jersey, filing number 54429642. Further, from January 25, 2023 through April 21, 2023, the Debtor obtained loans from PIRS Capital LLC, Vox Funding and 800 Funding. The face amount of the loans totaled $465,000,however, the Debtor received less than that amount from the Junior Lenders. Junior Lenders claim to have acquired future accounts receivable of Debtor. The Debtor contests any "true sale" contention of Junior Lenders. After accounting for the security interest of the SBA, the Debtor believes that the loans of the Junior Lenders are all undersecured/unsecured. The Debtor's ability to use cash collateral under the Interim Order will terminate on the date that is the earlier of: (i) the occurrence of a Termination Event; and (ii) entry of a final or additional interim order regarding cash collateral. These events will constitute a "Termination Event" under the Interim Order: (i) failure of the Debtor to abide by the Interim Order or Budget (subject to permitted variances); (ii) conversion of the chapter 11 cases to cases under chapter 7 of the Bankruptcy Code; (iii) dismissal of the chapter 11 cases; and (iv) the appointment of a chapter 11 trustee. As adequate protection for any post-petition diminution in the value of the cash collateral, the Secured Parties will receive replacement liens in and to all property presently securing the Secured Parties' claims, together with any post-petition proceeds thereof, to the extent of Secured Parties' actual prepetition interest in cash collateral. The Replacement Liens will not attach to causes of action or rights or recovery under Chapter 5 of the Bankruptcy Code, or the proceeds of such claims. In addition, the Debtor will provide SBA with adequate protection payments of $9,871 per month as set forth in the Budget. A final hearing on the matter is set for August 22 at 5 p.m. A copy of the motion is available at https://urlcurt.com/u?l=MkYtqG from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=75teU7 from PacerMonitor.com. About Wyckoff Equities LLC Wyckoff Equities LLC is part of the restaurant industry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 23-16874) on August 9, 2023. In the petition signed by Albert Franco, managing member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Daniel M. Eliades, Esq., at K&L GATES LLP, represents the Debtor as legal counsel. WYTHE BERRY: Has Deal on Cash Collateral Access ----------------------------------------------- Wythe Berry Fee Owner LLC asks the U.S. Bankruptcy Court for the Southern District of New York for authority to use cash collateral in accordance with its agreement with Mishmeret Trust Company Ltd., solely in its capacity as Trustee of the Series C Bonds. Fee Owner is the owner of the William Vale Hotel. On February 28, 2017, the Debtor and Wythe Berry LLC, with Zelig Weiss and Yoel Goldman as guarantors, entered into a February 28, 2017 Lease Agreement, pursuant to which the WV Complex was leased to Wythe Berry LLC. Pursuant to the Decision and Order dated December 1, 2021 and entered on December 6, 2021 in Wythe Berry Fee Owner LLC v. Wythe Berry LLC, Index No. 514152/2021 (Kings County Supreme Court), on August 2, 2023, Lessee made a Use and Occupancy payment to the Debtor in the amount of $7.5 million for possession of the WV Complex for the period from August 1, 2023 through and including January 31, 2024. On October 6, 2022, Mishmeret Trust, Yelin Lapidot Provident Funds Management Ltd., The Phoenix Insurance Company Limited and Klirmark Opportunity Fund III L.P. filed an involuntary petition seeking an Order for Relief pursuant to 11 U.S.C. section 303. On August 8, 2023, 2023, the Debtor, the Trustee, and Lessee reached certain agreements with respect to the August U&O Payment. The terms of their agreements are reflected in the Stipulation and Order Regarding Cash Collateral. Under the Stipulation, the Trustee waives the Termination Event resulting from the Debtor's failure to comply with any of the Milestones set forth in Sections 15(l)(2) and 15(l)(3) of the Cash Collateral Order. The Stipulation modifies certain provisions of the Cash Collateral Order and adds new agreements among the parties with respect to the August U&O Payment. The Debtor, Trustee, and Lessee agree that the Court's prompt approval of the Stipulation is critical to ensure an orderly transition of management should the Debtor or Lessee terminate the Lease and benefits the Debtor by effecting the Trustee’s waiver of the Termination Event. The Stipulation will facilitate the Debtor's restructuring and is in the best interests of the Debtor's estate. The Stipulation is essential to the restructuring and to preserve value for the Debtor's estate because it serves to ensure an orderly transition of management should the Debtor or Lessee terminate the Lease. In the event of a termination of the Lease prior to January 31, 2024, Lessee would be entitled to a pro rata refund of the August U&O Payment. The Debtor acknowledges that Lessee having made the August U&O Payment, Lessee may be entitled to remain in possession of the WV Complex for the period from August 1, 2023 through and including January 31, 2024. The Debtor acknowledges the possibility exists that it may consummate a sale or other transfer of the WV Complex prior to the expiration of the Current U&O Period, and has so advised Lessee. The Debtor, Lessee, and Mishmeret Trust Company Ltd., in its capacity as trustee of the bondholders of the Series C Bonds of All Year Holdings Ltd., accordingly have reached certain agreements with respect to the August U&O Payment and the Current U&O Period, as set forth therein. The Debtor requires immediate access to liquidity to ensure it is able to continue operating its business during the Chapter 11 Case, to preserve the value of its estate for the benefit of all parties-in-interest, and most importantly, to maximize value for all constituents in the Chapter 11 proceeding by resolving key issues under the Lease, conducting a sales process or negotiating a plan of reorganization. As adequate protection, the Trustee will be granted a post-petition claim against the Debtor's estate and (i) Adequate Protection Liens, (ii) a Section 507(b) Claim, and (iii) Information and Right to Access. A copy of the motion is available at https://urlcurt.com/u?l=PqnAUu from PacerMonitor.com. About Wythe Berry Fee Owner LLC Wythe Berry Fee Owner LLC is the titular owner of a commercial real property complex located in Brooklyn, New York, that includes The William Vale Hotel, one of Brooklyn's few luxury hotels. Wythe Berry Fee Owner is co-owned, indirectly, by Zelig Weiss and YGWV LLC, a wholly owned, direct subsidiary of All Year Holdings Limited, which is a debtor in a chapter 11 case also pending before Judge Martin Glenn. Weiss and YGWV each hold 50% of the membership interests in Member LLC, which, in turn, is the direct parent, and sole member, of Wythe Berry Fee Owner. YGWV purports to be the designated managing member of Member LLC and, thus, purports to control Wythe Berry Fee Owner. A group of noteholders, Mishmeret Trust Company Ltd., solely in its capacity as Trustee for the Series C Notes; Yelin Lapidot Provident Funds Management Ltd.; The Phoenix Insurance Company Limited; and Klirmark Opportunity Fund III L.P., filed an involuntary Chapter 11 bankruptcy petition against Wythe Berry Fee Owner LLC (Bankr. S.D.N.Y. Case No. 22-11340) on Oct. 6, 2022. The creditors are represented by Michael Friedman, Esq.,. at Chapman and Cutler LLP. Bankruptcy Judge Martin Glenn, who presides over the case, entered an Order for Relief in January 2023, allowing the bankruptcy proceedings against Wythe Berry Fee Owner LLC to proceed. Judge Glenn denied a request by hotel operator Zelig Weiss to dismiss the involuntary petition. Wythe Berry Fee Owner LLC is represented by law firm Herrick, Feinstein LLP. All Year Holdings Limited filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 21-12051) on Dec. 14, 2021, and is represented by Matthew Paul Goren, Esq., at Weil, Gotshal & Manges LLP. Weiss is represented by lawyers at Paul Hastings LLP. YS GARMENTS: S&P Downgrades ICR to 'CCC', Outlook Negative ---------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating to 'CCC' from 'B-' on YS Garments LLC (d/b/a Next Level Apparel), as it believes a default due to a balance sheet restructuring (including a potential debt repurchase below par) or liquidity crisis can be envisioned without unforeseen positive developments within the next 12 months. S&P said, "Concurrently, we lowered our issue-level rating on the company's nonextended portion of its senior secured debt due in 2024 and extended tranches due in 2026 to 'CCC' from 'B-'. The '3' recovery rating is unchanged and indicates our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a default." The negative outlook reflects the potential for a lower rating if a default appears inevitable within the subsequent six months, including an inability to repay the nonextending portion of its term loan and revolver ahead of its maturity in August 2024 or the potential for a restructuring of the company's capital structure, or a conventional default. Next Level's amendment has provided some relief, but default scenarios remain. On Aug. 15, 2023, Next Level entered into a waiver agreement and amendment to its credit facilities with its lender group for the next five quarters through Sept. 30, 2024, to address its near-term total net leverage covenant, which the company would have otherwise breached due to recent underperformance. The amendment also granted a delayed filing of its second-quarter financial statements. The group received an equity injection of $25 million, in the form of preferred equity from its sponsor, Blue Point Capital. The company will use this to pay down approximately $2.5 million of its revolver borrowings and $22.5 million of its term loan, with the paydowns applied ratably towards the extended and nonextended portions of its capital structure. S&P said, "We expect this to temporarily alleviate some near-term liquidity pressure. However, approximately $15.7 million of Next Level's nonextending term loan remains current and due on Aug. 9, 2024, and the company remains dependent upon near-term working capital improvement from lowering its inventory levels to cover this repayment. "We revised our assessment of Next Level's liquidity to less than adequate to reflect its constrained liquidity position that relies on near-term working capital improvements. "As part of the terms of its amendment and waiver agreement, the company's revolving commitments have been reduced to $42.5 million from $50 million. Additionally, we no longer consider approximately $1.3 million of the nonextended portion of Next Level's revolver as a liquidity source because it is now current. The lower commitment of its revolver, coupled with approximately $33 million drawn in the second quarter ended June 30, 2023 and low undrawn revolver availability, has limited liquidity sources over the next 12 months to its cash on hand of approximately $22.8 million and the company's ability to generate cash flow from operations and working capital reversal. "However, given tough operating conditions, we expect its liquidity sources could become inadequate to cover uses if its working capital position does not improve as expected and cash flow generation weakens further. The amendment also requires all amounts due under its excess cash flow sweep in excess of its $10 million minimum liquidity covenant to be due and payable in cash in 2024. "In place of its original net leverage covenant, Next Level is now subject to a minimum last-12-months EBITDA covenant, tested quarterly, and a minimum liquidity covenant of $10 million, tested monthly. We forecast the company to be in compliance with this covenant due to our expectation for $25 million–$30 million of free operating cash flow (FOCF) in 2023 and 2024. The amendment also features an equity cure right, limited to two times during the covenant relief period, as well as a monthly financial reporting requirement accompanied by a compliance certificate extended through Dec. 31, 2024. Given our expectation for headroom under the minimum EBITDA covenant to be tight towards the end of the waiver period, we expect Next Level could utilize these two equity cures if it cannot remain compliant when the requirement steps up, should its EBITDA shortfall continue for longer than expected." Next Level's near-term path to recovery remains challenging as macroeconomic headwinds persist. The company's S&P Global Ratings-adjusted leverage was 13.8x as of the 12 months ended June 30, 2023. The company reported a 32% decline in its second-quarter 2023 revenue relative to the same period last year, following a similar decline in first-quarter 2023. This top-line decline was primarily driven by low consumer demand and distributor inventory destocking trends persisting for longer than originally anticipated. In preparation for a demand rebound in early 2021, Next Level had increased its fabric purchases and inventory balance during a peak in inventory costs. However, recent weak demand and increased consumer trade down beginning in late 2022 have impaired the company's margins. Next Level has been unable to pass through further price increases and work through its high-cost inventory as inventory destocking and normalization at its distributors have continued for longer than our original expectations. S&P said, "Contrary to our original expectation of a rebound in 2023 following underperformance in 2022, we now expect leverage of about 8.2x in 2023, with revenue and S&P Global Ratings-adjusted EBITDA declining approximately 16% and 50%, respectively, from the end of 2022, as distributor inventory destocking continues through the rest of the year and into the first part of 2024. We expect this to result in overall lower volumes and a continued inability to take price and forecast EBITDA margins will remain depressed and leverage will remain high. "However, we expect some margin improvement between June and the end of the year as Next Level continues to make progress in offloading higher cost inventory throughout the year and sees benefit from selling, general, and administrative cost-savings initiatives that come online in the next two quarters. We treat the $25 million of sponsor-preferred equity as debt in our analysis given its PIK feature. Our S&P Global Ratings-adjusted leverage expectation is 7.4x without including the preferred equity as debt." The negative outlook reflects the potential for a lower rating if a default appears inevitable within the subsequent six months. S&P could lower the ratings if: -- Next Level cannot sufficiently reverse its working capital burden, leading to FOCF deficits and its liquidity position deteriorating further, resulting in reliance on its revolver to fund operations or a potential covenant compliance breach. -- The company cannot repay the nonextending portion of its term loan and revolver ahead of its maturity in August 2024, a restructuring of the company's capital structure, a conventional default, or a distressed exchange. S&P could take a positive rating action on Next Level if we believe the likelihood of default has declined. This could occur if the company: -- Successfully winds down inventory levels as forecasted or more than expected, leading to improved, sustained cash flow generation. -- Successfully addresses its upcoming term loan repayment without constraining liquidity. ZIPRECRUITER INC: S&P Alters Outlook to Neg., Affirms 'BB-' ICR --------------------------------------------------------------- S&P Global Ratings revised our outlook to negative from stable on Santa Monica, CA-based ZipRecruiter Inc. S&P affirmed its ratings, including its 'BB-' issuer credit rating. The negative outlook reflects the possibility that S&P's could lower the rating in the next 12 months if demand continues to soften and leads to contracting EBITDA and elevated leverage relative to its forecast. Softening employer demand for job posting services are hurting ZipRecruiter's top line performance. The company experienced declining revenue following a period of explosive growth in 2021 and into 2022. S&P said, "We think a cooling labor market, heightened economic uncertainty, and increasing cost of capital have led to moderated recruitment activities this year. The anticipated uptick in recruiting activity in the first quarter did not materialize this year, and ZipRecruiter's revenue continues to decline at an accelerating pace. Management has estimated more than 30% sales decline in the third quarter. We think the softness will likely persist through the fourth quarter and stabilize in the first quarter of 2024. Our base case forecast reflects improving performance starting in the second half of 2024 as market conditions improve, and ZipRecruiter enhances its capabilities." Still, a lack of visibility regarding the timing and cadence of a recovery in demand for recruiting services leads to a wide range of possible outcomes over the next 12-24 months. Persistent declining revenue could lead to sustained weaker credit measures and result in a ratings downgrade. ZipRecruiter's flexible cost structure allows for profit preservation despite its rapid sales decline. A significant portion of the company's cost base is allocated to sales and marketing expenses. The company typically responds to higher industry demand by increasing its marketing efforts to capture market share. Conversely, it can rapidly reduce its marketing in slower demand environments to preserve profits. As of the second quarter, the company had reduced its sales and marketing expenses to about $72 million, down from about $137 million the prior year period. S&P thinks it could undertake additional expense reduction if the situation continues to deteriorate. Management has demonstrated good discipline reducing expenses while continuing its product innovation efforts to improve its value proposition and remain competitive. S&P said, "We anticipate its cost management actions, including the 20% reduction in its labor force announced in the second quarter, will continue to preserve profit margins through the remainder of 2023, with full-year S&P Global Ratings-adjusted EBITDA margin of about 21%. Still, we anticipate elevated S&P Global Ratings-adjusted leverage at slightly above 4x at the end of the year. Our base case forecast reflects an improving demand trend in 2024 that enables EBITDA expansion and leverage improving to levels commensurate with the rating." Amid weak operating results, research and development investments will likely be maintained to enhance its product offering. ZipRecruiter's product innovation investments have allowed it to improve the quality of both recruiter and job seeker experience with its platform over the years, a trend we expect will continue. For example, the company has integrated its software with over 140 applicant tracking systems (ATS), allowing enterprise clients to utilize ZipRecruiter's platform through their existing recruiting systems and strengthen its value proposition among these clients. Meanwhile, integrating its virtual personal recruiter (Phil) throughout its platform allows the company to increase job seeker engagement, while also enhancing job matching capabilities. As the company continues to utilize artificial intelligence (AI) and machine learning with growing datasets, we anticipate its matching algorithms will improve further. S&P said, "We expect ZipRecruiter to generate positive cash flow through the downturn. Its favorably priced fixed-rate debt, along with its robust liquidity position provides financial flexibility to continue investing in its technology offering and maintain a strong competitive footing to take advantage of improving demand trends when they materialize. "The negative outlook on ZipRecruiter reflects that we could lower our rating if declining demand for recruiting services persists beyond our expectation, resulting in sustained weaker revenue, profitability, and cash flow generation. Our base case currently reflects S&P Global Ratings-adjusted leverage increasing above 4x temporarily at the end of 2023, and subsequently declining below 4x the following year." ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. 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On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***