/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/231018.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 18, 2023, Vol. 27, No. 290 Headlines 100 ORCHARD: Unsecureds Owed $170K to Get %100 of Their Claims 522 OVINGTON: Unsecureds Owed $220K to Get Remaining Cash ACRISURE LLC: S&P Assigns 'B' Rating on First-Lien Term Loan B-5 AMMACORE INC: Todd Hennings of Macey Named Subchapter V Trustee AMYRIS INC: Wants $190M DIP Loan to Receive Senior Liens APEX NORTH: Files Liquidating Plan ARETEC GROUP: S&P Affirms 'B' ICR, Off CreditWatch Negative BED BATH & BEYOND: Directors Want Coverage on Confidential Matter BIOLASE INC: Edson Krefta Has 10% Stake as of Oct. 6 BLACK DIAMOND: Seeks Extension to File DS/Plan Until Nov. 28 CLEARY PACKAGING: Court Approves Disclosure Statement COMSTOCK INC: Stakeholder Perception Analysis Report Released CONNEXA SPORTS: Modifies Credit Deal to Get $1M Additional Loan CONTINENTAL AMERICAN: U.S. Trustee Appoints Creditors' Committee CRESTWOOD HOSPITALITY: Claims Get Paid From Cash on Hand, Revenues DIGITAL MEDIA: NYSE Files Form 25 With SEC DINARDO LAW FIRM: U.S. Trustee Unable to Appoint Committee DIOCESE OF CAMDEN: Insurer Shared Private Info With 3rd Parties DIRECTBUY HOME: Case Summary & 20 Largest Unsecured Creditors DMK PHARMACEUTICALS: Falls Short of Nasdaq Bid Price Requirement EMERGENT BIOSOLUTIONS: State Street Has 2.18% Stake as of Sept. 30 EMERGENT BIOSOLUTIONS: Vanguard Group Has 5.1% Stake as of Sept. 29 EMPIRE COMMUNITIES: Fitch Alters Outlook on 'B-' IDR to Stable FREE SPEECH: Jones Fights Company Over $680K Back Pay Request GOLYAN ENTERPRISES: Unsecureds Get Share of Net Sale Proceeds HAWAIIAN HOLDINGS: Fitch Alters Outlook on 'B-' IDR to Negative HAWK LOGISTICS: Linda Leali Named Subchapter V Trustee HEYWOOD HEALTHCARE: Hits Chapter 11 Bankruptcy Protection HOWARD STREET: Case Summary & Four Unsecured Creditors I & A DEVELOPMENT: AJ Partners Says Plan Unconfirmable ICONIC BRANDS: Involuntary Chapter 11 Case Summary INNOVATE CORP: CEO to Receive $500K in Annual Salary INSTANT BRANDS: Centre Lane Sale Approved by Court INSULATED WALL: Case Summary & 20 Largest Unsecured Creditors JLM COUTURE: William Homony Named Subchapter V Trustee LANDMARK COMMERCIAL: Case Summary & Four Unsecured Creditors LEGACY CARES: Failed to Receive Qualified Bids LEGACY-XSPIRE: Seeks Chapter 11 Bankruptcy Protection LTL MANAGEMENT: Unsuccessful 'Two-Step' Bankruptcies Cost $178M MADARIPUR LLC: Salvatore LaMonica Named Subchapter V Trustee MALLINCKRODT PLC: Nears End of Opioid Settlement, 2nd Bankruptcy MANCUSO MOTORSPORTS: Unsecureds to Get 100% Plus 7% Interest MARINER HEALTH: Unsecured Owed $111K-$1.03M Get 4% or 80% in Plan MEGNA REAL ESTATE: U.S. Trustee Appoints Lynda Bui as Examiner MEGNA TEMECULA COUNTRY: U.S. Trustee Appoints Lynda Bui as Examiner MEGNA TEMECULA HACIENDA: UST Appoints Lynda Bui as Examiner METROPOLITAN BREWING: Matthew Brash Named Subchapter V Trustee MINIM INC: Signs LOI Regarding $2.4M Securities Purchase Deal NEW FORTRESS: S&P Rates $800MM Senior Secured Term Loan B 'BB' NEWFOLD DIGITAL: Fitch Affirms 'B' LongTerm IDR, Outlook Stable NINETY-FIVE MADISON: Unsecureds Unimpaired in Plan OCEAN POWER: Paragon Files Suit Over Breach of Fiduciary Duties OMNIQ CORP: Closes $3 Million Public Stock Offering PARTY CITY: Davis Polk Advises Group of First-Lien Noteholders PARTY CITY: Simpson Thacher Represented JPMorgan in Chapter 11 PEGASUS HOME: Wants to Give Linchpin Workers Incentives in Ch. 11 PERFORMANCE POWERSPORTS: Chapter 11 Plan Okayed by Court PRAIRIE ACQUIROR: S&P Alters Outlook to Neg., Affirms 'B+' ICR PREMIER GRILLING: Unsecureds Unimpaired in Plan PRIME CORE: Seeks Appropriate Treatment of Claims PROJECT RUBY: S&P Rates $230MM Incremental 1st-Lien Term Loan 'B' RITE AID: S&P Downgrades ICR to 'D' After Bankruptcy Announcement RJT FOOD: Property Occupant Proposes Plan ROBBIN'S NEST: Unsecureds to Get 10% of Net Profit SANUWAVE HEALTH: Expects Third Quarter Revenues of $4.7M to $4.9M SCUNGIO BORST: Department Says Plan Disclosures Inadequate SMILEDIRECTCLUB INC: U.S. Trustee Appoints Creditors' Committee SONIDA SENIOR: Completes Loan Modifications With Fannie Mae SPECIALTY PHARMA III: S&P Assigns 'B-' ICR, Outlook Stable SPEEDCAST HOLDINGS: S&P Lowers ICR to 'B-' on Higher Competition SPIRITS & MUSIC: Robert Altman Named Subchapter V Trustee SUMMIT SPRINGS: Court Approves Disclosure Statement SUNOCO LP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable SUNSET HOLDINGS: Case Summary & Five Unsecured Creditors SURGALIGN HOLDINGS: Court Approves Disclosures on Final Basis TAYLOR COURT: Court OKs Bid to Appoint Chapter 11 Trustee THEVELIA (US): S&P Withdraws 'B+' Rating on First-Lien Term Loans TRANSOCEAN LTD: Signs Indenture on $325M Senior Notes Offering UPTOWN GROUP INC: Commences Chapter 11 Bankruptcy Process WESLEY WOODS: Fitch Lowers Rating on $15.1MM Revenue Bonds to 'BB' WESTERN GLOBAL AIRLINES: Chapter 11 Plan Disclosure Okayed WESTERN GLOBAL: DOL Opposes Plan Disclosures WESTERN GLOBAL: ERISA Plaintiffs Say Disclosures Inadequate WHAIRHOUSE LIMITED: Court OKs Bid to Appoint Chapter 11 Trustee WILLIAM-WALTON INC: Joe Supple Named Subchapter V Trustee YU MING CHARTER SCHOOL: S&P Assigns 'BB+' ICR, Outlook Stable ZYMERGEN INC: U.S. Trustee Appoints Creditors' Committee [] Liability Management Takes Spotlight at Nov 29 DI Conference ********* 100 ORCHARD: Unsecureds Owed $170K to Get %100 of Their Claims -------------------------------------------------------------- 100 Orchard St. LLC d/b/a Blue Moon Hotel submitted an Amended Plan of Reorganization and a Disclosure Statement. The Debtor is a New York limited liability company that operates a 22-unit boutique hotel known as the Blue Moon Hotel (the "Hotel") located in Manhattan's lower east side, at 100 Orchard Street, in a historical building constructed in 1879. The Plan is based upon a settlement between the Debtor and its secured lender, Brick Moon Capital L.L.C., who holds a mortgage on the debtor's hotel. Brick has agreed to give the reorganized debtor 3 years to refinance the Brick mortgage, sell the hotel or, otherwise, pay Brick an agreed upon amount that is significantly less than the amount of Brick's claims. Without this agreement, it is unlikely there would be any funds available for any creditors other than Brick and the City of New York on account of a tax lien on the hotel. Under the Plan, Class 7 General Unsecured Claims total $170,000 and will be paid 100% of their allowed claims without interest over a period of 5 years from the Effective Date, payable $2,833 per month, with the first payment due 30 days after the Effective Date. Class 7 is impaired and is entitled to vote on the Plan. Class 7 is impaired. The Plan will be funded with (i) funds in the DIP Account, (ii) net income from the Hotel operations, and (iii) from a refinancing of the Debtor's mortgage on the Hotel, a sale of the Hotel, an equity infusion, or a combination of the foregoing. A ballot for voting is included with the Disclosure Statement for the claims entitled to vote for or against the Plan. All ballots must be received prior to 5:00 P.M. on October 27, 2023. The Debtor has been operating profitably since the Petition Date. The Debtor projects that the Reorganized Debtor will continue to operate the Hotel profitably during the Brick Refinancing Period. The Debtor expects to have more than $400,000 in reserve in the DIP Account as of the December 31, 2023. The Reserve shall be maintained by the Reorganized Debtor and will not be used to calculate the Brick semiannual payments. Attorneys for 100 Orchard St. LLC d/b/a Blue Moon Hotel Debtor and Debtor-in-Possession: David H. Wander, Esq. Scott S. Markowitz, Esq. Alexander Tiktin, Esq. TARTER KRINSKY & DROGIN LLP 1350 Broadway, 11th floor New York, NY 10018 Tel.: (212) 216-8000 E-mail: dwander@tarterkrinsky.com smarkowitz@tarterkrinsky.com atiktin@tarterkrinsky.com A copy of the Disclosure Statement dated September 29, 2023, is available at https://tinyurl.ph/vvEKg from PacerMonitor.com. About 100 Orchard St. LLC 100 Orchard St. LLC operates a 22-room boutique hotel known as the "Blue Moon Hotel," located in the lower east side of Manhattan, at 100 Orchard Street. The Hotel is a historical building built in 1879. Beginning in 2002, 100 Orchard redesigned the five-story tenement and restored the building to function as a stately eight-story hotel. It was a five-year art preservation and design project that received an award by National Geographic, acknowledged by the Historic Districts Council, and written up in 50 major articles. The Hotel was instrumental in revitalizing commerce south of Delancey Street. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10358) on March 23, 2022. In the petition signed by Randy Settenbrino, president and managing member, the Debtor disclosed $25,341,713 in assets and $11,166,747 in liabilities. Judge David S. Jones oversees the case. Scott S. Markowitz, Esq., at Tarter Krinsky and Drogin, LLP, is the Debtor's counsel. 522 OVINGTON: Unsecureds Owed $220K to Get Remaining Cash --------------------------------------------------------- 522 Ovington LLC submitted a Plan and a Disclosure Statement. The Debtor filed for Chapter 11 to protect a development parcel of real estate located at 552 Ovington Avenue, Brooklyn, NY (the Property") in the face of a pending foreclosure. After several delays, including one occasioned by the bankruptcy of the Debtor's secured mortgage lender, the Debtor has been able to negotiate a settlement (the "Settlement") pursuant to which the claim of the lender has been set in a reduced amount, subject to payment within a fixed timeline through either a sale of the Property or a refinancing of the secured debt. The Debtor has been negotiating with a third party for a sale (the "Sale") of the Property, while at the same time it has obtained a commitment for a $700,000 refinancing (the "Refinancing") to be made through Hirshmark Capital LLC ("Hirshmark"). Either of these two alternatives will provide the necessary funds to satisfy the Lender's secured mortgage claim at the reduced amount under the Settlement, as well as funding payment in full to the other noninsider creditors pursuant to a Chapter 11 plan of reorganization. Thus, the Debtor intends to pursue both paths simultaneously with the confirmation process while it explores whether the Sale or the Refinancing should be effectuated. Class 3 consists of the Allowed General Unsecured Claims. No timely proofs of Class 3 Claims were filed prior to the Bar Date. The Debtor's affiliate, 325 N. Broadway LLC, has an allowed scheduled Class 3 Claim in the amount of $220,0763.35 and is the only creditor in this class. On the Effective Date, the Class 3 claim shall be paid the balance of Available Cash, if any, remaining after the payment of Administrative Expense Claims, Priority Claims, and Class 1 and 2 Secured Claims. Because the sole member of Class 3 is an insider of the Debtor, its claim will not be counted toward confirmation of the Plan. Class 3 is impaired. The Plan shall be implemented by the Debtor through either a Refinancing or Sale. The Debtor is actively engaged in negotiations for a private Sale of the Property to a third party for a sum sufficient to pay the Class 1 and Class 2 Secured Claims in full, as well as to pay all Allowed Administrative Expense Claims and Priority Claims. If the Debtor elects to pursue a Sale, confirmation of the Plan shall be deemed to include approval of the private sale of the Property as permitted under Bankruptcy Rule 6004(f)(1), free and clear of all liens pursuant to Section 363(b) and (f) of the Bankruptcy Code. Since all non-insider claims are being paid in full from the Sale proceeds, the purchase price will be deemed to constitute fair market value, and will reflect the business judgment of the Debtor that competitive bidding will not result in a meaningfully higher or better offer. The Debtor is also pursuing a Refinancing of the Property in an amount sufficient to pay the Class 1 and Class 2 Secured Claims in full, as well as to pay all Allowed Administrative Expense Claims and Priority Claims, in the event that a Sale contract is not timely executed. Mr. Ziss shall retain full authority to execute all required loan documents and related instruments on behalf of the Debtor. At the Closing on the Refinancing, the proceeds of the loan shall be used for distribution to creditors by the Disbursing Agent under the terms of this Plan. The Debtor shall file an appropriate notice that it intends to proceed with either a Refinancing or a Sale no later than one week prior to the deadline for the filing of objections to confirmation, with final approval of the disposition of the Property to be heard in conjunction with the hearing on Confirmation of the Plan. Attorneys for the Debtor: J. Ted Donovan, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 125 Park Avenue, 12th Floor New York, NY 10017 A copy of the Disclosure Statement dated September 29, 2023, is available at https://tinyurl.ph/nwZja from PacerMonitor.com. About 552 Ovington 552 Ovington LLC is the owner of a 5,000-square-foot vacant land at 552 Ovington Avenue, Brooklyn, New York, which it acquired in 2016 following a foreclosure sale from the foreclosing third mortgagee, Congregation Imrei Yehuday. The property does not generate income. 552 Ovington LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 18-43983) on July 11, 2018. In the petition signed by Tim Ziss, managing member, the Debtor disclosed $1,006,564 in liabilities. Judge Nancy Hershey Lord presides over the case. The Debtor tapped Goldberg Weprin Finkel Goldstein, LLP as its legal counsel. ACRISURE LLC: S&P Assigns 'B' Rating on First-Lien Term Loan B-5 ---------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue rating and '3' recovery rating (50%-70%; rounded estimate: 50%) to Acrisure LLC's $1 billion incremental first-lien term loan B-5 due 2030. The ratings on Acrisure and its core subsidiaries--including S&P's 'B' long-term issuer credit rating, 'B' first-lien credit facility debt rating, and 'CCC+' unsecured debt rating--are unaffected by the financing. S&P expects Acrisure will use the proceeds of this syndicated offering to refinance its first-lien term loan B-4, which has an outstanding balance of $995 million as of June 30, 2023. Given steady debt levels following this transaction, Acrisure's pro forma leverage, which was 7.3x (11.3x including preferred payment-in-kind shares treated as debt) as of June 30, 2023, will be unchanged. S&P Global Ratings-adjusted EBITDA interest coverage was around 2x for the 12 months ended June 30, 2023. S&P expects modest interest cost saving from this transaction, since the company issued its existing B-4 tranche in the private market in the fourth quarter of 2022 at a rate of SOFR plus 5.75%, and better pricing is expected with this refinancing transaction. Acrisure performed well in the 12 months through June 30, 2023, achieving reported revenue growth of 31.9%, to $3.82 billion from $2.90 billion, and an EBITDA margin of 29.7% (per S&P's calculations), which is moderately below the historical trend. Total organic growth was 4.2% in the year to date through June 2023, in line with S&P's mid-single-digit expectation. AMMACORE INC: Todd Hennings of Macey Named Subchapter V Trustee --------------------------------------------------------------- The U.S. Trustee for Region 21 appointed Todd Hennings, Esq., at Macey, Wilensky & Hennings, LLP as Subchapter V trustee for Ammacore Inc. Mr. Hennings will be paid an hourly fee of $450 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Hennings declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Todd E. Hennings, Esq. Macey, Wilensky & Hennings, LLP 5500 Interstate North Parkway, Suite 435 Sandy Springs, GA 30328 Phone: (404) 584-1222 About Ammacore Inc. Ammacore Inc. is a national onsite technology service company for resellers, VARs, manufacturers, distributors, and software vendors. The Alpharetta, Ga.-based company partners with its clients to understand the technology and service challenges of their customers and employ its proprietary Scope of Service and Event Management Process to identify the best resources for their customers' needs. Ammacore filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-59671) on Oct. 2, 2023. In the petition signed by its chief executive officer, Chris C. Gaffney, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Barbara Ellis-Monro oversees the case. Cameron M. McCord, Esq., at Jones & Walden, LLC represents the Debtor as legal counsel. AMYRIS INC: Wants $190M DIP Loan to Receive Senior Liens -------------------------------------------------------- Rick Archer of Law360 reports that biochemical company Amyris Inc. on Tuesday, October 3, 2023, asked a Delaware bankruptcy judge to reject arguments the that cannabinoid maker Lavvan Inc. holds senior claims to Amyris' Chapter 11 lender, saying a loss on the motion would jeopardize the company's existence. About Amyris, Inc. 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 worldps 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 Debtorps corporate counsel. The Debtors tapped PricewaterhouseCoopers LLP as their financial advisor, while Intrepid Investment Bankers LLC serves as the Debtorsp investment banker. Stretto, Inc. is the Debtors' claims, noticing, solicitation agent and administrative adviser. APEX NORTH: Files Liquidating Plan ---------------------------------- Apex North Broad, LLC, submitted a Combined Plan of Liquidation and Disclosure Statement This is a Plan of Liquidation whereby the Debtor, Apex North Broad LLC intends to sell its only asset, real property located at 112- 122 North Broad Street, Elizabeth, New Jersey (the "Property"). This Plan permits Apex to sell its property free and clear of all liens, claims, and encumbrances. Secured creditors with liens against the Property will be paid from the proceeds of the sale in accordance with the priority of their valid liens. Pending receipt of payment, Secured creditors liens shall attach to the proceeds of sale in accordance with the priority of their valid liens. In the Debtor's estimation, the value of the Property is sufficient to pay all of the Debtor's Creditors in full through this Plan. Under the Plan, Class 3 General Unsecured Creditors will be paid from the net proceeds from the sale of the Property, after payment of all Administrative Expenses, Class 1 and Class 2 Creditors. Class 3 is impaired. The Plan will be funded by two means: (1) distribution of the proceeds from the sale of the Property; and (2) distribution of the balance of funds held by the Receiver after the sale of the Property. Counsel for Apex North Broad, LLC: Harry J. Giacometti, Esq. FLASTER/GREENBERG P.C. 1810 Chapel Avenue West Cherry Hill, NJ 08002 Tel: (215) 587-5680 E-mail: harry.giacometti@flastergreenberg.com A copy of the Disclosure Statement dated September 29, 2023, is available at https://tinyurl.ph/iGVYv from PacerMonitor.com. About Apex North Apex North Broad LLC, a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)), is a New Jersey limited liability company that exists for the purpose of owning the Property. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 23-16137) on July 19, 2023, with $10 million to $50 million in assets and $1 million to $10 million in liabilities. Ephraim Diamond, chief restructuring officer, signed the petition. Harry J. Giacometti, Esq., of FLASTER GREENBERG PC - Cherry Hill, is the Debtor's counsel. ARETEC GROUP: S&P Affirms 'B' ICR, Off CreditWatch Negative ----------------------------------------------------------- S&P Global Ratings said it affirmed its ratings on Aretec Group Inc., including its 'B' issuer credit, 'B' senior secured and 'CCC+' senior unsecured debt ratings, and removed them from CreditWatch, where S&P placed them with negative implications on Sept. 14, 2023. The outlook is stable. S&P also assigned a 'B' rating to the new revolving credit facility, incremental first-lien term loan, and new senior secured notes. S&P said, "The affirmation reflects our expectation that despite the increased debt burden from the Avantax acquisition, credit metrics will remain within our tolerances for the rating. After Aretec's August 2023 close of its acquisition of Securian Financial Group's retail wealth management business, our adjusted debt-to-EBITDA ratio and interest coverage ratio (on a pro forma basis as of June 30, 2023) was 3.5x and 3.4x, respectively, well below where it had been previously, and comfortably better than the downside thresholds of over 6.0x and below 2.0x." One of the big reasons for this improvement despite adding $750 million in that transaction is higher short-term rates, which has boosted cash sweep revenue by more than $200 million on an annual basis. While the increase in debt from the acquisition of Avantax increases pro forma leverage to 4.8x and lowers the interest coverage to 2.3x as of June 30, these metrics remain commensurate with the current ratings. Aretec Group plans to finance its $1.3 billion acquisition of Avantax primarily with debt.The company will issue a senior secured first-lien term loan of about $1.689 billion and $700 million of senior secured notes (pari passu with its first-lien term loan) to fund the acquisition of Avantax and refinance the existing $1.008 billion first-lien term loan due October 2025. Aretec will also replace the undrawn $175 million revolving credit facility with a new $300 million facility, maturing in 2028. S&P expects the $300 million revolving credit facility will remain undrawn. Higher-for-longer rates and cost synergies from acquisitions should support EBITDA over the next 12 months. S&P said, "We believe the Federal Reserve's intent to keep interest rates higher for longer should continue to support cash sweep revenues. We also believe execution risk related to the acquisition of Avantax is limited given the amount of fairly easily realizable synergies such as leadership and public company related staffing and overhead expenses and consolidation of shared services." The company continues to make progress in realizing the synergies identified as part of the recently closed acquisition of Securian. Longer term, S&P does not expect debt service capacity and leverage to deteriorate rapidly if interest rates fall. This is partly because declining interest rates also decrease interest expenses on Aretec's floating-rate term loan (about 70% of gross debt). Further, the company's hedging strategy, including converting some sweep program balances to fixed-rate contracts locks in rates over a few years, so they do not fall with declining short-term rates. While this has limited the growth in cash sweep revenue as rates rose, it reduces the negative impact of future lower rates on EBITDA and the credit metrics. S&P believes Aretec's acquisition of Avantax, with more than 3,000 advisors and $84 billion in total client assets, enhances the company's scale. Already one of the largest independent broker-dealers in the U.S., Aretec will operate with pro forma $426 billion in total client assets and approximately 12,000 financial advisors. The acquisition will supplement Aretec's existing capabilities in providing tax-focused wealth management services. It also adds Fidelity as a custodial partner for Aretec, opening the door to acquire broker-dealers using Fidelity's custody platform. Following the close of the transaction, expected by the end of 2023, Avantax will operate as a stand-alone entity within Aretec Group. S&P said, "The stable outlook indicates our expectation that Aretec will fairly quickly realize most of its planned expense synergies, which will support maintaining its S&P Global Ratings-adjusted debt-to-EBITDA ratio between 4.5x–5.5x and the interest coverage ratio between 2.25x–2.5x. "Over the next 12 months, we could lower the rating if we expect Aretec's interest coverage to fall below 2.0x, or if we expect S&P Global Ratings-adjusted debt to EBITDA to substantially increase above 6.0x. "An upgrade is unlikely over the next 12 months because of the financial sponsor's appetite for leverage. Over the longer term, we could upgrade Aretec if we expect it to sustain leverage across interest rate and market cycles well below 4.0x because of a demonstrated commitment to a reduced debt appetite." BED BATH & BEYOND: Directors Want Coverage on Confidential Matter ----------------------------------------------------------------- Alex Wolf of Bloomberg Law reports that a trio previously designated to serve as Bed Bath & Beyond Inc. board members by activist investor Ryan Cohen sought permission to use a company insurance policy to cover unspecified legal costs. The independent directors—two former and one current—asked the US Bankruptcy Court for the District of New Jersey on Tuesday, October 3, 2023, to allow them to tap a $10 million D&O policy to cover legal costs addressing a "a non-public, confidential matter" related to their time on the company's board. About Bed Bath & Beyond Bed Bath & Beyond Inc., together with its subsidiaries, is an omnichannel retailer selling a wide assortment of merchandise in the Home, Baby, Beauty & Wellness markets and operates under the names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face Values. The Company also operates Decorist, an online interior design platform that provides personalized home design services. At its peak, Bed Bath & Beyond operated the largest home furnishing retailer in the United States with over 970 stores across all 50 states, consistently at the forefront of major home and bath trends. Operating stores spanning the United States, Canada, Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from bed linens to cookware to electric appliances, home organization, baby care, and more. Bed Bath & Beyond closed over 430 locations across the United States and Canada before filing Chapter 11 cases, implementing full-scale wind-downs of their Canadian business and the Harmon branded stores. Left with 360 Bed Bath & Beyond, and 120 buybuy BABY stores, Bed Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to pursue a wind-down of operations. The cases are pending before the Honorable Vincent F. Papalia and have requested joint administration of the cases under Bankr. D.N.J. Lead Case No. 23-13359. Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Lazard Frares & Co. LLC is serving as investment banker, and AlixPartners LLP is serving as financial advisor. Bed Bath & Beyond Inc. has retained Hilco Merchant Resources LLC to assist with inventory sales. Kroll LLC is the claims agent. BIOLASE INC: Edson Krefta Has 10% Stake as of Oct. 6 ---------------------------------------------------- Edson Krefta disclosed in a Schedule 13G/A filed with the Securities and Exchange Commission that as of Oct. 6, 2023, he beneficially owned 107,225 shares of common stock of Biolase, Inc., representing 10 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/811240/000137647423000451/ek_sc13gz.htm About Biolase Biolase, Inc. -- http://www.biolase.com-- is a medical device company that develops, manufactures, markets, and sells laser systems in dentistry and medicine. BIOLASE's products advance the practice of dentistry and medicine for patients and healthcare professionals. BIOLASE's proprietary laser products incorporate approximately 259 actively patented and 24 patent-pending technologies designed to provide biologically and clinically superior performance with less pain and faster recovery times. Biolase reported a net loss of $28.63 million in 2022, a net loss of $16.16 million in 2021, a net loss of $16.83 million in 2020, a net loss of $17.85 million in 2019, and a net loss of $21.52 million in 2018. As of Sept. 30, 2022, the Company had $42.86 million in total assets, $29.01 million in total liabilities, and $13.86 million in total stockholders' equity. Costa Mesa, California-based BDO USA, LLP, the Company's auditor since 2005, issued a "going concern" qualification in its report dated March 28, 2023, citing that the Company has suffered recurring losses from operations and has had negative cash flows from operations for each of the three years ended Dec. 31, 2022. These factors, among others, raise substantial doubt about its ability to continue as a going concern. BLACK DIAMOND: Seeks Extension to File DS/Plan Until Nov. 28 ------------------------------------------------------------ Black Diamond Energy of Delaware, Inc., filed a motion to extend the deadline to file a chapter 11 plan and disclosure statement. The Debtor is requesting an extension of 60 days to November 28, 2023 to file a Chapter 11 Plan and Disclosure Statement. The Debtor maintains that sufficient cause exists for an extension of the deadline to file a Chapter 11 Plan and Disclosure Statement. The Debtor's oil and gas wells are still capped, stifling its ability to generate revenue. The Debtor must fully litigate or resolve the capping of its wells by Wyoming Oil & Gas Conservation Commission (the "WOGCC") prior to filing a Chapter 11 Plan so it can properly generate forecasts for the revenue it may produce from wells to fund its Plan. The evidentiary hearing on the matter with the WOGCC is scheduled for November 2, 2023. Additionally, because the Debtor's Motion to Obtain Financing was denied, the Debtor is looking into the option of incorporating additional funding into its Chapter 11 Plan. Finally, in light of the failed mediation with Powder River Energy Corporation ("PRECorp"), the Debtor is reassessing how to provide for PRECorp in its Plan. The extension will also allow the Debtor to continue to work with its other creditors to foster a plan of reorganization. The Debtor's creditors will not be prejudiced by the requested extensions. On the contrary, the Debtor's creditors will be best served with an extension of the filing deadline. The Debtor will continue to work in good faith towards a resolution of all matters and attempt to develop a confirmable chapter 11 plan. Counsel for the Debtor: Donald R. Calaiaro, Esq. CALAIARO VALENCIK 938 Penn Avenue, Suite 501 Pittsburgh, PA 15222-3708 Tel: (412) 232-0930 E-mail: dcalaiaro@c-vlaw.com About Black Diamond Energy of Delaware Black Diamond Energy of Delaware, Inc. -- https://www.blackdiamondenergy.com/ -- is a company based in Greensburg, Pa., which provides natural gas drilling programs for investor partners. It specializes in coalbed methane play in the Powder River Basin. Black Diamond sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21448) on July 26, 2022, with up to $50,000 in assets and $10 million to $50 million in liabilities. Eric Koval, president of Black Diamond, signed the petition. Donald R. Calaiaro, Esq., at Calaiaro Valencik and Eric Rossi CPA, LLC serve as the Debtor's legal counsel and accountant, respectively. CLEARY PACKAGING: Court Approves Disclosure Statement ----------------------------------------------------- Judge Michelle M. Harner has entered an order that a hearing to consider confirmation of the plan proposed by Cleary Packaging, LLC, and the plan proposed by creditor Cantwell−Cleary Co., Inc., will be held on October 26, 2023, and October 27, 2023, beginning at 10:00 a.m. each day in Courtroom 9−C, 101 West Lombard Street, Baltimore, Maryland 21201. The amended disclosure statements, as well as the solicitation packages are approved. Oct. 21, 2023, is fixed as the last day for filing and serving written objections to confirmation of the plan proposed by the Debtor and/or the plan proposed by the Creditor pursuant to Federal Bankruptcy Rule 3020(b)(1). Oct. 21, 2023, is fixed as the last day for submitting written acceptances or rejections of the plan proposed by the Debtor and/or the plan proposed by the Creditor. Oct. 24, 2023, is fixed as the last day for the Debtor and the Creditor to each file with the Court the tally of votes for their respective proposed plan. The Court will enter separately on the docket protocols that govern the confirmation hearing set for October 26, 2023, and October 27, 2023. About Cleary Packaging Cleary Packaging, LLC, is a wholesale distributor of packaging and janitorial supplies. The company sought protection under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-10765) on Feb. 7, 2021. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. The Debtor tapped Yumkas, Vidmar, Sweeney & Mulrenin as its legal counsel and George S. Magas CPA, PC as its accountant. Scott W. Miller has been appointed as Subchapter V Trustee for the Debtor. COMSTOCK INC: Stakeholder Perception Analysis Report Released ------------------------------------------------------------- Comstock Inc. has completed and published the Company's Q3 2023 Stakeholder Perception Analysis Report by the Company's investor relations firm, RB Milestone Group LLC. The Report provides insight into the Company's operational milestones and perceived strengths and weaknesses from the perspective of its shareholders, and includes a brief recording of Comstock's Executive Chairman and Chief Executive Officer, Corrado De Gasperis, addressing the results. "We have made transformational technological breakthroughs that we are commercializing to begin contributing to the global clean energy transition and accelerating decarbonization," said De Gasperis. "We recognize the importance of understanding our capital base and ensuring that we are both delivering on our objectives and doing so clearly, effectively, and in a timely manner. We want to thank all our shareholders that participated in RBMG's survey and look forward to hearing more from all our stakeholders as we grow together." RBMG compiled the results from an investor survey that stakeholders participated in during the period of August 10, 2023, and September 30, 2023. RBMG takes a proactive approach in collecting submissions from a balanced dataset, including a variety of participants, from small to larger shareholders, to prospective shareholders and strategic stakeholders in Comstock's industry. Moreover, the various choices in each category within the Report were discussed and confirmed by Company management and RBMG, both of whom did not participate in the survey. Comstock intends to publish these Reports compiled by RBMG on a quarterly basis to continue to provide increased transparency and grow its relationship with its current and prospective shareholders. Comstock and RBMG will open each new surveying period after each of the Company's earnings calls and close each period at the end of the applicable quarter. Each investor survey will be available for participation in the investors' section of the Company's website during each surveying period, along with each published final Report once complete. About Comstock Comstock Inc. (NYSE American: LODE) is a Nevada-based, precious and strategic metal-based exploration, economic resource development, mineral production, and metal processing business with a strategic focus on high-value, cash-generating, environmentally friendly, and economically enhancing mining and processing technologies and businesses. The company was formerly known as Comstock Mining Inc. and changed its name to Comstock Inc. in May 2022 Deloitte & Touche LLP, in Salt Lake City, Utah, the Company's auditor since 2011, issued a "going concern" qualification in its report dated March 30, 2020 citing that the Company has incurred recurring losses and cash outflows from operations, has an accumulated deficit and has debt maturing within 12 months from the issuance date of the financial statements that raise substantial doubt about its ability to continue as a going concern. In its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, Comstock noted that the Company has had recurring net losses from operations and had an accumulated deficit of $291.5 million at December 31, 2022. For the year ended December 31, 2022, the Company recognized a net loss of $46.7 million and cash and cash equivalents decreased by $3.4 million from $5.9 million at December 31, 2021 to $2.5 million at December 31, 2022. The Company said it intended to fund operations over the next 12 months from (i) existing cash and cash equivalents, (ii) sales of engineering services and technology licenses (iii) the repayment of advances from SSOF, and (iv) planned asset sales. Based on these expected funding sources, management believed the Company will have sufficient funds to sustain operations and meet commitments under its investment agreements during the next 12 months. The Company, however, cautioned that while it had success in the past in obtaining the necessary capital to support operations, including registered equity financings from existing shelf registration statement, borrowings and other means, there is no assurance the Company will be able to obtain additional equity capital or other financing, if needed. Comstock said, "Risks to our liquidity include future operating expenditures above management’s expectations, including but not limited to exploration, pre-development, research and development, selling, general and administrative, investment related expenditures which could be offset by the repayment of advances to SSOF, the sale of the Silver Springs Properties, proceeds from the sale of the LINICO facility and related equipment and amounts to be raised from the issuance of equity under our existing shelf registration statement. Declines in the share price of our common stock would also adversely affect our results of operations, financial condition and cash flows. If the Company is unable to obtain any necessary additional funds, this could have an immediate material adverse effect on liquidity and raise substantial doubt about our ability to continue as a going concern. In such case, the Company could be required to limit or discontinue certain business plans, activities or operations, reduce or delay certain capital expenditures or investments, or sell certain assets or businesses. There can be no assurance that the Company would be able to take any such actions on favorable terms, in a timely manner, or at all." As of June 30, 2023, Comstock has $104,984,221 in total assets and $53,893,730 in total liabilities. CONNEXA SPORTS: Modifies Credit Deal to Get $1M Additional Loan --------------------------------------------------------------- Connexa Sports Technologies Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that on Oct. 11, 2023, it entered into a loan and security modification agreement with one or more institutional investors and a certain institutional investor, as agent for the Lenders, amending the terms of the Loan and Security Agreement dated Jan. 6, 2023 by and among the Company, the Lenders and the Agent to make an additional loan of $1,000,000 and modify the terms of the LSA to reflect the New Loan. In connection with the Loan and Security Modification Agreement, the Company agreed to issue to the investor warrants to purchase up to 169,196 shares of Common Stock at an exercise price of $1.90 per share. The Common Warrants are exercisable six months after their issuance and will expire five and one-half years from their date of issuance. The Common Warrants and the shares of the Company's Common Stock issuable upon the exercise of the Common Warrants are not being registered under the Securities Act of 1933, as amended, were not offered pursuant to the Registration Statement and were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder. About Connexa Sports Headquartered in Windsor Mill, Maryland, Connexa Sports -- www.connexasports.com -- is a connected sports company delivering products, technologies, and services across a range of activities in sports. Connexa Sports reported a net loss of $71.15 million for the year ended April 30, 2023, compared to a net loss of $51.77 million for the year ended April 30, 2022. As of April 30, 2023, the Company had $7.11 million in total assets, $25.72 million in total liabilities, and a total stockholders' deficit of $18.61 million. Lagos, Nigeria-based Olayinka Oyebola & Co., the Company's auditor since 2023, issued a "going concern" qualification in its report dated Sept. 14, 2023, citing that the Company suffered an accumulated deficit of $(151,750,610), net loss of $(71,153,685) and a negative working capital of $(18,775,991). These matters raise substantial doubt about the Company's ability to continue as a going concern. CONTINENTAL AMERICAN: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------------- The U.S. Trustee for Region 20 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Continental American Corporation. The committee members are: 1. Distributor Central Richard Mitchell, Chief Financial Officer 1200 Energy Center Drive Gardner, KS 66030 Phone: (800) 884-7301 Email: rmitchell@tradenetpublishing.com 2. Glenroy, Inc. Michael Serembiczky, Chief Financial Officer W158 N9332 Nor-X-Way Menominee Falls, WI 53051 Phone: (800) 824-1482 Email: receivables@glenroy.com 3. GT Midwest Greg Hanlon, Credit Manager 2202 South West Street Wichita, KS 67213 Phone: (316) 494-7862 Email: ghanlon@gtmidwest.com 4. Hillsdale Development Co. Joe Zupan, Owner P.O. Box 187 Ashland, OH 44805 Phone: (419) 651-1200 Email: Hillsdale@zoominternet.net 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 Continental American Corp. Continental American Corporation operates a balloon manufacturing business in Wichita, Kan. Continental American and its affiliate, Pioneer National Latex, Inc., filed Chapter 11 petitions (Bankr. D. Kan. Lead Case No. 23-10938) on Sept. 22, 2023. Judge Mitchell L. Herren oversees the cases. At the time of the filing, Continental American reported $50 million to $100 million in assets and $10 million to $50 million in liabilities while Pioneer National Latex reported $1 million to $10 million in assets and $10 million to $50 million in liabilities. David Prelle Eron, Esq., at Prelle Eron & Bailey, P.A. represents the Debtors as legal counsel. CRESTWOOD HOSPITALITY: Claims Get Paid From Cash on Hand, Revenues ------------------------------------------------------------------ Crestwood Hospitality, L.L.C., submitted a Second Amended Plan OF Reorganization dated September 29, 2023. The Debtor intends to continue operating its Property as a Holiday Inn Express hotel pursuant to the Franchise Agreement, as discussed in more detail below. The Debtor intends to pay its creditors from (a) Cash-on-Hand as of the Effective Date, (b) Net Revenues generated from the operation of the Property during the term of the Plan, (c) the New Value Contribution to the Reorganized Debtor from the Interest Holders, and (d) proceeds from a refinancing or potential sale of the Property (if such a sale is deemed prudent by the Reorganized Debtor in its sole and absolute discretion). The Interest Holders will continue to own and manage the Reorganized Debtor, and Ledgestone will continue to operate and manage the Property under the guidance and supervision of the Interest Holders pursuant to the terms of the Ledgestone Management Agreement. Under the Plan, Class 3 consists of all Allowed Unsecured Claims that are not otherwise classified in the Plan, and shall include the ADOR's Unsecured Claim, the SBA's Allowed Unsecured Deficiency Claim, any Allowed Unsecured Claims resulting from the rejection of executory contracts, if any, and any other Allowed Claim not included in any other Class in the Plan. Allowed Unsecured Claims in this Class will be treated as follows: (a) First, Allowed Unsecured Claims will share, pro rata in a distribution of the sum of $75,000 in cash (the "Unsecured Distribution Amount") paid by the Reorganized Debtor from the New Value Contribution on the Effective Date. (b) Second, each quarter following the Effective Date until all Allowed Unsecured Claims are paid in full, the Reorganized Debtor will make interest only payments to Class 3 Claimants, based on the amount of each respective Allowed Unsecured Claim, at the rate of 6% per annum (the "Interest Payments"). (c) Third, Allowed Unsecured Claims will share, pro rata, in a total of two (2) annual distributions of 25% of the Reorganized Debtor's Net Revenues from the operations of the Property after payment of (a) the interest only payments to CIT, the City of Tucson, Brycon and the Allowed Unsecured Claimants, (b) the CIT Monthly Payments, (c) the City of Tucson Monthly Payments, (d) the Brycon Monthly Payments, (e) the SBA Monthly Payments, (f) monthly payments to Johnston and Khan on account of their respective Allowed Secured Claims in Classes 2-E and 2-F, as set forth above, and (g) an amount determined by the Reorganized Debtor to be reasonably necessary to set aside, periodically, as a cash reserve for emergency expenditures and repairs, capital expenditures for the benefit of the Property, and to cover potential periodic cash flow shortfalls, which reserve amount shall not exceed an aggregate of $250,000 (i.e., the Annual Percentage Distributions). The Annual Percentage Distributions will be made on each anniversary of the Effective Date for two consecutive years. (d) Fourth, on or before the first day of the 43rd month following the Effective Date, the Reorganized Debtor will pay any remaining balance due on Allowed Unsecured Claims (the "Unsecured Payoff Payments"). Upon their receipt of (a) their respective pro rata portions of the Unsecured Distribution Amount, (b) the Interest Payments, (c) their respective pro rata portions of the Annual Percentage Distributions over two years, and (d) the Unsecured Payoff Payments, all Allowed Unsecured Claims in this Class 3 shall be deemed paid, released, and discharged in full. So long as the Reorganized Debtor is making distributions to holders of Allowed Unsecured Claims as provided herein, any excess Net Revenue accumulated by the Reorganized Debtor (i.e., the Retained Net Revenues) can be used by the Reorganized Debtor in any way that it sees fit, in the exercise of its business judgment, including, but not limited to, the payment of operating expenses, the commencement of capital projects, the payment of PIP Expenses, and/or the pre-payment, in whole or in part, of any Allowed Claim outstanding under the Plan. The Plan will be funded from the Debtor's Cash-on-Hand, Net Revenues from the operation of the Property, the New Value Contribution, and from a refinancing of the Property or the proceeds of the sale of the Property (if such a sale is deemed prudent by the Reorganized Debtor in its sole and absolute discretion). Upon expiration of the Franchise Agreement on January 26, 2026, the Debtor anticipates that it will either extend the term of the Franchise Agreement with the Franchisor or convert the Property to another hospitality flag, such as, for example, a Marriott Fairfield Inn. As operators of other hotels in Arizona, the Debtor's principals have very good relationships with a variety of hospitality companies and such a conversion to a new flag will not be a hardship for the Debtor. The Debtor anticipates that, whether the Franchise Agreement is extended or the Property is converted to a new flag, the Debtor will be required to make certain improvements, upgrades and revisions to the Property (i.e. the PIP Expenses). The Debtor further anticipates that the PIP Expenses will cost between $2.0 million and $2.5 million. The Debtor intends to pay for the PIP Expenses from the Retained Net Revenues, the New Value Contribution (as and if necessary), and/or potential third party financing (i.e., the PIP Financing) (as and if necessary) which, if secured by the Property, will be junior to CIT's retained lien securing its Allowed Secured Claim. Attorneys for Debtor Crestwood Hospitality, LLC: Randy Nussbaum, Esq. Philip R. Rudd, Esq. SACKS TIERNEY P.A. 4250 N. Drinkwater Blvd., 4th Floor Scottsdale, AZ 85251-3693 Telephone: 480.425.2600 Facsimile: 480.970.4610 E-mail: Randy.Nussbaum@SacksTierney.com Philip.Rudd@SacksTierney.com A copy of the Plan of Reorganization dated September 29, 2023, is available at https://tinyurl.ph/YdFBp from PacerMonitor.com. About Crestwood Hospitality Crestwood Hospitality LLC, operates the Holiday Inn Express & Suites Tucson Mall, an "all suite" hotel built in 2004, pursuant to a license agreement with Holiday Hospitality Franchising, LLC. Crestwood filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 21-03091) on April 23, 2021. In the petition signed by Sukhbinder Khangura, its member and vice president, the Debtor estimated between $1 million and $10 million in assets, and between $10 million and $50 million in liabilities. Judge Brenda Moody Whinery is assigned to the case. Sacks Tierney P.A., is the Debtor's counsel. DIGITAL MEDIA: NYSE Files Form 25 With SEC ------------------------------------------ The New York Stock Exchange LLC filed a Form 25-NSE with the Securities and Exchange Commission on Oct. 10, 2023, which removed Digital Media Solutions, Inc.'s Class A common stock from listing on NYSE. About Digital Media Headquartered in Clearwater, Florida, Digital Media Solutions, Inc. (NYSE: DMS) -- @ digitalmediasolutions.com -- is a provider of data-driven, technology-enabled digital performance advertising solutions connecting consumers and advertisers within the auto, home, health, and life insurance, plus a long list of top consumer verticals. The DMS first-party data asset, proprietary advertising technology, significant proprietary media distribution, and data-driven processes help digital advertising clients de-risk their advertising spend while scaling their customer bases. Digital Media reported a net loss of $52.50 million for the year ended Dec. 31, 2022. As of March 31, 2023, the Company had $238.81 million in total assets, $337.08 million in total liabilities, $4.99 million in preferred stock, and a total deficit of $103.27 million. Digital Media received notice from the New York Stock Exchange on March 30, 2023, indicating that the Company is not in compliance with NYSE's continued listing standards because the average closing price of the Company's common stock was less than $1.00 over a consecutive 30 trading-day period. * * * As reported by the TCR on Sept. 1, 2023, S&P Global Ratings raised its issuer credit rating on U.S.-based digital advertising solutions provider Digital Media Solutions Inc. (DMS) to 'CCC' from 'SD' (selective default). S&P said the negative outlook reflects limited visibility into the company's recovery and the potential of a debt restructuring in 2024 following the expiration of the company's PIK option period, absent significant cash flow improvement. DINARDO LAW FIRM: 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 case of The DiNardo Law Firm, PC. About DiNardo Law Firm DiNardo Law Firm, PC filed Chapter 11 petition (Bankr. W.D.N.Y. Case No. 23-10865) on Sept. 8, 2023, with $1 million to $10 million in assets and $10 million to $50 million in liabilities. Joseph DiNardo, sole shareholder, signed the petition. The Debtor tapped Daniel F. Brown, Esq., at Lippes Mathias LLP as legal counsel and Dansa D'Arata & Soucia, LLP as accountant. DIOCESE OF CAMDEN: Insurer Shared Private Info With 3rd Parties --------------------------------------------------------------- James Nani of Bloomberg Law reports that sex abuse claimants are seeking court sanctions against Interstate Fire & Casualty Co. in a New Jersey Catholic diocese's bankruptcy, accusing the insurer of sharing their confidential information with third parties. The Catholic Diocese of Camden's insurer also improperly disclosed names of claimants it obtained in two other diocesan bankruptcy cases, a tort committee representing abuse survivors told a New Jersey bankruptcy court on Tuesday, October 3, 2023. The disclosures violated multiple confidentiality orders, the committee said. The committee is seeking to hold Interstate in contempt, plus sanctions. About The Diocese of Camden, NJ The Diocese of Camden, New Jersey is a nonprofit religious corporation organized pursuant to Title 16 of the Revised Statutes of New Jersey. The Diocese is the secular legal embodiment of the Roman Catholic Diocese of Camden, a juridic person recognized under Canon Law. The Diocese of Camden sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 20-21257) on Oct. 1, 2020. The petition was signed by Reverend Robert E. Hughes, vicar General and vice president. At the time of the filing, the Debtor had total assets of $53,575,365 and liabilities of $25,727,209. Judge Jerrold N. Poslusny Jr. oversees the case. McManimon, Scotland & Baumann, LLC, is the Debtor's legal counsel. DIRECTBUY HOME: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: DirectBuy Home Improvement, Inc. d/b/a Z Gallerie 1855 W. 139th Street Gardena, CA 90249 Business Description: DirectBuy provides home improvement products including furniture, appliances, flooring, mattresses, frames, and lighting. Chapter 11 Petition Date: October 16, 2023 Court: United States Bankruptcy Court District of New Jersey Case No.: 23-19159 Debtor's Counsel: Michael D. Sirota, Esq. COLE SCHOTZ P.C. Court Plaza North 25 Main Street Hackensack, NJ 07601 Tel: 201-489-3000 Fax: 201-489-1536 Email: msirota@coleschotz.com Debtor's Financial Advisor: SHERWOOD PARTNERS INC. Debtor's Investment Banker/ Business Broker: STUMP & COMPANY Estimated Assets: $50 million to $100 million Estimated Liabilities: $50 million to $100 million The petition was signed by Robert Fetterman as CFO and interim CEO. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BJDUP2A/DirectBuy_Home_Improvement_Inc__njbke-23-19159__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Federal Express (FedEx) $1,322,569 P.O. Box 72210 Pasadena, CA 91109-7321 2. AT&T $1,169,885 PO Box 5019 Carol Stream, IL 60197-5019 3. Terreno 139th LLC $718,531 c/o CBRE, Inc. 2221 Rosecrans Ave Ste 10 El Segundo, CA 90245 4. 4th Street Holdings LLC $701,866 c/o Bond Retail5 Third Street Ste 1225 San Francisco, CA 94103 5. Shayne (Macao Commercial $532,835 Offshore) Limit Rua De Pequin No 126 Edif Comercial I TA Macau 6. DC 02 - South Gate $402,887 5150 Overland Avenue c/o GK Management C Culver City, CA 90230 7. Google LLC $398,922 Dept 33654 PO Box 39000 San Francisco, CA 94139 8. Kuka (HK) Trad $317,067 Co. Limited Room 06 13A/F South Towerworld Finance C Harbour City, HK 00099-9077 9. Unified Logistix Group $287,644 740 S. Powerline Rd Ste F Deerfield Beach, FL 33442 10. Carmichael International $286,454 Service 533 Glendale Blvd Los Angeles, CA 90026 11. UPS Freight $284,364 P.O. Box 650116 Dallas, TX 75265-0116 12. South Coast Plaza $235,799 P.O. Box 54876 Los Angeles, CA 90074-4876 13. Quad/Graphics Inc. $213,990 PO Box 644840 Pittsburgh, PA 53089 14. Tampa Westshore $208,858 Associates LP c/o Comerica Bank - Dept 177001 P.O. Box Detroit, MI 48267-1770 15. Sovos Compliance LLC $208,609 PO Box 347977 Pittsburgh, PA 15251-4977 16. Connor Group $191,864 International LLC 990 S Rock Blvd Suite F Reno, NV 89502 17. Jonathan Louis $185,353 International FBO Jonathan Louis International P.O. Box Charlotte, NC 28201-1036 18. Giltnre Logistics $176,234 PO Box 150728 Ogden, UT 84415-0728 19. Fashion Show Mall LLC $174,680 SDS-12-2773 PO Box 86 Minneapolis, MN 55486-2773 20. Inspiro Relia, Inc $155,337 6F LV Locsin Building 6752 Ayala Ave Makati, NA 01223 DMK PHARMACEUTICALS: Falls Short of Nasdaq Bid Price Requirement ---------------------------------------------------------------- DMK Pharmaceuticals Corporation disclosed in a Form 8-K filed with the Securities and Exchange Commission that it received a notice from the Listing Qualifications Department of The Nasdaq Stock Market notifying the Company that it is not in compliance with the $1.00 minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. Based on the closing bid price of the Company's common stock for at least 30 consecutive business days before receipt of the notice on Oct. 4, 2023, the Company no longer meets the minimum bid price requirement of the Rule. This notice has no immediate effect on the Company's Nasdaq listing or the trading of its common stock. The Notice indicated that the Nasdaq Listing Rules provide the Company a compliance period of 180 calendar days from the date of the Notice, or until April 1, 2024, to regain compliance, pursuant to Listing Rule 5810(c)(3)(A). The Notice stated that if at any time during the compliance period the bid price of the Company's common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, the Staff will provide written notification that the Company has achieved compliance with the minimum bid price requirement, and the matter would be resolved. The Notice also stated that if the Company does not regain compliance within the initial compliance period, it may be eligible for an additional 180-day compliance period. To qualify for additional time, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period. The Notice stated that if the Company meets these requirements, Nasdaq will inform the Company that it has been granted an additional 180 calendar days to regain compliance. The Notice also stated that if it appears to the Staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, the Staff would notify the Company that it will not be granted additional 180 days for compliance and will be subject to delisting at that time. In the event of such notification, the Company may appeal the Staff's determination to delist its securities, but there can be no assurance that any such appeal would be successful. There are no assurances that the Company will be able to regain compliance with the Rule or will otherwise be in compliance with other Nasdaq listing requirements. The Company intends to monitor the closing bid price of its common stock and may consider, if appropriate, available options to regain compliance with the minimum bid price requirement of the Nasdaq Listing Rules. About DMK Pharmaceuticals DMK Pharmaceuticals (formerly known as Adamis Pharmaceuticals Corporation) is a commercial stage neuro-biotech company primarily focused on developing and commercializing products for the treatment of opioid overdose and substance use disorders. DMK's commercial products approved by the FDA include ZIMHI (naloxone) Injection for the treatment of opioid overdose, and SYMJEPI (epinephrine) Injection for use in the emergency treatment of acute allergic reactions, including anaphylaxis. The Company is focused on developing novel therapies for opioid use disorder (OUD) and other important neuro-based conditions where patients are currently underserved. DMK believes its technologies are at the forefront of endorphin-inspired drug design with its mono, bi- and tri-functional small molecules that simultaneously modulate critical networks in the nervous system. DMK has a library of approximately 750 small molecule neuropeptide analogues and a differentiated pipeline that could address unmet medical needs by taking the novel approach to integrate with the body's own efforts to regain balance of disrupted physiology. The Company's lead clinical stage product candidate, DPI-125, is being studied as a potential novel treatment for OUD. DMK also plans to develop the compound for the treatment of moderate to severe pain. The Company's other development stage product candidates include DPI-221 for bladder control problems and DPI-289 for severe end stage Parkinson's disease. San Diego, California-based BDO USA, LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated March 16, 2023, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. EMERGENT BIOSOLUTIONS: State Street Has 2.18% Stake as of Sept. 30 ------------------------------------------------------------------ State Street Corporation disclosed in a Schedule 13G/A filed with the Securities and Exchange Commission that as of Sept. 30, 2023, it beneficially owned 1,131,955 shares of common stock of Emergent Biosolutions Inc., representing 2.18 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1367644/000009375123000685/Emergent_BioSolutions_Inc.txt About Emergent Biosolutions Headquartered in Gaithersburg, MD, Emergent Biosolutions Inc. is a global life sciences company focused on providing innovative preparedness and response solutions addressing accidental, deliberate and naturally occurring public health threat. The Company's solutions include a product portfolio, a product development portfolio, and a contract development and manufacturing ("CDMO") services portfolio. Tysons, Virginia-based Ernst & Young LLP, the Company's auditor since 2004, issued a "going concern" qualification in its report dated March 1, 2023, citing that the Company does not expect to be in compliance with debt covenants in future periods without additional sources of liquidity or future amendments to its Credit Agreement, has a working capital deficiency, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. EMERGENT BIOSOLUTIONS: Vanguard Group Has 5.1% Stake as of Sept. 29 ------------------------------------------------------------------- The Vanguard Group disclosed in a Schedule 13G/A filed with the Securities and Exchange Commission that as of Sept. 29, 2023, it beneficially owns 2,646,366 shares of common stock of Emergent BioSolutions Inc., representing 5.11 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1367644/000110465923108046/tv0018-emergentbiosolutionsi.htm About Emergent Biosolutions Headquartered in Gaithersburg, MD, Emergent Biosolutions Inc. is a global life sciences company focused on providing innovative preparedness and response solutions addressing accidental, deliberate and naturally occurring public health threat. The Company's solutions include a product portfolio, a product development portfolio, and a contract development and manufacturing ("CDMO") services portfolio. Tysons, Virginia-based Ernst & Young LLP, the Company's auditor since 2004, issued a "going concern" qualification in its report dated March 1, 2023, citing that the Company does not expect to be in compliance with debt covenants in future periods without additional sources of liquidity or future amendments to its Credit Agreement, has a working capital deficiency, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. EMPIRE COMMUNITIES: Fitch Alters Outlook on 'B-' IDR to Stable -------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook of Empire Communities Corp. to Stable from Negative and affirmed the company's ratings, including its Long-term Issuer Default Rating (IDR) at 'B-', its USD375 million secured revolver at 'BB-'/'RR1' and its senior unsecured notes at 'B-'/'RR4'. The Outlook revision to Stable from Negative reflects the company's improved financial flexibility and better than expected operating results relative to Fitch's previous expectations. Strong net order growth during 2Q23 and higher average sales price of homes in backlog underpin Fitch's expectation of relatively stable margins despite headwinds in the housing sector. Fitch's expectation that EBITDA leverage and EBITDA interest coverage will have relatively comfortable cushion within the sensitivities of the 'B-' IDR supports the Stable Outlook. KEY RATING DRIVERS Improved Financial Flexibility: In January 2023, Empire amended its secured revolving credit facility and increased the facility commitment by USD110 million to USD375 million and extended the maturity from December 2023 to January 2026. Fitch believes this should provide the company with ample flexibility to navigate headwinds in the U.S. and Canadian housing markets while continuing to grow its U.S. operations. EBITDA interest coverage is forecast to be around 2.0x during the next few years. High Leverage: Fitch expects Empire's leverage to improve modestly, but remain elevated, as the company continues to grow its U.S. operations and generates negative FCF. Net debt to capitalization (excluding CAD35 million of cash classified by Fitch as not readily available for working capital and excluding non-controlling equity interest) is expected to be about 74% at the end of 2023 and around 70% at YE 2024, down from 77% as of June 30, 2023. EBITDA leverage is forecast to be 7.0x at the end of 2023 and 5.5x-6.5x at the end of 2024. Fitch's rating case forecast assumes revenues decline modestly while margins improve slightly this year, and revenues and margins improve in 2024. Volatile Cash Flow: Fitch expects Empire will generate negative cash flow from operations (CFO; after distributions from joint ventures and distributions to non-controlling interests) of CAD75 million to CAD125 million in 2023 due to elevated land and development spending, including the continued build-out of its high-rise projects. Fitch also expects Empire will generate slightly negative CFO in 2024 as continued working capital investment offsets higher profitability. Fitch's rating case forecast assumes higher debt levels in 2023 compared with YE 2022, and modest debt reduction in 2024. Empire's rating reflects Fitch's expectation that management would lower inventory spending and monetize its housing inventory if market conditions were to deteriorate. This should allow Empire to generate strong cash flow, which it could use to pay down debt or build cash on the balance sheet. However, given the company's exposure to high-rise projects, the ability to generate cash may not be as immediate as homebuilders focused on single-family homes as the high-rise projects, which take longer to construct, would need to be completed before Empire can monetize their backlog. Limited Geographic Diversification: The company is meaningfully less geographically diversified compared with most of the homebuilders in Fitch's coverage. At the end of 2Q23, Empire had 49 average active communities across five markets in the U.S. (Austin, San Antonio and Houston, TX, Atlanta, GA and various locations in North Carolina) and operations in the Greater Golden Horseshoe (including the Greater Toronto area) in the Southern Ontario region of Canada. Empire's geographic concentration in these select markets leaves the company exposed to an outsized impact if any of these markets were to experience a regional downturn. Strong Local Market Position in Canada: Empire is one of the leading low-rise builders in the Greater Golden Horseshoe region and Greater Toronto Area. Fitch views this as an advantage as scale in local metro markets provides homebuilders with efficiencies in purchasing and also enhances access to the local labor pool and land. Empire is predominantly a second-tier player (top 20 builder) in its U.S. markets given that it has only recently entered the U.S. As such, Empire's gross margins for its U.S. operations are lower compared to those of larger U.S. peers. Exposure to High-Rise Condominium Projects: Empire currently has four high-rise condominium projects, contributing about 5% of 2Q23 YTD revenues and gross profit. Fitch expects a larger contribution from these projects in 2024 as the completion of a project in late 2024 will lead to higher revenues from unit closings next year. These projects typically require significant upfront capital before generating revenues. A majority of these projects also take an extended period of time to construct, thus increasing risk, particularly in a housing downturn. The four high-rise projects are about 98% pre-sold as of June 30, 2023. Sales of high-rise units typically require at least a 20% down payment from the buyers, and, according to management, developers have recourse to the buyers should they decide to renege these contracts. Land Strategy: The company has a longer land position compared to its U.S. peers due to its exposure to the land-constrained Greater Golden Horseshoe market (including its high-rise operations) as well as its land development operations. The company's long overall land position, particularly in its land development operations in the U.S., makes the company susceptible to impairment charges if housing market conditions deteriorate. As of June 30, 2023, Empire controlled 23,207 lots, including 798 lot equivalents for its high-rise business and 4,041 lots for its land development operations. The company has an 9.4-year land supply (including high-rise units and land development operations). DERIVATION SUMMARY Empire Communities is meaningfully smaller and less geographically diversified when compared with the U.S. homebuilders in Fitch's coverage. The company's net debt to capitalization ratio of 74% and EBITDA leverage of 6.9x are significantly higher than its peers, including Adams Homes, Inc. (B+/Stable; net debt to capitalization of 25.5% and EBITDA leverage of 1.3x) and Dream Finders Homes, Inc. (BB-/Stable; net debt to capitalization of 51.5% and EBITDA leverage of 2.1x). The company's overall land position is also longer than its peers, although its land position in the U.S. is comparable to the large U.S. public homebuilders. Lastly, Empire's risk profile is higher given its exposure to high-rise projects as well as its land development operations. Its EBITDA margin is comparable to its U.S. peers. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer: - U.S. housing starts fall 10% in 2023 and decline mid-single digits in 2024; - Revenues decline 4%-5% in 2023 and improve 5%-7% in 2024; - EBITDA margin of 15.5%-16.5% in 2023 and 16%-17% in 2024; - Fitch-calculated net debt to capitalization of 74% at YE 2023 and around 70% at YE 2024; - Empire generates negative CFO of CAD75 million to CAD125 million in 2023 and slightly negative CFO in 2024; - EBITDA leverage of 7.0x at YE 2023 and 5.5x-6.5x at YE 2024; - EBITDA interest coverage of around 2.0x in 2023 and 2024. - SOFR rates averaging 5.5% in 2023 and 5.25% in 2024 KEY RECOVERY RATING ASSUMPTIONS Empire Communities' business profile could yield a distressed enterprise value of approximately CAD1.125 billion on the liquidation value of its inventory, receivables and PP&E. The CAD1.125 billion in resulting liquidation value exceeds Fitch's assessment of Empire's CAD900 million valuation as a going concern, given the high value of the company's inventory (low-rise and high-rise projects and land). Distress could result from a prolonged housing downturn, combined with an aggressive land and development spending. The going concern valuation is based on CAD150 million EBITDA estimate, reflecting Fitch's view of a sustainable, post reorganization EBITDA level. The GC EBITDA is 26% lower than the June 30, 2023 LTM EBITDA. Fitch assumes Empire could generate a 6.0x EBITDA multiple in a going concern sale. Fitch has assumed a 10% administrative claim. The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors: - 60% advance rate on inventory to account for shrinkage as well as impairment charges in a housing downturn. Fitch has revised the advance rate on inventory to 60% from 55% given Empire's significant land holdings in Canada that are carried at lower costs relative to their appraised values.; - 75% advance rate on receivables; - 50% advance rate on PP&E. Fitch assumed that the company's USD375 million secured revolving credit facility is 70%-90% drawn based on fluctuations in the borrowing base. The secured credit facility and Empire's high-rise project loans are senior to the company's unsecured notes in the waterfall. The allocation of the value in the liability waterfall results in a recovery corresponding to an 'RR1' for the senior secured revolving credit facility and a recovery corresponding to an 'RR4' for the unsecured notes. A material increase in the amount of secured high-rise debt or the total capacity of the secured revolving credit facility without a corresponding increase in Fitch's enterprise value assumptions in a recovery scenario could lead to a lower expected recovery for the unsecured notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Net debt-to-capitalization below 65% and EBITDA leverage consistently below 6.0x and the company maintains a healthy liquidity position; - Fitch may also consider positive rating actions if the company further diversifies its operations in the U.S. while maintaining a leadership position in the Greater Golden Horseshoe and Greater Toronto areas, while reporting net debt-to-capitalization approaching 65% and EBITDA leverage around 6.0x; - Fitch's view of improved financial flexibility as evidenced by the company's ability to fund land and development spending with funds from operations. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Deterioration in liquidity profile, including inability to meet covenant requirements or the company consistently generating negative cash flow from operations; - EBITDA interest coverage below 1.25x; - Inventory to debt consistently below 1.0x; - Net debt-to-capitalization consistently above 80%. LIQUIDITY AND DEBT STRUCTURE Sufficient Financial Flexibility: Empire has sufficient financial flexibility with cash of CAD131 million and roughly CAD124 million of borrowing availability under its USD375 million secured revolving credit facility that matures in January 2026. The company has sufficient liquidity to fund seasonal working capital needs. Fitch expects EBITDA interest coverage will be around 2.0x during the next few years. The company has CAD8.1 million of mortgage and non-revolving credit maturities in 2023 and about CAD123 million of debt maturities in 2024. Fitch expects some of these maturities will be rolled into new loans or extended. Nevertheless, Empire has sufficient cash and revolver availability to repay these if needed, although its liquidity will diminish somewhat. The company's next major maturity is in December 2025, when its two unsecured notes mature. Fitch expects the company will address these note maturities well before their due dates and Fitch's rating case forecast assumes that these notes are refinanced. Negative rating actions could occur if these notes become current and the company does not provide a credible plan to address their maturities. ISSUER PROFILE Empire Communities Corp. is one of the largest private homebuilders in North America. The company has leading market positions in the Greater Golden Horseshoe and Greater Toronto areas in Canada and has a small, albeit growing presence in the U.S. SUMMARY OF FINANCIAL ADJUSTMENTS Historical and projected EBITDA is adjusted to add back interest expense included in cost of sales and also excludes impairment charges, land option abandonment costs. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Empire Communities Corp. LT IDR B- Affirmed B- senior unsecured LT B- Affirmed RR4 B- senior secured LT BB- Affirmed RR1 BB- FREE SPEECH: Jones Fights Company Over $680K Back Pay Request ------------------------------------------------------------- Evan Ochsner of Bloomberg News reports that right-wing conspiracy theorist Alex Jones is facing resistance from his own company and a court-appointed bankruptcy trustee to his request for $680,000 in disputed, unpaid salary. Free Speech Systems—the parent company of Infowars—and the trustee overseeing its Chapter 11 case asked a judge to reject Jones' request for the payment. Jones is in the midst of his own, separate bankruptcy as well. Free Speech and Jones previously negotiated a $1.3 million annual salary for the conservative firebrand, Free Speech said in a Monday filing in the US Bankruptcy Court for the Southern District of Texas. About Free Speech Systems Free Speech Systems LLC is a broadcast media production and distribution company that provides broadcasting aural programs by radio to the public. Free Speech Systems is a family-run business founded by Alex Jones. FSS is engaged in the business of producing and syndicating Jones' radio and video talk shows and selling products targeted to Jones' loyal fan base via the Internet. FSS produces Alex Jones' syndicated news/talk show (The Alex Jones Show) from Austin, Texas, which airs via the Genesis Communications Network on over 100 radio stations across the United States and via the internet through websites including Infowars.com. Due to the content of Alex Jones' shows, Jones and FSS have faced an all-out ban of Infowars from mainstream online spaces. Shunning from financial institutions and banning Jones and FSS from major tech companies began in 2018. Jones, a conspiracy theorist, has been sued by victims' family members over Jones' lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet TV, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 22-60020) on April 18, 2022. The Debtors agreed to the dismissal of the Chapter 11 cases in June 2022 after the Sandy Hook victim families dismissed the three bankrupt companies from their lawsuits. Free Speech Systems filed a voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on July 29, 2022. In the petition filed by W. Marc Schwartz, as chief restructuring officer, the Debtor reported assets and liabilities between $50 million and $100 million. Melissa A. Haselden has been appointed as Subchapter V trustee. Alexander E. Jones filed for personal bankruptcy under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on Dec. 2, 2022, listing $1 million to $10 million in assets against liabilities of $1 billion to $10 billion in liabilities. Raymond William Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC, is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C., led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan, and Antonio Ortiz are representing Alex Jones. Judge Christopher Lopez oversees the FSS Chapter 11 case. GOLYAN ENTERPRISES: Unsecureds Get Share of Net Sale Proceeds ------------------------------------------------------------- Golyan Enterprises LLC submitted a Third Amended Disclosure Statement. The Plan is a liquidating plan as all assets of the Debtor will be liquidated to pay Allowed Claims against the Estate. This will be accomplished by both the sale of various assets, and the litigation and monetization of causes of action. As emphasized throughout the Plan, the Debtor's primary goal is to market and sell the Debtor's real property commonly known as 99-44 62nd Avenue, Rego Park, New York 11374, in the Borough of Queens, Block: 2107, Lot 24 (the "Premises"). The Premises is improved by a six story elevatored residential apartment building containing 62 apartments and a parking garage. The Premises have been under the control of the Receiver since at least September of 2020. Pursuant to the terms of the Cash Collateral Order, the Debtor has regained control of the Premises and its business, and will complete a review of the Receiver's books and records to determine whether the Debtor's business and/or property have been harmed by any inaction or action of the Receiver. The Receiver is required to file an accounting of all of his actions during his receivership. To date, that accounting has not been filed. The Debtor will pursue any and all causes of action against parties, if appropriate and recoverable under statute or case law, for damages and harm to the Premises. The Debtor has also retained a new Managing Agent and Broker. The Managing Agent will stabilize operations and seek to improve the rent roll and cure all violations that might impact the value of the Premises and the sale process. The Broker will seek to obtain the best possible price for the Premises under the timetable agreed to by the Debtor and the Lender as set forth in the Cash Collateral Order. Under the Plan, Class 2 consists of General Unsecured Claims. The Debtor anticipates that General Unsecured Claims, when and if to the extent Allowed, will receive a pro rata distribution of the Net Sale Proceeds from the sale of the Premises after payment of all Allowed Administrative, Priority and Secured Claims to be paid by the Debtor within 60 days after the Effective Date, with interest at the federal judgment rate in effect on the Confirmation Date, if the Claims are paid in full. The last date for creditors to file claims is August 11, 2023. Class 2 Claimants are impaired, and are eligible to vote on the Plan. The funding of the Plan through a combination of: (i) sale proceeds from the sale of the Premises; (ii) rents and other amounts collected during the Bankruptcy Case, and (iii) proceeds recovered from any causes of action will allow the Debtor make all distributions contemplated under the Plan. As a result, the Debtor submits that the Plan is feasible. Counsel to the Golyan Enterprises LLC: Avrum J. Rosen, Esq. Nico G. Pizzo, Esq. Law Offices of Avrum J. Rosen, PLLC 38 New Street Huntington, New York 11743 Tel: (631) 423-8527 A copy of the Disclosure Statement dated September 29, 2023, is available at https://tinyurl.ph/AVuaO from PacerMonitor.com. About Golyan Enterprises Golyan Enterprises, LLC, owns a residential apartment building located at 99-44 62nd Ave., Rego Park, N.Y. The property is valued at $12 million. Golyan Enterprises filed its voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 23-41647) on May 11, 2023, with $12,000,500 in assets and $10,472,736 in liabilities. Faraidoon Golyan, co-managing member, signed the petition. Judge Nancy Hershey Lord oversees the case. The Law Offices of Avrum J. Rosen, PLLC, serves as the Debtor's bankruptcy counsel. HAWAIIAN HOLDINGS: Fitch Alters Outlook on 'B-' IDR to Negative --------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook for Hawaiian Holdings, Inc. and Hawaiian Airlines, Inc. to Negative from Stable and has affirmed both entities' IDRs at 'B-'. In addition, Fitch has affirmed the Hawaiian Brand Intellectual Property, Ltd's, and Hawaiian Miles Loyalty, Ltd's senior secured debt at 'B+'/'RR2'. The Negative Outlook is driven by Fitch's expectation for weaker coverage and liquidity levels in the near to intermediate term. This is due to a delayed recovery in profitability driven by continued heavy competition that has been exacerbated by recent maintenance issues with Pratt and Whitney's geared turbo fan (GTF) engines. Fitch forecasts EBITDAR fixed charge coverage to run around 1x in near to immediate term, absent material improvement in profitability, which Fitch considers weak for the 'B-' rating. Support for the rating includes Hawaiian's current sizable liquidity balance that stands at $1.3 billion as of June 30, 2023. Hawaiian is expected to receive additional liquidity through compensation from RTX and cash flow related to flying air cargo for Amazon. However, visibility on these cash flows are limited. Fitch expects to resolve the Outlook within 12 to 18 months. Should Hawaiian exhibit an ability to manage profitability and improve its coverage ratio toward 1.25x, the Outlook may be revised to Stable, whereas continued underperformance may drive a downgrade. Fitch has also affirmed the rating for Hawaiian Airlines 2013-1 class A certificates at 'BB-'. The affirmation reflects no changes in Fitch's assessment of affirmation factor of the notes. The rating is achieved through a bottom up approach where Fitch assigns three notch uplift to the class A certificates from Hawaiian's 'B-' IDR. KEY RATING DRIVERS Adequate But Weakening Financial Flexibility: Fitch expects Hawaiian's EBITDAR Fixed Charge Coverage ratio to be under 1x through 2024, which is weak for the 'B-' rating. Fitch expects coverage to improve thereafter, but remain constrained, rising toward 1.4x in 2025. Fitch believes Hawaiian's weak coverage metrics are partly offset by its sizable liquidity balance. The company had $1.3 billion as of June 2023, consisting of cash, short-term investments and full revolver availability. Nevertheless, margin headwinds combined with sizable capex of about $550 million annually from 2024 to 2025 will likely sap the liquidity cushion unless alternative funding is secured. Fitch expects cash drain to be supplemented by compensation from RTX, as the engine manufacturer compensates airlines for the GTF engine issues. However, timing and magnitude of compensation remain uncertain. Hawaiian can also generate additional cash flow as the company starts flying 10 A330-300Fs for Amazon in late 2023 and 2024; although Fitch currently does not incorporate contribution from the Amazon contract in the agency's forecast, due to limited visibility on scheduling and potential size of the operations. Fitch recognizes Hawaiian also has some unencumbered assets after paying down the 2020-1 EETCs and purchasing recently delivered aircraft with cash. Prolonged Profitability Improvement: Fitch forecasts EBITDA margins to remain depressed at least through 2024, driven by challenges in raising unit revenues sufficiently to catch up with cost inflation. In its base case, Fitch projects Hawaiian will generate EBITDA margins in the negative single digits in 2023 and positive low single digits in 2024. Fitch believes the competitive market in Hawaii, increasing capacity from the addition of 787-9s in international markets, and Fitch's expected weaker economic environment will present headwinds to unit revenues. Rising costs related to wages, fuel, landing fees and maintenance also add pressure to profitability. Despite an increase in CASM of 17% in Q2 2023 relative to 2019, RASM has only increased 2%, driving weaker margins. Operating Environment Slows Recovery: Fitch expects maintenance issues with Hawaiian's GTF engines and recent wildfires in Maui to slow the recovery in traffic in the islands of Hawaii. Fitch currently assumes Hawaiian's traffic will not fully recover to the 2019 level until 2025, reflecting a moderate impact on capacity from grounded A321neos due to GTF engine inspections, impact of the Maui wildfire on travellers' plans into the beginning of 2024, and a weaker economic environment that weighs on domestic traffic. All of Hawaiian's 18 A321neos' engines were within the period impacted by Pratt & Whitney's production issues, although the final number and timing of inspections remain evolving as Pratt goes through individual engines. Arrival to Hawaii remained in decline at 4% yoy in the first week October 2023, with diversion of travels to other islands and the return of international visitors partially alleviating Maui traffic loss. Offsetting the challenges are a continued return of Japanese traffic, which has gained traction through 2023 and is currently at roughly 60% relative to pre-pandemic levels. Fitch expects returning Japanese traffic to provide a tailwind, though the weak Japanese Yen will likely limit the pace of recovery. Tourism from Japan represented 16% of Hawaiian arrivals prior to the pandemic. Hawaiian is also scheduled to take delivery of its 787-9s starting in 2024 that will add efficient capacity to international routes and to offset with a weaker domestic traffic. However, seat additions will likely keep yields weak. Maturity Wall in 2026: The majority of Hawaiian's debt, including the $1.2 billion loyalty notes and its 2013-1 EETCs, comes due in January 2026. Fitch currently expects Hawaiian to refinance the debt or settle a portion of the upcoming maturities in cash as profitability and credit metrics recover over the next two years. However, if the operating environment is more challenging than expected, weak credit metrics and declining cash balances could raise refinancing risks or put refinanced debt in unfavorable terms. The loyalty notes are currently trading around 12.5% YTM as of Oct 11, 2023. Market Concentration: Hawaiian's ratings have always been constrained by its reliance on tourist travel to the Hawaiian Islands. Unlike more diverse competitors, Hawaiian has greater exposure to risks such as natural disasters that could adversely affect its home market. Additionally, the Hawaiian market is competitive with the presence of other major national and international airlines. Market concentration risk for Hawaiian is partly offset by the relative resilience of leisure travel to the islands, which are perennially viewed as a top-tier vacation destination. EETC Rating Aircraft Tier and Stress Update: Collateral for the Hawaiian 2013-1 transaction consists of 2013 and 2014 vintage A330-200s. Fitch reclassified the A330-200 to Tier 3 from Tier 2 following its previous review of this transaction as part of a regular review of aircraft tier classifications. The tier revision was driven by sharp declines in A330 values through the pandemic, competition from newer generation technology, and a large percentage of the operating fleet in storage or retired. In connection with the tier revision, Fitch has raised its 'A' stress level for the aircraft to 45% from 40% and for the 'BBB' stress level to 40% from 35%. The transaction fails to pass Fitch's 'A' or 'BBB' level stress test with LTV remaining well above 100%. In such cases, Fitch's EETC criteria states that the rating achieved through the bottom-up approach can act as a rating floor. HA 2013-1 Class A Certificates Affirmation: The class A certificates' 'BB-' rating is achieved via Fitch's bottom-up approach and incorporates an unchanged three-notch uplift from Hawaiian's 'B-' IDR. The transaction benefits from two notches of uplift for a medium/high affirmation factor and one notch for the presence of a liquidity facility. The affirmation factor for the collateral aircraft is maintained at medium/high. Fitch believes the combination of a large number of leased A330s (50%) and older A330s in Hawaiian's fleet makes the A330s in the collateral pool less likely to be rejected in a bankruptcy scenario. The EETC debt also has a low coupon rate, supporting the affirmation of the collateral. The affirmation factor is negatively affected by Hawaii's plan to bring in 12 Boeing 787-9s with purchase rights for an additional 8 aircraft with scheduled deliveries between 2024 to 2027. These fuel-efficient, long-range aircraft with more available premium seats are strong substitutes to existing A330-200 aircraft. DERIVATION SUMMARY Fitch compares Hawaiian with Spirit Airlines (B+/ Negative). While both airlines are dealing with the GTF engine challenges, Hawaiian also faces headwinds related to increased inter-island competition, still recovering Japanese traffic, and the Maui wildfire that will slow recovery to pre pandemic level. Relative to Spirit, Hawaiian has a weaker financial profile, including credit and profitability metrics. EETC: The 'BB-' rating on the HA 2013-1 class A certificates is multiple notches below the rating on various comparable class A certificates issued by other airlines. The notching differential is driven by the concentration and depressed values of the A330-200s in the transaction and Hawaii's low corporate credit rating relative to other airlines. KEY ASSUMPTIONS - ASMs grow mid-single digits in 2024, driven by continued international traffic recovery and addition of 4 787-9s, partially offset by grounded A321s for engine inspections and Maui wildfire impact. Capacity beyond 2024 continues to increase upper single digits to low teens as more 787-9s are delivered and grounded aircraft come back from inspections. - RPMs recover to 2019 level by 2025 and load factor in the 83%-85% range from 2024 and 2026 - EBITDA margin improves slowly to low single digit percentage in 2024 and upper mid-single digit in 2025, due to limited RASM growth while wage increases from the new pilot contract, high fuel cost and other cost inflation (maintenance, airport landing fees) keep pressure on profitability. - CAPEX elevated at $550 million to $650 million through 2024 and 2025 as the company takes deliveries of the 787-9s. Fitch expects aircraft to be 75% financed by debt in a case of prolonged profitability recovery. Recovery Analysis for the Loyalty Program: Fitch's recovery analysis assumes that Hawaiian would be reorganized as a going concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim and assumes a bankruptcy scenario is driven by a combination of structural competition in the islands of Hawaii, prolonged economic downturn or elevated fuel prices. Fitch's estimate for the value available to the loyalty program-backed creditors is based on an internally generated discounted cash flow (DCF) analysis and assumes conservative future cash flows reflecting a materially shrinking customer base and a slow recovery post-bankruptcy. This analysis results in secured creditors receiving strong recovery in the 'RR2' band. EETC: - Key assumptions within the rating case for the issuer include a harsh downside scenario in which Hawaiian declares bankruptcy, chooses to reject the collateral aircraft, and where the aircraft are remarketed in the midst of a severe slump in aircraft values. Hawaiian's bankruptcy is hypothetical, and is not Fitch's current expectation; - Fitch's analysis incorporates a 8% annual depreciation rate for Tier 3 aircraft. - Fitch's recovery analyses utilize Fitch's 'BB' level stress tests and include a full draw on liquidity facilities and assumptions for repossessions and remarketing costs. Aircraft Value Stresses - A330-200: A level stress at 45%, BBB level stress at 40%, and BB level stress at 35%. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a Stabilization of the Outlook: - EBITDAR Fixed Charge Coverage towards 1.25x or higher; - Alleviation of liquidity and refinance risks demonstrated by improving profitability level and an ability to finance aircraft to maintain liquidity above $750 million. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Expectations for total EBITDAR leverage to fall below 5x; - EBITDAR Fixed Charge Coverage moving toward 2x Factors that could, individually or collectively, lead to negative rating action/downgrade: - Heightened liquidity and refinance risks, including total liquidity falling below $500 million; - EBITDAR Fixed Charge Coverage sustained at or below 1x. EETC: Factors that could, individually or collectively, lead to positive rating action/upgrade: - Positive rating actions are unlikely at this time due to the negative outlook on Hawaiian's IDR and depressed values for the A330-200 aircraft. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Due to the sharp decline in appraised values for aircraft in the HA 2013-1 transaction, the rating for the class A certificates are achieved via a bottom-up approach that acts as a rating floor. Should Fitch downgrades Hawaiian's IDR or change in assessment factor, the notes will be downgraded accordingly LIQUIDITY AND DEBT STRUCTURE Liquidity: As of June 30, 2023, Hawaiian held $1.3 billion liquidity consisting of $227 million cash on hand, $1.0 billion short-term investments and a full availability on its $235 million revolver. The level of total liquidity is equivalent to roughly 50% of 2019 revenues. Debt Maturities: Hawaiian's debt structure primarily consists of secured borrowings and aircraft-backed debt. The company's revolver matures in December 2025 and the majority of its debt including the $1.2 billion loyalty notes and $185 million EETC debt matures next in January 2026. The rest of Hawaiian's borrowing primarily consists of aircraft loan agreements secured by Boeing 717s, Japanese Yen denominated aircraft loans, capital leases on aircraft and loans under the PSP programs. ISSUER PROFILE Hawaiian Holdings, Inc. (NYSE: HA) is the parent company of Hawaiian Airlines, Inc., Hawaii's largest airline. The company is solely dedicated to serving customers coming to and from Hawaii and those traveling between the islands of Hawaii. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Hawaiian Holdings, Inc. LT IDR B- Affirmed B- Hawaiian Brand Intellectual Property, Ltd. senior secured LT B+ Affirmed RR2 B+ Hawaiian Airlines, Inc. LT IDR B- Affirmed B- HawaiianMiles Loyalty, Ltd. senior secured LT B+ Affirmed RR2 B+ Hawaiian Airlines 2013-1 Pass Through Trust senior secured LT BB- Affirmed BB- HAWK LOGISTICS: Linda Leali Named Subchapter V Trustee ------------------------------------------------------ The U.S. Trustee for Region 21 appointed Linda Leali, Esq., as Subchapter V trustee for Hawk Logistics LLC. Ms. Leali will be paid an hourly fee of $450 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Leali declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Linda M. Leali Linda M. Leali, P.A. 2525 Ponce De Leon Blvd., Suite 300 Coral Gables, FL 33134 Phone: (305) 341-0671, ext. 1 Fax: (786) 294-6671 Email: leali@lealilaw.com About Hawk Logistics Hawk Logistics, LLC operates in the general freight trucking industry. The company is based in North Bay Village, Fla. Hawk Logistics filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-18059) on Oct. 2, 2023, with $1 million to $10 million in both assets and liabilities. Osmel Guzman, chief financial officer, signed the petition. Judge Laurel M. Isicoff oversees the case. Eric J. Silver, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. represents the Debtor as legal counsel. HEYWOOD HEALTHCARE: Hits Chapter 11 Bankruptcy Protection --------------------------------------------------------- Maria Papadopoulos of Boston 25 News reports that Gardner-based Heywood Healthcare has voluntarily filed for Chapter 11 bankruptcy protection, the organization announced Monday, October 2, 2023. Heywood Healthcare operates Athol Hospital, Heywood Hospital, Heywood Medical Group, Heywood Rehabilitation Center, Murdock School-based Health Center, The Quabbin Retreat, and Winchendon Health Center. "Core hospital services will continue to operate as usual," Rozanna Penney, co-CEO of Heywood Healthcare, said in a statement Monday, October 2, 2023. In a statement on its website, Heywood Healthcare said, "In the midst of the pandemic, Heywood Healthcare and community hospitals across the Country were adversely affected by workforce and supply chain challenges and the revenue shortfalls it caused. Heywood Healthcare was also impacted by a costly and lengthy electronic medical record (EMR) transition, while managing its aging infrastructure, and engagement in a milestone construction project, also significantly impacted by the current economic landscape." Over the past few months, Heywood Healthcare said it "has made significant progress. Strong volume, responsible fiscal management, excellent operational stewardship, robust revenue cycle work and a dedicated workforce has contributed to improving its financial performance." "However, low reimbursement rates and the impact of the aforementioned events have contributed to a substantially challenging operational infrastructure," the organization said. "Heywood Hospital has stood independently for 116 years, while navigating national and local challenges, which include Heywood being one of the lowest commercially reimbursed hospitals in Commonwealth. Athol Hospital has operated for 73 years, and remains a hallmark critical access hospital. Though our health system has stood the test of time, we are not impervious to financial challenges," Tom Sullivan, co-CEO of Heywood Healthcare, said in a statement. Sullivan said Chapter 11 protection or "Reorganization" is a strategic business measure that provides the necessary framework and process to address historical and pressing fiscal challenges. "This path enables us to continue to provide essential healthcare services to our community, while restructuring historical financial obligations," he said. Penney said, "Access to quality healthcare in the Gardner and Athol areas remains our utmost priority. We are committed to our community, our patients, our medical staff and our employees." She said in the days and weeks ahead, "Heywood Healthcare will continue to provide exceptional patient-centered care and remain laser-focused on operational stability." About Heyward Healthcare Heyward Healthcare Inc. is a non-profit community-owned hospital licensed for 134 bed hospital, located in Gardner, Massachusetts. Heyward Healthcare Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Lead Case No. 23-40817) on October 1, 2023. In the petition filed by homas Sullivan, as co-chief executive office, the Debtor reports estimated assets between $100,000 and $500,000 and estimated liabilities up to $50,000. The Honorable Bankruptcy Judge Elizabeth D. Katz handles the case. FLICK LAW GROUP, P.C., is the Debtor's counsel. HOWARD STREET: Case Summary & Four Unsecured Creditors ------------------------------------------------------ Debtor: Howard Street Dance Company LLC 100 Main Street, Suite 1000 White Plains, NY 10606 Business Description: The Debtor is engaged in activities related to real estate. Chapter 11 Petition Date: October 16, 2023 Court: United States Bankruptcy Court Southern District of New York Case No.: 23-22766 Debtor's Counsel: Julie Curley, Esq. KIRBY AISNER & CURLEY LLP 700 Post Road Suite 237 Scarsdale, NY 10583 Tel: (914) 401-9503 Email: jcurley@kacllp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by James McGown as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/C54Q7IA/Howard_Street_Dance_Company_LLC__nysbke-23-22766__0001.0.pdf?mcid=tGE4TAMA I & A DEVELOPMENT: AJ Partners Says Plan Unconfirmable ------------------------------------------------------ Creditor AJ Partners, LLC, filed objections to the request of the debtors I & A Development LLC and ISF Properties LLC for the entry of an order approving their Disclosure Statement. The objections are founded upon the following factors: * The plan is unconfirmable on its face because AJ Partners, the sole secured creditor is impaired under the plan and AJ has made known its objections to the plan. There would therefore be no accepting impaired classes. Without the consent of AJ this plan cannot be confirmed. * In addition to AJ objecting to the plan, there are numerous deficiencies in the disclosure warranting disapproval: - There is no disclosure as to available cash in the debtor in possession bank account; - No projection of administrative expenses including legal fees and US Trustee fees that would need to be paid; - While they claim that payments will be made from "available cash" the latest operating report shows $279 in it so essentially there is no available cash. To the extent the debtor claims there is material cash, we will need discovery on income generated by the property, which may not be accurately reported. * The Debtor has failed to provide an ongoing accounting of the rental income being generated by the debtor's real estate. Based upon the Debtors' lack of reporting, the creditor does not know the amount of the required monthly rent due from the tenant, how much is paid, when it is paid or what period the rent is owed for. If this case proceeds, the creditor will likely need to issue subpoenas and/or examine the tenants to confirm the rental status. Attorneys for AJ PARTNERS, LLC: ADAM E. MIKOLAY, P.C. 400 Garden City Plaza Suite 405 Garden City, NY 11530 (516) 222-2050 (516) 222-0450 ICONIC BRANDS: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: Iconic Brands, Inc. 44 Seabro Avenue Amityville NY 11701 Business Description: The Debtor is a vertically integrated company offering a unique portfolio of wine & spirits, RTF alcohol ice pops, RTD cocktails, and mixers in the "Better-for- You","Better-for-the-Planet" categories. Involuntary Chapter 11 Petition Date: October 16, 2023 Court: United States Bankruptcy Court Eastern District of New York Case No.: 23-73829 Petitioners' Counsel: Keri Costello, Esq. SULLIVAN & WORCESTER LLP 1633 Broadway New York, NY 10019 Phone: (212) 660-3033 Email: kcostello@sullivanlaw.com A full-text copy of the Involuntary petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LMOYOUI/Iconic_Brands_Inc__nyebke-23-73829__0001.0.pdf?mcid=tGE4TAMA Alleged creditors who signed the petition: Petitioner Nature of Claim Claim Amount Arena Investors, LP Promissory Note $660,000 405 Lexington Ave., 59th Floor New York, NY 10174 Arena Finance Markets, LP Promissory Note $1,615,000 405 Lexington Ave., 59th Floor New York, NY 10174 Arena Special Opportunities Promissory Note $4,445,000 Partners I, LP 405 Lexington Ave., 59th Floor New York, NY 10174 INNOVATE CORP: CEO to Receive $500K in Annual Salary ---------------------------------------------------- Innovate Corp. disclosed in a Form 8-K filed with the Securities and Exchange Commission that it entered into an employment agreement with its newly appointed Chief Executive Officer Mr. Paul K. Voigt dated as of Oct. 6, 2023, setting forth the terms of his employment with the Company. Pursuant to the Employment Agreement, Mr. Voigt will receive an annual base salary of $500,000, and will be eligible to receive an annual discretionary bonus as determined by the Compensation Committee. The Employment Agreement further provides that Mr. Voigt shall receive (i) a one-time restricted stock award of shares of the Company's common stock, par value $0.001 per share, with a fair market value of $1,500,000, which will be 100% vested on the first anniversary of the issuance and subject to the terms of the Company's equity incentive plan; and (ii) in each year of Mr. Voigt's employment, a stock option award to purchase 1,000,000 shares of Common Stock, with an exercise price to be determined by the Compensation Committee, which will be 100% vested on the first anniversary of the issuance and subject to the terms of the Company's equity incentive plan. About Innovate New York-based Innovate -- www.innovatecorp.com -- is a diversified holding company that has a portfolio of subsidiaries in a variety of operating segments. The Company seeks to grow these businesses so that they can generate long-term sustainable free cash flow and attractive returns in order to maximize value for all stakeholders. As of Dec. 31, 2022, its three operating platforms or reportable segments, based on management's organization of the enterprise, are Infrastructure, Life Sciences and Spectrum, plus its Other segment, which includes businesses that do not meet the separately reportable segment thresholds. Innovate Corp. reported a net loss of $42 million in 2022 following a net loss of $236.2 million in 2021. As of June 30, 2023, the Company had $1.08 billion in total assets, $1.19 billion in total liabilities, $10.1 million in total temporary equity, and a total stockholders' deficit of $128.1 million. * * * As reported by the TCR on May 17, 2023, S&P Global Ratings lowered its issuer credit rating on Innovate Corp. to 'CCC+' from 'B-'. S&P said, "We expect Innovate to maintain less than adequate liquidity over the next 12 months. This reflects our expectation that while the company has enough liquidity to continue operating for the next 12 months, we believe the cushion is very thin and could quickly erode." INSTANT BRANDS: Centre Lane Sale Approved by Court -------------------------------------------------- Instant Brands, maker of consumer favorites like Instant Pot, Corelle, Pyrex, Snapware, CorningWare, Visions and Chicago Cutlery, announced that following a comprehensive sale process and competitive auction, the U.S. Bankruptcy Court for the Southern District of Texas approved the Company pursuing the sale of its housewares and appliance businesses to affiliates of Centre Lane Partners. "We believe our Company's sale to Centre Lane Partners represents the best path forward for our customers, retail partners, suppliers and employees," said Ben Gadbois, President and CEO of Instant Brands. "Through this process, we have found a great solution to fix our unsustainable capital structure that allows our business to continue driving innovation through our portfolio of iconic brands for consumers around the world." Mr. Gadbois continued, "We would also like to thank all of our employees across the globe for their continued hard work and dedication throughout this court-supervised process." The Company has entered into Asset Purchase Agreements with affiliates of Centre Lane, pursuant to which these affiliates will acquire Instant Brands' housewares and appliance businesses in separate transactions. The transactions are subject to regulatory approval and other closing conditions in the U.S. and Canada. Both transactions are expected to close in the fourth quarter of 2023. Additional information regarding the Company's court-supervised process is available at Instant Brands' restructuring website, InstantBrandsRestructuring.com. Court filings and other information related to the proceedings are available on a separate website administered by the Company's claims agent, Epiq, at https://dm.epiq11.com/InstantBrands, by calling Epiq toll-free at (888) 290-5211 (or (503) 694-4156 for calls originating outside of the U.S.), or by sending an email to InstantBrandsInfo@epiqglobal.com. Davis Polk & Wardwell LLP is serving as Instant Brands' legal counsel, Guggenheim Securities, LLC is serving as investment banker and AlixPartners is serving as restructuring advisor. About Instant Brands Instant Brands designs, manufactures and markets a global portfolio of innovative and iconic consumer lifestyle brands: Instant, Pyrex, Corelle, Corningware, Snapware, Chicago Cutlery, ZOID and Visions. Instant Brands Holdings Inc. and Instant Brands Inc., and their affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90716) on June 12, 2023. In the petition signed by Adam Hollerbach, chief restructuring officer, the Debtors disclosed up to $1 billion in both assets and liabilities. Judge David R. Jones oversees the case. Davis Polk & Wardwell LLP's Brian M. Resnick, Steven Z. Szanzer and Joanna McDonald serve as counsel to the Debtors. The Debtors also tapped Haynes and Boone, LLP as Texas counsel, Stikeman Elliott LLP as Canadian counsel, AlixPartners, LLP as financial advisor, Guggenheim Securities LLC as investment banker, and Epiq Corporate Restructuring, LLC as claims, noticing, agent, solicitation and administrative advisor. DLA Piper LLP (US) serves as counsel to the Official Committee of Unsecured Creditors. Ropes & Gray LLP serves as counsel to the DIP Lenders, and Moelis & Company LLC and Ankura Consulting Group, LLC act as advisors to the Term DIP Secured Parties. Skadden, Arps, Slate, Meagher & Flom LLP and Norton Rose Fulbright and Norton Rose Fulbright Canada LLP serve as counsel and FTI Consulting as financial advisor to the ABL DIP Secured Parties. Kramer Levin Naftalis & Frankel LLP serves as counsel to Cornell Capital. INSULATED WALL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Insulated Wall Holdings, LLC d/b/a Wally Walls 6320 30th Ave Kenosha, WI 53143 Business Description: The Debtor produces light gauge steel structural insulated panels in Kenosha, Wisconsin. Chapter 11 Petition Date: October 16, 2023 Court: United States Bankruptcy Court Eastern District of Wisconsin Case No.: 23-24709 Judge: Hon. G. Michael Halfenger Debtor's Counsel: Evan P. Schmit, Esq. KERKMAN & DUNN 839 N. Jefferson St., Ste. 400 Milwaukee, WI 53202-3744 Tel: 414-277-8200 Email: eschmit@kerkmandunn.com Total Assets as of December 31, 2022: $1,500,317 Total Debts as of December 31, 2022: $2,268,856 The petition was signed by David T. Wallach as CEO. 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/SOLYA2I/Insulated_Wall_Holdings_LLC__wiebke-23-24709__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/SFEZRPI/Insulated_Wall_Holdings_LLC__wiebke-23-24709__0001.0.pdf?mcid=tGE4TAMA JLM COUTURE: William Homony Named Subchapter V Trustee ------------------------------------------------------ The U.S. Trustee for Regions 3 and 9 appointed William Homony of Miller Coffey Tate, LLP as Subchapter V trustee for JLM Couture, Inc. Mr. Homony will be paid an hourly fee of $400 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Homony declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: William A. Homony, CIRA Miller Coffey Tate, LLP 1628 John F. Kennedy Boulevard, Suite 950 Philadelphia, PA 19103 Telephone: (215) 561-0950 ext. 26 Fax: (215) 561-0330 Email: bhomony@mctllp.com About JLM Couture JLM Couture, Inc. operates a bridal design and manufacturing business in New York. It operates 12 collections, nine of which are bridal lines, one bridesmaid line and one flower girl line. JLM Couture filed its voluntary petition for relief under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Del. Case No. 23-11659) on Oct. 2, 2023, with $2,850,196 in total assets and $2,115,305 in total liabilities. Joseph L. Murphy, president, signed the petition. Judge J. Kate Stickles oversees the case. The Debtor tapped Cross & Simon, LLC as its legal counsel. LANDMARK COMMERCIAL: Case Summary & Four Unsecured Creditors ------------------------------------------------------------ Debtor: Landmark Commercial Centers Development Inc. Carretera Num. 2 San German, PR 00683 Business Description: The Debtor is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: October 16, 2023 Court: United States Bankruptcy Court District of Puerto Rico Case No.: 23-03338 Debtor's Counsel: Wigberto Lugo Mender, Esq. LUGO MENDER GROUP, LLC 100 Carr 165 Suite 501 Guaynabo, PR 00968-8052 Tel: (787) 707-0404 Fax: (787) 707-0412 Email: wlugo@lugomender.com Total Assets: $6,555,072 Total Liabilities: $8,609,063 The petition was signed by Jose A. Feliciano-Ruiz as president. A full-text copy of the petition containing, among other items, a list of the Debtor's Four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PDEEKNY/LANDMARK_COMMERCIAL_CENTERS_DEVELOPMENT__prbke-23-03338__0001.0.pdf?mcid=tGE4TAMA LEGACY CARES: Failed to Receive Qualified Bids ---------------------------------------------- Martin Z. Braun of Bloomberg News reports that a bankrupt Arizona youth sports complex financed with $280 million municipal bonds didn't receive any qualified bids by a Sept. 28 deadline, but several parties are still interested, the debtor said in a bankruptcy court filing. Legacy Cares, Inc., the nonprofit owner of the 320-acre Legacy Park, is working with its investment banker, Miller Buckfire, to "improve/confirm" submissions so they become qualified bids to purchase the complex must have committed financing and meet 21 other conditions to be deemed qualified, according to the bidding procedures. About Legacy Cares Legacy Cares, Inc. is a 501c3 non-profit organization dedicated to providing athletes and non-athletes of all ages, economic backgrounds and levels of athletic proficiency the opportunity to participate in sports and e-sports while fostering the enjoyment and camaraderie of teamwork and perseverance, key components in athletic competition and lifetime success. The organization is based in Mesa, Ariz. Legacy Cares sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02832) on May 1, 2023, with $242,329,104 in assets and $366,719,676 in liabilities. Douglas Moss, president of Legacy Cares, signed the petition. Judge Daniel P. Collins oversees the case. The Debtor tapped Henk Taylor, Esq., at Warner Angle Hallam Jackson Formanek, PLC as bankruptcy counsel; Papetti Samuels Weiss McKirgan, LLP and Slania Law, PLLC as special counsels; and Miller Buckfire & Co., LLC and its affiliate, Stifel, Nicolaus & Co., Inc., as investment banker. Epiq Corporate Restructuring, LLC is the noticing, claims and balloting agent. The U.S. Trustee for Region 14 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. Pachulski Stang Ziehl & Jones, LLP and AlixPartners, LLP serve as the committee's legal counsel and financial advisor, respectively. LEGACY-XSPIRE: Seeks Chapter 11 Bankruptcy Protection ----------------------------------------------------- Legacy-Xspire Holdings LLC filed for chapter 11 protection in the Middle District of Florida. According to court documents, the Debtor reported between $10 million and $50 million in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Nov. 1, 2023, at 10:00 AM, TELEPHONIC MEETING. CONFERENCE LINE:866-910-0293 PARTICIPANT CODE:7560574. About Legacy-Xspire Holdings Legacy-Xspire Holdings LLC market and distribute niche branded and generic prescription products to physicians, pharmacies, wholesale distributors, and specialty pharmaceutical distributors across the United States. Legacy-Xspire's product portfolio consists primarily of therapies for pain management and steroid-responsive disease states. Legacy-Xspire Holdings LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-04251) on Sept. 26, 2023. In the petition filed by Greg Stokes, as CEO, the Debtor reports estimated assets between $50 million and $100 million and estimated liabilities between $10 million and $50 million. Honorable Bankruptcy Judge Roberta A. Colton oversees the case. The Debtor is represented by: Steven M Berman, Esq. Shumaker, Loop & Kendrick, LLP 5550 W Executive Drive Ste. 230 Tampa, FL 33609 LTL MANAGEMENT: Unsuccessful 'Two-Step' Bankruptcies Cost $178M --------------------------------------------------------------- Evan Ochsner of Bloomberg Law reports that Johnson & Johnson's failed effort to use bankruptcy to resolve widespread cancer lawsuits has cost about $178 million in legal fees, offering a price tag for an increasingly controversial litigation strategy. J&J has on two separate occasions placed its subsidiary, LTL Management LLC, into bankruptcy to address tens of thousands of claims that its talc-based baby powder caused cancer. The millions of dollars in fees are part of the rising cost of corporate lawyers, but also the time and effort of pursuing a relatively new legal strategy in an already complicated Chapter 11. J&J has been trying to employ the Texas Two-Step, the legal tactic that roughly half a dozen companies—including Koch Industries Inc.-backed Georgia-Pacific LLC—have used with the goal of settling mass tort liabilities outside of the traditional judicial system. Neither of J&J's attempts have worked so far. It has appealed the July dismissal of the second bankruptcy attempt. "It seems to me $175 million is a lot to pay for a failed strategy," said Bruce Markell, a Northwestern University law professor and former bankruptcy judge. The first bankruptcy and a related appeal incurred fees of about $116 million, court records reviewed by Bloomberg Law show. The second bankruptcy attempt, which was dismissed in July 2023, has so far racked up approximately $62 million in fees. The company still faces claims that its talc-based products caused cancer, and the suits have already cost it billions of dollars in verdicts, settlements, and litigation fees. Still, the fees represent a mere fraction of J&J’s overall financial wealth. The company reported $94.9 billion in 2022 gross sales and offered $8.9 billion to resolve the talc claims. Even if failed, the bankruptcies weren't without benefits, shielding J&J from most talc-related lawsuits while pursuing them. The company also notched a victory Tuesday when an appeals court threw out a jury verdict that had awarded $223 million to a group of people who blamed their cancers on J&J's talc-based products. Now, it must resume defending itself in talc cases outside of bankruptcy, meaning money it had offered to settle with victims will go to legal expenses, J&J's worldwide vice president for litigation Erik Haas said at a September Senate hearing. "At the end of the day, the $8.9 billion is going to go to one place: lawyers who are litigating this case," Haas said. "A bankruptcy resolution would provide—and is the only way to provide in the short term—an equitable resolution." A Novel Case Jones Day, lead counsel for LTL in both bankruptcies, charged a combined $42.4 million for its work on the cases over the course of nearly two years, according to court filings. But that dollar amount isn't unusual for lead counsel in a case of this size and complexity. Kirkland & Ellis LLP charged about $40 million for its work on a 3M Co. subsidiary's bankruptcy that raised similar issues and lasted about 10 months. The Third Circuit threw out LTL's first bankruptcy case in January, ruling that LTL didn't qualify for bankruptcy relief because, with J&J's financial backing, it wasn’t in financial distress. Just hours after the first bankruptcy was formally dismissed in April, J&J again placed LTL into Chapter 11. But Judge Michael Kaplan of the US Bankruptcy Court for the District of New Jersey dismissed that case as well. Applying the Third Circuit's standard, he ruled that LTL couldn't receive bankruptcy protection because it wasn’t in "imminent and immediate financial distress." LTL has appealed Kaplan's ruling. The novelty of the Texas Two-Step makes it vulnerable to higher fees, lawyers said. Complex or unusual cases usually bring steeper fees because lawyers spend more time working on them. The FTX bankruptcy is another example of a complicated, expensive case. Multiple lawyers in the crypto exchange's bankruptcy have charged more than $2,000 an hour. FTX racked up more than $200 million in fees in just seven months as attorneys and judges alike found themselves in the unfamiliar territory of digital currency. The Texas Two-Step and crypto bankruptcies are similar in that they're both still-developing areas of the law, said Nancy Rapoport, a University of Nevada, Las Vegas bankruptcy professor who has worked as a fee examiner in Chapter 11 cases. Breaking Down the Costs Claimant lawyers seeking damages from J&J moved to dismiss the bankruptcies several times, repeatedly arguing that the two-step strategy was illegal. Under the bankruptcy code, LTL was on the hook to pay for that opposition: Debtors have to cover the legal fees of court-approved creditors' committees. LTL incurred committee fees totaling about $56.7 million during the first bankruptcy and the subsequent appeal. Its own lawyers, consultants, and financial advisers charged approximately $53.7 million for the same time period, court records show. Another $4.8 million was billed by the teams backing a court-appointed fee examiner and a representative advocating for the value of future claims. In the second bankruptcy, the company has so far incurred about $33.5 million on the combined cost of its own professionals and those of a group of claimant law firms that supported the $8.9 billion settlement proposal. The official committee that fought to dismiss the bankruptcy billed about $27.6 million. In all, at least 38 different law firms, financial advisers, and other experts billed LTL for their work on the bankruptcies or the related appeal. Rising Rates Most professionals charged more per hour for the second bankruptcy than they did for the first. Jones Day partner Greg Gordon charged $1,550 an hour for services he provided in the first LTL bankruptcy, which was filed in October 2021. After the US Court of Appeals for the Third Circuit struck down the strategy—which Gordon has called the "greatest innovation in the history of bankruptcy"— Jones Day upped Gordon's rate. In the second bankruptcy, filed in April, Gordon charged $1,800 an hour. The rate change is par for the course amid a rapid increase in hourly rates seen across the restructuring field. In multiple cases this 2023, lawyers charged upwards of $2,000 an hour. Brown Rudnick LLP partner David Molton came close to the $2,000-an-hour mark in the second bankruptcy, charging $1,950 per hour—up from $1,620 per hour in the first case. Molton was part of the group that led the opposition to both bankruptcies. Rates have ballooned over the past decade. In 2009, Judge Kevin Carey of the US Bankruptcy Court for the District of Delaware capped a Sidley Austin LLP partner's fees at $925 per hour in the Tribune Co. bankruptcy, one of the more onerous and lengthy Chapter 11 cases of the time. Carey said any lawyer seeking to charge more than that needed to provide evidence in support of a higher fee. "It took us a long time to get to $1,000 an hour as a permissible rate, and in a relatively, comparatively short period of time, we’re now north of $2,000 an hour," said Robert Keach, co-chair of Bernstein Shur Sawyer & Nelson PA's restructuring group, who worked as the fee examiner in the first LTL bankruptcy. Keach declined to comment on LTL's fees. With LTL, Jones Day was testing a strategy in which a company designates its liability to a subsidiary and then places that subsidiary into bankruptcy. The legality and effectiveness of the Texas Two-Step are still up in the air as companies that have tried it—including Georgia-Pacific unit Bestwall LLC, which faces mass asbestos liabilities—remain mired in lengthy court battles. "Maybe at some point people are worth $2,000 an hour," Markell said. "But I would like them to get paid $2,000 an hour for strategies that have uniformly succeeded rather than strategies that are still being tested." When claimants asked the Third Circuit to strike down the first bankruptcy, LTL brought in Hogan Lovells partner and former acting Solicitor General Neal Katyal, who charged $2,465 an hour. His rate prompted an objection from the Justice Department, which was overruled. 'Astronomical' Fees Bankruptcy has long been an expensive exercise. Lehman Brothers Holdings Inc., the largest bankruptcy in US history, accrued more than $2 billion in legal fees. The size of a bankrupt company, the number of professionals retained, and the existence of official committees all have significant effects on how much a bankruptcy costs, according to a 2007 study commissioned by the American Bankruptcy Institute. Total fees for the LTL litigation will climb as lawyers continue to submit fee applications for their work during both bankruptcies, even after the cases were dismissed. The company will also have to cover appellate costs. Cases like Lehman Brothers and FTX show that bankruptcy can be far more expensive than what LTL's cases so far. Even so, the cost of the case is striking, said Cliff White, the former head of the Justice Department's bankruptcy watchdog. "When I tell you that fees approaching $200 million are not unprecedented, it's not to diminish the fact that they are astronomical," he said. The cases are LTL Management LLC, Bankr. D.N.J., No. 21-30589, 4/4/23 and LTL Management LLC, Bankr. D.N.J., No. 23-12825, 8/11/23. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. Re-Filing of Chapter 11 Petition On Jan. 30, 2023, a panel of the Third Circuit issued an opinion directing the Court to dismiss the 2021 Chapter 11 Case on the basis that it was not filed in good faith. Although the Third Circuit panel recognized that the Debtor "inherited massive liabilities" and faced "thousands" of future claims, it concluded that the Debtor was not in financial distress before the filing. On March 22, 2023, the Third Circuit entered an order denying the Debtor's petition for rehearing. The Third Circuit entered an order denying LTL's stay motion on March 31, 2023, and, on the same day, issued its mandate directing the Bankruptcy Court to dismiss the 2021 Chapter 11 Case. The Bankruptcy Court entered an order dismissing the 2021 Case on April 4, 2023. Johnson & Johnson on April 4, 2023, announced that its subsidiary LTL Management LLC (LTL) has re-filed for voluntary Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain approval of a reorganization plan that will equitably and efficiently resolve all claims arising from cosmetic talc litigation against the Company and its affiliates in North America. In the new filing, J&J said it has agreed to contribute up to a present value of $8.9 billion, payable over 25 years, to resolve all the current and future talc claims, which is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL's initial bankruptcy filing in October 2021. LTL also has secured commitments from over 60,000 current claimants to support a global resolution on these terms. MADARIPUR LLC: Salvatore LaMonica Named Subchapter V Trustee ------------------------------------------------------------ The U.S. Trustee for Region 2 appointed Salvatore LaMonica, Esq., at LaMonica Herbst & Maniscalco, LLP, as Subchapter V trustee for Madaripur, LLC. Mr. LaMonica will be paid an hourly fee of $675 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. LaMonica declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Salvatore LaMonica, Esq. LaMonica Herbst & Maniscalco, LLP 3305 Jerusalem Avenue, Suite 201 Wantagh, NY 11793 Phone: 516-826-6500 Email: sl@lhmlawfirm.com About Madaripur LLC Madaripur, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-43559) on Oct. 2, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Elizabeth S. Stong oversees the case. Thomas A. Farinella, Esq., at the Law Offices of Thomas A. Farinella, PC represents the Debtor as bankruptcy counsel. MALLINCKRODT PLC: Nears End of Opioid Settlement, 2nd Bankruptcy ---------------------------------------------------------------- Steven Church of Bloomberg News reports that drug maker Mallinckrodt Plc made its final push Wednesday, October 4, 2023, for a new debt-reduction plan that gives victims of America's opioid epidemic about $1 billion less than they were promised the last time the company tried to use the bankruptcy process to revive itself. The company asked US Bankruptcy Judge John Dorsey to dismiss objections from shareholders who argue that Mallinckrodt should have tried harder to resolve its debt woes without filing a Chapter 11 case. Under the plan, shareholders will be wiped out, which happens in nearly all big bankruptcies unless creditors are paid in full. About Mallinckrodt plc Mallinckrodt plc is global business consisting of multiple wholly owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. 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. Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 23-11258) on August 28, 2023. Mallinckrodt plc disclosed $5,106,900,000 in assets and $3,512,000,000 in liabilities as of June 30, 2023. Bryan M. Reasons, authorized signatory, signed the petition. 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; Guggenheim Securities, LLC as investment banker; and AlixPartners, LLP, as restructuring advisor. MANCUSO MOTORSPORTS: Unsecureds to Get 100% Plus 7% Interest ------------------------------------------------------------ Mancuso Motorsports, Inc., submitted a First Amended Plan of Reorganization. The Debtor, as of the Petition Date, held bank accounts totaling $44,362, accounts receivable of $135,560, and inventory valued at approximately $50,070 at cost. The Debtor's bank account now holds approximately $400,000, its accounts receivable total approximately $246,000 and inventory is approximately $101,000 at cost. During the Chapter 11 case, the Debtor has worked jointly with the trustee in preparing and proposing this Plan. Since the plan provides for a 100% distribution of all allowed claims plus interest at the rate of 7% on the Effective Date, voting has been deemed unnecessary. The Debtor is the proponent of the Plan. The Plan provides for 100% distribution plus interest to creditors with Allowed Claims from funds realized from the continued operations of the business by the Debtor, and a $1 million cash infusion by Ryan Daube, a 67.5% shareholder of the Debtor (the "Daube Capital Contribution"), some of which will be used to fund operations going forward. Daube and various of his entities and trusts are also secured creditors of the Debtor in the approximate amount of $10 million and are waiving their rights to recover any distributions under the Plan, but not waiving their rights to distribution in perpetuity. After Confirmation, the Debtor will emerge renamed as Superior Collision Custom, LLC (the "Reorganized Debtor"). As a result of the Agreement, Daube, and/or his entities or trusts will be the sole member of the Reorganized Debtor. The Debtor has prepared cash-flow projections to support the Plan, are unnecessary, given funding of the Plan is currently in escrow, and the Debtor has enough cash in its bank account to fund distributions under the Plan. Under the Plan, Class 3 General Unsecured Claims totaling approximately $279,000, when the 3120 Claim is taken out of the equation, will be paid 100% plus interest at the rate of 7% on the Effective Date, out of existing operations and the Daube Capital Contribution. Class 3 Claims are not impaired. The Allowed Insider $630,769 claim of 3120 LLC, and entity solely owned and/or controlled by Daube, which will not share in distributions under the Plan. Distributions under the Plan will be made from proceeds realized from the continued operation of the Debtor's business by the Reorganized Debtor and from the Daube Capital Contribution. The Debtor does not intend to borrow funds but reserves the right to borrow funds in order to make the Plan payments. The Debtor will have cash to pay Administrative Claims in full. Counsel for the Debtor: Scott R. Clar, Esq. Crane, Simon, Clar & Goodman 135 S. LaSalle Street, Suite 3950 Chicago, IL 60603 Tel.: (312) 641-6777 E-mail: sclar@cranesimon.com A copy of the Plan of Reorganization dated September 27, 2023, is available at https://tinyurl.ph/WXfdw from PacerMonitor.com. About Mancuso Motorsports Mancuso Motorsports, Inc., is a privately held company that provides automotive repair and maintenance services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14513) on Dec. 16, 2022. In the petition signed by Jackie Cahan, CFO and COO, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Donald R. Cassling oversees the case. Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, serves as counsel to the Debtor. MARINER HEALTH: Unsecured Owed $111K-$1.03M Get 4% or 80% in Plan ----------------------------------------------------------------- Mariner Health Central, Inc., et al., submitted a First Amended Joint Plan of Reorganization and a Disclosure Statement. When the Debtors commenced Chapter 11 cases in September, 2022, they were hopeful that a consensual plan could be achieved in a relatively short time-frame and any disruption to current residents would be minimized. From the outset, the Debtors were clear about their liquidity constraints and the need for a streamlined process of these Cases. The nature of the allegations and potential claims that the Independent Director was charged with investigating under a jointly developed protocol with the Committee (agreed to by the Debtors), however, warranted extensive analysis of the Debtors' (and Non-Debtor Affiliates' and certain third parties') prepetition conduct. Following months of discovery (delayed in part by the Debtors' reluctance to provide certain information to the Independent Director and a protracted dispute with Fundamental Administrative Services, LLC), and the conclusion of material portions of the Independent Director's Investigation, which were followed by negotiations among key creditors, including participating in mediation, the parties could not reach agreement on the valuation of Parkview or on a global resolution of claims identified through the Independent Director's Investigation for the consensual conclusion of these Cases and the Debtors were compelled to commence a process to sell the Parkview Facility. On May 30, 2023, the Bankruptcy Court approved the sale of the Parkview Facility, and the sale closed on June 15, 2023. The Debtors believe that, due to, among other things, the litigious stance of certain parties in the Chapter 11 cases, and the delays and investigation, Professional Fees have accrued far in excess of amounts originally anticipated, thereby reducing funds that would have been available to unsecured creditors under a plan in a streamlined process (unless a portion of such amount is reduced by the Court, consent or gifted by such Professional(s) to other Creditor(s)). The Debtors have tried to reach the best settlements they can and need to move forward with a plan and confirmation process to bring the Chapter 11 cases to conclusion. The Plan proposes a Cash-Out Option that contemplates substantial contributions by Non-Debtor Affiliates and payments to Creditors based on proposed settlements of various claims and causes of actions. While the Debtors, to date, have been unable to reach a resolution with certain creditors, they have reached agreements in principle with a sufficient number of creditors regarding the proposed treatment of their claims and the Debtors expect such creditors will support the Plan. The Debtors intend to continue negotiations with any remaining parties who wish to continue discussions to try to achieve a fully consensual plan of reorganization. The Plan Proponents believe that the Plan's Cash-Out Option maximizes values to these Estates by (a) settling certain Claims asserted against the Estates, (b) settling certain Estate Causes of Action against Non-Debtor Affiliates, Officers and Directors, and related NonDebtor Released Parties resulting in substantial financial contributions to the Plan for Distribution to Creditors (as defined in the Plan, the "Affiliate Settlement") and (c) establishing a mechanism to provide Creditors with near-term Cash recoveries without the risk of lengthy and speculative litigation that could ultimately result in lesser recoveries. The Plan also provides for recoveries to Holders of Claims based on compensatory damages before Distributions are made to Holders of Claims based on non-compensatory damages, including without limitation penalties or punitive damages, or other Claims that are subordinated pursuant to Section 510 or any other provision of the Bankruptcy Code or applicable law. In addition to the distribution to Creditors of the approximately $6.6 million representing a higher range of estimated value of the Debtors (exclusive of potential litigation assets), the Affiliate Settlement provides for contributions from the Non-Debtor Affiliates to the Estates up to an amount in excess of $9.3 million, enabling the Debtors to have approximately $10 million available for Distribution on the Effective Date, and in excess of $6 million for Distribution under the Plan over a period of time to Creditors with Allowed Claims that vote to accept the Plan and release the Non-Debtor Affiliates of Claims arising prior to the Petition Date, pursuant to the terms and conditions set forth in the Plan. As a result, over $16 million will be Distributed to Creditors under the Plan's Cash-Out Option. Under the Cash-Out Option, Creditors can decline to consent to the Third-Party Releases and choose not to receive the Affiliate Cash contributions but instead seek to pursue recoveries on such Creditor's direct (individualized) claims against the Non-Debtor Affiliates through further litigation outside the Chapter 11 Cases. For Creditors that do not consent to the Third-Party Releases, a contribution of 5% of the proposed Cash-Out Payment to such Creditor will be made to the MHC Fund or the Parkview Fund (or divided evenly between those funds) and all parties' rights will be reserved to dispute the related claims under the Plan. Individualized direct claims (i.e., claims peculiar to an individual or groups of creditors) asserted by a creditor that elects the reduced Cash-Out Option (i.e., creditor does not consent to Third Party Releases) against the Released Parties will not be released by such creditor(s). Upon the filing of a bankruptcy case, certain "generalized" claims that could have been asserted by an individual plaintiff prior to the bankruptcy become "estate" claims that can be asserted by a debtor, a bankruptcy trustee, or another party vested by the Bankruptcy Court with the right to pursue such claims on behalf of all creditors. The determination of which claims remain "individualized" and which claims are considered "generalized" or derivative claims after a filing may vary by court. Claims against the Released Parties that are generalized or derivative in nature that are deemed to belong to the Debtors' Estates will be released under the Cash-Out Option. Whether a particular claim is individualized or generalized (or derivative) is, to the extent not already settled under Ninth Circuit law, a question for the Bankruptcy Court to determine. Claimants with questions about the nature of their claims, and how they will be affected by the releases to be granted under this Plan, are urged to consult counsel. The Debtors also reached other settlements in principle with various Creditors respecting their Claims against the Estates that would reduce the aggregate Claim pool and go forward litigation costs to the Estates. Significantly, subject to Court approval, one of the settlements the Debtors reached was with Integra (subject to approval by the Department of Justice), the terms of which are reflected in the Plan. As a result, Distributions under the Plan will be funded, in the Debtors' and Reorganized Debtors' discretion consistent with the terms of the Plan, with one or more of the following, as applicable: (i) the Debtors' Cash on Hand (if any); (ii) accounts receivable and other de minimis assets of the Debtors (if any), (iii) proceeds from the sale of the Parkview Facility; (iv) contributions from the Non-Debtor Affiliates pursuant to the Affiliate Settlement; and (v) proceeds from future operations of Reorganized Debtor MHC and Non-Debtor Affiliates. Holders of Equity Interests will receive no distribution under the Plan on account of their Equity Interests in one or more of the Debtors; however, in consideration of the New Value Contribution to be made by Non-Debtor Affiliates pursuant to the Affiliate Settlement, equity interests in the Reorganized Debtors may be reinstated. The Debtors believe the Plan's Cash-Out Option enables similarly situated Creditors to receive their fair share of recoveries from the Estates in accordance with the Bankruptcy Code's claim priority scheme, avoiding individual creditors from obtaining windfall recoveries to the detriment of other creditors if the Cases were dismissed. The Plan's Cash-Out Option also provides a greater recovery to Creditors than such creditors would receive under a Chapter 7 liquidation. Moreover, any potential material recovery to Creditors outside of the Plan (including under a Chapter 7 liquidation) would be speculative and a lengthy, costly litigious process. Nevertheless, the Plan further provides that in the event the Debtors are unable to confirm the Plan under the Cash-Out Option, the Litigation Only Alternative will be implemented under the Plan. Under the Litigation Only Alternative, the Non-Debtor Affiliates will not contribute the amounts proposed for the Cash-Out Payment and will not be Released Parties. In lieu of the Cash-Out Payments, under the Litigation Only Alternative, the Debtors will be liquidated and Creditors of Allowed Claims shall have an interest in the Litigation Trust. The proposed settled claims under the Cash-Out Option will remain disputed under the Litigation Only Alternative and subject to potential litigation, and the Litigation Trustee will have the sole authority to pursue any and all Estate Causes of Action (including "generalized" or derivative claims that are property of the Estates). All Distributions shall be made according to the Bankruptcy Code Distribution priority scheme from any and all recoveries obtained by the Litigation Trust. Under the Litigation Only Alternative, nothing under the Plan would preclude Creditors from pursuing their individual, non-generalized claims, if any, against Non-Debtor Affiliates through further litigation against the Non-Debtor Affiliates outside the Chapter 11 Cases. Consistent with the discharge of the Debtors provided for in Article VIII.B. of the Plan, any judgment obtained against Non-Debtor Affiliates relating to the period prior to the Effective Date may not be enforced against the Debtors or Reorganized Debtors. Subject to the terms and conditions set forth in the Plan, under the Cash-Out Option the Debtor's Cash on Hand (if any), proceeds from existing accounts receivable, contributions from the Non-Debtors Affiliates pursuant to the Affiliate Settlement (which exceed $9.3 million under the Cash-Out Option with releases), and proceeds from future operations of Reorganized Debtor MHC and Non-Debtor Affiliates, will be available to certain Creditors with Allowed Claims in accordance with the priority structure set forth in the Bankruptcy Code and the Plan. Article IV of this Disclosure Statement provides additional information regarding estimated recoveries under the Plan. Under the Litigation Only Alternative, Estate Causes of Action will be transferred to a Liquidating Trust for the benefit of Creditors holding Allowed Claims. To the extent Estate Causes of Action result in favorable judgments or settlements, such assets will be distributed to eligible Creditors on a pro rata basis. Under the Plan, Classes 3A, 3B, 3C General Unsecured Claims total $111,000 to $1.03 million and will recover 80% of their claims under the Plan Pay-Out Option (with consent to third-party releases), or 4% under Plan PayOut Option (with opt-out of third-party releases). Each Holder of an Allowed Claim in 3A, 3B, and 3C will receive, in full, final and complete satisfaction, settlement, release, and discharge of such Claim, either- (i) if such Holder submits an Accepting Ballot and consents to releases of the Released Parties, a payment in Cash equal to 80% of the Allowed amount of such Claim, with such payment to be made on, or as soon as practicable after, the later of the Initial Distribution Date or the date that any such Claim becomes Allowed; provided however, in the event that the total General Unsecured Claims in Classes 3A, 3B and 3C exceeds $400,000, Holders of Claims under this subsection (i) shall receive their Pro Rata Share of a $400,000 Distribution; or (ii) alternatively, if such Holder does not consent to releases of the Released Parties, a payment in Cash equal to 5% of the amount of the Allowed amount of such Claim, with such payment to be made on, or as soon as practicable after, the later of the Initial Distribution Date or the date that any such Claim becomes Allowed; provided however, in the event that the total Allowed amount of General Unsecured Claims in Classes 3A, 3B and 3C exceeds $400,000, Holders of Claims under this subsection (ii) will receive a payment in Cash equal to 5% of their otherwise Pro Rata Share of a 400,000 Distribution. Notwithstanding anything to the contrary herein, in the event that the Plan is confirmed with the Litigation Only Alternative, each Holder of an Allowed Claim in this Class shall receive, in full, final and complete satisfaction, settlement, release, and discharge of such Claim, a Pro Rata Share of Litigation Trust Interests. Any Distributions on account of Allowed Claims in Classes 3A, 3B, and 3C under Option (ii) shall be made on the later of the Initial Distribution Date and/or any Subsequent Distribution Date that occurs after such Claim becomes Allowed, or as soon thereafter as is practicable. Distributions are subject to the prior payment in full, or a Reserve Fund being established for, all Administrative Claims, Priority Tax Claims, Professional Fees, Statutory Fees, Secured Claims, Other Priority Claims, and Disputed Claims in Classes 3 (to the extent applicable). No Distribution shall be made on account of any Claim so long as any part of that Claim is Disputed. Class 3 is impaired. The substantial financial contributions by the Non-Debtor Affiliates under the terms of the Affiliate Settlement will enable the Debtors (or Non-Debtor Affiliates) to provide additional payments to Creditors as set forth in the Plan. Distributions under the Plan shall be funded, in the Debtors' and Reorganized Debtors' discretion consistent with the terms of the Plan with one or more of the following, as applicable: (i) the Debtors' Cash on Hand (if any); (ii) accounts receivable; (iii) proceeds from sale of the Parkview Facility; (iv) contributions from the Non-Debtor Affiliates pursuant to the Affiliate Settlement; and (v) proceeds from future operations of the Reorganized Debtor MHC and Non-Debtor Affiliates. Each distribution made under the Plan shall be governed by the terms and conditions set forth in the Plan applicable to such Distribution and by the terms and conditions of any instruments or other documents evidencing or relating to such Distribution, which terms and conditions shall bind each Entity receiving such Distribution. The voting deadline is 5:00 p.m. prevailing pacific time on October 20, 2023. Counsel for Debtors: Maxim B. Litvak, Esq. PACHULSKI STANG ZIEHL & JONES LLP One Sansome Street, Suite 3430 San Francisco, CA 94104 Tel: (415) 263-7000 E-mail: mlitvak@pszjlaw.com - and - Hamid R. Rafatjoo, Esq. RAINES FELDMAN LITTRELL LLP 1900 Avenue of the Stars, 19th Floor Los Angeles, CA 90067 Tel: (310) 440-4100 Facsimile: (310) 691-1367 E-mail: hrafatjoo@raineslaw.com - and - Carollynn H.G. Callari, Esq. David S. Forsh, Esq. RAINES FELDMAN LITTRELL LLP 1350 Avenue of the Americas, 22nd Floor New York, NY 10019 Tel: (917) 790-7100 E-mail: ccallari@raineslaw.com dforsh@raineslaw.com A copy of the Plan of Reorganization dated September 23, 2023, is available at https://tinyurl.ph/ZHYIO from www.kccllc.net, the claims agent. About Mariner Health Central Atlanta-based Mariner Health Central, Inc., provides administrative, clinic and operational support services to skilled nursing facilities, including the 121-bed facility operated by Parkview Operating Company, LP. Mariner and its affiliates, Parkview Operating Company and Parkview Holding Company GP, LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 22-10877) on Sept. 19, 2022. The cases were transferred to the U.S. Bankruptcy Court for the Northern District of California (Case No. 22-41079) on Oct. 25, 2022. The Debtors estimated assets of $1 million to $10 million and liabilities of $10 million to $50 million as of the bankruptcy filing. Judge William J. Lafferty oversees the cases. The Debtors tapped Raines Feldman, LLP as general bankruptcy counsel; Pachulski Stang Ziehl & Jones, LLP as local Delaware counsel; and SierraConstellation Partners, LLC as restructuring advisor. Lawrence Perkins, chief executive officer of SierraConstellation, serves as the Debtors' chief restructuring officer. Kurtzman Carson Consultants, LLC, is the claims and noticing agent and administrative advisor. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Robinson & Cole, LLP. Blanca E. Castro is the patient care ombudsman appointed in the Debtors' bankruptcy case. MEGNA REAL ESTATE: U.S. Trustee Appoints Lynda Bui as Examiner -------------------------------------------------------------- Peter Anderson, the U.S. Trustee for Region 16, asked the U.S. Bankruptcy Court for the Central District of California to approve the appointment of Lynda Bui, Esq., as examiner for Megna Real Estate Investments, Inc. Ms. Bui, a partner at Shulman Friedman & Bui, LLP, was appointed by the U.S. Trustee on Sept. 12. Ms. Bui disclosed in a court filing that she is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. About Megna Real Estate Megna Real Estate Investments, Inc. owns a single-family residence located at 705 Yarmouth Road, Palos Verdes, Estates, Calif., valued at $2.5 million. Megna Real Estate Investments filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 23-10809) on June 12, 2023, with $2,509,232 in assets and $6,625,582 in liabilities. John-Patrick Fritz has been appointed as Subchapter V trustee. Judge Martin R. Barash oversees the case. Donahoe Young & Williams, LLP is the Debtor's legal counsel. MEGNA TEMECULA COUNTRY: U.S. Trustee Appoints Lynda Bui as Examiner ------------------------------------------------------------------- Peter Anderson, the U.S. Trustee for Region 16, asked the U.S. Bankruptcy Court for the Central District of California to approve the appointment of Lynda Bui, Esq., as examiner for Megna Temecula Country Inn, Inc. Ms. Bui, a partner at Shulman Friedman & Bui, LLP, was appointed by the U.S. Trustee on Sept. 12. Ms. Bui disclosed in a court filing that she is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. About Megna Temecula Country Inn Megna Temecula Country Inn, Inc. owns a single-family residence located at 41300 Berkswell Lane, Temecula, Calif., valued at $3.1 million. Megna Temecula Country Inn filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10843) on June 16, 2023, with $3,102,827 in assets and $6,636,973 in liabilities. John-Patrick Fritz has been appointed as Subchapter V trustee. Judge Victoria S. Kaufman oversees the case. Donahoe Young & Williams, LLP is the Debtor's legal counsel. MEGNA TEMECULA HACIENDA: UST Appoints Lynda Bui as Examiner ----------------------------------------------------------- Peter Anderson, the U.S. Trustee for Region 16, asked the U.S. Bankruptcy Court for the Central District of California to approve the appointment of Lynda Bui, Esq., as examiner for Megna Temecula Hacienda De Endar Inn, Inc. Ms. Bui, a partner at Shulman Friedman & Bui, LLP, was appointed by the U.S. Trustee on Sept. 12. Ms. Bui disclosed in a court filing that she is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. About Megna Temecula Hacienda Megna Temecula Hacienda De Endar Inn, Inc. owns a single-family residence located at 35438 De Portola Road, Temecula, Calif., valued at $3.3 million. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10842) on June 16, 2023, with $3,302,843 in assets and $6,617,238 in liabilities. John-Patrick Fritz has been appointed as Subchapter V trustee. Judge Martin R. Barash oversees the case. Donahoe Young & Williams, LLP is the Debtor's legal counsel. METROPOLITAN BREWING: Matthew Brash Named Subchapter V Trustee -------------------------------------------------------------- The U.S. Trustee for Region 11 appointed Matthew Brash of Newpoint Advisors Corporation as Subchapter V trustee for Metropolitan Brewing, LLC. Mr. Brash will be paid an hourly fee of $395 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Brash declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Matthew Brash Newpoint Advisors Corporation 655 Deerfield Road, Suite 100-311 Deerfield, IL 60015 Tel: (847) 404-7845 Email: mbrash@newpointadvisors.us About Metropolitan Brewing Metropolitan Brewing, LLC is a manufacturer of German-style beers in Chicago, Ill. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-13209) on Oct. 3, 2023, with $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Tracy Hurst, authorized representative of the Debtor, signed the petition. Judge Deborah L. Thorne oversees the case. Matthew E. McClintock, Esq., at Goldstein & McClintock, LLLP represents the Debtor as legal counsel. MINIM INC: Signs LOI Regarding $2.4M Securities Purchase Deal ------------------------------------------------------------- Minim, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that on Sept. 29, 2023, it entered into a non-binding letter of intent with an investor whereby the investor would purchase $2.4 million of convertible preferred stock and warrants, which, on a fully-diluted basis, would constitute a majority of the Company's outstanding common stock and the proceeds of which would be used for the sole purpose of settling all of the Company's and its subsidiaries' liabilities. If the Transaction were to occur, the Letter of Intent contemplates the investor would be appointed as the Company's chief executive officer and the investor and its nominees would be appointed to the Company's board of directors to which they would constitute a majority of the then-board of directors. Minim said, "The Company and the investor are working on completing definitive transaction documents regarding the Transaction, but, as the Letter of Intent is non-binding, there can be no assurances that such definitive transaction documentation will be executed or that the Transaction will be completed." Exploring Potential Bankruptcy Filing The Company added, "As previously disclosed, the Company has continued to experience material liquidity pressures as it has attempted to manage its negative cash-flow position due to supply disruptions from its principal manufacturing partners as a result of the Company's inability to pay past expenses, which has severely impacted revenue and its cash position. The Company's actions thus far have not fully offset the Company's lack of continual revenue from normal operations. As such, substantial doubt exists about our ability to continue as a going concern, and we will require additional liquidity to continue operations. The Company has been exploring all remaining alternatives, including strategic initiatives or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code." About Minim Inc. Minim was founded in 1977 as a networking company and now delivers intelligent software to protect and improve the WiFi connections. Headquartered in Manchester, New Hampshire, Minim holds the exclusive global license to design, manufacture, and sell consumer networking products under the Motorola brand. Its cable and WiFi products, with an intelligent operating system and bundled mobile app, can be found in leading retailers and e-commerce channels in the United States. The Company's AI-driven cloud software platform and applications make network management and security simple for home and business users, as well as the service providers that assist them- leading to higher customer satisfaction and decreased support burden. On Aug. 17, 2023, Minim received a letter from The Nasdaq Stock Market LLC stating that, because the Company has not filed its Form 10-Q for the period ended June 30, 2023 with the Securities and Exchange Commission, the Company is not in compliance with Nasdaq's rules for continued listing under Nasdaq Listing Rule 5250. Rule 5250 requires, in part, that listed companies timely file all required periodic financial reports with the Commission. The non-compliance resulted from the Company's inability to timely appoint an audit committee to review the financial statements required to be included in its Form 10-Q for the period ended June 30, 2023 and the Company's Form 10-Q for the period ended March 31, 2023. Minim reported a net loss of $15.55 million in 2022 following a net loss of $2.20 million in 2021. Boston, Massachusetts-based RSM US LLP, the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 31, 2023, citing that Company has suffered recurring losses and negative cash flows from operations and will need additional funding within the next twelve months. This raises substantial doubt about the Company's ability to continue as a going concern. NEW FORTRESS: S&P Rates $800MM Senior Secured Term Loan B 'BB' -------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '2' recovery rating to U.S.-based global integrated gas-to-power company New Fortress Energy Inc.'s (NFE) proposed $800 million senior secured term loan B due 2030. The company intends to use the net proceeds from this loan to repay and refinance its existing debt, as well as for general corporate purposes. S&P said, "The '2' recovery rating indicates our expectation that lenders would receive substantial (50%-70%; rounded estimate: 70%) recovery in the event of a payment default. Our 'BB-' issuer credit rating and stable outlook on NFE are unchanged." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors S&P said, "Our simulated default scenario for NFE contemplates a default arising in 2027 due to a prolonged period of weak natural gas and liquefied natural gas prices, coupled with significantly lower volumes, weakening demand for power in the markets it serves, and higher operating costs. A default could occur if the company's cash flow generation falls below its assumed fixed-charge requirements at default (approximately $595 million) for an extended period and its liquidity is fully utilized. Our scenario also assumes that NFE does not receive any residual cash flows to service its senior secured debt obligations from its interests in its fleet of leased vessels and other assets." Simulated default assumptions -- S&P estimates a gross recovery value of about $4.4 billion, assuming NFE recoups lost revenue as its volumes and pricing rebound and operating margins stabilize through cost cutting during the reorganization process. -- Emergence EBITDA: $625 million -- EBITDA multiple: 7x -- Net recovery value (after 5% administrative costs): $4.2 billion -- Obligor split: 20% secured assets and leased assets/80% all other New Fortress assets Simplified waterfall -- S&P said, "In our recovery waterfall, we split approximately 20% of the recovery value to assets that do not secure the senior notes or proposed term loan, which comprises cash flow from the Energos maritime joint venture and other assets, like the Barcarena term loan and equipment notes in Puerto Rico. We anticipate no residual value left after these debt obligations are satisfied, which would benefit the company's senior noteholders." -- Vessel joint venture and other asset recovery value: $830 million -- First-priority claims and vessel financing obligations (nonrecourse): $2 billion -- Recovery prospects for NFE's other secured creditors are derived from the remaining 80% in recovery value, or $3.3 billion. After the revolver debt of $770 million outstanding at default is repaid, based on our assumption of an 100% draw of the facility and six months of capitalized interest, results in $2.6 billion available to satisfy the $3.6 billion of senior secured debt outstanding. S&P expects substantial (70%-90%; rounded estimate: 70%) recovery prospects for the senior secured noteholders in a default. -- Net recovery value from the rest of NFE: $3.3 billion -- Revolver balance outstanding at default: $770 million -- Recovery value available to senior secured notes: $2.6 billion -- Senior secured notes outstanding at default: $3.6 billion --Recovery estimate for senior secured notes: 70%-90% (rounded estimate: 70%) NEWFOLD DIGITAL: Fitch Affirms 'B' LongTerm IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has assigned a 'BB-'/'RR2' rating to Newfold Digital Holdings Group, Inc's (Newfold Digital) offering of $500 million of Senior Secured Notes due 2028. The Notes will be pari passu with Newfold Digital's existing and future first lien indebtedness. The company will use $400 million of net proceeds from the offering to pay a dividend to the sponsors and the remaining $100 million to repay a portion of the existing 6.00% Senior Unsecured Notes due 2029. Fitch Ratings has affirmed at 'B' the Long-Term Issuer Default Rating (IDR) of Newfold Digital Holdings Group, Inc., and its subsidiaries, Newfold Digital, Inc., and Web.com Group, Inc. Fitch has also affirmed at 'BB-'/'RR2' the ratings of the $275 million and $105 million first lien secured revolving credit facilities and the $2,675 million first lien term loan and at 'CCC+'/'RR6' the rating of the $685 million unsecured notes. The Rating Outlook is Stable. KEY RATING DRIVERS Elevated Leverage Profile with Deleveraging Capacity: Fitch estimates Newfold Digital's EBITDA leverage will approximate 7x at FYE 2023, reflecting the incremental debt. The recent transaction is expected to moderately increase Fitch's leverage expectations, offset by a combination of revenue growth and full realization of projected cost savings. Newfold Digital has successfully completed the integration of recently acquired businesses ahead of time, indicating strong execution capabilities. The company expects to further reduce financial leverage in the near-term through a combination of EBITDA growth and repayment of its revolving credit facilities. Fitch continues to forecast Newfold Digital's gross leverage to approach 6x in 2024. Recurring Revenue and Strong Profitability: Approximately 95% of Newfold Digital's revenue is recurring providing visibility to its revenue stream. The company has successfully delivered on its planned operational optimization since the divestiture of its email marketing business and acquisition of Web.com in 2021 and MarkMonitor in 2022, resulting in overachieving on estimated cost savings. Continued operational optimization efforts could further improve the company's profitability. SMB Exposure: Newfold Digital offers products addressing the web presence needs of small to midsize business (SMB) customers that have limited technical or marketing resources dedicated to launching and maintaining their digital presence. These include domains, hosting, website development, and security. The SMB segment generally has high failure rates resulting in high subscriber churn. This results in the need for Newfold Digital to maintain revenues by replacing churned customers with new ones and cross-selling. Exposure to SMB customers also results in exposure to the cyclical impact of economic cycles, which could potentially lead to cash flow volatility during periods of economic stress. Significant Customer Diversification: Newfold Digital has a highly diversified customer base with over seven million subscribers with hosting and domains representing near equal revenue contributions of 40% each. The diverse customer base effectively minimizes idiosyncratic risks that are associated with the individual end-market and should reduce revenue volatility. Fragmented Industry: The products and services provided by Newfold Digital individually operate in fragmented markets with competitors of various scales. Collectively, Newfold Digital is the second largest provider of a portfolio of products serving the SMB segment addressing a broad spectrum of web presence needs. The ability to cross-sell and provide multiple products to individual customers enhances customer retention rates. Strong FCF Generation: The strong EBITDA to FCF conversion enables Newfold Digital to generate FCF margins in the teens in a normalized environment. Elevated interest expense has suppressed the company's FCF margins to the high single-digits for 2022-2023. However, as the company plans to repay portions of its revolving credit facility in the near-term in conjunction with EBITDA growth, Fitch forecasts FCF margins to return to teens in 2024. DERIVATION SUMMARY Newfold Digital's 'B' Long-Term Issuer Default Rating reflects its strong market position as a software vendor in the fragmented SMB web presence solutions industry. The company provides SMBs the tools and services necessary to create and maintain their presence on the web including internet domains, hosting, websites, eCommerce, and related products. Demand for web presence is expected to grow as SMBs seek to maximize their reach to customers. Newfold Digital's operating profile is also strengthened by the highly recurring nature of its revenues supported by the subscription model. Limitations to Newfold Digital's rating include its SMB exposure that could result in revenue volatility during extended economic weakness. Fitch expects Newfold Digital to maintain some level of financial leverage as a private equity owned company as equity owners typically optimize portfolio companies' capital structures to maximize ROE. Newfold Digital's market position, revenue scale, SMB exposure and leverage profile are consistent with the 'B' rating category. KEY ASSUMPTIONS - Organic revenue grows in the mid- to high-single digits with weaker growth in 2024 due to macroeconomic headwinds; - Aggregate acquisitions of $200 million through 2026; - Capex remaining stable at 3.5% of revenue; - Outstanding revolver balance fully repaid by 2026 and term loan repayment limited to mandatory amortization; - No dividend assumed through 2026. KEY RECOVERY RATING ASSUMPTIONS - The recovery analysis assumes that Newfold Digital would be recognized as a going concern in bankruptcy rather than liquidated; - Fitch assumed a 10% administrative claim; - Fitch also assumed a 1% concession payment for the holders of the unsecured notes. Going-Concern (GC) Approach - Fitch has re-assessed the GC EBITDA to incorporate successful integration of the recently acquired entities, which has resulted in a change in Newfold's cost structure. The company has disciplined its cost structure by eliminating some of the duplicate costs, consolidating platforms, and data centers, combined with a more disciplined approach on the marketing spend; - A bankruptcy scenario could occur if Newfold Digital faced prolonged macro headwinds impacting its SMB customer base resulting in a multi-year aggregate revenue decline of 10% vs. 2022. In conjunction with this revenue decline, EBITDA margins fail to expand beyond current levels. In such a scenario, Fitch assumes Newfold Digital's GC EBITDA to be approximately $400 million; - The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation; - Fitch assumes an adjusted distressed enterprise valuation of $2.34 billion; - Fitch assumes that Newfold Digital will receive a going-concern recovery multiple of 6.5x. The estimate considers several factors, including the highly recurring nature of the revenue, the high customer retention, the secular growth drivers for the sector, the company's strong normalized FCF generation and the competitive dynamics. The enterprise value multiple is supported by: - The historical bankruptcy case study exit multiples for technology peer companies ranged from 2.6x to 10.8x; - Of these companies, only three were in the Software sector: Allen Systems Group, Inc., Avaya, Inc. and Aspect Software Parent, Inc., which received recovery multiples of 8.4x, 8.1x and 5.5x, respectively; - The highly recurring nature of Newfold Digital's revenue is somewhat offset by its SMB market exposure resulting in an EBITDA multiple that is above the mid-point of the range. RATING SENSITIVITIES Fitch is unlikely to upgrade the ratings given the current financial capital structure, although an upgrade could happen if the company delivers on the following sensitivities. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Fitch's expectation of EBITDA leverage sustaining below 5.0x; - (CFO - capex)/debt sustaining near 10%; - Sufficient financial flexibility for the company to pursue strategic actions without significant deviation in credit metrics; - Organic revenue growth sustaining above the mid-single digits. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Fitch's expectation of EBITDA leverage sustaining above 6.5x due to operational underperformance or capital allocation policy that meaningfully deviates from Fitch's expectations; - EBITDA/Interest Coverage sustaining below 2x; - (CFO - capex)/debt ratio sustaining below 5%; - Erosion in revenue retention rates resulting in organic revenue growth sustaining near or below 0%. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of August 2023, Newfold Digital had nearly $109 million of cash on balance sheet and $145 million availability on its revolving credit facilities ($380 million total capacity). Though Fitch projects 2023 FCF to be negative as a result of a recent dividend payout, Fitch expects that the company will return to mid-teens FCF margin in 2024, owing to strong cost optimization. Fitch projects FCF generation in excess of $150 million annually post 2023. Fitch forecasts the company to generate sufficient FCF to fully repay its outstanding revolver balance prior to maturity. Refinancing of the term loan would be necessary prior to the debt becoming current in 2027. Debt Structure: Newfold Digital has staggered maturities from 2026 through 2029. Two tranches of revolving credit facilities ($235 million outstanding as of August 2023) are due in 2026. $2,675 million first lien secured term loan ($2,352 million outstanding as of August 2023) matures in 2028. $500 million senior secured notes (post transaction) mature in 2028, and $685 million unsecured notes ($514 million outstanding post transaction) mature in 2029. ISSUER PROFILE Newfold Digital is a provider of web presence solutions primarily serving the SMB markets. Its products include internet domains, hosting, websites, eCommerce, and related products. Its brands include web.com and bluehost and over 15 other related brands. Domains and hosting contribute to approximately 80% of total revenue. Newfold Digital was formed with merger of Endurance Web Presence and web.com in 2021 and owned by private equity firms Siris Capital Group, LLC and Clearlake Capital Group, LP. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Newfold Digital Holdings Group, Inc. LT IDR B Affirmed B senior secured LT BB- New Rating RR2 senior unsecured LT CCC+ Affirmed RR6 CCC+ senior secured LT BB- Affirmed RR2 BB- Newfold Digital, Inc. LT IDR B Affirmed B senior secured LT BB- Affirmed RR2 BB- Web.com Group, Inc. LT IDR B Affirmed B senior secured LT BB- Affirmed RR2 BB- NINETY-FIVE MADISON: Unsecureds Unimpaired in Plan -------------------------------------------------- Ninety-Five Madison Company, L.P., submitted a Combined Chapter 11 Plan of Reorganization and Disclosure Statement. At a high level, the Plan facilitates a toggle between 2 potential transactions that, if representing higher or better value, will either be incorporated as a Restructuring Transaction or a Sale Transaction: * A Sale Transaction contemplates a sale or other disposition of the Property upon completion of the Debtor's ongoing marketing process pursuant to the terms of a Purchase and Sale Agreement between the Debtor and a Purchaser, the proceeds of which would be used to satisfy all Allowed Claims and Allowed Interests in full; and * A Restructuring Transaction contemplates, among other things, the payment of all claims in full through the DIP Facility and the consummation of the exit facility as provided in the DIP Documents. Although the Debtor will continue to pursue the marketing process in earnest, the Restructuring Transaction will serve as a backstop and provide the Debtor the optionality to enter into a sale or other disposition transaction(s) if such a transaction(s) represents higher or better value. Given the market climate in 2022, the Debtor and its Professionals enacted a marketing process of the Property. To assist with the marketing of the Property, the Debtor retained Branton Realty Services LLC ("BRS") as real estate broker and sales agent.10 Woody Heller is BRS's lead professional for the Debtor, and since BRS's retention, Mr. Heller has overseen the day-to-day management of the marketing process. The Debtor also retained Fried, Frank, Harris, Shriver & Jacobson LLP as special real estate transaction and tax counsel to the Debtor to prepare a form Purchase and Sale Agreement for eventual execution by the Debtor and any Purchaser of the Property. The Debtor first conducted a "premarketing" process during which Mr. Heller informally gauged interest from potentially interested buyer groups, while marketing materials and expert reports were finalized for official open market promotion. Mr. Heller received inquiries from two types of potential buyer groups: (i) buyers that sought to convert the Property for residential use; and (ii) buyers that sought to maintain the Property for commercial office purposes. In early 2023, the Debtor launched a formal marketing process. During this period, the Debtor officially listed the Property on the open market. To-date, the Debtor has received multiple bids for the Property, and continues to seek additional bids. If the Debtor is able to secure a winning bid by the Outside Date, the Debtor intends to effectuate a Sale Transaction, as further described herein. Under the Plan, holders of Class 3 General Unsecured Claims will receive, in full satisfaction of such Allowed General Unsecured Claim, Cash in an amount equal to such Allowed General Unsecured Claim, on or as soon as reasonably practicable after the later of (i) the Effective Date; and (ii) the date the General Unsecured Claim becomes an Allowed Claim, including if such General Unsecured Claim becomes Allowed after the Effective Date. Class 3 is unimpaired. The Debtor will fund distributions and satisfy applicable Allowed Claims and Allowed Interests under the Plan with respect to the Sale Transaction using Cash on hand and the Asset Sale Proceeds. The Debtor will fund distributions and satisfy applicable Allowed Claims and Allowed Interests under the Plan with respect to the Reorganization Transaction with Cash on hand and the DIP Facility. Counsel to the Debtor Ninety-Five Madison Company, L.P.: Andrew K. Glenn, Esq. Shai Schmidt, Esq. Richard C. Ramirez, Esq. Naznen Rahman, Esq. GLENN AGRE BERGMAN & FUENTES LLP 1185 Avenue of the Americas, 22nd Floor New York, NY 10036 Telephone: (212) 970-1600 A copy of the Combined Chapter 11 Plan of Reorganization and Disclosure Statement dated September 27, 2023, is available at https://tinyurl.ph/GxVer from PacerMonitor.com. About Ninety-Five Madison Company Ninety-Five Madison Company, L.P., filed its voluntary petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 21-10529) on May 22, 2021, listing up to $100 million in assets and up to $10 million in liabilities. Judge Sean H. Lane oversees the case. The Debtor tapped Glenn Agre Bergman & Fuentes, LLP as bankruptcy counsel. Rosenberg & Estis, P.C. and Quinn McCabe, LLP serve as the Debtor's special counsel. The Debtor filed its proposed Chapter 11 plan of reorganization on Sept. 12, 2021, which provides for payment in full of its creditors. OCEAN POWER: Paragon Files Suit Over Breach of Fiduciary Duties --------------------------------------------------------------- Paragon Technologies, Inc., a diversified holding company that owns approximately 3.9% of the outstanding shares of common stock Ocean Power Technologies, Inc., has commenced a litigation against the Company and each of its directors -- Terence J. Cyran, Peter E. Slaiby, Clyde W. Hewlett, Natalie Lorenz-Anderson, Diana G. Purcel -- and CEO Philip Stratmann alleging violation of their fiduciary duty as directors of the Company. In a press release Paragon said, "Despite Paragon's numerous efforts and attempts to exercise its most basic lawful right as a shareholder, we believe OPT's board has taken and continues to take deliberate measures to prevent Paragon from doing so." Paragon wrote to OPT's board a letter expressing its urgent concerns relating to the Company's future viability given what Paragon believes to be OPT's alarming and precipitous financial record including: * A lack of a coherent, measurable, and accountable business plan. * Excessive and increasing director and executive compensation while OPT expenses and losses increase. * Continued assurances from CEO Stratmann and CFO Bob Powers that OPT's "strategy is working," and costs are being managed "tightly" while OPT continues to report growing losses and expenses. "In that letter, Paragon requested that its three directors be appointed to a six-member OPT Board, given that Paragon believes it is OPT's largest shareholder. Rather than engage in a constructive dialogue with Paragon, OPT immediately adopted what we believe to be the most burdensome and extreme nomination by-laws found in the market today. "We believe that the timing of the Amended By-laws reflects an improper entrenchment purpose, and that the adoption of the By-laws may constitute a violation of the board's fiduciary duties. We also believe that the OPT board has used these burdensome advance notice provisions, not in the way intended under Delaware law, but to block Paragon's efforts to nominate a slate of directors. "Furthermore, on July 20, 2023, Paragon submitted an exemption request to OPT requesting an exemption to OPT's suddenly adopted poison pill granting Paragon the right to acquire up to 19.9% of the Company's common stock after having confirmed that the ownership by Paragon of up to 19.9% of OPT's outstanding shares should not place in jeopardy any of OPT's net operating losses. It has been over 60 days since Paragon made its exemption request and OPT has continued to ignore our request. "On September 14, 2023, OPT announced its Fiscal 2024 First Quarter results. Yet again, despite 21% and 29% increases in losses and expenses, respectively, CEO Stratmann touts his pleasure with OPT's performance and claims that their "strategy is working" while CFO Robert F. Powers tells shareholders that they "continue to manage costs tightly." "We strongly condemn these statements which we believe to be fundamentally misleading to all OPT shareholders. OPT's losses and expenses are growing. Shares outstanding increased by over 2.4 million shares as the Company continues to dilute shareholders to fund the increasing losses. "The strategy, if there is one, is not working. Costs are not being managed. OPT shareholders are suffering, and Paragon is determined to hold each individual director of OPT personally accountable for these actions to the fullest extent permitted by law. "If OPT is indeed committed to doing what is best for all shareholders, then OPT should let shareholders determine who they want to run their Company instead of implementing measures to deny Paragon its lawful right to represent OPT shareholders." "OPT is a company in dire need of a management change," says Sham Gad, Chairman of Paragon Technologies. "Since 2008, OPT's share price has nose-dived from $3,600 per share to less than 40 cents today. "Since OPT's restructured executive team and directors were put in place the financial degradation of OPT has gotten exponentially worse." "OPT no longer has the luxury of time. Current management has taken a cash balance of over $80 million as of April 30, 2021 and brought it down to under $25 million as of July 31, 2023," commented Mr. Gad, "yet during that time the company has failed to generate a single nickel of profitability, and whatever revenues OPT has mustered to earn have been consumed by the salaries and fees paid to the officers and directors. OPT can no longer be trusted under the current management scheme." Mr. Gad further states, "We have assembled a slate of directors that is imminently qualified to execute our strategy for long-term value creation because we have done just that - not once but twice." Paragon is the beneficial owner of 2,298,076 shares of common stock of the company, par value $0.001 per share. A full-text copy of the Schedule 13D/A as filed with the Securities and Exchange Commission is available for free at: https://www.sec.gov/Archives/edgar/data/1378140/000110465923107738/tm2328073d2_sc13da.htm About Ocean Power Technologies Headquartered in Monroe Township, New Jersey, Ocean Power Technologies, Inc. -- http://www.oceanpowertechnologies.com-- provides ocean data collection and reporting, marine power, offshore communications, and Maritime Domain Awareness ("MDA") products and consulting services. The Company offers its products and services to a wide-range of customers, including those in government and offshore energy, oil and gas, construction, wind power and other industries. The Company is involved in the entire life cycle of product development, from product design through manufacturing, testing, deployment, maintenance and upgrades, working closely with partners across its supply chain. Ocean Power reported a net loss of $26.33 million for the fiscal year ended April 30, 2023, a net loss of $18.87 million for fiscal year ended April 30, 2022, a net loss of $14.76 million for the 12 months ended April 30, 2021, a net loss of $10.35 million for the 12 months ended April 30, 2020, and a net loss of $12.25 million for the 12 months ended April 30, 2019. As of July 31, 2023, the Company had $45.68 million in total assets, $7.12 million in total liabilities, and $38.56 million in total shareholders' equity. OMNIQ CORP: Closes $3 Million Public Stock Offering --------------------------------------------------- OMNIQ Corp. announced the closing of its public offering of 3,000,000 shares of its common stock (or Pre-Funded Warrants in lieu thereof) at a public offering price of $1.00 per share (inclusive of the Pre-Funded Warrant exercise price), for gross proceeds of approximately $3,000,000, before deducting underwriting discounts and offering expenses. In addition, OMNIQ Corp. has granted the underwriters a 45-day option to purchase up to an additional 450,000 shares of common stock and/or Pre-Funded Warrants to cover over-allotments, if any, at the public offering price, less the underwriting discount. The Company intends to use the proceeds from the offering for working capital and general corporate purposes. ThinkEquity acted as sole book-running manager for the offering. The offering is being made pursuant to an effective shelf registration statement that has been filed with the U.S. Securities and Exchange Commission. The final prospectus supplement relating to the offering was filed with the SEC and is available on the SEC's website at http://www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained from ThinkEquity, 17 State Street, 41st Floor, New York, New York 10004. About omniQ Corp. Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) -- http://www.omniq.com-- provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver data collection, real time surveillance and monitoring for supply chain management, homeland security, public safety, traffic and parking management and access control applications. The technology and services provided by the Company help clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. Omniq Corp reported a net loss of $13.61 million for the year ended Dec. 31, 2022, compared to a net loss of $13.14 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $68.47 million in total assets, $81.31 million in total liabilities, and a total stockholders' deficit of $12.84 million. Salt Lake City, Utah-based Haynie & Company, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 30, 2023, citing that the Company has a deficit in stockholders' equity, and has sustained recurring losses from operations. This raises substantial doubt about the Company's ability to continue as a going concern. PARTY CITY: Davis Polk Advises Group of First-Lien Noteholders -------------------------------------------------------------- Davis Polk advised an ad hoc group of first-lien secured noteholders in connection with the chapter 11 restructuring of Party City Holdings Inc. and certain of its subsidiaries. On January 17, 2023, Party City filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Southern District of Texas. In connection with the chapter 11 filing, members of the ad hoc group backstopped a $150 million new money DIP financing loan. The bankruptcy court confirmed Party City’s plan of reorganization on September 6, 2023, and on October 12, 2023, Party City emerged from bankruptcy. The restructuring deleveraged Party City by approximately $1 billion, and Party City emerged with a new exit ABL facility of approximately $562 million and a $75 million new money investment, fully backstopped by members of the ad hoc group to fund go-forward operations and distributions under the plan of reorganization. Based in New Jersey, Party City is a global leader in the celebrations industry, with its offerings spanning more than 70 countries around the world. Party City is also the largest vertically integrated designer, manufacturer, distributor, and retailer of party goods in North America. The Davis Polk restructuring team included partners Damian S. Schaible and Adam L. Shpeen, counsel Jon Finelli and Robert (Bodie) Stewart and associate Abraham Bane. The litigation team included partner Elliot Moskowitz. The corporate team included partner Brian Wolfe. The capital markets team included partner Dan Gibbons. Partner Patrick E. Sigmon and counsel Leslie J. Altus provided tax advice. All members of the Davis Polk team are based in the New York office. Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited liability partnership, and its associated entities. About Party City Holdco Party City Holdco Inc. (NYSE: PRTY) is the global leader in the celebrations' industry, with its offerings spanning more than 70 countries around the world. It is also the largest designer, manufacturer, distributor, and retailer of party goods in North America. Party City Holdco had 761 company-owned stores as of September 2022. It is headquartered in Woodcliff Lake, N.J. with additional locations throughout the Americas and Asia. Party City Holdco and its domestic subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90005). As of Sept. 30, 2022, Party City Holdco had total assets of $2,869,248,000 against total debt of $3,022,960,000. Judge David R. Jones oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP, as legal counsel; Moelis & Company, LLC as investment banker; AlixPartners, LLP as financial advisor; A&G Realty Partners as real estate advisor; and Kroll as the claims agent. PricewaterhouseCoopers LLP (PwC) provides accounting and valuation advisory services, tax-related services, and internal audit Sarbanes-Oxley Act support services. Davis Polk & Wardwell, LLP and Lazard serve as legal counsel and investment banker, respectively, to the ad hoc group of first lien holders. The U.S. Trustee for Region 6 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Pachulski Stang Ziehl & Jones, LLP. PARTY CITY: Simpson Thacher Represented JPMorgan in Chapter 11 -------------------------------------------------------------- Simpson Thacher represented JPMorgan Chase Bank, N.A., as administrative agent and lender under a pre-petition ABL facility in connection with the bankruptcy cases of Party City Holdco, Inc. and its affiliated debtors ("Party City") and as administrative agent and lead arranger of Party City's exit ABL facility (the "Exit Facility"). Party City's chapter 11 restructuring went effective and the Exit Facility closed on October 12, 2023, after the Bankruptcy Court confirmed the Company's plan of reorganization at the September 6, 2023 confirmation hearing. JPM led and arranged the $562 million Exit Facility comprised of a $545 million revolver tranche and $17 million FILO term tranche. Party City is a global leader in the celebrations industry, with its offerings being sold in more than 70 countries around the world. Party City is also the largest vertically integrated designer, manufacturer, distributor and retailer of party goods in North America. The Simpson Thacher team included Partner Elisha Graff and Associates Zachary Weiner and Jonathan Mitnick (Restructuring); Partner Brandan Still and Associates Ron Havas and Gavin Jaco (Houston – Credit); Counsel Michael Mann (Tax); Counsel Timothy Gallagher (Real Estate); Associate Courtney Welshimer (IP); Senior Counsel Michael Isby (Environmental); Partner Abram Ellis and Associate Ryan Stalnaker (Washington, D.C. – Regulatory); Partner Jonathan Pall (Collateral); and Partner Bill Russell (Litigation). All attorneys are based in New York unless otherwise stated. About Party City Holdco Party City Holdco Inc. (NYSE: PRTY) is the global leader in the celebrations' industry, with its offerings spanning more than 70 countries around the world. It is also the largest designer, manufacturer, distributor, and retailer of party goods in North America. Party City Holdco had 761 company-owned stores as of September 2022. It is headquartered in Woodcliff Lake, N.J. with additional locations throughout the Americas and Asia. Party City Holdco and its domestic subsidiaries sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90005). As of Sept. 30, 2022, Party City Holdco had total assets of $2,869,248,000 against total debt of $3,022,960,000. Judge David R. Jones oversees the cases. The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP, as legal counsel; Moelis & Company, LLC as investment banker; AlixPartners, LLP as financial advisor; A&G Realty Partners as real estate advisor; and Kroll as the claims agent. PricewaterhouseCoopers LLP (PwC) provides accounting and valuation advisory services, tax-related services, and internal audit Sarbanes-Oxley Act support services. Davis Polk & Wardwell, LLP and Lazard serve as legal counsel and investment banker, respectively, to the ad hoc group of first lien holders. The U.S. Trustee for Region 6 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Pachulski Stang Ziehl & Jones, LLP. PEGASUS HOME: Wants to Give Linchpin Workers Incentives in Ch. 11 ----------------------------------------------------------------- Emlyn Cameron of Law360 reports that bankrupt pillow maker Pegasus Home Fashions has asked a Delaware judge to let it use nearly $803,000 to incentivize linchpin employees to stay with the company during its bankruptcy case. About Pegasus Home Fashions Pegasus Home Fashions Inc. manufactures house furnishing products. The Company offers pillows, memory foam, quilts, bedspreads, blankets, throws, sheet sets, pet beds, furniture protectors, and mattress pads. Pegasus Home Fashions serves customers in the U.S. Pegasus Home Fashions and three affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-11236) on August 24, 2023. In the petition filed by Timothy Boates, as chief executive officer, the Debtor reports estimated assets and liabilities between $100 million and $500 million each. Judge Mary F. Walrath oversees the case. The Debtors are represented by Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor. Schulte Roth & Zabel LLP, and Landis Rath & Cobb LLP, advise Blue Torch Finance, LLC. Thompson Coburn LLP advises Webster Business Credit. PERFORMANCE POWERSPORTS: Chapter 11 Plan Okayed by Court -------------------------------------------------------- Emily Lever of Law360 reports that bankrupt all-terrain vehicle seller Performance Powersports Group on Wednesday, October 4, 2023, got its Chapter 11 reorganization plan approved by a Delaware bankruptcy court, clearing the way for it to head to liquidation. About Performance Powersports Group Investor Performance Powersports Group Investor, LLC -- https://colemanpowersportsusa.com/ -- is a leading producer of entry-level powersports equipment sold through "Big Box" retailers. Performance Powersports is in the business of adventure, selling dirt bikes, go-karts, ATVs, golf carts, and the like to retailers throughout the US. PPGI and three affiliates, including Performance Powersports Group Holdings, Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10047) on Jan. 16, 2023. In the petition signed by its chief financial officer, Ken Vanden Berg, PPGI disclosed $100 million to $500 million in both assets and liabilities. The petition states that funds will be available to unsecured creditors. Judge Laurie Selber Silverstein oversees the cases. The Debtors tapped Klehr Harrison Harvey Branzburg LLP as legal counsel and Omni Agent Solutions as claims, noticing and administrative agent. Triple P RTS, LLC and Triple P Securities, LLC, wholly owned firms by Portage Point Partners, LLC, are the Debtors' restructuring advisor and investment banker, respectively. Tankas Funding VI, LLC, as DIP lender, is represented by Kirkland & Ellis LLP. PRAIRIE ACQUIROR: S&P Alters Outlook to Neg., Affirms 'B+' ICR -------------------------------------------------------------- S&P Global Ratings affirmed the 'B+' issuer credit rating on Prairie Acquiror L.P. and revised the outlook to negative from stable. The recovery rating of '2' on the company's senior unsecured notes and '5' recovery rating on the term loan is unchanged. The issue-level ratings on the notes and term loan are unchanged at 'BB-' and 'B', respectively. The negative outlook reflects S&P's expectation for leverage to be above 7.5x for about a year as construction and funding for TPCO2 commences in fiscal 2024 before deleveraging once the project comes online at some point in 2025. S&P said, "We forecast that consolidated S&P Global Ratings-adjusted leverage will increase above 7.5x for a period of time as Prairie funds TPCO2.Construction is expected to begin in fiscal 2024, with a targeted in-service date of some point in 2025. Given this timeline we anticipate the company will take on additional project level debt for funding in fiscal 2024 in a sufficient quantum to increase leverage above our trigger of 7.5x debt to EBITDA. We forecast leverage will remain at this level until TPCO2 is completed and reaches operation, at which time the company will de-lever. We note that we do not provide pro forma EBITDA credit for projects currently in construction, so deleveraging will not occur until TPCO2 is operational. Therefore, we anticipate leverage could be above 7.5x for about a year. "The negative outlook on Prairie reflects our expectation that leverage will be elevated above 7.5x while the company pursues the conversion of the Trailblazer pipeline to CO2 service. However, we do not expect the company to maintain leverage above 7.5x over the long term." S&P could lower the rating on Prairie if it anticipate leverage to further deteriorate from our current expectations, which could occur if: -- S&P has additional details on the scope and cost of the project, which causes credit metrics to be worse than expected; or -- The company faces delays or other obstacles in project construction leading to cost overruns that elevate execution and strategic risk. S&P could revise the outlook on Prairie to stable if it has visibility into the company de-leveraging comfortably below 7.5x. This could be a result of the following: -- Clear line of sight into completion of the Trailblazer project which leads to increased EBITDA, which coupled with reduced capital expenditures and increased free cash flow allocated to debt repayment leads to deleveraging; and -- S&P's view that the financial policy is supportive of maintained leverage below 7.5x. S&P said, "Environmental factors are a moderately negative consideration on our rating on Prairie Acquiror L.P. Prairie is a levered holding company that owns 100% interest in Tallgrass Energy Partners. Tallgrass mainly transports natural gas and crude oil through its various long-haul and localized pipelines. We think the company's exposure to energy-transition trends could lead to deteriorating market prices and complicate recontracting efforts when contracts come due. Having said that, the company has a good degree of long-term contracts, especially on Rockies Express and Pony Express pipelines that should mitigate these risks over the next five-10 years." PREMIER GRILLING: Unsecureds Unimpaired in Plan ----------------------------------------------- Premier Grilling LLC, et al., submitted a Plan and a Disclosure Statement. Premier Grilling LLC and Premier Grilling Outdoors LLC's Plan generally provides for the payment in full of all Priority Claims and Secured Claims. Unsecured Claims will not receive any distribution under the Plan. The funds to be used for the payment of Claims or other Distributions to be made under the Plan will be from the proceeds of the continued operation of Premier Grilling LLC and Premier Grilling Outdoors LLC's businesses and any available funds or property which the Reorganized Debtors may otherwise possess on or after the Effective Date. The perfected liens and security interests held by any Secured Creditor will be continued, preserved and retained to secure the unpaid balance of such Secured Creditor' Allowed Secured Claim. Current Interests in the Debtors will be cancelled, and post-confirmation, Premier Grilling Outdoors LLC will be wholly owned by Premier Grilling LLC. The New Equity Holders will obtain 100% of the equity interests in the Reorganized Premier Grilling Debtor. Under the Plan, Class 10 Allowed General Unsecured Claims are unimpaired. Holders of Class 10 Allowed General Unsecured Claims will neither receive nor retain any property under this Plan. The funds to be used for the payment of claims or other distributions to be made under the Plan will come from the proceeds of the continued operation of the Debtors' businesses and any available funds or property which the Reorganized Debtors may otherwise possess on or after the Effective Date Counsel for the Debtors: Melissa S. Hayward, Esq. HAYWARD PLLC 10501 North Central Expy., Suite 106 Dallas, TX 75231 Tel/fax: (972) 755-7100 E-mail: MHayward@HaywardFirm.com A copy of the Disclosure Statement dated September 27, 2023, is available at https://tinyurl.ph/bDSAo from PacerMonitor.com. About Premier Grilling Premier Grilling, LLC is a grill store in Texas offering BBQ smokers, charcoal grills, flat- top grills and griddles, gas grills, infrared grills, kamado grills, and pellet grills. Premier Grilling and Premier Grilling Outdoors, LLC, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Lead Case No. 22-41727) on Dec. 9, 2022. In the petitions signed by Brian Rush as CEO of Premier Grilling LLC and Dan Ferguson as president of Premier Grilling Outdoors, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Brenda T. Rhoades oversees the cases. Melissa S. Hayward, Esq., at Hayward PLLC, is the Debtors' legal counsel. PRIME CORE: Seeks Appropriate Treatment of Claims ------------------------------------------------- Allegheny Casualty Company filed a limited objection and reservation of rights with respect to the Motion for Entry of an order approving the disclosure statement on an interim basis for solicitation purposes only and granting related relief and the Joint Chapter 11 Plan of Reorganization for Prime Core Technologies Inc. and Its Affiliated Debtors. Allegheny Casualty is a surety bond provider for the Debtors. On June 1, 2023, Allegheny Casualty issued 22 money transmitter bonds (the "Bonds"), expiring on May 30, 2024, in the aggregate coverage amount of $7,445,000.00 to Debtor Prime Trust, LLC ("Prime Trust") to fulfill the statutory requirements for money transmitters in the various states in which the Debtors are licensed to do business. Allegheny Casualty objects to the Plan in its current form given the Plan's failure to provide any treatment for secured creditors' claims, such as those of Allegheny Casualty, rendering the Plan patently unconfirmable. While the Plan includes the language addressing the treatment of Allegheny Casualty's Bonds and related agreements in the event of a Reorganization Transaction, the Plan nevertheless fails completely to address treatment of Allegheny Casualty's related secured claims themselves (including liquidated secured claims incurred by Allegheny Casualty to date, which continue to accrue) in the event of either a Reorganization Transaction or any alternative scenario to a Reorganization Transaction. Absent providing appropriate treatment for such secured claims, the proposed Plan is patently unconfirmable. Allegheny Casualty appreciates that Section 9.6(d) of the Plan provides that in the event of a Reorganization Transaction, the Bonds and related agreements between Debtors and Allegheny Casualty shall be vested and performed by the Reorganized Debtors and shall survive and remain unaffected by entry of the Confirmation Order. However, the Plan and Disclosure Statement must nevertheless also be revised to provide for appropriate voting rights and treatment of Allegheny Casualty's related secured claims in these cases (including, without limitation, accrued fees and expenses) consistent with the Bankruptcy Code and the applicable agreements between the Debtors and Allegheny Casualty. Consequently, Allegheny Casualty seeks modification of the Disclosure Statement and Plan accordingly, and is willing to work with the Debtors in an effort to reach consensual agreement on such modifications. Allegheny Casualty respectfully requests that the Court (a) condition approval of the Disclosure Statement and Plan on the inclusion of express language therein providing voting rights and appropriate treatment for secured creditors' their claims, including those of Allegheny Casualty, and (b) provide such other and further relief to Allegheny Casualty as this Court deems just and proper. Attorneys for Allegheny Casualty Company: John W. Weiss, Esq. William R. Firth, III, Esq. PASHMAN STEIN WALDER HAYDEN, P.C. 1007 North Orange Street 4th Floor, Suite 183 Wilmington, DE 19801 Telephone: (302) 592-6496 E-mail: jweiss@pashmanstein.com wfirth@pashmanstein.com About Prime Core Prime Core Technologies, Inc. and three of its affiliates sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Lead Case No. 23-11161) on Aug. 16, 2023. The petitions were signed by Jor Law as interim chief executive officer. The Hon. J. Kate Stickle presides over the Debtors' cases. The Debtors listed $50 million to $100 million in estimated assets and $100 million to $500 million estimated liabilities. McDermott Will & Emery LLP serves as counsel to the Debtors. The Debtors' financial advisor is M3 Advisory Partners, LP; their investment banker is Galaxy Digital Partners LLC; and their claims and noticing agent is Stretto. PROJECT RUBY: S&P Rates $230MM Incremental 1st-Lien Term Loan 'B' ----------------------------------------------------------------- S&P Global Ratings assigned a 'B' issue-level rating and '2' recovery rating to Project Ruby Parent Corp.'s subsidiary Project Ruby Ultimate Parent Co.'s $230 million incremental first-lien term loan issued to acquire Corridor Group's software platform specializing in coding and revenue cycle management for nonacute (home health and hospice) health care providers. The acquisition is consistent with the company's strategy of expanding its focus on value-based care in the broad post-acute care segment, and we believe the acquired software is complementary to Wellsky's existing end markets and software offerings. S&P expects the company to continue investing in its recently acquired Experience Care software, also addressing the long-term care market and believe the company is well-positioned to capitalize on secular tailwinds in the post-acute/nonacute care industry, including the shift of volumes from hospitals to home and community settings. S&P said, "Our issuer credit rating on the Project Ruby Parent Corp. remains 'B-'. The stable outlook reflects our expectation that Wellsky's customer renewal rates will remain strong while its organic revenue increases by the mid- to high-single-digit percent area. We continue to expect leverage of about 8x in fiscal 2024, with lower-than-expected breakeven free operating cash flows largely due to the increased interest expense. Nevertheless, we expect the company's cash flow to strengthen in fiscal 2025 with EBITDA expansion from continued investment in key growth initiatives including analytics, and some synergies net of one-time achievement costs." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- Project Ruby's capital structure comprises a $110 million revolver maturing in 2026, a $1.497 billion first-lien term loan maturing in 2028, a $230 million incremental first-lien term loan, and a $405 million second-lien term loan maturing in 2029. -- S&P continues to value the company as a going concern using a 6.5x multiple of its projected emergence EBITDA. -- This valuation multiple is consistent with the multiples S&P uses for similar software companies operating in the health care information technology (HCIT) industry. -- S&P's simulated default scenario assumes a default occurring in 2023 due to increased competition, a failure to retain customers, and service disruptions. Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: $215 million -- EBITDA multiple: 6.5x Simplified waterfall -- Gross enterprise value: $1.399 million -- Net recovery value for waterfall after admin. expenses (5%): $1.329 million -- Obligor/nonobligor valuation split: 97%/3% -- Estimated first-lien claim: $1.865 billion -- Value available for first-lien claim: $1.315 million --Recovery expectations: 70%-90% (rounded estimate: 70%) RITE AID: S&P Downgrades ICR to 'D' After Bankruptcy Announcement ----------------------------------------------------------------- S&P Global Ratings lowered the issuer credit rating on U.S.-based drugstore retailer Rite Aid Corp. to 'D' from 'CCC-'. At the same time, S&P lowered its issue-level ratings on all tranches of debt in the company's capital structure to 'D', including the asset-based lending (ABL) facility (from 'CCC+'), the FILO term loan (from 'CCC'), and the second-lien secured and unsecured debt (from 'C'). The downgrade follows Rite Aid's announcement that it has initiated a voluntary bankruptcy proceeding under chapter 11 of the U.S. bankruptcy code. This is after the company reached an agreement, in principle, with senior secured lenders. In connection with the voluntary restructuring, the company agreed with senior lenders to a $3.45 billion commitment in new financing. The company's bankruptcy filing follows an accelerated deterioration in its operating performance and significant financial risks stemming from opioid litigation. In addition, Rite Aid has large financial obligations and had reported more than $3.3 billion in balance sheet debt as of June 3, 2023. Camp Hill, Pa.-based Rite Aid is the third-largest drugstore retailer in the U.S. by revenue. It had operated more than 2,300 stores as of June 2023. The company's operations are organized into two divisions: retail pharmacy and pharmacy services (operates as a pharmacy benefit manager). Environmental, social, and governance (ESG) credit factors for this change in credit rating/outlook and/or CreditWatch status: -- Health and safety RJT FOOD: Property Occupant Proposes Plan ----------------------------------------- Richard Bivona filed a Plan and a Disclosure Statement for RJT Food & Restaurant, LLC. The Debtor owns residential real property located 1999 Deerfield Rd., Water Mill, NY 11976 (the "Property"). The Plan Proponent is the occupant of the Property. Since the appointment of the Trustee Mr. Bivona has been paying use and occupancy to the Debtor in the amount of $24,000 per month. General unsecured creditors are classified in Class 4 and are projected to receive a distribution of 100% of their allowed claims to be paid on the effective date of the Plan provided that the Plan Proponent secures funding sufficient to make payment to all creditors in full. In the event that the Plan Proponent does not obtain such finding, the Plan provides that the Debtor's real property located at 1999 Deerfield Rd., Water Mill, NY 11976 (the "Property") will be sold at auction. If the Property is sold at auction, unsecured creditors will receive the net proceeds of sale after payment in full of administrative, secured, and priority claims. Secured creditors are classified in Classes 1, 2 and 3 and they will also be paid 100% of their allowed claims on the effective date of the Plan subject to the Plan Proponent's refinance of the Property or sale at auction. Under the Plan, Class 4 consists of All General Unsecured Creditors. The Plan Proponent will pay all unsecured creditors in full through a refinance of the mortgages on the Property. However, in the event that an adequate refinance is not obtained, the Property will be sold at auction. If the Property is sold at auction, unsecured creditors shall receive the net proceeds of sale after the payment of secured, administrative, and priority claims. Class 4 is impaired. The Plan Proponent shall fund the Plan by refinancing the mortgage on the Property or selling the Property. Under the Plan the Plan Proponent shall market the Property for sale or shall obtain a refinance of the mortgage. The Plan Proponent shall have through November 30, 2023 to enter into a contract for the sale of the Property or refinance of the mortgage and through December 29, 2023 to close the sale or refinance of the mortgage. In the event that the Plan Proponent fails to meet those deadlines, the Plan Proponent shall within 14 days file a motion with the Bankruptcy Court to sell the Property at an auction to be held at the Bankruptcy Court or such other place that is mutually acceptable to the Debtor and creditors. The December 29, 2023 deadline may be extended on consent of the secured creditors by Notice of Proposed Stipulation subject to approval of the Bankruptcy Court. The Debtor shall have the option at all times to refinance the Property provided that such refinancing is at an amount sufficient to pay all creditors in full. The Plan Proponent's counsel Morrison Tenenbaum PLLC (the "Disbursing Agent") shall be the disbursing agent under the Plan. Attorneys for the Debtor: Brian J. Hufnagel, Esq. MORRISON TENENBAUM PLLC 87 Walker Street, Floor 2 New York, NY 10013 Telephone: (212) 620-0938 Facsimile: (646)390-5095 A copy of the Disclosure Statement dated September 27, 2023, is available at https://tinyurl.ph/oJWsL from PacerMonitor.com. About RJT Food & Restaurant RJT Food & Restaurant, LLC, filed its voluntary Chapter 11 petition (Bankr. E.D.N.Y. Case No. 23-70447) on Feb. 8, 2023, with $1 million to $10 million in assets and up to $50,000 in liabilities. Richard J. Bivona, president, signed the petition. Judge Robert E. Grossman oversees the case. Ronald D. Weiss, Esq., at Ronald D. Weiss, P.C., is the Debtor's counsel. Salvatore LaMonica, the court-appointed Chapter 11 trustee, tapped LaMonica Herbst & Maniscalco, LLP and Joseph A. Broderick, P.C. as his legal counsel and accountant, respectively. ROBBIN'S NEST: Unsecureds to Get 10% of Net Profit -------------------------------------------------- Robbin's Nest for Children, LLC, filed a Plan of Reorganization under Chapter 11 of the Bankruptcy Code that proposes to pay creditors from future income. Under the Plan, Class 4 Allowed General Unsecured Creditors are owed a total of approximately $413,054 and they will be paid as much of the balance of what they are owed as possible. These creditors will be mailed Robbin's Nest for Children, LLC'S previous year's financial statement each year for five years, during the term of the five-year Plan, on or about May 1st each year, beginning on May 1, 2024, and thereafter on or about May 1, 2025, May 1, 2026, May 1, 2027, and May 1, 2028. Each year, if the Reorganized Debtor made a profit, after income taxes, and after making all priority and secured plan payments and normal overhead payments, the Reorganized Debtor shall pay to the allowed unsecured creditors their pro-rata share of 10% of the net profit for the previous year, in twelve monthly payments beginning on June 15th of the year in which the financial statement is mailed to these creditors. Each year, during the term of the five-year Plan, the Reorganized Debtor will repeat the 12-month payment plan to the allowed unsecured creditors if the Reorganized Debtor made a net profit the previous year as reflected in the previous year's financial statement. This payout will not exceed five years, and at the end of the five-year Plan term, the remaining balance owed, if any, to the allowed unsecured creditors will be discharged. Class 4 is impaired. This Plan of Reorganization will be funded by the Reorganized Debtor through future business income of the Debtor. The current management will remain in control. A copy of the Plan of Reorganization dated September 27, 2023, is available at https://tinyurl.ph/ykUhW from PacerMonitor.com. About Robbin's Nest for Children Robbin's Nest for Children, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Texas Case No. 23-30735) on March 3, 2023, with as much as $1 million in both assets and liabilities. Judge Jeffrey P. Norman oversees the case. The Debtor tapped Margaret M. McClure, Esq., as legal counsel and Karyn Andersen of Total Sum, LLC as bookkeeper. SANUWAVE HEALTH: Expects Third Quarter Revenues of $4.7M to $4.9M ----------------------------------------------------------------- SANUWAVE Health, Inc. announced that revenues for the third quarter of 2023 (ending September 30) are expected to be in the range of $4.7 million to $4.9 million. "As the Company continues to make progress alleviating the production constraints discussed on the last earnings call, we are pleased to have been able to achieve ongoing revenue growth," said Morgan Frank, chairman and CEO. "Overall revenues in the quarter were positively impacted by significant growth in the core UltraMIST product lines which constituted greater than 90% of SANUWAVE's overall revenues in the quarter. The Company plans to release its full quarterly numbers for Q3 in mid-November, and we look forward to speaking with you then to give you a more complete update on our quarterly performance and our future plans." The preliminary revenue results are based on management's initial analysis of the third quarter ended Sept. 30, 2023 and may be subject to adjustments based on the Company's completion of its quarter-end financial close process. About SANUWAVE Health Headquartered in Suwanee, Georgia, SANUWAVE Health, Inc. (OTCQB:SNWV) -- http://www.SANUWAVE.com-- is focused on the research, development, and commercialization of its patented, non-invasive and biological response-activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures. SANUWAVE's end-to-end wound care portfolio of regenerative medicine products and product candidates help restore the body's normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, aesthetic/cosmetic, and cardiac/endovascular conditions. SANUWAVE reported a net loss of $10.29 million for the year ended Dec. 31, 2022, compared to a net loss of $27.26 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $19.87 million in total assets, $60.88 million in total liabilities, and a total stockholders' deficit of $41.01 million. New York, NY-based Marcum LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 31, 2023, citing that the Company has incurred recurring losses and needs to raise additional funds to meet its obligations and sustain its operations and the occurrence of the events of default on the Company's debt. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SCUNGIO BORST: Department Says Plan Disclosures Inadequate ---------------------------------------------------------- The Commonwealth of Pennsylvania, Department of Revenue, objects to the Disclosure Statement and Plan of Reorganization of Scungio Borst & Associates LLC. Delinquent Pennsylvania Tax Returns and Disregard of Pennsylvania Tax Obligations The Department is not able to file and finalize correct and complete pre-petition and post-petition proofs of claim as the Debtor has a number of delinquent Pennsylvania tax returns. The Department's records show that the Debtor has not filed a complete tax returns. Disclosure Statement Requirements Not Met The Disclosure Statement and Plan do not adequately provide for the payment of the Department's Proofs of Claim. The Plan should not be confirmed because of the aforementioned delinquent tax returns. The tax returns need to be filed for the Department to determine whether there are any outstanding tax liabilities for these delinquent tax years. The Disclosure Statement does not provide adequate information regarding the Debtor's business operations. There are also a number of items should require additional explanation. Because of the aforementioned unaddressed matter in the Disclosure Statement, the Disclosure Statement should not be approved as it does not contain adequate information as required under Section 1125. The Disclosure Statement Should Not Be Approved Because the Plan It Describes Is Unconfirmable Despite the fact that the Disclosure Statement provides inadequate information and thus cannot be approved, the proposed Plan itself contains numerous issues that will prevent confirmation and which make an amendment of the Disclosure Statement fruitless. As will be shown, the Plan does not comply "with the applicable provisions of this title" and "has [not] been proposed in good faith and not by any means forbidden by law." Administrative Claim Not Adequately Provided For The Disclosure Statement does not provide any information regarding the Debtor's post-petition Employer Withholding Tax liabilities in Pennsylvania. Also, the Plan does not adequately provide for the payment of the Department's post-petition claim. The Plan should provide for the payment of post-petition claims in cash by the Effective Date, consistent with Section 1129(a)(9)(A), which means that the post-petition claims will continue to accrue interest and penalties until paid. The Plan does not provide for this. That is, administrative expense claims of the Department that are allowed allowed pursuant to the Plan or the Bankruptcy Code shall be paid in full in cash on the Effective Date or as soon as practicable after the Effective Date and shall continue accrue interest (7%) and penalties in accordance with the Bankruptcy Code and non-bankruptcy law until paid in full. Unsecured Priority Claim Not Adequately Provided For The Disclosure Statement (Article 2) and proposed Plan (Article 5.2, N. 1) provides that the Allowed Priority Non-Tax Claims will be paid second, while the Allowed Priority Tax Claims will be paid third. The two Allowed Priority Claims should be treated equally. The proposed Plan (Article 4.3) provides that the SBA Plan Trust Administrator has two options to pay Unsecured Priority Tax Claims. None of the options as written provide for the payment of an amount that is "equal to the present value" of the Unsecured Priority Tax Claims. Either option should require the payment of interest (of 7%) up until the time the Department's Unsecured Priority Tax Claim is paid in full. In summary, the Department's Unsecured Priority Tax Claims allowed pursuant to the Plan or the Bankruptcy Code should be paid in accordance with Section 1129(a)(9)(C) of the Bankruptcy Code with interest (7%). To the extent such allowed Unsecured Priority Tax Claims (including any penalties, interest or additions to tax entitled to priority under the Bankruptcy Code) are not paid in full in cash on the Effective Date, then such Unsecured Priority Tax Claims under either option shall accrue interest (7%) commencing on the Effective Date at the rate set forth in Section 511 of the Bankruptcy Code and nonbankruptcy law until paid in full. Default Provision Must Be Added The Plan does not provide for default remedies and, therefore, is not acceptable. Section 1123(a)(5)(G) specifies that a plan shall provide adequate means for a plan's implementation such as provisions for curing any default. The Plan provides that creditors are "limited to remedies as provided under the Bankruptcy Code and applicable law." These limited default remedies forces creditors into an untenable situation should the Debtor default on its Plan obligations. Without a proper default plan provision, tax claimants are forced to pursue collection of plan defaults in the bankruptcy court. The purpose of post-confirmation jurisdiction is essentially and necessarily limited to protecting the order confirming the plan and preventing interference with the execution of the plan, not enforcing defaults of plan payments. Department's Setoff and Recoupment Rights Are Not Provided for under the Plan: The Plan does not adequately provide for and preserve the Department's setoff and recoupment rights. Article 6.2.7 of the Plan provides only setoff rights for the Debtor and the SBA Plan Trust Administrator. That is, the provision only allows them to setoff a claim, etc. This is not how Section 553 of the Bankruptcy Code reads, which preserves a creditor's setoff rights Estimation of Claims: * Article 9.4 of the Plan provides for the Debtor (prior to the effective date) and the SBA Plan Trust Administrator (on or after effective date) to estimate any disputed claim at any time pursuant to Section 502(c). The Department objects to this broad authority. The Department requests that the Debtor and the SBA Plan Trust Administrator be prohibited from modifying the scope of Sections 502 and 505 of the Bankruptcy Code with respect to the Department's claims. Exculpation Provision Is Improper Article 11.13 of the Plan provides for the exculpation of the "Exculpated Parties" as defined in the Plan (Article 1.9) (Debtor; the directors, officers, and managers of the Debtor that served during the Chapter 11 Case; the Committee; all Professionals retained by the Debtor in the Chapter 11 Case; all Professionals retained by the Committee in the Chapter 11 case; all of whom acted in their capacity as such). It is the Department's position that the blanket releases of the Debtor and a number of nondebtor parties goes too far. All the parties should be held accountable for their conduct or transgressions. Confirmation Requirements Not Met The proposed Plan cannot be confirmed as it has not been proposed in good faith as required under 11 U.S.C. s 1129(a)(3). A plan fails to meet the good faith requirement where (1) it is inconsistent with Bankruptcy Code's objectives, (2) it is not proposed with honest intentions and an achievable basis for reorganization, or (3) lacks fundamental fairness in dealing with creditors. Counsel of Commonwealth of Pennsylvania, Department of Revenue: Christos A. Katsaounis, Esq. Senior Counsel PA Department of Revenue Office of Chief Counsel P.O. Box 281061 Harrisburg, PA 17128-1061 Telephone: (717) 346-4643 Facsimile: (717) 772-1459 E-mail: ckatsaouni@state.pa.us About Scungio Borst & Associates Scungio Borst & Associates, LLC, is a worldwide construction services firm specializing in general construction, consulting and project management. It is based in Camden, N.J. Scungio Borst & Associates filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Penn. Case No. 22-10609) on March 11, 2022, with $10 million to $50 million in both assets and liabilities. Judge Ashely M. Chan oversees the case. The Debtor tapped Karalis, PC, led by Aris J. Karalis, Esq., as legal counsel; MillerSearles, LLC as tax services provider; and Harlyn Consulting, LLC as financial support consultant. SMILEDIRECTCLUB INC: U.S. Trustee Appoints Creditors' Committee --------------------------------------------------------------- The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of SmileDirectClub Inc. and its affiliates. The committee members are: 1. Wilmington Trust National Assoc. as Trustee for 2026 Senior Convertible Notes Attn: Rita Marie Ritrovato VP 1100 North Market Street Wilmington, DE 19890-1605 Phone: 302-636-5137 Email: rritrovato@wilmingtontrust.com 2. Horizon Media LLC Attn: Maria Freda 75 Varick St. New York, NY 10013 Phone: 212-220-1730 Email: mfreda@horizonmedia.com 3. Legility LLC Attn: Michael Flanagan -- GC 1828 L St., NW, Ste. 1070 Washington, D.C. 20036 Phone: 202-559-3812 Email: michael.flanagan@consilio.com 4. LTIMindtree Limited Attn: Dheeraj Mani L&T House, Ballard Estate Mumbai-400001, India Phone: +91-226-776-6776 Email: Dheeraj.Mani@ltimindtree.com 5. Smile Stream Solutions Attn: Tim Law 1931 Liggett Rd, A16 Castle Rock, CO 80109 Phone: 801-691-9945 Email: tlaw@smilestreamsolutions.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 SmileDirectClub SmileDirectClub, Inc. (Nasdaq: SDC) -- http://www.SmileDirectClub.com/-- is an oral care company and creator of the first medtech platform for teeth straightening. Through its cutting-edge telehealth technology and vertically integrated model, SmileDirectClub is revolutionizing the oral care industry. Its mission is to democratize access to a smile each and every person loves by making it affordable and convenient for everyone. SmileDirectClub is headquartered in Nashville, Tennessee. SmileDirectClub and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90786) on Sept. 29, 2023. In the petition signed by its chief financial officer, Troy Crawford, SmileDirectClub disclosed $498,712,000 in assets and $1,051,823,000 in liabilities. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International, LLP as general bankruptcy counsel; Jackson Walker, LLP as local bankruptcy counsel; Centerview Partners, LLC as financial advisor and investment banker; FTI Consulting, Inc. as restructuring advisor; and Kroll Restructuring Administration, LLC as notice and claims agent. SONIDA SENIOR: Completes Loan Modifications With Fannie Mae ----------------------------------------------------------- Sonida Senior Living, Inc. announced the execution of its loan modifications with Fannie Mae in tandem with strong September and Q3 2023 occupancy growth. Sonida, on June 29, 2023, entered into a comprehensive forbearance agreement with Fannie Mae as the first of a two-step process to modify all existing mortgage agreements with Fannie Mae. On Oct. 2, 2023, Sonida and Fannie Mae entered into loan modification agreements covering all 37 Fannie Mae mortgaged communities, which finalizes the previously announced comprehensive restructuring. The terms of the Fannie Mae loan modifications were consistent with those set forth in the June 29, 2023 forbearance agreement. Key elements of the loan modification include: * All maturities under the 37 Fannie Mae loans have been extended to December 2026 or later. * All contractually required principal payments under the 37 Fannie Mae loans have been deferred for three years or waived until maturity, resulting in $33.0 million of cash flow savings through maturity. * Sonida received near-term interest rate reduction on all 37 assets, resulting in $6.1 million in cash interest savings from June 2023 through May 2024. * Sonida to provide two $5 million principal payments to be applied against the loan balances. The first paydown was funded in June 2023 and the second will be funded in June 2024. As previously announced, Conversant Capital committed to purchase up to $13.5 million of common equity at $10 per share over an 18-month period following the date of its commitment. Sonida shall have the right, but not the obligation, to utilize Conversant's equity commitment and may draw on the commitment in whole or in part. The Company drew $6.0 million in July, in conjunction with the first $5.0 million principal payment to Fannie Mae. The remaining funds may be drawn as needed for general working capital needs or to fund the second $5.0 million loan paydown due to Fannie Mae. Also, as previously announced, in connection with the Fannie loan modifications and the Conversant equity commitment, Ally Bank agreed to temporarily reduce the minimum liquidity requirement under its $88.1 million facility with the Company for 18 months (effective June 1, 2023), subject to certain conditions that the Company expects to meet. The Company said the loan modification agreements along with the modified liquidity requirements with Ally Bank will contribute significantly to its ongoing financial stability. The Company continues to engage in dialogue with its other significant lending partner, Protective Life, regarding potential modifications or repurchases, among other possibilities. The Company remains optimistic for positive near-term outcomes. Q3 Performance Spot occupancy ended September at 86.8% for the Company's owned communities, and average occupancy for Q3 increased approximately 100 basis points from Q2 2023. Average rate continues to be a significant component of the Company's 2023 NOI margin expansion with a year-over-year increase in average rate of 9.8% through the first nine months of the year. "The debt restructuring along with strong Q3 occupancy gains have created significant momentum for us as we move into the final quarter of the year," said Kevin Detz, chief financial officer. "Our strong results and sequential improvement throughout the first nine months of the year are a testament to our ongoing focus on operational excellence and our team's dedication to providing high-quality care and personalized service that enhances our residents' quality of life." "We are very pleased with the Company's strong operating results and the completion of the loan modifications with Fannie Mae. Our performance throughout the year, coupled with the ongoing support from our investors and lenders, remains a key point of differentiation in the current economic climate," said Brandon Ribar, president and CEO. "We believe Sonida is at an exciting inflection point with our balance sheet repositioning nearly behind us and continued portfolio performance improving, allowing us to pivot our focus towards growth. Many owners, operators and lenders across senior living are actively identifying strategic alternatives for their existing assets; our goal this year has been to make the needed improvements to our balance sheet, organizational structure and operations to position Sonida to be the consolidator of choice in the industry as it continues to evolve." About Sonida Sonida Senior Living, Inc., (formerly known as Capital Senior Living Corporation), is an owner-operator of senior housing communities in the United States. The Company and its predecessors have provided senior housing since 1990. The Company provides compassionate, resident-centric services and care as well as engaging programming operating 71 senior housing communities in 18 states with an aggregate capacity of approximately 8,000 residents, including 61 communities which the Company owns and 10 communities that the Company manages on behalf of third parties. Dallas, Texas-based RSM US LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated March 30, 2023, citing that the Company has suffered from recurring losses from operations and total current liabilities exceed total current assets. This raises substantial doubt about the Company's ability to continue as a going concern. SPECIALTY PHARMA III: S&P Assigns 'B-' ICR, Outlook Stable ---------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to Specialty Pharma III Inc. (doing business as Wedgewood Pharmacy) and withdrew its 'B-' issuer credit rating on Specialty Pharma II Inc. S&P moved the issuer credit rating to Specialty Pharma III Inc. because it is the issuer of the group's financial statements and the borrower of its debt. S&P said, "At the same time, we assigned our 'B-' issue-level rating and '3' recovery rating to the company's new $50 million first-lien delayed draw term loan. The '3' recovery rating indicates our expectations for meaningful (50%-70%; rounded estimate: 50%) recovery prospects in the event of a hypothetical default. Our 'B-' issue-level rating and '3' recovery rating on the existing first-lien term loan are unchanged. "The stable outlook on Specialty Pharma III Inc. continues to reflect our expectation that it will increase its revenue by the double-digit percent area annually (with a mid- to high-single digit percent rise in its organic revenue), supported by a strong expansion in the outsourced U.S. animal health compounding pharmacy market. It also reflects our expectation that the company will sustain S&P Global Ratings-adjusted leverage of more than 5x for the next several years and generate limited free operating cash flow." On Sept. 8, 2023, Specialty Pharma III Inc. signed an agreement to purchase a 503B facility in the U.S. Midwest (that may compound drugs for office stock with or without a prescription). The company also announced its plan to build a new Arizona-based 503A facility (that compounds drugs for patient-specific solutions and for veterinary office stock, as permitted by state law). To support these growth initiatives, it is raising a $50 million non-fungible incremental first-lien delayed draw term loan. Wedgewood Pharmacy is raising a $50 million first-lien delayed draw term loan to support its growth initiatives. S&P assigned its 'B-' issuer credit rating and stable outlook to Wedgewood (the same level as the ICR S&P withdrew on Specialty Pharma II) because it is issuer of the group's financial statements and the borrower of its debt. SPEEDCAST HOLDINGS: S&P Lowers ICR to 'B-' on Higher Competition ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on satellite communications provider Speedcast Holdings III LLC to 'B-' from 'B'. At the same time, S&P lowered its issue-level rating on the company's secured debt to 'B-' from 'B'. The stable outlook reflects S&P's expectation that Speedcast will maintain leverage in the mid-4x area over the next 12 months and has a path toward sustainable positive free cash flow. Increased competition in the cruise industry will pressure Speedcast's operations. The entrance of Starlink has created substantial pressure on the competitive environment and provides cruise customers with a strong alternative to service their needs. S&P said, "While Speedcast has renewed both contracts with its two largest customers in the cruise segment, we expect competition from Starlink will result in material changes to the economics of these customer relationships. We forecast that one of the contract renewals will result in lower volume with a slightly improved margin profile while the other contract renewal has led to reduced margins in 2023. We expect the increase in competitive pressure will reduce cruise segment revenue by a single-digit percentage in 2024. However, despite challenges from the competitive landscape, potential for lower volume in 2024 and margins deterioration already impacting 2023, we expect Speedcast will not lose partnerships with its large cruise customers because these clients employ a two-provider strategies to ensure backup connectivity." High interest rates limit the company's ability to generate free cash flow. Speedcast's entire capital structure comprises floating-rate debt. S&P said, "While the company has interest rate hedges on about two-thirds of its debt to limit the impact from further increases, we do not expect interest expense to decrease materially in the next 12 months. This combined with margin pressure from increased competition will limit Speedcast's ability to generate substantial free operating cash flow (FOCF). Through the first half of the year, the company generated FOCF of about $3 million. We expect FOCF to debt to remain about break-even through 2024 as Speedcast begins to recognize the impact of renegotiated contracts with its large cruise partners." S&P said, "We expect energy segment demand and low leverage will support the 'B-' rating over the next 12 months. S&P Global Ratings expects oil prices will remain elevated and steady through 2026. High oil prices support demand for offshore drilling that utilizes Speedcast to provide telecommunication services. We expect modest growth in the segment will partially offset increased cruise industry competition and support our rating on Speedcast. We also recognize the longer-term risk of increasing competition to spill over into the energy segment. Additionally, the company's relatively low leverage supports the rating. As of the end of the second quarter, S&P Global Ratings-adjusted leverage was about 4.5x, with more than three years to maturity for the revolving credit facility and more than five years for the term loan. "The stable outlook reflects our expectations that Speedcast will maintain leverage in the mid-4x area over the next 12 months and has a path toward generating sustainable positive free cash flow." S&P could lower the rating if it does not expect Speedcast will generate sustained positive FOCF long term and that the capital structure is unsustainable. This could occur if: -- Competitive pressure continues to increase and lead to major customer losses or margin deterioration; or -- Interest rates increase above our current expectations and remain elevated for a prolonged period. S&P could raise the rating if: -- Speedcast sustainably generates FOCF to debt above 5%; and -- S&P does not expect a material impact to operating performance from additional competitive pressures, especially from Starlink and other emerging low-Earth-orbit satellite providers. SPIRITS & MUSIC: Robert Altman Named Subchapter V Trustee --------------------------------------------------------- The U.S. Trustee for Region 21 appointed Robert Altman as Subchapter V trustee for Spirits and Music, LLC. 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 Spirits and Music Spirits and Music, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02365) on Oct. 3, 2023, with $100,001 to $500,000 in both assets and liabilities. Judge Jacob A. Brown oversees the case. Christopher W. Wickersham, Jr., Esq., at the Law Offices of C.W. Wickersham Jr., P.A. represents the Debtor as bankruptcy counsel. SUMMIT SPRINGS: Court Approves Disclosure Statement --------------------------------------------------- Judge Wendy L. Hagenau has entered an order approving Summit Springs Holdings LLC's Amended Disclosure Statement dated September 15, 2023. November 6, 2023 is fixed as the last day for filing written acceptances or rejections of the Amended Chapter 11 Plan. November 6, 2023 is fixed as the last day for filing and serving written objections to confirmation of the Amended Chapter 11 Plan pursuant to Federal Rule of Bankruptcy Procedure 3020(b)(1). November 16, 2023 is fixed for the hearing on confirmation of the Amended Chapter 11 Plan. Said hearing shall be held at 1:30 p.m. in Courtroom 1403, United States Courthouse, 75 Ted Turner Dr., SW, Atlanta, Georgia, before the undersigned. About Summit Springs Holdings Summit Springs Holdings, LLC, owns six acres of to-be-developed 21 townhome units located at 208 Sandy Springs Place, Sandy Springs, Ga. The properties are valued at $4.4 million. Summit Springs Holdings filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-54043) on May 1, 2023, with $4,470,000 in assets and $2,623,041 in liabilities. Eric McConaghy, manager, signed the petition. Judge Wendy L. Hagenau oversees the case. The Debtor tapped Ian M. Falcone, Esq., at The Falcone Law Firm, P.C. as bankruptcy counsel and Stogner Law, LLC as special counsel. SUNOCO LP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed Sunoco LP's (SUN) Long-Term Issuer Default Rating (IDR) at 'BB+'. Fitch has also affirmed the senior unsecured bonds co-issued by SUN and Sunoco Finance Corp. at 'BB+'/'RR4'. Fitch has additionally affirmed the senior secured revolver rating at 'BBB-'/'RR1'. The Rating Outlook is Stable. The 'BB+' rating reflects SUN's leverage, healthy margins, and resilient business. A challenge for SUN's credit quality is macro uncertainty related to inflation and demand destruction. KEY RATING DRIVERS Stable Margins: A contract with 7-Eleven, Inc. with 10 years remaining provides a fixed price for a fixed number of gallons per annum. The specified base gallonage is 2.2 billion gallons per annum, which is sizeable against the partnership's run-rate total of about 7.8 billion gallons. In addition, the entire value chain stretching from retail stores (where the partnership is a lessor, and, in small numbers, a retailer) to wholesaling (the partnership core) features elements that make for resilient margins. The product is a necessity of most U.S. citizens' everyday lives, and the value chain in aggregate generally adjusts its selling price when volumes fall (like at the onset of the pandemic) to preserve a gross margin dollar value. Leverage Forecast: Fitch's previous leverage forecast projected SUN to delever as the company aimed to follow its own stated 4.0x leverage target. Fitch's forecast for 2022 and 2023 was 4.2x, and through Q2 2023 SUN outperformed this forecast by reaching a Fitch-calculated leverage of below 3.9x. This was due to the nature of its resilient business and its ability to increase profit per gallon and volumes sold. SUN calculates its leverage using a net leverage, which generally leads to a lower leverage number than Fitch's figure. Over the forecast period, Fitch projects SUN to remain strongly positioned compared to the Fitch negative rating sensitivity threshold. Volumes and the per unit gross margin remain important rating factors. Inflation remains a topic of general concern and political discussion, which includes the price of gasoline. Fitch believes SUN's management is committed to its leverage policy, and the company has a solid track record of execution, both before, during, and after the pandemic. Highly Fragmented Sector: SUN is the largest independent distributor of motor fuels in the U.S. The overall sector (both independents and non-independents) is highly fragmented. SUN's range of activities is wide, from being the 'bridge' between credit card banks and Sunoco credit card customers, to wholesaling to other wholesalers at its terminals. Terminal ownership continues to grow as the company makes acquisitions, and over the years the company has demonstrated its ability to smoothly integrate new acquisitions. Fitch believes that the sector is likely to present attractive acquisition opportunities. In the event a series of new deals are struck, Fitch will monitor acquisition multiples and financing plans. Fitch believes that high credit quality would be inconsistent with the suspension of SUN's 4.0x long-term target policy in most years. Parent Subsidiary Linkage: SUN's ratings reflect its standalone credit profile with no express linkage to its parent company. Fitch believes Energy Transfer LP (ET; BBB-/Positive; the general partner and owner of a minority but meaningful stake in the limited partnership units) has the stronger credit profile of the two entities, given ET's size, scale, geographic, operational and cash flow diversity relative to SUN. No uplift is provided to SUN's ratings as Fitch considers strategic, operational and legal (e.g., cross-defaults) incentives weak. Certain SUN board members are designated as independent board members and serve on a conflicts committee. DERIVATION SUMMARY SUN's status as a nearly pure play wholesale motor fuel distribution company makes it unique in Fitch's North American midstream energy coverage. Retailer AmeriGas Partners, LP (APU; BB-/Negative) is the leading peer for SUN given that it shares a focus on trucking a necessary fuel (in APU's case, propane), requiring both companies to perform fuel sourcing operations, and meshing those operations with the price to the customer so as to negate commodity price risk. Both companies have leading positions in a fragmented industry. Fitch expects SUN will continue to remain around its 4.0x stated leverage target over the forecast. Fitch expects APU's leverage to be at approximately 5.5x-5.6x by FYE 2023, as the company continues to struggle with elevated operating costs and lower retail volumes. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer: - Fitch oil price deck, which bears, over the long term, a relationship to the price of motor fuels; - Motor fuel sales gallons sold in line with management's forecast; - Cents per gallon (CPG) immaterially lower than management forecast, reflecting mainly the intensity of consumer focus on gasoline prices at a time of general inflation concerns. If the motor fuel sales gallons sold exceeds Fitch's expectations (which, as mentioned are in line with management), then Fitch expects CPG to be below management's outlook; - Increasing distributions to unitholders; - Maintenance capital expenditures and growth capex generally in line with management's forecast; - Some small acquisitions, based on the company's demonstrated successful track record, the fragmented nature of the industry, and SUN's versatile operating span of activities; - Base interest rates in line with the Fitch Global Economic Outlook. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Fitch does not currently expect an upgrade given the company's financial policy on leverage. However, achievement of EBITDA Leverage forecasted for a sustained period to be at or less than 3.3x could result in an upgrade. Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA Leverage at or above 4.3x on a sustained basis could result in negative rating action; - EBIT margin at or below 2.0% on a sustained basis; - A transformative acquisition that increases business risk, unless balanced as to its financing. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: SUN has a $1.5 billion revolving credit agreement that matures in April 2027. There are no bond maturities in the near future with the next maturity date in 2027. As of June 30, 2023, SUN had $239 million in cash. Pro-forma for SUN's recent September 2023 $500 million note issuance, which was used to pay down some of its revolver balance, SUN has around $1 billion in revolver availability. The revolving credit agreement requires the partnership to maintain a net leverage ratio below 5.5x and an interest coverage ratio above 2.25x. As of June 30, 2023, SUN was in compliance with its covenants, and Fitch believes that SUN will remain in compliance with its covenants through its forecast period. The revolver is secured by a security interest in, among other things, all its present and future personal property and all present and future personal property of its guarantors, the capital stock of its material subsidiaries (or 66% of the capital stock of material foreign subsidiaries), and any intercompany debt. ISSUER PROFILE Sunoco, LP (SUN) is a wholesale motor fuels distributor that distributes diesel and gasoline to retail service stations throughout the U.S., with a focus on the Northeast. SUN is organized as a master limited partnership. Energy Transfer LP (ET) owns SUN's general partner. SUMMARY OF FINANCIAL ADJUSTMENTS For unconsolidated investees, Fitch incorporates in EBITDA distributions from such entities, not equity-method income, nor pro-rata EBITDA. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Sunoco LP LT IDR BB+ Affirmed BB+ senior secured LT BBB- Affirmed RR1 BBB- senior unsecured LT BB+ Affirmed RR4 BB+ SUNSET HOLDINGS: Case Summary & Five Unsecured Creditors -------------------------------------------------------- Debtor: Sunset Holdings and Management LLC 13023 Sunset Blvd Los Angeles, CA 90049 Business Description: Sunset Holdings is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: October 16, 2023 Court: United States Bankruptcy Court Central District of California Case No.: 23-16752 Debtor's Counsel: RoseAnn Frazee, Esq. FRAZEE LAW GROUP 5133 Eagle Rock Blvd Los Angeles, CA 90041 Tel: (323) 274-4287 Email: roseann@frazeelawgroup.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Katrina Anyanwu as managing member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2NL5OIQ/Sunset_Holdings_and_Management__cacbke-23-16752__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Five Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Franchise Tax Board $0 Bankruptcy Section, MS: A-340 PO Box 2952 Sacramento, CA 95812 2. Internal Revenue Service $0 PO Box 7346 Philadelphia, PA 19101 3. Los Angeles County $0 Tax Collector PO Box 54110 Los Angeles, CA 90054 4. Palm Grove Unknown Management LLC 400 Corporate Pointe Suite 300 Culver City, CA 90230 5. Saluda Grade Unknown Alternative Mortgage 600 Anton Blvd Suite 1400 Costa Mesa, CA 92626 SURGALIGN HOLDINGS: Court Approves Disclosures on Final Basis ------------------------------------------------------------- Judge Christopher Lopez has entered an order approving Surgalign Holdings, Inc., et al.'s Disclosure Statement on a final basis. The Plan, including (a) all modifications to the Plan filed with the Court prior to or during the Combined Hearing and (b) all documents incorporated into the Plan through the Plan Supplement, is approved in its entirety, as modified herein, and confirmed pursuant to section 1129 of the Bankruptcy Code. All terms of the Plan and the Plan Supplement are incorporated herein by reference and are an integral part of this Order. The failure to specifically include or refer to any particular article, section, or provision of the Plan, the Plan Supplement, or any related document in this Order does not diminish or impair the effectiveness or enforceability of such article, section, or provision. Claims in Classes 4 through 8 are Impaired under the Plan and deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code (the "Deemed Rejecting Classes"). Although section 1129(a)(8) of the Bankruptcy Code has not been satisfied with respect to the Deemed Rejecting Classes, the Plan is confirmable because the Plan does not discriminate unfairly and is fair and equitable with respect to the Deemed Rejecting Classes and, thus, satisfies section 1129(b) of the Bankruptcy Code with respect to such Classes. All objections, responses, statements, reservation of rights, and comments in opposition, if any, to final approval of the Disclosure Statement or confirmation of the Plan that have not been withdrawn, waived, settled, resolved prior to the Combined Hearing or otherwise resolved on the record of the Combined Hearing or in this Order are hereby overruled and denied on the merits, with prejudice. All objections to the entry of this Order or to the relief granted herein that were not timely filed and served prior to the Plan and Disclosure Statement Objection Deadline are deemed waived and forever barred. All of the transactions contemplated by the Plan and the Plan Supplement are approved. The Debtors, the Wind-Down Debtors, and the Plan Administrator are authorized to and may issue, execute, deliver, file, or record such contracts, instruments, releases, and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement and evidence the terms and conditions of the Plan, including the Plan Supplement, in each case, in the name of and on behalf of the Debtors or the Wind-Down Debtors, as applicable, without the need for any approvals, authorization or consents except those expressly required pursuant to the Plan. One or more of the Debtors shall continue in existence after the Effective Date, each as a Wind-Down Debtor, for purposes of (1) preserving the Retained Estate Claims and Causes of Action for the benefit of the Wind-Down Beneficiaries, (2) winding down the Debtors' remaining businesses and affairs as expeditiously as reasonably possible and liquidating any assets held by the Wind-Down Debtors after the Effective Date, (3) resolving any Disputed Claims, (4) paying Allowed Claims for which there is not a Distribution Agent other than the Wind-Down Debtors, (5) filing appropriate tax returns, and (6) administering the Plan in an efficacious manner. Except as otherwise provided in the Plan, the Wind-Down Debtors shall be deemed to be substituted as the party-in-lieu of the Debtors in all matters, including (a) motions, contested matters, and adversary proceedings pending in the Court, and (b) all matters pending in any courts, tribunals, forums, or administrative proceedings outside of the Court, in each case without the need or requirement for the Wind-Down Debtors or the Plan Administrator to file motions or substitutions of parties or counsel in each such matter. Except as otherwise provided in the Plan or the Plan Supplement, or in any agreement, instrument, or other document incorporated in the Plan, on the Effective Date, pursuant to sections 1141(c) of the Bankruptcy Code, the Wind-Down Debtor Assets, including all Causes of Action (including all Retained Estate Claims and Causes of Action) that are not released, and any property acquired by any of the Debtors under the Plan shall vest in the applicable Wind-Down Debtor, free and clear of all Liens, Claims, Interests, charges, or other encumbrances. Chapter 11 Plan Surgalign Holdings, Inc., et al., submitted a Modified Combined Disclosure Statement and Joint Chapter 11 Plan. As of the Petition Date, the Debtors' assets generally fell into three primary categories: * Hardware and Biomaterials Business: The Debtors had a broad portfolio of spinal hardware implants, including solutions for fusion procedures in the lumbar, thoracic, and cervical spine, as well as a biomaterials portfolio of advanced and traditional orthobiologics. Additionally, the Debtors' hardware business had valuable long term distribution agreements with original equipment manufacturers, hospitals or other healthcare providers that allowed the Debtors to, among other things, receive supply chain services or provide certain of their products to such healthcare facilities, as applicable. * International Business: The Debtors' broad portfolio of spinal hardware implants described above was also marketed and sold outside of the U.S. similar to the U.S. hardware and biomaterials business. Such non-Debtor subsidiaries that comprised the international hardware business were incorporated or formed in Germany, Austria, Switzerland, Luxembourg, Netherlands, Australia, Singapore, United Kingdom, and Spain. The Debtors also have non-Debtor subsidiaries related to the digital business, which include non-Debtor subsidiaries in Poland. * Digital Health Business: The Debtors developed an artificial intelligence and augmented reality technology navigation platform to support better surgery and AI/ML algorithms used on medical imaging, MRI and MRA that connects the continuum of care from the preoperative and clinical stage through postoperative care and is designed to achieve better surgical outcomes, reduce complications, and improve patient satisfaction. The Debtors' AI/AR based navigation platform was developed to function as intelligent anatomical mapping technology designed to assist surgeons by allowing them to remain in safe anatomical zones and to enhance surgical performance. Prior to the Petition Date, the Debtors commenced a marketing process for their assets, in whole or in part. Based on the Debtors' marketing efforts, shortly before the Petition Date, Xtant Medical Holdings, Inc. ("Xtant") agreed to provide the stalking horse bid for substantially all of the assets encompassing the U.S. hardware and biomaterials business and the equity interests in non-Debtor entities related to the Debtors' hardware business outside of the U.S. (collectively, the "Stalking Horse Hardware Assets"), which contemplated a purchase price of $5,000,000 and the assumption of certain liabilities. On June 18, 2023, the Debtors entered into an asset purchase agreement memorializing Xtant's bid. On the Petition Date, the Debtors requested authority to continue to conduct their prepetition marketing process through a competitive court-supervised marketing process. Pursuant to such process, which was approved by the Bankruptcy Court on June 30, 2023 [Docket No. 137], the Debtors continued to reach out to strategic and financial partners and purchasers. As of the Bid Deadline, the Debtors did not receive any Qualified Bids for the Stalking Horse Hardware Assets other than the Stalking Horse Bid, and accordingly designated Xtant as the Successful Bidder for the Stalking Horse Hardware Assets. Prior to the Bid Deadline, the Debtors identified two Qualified Bidders for certain assets related to the Debtors' digital health business (the "Digital Assets")—(a) Augmedics, Inc. ("Augmedics") and (b) Brainlab AG ("Brainlab"). As a result, the Debtors determined to hold an auction to determine the highest and best bid. On July 27, 2023, the Debtors conducted multiple rounds of bidding ending in the selection of Augmedics as the Successful Bidder and Brainlab as the Back-Up Bidder for the Debtors' Digital Assets. On August 9, 2023, the Debtors entered into an asset purchase agreement memorializing Augmedics' bid, which included a purchase price of $1,500,000. The Plan provides for the distribution of proceeds from the sale transactions with Xtant and Augmedics, as well as other cash, and the timely monetization of all remaining property of the Debtors. Causes of Action not sold, transferred, or otherwise waived or released before the Effective Date of the Plan shall be prosecuted by the Wind-Down Debtors for the benefit of the Holders of General Unsecured Claims. All Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims, and Allowed Secured Claims shall be satisfied in full. The Plan is a liquidation plan and provides for the distribution of proceeds from any sale of the Debtors' assets, as well as the distribution of other cash, and the liquidation of all remaining property of the Debtors, including Causes of Action not sold, transferred or otherwise waived or released before the Effective Date of the Plan. The Plan further provides for the substantive consolidation of all of the Debtors, the termination of all Interests in the Debtors, the dissolution and wind-up of the affairs of the Debtors and their Affiliates, and the vesting of any remaining assets in the Wind-Down Debtors on the Effective Date. The Wind-Down Debtors' Assets, including the net proceeds, if any, from the prosecution of Retained Estate Claims and Causes of Action, will be distributed to creditors as set forth in the Plan and Disclosure Statement and the Plan Administrator Agreement. As of the Effective Date of the Plan, except as otherwise provided in the Plan and Disclosure Statement, the Wind-Down Debtors will be responsible for all payments and Distributions to be made under the Plan to the Holders of Allowed Claims. On the Petition Date, the Debtors filed a motion for entry of an order (a) establishing bid procedures (the "Bid Procedures") for a competitive marketing and auction process for substantially all of the Debtors' assets, (b) authorizing the Debtors to enter into the Stalking Horse Agreement the Stalking Horse Bidder, (c) authorizing assumption and assignment procedures for certain executory contracts and unexpired leases, (d) approving the form and manner of related notices, (e) establishing a hearing to consider protections for the Stalking Horse Bidder and the sale of substantially all of the Debtors' assets to the bidder with the highest and best bid after completion of the Debtors' in-court sales process (including, if necessary, an auction) (the "Bid Procedures Motion"). On June 30, 2023, the Bankruptcy Court held a hearing to consider the Bid Procedures Motion focusing primarily on the Debtors' position that the sale process is the best path forward for the Debtors. The Bankruptcy Court ultimately entered the Bid Procedures Order, approving the Bid Procedures and the expedited sale timeline set forth therein. On June 30, 2023, the Bankruptcy Court also entered the Bid Protections Order approving (a) a break-up fee equal to $150,000 (i.e., 3% of the $5 million purchase price) and (b) the reimbursement from the Debtors of reasonable, documented out of pocket fees, costs and expenses of the Stalking Horse Bidder incurred in connection with the Stalking Horse Bid up to an amount equal to $150,000. Following entry of the Bid Procedures Order, on July 5, 2023, the Debtors filed the Notice of Auction, Stalking Horse Agreement, Sale or Other Potential Transaction, and Sale Hearing (the "Sale Notice"). The Sale Notice was also published in the national edition of the New York Times on July 7, 2023. Following the expiration of the Bid Deadline and pursuant to the Bid Procedures Order, the Debtors filed the Notice of Successful Bidders and Back-Up Bidder with Respect to the Auction of the Debtors' Assets [Docket No. 290], which provided, among other things, that no Qualified Bids apart from the Stalking Horse Bid were received by the Bid Deadline for the Stalking Horse Hardware Assets and, accordingly, announced the cancellation of the auction and designation of Xtant as the Successful Bidder with respect to the Stalking Horse Hardware Assets. On July 27, 2023, the Debtors conducted an Auction in connection with the two competing Qualified Bids for certain non-Stalking Horse Hardware Assets in connection with the Debtors' digital health business. At the conclusion of the Auction, the Debtors, in a reasonable exercise of their business judgment and after consultation with the Committee, selected Augmedics as the Successful Bidder for the Digital Assets for an aggregate purchase price of $900,000 and the assumption of certain liabilities, as set forth in the Digital Assets Purchase Agreement. This represented an increase of $650,000 from the Starting Bid at the outset of the Auction. The Debtors, in consultation with the Committee, also selected Brainlab as the Back-Up Bidder for the Digital Assets for an aggregate purchase price of $850,000 and the assumption of certain liabilities. Following the Auction, the Debtors continued to engage with Augmedics regarding certain outstanding points in connection with Augmedics' asset purchase agreement. At that time, no other person or entity or group of persons or entities had submitted a Qualified Bid to purchase the Digital Assets on substantially similar or more favorable terms than Augmedics. On August 1, 2023, the Debtors were contacted by a medical technology company, Surgical Theater, Inc. ("Surgical Theater"), seeking to submit a significantly better bid than the Successful Bid. Surgical Theater indicated that it planned to object to the sale of the Digital Assets if it was not allowed to submit a bid. In response, the Debtors' counsel informed Surgical Theater's counsel that the Debtors believed that the marketing process was robust and the fact that one potential bidder was not contacted was not an indication that the process was flawed in any way. The Debtors' counsel also disputed that Surgical Theater had any standing to object to the proposed sale. Nevertheless, the Debtors' counsel also determined that it was permissible to engage with Surgical Theater in accordance with the broad "fiduciary out" included in the Bid Procedures. Among other things: (a) a potential bid from Augmedics could significantly enhance stakeholder recoveries in a case where creditors may not receive payment in full in cash; (b) there were essentially no costs for the estates to engage with Surgical Theater due to the fact that the virtual data room established for the sale process remained intact and there was a fully negotiated form of purchase agreement with Augmedics that could serve as the form of agreement with Surgical Theater; (c) while the Debtors provided Surgical Theater's business partners with notice of the marketing process, the Debtors did not contact Surgical Theater in connection with the marketing process; and (d) Augmedics had not yet confirmed that certain ancillary documents contemplated by its purchase agreement were in final form after the Auction concluded on July 27, 2023. Accordingly, on that same day, and following discussions with the Debtors' advisors, Surgical Theater executed a non-disclosure agreement and received access to the Debtors' virtual data room. The next day, on Wednesday, August 2, 2023, the Debtors informed the Committee of Surgical Theater's unsolicited interest. Counsel and advisors to the Committee did not oppose the Debtors' engagement with Surgical Theater at that time. Thereafter, the Debtors had contact with the Committee's professionals regarding this matter nearly every business day. On Friday, August 4, 2023, Surgical Theater submitted a signed purchase agreement reflecting a cash bid of $1,100,000 bid for the Digital Assets (i.e., approximately 22% higher than the Augmedics bid). Later that day, the Debtors' advisors promptly informed Surgical Theater that its bid was not acceptable in light of the proposed purchase price relative to the Augmedics bid when taking into account the prospect of litigation costs and delay. Later that day, following discussions with the Debtors' counsel and advisors, Surgical Theater confirmed that it was willing to increase its bid to $1,300,000 in cash (i.e., approximately 44% higher than the Augmedics bid). The Debtors' advisors again promptly informed Surgical Theater that its bid was not acceptable. On Monday, August 7, 2023, Surgical Theater submitted an executed $1,500,000 bid for the Digital Assets, along with a deposit for 10% of the purchase price. Surgical Theater's offer was on substantially the same terms as Augmedics' bid, except for an approximately 67% increase in the purchase price and the retention of certain employees. In the exercise of their fiduciary duties and in view of the overarching objective to maximize the value of the Digital Assets, the Debtors immediately informed Augmedics of the competing bid and invited Augmedics to overbid. The Debtors also conferred further with the Committee's professionals regarding this matter. On August 8, 2023, the Bankruptcy Court held a hearing (the "Sale Hearing") to approve the Hardware Assets Sale Transaction in accordance with the terms of the Hardware Assets Purchase Agreement and a sale of the Digital Assets. The Debtors resolved all objections to the Hardware Assets Sale Transaction and the assumption and assignment of certain executory contracts and unexpired leases through revisions to the Hardware Assets Sale Order. On August 9, 2023, the Bankruptcy Court entered the Hardware Assets Sale Order. The Hardware Assets Sale Transaction closed on August 10, 2023. During the initial Sale Hearing, the Debtors initially informed the Bankruptcy Court that the Debtors intended to move forward with seeking approval of the Surgical Theater bid. Following the Bankruptcy Court's commentary and decision to end the Sale Hearing, the Debtors conferred with the Committee's professionals on the best course forward. The Debtors also conferred with Augmedics, which informed the Debtors that it would proceed with an increased bid of $1,500,000. Augmedics also finalized the remaining ancillary documents, which had not been finalized as of the Sale Hearing. Accordingly, on the afternoon of Wednesday, August 9, 2023, the Debtors informed Augmedics that it would proceed with its improved bid at the hearing on August 10, 2023. The Debtors conferred with the Committee's professionals and were informed that the Committee supported this decision.9 The revised asset purchase agreement between the Debtors and Augmedics was filed that same day. On August 10, 2023, the Bankruptcy Court entered the Digital Assets Sale Order. The Digital Assets Sale Transaction closed on August 11, 2023. Under the Plan, Class 3 General Unsecured Claims total $36,768,000 to $71,646,000 and will recover 4% to 18% of their claims. The estimated recoveries for Class 3 General Unsecured Claims are based upon the assumption that the INN Seller Notes Claims, Proof of Claim Nos. 151 and 153, each filed in the amount of $6 million, are subordinated to the fullest extent permitted by the Bankruptcy Code. To the extent that the Bankruptcy Court does not permit the INN Seller Notes Claims to be subordinated, the holders of INN Seller Notes Claims shall recover at the same level as Class 3 General Unsecured Claims. In such a scenario, the estimated recovery for holders of Class 3 General Unsecured Claims and Class 4 INN Seller Notes Claims would be approximately 3.5% to 14%. Additionally, the Debtors will seek to subordinate, pursuant to Section 510(b) of the Bankruptcy Code, Proof of Claims Nos. 148, 150, 152, and 155, which were filed by (i) Pawel Lewicki, as third party beneficiary to Neva, LLC, (ii) Neva, LLC as successor-in-interest to Robotocine, Inc, (iii) Dearborn Capital Management LLC as successor-in-interest to Robotocine, Inc., and (iv) Krzysztof Siemionow, as third party beneficiary to Dearborn Capital Management LLC, respectively, each in the amount of approximately $73 million. Such Claims are classified in and will recover pursuant to the treatment afforded Class 8 Section 510(b) Claims. To the extent that any of these Claims are allowed, in whole or in part, and are not subordinated, such Claims may be classified in and treated as Class 3 General Unsecured Claims, which will materially decrease recoveries to Class 3 General Unsecured Claims. On the applicable Distribution Date, unless otherwise agreed by a Holder of an Allowed General Unsecured Claim and the Debtors (prior to the Effective Date) or the Wind-Down Debtors (on or after the Effective Date), each Holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of: (i) the Distributable Cash; and (ii) to effectuate distributions from the Wind-Down Debtors, the Wind-Down Debtor Assets; provided that any distributions on account of the WindDown Debtor Assets shall only be made following payment in full of, or reserve for, Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims, and Allowed Secured Claims. Class 3 is impaired. "Distributable Cash" means the Debtors' Cash on hand as of the Effective Date (including proceeds from the Digital Assets Sale Transaction, the Hardware Assets Sale Transaction, and the Prompt Sale Transaction) but excluding, for the avoidance of any doubt, any Cash necessary to (x) satisfy Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax Claims, and Allowed Secured Claims in full; and (y) fund the Wind-Down Budget. "Wind-Down Debtor Assets" means all of the Debtors' assets, which shall vest in the Wind-Down Debtors as of the Effective Date pursuant to the Plan Administrator Agreement, including the Retained Estate Claims and Causes of Action, the Wind-Down Reserve, and, subject to Article IX.D. of the Plan, the Insurance Coverage Rights. Distributions under the Plan shall be funded by (i) the proceeds of each of the Digital Assets Sale Transaction and the Hardware Assets Sale Transaction, and (ii) the Wind-Down Debtors from the WindDown Debtor Assets; provided, however, that Allowed Professional Fee Claims shall be paid from the Professional Fee Escrow Account in the first instance. The Wind-Down Debtor Assets shall be used to pay the Wind-Down Debtor Expenses (including the compensation of the Plan Administrator and any professionals retained by the Wind-Down Debtors), and to satisfy payment of Allowed Claims and Interests as set forth in the Plan. On and after the Effective Date, the Plan Administrator will be authorized to implement the Plan and any applicable orders of the Bankruptcy Court, and the Plan Administrator shall have the power and authority to take any action necessary to wind down and dissolve the Wind-Down Debtors' Estates and to wind down and dissolve any of the non-Debtor subsidiaries. As soon as practicable after the Effective Date, the Plan Administrator shall: (1) take any actions necessary to wind down the Wind-Down Debtors' Estates; provided that the Wind-Down Debtors shall not be dissolved until all Causes of Action included in the Retained Estate Claims and Causes of Action Schedule are prosecuted and the conditions precedent to such dissolution are satisfied; and (2) take such other actions as the Plan Administrator may determine to be necessary or desirable to carry out the purposes of the Plan. From and after the Effective Date, except as set forth herein, the Wind-Down Debtors for all purposes (x) shall be deemed to have withdrawn their business operations from any state in which the WindDown Debtors were previously conducting, or are registered or licensed to conduct, their business operations, (y) shall not be required to file any document, pay any sum, or take any other action in order to effectuate such withdrawal, and (z) shall not be liable in any manner to any taxing authority for franchise, business, license, or similar taxes accruing on or after the Effective Date. The filing of the final monthly operating report (for the month in which the Effective Date occurs) and all subsequent quarterly operating reports shall be the responsibility of the Plan Administrator. Co-Counsel to the Debtors: Veronica A. Polnick, Esq. J. Machir Stull, Esq. Matthew D. Cavenaugh, Esq. JACKSON WALKER LLP 1401 McKinney Street, Suite 1900 Houston, TX 77010 Telephone: (713) 752-4200 E-mail: vpolnick@jw.com mstull@jw.com mcavenaugh@jw.com - and - Gregory F. Pesce, Esq. Laura E. Baccash, Esq. WHITE & CASE LLP 111 South Wacker Drive, Suite 5100 Chicago, IL 60606 Telephone: (312) 881-5400 E-mail: gregory.pesce@whitecase.com laura.baccash@whitecase.com - and - Charles R. Koster, Esq. 609 Main Street, Suite 2900 Houston, TX 77002 Telephone: (713) 496-9700 E-mail: charles.koster@whitecase.com - and - Barrett B. Lingle, Esq. 1221 Avenue of the Americas New York, NY 10020 Telephone: (212) 819-8200 E-mail: barrett.lingle@whitecase.com A copy of the Order dated September 27, 2023, is available at https://tinyurl.ph/pPEmA from restructuring.ra.kroll.com, the claims agent. About Surgalign Holdings Surgalign Holdings, Inc., is a global medical technology company focused on elevating the standard of care by driving the evolution of digital health. It has developed an artificial intelligence and augmented reality technology platform called HOLO AI, which the company views as a powerful suite of AI software technology which connects the continuum of care from the pre-op and clinical stage through post-op care, and is designed to achieve better surgical outcomes, reduce complications, and improve patient satisfaction. Surgalign Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90731) on June 19, 2023. At the time of the filing, the Debtors reported $50 million to $100 million in both assets and liabilities. Judge Christopher M. Lopez oversees the cases. The Debtors tapped White & Case, LLP as lead bankruptcy counsel; Jackson Walker, LLP as local and conflict counsel; PricewaterhouseCoopers, LLP, as tax services provider; and Alvarez & Marsal Securities, LLC, as investment banker and financial advisor. Kroll Restructuring Administration, LLC is the Debtors' notice and claims agent. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. Pachulski Stang Ziehl & Jones, LLP, and Province, LLC, serve as the committee's legal counsel and financial advisor, respectively. TAYLOR COURT: Court OKs Bid to Appoint Chapter 11 Trustee --------------------------------------------------------- Judge Rosemary Gambardella of the U.S. Bankruptcy Court for the District of New Jersey granted the motion by Anthony Barone and Anthony Martini to appoint a Chapter 11 trustee in the bankruptcy case of Taylor Court Apartments, LLC. The bankruptcy judge ordered the U.S. Trustee for Region 3 to appoint a bankruptcy trustee to preserve the assets of the company and to perform all duties pursuant to Section 704 of the Bankruptcy Code. About Taylor Court Apartments Taylor Court Apartments, LLC filed Chapter 11 petition (Bankr. D.N.J. Case No. 23-16641) on Aug. 2, 2023, with $1 million to $10 million in both assets and liabilities. The petition was filed pro se. Judge Rosemary Gambardella oversees the case. THEVELIA (US): S&P Withdraws 'B+' Rating on First-Lien Term Loans ----------------------------------------------------------------- S&P Global Ratings withdrew its 'B+' issue rating on the Hong Kong dollar tranche of Thevelia (US) LLC's first-lien term loans. At the same time, S&P also withdrew the 'B+' issue rating on the company's revolving credit facility. S&P had assigned both ratings in error. There were no changes to the 'B+' issue ratings on the U.S. dollar and euro tranches of the term loans. TRANSOCEAN LTD: Signs Indenture on $325M Senior Notes Offering -------------------------------------------------------------- Transocean Ltd. disclosed in a Form 8-K filed with the Securities and Exchange Commission that on Oct. 11, 2023, in connection with the closing of the offering by Transocean Aquila Limited (the "Issuer"), a wholly owned indirect subsidiary of Transocean Ltd., of U.S. $325 million in aggregate principal amount of 8.000% Senior Secured Notes due 2028, the Issuer entered into an indenture with the Company, Transocean Inc. and Transocean DWA Limited, (the "Guarantors"), and Truist Bank, as trustee and collateral agent. The terms of the Notes are governed by the Indenture, which contains covenants that, among other things, (i) limit the activities of the Issuer, the owner of the collateral rig (which, as of the date hereof, is TDWA) and certain operators of the collateral rig, (ii) limit the ability of TINC and its subsidiaries to incur liens and engage in certain sale and lease-back transactions, (iii) limit the ability of TINC's subsidiaries to incur indebtedness and (iv) limit the ability of the Issuer and the Guarantors to consolidate, merge or enter into a scheme of arrangement qualifying as an amalgamation. The Indenture also contains customary events of default. Indebtedness under the Notes may be accelerated in certain circumstances upon an event of default as set forth in the Indenture. The Notes are secured by a lien on the Deepwater Aquila and certain other assets related to the rig. The Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors on a senior basis. The Notes have not been registered under the U.S. Securities Act of 1933, as amended, or under any state securities laws, and were offered only to qualified institutional buyers under Rule 144A promulgated under the Securities Act and outside the United States in compliance with Regulation S promulgated under the Securities Act. A full-text copy of the Indenture is available for free at: https://www.sec.gov/Archives/edgar/data/1451505/000145150523000114/rig-20231011xex4d1.htm About Transocean Transocean Ltd. is an international provider of offshore contract drilling services for oil and gas wells. The Company specializes in technically demanding sectors of the offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services. Transocean Ltd. reported a net loss of $621 million for the year ended Dec. 31, 2022, a net loss of $591 million for the year ended Dec. 31, 2021, a net loss of $568 million for the year ended Dec. 31, 2020 and a net loss of $1.25 billion for the year ended Dec. 31, 2019. As of March 31, 2023, the Company had $20.19 billion in total assets, $1.05 billion in total current liabilities, $8.81 million in total long-term liabilities, and $10.32 billion in total equity. * * * As reported by the TCR on Sept. 28, 2023, S&P Global Ratings raised its issuer credit rating on offshore drilling contractor Transocean Ltd. to 'CCC+' from 'CCC'. S&P said, "The upgrade reflects improved rig demand, higher day rates, and our view that there is reduced near-term risk of a distressed debt exchange or balance sheet restructuring." UPTOWN GROUP INC: Commences Chapter 11 Bankruptcy Process --------------------------------------------------------- Uptown Group Inc. filed for chapter 11 protection in the Eastern District of New York. According to court filing, the Debtor listed $1,100,000 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. A teleconference meeting of creditors under 11 U.S.C. Section 341(a) is slated for October 30, 2023, at 2:00 PM. About Uptown Group Inc. Uptown Group Inc. is the owner of real property located at 2276A Atlantic Avenue, Brooklyn, NY 11233 valued at $500,000. Uptown Group Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-43443) on September 26, 2023. In the petition filed by Ibrahim Mohammed, as member, the Debtor reports total assets of $500,000 and total liabilities of $1,100,000. The case is overseen by Honorable Bankruptcy Judge Jil Mazer-Marino. The Debtor is represented by: Charles Wertman, Esq. Law Offices of Charles Wertman P.C. 2276A Atlantic Ave Brooklyn, NY 11233-0000 WESLEY WOODS: Fitch Lowers Rating on $15.1MM Revenue Bonds to 'BB' ------------------------------------------------------------------ Fitch Ratings has downgraded the rating on $15.1 million series 2021 revenue bonds issued by the Residential Care Facilities Authority for the Elderly of Coweta County on behalf of Wesley Woods of Newnan-Peachtree City, Inc., GA (Wesley Woods) to 'BB' from 'BB+'. Fitch has also downgraded Wesley Woods' Issuer Default Rating (IDR) to 'BB' from 'BB+'. The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Wesley Woods of Newnan-Peachtree City, Inc. (GA) LT IDR BB Downgrade BB+ Wesley Woods of Newnan-Peachtree City, Inc. (GA) /General Revenues/1 LT LT BB Downgrade BB+ The downgrade to 'BB' reflects the roughly 30% decline in Wesley Woods' cash and investments, which is attributable primarily to higher than budgeted operating and capital expenses and to lower revenues stemming, in part, from lower than expected independent living unit (ILU) occupancy. This decline resulted in weakened cash-to-adjusted debt of approximately 33.1% and days cash on hand (DCOH) of 170 in FY23, compared to 45.9% and 286 DCOH in FY22. Approximately $1.0 million of capex in FY23 will be reimbursed with initial entrance fees on the related ILUs, which allows for some cash recovery. However, including that amount, pro forma cash represented just 39.2% of adjusted debt and 210 DCOH. At this depressed cash-to-adjusted debt level, Wesley Woods' financial profile is no longer consistent with the higher rating, despite strong MADS coverage, which Fitch calculates at 1.9x in FY23. The decline in cash is significant given Wesley Woods' narrow operating scope and aging plant requiring a high degree of capex to maintain at a level to support occupancy. These factors shift Wesley Woods' financial profile to levels more consistent with a 'BB' rating in Fitch's five-year forward look, especially in the stress case scenario. The Stable Outlook reflects Wesley Woods' strong maximum annual debt service (MADS) coverage and its solid market position. It also has a competitive advantage as the only life plan community (LPC) in its primary market area (PMA), which should aid in stabilizing operating performance over time. In combination with its type-B (modified fee-for-service) contract mix, Fitch believes Wesley Woods' competitive positioning supports stable demand and solid operations, which is consistent with midrange assessments of its revenue defensibility and operating risk. SECURITY The bonds are secured by a first mortgage lien, a pledge of gross revenues and a debt service reserve fund (DSRF). KEY RATING DRIVERS Revenue Defensibility - 'bbb' Single-Site LPC with Very Limited Competition Wesley Woods maintains a solid market position and competitive advantage as the only LPC in its PMA. Its ILU occupancy averaged an adequate 85% in FY 2019-2023. Due to the challenges of the coronavirus pandemic, ILU occupancy averaged about 79% in FY 2021, but levels recovered as expected at Fitch's last review to 84.1% in FY 2022 and 88% in FY 2023. Wesley Woods' PMA is characterized by favorable demographic and economic indicators, and its entrance and monthly service fees are highly affordable. Under Georgia law, the community only admits internal residents from the LPC to its skilled nursing facility (SNF). Operating Risk - 'bbb' Midrange Operating Risk Wesley Woods' operating performance is solid and consistent with Fitch's expectations for a type-B LPC. Its net operating margin (NOM) averaged a strong 14.8% in FY 2019-2023 (2023 results are unaudited), while its operating ratio and NOM-adjusted have trended more midrange, averaging 94.8% and 24.4%, respectively, over the same period. Since Wesley Woods only admits internal residents from the community to its skilled care units, its healthcare payor mix is 100% private pay, which Fitch views favorably as the community is not exposed to governmental reimbursement risk. Wesley Woods' operating ratio was 99.5% in FY 2023, which was somewhat weak compared to its historical average but remains consistent with Fitch's 'bbb' operating risk assessment. This weaker operating ratio was due to intra-year census challenges in its ILUs, increased salary and wage expenses and additional capital expense related to a sprinkler head malfunction that caused some minor flooding to resident units. The damage has now been remedied, with a portion of the expenses covered by an outside contractor. Wesley Woods has implemented certain cost saving initiatives, most notably the outsourcing of its dining services. Wesley Woods' average age of plant was high at 17.2 years as of FY 2023. As a result, its required capex spend is also high, averaging about 126.3% of depreciation in FY 2018-2023 and budgeted at about 130% of depreciation in FY24. This includes cottage expansions over the last two fiscal years and a planned dining renovation, which management believes will lead to more operating efficiencies for the outsourced vendor. Fitch believes the high level of capex is necessary for Wesley Woods to maintain its demand profile given its high average age of plant, but the lack of meaningful competition in its market area is a mitigating factor to capex outside of routine repair and maintenance. About $1.0 million of this capex was for two remaining cottages that are opening shortly and are both reserved. Management plans to be reimbursed for the construction costs for the cottages from initial entrance fees. Wesley Woods' MADS is approximately $1.0 million following the series 2021 transaction, an approximately $250,000 savings off its previous MADS. The community's resultant capital-related metrics are solidly midrange with average revenue-only MADS coverage of 1.5x, MADS at 11.1% of revenues and debt-to-net available of 6.4x in FY 2019-2023. Wesley Woods' most recent largescale capital project was the construction of 10 new ILU cottages, which were completed in FY 2023 and are 100% occupied or reserved. Capex budgeted for FY 2024 includes the construction of one final duplex cottage (both units presold), routine maintenance items and refurbishment of existing ILUs and healthcare units. Wesley Woods continues to develop a master plan for its 30 acres vacant property. They are exploring the possibility of adding multi-level duplex cottages but will not pursue any projects until ILU apartment occupancy stabilizes closer to pre-pandemic levels. Financial Profile - 'bb' Weakened Financial Cushion As of FYE 2023, Wesley Woods had unrestricted cash and investments of about $5.4 million, including an approximately $1.0 million debt service reserve fund (DSRF), representing a thin 33.1% of adjusted debt and 170 DCOH, which is below Fitch's 200 DCOH threshold for a neutral assessment of Wesley Woods' liquidity profile. This level of unrestricted cash represented an approximately 30% decline in cash year over year, compared to $7.4 million or 45.9% of adjusted debt at FYE 2022. Wesley Woods attributes this decline to operating volatility, especially the malfunction of the sprinkler head, which contributed to an overage of about $469,000 on its capex budget. Fitch is concerned about this decline in cash, even when including planned reimbursement from initial entrance fees, especially given Wesley Woods' narrow operating scope, which renders its financial profile less able to recover to levels consistent with the 'BB+' rating in Fitch's five-year forward look, and to show additional decline without considerable interventions to conserve cash in Fitch's stress case scenario, underscoring the downgrade to 'BB'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Lack of recovery or further deterioration in cash-to-adjusted debt from current levels and/or inability to maintain MADS coverage at current levels; - Wesley Woods has no additional debt capacity at the current rating, given its very thin cash cushion. Any additional borrowing or other sustained deterioration in its cash-to-adjusted debt or MADS coverage levels to finance strategic capex would pressure the rating. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Improved and sustained NOM and NOM-adjusted performance to levels more consistent with historical ratios near 20% and 30%, respectively; - Expectations of a recovery in cash-to-adjusted levels sustained above 40% combined with stable MADS coverage in Fitch's stress case scenario could lead to positive rating action over time. PROFILE Organized in 1992, Wesley Woods is located on a 54-acre site in Newnan, Coweta County, Georgia. The community currently consists of 84 ILU apartments, 20 ILU cottages and a healthcare center comprised of eight memory care units (MCUs), 37 ALUs and 23 SNF beds. Wesley Woods' total operating revenues were approximately $9.9 million in FY23 (FYE Aug. 31, unaudited). Wesley Woods is a controlled affiliate of Wesley Woods Senior Living, Inc., a Georgia not-for-profit corporation, which acts as the controlling entity for certain affiliated entities, including the Foundation of Wesley Woods, Inc., Wesley Woods of Athens, Inc., Wesley Mountain Village, Inc., Wesley Woods Management Corporation, Inc. and Wesley Homes, Inc. Wesley Woods of Newnan-Peachtree City, Inc. is the only member of the obligated group. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. WESTERN GLOBAL AIRLINES: Chapter 11 Plan Disclosure Okayed ---------------------------------------------------------- Jeff Montgomery of Law360 reports that Western Global Airlines has taken off toward a Nov. 13 plan confirmation hearing following court approval of the air cargo company's amended disclosure statement and the release of an amended proposed Chapter 11 plan Tuesday, October 3, 2023. About Western Global Airlines Western Global Airlines, Inc. provides contracted air cargo transportation services ranging from ACMI (Aircraft, Crew, Maintenance, and Insurance) to Full Service, on a global scale. WGA is a high-tech air cargo platform serving customers in e-commerce, express, freight forwarding, logistics, nonprofit, and governmental organizations. The Debtor and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11093) on August 7, 2023. In the petition signed by James K. Neff, chief executive officer, the Debtor disclosed up to $500 million in assets and up to $1 billion in liabilities. Judge Karen B. Owens oversees the case. The Debtors tapped Weil, Gotshal & Manges LLP as general bankruptcy counsel, Richards, Layton & Finger, P.A. as local bankruptcy counsel, Evercore Group L.L.C. as investment banker, FTI Consulting, Inc. as provider of interim management and financial advisory services. and Stretto, Inc. as claims, noticing, and solicitation agent. DKB Partners LLC, as DIP Lender and Prepetition Lender, is represented by Young Conaway Stargatt & Taylor, LLP. Daugherty, Fowler, Peregrin, Haught and Jenson, P.C., serves as DOT/FAA counsel for the DKB DIP Lender. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as counsel to the Ad Hoc Group of DIP Lenders and Certain Creditors. Ducera Partners LLC, serves as financial advisor for the Funding Group DIP Lenders. Landis Rath & Cobb LLP, is the Delaware counsel for the Funding Group DIP Lenders. PIRINATE Consulting Group, LLC, is the strategic advisor to the Funding Group DIP Lenders. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Western Global Airlines Inc. The committee hires Willkie Farr & Gallagher LLP as its lead counsel. Potter Anderson & Corroon LLP as Delaware and conflicts counsel. AlixPartners, LLP as financial advisor. WESTERN GLOBAL: DOL Opposes Plan Disclosures -------------------------------------------- The Acting Secretary of Labor, United States Department of Labor, filed an objection to Western Global Airlines, Inc., et al.'s motion for entry of an order approving their proposed disclosure statement. The Acting Secretary has statutory authority to investigate violations of the Employee Retirement Income Security Act of 1974 ("ERISA") and to prosecute civil actions to obtain appropriate equitable and remedial relief to redress fiduciary breaches and other violations relating to the administration or management of employee benefit plans established or maintained by employers. In addition to recovering losses to employee benefit plans, the Department of Labor has broad authority to monitor the administration of employee benefit plans, deter violations of ERISA, and ensure the integrity of those plans. Western Global Airlines, Inc. ("WGA") established the Western Global Airlines, Inc. Employee Stock Ownership Plan ("ESOP") effective as of June 6, 2020, for the primary purpose of purchasing and holding WGA's stock in trust for WGA's employees. The ESOP currently holds a 37.5 percent ownership interest in WGA through its holding 375,000 shares of Class B common stock in WGA's parent company, Western Global Airlines Holdings, Inc. Although all the ESOP's existing equity interest in WGA is being canceled, the Disclosure Statement fails to identify how the ESOP will be compensated. Instead, it simply states that it is "the intention of the Majority Shareholders and the Ad Hoc Group to provide some form of consideration to the ESOP." Disclosure Statement at 37. It appears that such consideration may be in the form of New Common Stock because the Debtors frequently note that the New Common Stock being issued under the Chapter 11 Plan will be further diluted by "any New Common Stock (i) issuable upon conversion of the New Convertible Notes, (ii) issuable upon exercise of the New Warrants, or (iii) that may be issued by Reorganized Western Global to the ESOP." Chapter 11 Plan at § 5.5(d) (emphasis added). How the ESOP is to be compensated for the loss of all its equity needs to be concretely defined rather than simply left unsaid. Not only is it significant information in itself, but as reflected in sections 5.5(d) and (e) of the Plan, the New Common Stock to be issued to the ESOP will affect the equity issued to other creditors. The issuance of the New Warrants, the form of consideration to be paid to Class 4 (the Unsecured Notes Claims), raises another Disclosure Statement issue. The Chapter 11 Plan provides that holders of the Unsecured Notes will share in an "Unsecured Notes Cash Pool" of $17.5 million rather than being entitled to New Warrants if a "DIP Buyout" is consummated, but the DIP Buyout is not detailed in the Disclosure Statement. Rather, the terms are in the DIP Term Sheet where "DIP Buyout" is defined as the "Call Option." DIP Term Sheet at 19. If this Call Option is exercised by DKB Partners, the primary Neff Entity in this Chapter 11 Plan, DKB Partners will receive all the New Common Stock to which the DIP Lenders are entitled rather than only approximately 71 percent. Id. The DIP Term Sheet also requires that DKB Partners give notice of its intention to exercise the Call Option (the DIP Buyout) by September 21, 2023, a date that has already passed. None of the Call Option mechanics is described in the Disclosure Statement even though whether DKB Partners has chosen to exercise the Call Option should be known at the time of the hearing on the Disclosure Statement. Another critical failure in the Disclosure Statement is the absence of any description of how the Chapter 11 Plan will address the claims against the Majority Shareholders that are to be released. Those releases are a centerpiece of the Chapter 11 Plan. The Disclosure Statement simply states that the consideration for the releases could be structured "so that the holders of Unsecured Notes Claims [Class 4] and General Unsecured Claims [Class 5] will receive a distribution under the Plan." Disclosure Statement at 23. This description fails to reflect that these classes will already receive some distributions under the Plan. However, it does reflect the problems of grafting an appropriate solution for claims against insiders onto a Chapter 11 Plan structured as a debt-to-equity exchange, particularly where those subject to potential liability are slated to remain in sole control of the Reorganized Debtors. It is unclear how such a solution would play out, as certain of the Majority Shareholders are significant holders of the Class 5 claims and there is no way of knowing from reading the Disclosure Statement what other Neff entities may hold Class 4 or Class 5 claims. In addition, the claims to be released are not just those against the Majority Shareholders, but also against the extensive list of "Related Parties," as defined in section 1.97 of the Chapter 11 Plan. This does not mean that some appropriate resolution cannot be crafted. But how such an appropriate process may be worked out is uncertain when a decision on just the outcome of the Investigation into what claims exist against the Majority Shareholders is to be made only within days rather than weeks "before the hearing to approve the Disclosure Statement." Attorneys for the Acting Secretary of Labor: Geoffrey Forney, Esq. Trial Attorney United States Department of Labor 200 Constitution Ave. N.W. Rm. N-4611 Washington, D.C. 20210 Tel: (202) 615-8315 E-mail: forney.geoffrey.d@dol.gov About Western Global Airlines Western Global Airlines, Inc. provides contracted air cargo transportation services ranging from ACMI (Aircraft, Crew, Maintenance, and Insurance) to Full Service, on a global scale. WGA is a high-tech air cargo platform serving customers in e-commerce, express, freight forwarding, logistics, nonprofit, and governmental organizations. Western Global and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11093) on August 7, 2023. In the petition signed by James K. Neff, chief executive officer, the Debtor disclosed up to $500 million in assets and up to $1 billion in liabilities. Judge Karen B. Owens oversees the case. The Debtors tapped Weil, Gotshal & Manges LLP as general bankruptcy counsel, Richards, Layton & Finger, P.A. as local bankruptcy counsel, Evercore Group L.L.C. as investment banker, FTI Consulting, Inc. as provider of interim management and financial advisory services. and Stretto, Inc. as claims, noticing, and solicitation agent. DKB Partners LLC, as DIP Lender and Prepetition Lender, is represented by Young Conaway Stargatt & Taylor, LLP. Daugherty, Fowler, Peregrin, Haught and Jenson, P.C., serves as DOT/FAA counsel for the DKB DIP Lender. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as counsel to the Ad Hoc Group of DIP Lenders and Certain Creditors. Ducera Partners LLC, serves as financial advisor for the Funding Group DIP Lenders. Landis Rath & Cobb LLP, is the Delaware counsel for the Funding Group DIP Lenders. PIRINATE Consulting Group, LLC, is the strategic advisor to the Funding Group DIP Lenders. WESTERN GLOBAL: ERISA Plaintiffs Say Disclosures Inadequate ----------------------------------------------------------- David Burnett and David Nelson, as representative plaintiffs (the "ERISA Plaintiffs") in the pending ERISA class action captioned as Burnett et al. v. Prudent Fiduciary Services LLC, et al., Case 1:22-cv-00270-UNA (the "ERISA Class Action") in the United States District Court for the District of Delaware, for themselves and on behalf of the proposed class in the ERISA Class Action (the "Proposed Class"), filed an objection and reservation of rights to the Motion of Debtors for Entry of Order approving proposed disclosure statement and form and manner of notice of disclosure statement hearing and granting related relief and approval of the Disclosure Statement for Joint Chapter 11 Plan of Reorganization of Western Global Airlines, Inc. and its Debtor Affiliates filed by Debtor Western Global Airlines, Inc. et al. In support of this Objection, the ERISA Plaintiffs respectfully state as follows: The Disclosure Statement is ambiguous, confusing, and lacks adequate information for members of the Proposed Class to ascertain the impact of the Plan, and specifically the Third Party Release, on their interests. Aside from the convoluted definitions which make it nearly impossible for members of the Proposed Class (who are likely not sophisticated individuals with regard to complex chapter 11 proceedings) to interpret the provisions of the Plan and Disclosure Statement, the Disclosure Statement, and, as a result, the Plan, do not adequately address the impact of the Plan on the claims brought in the ERISA Class Action. In fact, whether unintentionally or not, Proposed Class members are left with the wrong impression that they are holders of general unsecured claims against the Debtors, therefore improperly implicating the Third Party Release with respect to the claims asserted in the ERISA Class Action against non-debtors who are directly or indirectly controlling the Chapter 11 Cases. The fact is that there are no claims against the Debtors in the ERISA Class Action and no such claims are contemplated. As an initial matter, the Disclosure Statement does not mention, let alone contain an adequate description of, the ERISA Class Action. Although the Disclosure Statement indicates that the Debtors' Independent Director is investigating whether the Debtors may have claims under ERISA, it fails to mention that a federal class action asserting ERISA claims on behalf of the ESOP participants is already pending, and the potential impact confirmation of the Plan would have on the ERISA Class Action. While the ERISA Plaintiffs maintain that the Plan, even as it currently exists, should have no impact on such claims, it is anything but clear. Further, the ERISA Plaintiffs and members of the Proposed Class are holders of equity interests—not general unsecured claims. In re Indian Jewelers Supply Co., 604 B.R. 408, 415 (Bankr. D.N.M. 2019). However, the Debtors' Schedules indicate that the ERISA Plaintiffs, and at least some members of the Proposed Class, are creditors. Because the ERISA Plaintiffs and Proposed Class members are at best equity holders who are not receiving anything pursuant to the proposed Plan, they are (i) not entitled to vote on the Plan and (ii) not Releasing Parties pursuant to the Plan. But, given the unilateral and incorrect designation as creditors, if any member of the Proposed Class mistakenly files a proof of claim—which the Debtors improperly invite by including at least certain Proposed Class members in their Schedules as holders of general unsecured claims—those members of the Proposed Class may subject themselves unwittingly and unnecessarily to the Third Party Release, eviscerating their right to participate in the ERISA Class Action and to recover from the non-Debtor Defendants. This ambiguity is further exacerbated by the ESOP Trustee's potential involvement. As a Defendant in the ERISA Class Action, the ESOP Trustee is inherently conflicted from taking any action that could subject the ERISA Plaintiffs and the Proposed Class to the Third Party Release. For example, if the ESOP Trustee (inappropriately) files a claim on behalf of the ESOP, it may attempt to vote in favor of the Plan and/or opt in to the Third Party Release, thereby potentially releasing the claims and causes of action in the ERISA Class Action brought against itself. This inherent conflict, potentially leading to an improper and inequitable release, must be prevented. The ERISA Plaintiffs' objections herein, and ultimately to the Plan, can be reconciled by (i) adding appropriate disclosures regarding the ERISA Class Action, the status of the ERISA Plaintiffs and members of the Proposed Class as equity holders, and the Third Party Release to the Disclosure Statement, and (ii) eliminating any ambiguity and potential prejudice by explicitly carving (i) the claims of the ERISA Plaintiffs and Proposed Class out of the Third Party Release and (ii) the ERISA Plaintiffs and Proposed Class out of the Plan's definition of Releasing Parties. Thus, unless the Debtors modify the Disclosure Statement and Solicitation Procedures accordingly, with corresponding modifications to the Plan, to address these disclosure defects and resultant confusion, the Disclosure Statement should not be approved, and the Disclosure Statement Motion should not be granted. Bankruptcy Counsel to the ERISA Plaintiffs and the Proposed Class: Christopher P. Simon, Esq. CROSS & SIMON, LLC 1105 North Market Street, Suite 901 Wilmington, DE 19801 Telephone: (302) 777-4200 Facsimile: (302) 777-4224 E-mail: csimon@crosslaw.com - and - Michael S. Etkin, Esq. Colleen M. Restel, Esq. LOWENSTEIN SANDLER LLP One Lowenstein Drive Roseland, NJ 07068 Tel.: (973) 597-2500 E-mail: metkin@lowenstein.com crestel@lowenstein.com About Western Global Airlines Western Global Airlines, Inc., provides contracted air cargo transportation services ranging from ACMI (Aircraft, Crew, Maintenance, and Insurance) to Full Service, on a global scale. WGA is a high-tech air cargo platform serving customers in e-commerce, express, freight forwarding, logistics, nonprofit, and governmental organizations. Western Global Airlines and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11093) on August 7, 2023. In the petition signed by James K. Neff, chief executive officer, the Debtor disclosed up to $500 million in assets and up to $1 billion in liabilities. Judge Karen B. Owens oversees the case. The Debtors tapped Weil, Gotshal & Manges LLP as general bankruptcy counsel, Richards, Layton & Finger, P.A. as local bankruptcy counsel, Evercore Group L.L.C. as investment banker, FTI Consulting, Inc. as provider of interim management and financial advisory services. and Stretto, Inc. as claims, noticing, and solicitation agent. DKB Partners LLC, as DIP Lender and Prepetition Lender, is represented by Young Conaway Stargatt & Taylor, LLP. Daugherty, Fowler, Peregrin, Haught and Jenson, P.C., serves as DOT/FAA counsel for the DKB DIP Lender. Paul, Weiss, Rifkind, Wharton & Garrison LLP, serves as counsel to the Ad Hoc Group of DIP Lenders and Certain Creditors. Ducera Partners LLC, serves as financial advisor for the Funding Group DIP Lenders. Landis Rath & Cobb LLP, is the Delaware counsel for the Funding Group DIP Lenders. PIRINATE Consulting Group, LLC, is the strategic advisor to the Funding Group DIP Lenders. WHAIRHOUSE LIMITED: Court OKs Bid to Appoint Chapter 11 Trustee --------------------------------------------------------------- Judge Rosemary Gambardella of the U.S. Bankruptcy Court for the District of New Jersey granted the motion by RG3, LLC and eight other creditors to appoint a Chapter 11 trustee in the bankruptcy case of Whairhouse Limited Liability Company. Judge Gambardella ordered the U.S. Trustee for Region 3 to appoint a bankruptcy trustee to preserve the assets of the company and to perform all duties pursuant to Section 704 of the Bankruptcy Code. About Whairhouse Limited RG3, LLC and eight other creditors of Whairhouse Limited Liability Company filed an involuntary Chapter 11 petition (Bankr. D.N.J. Case No. 23-17272) against the company on Aug. 22, 2023. The creditors are represented by Sean Mack, Esq., at Pashman Stein Walder Hayden, PC. Judge Rosemary Gambardella oversees the case. Whairhouse is represented by the Law Firm of Brian W. Hofmeister. WILLIAM-WALTON INC: Joe Supple Named Subchapter V Trustee --------------------------------------------------------- The Acting U.S. Trustee for Region 4 appointed Joe Supple, Esq., at Supple Law Office, PLLC as Subchapter V trustee for William Walton, Inc. Mr. Supple will be paid an hourly fee of $350 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Supple declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Joe M. Supple, Esq. Supple Law Office, PLLC 801 Viand Street Point Pleasant, WV 25550 Phone: 304-675-6249 Email: joe.supple@supplelawoffice.com About William-Walton Inc. William-Walton, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 23-50082) on Sept. 29, 2023, with $50,001 to $100,000 in assets and $100,001 to $500,000 in liabilities. Paul W. Roop, II, Esq. at Roop Law Office LC represents the Debtor as bankruptcy counsel. YU MING CHARTER SCHOOL: S&P Assigns 'BB+' ICR, Outlook Stable ------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issuer credit rating (ICR) to Yu Ming Charter School (YMCS), Calif. The outlook is stable. "In our opinion, the rating of 'BB+' reflects YMCS' solid enrollment and demand profile, as evidenced by its excellent academics and experienced management team, which will enable the school to successfully continue growing enrollment, meet budgeted expectations, and maintain steady coverage and liquidity levels," said S&P Global Ratings credit analyst Sue Ryu. S&P said, "The stable outlook reflects our expectation that over the one-year outlook period, YMCS will successfully transition into its new facility and meet enrollment projections, supporting surplus operations, steady coverage levels, and sufficient liquidity metrics in line with the rating level. "We would lower the rating if the school does not meet enrollment projections, such that financial performance deteriorates, resulting in weaker maximum annual debt service coverage or liquidity. Additionally, while not expected during the outlook period, we could lower the rating should YMCS issue significant additional debt that pressures its coverage levels or debt metrics. "While unlikely over the outlook period, we could consider an upward rating action over time if the school can demonstrate a stronger trend of financial performance and days' cash on hand in line with those of higher-rated peers, while maintaining its solid enrollment and demand profile." ZYMERGEN INC: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Zymergen, Inc. and its affiliates. The committee members are: 1. BRE-BMR 5300 Chiron LP Attn: Marie Lewis 4570 Executive Drive, Suite 400 San Diego, CA 92121 Phone: (858) 207-5967 Email: marie.lewis@biomedrealty.com 2. S+B James Construction California, Inc. Attn: Shane Hunter 1450 Halyard Dr. Ste. 11A West Sacramento, CA 95691 Phone: (541) 826-5668 Email: shanehunter@sbjames.com 3. GreenLight Biosciences, Inc. Attn: Nina Thayer 29 Hartwell Ave. Lexington, MA 02421 Email: nina.thayer@greenlightbio.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 Zymergen Inc. Zymergen, Inc., which was founded in April 2013, is a science and material innovation company focused on designing, developing and commercializing bio-based products for use in a variety of industries. It is based in Emeryville, Calif. Zymergen and its affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 23-11661) on Oct. 3, 2023. At the time of the filing, Zymergen reported $100 million to $500 million in both assets and liabilities. Judge Karen B. Owens oversees the cases. The Debtors tapped Morris, Nichols, Arsht & Tunnell, LLP as legal counsel and Epiq Corporate Restructuring, LLC as claims and noticing agent. [] Liability Management Takes Spotlight at Nov 29 DI Conference --------------------------------------------------------------- Catch not one, but two sessions on the issue of liability management at the 30TH DISTRESSED INVESTING CONFERENCE presented by Beard Group, Inc. on Nov. 29. Join experts Mark Hebbeln, Partner, Foley & Lardner LLP; Evan Hill, Partner, Corporate Restructuring, Skadden; and Dan Kamensky, Founder, Creditor Coalition, as they take on one of the credit market's most contentious issues: the rising trend of companies, especially those backed by financial sponsors, employing aggressive liability management techniques to extend runway but in the process favoring one group of creditors over another, leading to intense battles over the spoils. Discover how changes in market norms and contractual rights in the past two decades have fueled these aggressive techniques and understand the judiciary's reaction through pivotal case law developments. Karn Chopra, Partner, Central View Partners; Damian Schaible, Partner, Davis Polk; Anthony Sexton, Partner, Kirkland & Ellis; and John Sobolewski, Partner, Wachtell, Lipton, Rosen & Katz then take over to discuss the intricacies of liability management techniques, emphasizing the intricate deal dynamics and the relationships among transaction parties. Uncover their driving motivations and learn how they shield themselves from self-serving actions. Get insights into the structures used in these transactions, common influential tax problems, and strategies used to safeguard against future challenges. Registration remains open for the 30th DI Conference to be held Wed., Nov. 29, in-person at the Harmonie Club in Manhattan. Top industry experts gather together to discuss the latest topics and trends in the distressed investing industry. Now on its 30th year, this value-packed event features special presentations from keynote speakers, live panel discussions and networking sessions with other insolvency professionals. This year's Distressed Investing Conference is sponsored by: * Kirkland & Ellis and Foley & Lardner, as conference co-chairs * Davis Polk * Dechert * Dentons * DSI * Locke Lord * Parkins & Rubio * RJReuter * Skadden * SSG * Stein Advisors * Troutman Pepper * Wachtell Lipton Rosen & Katz * Weil Gotshal Our Media partners: * BankruptcyData * Debtwire * LevFin Insights * PacerMonitor * REORG Our knowledge partner: * Creditor Rights Coalition Visit https://www.distressedinvestingconference.com/ for more information. For conference sponsorship and speaking opportunities, contact: Will Etchison 305-707-7493 Will@BeardGroup.com ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***