/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/231215.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 15, 2023, Vol. 27, No. 348 Headlines 1457 N PRIEUR: Seeks to Hire Brandon Meyer as Real Estate Agent 22 ELM RYE: Seeks to Hire Greenwich Commercial Property as Broker 4011- 4099 NW 34TH: Seeks to Hire Yip Associates as Accountant 4011-4099 NW 34TH: Seeks to Hire LSS Law as Bankruptcy Counsel 4E BRANDS: Jackson Walker Faces Creditor Call for Fee Clawback 560 SEVENTH AVENUE: Judge Declines Lenders' Bid to Control Resort 8515 RIVER ROAD: Gets OK to Hire The Smeberg Law Firm as Counsel ADAVAN FITNESS: Amends Several Secured Claims Pay Details ADMI CORP: Moody's Affirms 'B3' CFR, Outlook Stable AEARO TECHNOLOGIES: 3M Stocks in Earplug Deal Questioned in Court ALOA-ETS LLC: Ted Burr Named Subchapter V Trustee ALPHA RE PROPERTIES: Unsecureds Will Get 1% of Claims in Plan ALVOGEN PHARMA: Moody's Alters Outlook on 'B3' CFR to Stable AMC ENTERTAINMENT: Wraps Up $350M Offering, Cuts Debt by $62 Mil. AMYRIS INC: Creditors Object to 'Tainted' Chapter 11 Plan AMYRIS INC: Cross-Holders Say Amended Plan Has Infirmities ATLAS LITHIUM: Inks Agreement to Dismiss Salomon Complaint AVENTIS SYSTEMS: UCB Say Disclosures Inadequate BELLAREED CONSTRUCTION: Seeks to Hire Douglas Jacobson as Counsel BLOCK COMMUNICATIONS: Moody's Cuts CFR to B1 & Unsec. Notes to B2 BLOCKFI INC: Bankruptcy Attorneys Want $40 Million in Fees CACTUSRV.COM LLC: Unsecured Creditors to Split $5K over 60 Months CD&R VIALTO: S&P Downgrades ICR to 'CCC+', Outlook Negative CHS/COMMUNITY HEALTH: Moody's Cuts CFR to Caa2 & Unsec. Debt to Ca CIAOBABYONMAIN LLC: Taps Golding and Leibowitz as Legal Counsel CLAUSEN OYSTERS: Unsecureds to Get Full Payment With Interest CLEAR BLUE: Creditors to Get Proceeds From Liquidation COJAM CONSTRUCTION: Secured Creditor Proposes Liquidating Plan COMMUNITY HEALTH: Derivative Action Settlement Gets Preliminary OK CONGREGATION BNAI: Case Summary & Nine Unsecured Creditors CROWNROCK LP: Fitch Puts 'BB-' LongTerm IDR on Watch Positive CROWNROCK LP: Moody's Puts 'Ba3' CFR on Review for Upgrade CTC HOLDINGS: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable DENTAL EXPRESSION: Updates Several Secured & Unsecured Claims Pay DOMUS BWW: 47 East Says Disclosures Inadequate DOTLESS LLC: Seeks to Hire Bilu Law PA as Bankruptcy Counsel EAST ALLEGHENY SD: Moody's Affirms 'Caa1' Issuer & GOLT Ratings EAST BROADWAY: Court Confirms BOH's Plan of Liquidation ELDAN LLC: To Seek Plan Confirmation on Jan. 24 ELITE ROOF: Voluntary Chapter 11 Case Summary ESTUARY OYSTERS: Jodi Daniel Dubose Named Subchapter V Trustee EVENTIDE CREDIT: Hires Donlin as Claims Agent FARFETCH LTD: Moody's Cuts CFR to Caa2, Under Review for Downgrade FIRST QUANTUM: Fitch Gives 'B+' LongTerm IDR on Watch Negative FIVE POINT: Moody's Gives B3 Rating on New Senior Unsecured Notes FTX GROUP: IRS Tax Demands Could Reduce Payouts FTX GROUP: Lawyer Says SBF Was 'Worst' Witness GAV REST: Unsecureds to be Paid in Full with Interest in 5 Years GEO. J. & HILDA: Seeks to Hire Conroy Baran as Bankruptcy Counsel GEORGIA'S PERFECT: Cameron McCord Named Subchapter V Trustee GOOD GAMING: Raises Going Concern Doubt GOTO GROUP: Fitch Lowers LongTerm IDR to 'CCC+' GREATER LIGHT: Case Summary & Two Unsecured Creditors GRIFFON GANSEVOORT: Court Approve Disclosures, Confirms Plan HALMAR LLC: Unsecureds to be Paid in Full over 36 Months HANJIN INT'L: Moody's Hikes CFR to Ba3 & Secured Term Loan to Ba1 HELLO BELLO: $65 Million Chapter 11 Sale Okayed HO1KB NORTH: Seeks Approval to Hire Blue Slate Accounting HOODSTOCK ENTERPRISES: Unsecureds Get Full Payment Plus Interest HOUSEWORX INVESTMENTS: Asset Sale & Insurance Proceeds to Fund Plan HRH FENCHAK: Taps Three Rivers Commercial Advisors as Realtor HULL EQUITY: Case Summary & Five Unsecured Creditors ICAHN ENTERPRISES: Moody's Affirms Ba3 CFR Following Refinancing INTOUCH FOOTWEAR: Seeks Conditional Approval of Disclosures IRONNET INC: Gets Court Okay for $10 Million DIP in Chapter 11 JACKSON CITY: Moody's Withdraws Ba2 Rating on System Revenue Bonds KAI LAND: Voluntary Chapter 11 Case Summary LEGALSHIELD: Moody's Cuts CFR to B3 & Alters Outlook to Stable MATTHEWS TIMBER: Richard Preston Cook Named Subchapter V Trustee MED PARENTCO: Moody's Alters Outlook on 'Caa1' CFR to Positive MORNINGSIDE MINISTRIES: Fitch Lowers IDR to 'BB', Outlook Stable MOTLEY MILL: Seeks Approval to Hire Tarbox Law PC as Legal Counsel NATURAL DISASTER: Seeks to Hire Modesto Bigas Mendez as Counsel NEXTPOINT FINANCIAL: U.S. Bankruptcy Court Recognizes CCAA Order NOVVI LLC: Gets OK to Hire Donlin as Claims Agent OAK PARENT: Moody's Withdraws 'Caa1' CFR Following Debt Repayment OUTERSTUFF LLC: S&P Lowers Issuer Credit Rating to 'SD' PALMER SQUARE 2023-3: S&P Assigns BB- (sf) Rating on Class E Notes PARK RIVER: Moody's Lowers CFR to B3 & Alters Outlook to Stable PDG HOLDINGS: Voluntary Chapter 11 Case Summary PELOTON INTERACTIVE: Expects to Complete Restructuring Plan by June PENNSYLVANIA REAL ESTATE: Gives Up Fashion District Control PERSIMMON HOLLOW: Seeks to Hire Nperspective as Financial Advisor PGX HOLDINGS INC: Reaches $1.45 Million Deal With WARN Ex-Employees PHOENIX GUARANTOR: S&P Alters Outlook to Stable, Affirms 'B' ICR PIEDRA MALA: Gets OK to Hire The Smeberg Law Firm as Counsel PREMIER BRANDS: Moody's Ups CFR to Caa1 & First Lien Loan to Caa2 PROBITAS TECHNOLOGY: Seeks to Hire Cunningham as Bankruptcy Counsel PROPERTY MASTERSHIP: Seeks to Hire Farsad Law Office as Counsel RACE POINT X: S&P Lowers Class F-R Notes Rating to 'CCC+ (sf)' RGP INC: Richardo Kilpatrick Named Subchapter V Trustee RKS ENTERPRISES: Seeks to Hire Keith Boyd as Bankruptcy Counsel ROAD LION: Jodi Dubose Named Subchapter V Trustee RODS CUSTOM: Gets OK to Hire Goodman Law Practice as Counsel SHAGTASTIC ENTERPRISES: Case Summary & 18 Unsecured Creditors SMOKE SHOWIN: Michael Markham Named Subchapter V Trustee SOHO OFFICES: Seeks Approval to Hire Frances Caruso as Bookkeeper SPARTAN GROUP: Voluntary Chapter 11 Case Summary SUNOPTA FOODS: Moody's Withdraws 'B2' CFR Following Debt Repayment SUPOR PROPERTIES: Files Amendment to Disclosure Statement SUPOR PROPERTIES: Seeks to Tap Tomei & Tomei as Bankruptcy Counsel TERRESTRIAL BREWING: Frederic Schwieg Named Subchapter V Trustee TIKEHAU US V: S&P Assigns BB-(sf) Rating on $16.25MM Class E Notes TOSCA SERVICES: Moody's Lowers CFR & First Lien Term Loan to Caa1 TRI-STATE PAPER: Taps US Realty Associates as Real Estate Agent TRIMAX MEDICAL: Seeks Approval to Hire Stone & Baxter as Counsel TRINET GROUP: Fitch Assigns 'BB+' First-Time IDR, Outlook Stable VAN'S AIRCRAFT: Gets OK to Tap BMC Group as Claims Agent VAN'S AIRCRAFT: Seeks to Tap Tonkon Torp LLP as Bankruptcy Counsel VAN'S AIRCRAFT: Taps Hamstreet as Restructuring Advisor VIDEOTRON LTEE: Moody's Alters Outlook on 'Ba1' CFR to Positive WABASH NATIONAL: Moody's Hikes CFR to Ba3 & Unsecured Notes to B1 WEWORK INC: Cleared to Use $650 Million DIP Loan as Collateral YELLOW CORP: Saia Will Buy 17 Terminals in Bankruptcy Sale ZAGACITY TECH: Seeks to Hire Tamarez CPA as Accountant [^] BOOK REVIEW: A History of the New York Stock Market ********* 1457 N PRIEUR: Seeks to Hire Brandon Meyer as Real Estate Agent --------------------------------------------------------------- 1457 N Prieur St. NO, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ Brandon Meyer, a real estate agent in Metairie, La. The Debtor needs a real estate agent to list its property located at 1457 N. Prieur St., New Orleans, La., for sale. Mr. Meyer will receive a 5 percent commission as compensation for his services. Mr. Meyer disclosed in a court filing that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The professional can be reached at: Brandon J. Meyer 3900 N. Causeway Blvd. Metairie, LA 70002 Telephone: (504) 421-2764 About 1457 N Prieur 1457 N Prieur St No, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. La. Case No. 23-11657) on Sept. 26, 2023, with $100,001 to $500,000 in assets and up to $50,000 in liabilities. Greta Brouphy, Esq., at Heller, Draper and Horn, LLC serves as Subchapter V trustee. Judge Meredith S. Grabill oversees the case. James Graham, Esq., represents the Debtor as legal counsel. 22 ELM RYE: Seeks to Hire Greenwich Commercial Property as Broker ----------------------------------------------------------------- 22 Elm Rye Inc., also known as Meso Restaurant, seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Greenwich Commercial Property, LLC as broker. The Debtor requires a broker to: (a) give advice and guide the Debtor and its counsel as to market conditions and strategies to maximize the value of the restaurant for sale; (b) market and list the restaurant for sale; (c) consult and advise the Debtor and its counsel with regard to negotiation of price and terms of potential sales; (d) provide such other necessary services typically provided by brokers listing restaurants in the geographic area of the restaurant; and (e) provide the appropriate reports and affidavits to the court relating to the sales process and ultimate purchaser. The broker will receive a 10 percent commission for its services. William Mason, a member of Greenwich Commercial Property, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: William Mason Greenwich Commercial Property, LLC 4 Lafayette Ct. Greenwich, CT 06830 Telephone: (203) 869-3300 About 22 Elm Rye Inc. 22 Elm Rye, Inc. is a restaurant operator specializing in Mediterranean cuisine. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22544) on August 16, 2022. In the petition signed by Alan Schoening, president, the Debtor disclosed $1,318,000 in total assets and $2,938,497 in total liabilities. Judge Sean H. Lane oversees the case. H. Bruce Bronson, Esq., at Bronson Law Office, P.C. is the Debtor's counsel. 4011- 4099 NW 34TH: Seeks to Hire Yip Associates as Accountant -------------------------------------------------------------- 4011- 4099 NW 34th Street, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Yip Associates as accountant. The Debtor needs an accountant to prepare and file any required tax returns or amended tax returns and to further provide tax advice. Prior to filing the case, the Debtor paid Hal Levenberg, a partner at Yip Associates, a fee and cost retainer in the amount of $10,000. Mr. Levenberg disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Hal Levenberg Yip Associates 2 Biscayne Blvd., Ste. 2690 Miami, FL 33131 Telephone: (305) 569-0550 Facsimile: (888) 632-2672 Email: hlevenberg@yipcpa.com About 4011- 4099 NW 34th Street 4011- 4099 NW 34th Street, LLC is the owner of real property located at 4011-4090 NW 34th Street, Lauderhill, Fla., valued at $2 million. 4011- 4099 NW 34th Street filed Chapter 11 petition (Bankr. S.D. Fla. Case No. 23-19421) on Nov. 16, 2023. In the petition signed by Jose Gaspard Morell, an authorized officer, the Debtor disclosed $2,054,566 in total assets and $590,001 in total liabilities. Judge Corali Lopez-Castro oversees the case. The Debtor tapped Zach B. Shelomith, Esq., and Christian Somodevilla, Esq., at LSS Law as bankruptcy counsel and Hal Levenberg at Yip Associates as accountant. 4011-4099 NW 34TH: Seeks to Hire LSS Law as Bankruptcy Counsel -------------------------------------------------------------- 4011-4099 NW 34th Street, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ the law firm of Leiderman Shelomith + Somodevilla, PLLC, doing business as LSS Law. The Debtor requires legal counsel to: (a) give advice with respect to the powers and duties of the Debtor; (b) advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; (c) prepare legal documents necessary in the administration of the case; (d) protect the interests of the Debtor in all matters pending before the court; (e) represent the Debtor in negotiation with its creditors in the preparation of a plan; and (f) perform all other legal services for the Debtor, which may be necessary herein. The hourly rates of the firm's counsel and staff are as follows: Zach B. Shelomith $535 Christian Somodevilla $475 Paraprofessionals $215 In addition, the firm will seek reimbursement for expenses incurred. Prior to filing the case, the Debtor paid LSS a fee and cost retainer in the amount of $51,738. Zach Shelomith, Esq., and Christian Somodevilla, Esq., members of LSS Law, disclosed in court filings that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Zach B. Shelomith, Esq. LSS LAW 2699 Stirling Road, Suite C401 Ft. Lauderdale, FL 33312 Telephone: (954) 920-5355 Facsimile: (954) 920-5371 - and – Christian Somodevilla, Esq. LSS LAW 2 South Biscayne Boulevard, Suite 2200 Miami, FL 33131 Telephone: (305) 894-6163 Facsimile: (305) 503-9447 Email: zbs@lss.law cs@lss.law About 4011- 4099 NW 34th Street 4011- 4099 NW 34th Street, LLC is the owner of real property located at 4011-4090 NW 34th Street, Lauderhill, Fla., valued at $2 million. 4011- 4099 NW 34th Street filed Chapter 11 petition (Bankr. S.D. Fla. Case No. 23-19421) on Nov. 16, 2023. In the petition signed by Jose Gaspard Morell, an authorized officer, the Debtor disclosed $2,054,566 in total assets and $590,001 in total liabilities. Judge Corali Lopez-Castro oversees the case. The Debtor tapped Zach B. Shelomith, Esq., and Christian Somodevilla, Esq., at LSS Law as bankruptcy counsel and Hal Levenberg at Yip Associates as accountant. 4E BRANDS: Jackson Walker Faces Creditor Call for Fee Clawback -------------------------------------------------------------- James Nani of Bloomberg Law reports that Jackson Walker LLP faces creditor call for bankruptcy fee clawback. Jackson Walker LLP should give back fees it earned during a hand sanitizer company's bankruptcy because it failed to disclose a relationship between an attorney and the judge who oversaw the case, creditors said. The creditors alleged Jackson Walker allowed one of its attorneys to work on 4E Brands Northamerica LLC’s 2022 bankruptcy despite saying recently that she was distanced from the judge’s cases. The firm should be disqualified from the case and be forced to give up all fees it earned since its retention in the bankruptcy, an unsecured creditors group told the US Bankruptcy Court for the Southern District of Texas. About 4E Brands North America 4e Brands North America, LLC, is a manufacturer of personal care and hygiene products based in San Antonio, Texas. Its brand name products include Blumen Hand Sanitizer, Assured Hand Sanitizer, and various other hand sanitizers and hand soaps. The Debtor is no longer operating. 4e Brands North America sought Chapter 11 bankruptcy protection (Bankr. S.D. Texas Case No. 22-50009) on Feb. 22, 2022, with up to $50,000 in assets and up to $50 million in liabilities. David Dunn, chief restructuring officer, signed the petition. The case is handled by Judge David R. Jones. Matthew D. Cavenaugh, Esq., at Jackson Walker, LLP is the Debtor's legal counsel. Stretto is the claims agent. The U.S. Trustee for Region 6 appointed an official committee of unsecured creditors on March 1, 2022. The committee tapped Tucker Ellis, LLP as bankruptcy counsel; Munsch Hardt Kopf & Harr, P.C., as Texas counsel; and Oxford Restructuring Advisors, LLC, as financial advisor. 560 SEVENTH AVENUE: Judge Declines Lenders' Bid to Control Resort ----------------------------------------------------------------- Rick Archer of Law360 reports that a New York bankruptcy judge on Friday, December 8, 2023, denied lenders an emergency motion to take over management of the Times Square Margaritaville resort, saying there was no evidence of an urgent need to swap control and that the lenders appeared to be wrong on the law. About 560 Seventh Avenue Owner Primary 560 Seventh Avenue Owner Primary LLC owns and operates the Margaritaville Resort Times Square Hotel located at 560 Seventh Avenue, New York, NY. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. N.Y. Case No. 23-11289) on Aug. 12, 2023. In the petition signed by Stehian Pomerantz, president, the Debtor disclosed up to $500 million in both assets and liabilities. Judge Philip Bentley oversees the case. Kevin J. Nash, Esq., at GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP, is the Debtor's legal counsel. 8515 RIVER ROAD: Gets OK to Hire The Smeberg Law Firm as Counsel ---------------------------------------------------------------- 8515 River Road PS LLC, a Series of RRED HC, LLC, and its affiliates received approval from the U.S. Bankruptcy Court for the Western District of Texas to employ The Smeberg Law Firm, PLLC to handle their Chapter 11 cases. The hourly rates of the firm's counsel and staff are as follows: Ronald J. Smeberg, Esq. $450 Other Experienced Attorneys $450 Associate Attorneys $300 Legal Assistants/Paralegals $175 Accounting Professionals $275 In addition, the firm will seek reimbursement for expenses incurred. Ronald Smeberg, Esq., an attorney at The Smeberg Law Firm, disclosed in a court filing that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ronald J. Smeberg, Esq. The Smeberg Law Firm, PLLC 4 Imperial Oaks San Antonio, TX 78248 Telephone: (210) 695-6684 Facsimile: (210) 598-7357 Email: ron@smeberg.com About 8515 River Road PS LLC 8515 River Road PS LLC, a Series of RRED HC, LLC, and its affiliates filed a voluntary petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Texas Case No. 23-51538) on Nov. 6, 2023. In the petition signed by Robert Kane, manager, 8515 River Road PS disclosed up to $10 million in both assets and liabilities. Judge Craig A. Gargotta oversees the case. Ronald J. Smeberg, Esq., at The Smeberg Law Firm, PLLC represents the Debtor as bankruptcy counsel. ADAVAN FITNESS: Amends Several Secured Claims Pay Details --------------------------------------------------------- Adavan Fitness Melbourne LLC submitted an Amended Plan of Reorganization for Small Business dated December 5, 2023. Treatment of Claims and Interests Under the Plan is amended as follows: Class 2 consists of the Secured Claim of the Brevard County Tax Collector. Amortized over three years from the petition date, $3,698 in allowed principal and $819.52 in allowed interest (at 13.5% pursuant to Section 1129(a)(9)(C) of the Bankruptcy Code), payable in equal monthly installments beginning on the sixteenth of the calendar month following the Effective Date, with the final payment due on June 16, 2026. This Class is unimpaired. Class 3 consists of the Secured Claim of the Brevard County Tax Collector. This Class shall be paid $2,886 in allowed principal and $458.64 in allowed interest at 13.5% pursuant to Section 1129(a)(9)(C) of the Bankruptcy Code, payable in equal monthly installments beginning on the sixteenth of the calendar month following the Effective Date, with the final payment due on June 16, 2026. This Class is unimpaired. Class 4 consists of the Secured Claim of Viera SPE LLC. This Class shall be paid $26,457 in allowed principal and $5,495 in allowed interest (at 7.69% amortized over five years from the petition date), payable in equal monthly installments beginning on the sixteenth of the calendar month following the Effective Date, with the final payment due on June 16, 2028. This Class is unimpaired. Class 5 consists of the Secured Claim of the U.S. Small Business Administration. This Class shall be paid $10,206 in allowed principal and $3,658 in allowed interest (at 3.75% amortized over five years from the petition date), payable in equal monthly installments beginning on the sixteenth of the calendar month following the Effective Date, with the final payment due on June 16, 2028. This Class is unimpaired. The treatment remains the same for Non-priority Unsecured Creditors, denominated as Class 5 in the original plan. A full-text copy of the Amended Plan of Reorganization dated Dec. 5, 2023 is available at https://urlcurt.com/u?l=CecjAZ from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Michael Faro, Esq. Faro & Crowder, PA 700 N. Wickham Rd, Suite 205 Melbourne, FL 32935 Telephone: (321) 784-8158 E-mail: mfaro@farolaw.com About Adavan Fitness Adavan Fitness Melbourne, LLC, operates an instructor-led, music-driven stationary cycling studio under the CycleBar franchise. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02367) on June 16, 2023, with as much as $50,000 in assets and $500,001 to $1 million in liabilities. Judge Tiffany P. Geyer oversees the case. The Debtor is represented by Michael Faro, Esq., at Faro & Crowder. ADMI CORP: Moody's Affirms 'B3' CFR, Outlook Stable --------------------------------------------------- Moody's Investors Service affirmed the ratings of ADMI Corp. (d/b/a "The Aspen Group", "TAG"), including the B3 Corporate Family Rating, B3-PD Probability of Default Rating, and the B3 rating on the existing backed senior secured first lien term loan B2 due 2027, backed senior secured first lien term loan B3 due 2027 and backed senior secured first lien term loan B4 due 2027. At the same time, Moody's assigned B3 ratings to the new backed senior secured first lien term loan B due 2027 and the new backed senior secured revolving credit facility due 2028. The outlook is maintained stable. This follows TAG's announced transaction where the company will raise $780 million in first lien senior secured term loan due 2027 and $450 million of new preferred equity from the existing private equity sponsors and management. The proceeds will be used to fully pay down the existing revolving credit facility, fully repay the existing term loan B1 due 2025 and add cash to the balance sheet. The ratings on these legacy instruments will be withdrawn upon their full repayment. The new equity investment will be used to shore up liquidity and fund growth capital expenditures including new clinic openings. Pro forma for the transaction, leverage will be 8.2 times as of September 30, 2023. The affirmation of TAG's ratings primarily reflects Moody's expectations that the core dental business will continue to grow, driven by organic patient volume growth and rising payor rates. The affirmation also reflects the improved liquidity position of the company, bolstered by the equity infusion. Moody's expects overall earnings growth will drive leverage to the mid 6 times range by the end of 2024. Moody's expects TAG will reduce the pace of its acquisitions and de novos in order to maintain good liquidity in a more challenging operating environment. Moody's expects no further effects from a cybersecurity incident in the second quarter of 2023, which impacted scheduling and billing on the company's core dental business. Moody's also expects meaningful improvement in WellNow, the urgent care brand supported by TAG, and a stabilization in earnings in this segment going forward. RATINGS RATIONALE TAG's B3 CFR reflects its elevated financial leverage of 8.2x as of September 30, 2023 pro forma for the transaction. TAG's rating is constrained by ongoing business risk considerations, including operational issues at the urgent care business, risks tied to the company's aggressive growth strategy, and potential for lingering effects from the cybersecurity incident in the second quarter of 2023. The rating is supported the company's strong market presence in the dental space, national footprint, geographic diversification, and economies of scale relative to local competitors. Moody's expects TAG's liquidity profile to be good over the next 12-18 months. Liquidity is supported by the company's cash balance of approximately $95 million at the close of the transaction and full availability on its new $450 million backed senior secured revolving credit facility and no near-term debt maturities. Moody's expects interest expense to rise as the new debt comes at a higher spread. Moody's expects slightly negative free cash flow in 2024 and positive free cash flow in 2025. The outlook is stable. Moody's expects TAG's earnings will improve, driven by strong growth in the core dental business and a stabilization in the urgent care business. The outlook also reflects Moody's view that the company will maintain good liquidity and leverage will decline in the next 12-18 months. Marketing terms for the new credit facilities (final terms may differ materially) include the following: Incremental pari passu debt capacity up to the greater of $256 million and 50% of EBITDA, plus unlimited amounts subject to 5.6x first lien net leverage. There is an inside maturity sublimit up to the greater of $214 million and 50% of EBITDA. A "blocker" provision restricts the transfer of material intellectual property to unrestricted subsidiaries. There are no protective provisions restricting an up-tiering transaction. Amounts up to 100% of unused capacity from the builder basket may be reallocated to incur debt. ESG CONSIDERATIONS TAG's CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. This reflects governance risks (G-4), driven by the company's aggressive financial policy, including high financial leverage and history of debt-funded acquisitions as well as management credibility risks given operational issues at the urgent care business. The company, similar to other healthcare service providers, has exposure to social risks (S-4) reflecting concerns around the access and affordability of healthcare services, the company's reliance on a highly skilled workforce, and customer relations risks due to a cyber incident which disrupted scheduling and billing. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if the company's liquidity and free cash flow trends worsen or if the company is unable to address operational headwinds at WellNow and return the segment to growth and profitability. Additionally, the ratings could be downgraded if financial policies become more aggressive, including a reacceleration in the pace of debt funded acquisitions. The ratings could be upgraded if TAG improves its liquidity, generating positive free cash flow on a sustained basis. Additionally, reducing Debt to EBITDA below 6 times on a sustained basis would also be viewed positively. TAG operations are comprised of over 1,356 offices in 45 states across four brands including Aspen Dental, ClearChoice, WellNow, and AZPetVet (noting AZPetVet is not in the credit group). TAG, through the Aspen Dental brand, provides business support services to its 1,044 affiliated dental offices, while ClearChoice serves a network of 95 affiliated dental implant centers. ClearChoice practices are the leading national provider of fixed full-arch dental implants and related treatments. TAG also supports the practices under the WellNow urgent care brand that has 195 locations. TAG is privately-held, and majority owned by Ares Management, LP and Leonard Green & Partners, L.P., with the remaining 35% owned by American Securities, management, and dentists. LTM combined net patient revenues as of September 30, 2023 including practice ownership program offices, was approximately $3.5 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. AEARO TECHNOLOGIES: 3M Stocks in Earplug Deal Questioned in Court ----------------------------------------------------------------- Martina Barash of Bloomberg Law reports that 3M Co.'s $6 billion deal to end hearing-loss claims over its combat earplugs was questioned Monday, December 11, 2023, after a lone veteran told a packed courtroom that he's concerned the company will undermine the settlement's $1 billion stock transfer provision. Judge M. Casey Rodgers, who oversees the vast personal injury litigation, responded to service member Duane Nancarrow's worry that 3M might declare bankruptcy by saying that she didn't see 3M contemplating that action. Other witnesses testified in favor of the arrangement. About Aearo Technologies Aearo Technologies -- https://earglobal.com/en -- is a 3M company that designs, manufactures, and sells personal protection equipment. The Company offers prescription and non-prescription safety eye wear, face shields, hard hats, and respirators. Aearo serves customers worldwide. To address claims related to the Combat Arms Earplugs Version 2, Aearo Technologies LLC and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case No. 22-02890) on July 26, 2022. In the petition filed by John R. Castellano, as authorized signatory, Aearo Technologies estimated assets and liabilities between $1 billion and $10 billion each. 3M is not a debtor in the Chapter 11 cases. 3M has committed $1 billion to fund a trust allocated for Combat Arms claims. Kirkland & Ellis LLP is serving as legal counsel and AlixPartners LLP is serving as restructuring advisor to Aearo Technologies. Ice Miller LLP, is serving as bankruptcy co-counsel to the Debtors. Kroll is the claims agent. PJT Partners is serving as financial advisor and White & Case LLP is serving as legal counsel to 3M. * * * U.S. Bankruptcy Judge Jeffrey Graham in Indianapolis in early June 2023, dismissed the bankruptcy case of Aearo Technologies, rejecting an effort to resolve nearly 260,000 lawsuits alleging that 3M military earplugs caused hearing loss for veterans and U.S. service members. Judge Graham ruled that Aearo, as a well-supported subsidiary of 3M, enjoys a "greater degree of financial security than warrants bankruptcy protection." ALOA-ETS LLC: Ted Burr Named Subchapter V Trustee ------------------------------------------------- The U.S. Trustee for Region 14 appointed Tedd Burr of Mac Restructuring Advisors, LLC as Subchapter V trustee for Aloa-ETS LLC. Mr. Burr will be paid an hourly fee of $425 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Burr declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Tedd Burr Mac Restructuring Advisors, LLC 10191 E. Shangri La Road Scottsdale, AZ 85260 Cell: (602) 418-2906 Email: Ted@MacRestructuring.com About Aloa-ETS LLC Aloa-ETS, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Ariz. Case No. 23-08632) on Nov. 30, 2023, with up to $50,000 in assets and $500,001 to $1 million in liabilities. Nathan E. Carr, Esq., at Carr Law, PC represents the Debtor as bankruptcy counsel. ALPHA RE PROPERTIES: Unsecureds Will Get 1% of Claims in Plan ------------------------------------------------------------- Alpha RE Properties, LLC, filed with the U.S. Bankruptcy Court for the District of New Jersey a Subchapter V Plan of Reorganization dated December 5, 2023. The Debtor is single member LLC in the business of renting out residential condominium units in East Windsor, New Jersey. The Debtor is owned and operated by its principal, Parag Parikh. The Debtor was formed in 2016 for the purpose of purchasing rental real estate. Also in that year, the Debtor's principal caused the Debtor to sign a guarantee obligating it for the liabilities of another company owned by him called Alpha RE Assets One, LLC. The guarantee was in favor of DLP Lending Fund, LLC. In 2019, DLP sued Alpha RE One in connection with an alleged default of the original loan, and at the same time sued the Debtor on the guarantee. DLP obtained a judgment in 2021 and in 2023 attempted to sell the Debtor's real estate at a Sheriff's Sale, whereupon the Debtor filed this Chapter 11 case. Class 1 consists of the Secured claim of Windsor Regency Condominium Assoc. Secured Creditor will retain lien until completion of payments due under Chapter 11 Plan. Debtor will make monthly payments of $1,000 for 59 months and a final payment of $1,700.25 in the 60th month of the Plan. Class 2 consists of the Secured claim of DLP Lending Fund, LLC. Secured Creditor will retain lien until completion of payments due under Chapter 11 Plan. The secured claim will be amortized over 20 years with an interest rate of 7%. Debtor will make monthly payments of $4,419.20 for 60 months whereupon the loan will be refinanced and the balance will be paid in full. Class 3 consists of General Unsecured Claims, including any unsecured portion of secured claim of DLP Lending Fund, LLC. A total of $15,000 will be paid to general unsecured creditors, to be distributed pro-rata, in quarterly payments commencing on the Effective Date. The Debtor estimates this will result in a distribution of approximately 1% of creditors' claims. This Class is impaired. Equity Interest Holders shall retain ownership of Debtor/Reorganized Debtor. In addition to direct payments made to administrative claimants, Windsor Regency Condominium Association, and DLP Lending, LLP, the Debtor shall make quarterly payments of $750 towards the Chapter11 Plan obligations (general unsecured creditors). The payment will be made to the Disbursing Agent every three months, commencing on the Effective Date. The Debtor must submit all or such portion of the future earnings or other future income of the Debtor to the supervision and control of the Trustee as is necessary for the execution of the Plan. The final Plan payment is expected to be paid on or before 60 months after confirmation of the original Chapter 11 Plan. A full-text copy of the Plan of Reorganization dated December 5, 2023 is available at https://urlcurt.com/u?l=tw0GTD from PacerMonitor.com at no charge. Attorneys for the Debtor: Ellen M. McDowell, Esq. McDowell Law, PC 46 W. Main Street Maple Shade, NJ 08052 About Alpha RE Properties Alpha RE Properties, LLC, is a single member LLC in the business of renting out residential condominium units in East Windsor, New Jersey. Alpha RE Properties filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 23-17790) on Sept. 6, 2023, with as much as $50,000 in assets and liabilities. Ellen M. McDowell, Esq., at Mcdowell Law, PC, is the Debtor's bankruptcy counsel. ALVOGEN PHARMA: Moody's Alters Outlook on 'B3' CFR to Stable ------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Alvogen Pharma US, Inc., including the B3 Corporate Family Rating, the B3-PD Probability of Default Rating, and the B3 rating on the senior secured term loan. The outlook was revised to stable from negative. The rating affirmation reflects Moody's expectation for ongoing improvement in Alvogen's growth and profitability, largely driven by growing contributions form lenalidomide and lisdexamfetamine, as well as other near-term product launches. The financial leverage at 4.5x as of September 30, 2023, has considerably improved from above 10 times, a year ago. Alvogen's ratings remain constrained by approaching debt maturities with ABL revolver expiring in January 2025, followed by term loan maturing in June 2025. The stable outlook incorporates Moody's expectation that Alvogen will successfully address its upcoming debt maturities and continue to see earnings growth of at least high single-digits, while maintaining moderate financial leverage. Additionally, Moody's expects solid free cash flow will allow Alvogen to repay portion of its revolver balance, over the next 12 months. RATINGS RATIONALE Alvogen's B3 Corporate Family Rating reflects its moderate size and scale with revenues of approximately $790 million for the LTM period ended September 30, 2023, in the highly competitive generic pharmaceutical industry. The ratings are constrained by moderately high financial leverage at 4.5x debt/EBITDA as of September 30, 2023. While Alvogen's growth and profitability are largely driven by contributions form lenalidomide and lisdexamfetamine, near-term product launches could provide for meaningful improvement in credit metrics in the next several years. Free cash flow will continue to strengthen, supported by higher overall revenues and improving gross margins. Alvogen's ratings remain constrained by approaching debt maturities with ABL revolver expiring in January 2025, followed by term loan maturing in June 2025. Alvogen's CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. The credit impact score reflects social risks exposures including regulatory and legislative efforts aimed at reducing drug prices. These dynamics relate to demographic and societal trends that are pressuring government budgets because of rising healthcare spending. Alvogen faces highly negative governance risk specifically related to financial strategy and risk management as Alvogen has a history of operating with high financial leverage. Additionally, ownership of the company by a consortium of private equity firms including CVC Capital and Temasek, as well as a significant stake by the company's chairman, increases governance risk. Moody's expects Alvogen's liquidity to remain weak over the next twelve months. The liquidity remains constrained by approaching debt maturities. Alvogen had cash of roughly $6 million as of September 30, 2023. Moody's expects Alvogen's free cash flows to surpass $100 million in 2024, but tempered by investment into the commercialization of the company's pipeline of products, interest expense and the term loan amortization of 5%, annually. Additionally, the liquidity profile reflects approaching debt maturities including roughly $43 million of the non-extended term loan due in December 2023, which Moody's expects to be largely repaid by additional borrowings under the $240 million ABL revolver. The ABL revolver which had roughly $164 million drawn on the facility as of September 30, 2023, will expire in January 2025. The roughly $779 million extended portion of term loan does not contain any financial maintenance covenants and matures in June 2025. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade the ratings if Alvogen sustains debt/EBITDA below 5.0x, combined with a proven ability to more than offset base business declines with new product launches. Additionally, the company would need to strengthen its liquidity profile, generate consistently positive free cash flow, and successfully address its approaching debt maturities, for Moody's to consider an upgrade. Factors that could lead to a downgrade include failure to refinance the term loan and ABL facility, or inability to offset base business declines with new product launches. Additionally, weakening of liquidity profile, including sustained negative free cash flow could lead to a downgrade. Alvogen Pharma US, Inc. ("Alvogen") is a subsidiary of Alvogen Lux Holdings S.a.r.l. ("LuxCo"). Alvogen Pharma US, Inc. comprises the US generic and branded pharmaceuticals divisions and contract manufacturing operations of LuxCo, which also has international operations not included in the US credit group. For the twelve months ended September 30, 2023, Alvogen Pharma US, Inc. reported revenues of approximately $790 million. Alvogen Pharma US, Inc. is owned by a consortium of private equity firms including CVC Capital and Temasek. The company's Chairman Robert Wessman also owns a significant stake in the company. The principal methodology used in these ratings was Pharmaceuticals published in November 2021. AMC ENTERTAINMENT: Wraps Up $350M Offering, Cuts Debt by $62 Mil. ----------------------------------------------------------------- Dade Hayes of Deadline reports that leading movie theater operator AMC Entertainment has wrapped a $350 million at-the-market equity offering and reduced its debt by $62 million. The transaction was announced after the close of trading Monday. AMC had announced the equity offering in November 2023. AMC said it raised $350 million of new equity capital, before commissions and fees, through the sale of about 48 million shares, at an average price of about $7.29 per share. Exhibitors are facing a difficult stretch over the next few months due to a squeeze on the supply of studio films. Confronting the dual strikes by writers and actors, studios pushed a number of 2023 and early 2024 releases to later dates given production and promotion challenges. Theaters, though, depend on event titles and are heading toward a January period with only a handful of wide releases. Unlike past Christmases, when franchise titles like Avatar: The Way of Water drove significant box office, this year's late-December slate has mainly Wonka and the Aquaman sequel as audience draws. "Successfully raising an additional $350 million of equity capital and reducing debt by more than $62 million in a single month underscores our continued commitment to strengthen our balance sheet by bolstering liquidity and methodically reducing debt levels," CEO Adam Aron said. In 2023 to date, Aron said, AMC has raised $865 million of gross equity capital. It has also lowered liabilities by approximately $440 million by reducing our corporate borrowings by about $350 million and repaying more than $90 million of Covid-related deferred rent liabilities. "Through methodically fortifying our financial position as we progress along our recovery trajectory, we ensure our ability to manage through industry challenges, including the ongoing impact of the Hollywood strikes earlier this year, and position AMC to thrive in the future as we deliver value to our shareholders," Aron added. About AMC Entertainment AMC Entertainment Holdings, Inc., is engaged in the theatrical exhibition business. It operates through theatrical exhibition operations segment. It licenses first-run motion pictures from distributors owned by film production companies and from independent distributors. The Company also offers a range of food and beverage items, which include popcorn; soft drinks; candy; hot dogs; specialty drinks, including beers, wine and mixed drinks, and made to order hot foods, including menu choices, such as curly fries, chicken tenders and mozzarella sticks. AMC operates over 900 theatres with 10,000 screens globally, including over 661 theatres with 8,200 screens in the United States and over 244 theatres with approximately 2,200 screens in Europe. The Company's subsidiary also includes Carmike Cinemas, Inc. AMC was forced to close its shutter its theaters when the Covid-19 pandemic struck in March 2020. It eventually reopened its theaters but admissions remained substantially low. The world's biggest theater chain said in an October 2020 filing that liquidity will be largely depleted by the end of the year or early 2021 if attendance doesn't pick up, and it's exploring actions that include asset sales and joint ventures. However, AMC managed to raise $1.8 billion in 2021, capitalizing on the rally triggered by retail investors' interest in meme stocks. * * * In February 2023, S&P Global Ratings raised its issuer credit rating on AMC Entertainment Holdings to 'CCC+' from 'SD'. S&P raised its issue-level rating on the second-lien notes to 'CCC-' from 'D'. The stable outlook reflects S&P's expectations that despite improving attendance in cinemas, AMC's heavy debt burden will result in leverage in the high-7x area and poor cash flow in 2023, but that the company's cash balance will allow it to service its debt obligations. AMC, the world's largest motion picture exhibitor, completed its distressed exchange, swapping $100 million of its second-lien notes due in 2026 for preferred equity. Additionally, the company repurchased $85 million aggregate principal amount of its outstanding debt since Dec. 19, 2022, at an average discount of approximately 49%. AMYRIS INC: Creditors Object to 'Tainted' Chapter 11 Plan --------------------------------------------------------- Emily Lever of Law360 reports that noteholders and shareholders of bankrupt biochemical company Amyris Inc. have lodged an objection to its Chapter 11 plan and disclosure statement, contending the plan keeps creditors in the dark about the impact of its third-party releases and exemplifies a larger lack of transparency. About Amyris Inc. Amyris (Nasdaq: AMRS) -- http://www.amyris.com/-- is a synthetic biotechnology company, transitioning the Clean Health & Beauty and Flavors & Fragrances markets to sustainable ingredients through fermentation and the company's proprietary Lab-to-Market(TM) technology platform. This Amyris platform leverages state-of-the-art machine learning, robotics, and artificial intelligence, enabling the company to rapidly bring new innovation to market at commercial scale. Amyris ingredients are included in over 20,000 products from the world's top brands, reaching more than 300 million consumers. Amyris also owns and operates a family of consumer brands that is constantly evolving to meet the growing demand for sustainable, effective, and accessible products. Amyris, Inc. and its affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 23-11131) on Aug. 9, 2023. In the petition signed by its interim chief executive officer and chief financial officer, Han Kieftenbeld, Amyris disclosed $679,679,000 in assets and $1,327,747,000 in liabilities. Judge Thomas M. Horan oversees the cases. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as their bankruptcy counsel; Fenwick & West, LLP as corporate counsel; Gordon Rees Scully Mansukhani, LLP as special counsel; PricewaterhouseCoopers LLP as financial advisor; and Intrepid Investment Bankers LLC as investment banker. Stretto, Inc., is the Debtors' claims, noticing, solicitation agent and administrative adviser. AMYRIS INC: Cross-Holders Say Amended Plan Has Infirmities ---------------------------------------------------------- The ad hoc group (the "Ad Hoc Cross-Holder Group") of certain unaffiliated (a) holders of notes or other indebtedness issued under that certain Indenture, dated as of November 15, 2021 pursuant to which Amyris, Inc. issued certain 1.5% Convertible Senior Notes Due 2026 and/or (b) shareholders of Amyris, Inc., filed an objection and reservation of rights to the Amyris, Inc. et al.'s motion for an order approving the Disclosure Statement. The Ad Hoc Cross-Holder Group understands the need to move the plan process forward. The Ad Hoc Cross-Holder Group also recognizes and applauds the two other committees in obtaining the improved and better treatment of unsecured creditors. The selfimposed liquidity constraints and desire to move valuable assets to the insider DIP Lender, however, does not give the Debtors a mandate to short-circuit the creditor protections afforded by the Bankruptcy Code. Given the self-created accelerated confirmation process and compressed schedule, the Ad Hoc Cross-Holder Group has only had a few days to review, analyze and discuss the Disclosure Statement and Plan. Based upon a preliminary review, the Ad Hoc Cross-Holder Group, however, believes that the Plan seems to contain certain infirmities and defects that would render it unconfirmable. The Ad Hoc Cross-Holder Group reserves all rights with respect to those issues and will continue its dialogue with the Debtors to address them with the goal of obtaining a negotiated resolution in advance of confirmation. By their own admission, the Debtors' sale of their Consumer Brands assets was an unmitigated disaster. The projected $250+ million in sale proceeds to fund a plan turned out to be less than $30 million. This stunning turn of event raises serious questions into what went wrong and how the company could fail in such spectacular fashion compared to the expectations set just a few months ago. No plausible explanation is provided in the Disclosure Statement. In these circumstances in particular, disclosure is paramount. While the Disclosure Statement and Plan have been updated to reflect these results and a proposed settlement and release of various estate and third-party claims and causes of action, the accompanying disclosures fall well short of what a party-in-interest requires to make an informed decision about the Plan. First, according to the Ad Hoc Group, the Disclosure Statement still contains no meaningful information about the estate claims and causes of action being released or the results of the alleged multiple investigations examining them. With respect to the Debtors' alleged independent investigation, the Debtors claim that Mr. Reiss has produced a secret report shared only with the Creditors' Committee and one new "independent director." There is no additional color on the nature or findings in the report. In fact, the Debtors claim that such investigation is ongoing but they nevertheless determined to release the claims under the original plan months ago. It is unclear who made that decision on behalf of the Debtors. What is clear is that the so-called "independent report" carries no real weight so long as it remains secret and subject to a tainted process. Without the disclosure of the contents of the report, the process has the appearance of lacking integrity and openness. In order to protect integrity, comply with the Bankruptcy Code's requirements and avoid selective and incomplete disclosure of information, the Debtors should incorporate the report into the Disclosure Statement. The Debtors should also be required to file a supplement when the investigation is completed, which should happen in advance of the voting deadline. The Disclosure Statement only briefly mentions the Committee's investigation and agreement to reach a settlement of estate claims. It contains no description of the findings, the nature of the claims, or an explanation of the risks and benefits of settling that would permit a stakeholder to make an informed decision about the Plan. The Ad Hoc Noteholder Committee's investigation has likewise been kept secret from voting stakeholders. Passing references to issues considered and documents produced is not adequate disclosure within the meaning of Section 1125. In order to consider the settlement of estate claims and causes of action and vote on whether to accept the Plan, stakeholders must, at a minimum, have an understanding of the claims, their strengths and weaknesses and the potential recoveries. Second, the Ad Hoc Group points out, the Disclosure Statement contains inadequate information about how the Debtors propose to meet the difficult standard for obtaining the controversial non-consensual Third Party Releases. In order to make an informed decision about voting and potentially opting out of the Third-Party Release, stakeholders need to understand the standard applied under the Third Circuit and how the Debtors plan to meet their burden. Currently the Disclosure Statement is not clear about who specifically is receiving a Third-Party Release and how much each Released Party is contributing to the reorganization. It appears, however, that parties obtaining the Third-Party Releases extend well beyond Foris and the DIP Lenders (the only two entities providing any consideration). Nor is there any explanation why such releases are necessary to the reorganization or who made the decision to authorize them. Without more information, stakeholders cannot make a decision on whether to support or oppose the Plan or to opt out. Third, according to the Ad Hoc Group, the Disclosure Statement contains no information about the market testing process for the Other Assets, including the intellectual property and R&D assets upon which the Debtors plan to reorganize. Instead, the insiders who developed the Plan and who are now charged with prosecuting it, are handing themselves all of the value of the Reorganized Debtors and giving themselves sole discretion to determine whether to explore any alternatives. There is also no discussion as to going concern value of those assets. Delaware law and applicable Bankruptcy law require a higher level of scrutiny when insiders are in control and obtaining control of the Reorganized Debtors. The Debtors' lack of disclosure and failure to market the Other Assets is problematic and will be an issue at confirmation. Finally, in connection with the confirmation schedule, the Ad Hoc Cross-Holder Group is working with the Debtors to come up with a workable schedule to engage in Plan-related discovery and ensure a fair and fulsome confirmation hearing in the proposed compressed timeframe. If consensus is not achieved, the Cross-Holder Group will address specific issues before the Court at the hearing. Counsel of the Ad Hoc Cross-Holder Group: Matthew P. Ward, Esq. Morgan L. Patterson, Esq. WOMBLE BOND DICKINSON LLP 1313 North Market Street, Suite 1200 Wilmington, DE 19801 Tel: (302) 252-4320 Fax: (302) 252-4330 E-mail: matthew.ward@wbd-us.com morgan.patterson@wbd-us.com - and - Andrew I. Silfen, Esq. Beth M. Brownstein, Esq. ARENTFOX SCHIFF LLP 1301 Avenue of the Americas 42nd Fl. New York, NY 10019 Tel: (212) 484-3900 Fax: (212) 484-3990 E-mail: Andrew.Silfen@afslaw.com Beth.Brownstein@afslaw.com - and - Eric J. Silver, Esq. STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON P.A. 150 W. Flagler St, Suite 2200 Miami, FL 33130 Tel: (302) 789-3200 Fax: (305) 789-2688 E-mail: esilver@stearnsweaver.com About Amyris Inc. Amyris (Nasdaq: AMRS) -- http://www.amyris.com/-- is a synthetic biotechnology company, transitioning the Clean Health & Beauty and Flavors & Fragrances markets to sustainable ingredients through fermentation and the company's proprietary Lab-to-Market(TM) technology platform. This Amyris platform leverages state-of-the-art machine learning, robotics, and artificial intelligence, enabling the company to rapidly bring new innovation to market at commercial scale. Amyris ingredients are included in over 20,000 products from the world's top brands, reaching more than 300 million consumers. Amyris also owns and operates a family of consumer brands that is constantly evolving to meet the growing demand for sustainable, effective, and accessible products. Amyris, Inc. and its affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 23-11131) on Aug. 9, 2023. In the petition signed by its interim chief executive officer and chief financial officer, Han Kieftenbeld, Amyris disclosed $679,679,000 in assets and $1,327,747,000 in liabilities. Judge Thomas M. Horan oversees the cases. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as their bankruptcy counsel; Fenwick & West, LLP as corporate counsel; Gordon Rees Scully Mansukhani, LLP as special counsel; PricewaterhouseCoopers LLP as financial advisor; and Intrepid Investment Bankers LLC as investment banker. Stretto, Inc., is the Debtors' claims, noticing, solicitation agent and administrative adviser. ATLAS LITHIUM: Inks Agreement to Dismiss Salomon Complaint ---------------------------------------------------------- Atlas Lithium Corporation disclosed in a Form 8-K filed with the Securities and Exchange Commission that the lead plaintiff in the complaint filed by Douglas Salomon against the Company and certain members of the Company's senior management in the U.S. District Court for the Central District of California opted to dismiss the Complaint and filed a stipulation of dismissal signed by all parties which ended the Complaint. On the June 6, 2023 Form 8-K, the Company indicated that it believed the Complaint to be without any merit. On Sept. 11, 2023, the Court entered an order appointing a lead plaintiff. On Oct. 5, 2023, the Court entered a scheduling order providing, among other things, a deadline of Nov. 27, 2023 for lead plaintiff to file a consolidated amended Complaint. About Atlas Lithium Atlas Lithium Corporations formerly Brazil Minerals, Inc. is a mineral exploration and development company with lithium projects and exploration properties in other critical and battery minerals, including nickel, rare earths, graphite, and titanium, to power the increased demand for electrification. The Company's current focus is on developing its hard-rock lithium project located in Minas Gerais State in Brazil at a well-known, premier pegmatitic district in Brazil. The Company intends to produce and sell lithium concentrate, a key ingredient for the global battery supply chain. Atlas Lithium reported a net loss of $5.66 million in 2022, a net loss of $4.03 million in 2021, a net loss of $1.55 million in 2020, a net loss of $2.08 million in 2019, a net loss of $1.85 million in 2018, a net loss of $1.89 million in 2017, a net loss of $1.74 million in 2016, and a net loss of $1.88 million in 2015. For the nine months ended Sept. 30, 2023, the Company reported a net loss of $25.60 million. AVENTIS SYSTEMS: UCB Say Disclosures Inadequate ----------------------------------------------- United Community Bank ("UCB"), creditor and party in interest in the Chapter 11 case of Aventis Systems, Inc. ("Aventis") and Cortavo, Inc. ("Cortavo" together with Aventis, the "Debtor") objects to approval of the First Amended Disclosure Statement for Joint Plan and to the First Amended Joint Plan of Reorganization filed by the Debtor on November 8, 2023, and in support, states as follows: Prior to the Petition Date, Aventis executed and delivered to UCB certain short term promissory notes including (i) Promissory Note dated April 19, 2022 in the principal amount of $3,000,000 with a twelve month term, which renewed prior indebtedness (as modified or amended from time to time, "Note 1"); and (ii) Promissory Note dated April 25, 2022, in the principal amount of $500,000 with a 13 month term, which renewed prior indebtedness (as modified or amended from time to time, "Note 2," together with Note 1 the "Notes"). Under the Plan, the Debtor classified UCB as the holder of a Class 4 impaired fully secured claim. The Debtor proposes to pay the Class 4 claim 100% of the allowed claim, plus interest over a period of 61 months beginning 30 days after the Effective Date or within 10 Business Days after such Class 4 Claim is allowed, whichever is later, as follows: (i) 60 monthly interest payments, calculated at the Prime Rate but no less than 5%, to be paid on the last day of each month; (ii) 60 monthly principal payments in accordance with the proposed schedule in the Plan which provides inter alia principal installments to be equal to one third of the Combined Positive Cash Flow of Aventis and Cortavo, but no less than specified amounts for each 12 month period; and (iii) 61 months after the initial payments of principal, a balloon payment all of the accrued interest and principal then owing to UCB, which, assuming that only the minimum monthly principal payment is made, would be $200,000. Objections to the Debtor's Disclosure Statement: * UCB points out that the current Disclosure Statement filed by the Debtor does not provide adequate information as required by § 1125, and unless it is amended to include the below financial information, it should not be approved. Section VIII, Financial Information of the Disclosure Statement states that Exhibit B to the Disclosure Statement reflects a pro forma projection of a Six-Year Pro-Forma which represents Debtors' best estimate of projections related to the Debtors' business operations on a going forward basis for a period of six years after the Effective Date. Standing alone, the projections are not sufficient for UCB (or other Creditors) to make an informed decision whether to vote in favor of the Plan. At a minimum, the Disclosure Statement needs to include monthly projections for (i) balance sheet, (ii) income statement and (iii) Schedule of Reconciliation of Net Income (Loss) to Cash Flow, all in the form prepared by the Debtor's CPA in connection with the Cash Collateral Orders. In addition, the Disclosure Statement does not include a 13 week cash flow projection to evidence whether the Debtor will be able to satisfy its proposed Plan obligations during the first 13 weeks after the Effective Date of the Plan. These business projections will play a critical part in UCB's and other creditors' determination on whether to vote in favor of the Plan. * UCB further objects to the Disclosure Statement in that it fails to describe the remedies available to creditors in the event post-confirmation payments are not made. Objections to the Plan: * As it relates to UCB, the Debtor's current Plan calls for the repayment of UCB's Class 4 claim 100% of the allowed claim, plus interest over a period of 61 months beginning 30 days after the Effective Date or within ten (10) Business Days after such Class 4 Claim is allowed, whichever is later, as follows: (i) 60 monthly interest payments, calculated at the Prime Rate but no less than 5.0%, to be paid on the last day of each month; (ii) 60 monthly principal payments in accordance with the proposed schedule in the Plan which provides inter alia principal installments to be equal to one-third of the Combined Positive Cash Flow of Aventis and Cortavo, but no less than specified amounts for each 12 month period; and (iii) 61 month after the initial payments of principal, a balloon payment all of the accrued interest and principal then owing to UCB, which, assuming that only the minimum monthly principal payment is made, would be $200,000. The proposed Plan effectively converts UCB's short term Notes (12 and 13 months respectively), which matured on April 18, 2023 and May 25, 2023, to be repaid over the course of 61 months at the Prime Rate. This is clearly not fair or equitable and UCB objects to the confirmation of the Plan based on these inflated proposed metrics. UCB submits that the efficient market rate is substantially higher than the Prime Rate and would likely be no less than Prime plus 5% and as high as 18% per annum. Further, if the Court determines that there is no market for a commercial loan the Till factors become necessary. UCB submits that an application of Till would require substantially more than the proposed minimum Prime Rate. Accordingly, the proposed Prime Rate is patently inadequate. * Further, the proposed Plan does not propose to pay UCB (i) default interest at 16% from the maturity date of the Notes through the Effective Date of the Plan; or (iii) Section 506(b) attorneys' fees and costs to UCB as an over- secured creditor. * Neither the Disclosure Statement, nor the current Plan provides sufficient financial information which would allow the creditors to adequately evaluate the feasibility of the Plan. Accordingly, the Plan does not contain adequate information with respect to the means by which the Debtor will implement its Plan, or the practical feasibility of such. Further, if a plan described in a disclosure statement is unconfirmable as a matter of law, the court is authorized to deny approval of the disclosure statement. Counsel for United Community Bank: Paul G. Durdaller, Esq. Brian J. Levy, Esq. BURR & FORMAN 1075 Peachtree St. NE Suite 3000 Atlanta, GA30309 Tel: (404) 815-3000 Fax: (404) 817-3244 E-mail: pdurdaller@burr.com blevy@burr.com About Aventis Systems Aventis Systems, Inc., a company in Atlanta, offers custom IT solutions to build and operate complete physical and virtual infrastructures. The comprehensive solutions include refurbished and new hardware, system and application software, and an array of in-depth managed services including infrastructure consultation, cloud hosting and migration, virtualization deployment, data and disaster recovery, security consultation, hardware relocation, and equipment buyback. Aventis Systems and affiliate, Cortavo, Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Lead Case No. 23-51162) on Feb. 6, 2023. In the petition signed by its chief executive officer, Hessam Lamei, Aventis Systems disclosed up to $50 million in assets and up to $10 million in liabilities. Judge Lisa Ritchey Craig oversees the cases. The Debtors tapped Anna Humnicky, Esq., at Small Herrin, LLP as bankruptcy counsel; AI Law as special counsel; and Nichols, Cauley & Associates, LLC as accountant. BELLAREED CONSTRUCTION: Seeks to Hire Douglas Jacobson as Counsel ----------------------------------------------------------------- Bellareed Construction & Remodeling, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ the Law Offices of Douglas Jacobson, LLC as its bankruptcy counsel. The Debtor requires legal counsel to: (a) give advice concerning questions arising in the conduct of the administration of the estate and the Debtor's rights and remedies with regard to the estate's assets and the claims of secured, preferred and unsecured creditors and other parties-in-interest; (b) appear for, prosecute, defend, and represent the Debtor's interest in suits arising in or related to this case; (c) investigate and prosecute preference and other actions arising under the Debtor's avoidance powers; and (d) assist in the preparation of such pleadings, motions, notices, and orders as are required for the orderly administration of this estate; and to consult with and advise the Debtor in connection with the operation of or the termination of the operation of its business. The hourly rates of the firm's attorneys and staff are as follows: Partners $350 Paraprofessionals $75 The firm received $11,378 pre-petition from the Debtor and billed $700 for pre-petition fees and $1,738 for the Chapter 11 filing fee. Douglas Jacobson, Esq., the owner of the Law Offices of Douglas Jacobson, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Douglas Jacobson, Esq. Law Offices of Douglas Jacobson, LLC 11539 Park Woods Circle, Suite 304 Alpharetta, GA 30005 Telephone: (678) 341-9114 Email: douglas@douglasjacobsonlaw.com About Bellareed Construction & Remodeling Bellareed Construction & Remodeling, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-61726) on November 28, 2023. In the petition signed by Edward Karram, member, the Debtor disclosed under $1 million in both assets and liabilities. Judge Wendy L. Hagenau oversees the case. The Law Offices of Douglas Jacobson, LLC serves as the Debtor's counsel. BLOCK COMMUNICATIONS: Moody's Cuts CFR to B1 & Unsec. Notes to B2 ----------------------------------------------------------------- Moody's Investors Service downgraded Block Communications, Inc.'s Corporate Family Rating to B1 from Ba3 and Probability of Default Rating to B1-PD from Ba3-PD. Moody's affirmed the Ba1 rated senior secured first lien bank credit facilities, including the term loan B and revolver. The senior unsecured notes were downgraded to B2 from B1. The outlook was changed to negative from stable. The downgrade of Block's CFR to B1 reflects deteriorating operating performance and weaker credit metrics and liquidity. Performance has been affected by continued and higher losses in the publishing unit, more intense competitive dynamics in its cable and telecom businesses, and persistent unfavorable secular trends in pay-TV continues which is driving subscribers lower in the broadcast segment. The pressure is evident in negative revenue and EBITDA trends which fell 4% and near 15%, respectively, LTM versus 2022. As a result of the decline in EBITDA, leverage (Moody's adjusted gross debt to EBITDA) rose sharply to 4.0x at Q3 (September 30, LTM), up significantly from 3.4x at the end of 2022. Absent a stabilization in subscriber and ARPU trends in the cable business, Moody's expects the ratio could rise higher, to mid to high 4x over the next 12-18 months due to lower EBITDA and higher debt as the company may draw on its revolving credit with more limited internal cash flows to fund operations. Moody's expect free cash flows, which were negative on an LTM basis at Q3, to be held near zero over the next 12-18 months, with a significant reduction in capital intensity, approaching maintenance levels. RATINGS RATIONALE Block's B1 Corporate Family Rating (CFR) is supported by the Company's long operating history and stable family ownership, with limited shareholder-friendly transactions. The business is also well diversified for its small scale, with a mix of four distinct subscription-based businesses including telecommunications, publishing, broadcast, and cable which is the largest and most profitable. The cable operation is supported by secular broadband demand, a competitive, high-speed network, and a profitable business model, with relatively stable and strong EBITDA margins in the mid 40% range. Block's credit profile is constrained by governance risk as reflected in the G-4 Issuer Profile Score and CIS-4 Credit Impact score. Financial strategy and risk management policies tolerates leverage at or near 4.0x (Moody's adjusted), and ownership is highly concentrated with the Block family in full control of the business without independent board oversight. Key-man risk is also an exposure. Capital intensity is a persistent call on operating cash flows, with capex to revenue in the high 20% LTM and necessary to grow and defend market share. Unfavorable secular trends in publishing, telecom, and broadcast and persistent or higher competitive intensity across all its segments is a constraint on revenue growth and higher profitability. Block has good liquidity, with internal cash sources sufficient to cover all mandatory expenses over the next 12 months, plus a $110 million revolver that is expected to be only partially drawn. Moody's also expects comfortable headroom under financial maintenance covenants of the revolver which limits consolidated gross leverage to 5x. Alternate liquidity is more limited with a partially secured capital structure. The senior secured first lien credit facilities, including the revolver and term loan, are rated Ba1, three notches above the B1 CFR, reflecting the priority position in the collateral of substantially all assets and upstream guarantees from direct and indirect domestic subsidiaries. The unsecured notes are rated B2, one notch below the CFR given its subordination to the senior secured credit facilities. The instrument ratings reflect the probability of default of the company, as reflected in the B1-PD Probability of Default Rating, and an average expected family recovery rate of 50% in a distress scenario. The negative outlook reflects Moody's expectation that revenue and EBITDA are likely to remain under pressure, falling by low to mid-single-digit percent. Moody's expects EBITDA margins to remain near mid 20%, while capex to revenue could fall to mid-teens percent, while borrowing costs will remain near 6%. Free cash flows are expected to be near zero. Leverage (Moody's adjusted gross debt-to-EBITDA) could rise to mid to high 4x. Key assumptions include cable revenue to decline by low to mid-single digit percent, broadcast revenue to grow by low single digit percent (2-year average), telecom revenue to fall by low single-digit percent, and publishing revenue to fall by up to 10%. Note: all figures referenced are Moody's adjusted over the next 12-18 months, unless otherwise noted. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the Company's small scale and declining operating trends, an upgrade is unlikely in the near term. However, ratings could be upgraded if leverage is sustained comfortably below 3.5x (Moody's adjusted consolidated debt-to-EBITDA), and retained cash flow to net debt is sustained above 25% (Moody's adjusted). A positive rating action could also be conditional on larger scale, sustainable growth in revenue earnings and free cash flow, and improved liquidity. Ratings could be downgraded if leverage is sustained above 4.5x (Moody's adjusted debt-to-EBITDA), or retained cash flow to net debt is sustained below 20% (Moody's adjusted). A negative rating action could also be considered if liquidity worsens, the scale or diversity of the company is reduced, or there is material unfavorable changes in operating performance or market position. If the revolving credit facility is not extended by the end of January 2024, at least one year ahead of the maturity (February 2025), Moody's would likely have a less favorable view of liquidity which could lead to negative rating action. Block Communications, Inc., founded in 1900, is a privately held, diversified media company headquartered in Toledo, Ohio. It is wholly-owned and controlled by the Block Family. It operates four segments including cable television, telecommunications, newspaper publishing, and television broadcasting. The Company's cable operations are branded Buckeye Broadband (serving Toledo and Erie County Ohio and parts of Southeast Michigan) and MaxxSouth serving North and Central Mississippi and North West Alabama. Its telecommunications system includes TeleSystem (previously known as Buckeye Telesystem Inc. and Block Line Systems, LLC). Block has two daily metropolitan newspapers, the Pittsburgh Post-Gazette in Pittsburgh, PA and the Blade in Toledo, OH. It also owns and operates four television stations and one wide-coverage Class A station, carrying 14 broadcast network affiliated channels (including NBC, ABC, CBS, and FOX, among others) in Lima, OH, Louisville, KY, and Champaign-Springfield-Decatur, IL. The Company reported revenue of approximately $546 million for the LTM period ended September 30, 2023. The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. BLOCKFI INC: Bankruptcy Attorneys Want $40 Million in Fees ---------------------------------------------------------- Aislinn Keely of Law360 reports that law firms representing defunct cryptocurrency lender BlockFi and its creditor committee through the Chapter 11 process have requested roughly $40 million from the estate ahead of a January hearing on compensation. About BlockFi Inc. BlockFi is building a bridge between digital assets and traditional financial and wealth management products to advance the overall digital asset ecosystem for individual and institutional investors. BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in its early days had backing from influential Wall Street investors like Mike Novogratz and, later on, Valar Ventures, a Peter Thiel-backed venture fund as well as Winklevoss Capital, among others. BlockFi made waves in 2019 when it began providing interest-bearing accounts with returns paid in Bitcoin and Ether, with its program attracting millions of dollars in deposits right away. BlockFi grew during the pandemic years and had offices in New York, New Jersey, Singapore, Poland and Argentina. BlockFi worked with FTX US after it took an $80 million hit from the bad debt of crypto hedge fund Three Arrows Capital, which imploded after the TerraUSD stablecoin wipeout in May 2022. BlockFi had significant exposure to the companies founded by former FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a $400 million credit line from FTX US in an agreement that also gave FTX the option to acquire BlockFi through a bailout orchestrated by Bankman-Fried over the summer. BlockFi also had collateralized loans to Alameda Research, the trading firm co-founded by Bankman-Fried. BlockFi is the latest crypto firm to seek bankruptcy amid a prolonged slump in digital asset prices. Lenders Celsius Network LLC and Voyager Digital Holdings Inc. also filed for court protection this year. Kirkland & Ellis is also advising Celsius and Voyager in their separate Chapter 11 cases. BlockFi Inc. and eight affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on Nov. 28, 2022. In the petitions signed by their chief executive officer, Zachary Prince, the Debtors reported $1 billion to $10 billion in both assets and liabilities. Judge Michael B. Kaplan oversees the cases. The Debtors tapped Kirkland & Ellis and Haynes and Boone, LLP, as general bankruptcy counsels; Walkers (Bermuda) Limited as special Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley Research Group, LLC as financial advisor; Moelis & Company as investment banker; and Street Advisory Group, LLC, as strategic and communications advisor. Kroll Restructuring Administration, LLC, is the notice and claims agent. CACTUSRV.COM LLC: Unsecured Creditors to Split $5K over 60 Months ----------------------------------------------------------------- CactusRV.com LLC filed with the U.S. Bankruptcy Court for the District of Arizona a Plan of Reorganization for Small Business. The Debtor owns and operates a retail enterprise which sells recreational vehicles, boats, and trailers. It has two locations in Tucson, Arizona. The original location is located at 3655 N. Romero Road, which, as of the Petition Date, acted as its service center. The second location is located at 5374 N. Casa Grande Highway, which as of the Petition Date, acted as the showroom and retail center. Debtor does not own the real property it conducts its business on. An affiliate, Cactus RV Holdings, LLC owns the real property located at 3655 N. Romero Road, subject to an existing mortgage. The Debtor filed for chapter 11 relief in order to reduce its secured debt obligations under its flooring plans, which consist of curtailments and other high-interest obligations. This Plan of Reorganization under chapter 11 of the Bankruptcy Code, Subchapter V, proposes to pay creditors of the Debtor from cash flow from continued business operations. Non-priority, unsecured creditors holding allowed claims will receive a pro rata share of $5,369.64 after all administrative, priority, and secured creditors payments, on a quarterly basis. This class will be paid in full. This Plan also provides for full payment of administrative and priority claims over the term of the Plan. Class 3 consists of non-priority unsecured claims. The creditors with Allowed Unsecured Claims in Class 3 shall be paid quarterly their pro rata share of funds paid into the Plan Fund after all administrative claims are paid in full, their pro-rata share of a total of $5,369.64 over 60 months. The Debtor may pre-pay Allowed Non-priority Unsecured Claims without penalty. This Class is unimpaired. The Debtor shall retain all assets not distributed to creditors pursuant to the Plan, and such assets shall be revested in the Debtor upon confirmation of the Plan, if the Plan confirmation is consensual, or upon closing of the case, if the Plan confirmation is non-consensual. These payments shall be in full satisfaction of any obligation of the Debtor and any guarantor of the obligations. Class 4 consists of Equity Interest Holders. No distribution shall be made to the members of this class on account of their ownership interests in Debtor during the 5-year term of this plan. However, Debtor may pay these class members any wages earned in due course. The Debtor shall pay the administrative and unsecured creditors as set forth directly. The Debtor shall establish a separate Plan Fund for the management of all funds for distribution to administrative and unsecured creditors with allowed claims. The Plan Fund will be administered by the Debtor if the plan confirmation is consensual as determined by the Court or by the subchapter V trustee if plan confirmation is non-consensual as determined by the Court. The Debtor shall make deposits into the Plan Fund at a minimum quarterly (no later than the 10th day of the first month of the next quarter), following Plan confirmation. In the event the Debtor's income in any quarter is insufficient to make the payment, the Debtor shall contribute the Debtor's actual "disposable income" as defined in Section 1191(d) of the Bankruptcy Code for that quarter. Distributions from the Plan Fund shall be made no later than the 20th day following the deposits by the Debtor, through the termination of the Plan. A full-text copy of the Plan of Reorganization dated December 5, 2023 is available at https://urlcurt.com/u?l=3X7E2k from PacerMonitor.com at no charge. Attorneys for the Debtor: Jody A. Corrales, Esq. Deconcini Mcdonald Yetwin & Lacy P.C. 2525 E. Broadway Blvd., Suite 200 Tucson, AZ 85716 Tel: (520) 322-5000 Fax: (520) 322-5585 Email: jcorrales@dmyl.com About CACTUSRV.COM LLC CACTUSRV.COM LLC offers a large selection of new and pre-owned toy haulers, travel trailers, and boats. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 23-06136) on Sept. 5, 2023. In the petition signed by Phillip E. Delaney, member, the Debtor disclosed $8,384,417 in assets and $7,290,539 in liabilities. Judge Brenda Moody Whinery oversees the case. Jody A. Corrales, Esq., at Deconcini McDonald Yetwin & Lacy, P.C., is the Debtor's legal counsel. CD&R VIALTO: S&P Downgrades ICR to 'CCC+', Outlook Negative ----------------------------------------------------------- S&P Global Ratings lowered its ratings including the issuer credit rating on New York-based provider of global mobility solutions CD&R Vialto UK Intermediate 3 Ltd. to 'CCC+' from 'B-'. The negative outlook reflects S&P's view that the company could be at heightened default risk absent material improvement to its profit margin profile and cash generation. S&P said, "Vialto's performance since its carveout from PwC has lagged our expectations, and we now believe its capital structure is currently unsustainable. Despite its strong value proposition, new client wins, and sustained good customer retention, Vialto's revenue, earnings, and cash generation fell short of our expectations in the first quarter of fiscal 2024 (ended Sept. 30, 2023). The company reported management-adjusted EBITDA margin contraction of about 450 basis points (bps), and EBITDA decline of nearly 40% relative to the prior year's first quarter. Its separation from PwC is effectively complete, but the company continues to face lingering costs and challenges associated with operating on a stand-alone basis. We think this accounts for some of its earnings decline in the most recent quarter, and we expect positive year-over-year comparisons through the remainder of the year, though not sufficient to achieve sustainable positive free operating cash flow (FOCF). We think the cost structure of the stand-alone organization was initially underestimated, while the business' growth prospects were overstated. "We revised our forecast to reflect slightly slower growth that is better aligned with recently observed trends and our expectations for slowing economic growth. In our view, growth in workforce mobility and related consulting activities could stagnate over the coming quarters. Meanwhile, we anticipate Vialto's gross margin profile will be sustained in the low-30% area, compared to our prior expectation that it would approach 40%. We believe the company will achieve mid-single-digit percent S&P Global Ratings-adjusted EBITDA margin in fiscal 2024 (ending June 30, 2024), improving toward the low-teens percent area in fiscal 2025 as one-time expenses roll off. "Our expectation for persistent FOCF deficits results from a high interest rate environment, combined with our revised forecast. Vialto has a highly leveraged capital structure, with over $1.4 billion of floating rate debt (including temporary revolver borrowings) as of Sept. 30, 2023." Its onerous debt balances result in over $150 million of forecast annual debt service costs, including interest and amortization requirements. In the first quarter of fiscal 2024, Vialto recorded an FOCF deficit of over $120 million. Improving operating performance through the remainder of the year, including its seasonal peak in the third and fourth quarter and unwinding working capital flows, leads to our forecast for FOCF deficit moderating to roughly negative $35 million for the full year. With normalizing operations in fiscal 2025, we forecast FOCF deficit will shrink to about negative $20 million on better profitability, moderated working capital flows, and lower capital expenditure (capex) needs. Visibility remains limited as Vialto settles into operating as a stand-alone entity.The complexity of its separation from PwC has led to mounting unanticipated costs and challenges. These include higher-than-expected costs related to building out its stand-alone infrastructure, slower revenue growth amid management distractions, overestimating earnings, and more. In S&P's view, this results from ineffective planning as well as a failure to recognize the complexity of the separation process and to anticipate the needs of the business. As Vialto operates on a stand-alone basis for the first time over the next 12-24 months, we think it could face additional operating hurdles that limit its earnings and cash flow generation. Given its limited liquidity position, unanticipated cash flow volatility could be detrimental to Vialto's ability to service its obligations. S&P said, "We think Vialto's tightening liquidity position, with material draws under its revolver at the end of the first quarter, does not provide sufficient cushion to absorb potential adversities. Meanwhile, we believe its standing in the credit markets has deteriorated based on recent debt trading prices. Still, we do not foresee a cash shortfall over the next 12-24 months and anticipate that the company will maintain access to its revolver, based on our forecast for sufficient cushion relative to the springing 8x first-lien net leverage covenant." The negative outlook reflects the risk that the company will be unable to expand profitability and revenues sufficient to achieve sustainably positive FOCF, which could lead to increasing default risk. S&P said, "We view governance factors as a negative consideration in our credit rating analysis of Vialto due partly to its ownership by private-equity sponsors. We believe the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects private-equity sponsors' generally finite holding periods and focus on maximizing shareholder returns. Additionally, we note the company's performance has deviated significantly from expectations, owing to shortcomings in management's planning and preparations through the separation process." CHS/COMMUNITY HEALTH: Moody's Cuts CFR to Caa2 & Unsec. Debt to Ca ------------------------------------------------------------------ Moody's Investors Service downgraded CHS/Community Health Systems, Inc.'s ("Community Health") Corporate Family Rating to Caa2 from Caa1 and Probability of Default Rating to Caa2-PD from Caa1-PD. Moody's also downgraded the ratings of the company's senior secured notes to Caa1 from B3, backed senior secured junior-priority notes to Caa3 from Caa2 and senior unsecured notes to Ca from Caa3. The Speculative Grade Liquidity Rating ("SGL") was revised to SGL-4 from SGL-3. The outlook is maintained at stable. At the same time, Moody's assigned a Caa1 rating to Community Health's proposed senior secured notes due 2032. Proceeds from the new debt offering will be used to redeem a portion of the company's $2.1 billion senior secured first lien notes due in 2026 and to pay related fees and expenses. On December 1, 2023, Community Health announced that it has sold 3 hospitals in Florida. From the proceeds of the sale, the company purchased a portion of the senior secured first lien notes due 2029, backed senior secured junior notes due 2029 and backed senior secured junior notes due 2030, in amounts corresponding to face value of $256.1 million, $141.8 million and $4.5 million respectively through a combination of open market and private transactions. The downgrade of Community Health's ratings reflects the company's very high level of the financial leverage and the company's inability to generate positive free cash flow despite some industrywide easing of labor pressure in recent quarters. The company's debt/EBITDA was approximately 8.5 times for the last twelve months ended on September 30, 2023, slightly up from 8.2 times at the end of 2022. Moody's expects that the financial leverage will remain very high above 8.0 times in the next 12-18 months as the company battles with high operating costs and disruptions from active hospital portfolio downsizing/rationalization efforts. RATINGS RATIONALE Community Health's Caa2 Corporate Family Rating reflects Moody's expectation that the company will operate with very high financial leverage above 8.0 times over the next 12-18 months. In addition, the rating considers increased operating costs and limited potential benefits from Community Health's turnaround initiatives. Community Health's Caa2 CFR is supported by its large scale, geographic diversity and the gradual progress it is making with its divestiture program. As of September 30, 2023, the company owned/operated 76 hospitals with 12,494 licensed beds, compared to 110 hospitals and 18,227 licensed beds respectively at the end of 2018. Community has actively divested hospitals with weak market positions and limited negotiating leverage with managed care payors. The SGL-4 Speculative Grade Liquidity Rating reflects Moody's view that the company will remain free cash flow negative in the next 12 months. The company's has $91 million of cash on hand and $687 million available under its $1.0 billion ABL borrowing facility as of September 30, 2023. Moody's expects the company will have to rely on the ABL revolver borrowing to run its operations and the sale of assets to reduce its debt burden. Community Health's almost entire debt (except ABL) has fixed interest rates. Therefore, its exposure to interest rate rise is minimal. Also, the company does not have any meaningful debt maturity before 2026. Community Health's senior secured notes are rated Caa1, one notch higher than the Corporate Family Rating of Caa2. This reflects the priority claim on the assets and the presence of a considerable amount of debt below the first lien borrowings that would absorb losses ahead of the first lien secured creditors. The rating on the first lien secured debt also reflects its position behind a $1 billion ABL (unrated) which has first priority on the company's most liquid assets including cash, receivables and inventory ("ABL collateral"). The company's Backed Senior Secured Junior priority notes are rated Caa3. These notes have a second lien on tangible and intangible assets that secure the first lien debt and a third priority lien on the ABL collateral. Community Health's unsecured notes, junior to all secured debt, are rated Ca. Community Health's CIS-5 ESG credit impact score indicates that the company's credit profile is weaker than it would have been if ESG exposures did not exist, and the negative impact is more pronounced than for issuers scored CIS-4. The CIS-5 score reflects governance considerations including very aggressive financial strategy, potential liability related to patient care, exposure to changes in reimbursement rates by its payors, and regulatory and litigation risks. Community Health's G-5 governance issuer profile score reflects a long track record of persistently high leverage and weak execution, which culminated in transactions Moody's deemed to be distressed exchanges in December 2019 and in December 2020. Community also has an inconsistent track record relative to peers, though recent divestitures of underperforming hospitals have helped the company to reduce its debt load. Community Health's S-4 social issuer profile score mainly reflects risks associated with responsible production which considers the company's potential liability related to patient care and the exposure to human capital because the company relies on highly specialized labor to provide its services. The company is also exposed to changes in reimbursement rates by its payors, including government payors. The outlook is stable. Moody's expects that Community Health will operate with very high financial leverage and weak liquidity in the next 12-18 months increasing the risk of default. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could downgrade the ratings if liquidity erodes or if Community Health's earnings weaken further. The ratings could also be downgraded if the probability of default increases or if the company pursues a transaction that Moody's deems as a distressed exchange. Moody's could upgrade the ratings if operational initiatives result in improved volume growth and margin expansion. Community Health would also need to improve its free cash flow and liquidity and reduce financial leverage. CHS/Community Health Systems, Inc., headquartered in Franklin, Tennessee, is an operator of general acute care hospitals in non-urban and mid-sized markets throughout the US. Revenues in the last twelve months ended September 30, 2023, were approximately $12.4 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. CIAOBABYONMAIN LLC: Taps Golding and Leibowitz as Legal Counsel --------------------------------------------------------------- CiaoBabyOnMain, LLC received approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ The Golding Law Offices, PC and the Law Offices of David P. Leibowitz, LLC. The Debtor requires legal counsel to: (a) give advice with respect to the powers and duties of the Debtor in the continued management and operation of its business and properties; (b) attend meetings with, and negotiate with, respective creditors and other parties in interest; (c) advise and consult on the conduct of the case; (d) advise the Debtor in connection with real estate and mortgage related issues; (e) advise the Debtor in connection with post-petition financing arrangements and negotiating and drafting documents relating thereto; (f) provide advice to the Debtor with respect to legal issues arising in or relating to its ordinary course of business; (g) take all necessary actions to protect and preserve the Debtor's estate; (h) prepare legal papers; (i) prepare, on the Debtor's behalf, a plan of reorganization or liquidation, and all related agreements and/or documents and take any necessary action to obtain confirmation of such plan; (j) attend meetings with third parties and participate in negotiations with respect to the above matters; (k) appear before this court, other courts, and the U.S. Trustee, and protect the interests of the Debtor's estate before such courts and the U.S. Trustee; and (l) perform all other necessary and appropriate legal services and provide all other necessary legal advice to the Debtor in connection with this Chapter 11 case. The hourly rates of the firms' attorneys and staff are as follows: David P. Leibowitz $800 Richard N. Golding $600 Linda A. Green $550 Paralegals $150 In addition, the firms will seek reimbursement for expenses incurred. Prior to the filing of this case, the Debtor paid Golding an initial retainer of $10,000. Of this amount $5,000 was paid by Golding to the Law Offices of David P. Leibowitz, LLC. David Leibowitz, Esq., an attorney at the Law Offices of David P. Leibowitz, and Richard Golding, Esq., an attorney at The Golding Law Offices, disclosed in court filings that the firms are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: David P. Leibowitz, Esq. Law Offices of David P. Leibowitz, LLC 3478 N. Broadway – Unit 234 Chicago, IL 60657 Telephone: (312) 662-5750 Email: dleibowitz@lakelaw.com - and – Richard N. Golding, Esq. The Golding Law Offices, P.C. 161 N. Clark Street, Suite 1700 Chicago, IL 60601 Telephone: (312) 832-7885 Email: rgolding@goldinglaw.net About CiaoBabyOnMain LLC CiaoBabyOnMain, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-14640) on Oct. 31, 2023, with up to $50,000 in assets and $100,001 to $500,000 in liabilities. Judge Janet S. Baer oversees the case. Richard N. Golding, Esq., at the Law Offices of Richard N. Golding, P.C. and David P. Leibowitz, Esq., at the Law Offices of David P. Leibowitz, LLC represent the Debtor as counsel. CLAUSEN OYSTERS: Unsecureds to Get Full Payment With Interest ------------------------------------------------------------- Clausen Oysters LLC submitted a Second Amended Plan of Reorganization, dated Dec. 8, 2023. During the bankruptcy case, Clausen Oysters, LLC, was able to negotiate a settlement with the Clausen Family, whereby the $3,500,000 seller note was paid off, and the Clausen Family's related liens and encumbrances were be released, in exchange for a reduced payment of $2,250,000. The payment to the Clausen Family was accomplished through post-petition financing in the amount of $1,897,000, and from capital contributions made by Debtor's member, Haynes Inlet, LLC. The post-petition loan closed, and the Clausen Family was paid on October 13, 2023. With the debt reduced to a more realistic level, Clausen Oysters, LLC has been able to qualify for long-term financing with a lender offering a USDA-guaranteed loan. This type of loan is anticipated to have more favorable terms for the Debtor than would ordinarily be available to the Debtor with conventional loan products. Debtor will work on finalizing and obtaining the USDA-guaranteed loan after the bankruptcy case is closed. The Debtor expects to repay all creditors in full with interest from the Petition Date, in one lump-sum payment that will be made within 210 days of the Effective Date of the Plan. Such payment is expected to be made on or before July 31, 2024. This Plan of Reorganization (the Plan) under chapter 11 of the Bankruptcy Code (the Code) proposes to pay creditors of (the Debtor) from cash flow from operations and additional capital contributions from members. Non-priority unsecured creditors holding allowed claims will receive distributions of 100% of the amount of their allowed claims, without interest. Under the Plan, Class 2 – All non-priority unsecured creditors holding allowed claims will be paid in full with interest at the federal judgment rate, determined as of the Effective Date. Such interest will accrue from the Petition Date until the Class 2 claims are paid in full. Payment to the Class 2 claims will be made in one lump-sum payment within 210 days from the Effective Date of the Plan. Class 2 is impaired Debtor intends to implement the Plan by continuing the operation of its oyster farming and wholesale business, the operation of its deli and restaurant, and using funds contributed by Debtor's member. Attorney for the Debtor in Possession: Nicholas J. Henderson, Esq. MOTSCHENBACHER & BLATTNER LLP 117 SW Taylor St., Suite 300 Portland, Oregon 97204 Tel: (503) 417-0500 Fax: (503) 417-0501 E-mail: www.portlaw.com A copy of the Disclosure Statement dated December 8, 2023, is available at https://tinyurl.ph/akUBG from PacerMonitor.com. About Clausen Oysters Clausen Oysters, LLC, owns an oyster farm in the State of Oregon. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ore. Case No. 23-60847) on May 18, 2023. In the petition signed by Seth Silverman, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Thomas M. Renn oversees the case. Nicholas J. Henderson, Esq., at MOTSCHENBACHER & BLATTNER, LLP, is the Debtor's legal counsel. CLEAR BLUE: Creditors to Get Proceeds From Liquidation ------------------------------------------------------ Clear Blue Pool Supply San Antonio, LLC, filed with the U.S. Bankruptcy Court for the Western District of Texas a Plan of Liquidation dated December 5, 2023. In July 2016, Aaron Thompson formed the Debtor, a pool repair, maintenance, and retail sales business. Clear Blue provides top tier pool and spa maintenance, repair, and janitorial cleaning services to residents of San Antonio and the surrounding areas. Clear Blue's debt problems originated from its use of Merchant Cash Advance Loans (hereinafter "MCA") to pay for its quick growth and to maintain business in the slow winter months where sales decreased by up to 66%. Beginning in 2021 Debtor took out new MCA loans to help it survive COVID, Clear Blue took out a $132,563.43 MCA from PayPal Holdings, Inc. and a $48,427.84 MCA loan from OnDeck Capital (collectively the "MCA Creditors") to pay its staff, maintain its overhead expenses, and generally stay afloat. In spite of these difficulties, Clear Blue made substantial progress toward paying off its creditors, and has been able to pay down its debt to the PAP Entities by $100,000, leaving approximately $114,000 in remaining debt. Additionally, Clear Blue was able to pay down other debts through the sale of pool routes. Clear Blue sold its warehouse location, all contents within the warehouse, 260 maintenance routes, and six company vehicles for $680,000 allowing it to pay down a substantial amount of its debt. While Debtor has made great strides toward eliminating its debt, the most recent MCA creditor arbitration and lawsuit necessitated its bankruptcy filing. Debtor originally hoped to reorganize and continue operations. However, Debtor was unable to fund operations through winter 2024, which is Debtor's slowest time of year, without further financial assistance from PAP. Therefore, Debtor has elected to sell its business as a going concern, which it believes will generate sufficient funds to pay all of its creditors and pay a dividend to its equity holders. Debtor's Plan generally is to liquidate its assets and pay its secured creditors in full through the liquidation sale proceeds in order of their priority. All unsecured creditors will generally be paid their allowed claims with the remaining sale proceeds. To the extent there is not sufficient funds to pay all unsecured creditors in full, then the unsecured creditors shall be paid pro rata. Debtor shall continue to operate and maintain the business until it is sold. The Class 5 claims consist of the allowed general unsecured claims. The Class 5 Claimants shall receive their pro rata share of the proceeds of the Franchise Sale up to the amount of their allowed claims after the costs of sale, secured claims, and payment of all claims of higher priority pursuant to Section 507 of the Bankruptcy Code have been paid. The Class 5 claims consist of Debtor's members. Equity Holders shall retainer their membership interests in the Debtor and shall be entitled to receive all funds remaining from the Franchise Sale after payment of all allowed claims. Further, to the extent any Debtor assets remain after the payment of all allowed claims, the remaining assets may be disposed of by the Debtor and the proceeds distributed to the Equity Holders. Debtor shall continue to operate the franchise business until the business is sold. Debtor is first attempting to sell the franchise directly through help from PAP. Before the Confirmation hearing, if no buyer has been contracted, Debtor shall employ a broker to facilitate the sale. Debtor anticipates a sales price of $600,000 to $850,000. Debtor does not anticipate making disbursements under the plan until the franchise is sold; hence, Debtor does not anticipate substantial consummation of the plan to occur until after the franchise is sold and disbursements made. Debtor has 8 vehicles titled under AJTS Acquisitions and one under Debtor. Debtor intends on keeping three vehicles for the Franchise Sale and selling the remaining vehicles in coordinating with their lien holder Frost Bank. Debtor may sell these vehicles without court permission, provided the net proceeds (after paying Frost Bank the debt associated with the vehicle) are paid into the Debtor's operating account. A full-text copy of the Liquidating Plan dated December 5, 2023 is available at https://urlcurt.com/u?l=8veMAj from PacerMonitor.com at no charge. Attorney for Debtor: Ronald Smeberg, Esq. THE SMEBERG LAW FIRM, PLLC 4 Imperial Oaks San Antonio, TX 78248-1609 Tel: (210) 695-6684 Email: ron@smeberg.com About Clear Blue Pool Supply San Antonio Clear Blue Pool Supply San Antonio, LLC, provides top tier pool and spa maintenance, repair, and janitorial cleaning services to residents of San Antonio and the surrounding areas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No.23-51217-cag) on Sept. 6, 2023. In the petition filed by Aaron J. Thompson, manager, the Debtor disclosed $100,000 in total assets and $500,000 in estimated liabilities. Ronald Smeberg, Esq., at Smeberg Law Firm, represents the Debtor as legal counsel. COJAM CONSTRUCTION: Secured Creditor Proposes Liquidating Plan -------------------------------------------------------------- Vincent Cortazar, as secured creditor of debtor Cojam Construction, Inc., has filed his Plan of Liquidation for the Debtor. A Disclosure Statement for the Plan has been submitted for approval of the Bankruptcy Court in connection with the Plan, which will, if confirmed and effective, sell substantially all of the assets of the estate of the Debtor pursuant to Section 1125 of Title 11 of the United State Code. The Plan provides for the sale of the assets of the Debtor. The Debtor's exclusive period to file a plan expired on December 6, 2023. The Proponent decided that it needed to file its own Plan that provides for the liquidation of the Debtor by the sale of the Property to the highest and best bidder and use the proceeds from the sale to pay Claims. The real property owned by Cojam is commonly known as and located at 29-08 12th Street, Astoria, New York 11102 (the "Cojam Property"). Under the Plan, Class 2 consists of the Cortazar Secured Claim. The Plan allows the Cortazar Secured Claim at $1,991,559.64 plus interest at 9% per annum from March 31, 2021. Subject to the provisions of Article 8 of the Plan with respect to Disputed Claims, the Cortazar Secured Claim will receive on account of such Claim: (a) the Cojam Property pursuant to a credit bid at the Sale of the Cojam Property; and/or (b) a distribution of Available Cash up to payment in full of the Cojam Secured Claim from the proceeds of the Sale of the Cojam Property. The Cortazar Secured Claim is impaired under the Plan. Class 4 consists of the General Unsecured Claims. Subject to the provisions of Article 8 of the Plan with respect to Disputed Claims, the holders of the Allowed Class 4 General Unsecured Claims will receive on account of such Claims a pro rata distribution of Available Cash after payment in full to Class 1 Claims, the Class 2 Claim, the Class 3 Claim, and Statutory Fees and Administrative Claims of Cojam. The General Unsecured Claims are impaired under the Plan. Attorneys for Vincent Cortazar: Marc A, Pergament, Esq. WEINBERG, GROSS & PERGAMENT LLC 400 Garden City Plaza, Suite 309 Garden City, NY 11530 Tel: (316) 877-2424 ext. 226 A copy of the Plan of Liquidation dated December 8, 2023, is available at https://tinyurl.ph/qUSGo from PacerMonitor.com. About Cojam Construction Cojam Construction, Inc., owns a commercial building located at Astoria Boulevard, Long Island City, NY, (aka Welling Court, Long Island City NY) valued at $3 million. Cojam Construction sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 23-42813) on Aug. 8, 2023. The Hon. Elizabeth S. Stong is the case judge. Richard S Feinsilver, Esq., is the Debtor's counsel. The Debtor estimated assets and debt of $1 million to $10 million as of the bankruptcy filing. COMMUNITY HEALTH: Derivative Action Settlement Gets Preliminary OK ------------------------------------------------------------------ Community Health Systems, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that U.S. District Court Judge Eli J. Richardson of the U.S. District Court for the Middle District of Tennessee entered an order preliminarily approving a stipulation and settlement and dismissal with prejudice of the action styled Ayers v. Smith, et al. (Case No. 3:19-cv-00733). The settlement embodied in that stipulation is also intended to dismiss with prejudice the action styled In re Community Health Systems, Inc. Stockholder Derivative Litigation pending in the U.S. District Court for the District of Delaware (Consol. C.A. No. 1:19-cv-01506-GBW). The filing of the Form 8-K with the attached Notice of (I) Pendency and Proposed Settlement of Stockholder Derivative Action; (II) Settlement Fairness Hearing; and (III) Motion for An Award of Attorneys' Fees and Litigation Expenses and Stipulation and Agreement of Settlement provide notice of the proposed settlement and the terms and conditions thereof, as well as deadlines for stockholder objections and a final hearing on the settlement. The purpose of this Notice is to inform of: (i) the stockholder derivative action captioned Ayers v. Smith, Case No. 3:19-cv-00733, pending in the United States District Court for the Middle District of Tennessee; (ii) a proposed settlement of the Action, subject to the approval of the Court pursuant to Rule 23.1 of the Federal Rules of Civil Procedure, as provided in the Stipulation and Agreement of Settlement dated November 13, 2023; (iii) the hearing that the Court will hold on Jan. 29, 2024 at 8:30 a.m. to determine whether to finally approve the proposed Settlement and to consider the application by Plaintiff's counsel, on behalf of all Plaintiffs' Counsel, for an award of attorneys' fees and expenses; and (iv) CHSI Stockholders' rights with respect to the proposed Settlement and the application for an award of attorneys' fees and expenses to Plaintiffs' Counsel. A full-text copy of the Notice is available for free at: https://www.sec.gov/Archives/edgar/data/1108109/000119312523291658/d16716dex991.htm About Community Health Systems Inc. Community Health Systems, Inc. -- http://www.chs.net-- is a publicly traded hospital company and an operator of general acute care hospitals in communities across the country. CHS subsidiaries own or lease 71 affiliated hospitals with approximately 12,000 beds and operate more than 1,000 sites of care, including physician practices, urgent care centers, freestanding emergency departments, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers. As of Sept. 30, 2023, the Company had $14.67 billion in total assets, $15.56 billion in total liabilities, $329 million in redeemable noncontrolling interests in equity of consolidated subsidiaries, and a total stockholders' deficit of $1.22 billion. * * * As reported by the TCR on March 3, 2023, Moody's Investors Service downgraded CHS/Community Health Systems, Inc.'s ("Community") Corporate Family Rating to Caa1 from B3. Moody's said the downgrade of Community's ratings reflects a significant increase in the company's financial leverage and the uncertainty associated with the company's ability to generate positive free cash flow given the tough operating environment. As reported by the TCR on March 13, 2023, S&P Global Ratings raised its rating on Community Health Systems Inc. to 'CCC+' from 'SD'. The outlook is negative reflecting the potential risk of further distressed exchanges over the next year. CONGREGATION BNAI: Case Summary & Nine Unsecured Creditors ---------------------------------------------------------- Debtor: Congregation Bnai Chaim of Murrieta Hot Springs 29500 Via Princesa Murrieta, CA 92563 Business Description: The Debtor is a tax-exempt religious organization. Chapter 11 Petition Date: December 13, 2023 Court: United States Bankruptcy Court Central District of California Case No.: 23-15822 Judge: Hon. Mark D. Houle Debtor's Counsel: James E. Till, Esq. TILL LAW GROUP 120 Newport Center Dr Newport Beach CA 92660 Tel: (949) 524-4999 (310) 721-4645 E-mail: james.till@till-lawgroup.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $100,000 to $500,000 The petition was signed by Tracy Nusbaum as chief executive officer. A full-text copy of the petition containing, among other items, a list of the Debtor's nine unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BASJACQ/Congregation_Bnai_Chaim_of_Murrieta__cacbke-23-15822__0001.0.pdf?mcid=tGE4TAMA CROWNROCK LP: Fitch Puts 'BB-' LongTerm IDR on Watch Positive ------------------------------------------------------------- Fitch Ratings has placed CrownRock, L.P.'s 'BB-' Long-Term Issuer Default Rating (IDR) and all issue-level ratings on Rating Watch Positive (RWP). The Positive Watch follows the announcement that Occidental Petroleum Corp. (OXY; BBB- IDR/Outlook Stable) has entered into a definitive agreement to acquire CrownRock in a mostly debt-funded acquisition valued at approximately $12 billion, inclusive of CrownRock's debt. While the CrownRock acquisition is relatively expensive for OXY and leveraging with approximately $10 billion in new debt expected, this is largely offset by OXY's strong standalone FCF generation capability and credible path to near-term debt reduction through FCF and asset sales. The transaction should also benefit OXY's business profile by adding over 150 Mboepd of high quality, liquids-rich Permian production, increasing pro forma production to around 1.4 million boepd from 1.22 million boepd in 3Q23. Fitch expects to resolve the RWP, move CrownRock's existing unsecured bonds under OXY and equalize them with OXY's current 'BBB-' ratings at close, currently expected in 1H24. Although unlikely, the closing of the transaction and resolution of the RWP could take longer than six months. KEY RATING DRIVERS High Quality, Credit Positive Transaction: Fitch views the proposed acquisition positively for CrownRock as the company will benefit from OXY's support as an investment-grade issuer through strong strategic and operational ties post-close. OXY's acquisition of CrownRock will add 94.4k net acres in the core of the Midland basin in Martin, Midland, Howard, Glasscock, and Upton counties. The transaction will more than quadruple OXY's sub-$40 inventory in the Midland basin and add around 153kboepd of high margin, high liquids production. Leveraging Transaction: The transaction is leveraging relative to recent peer transactions, with an 80-85% debt component and will temporarily reverse the headroom OXY built over the past few years by adding over $10 billion in debt. To support its goal of accelerated de-leveraging, OXY announced a revised financial policy to allocate all FCF after common dividends, as well as asset sale proceeds, to balance sheet reduction, with a goal of reducing principal debt below $15 billion. Fitch believes the repayment plan has some execution risk but is credible, with reasonable line of sight for accelerated debt repayment over the next several quarters. Fitch expects OXY's credit metrics will remain within bounds of the 'BBB-' rating under the agency's base case assumptions (WTI oil prices of $75/bbl in 2024, $65/bbl in 2025, and $60/bbl in 2026), but notes a sustained drop in oil prices would be a key risk for repayment given the lack of hedges at OXY. Strong Permian Asset Base: CrownRock's asset base has high liquids exposure (77% liquids, 48% oil) as of 3Q23, with over 80% of its core acreage held by production. Drilling inventory remains robust with nearly 1,250 net horizontal drilling locations that are economic below $60/bbl West Texas Intermediate (WTI), targeting primarily the middle and lower Spraberry, Wolfcamp A, Wolfcamp B and Wolfcamp D intervals. The company's Fitch-calculated half-cycle cost structure also remains one of the lowest among Fitch's Permian peer group at $10.1/boe in 3Q23 and is more competitive than many investment-grade peers. Sub-1.0x Standalone Leverage: Fitch forecasts CrownRock's standalone EBITDA leverage will be maintained below 1.0x throughout the rating horizon following continued reduction of the outstanding 2025 notes through open market repurchases (OMR) and strong EBITDA generation. CrownRock repurchased over $160 million of its 2025 senior notes YTD through the open market, leaving $868 million remaining as of 3Q23. Fitch believes OXY will look to refinance these 2025 notes at a more attractive coupon in the near term. DERIVATION SUMMARY CrownRock is a medium-sized operator with 3Q23 average daily production of approximately 153Mboepd, larger than Permian peers Matador Resources Company (BB-/Outlook Positive; 135Mboepd) and Callon Petroleum Company (B+/Stable; 102Mboepd), but similar to SM Energy Company (BB-/Stable; 154Mboepd). The company's forecast sub-1.0x gross leverage is similar to peers Matador and SM Energy, but lower than Callon. In terms of cost structure, CrownRock's core position in the Midland Basin and continued efficiencies have resulted in Fitch-calculated half-cycle operating costs of $10.1/boe in 3Q23, which is about is about $1/boe-$3/boe more competitive than the Permian peer average. While CrownRock's average realized price historically has been slightly weaker than Permian peers given in-basin hydrocarbon pricing, their peer-leading cost structure results in midcycle unhedged cash netbacks toward the higher end of Fitch's Permian peer average. KEY ASSUMPTIONS - WTI oil price of $78/bbl in 2023, $75/bbl in 2024, $65/bbl in 2025, and $60/bbl in 2026, and $57/bbl in the long term; - Henry Hub natural gas price of $2.80/mcf in 2023, $3.25/mcf in 2024, $3.00/mcf in 2025 and $2.75 in the long term; - OXY Acquisition closes in 1H24; - Average standalone annual production growth in the high single-digit percentage points; - Growth-linked capital expenditures throughout the rating case. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Fitch expects to resolve the RWP upon completion of the contemplated transaction under proposed terms and favorable treatment of CrownRock debt; Factors that could lead to a positive rating action for CrownRock independent of the transaction include: - Continued debt reduction and proactive management of the maturity profile that reduces medium-term refinance risks; - Execution on production growth targets while de-risking prospective intervals that results in average production sustained above 150,000 boepd; - Midcycle EBITDA leverage sustained below 2.0x; - Inability to manage the maturity profile and/or access capital markets that heightens refinance risks; - Midcycle EBITDA leverage sustained above 2.5x; - A change in financial policy or capital deployment strategy that results in a substantially weaker liquidity position and/or leverage exceeding the threshold stated above. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: As of 3Q23, CrownRock's liquidity consists of approximately $142 million of cash on its balance sheet and full availability under the $1.0 billion ($2.0 billion borrowing base) RBL facility. In March, the company amended its credit facility and increased its elected commitment from $700 million to $1.0 billion, increased the borrowing base offered by the lenders from $925 million to $2.0 billion and extended the facility's maturity to 2028. ISSUER PROFILE CrownRock, L.P. is a privately-owned exploration and production company with a core position of oil-weighted acreage in the Midland basin in West Texas. 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 ----------- ------ -------- ----- CrownRock, L.P. LT IDR BB- Rating Watch On BB- senior secured LT BB+ Rating Watch On RR1 BB+ senior unsecured LT BB- Rating Watch On RR4 BB- CROWNROCK LP: Moody's Puts 'Ba3' CFR on Review for Upgrade ---------------------------------------------------------- Moody's Investors Service placed CrownRock, L.P.'s ratings on review for upgrade, including its Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating and B1 senior unsecured ratings. Previously, the outlook was stable. This action follows a definitive agreement reached by CrownRock to be acquired by Occidental Petroleum Corporation (Occidental, Baa3 stable) in a $12.0 billion cash and stock deal, including CrownRock's debt. The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions and regulatory approvals. RATINGS RATIONALE/FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS CrownRock's ratings were placed on review for upgrade based on its potential ownership by Occidental, which has a much stronger credit profile, larger and more diversified asset base, and greater financial resources. CrownRock's Midland basin focused asset base complement Occidental's assets in the area and will add to the company's high-return inventory of drilling locations and provide opportunities to drive operational and capital efficiency improvements. If CrownRock's notes remain outstanding and are assumed or guaranteed by Occidental, then the ratings on the notes would be upgraded to Occidental's rating level. If CrownRock were to become an unguaranteed subsidiary of Occidental post-acquisition and continue to provide separate audited financial statements going forward, then its ratings would likely be upgraded based on the level of parental support. CrownRock, L.P. (CrownRock) is a privately owned independent exploration and production (E&P) company whose core area is in the Permian Basin of West Texas. Occidental Petroleum Corporation, headquartered in Houston, Texas, is a publicly traded independent E&P company with major operations in the Permian Basin, the Rockies, the US Gulf of Mexico, the Middle East and Latin America. It also has significant midstream and chemical businesses. The principal methodology used in these ratings was Independent Exploration and Production published in December 2022. CTC HOLDINGS: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable --------------------------------------------------------------- Moody's Investors Service has affirmed CTC Holdings, L.P.'s Ba3 Corporate Family Rating and its B1 senior secured bank credit facility rating. CTC's outlook was maintained stable. RATINGS RATIONALE The ratings affirmation reflects CTC's solid franchise as an options market maker, good profitability, liquid balance sheet, and strong risk management track record. The firm benefits from sustained oversight from a highly engaged ownership and leadership team. Nonetheless, Moody's said there is an inherently high level of operational and market risk in CTC's relatively narrow principal trading and market making activities, that could result in rapid and severe losses and a deterioration in liquidity and funding in the event of a severe risk management failure. Moody's said that CTC's relatively narrow concentration and specialization in options trading is a constraint to its credit profile, especially compared to peers that have extensive trading capabilities spanning multiple asset classes and product lines. Since the bulk of CTC's trading revenue comes from options-related strategies, it generally performs best during periods of elevated market volumes and volatility, as experienced from 2020 through 2022. CTC has been attempting to improve its diversification by developing trading strategies in different asset classes. However, Moody's expects that the firm will remain concentrated in its core options trading activities for the next 12-18 months. During 2023, market volatility and volumes subsided significantly from 2020-2022 levels, weighing on CTC's results compared to recent prior periods. Moody's said the financial profile risks associated with a sustained period of low volatility and trading volumes is reflected in CTC's rating level. CTC's rating also reflects its propensity to deploy certain longer-duration strategies (i.e. holding positions for days to weeks, rather than minutes to hours) to complement its traditional higher-frequency strategies that could pose greater risks for the firm's creditors if not properly managed given the increased capital intensity and longevity of these trades. CTC's core options market making business results in a high level of balance sheet leverage as measured by tangible assets / tangible equity due to the grossing-up of long and short trading positions in closely related options on the same underlying asset. However, Moody's noted that CTC aims to hedge exposure to directional price moves of the underlying assets with these long and short options positions that are economic offsets. Additionally, its balance sheet size and leverage generally expands and contracts from one period to the next, depending on market conditions and demand for liquidity. CTC's balance sheet intensive trading also creates reliance on prime broker relationships for financing and clearing its trades. However, Moody's noted that CTC has focused on diversifying and improving these relationships on an ongoing basis. Moody's said that the B1-rated senior secured bank credit facility was issued by CTC Holdings, L.P., which is the holding company of the corporate family, and accordingly this rating is one notch below the Ba3 CFR because obligations at the holding company are structurally inferior to those of CTC's operating companies, where the preponderance of the group's liabilities reside. CTC's stable outlook is based on Moody's expectation that the firm will continue to be profitable, even though its sensitivity to lower market volatility and trading volumes could remain a revenue headwind in 2024; that it will sustain its healthy liquidity profile; and that its leaders will continue to place a high emphasis on maintaining an effective risk management and controls framework. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS CTC's ratings could be upgraded should it sustainably improve the quality and diversity of its profitability and cash flows from the development of lower-risk ancillary business activities; grow its equity capital relative to the level of its assets; and reduce reliance or change to more favorable terms in key prime brokerage relationships. CTC's ratings could be downgraded if it were to suffer from a sustained reduction in profitability from market or regulatory changes or experience a substantial trading loss or risk control failure. CTC's ratings could also be downgraded if there were a significant reduction in equity capital or inability to increase capital alongside asset growth either through an unfavorable distribution policy or reduced profitability. Any adverse changes in corporate culture or management quality or shift towards a more aggressive risk appetite could also result in a downgrade. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Securities Industry Market Makers Methodology published in November 2019. DENTAL EXPRESSION: Updates Several Secured & Unsecured Claims Pay ----------------------------------------------------------------- Dental Expression, PLLC, submitted a Fourth Amended Plan of Reorganization dated December 7, 2023. The Debtor is a professional limited liability company operating under the laws of the State of Tennessee. The projected income reveals that there will be sufficient cash flow to meet monthly expenses as well as payments to all classes of creditors under the plan. Claim 3 consists of Allowed Secured Claim of the Great American Finance. Great American Finance holds a perfected security interest in computer and software in the amount of $6,200.00. This claim shall be secured at $2,200.00 with a 6% interest and a payment of $42.53. Payments shall begin 30 days after the Effective Date. Claim 4 consists of Allowed Secured Claim East West Bank. East West Bank holds a perfected security interest in dental supplies in the amount of $72,432.00. This claim shall be secured at $72,432.00 with a 6% interest and a payment of $2,500.00. Payments shall begin 30 days after the Effective Date. Claim 5 consists of Allowed Secured Claim of the City of Memphis. The City of Memphis holds a secured claim in the amount of $8,047.75 for delinquent property taxes. This claim shall be fully secured with an 18% per annum and a monthly payment of $215.45. Payments shall begin 30 days after the Effective Date. Claim 6 consists of Allowed Secured Claim of Shelby County Trustee. The Shelby County Trustee holds a secured claim for unpaid property taxes in the amount of $6,500.00. This claim shall be fully secured with an 18% interest rate per annum and a monthly payment of $228.00. Payments shall begin 30 days after the Effective Date. Claim 8 consists of the Unsecured Claim of Fundation. Fundation holds a general unsecured claim in the amount of $8,060.00. This claim shall be paid a dividend of 20% with 0% interest and a monthly payment of $26.86. Payments shall begin 30 days after the Effective Date. Claim 9 consists of the Deficiency Claim of Patterson Dental Supply. Patterson Dental Supply holds an unsecured claim in the amount of $75,000.00. This claim shall be paid a dividend of 20% with a 0% interest in the amount of $250.00. Claim No. 9 Deficiency Claim of Great American Finance. Great American Finance holds an unsecured deficiency claim in the amount of $4,000.00. This claim shall be paid a dividend of 20% with 0% interest and a monthly payment of $68.66. Payments shall begin 30 days after the Effective Date. The Plan will be funded by: (a) the Cash on hand, that will be transferred to the Reorganized Debtor, on the Effective Date; (b) the weekly income generated by the Debtor. A full-text copy of the Fourth Amended Plan dated December 7, 2023 is available at https://urlcurt.com/u?l=mQLK96 from PacerMonitor.com at no charge. Counsel for Debtor: John E. Dunlap, Esq. Law Office of John E. Dunlap 3340 Polar Avenue, Suite 320 Memphis, TN 38111 Phone: (901) 320-1603 Fax: (901) 320-6914 Email: jdunlap00@gmail.com About Dental Expression Dental Expression, PLLC, is a Tennessee Professional Limited Liability Company. The Debtor sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 23-20354) on Jan. 20, 2023, with $100,001 to $500,000 in both assets and liabilities. Judge Jennie D. Latta oversees the case. The Law Office of John E. Dunlap serves as the Debtor's counsel. DOMUS BWW: 47 East Says Disclosures Inadequate ---------------------------------------------- 47 EAST 34th Street (N.Y.), LP, filed an amended objection to the motion of Domus BWW Funding, LLC and 1801 Admin, LLC for entry of order approving the Disclosure Statement and granting related relief. The foremost purpose of a disclosure statement is to provide creditors and other parties in interest with the information necessary to decide whether to support a plan of reorganization. The Disclosure Statement here in issue plainly fails to do so. Nor could it because the plan itself is missing critical information. The following are some of the most glaring defects in the Disclosure Statement and the Plan: * Under the proposed Plan, the affiliates are being released of any and all fraudulent transfer and preference claims for no consideration. The value of the avoidance claims that are being released is not stated, and the identities of the parties being released is not given in the Disclosure Statement or the Plan. * In addition to fraudulent conveyance and preference claims, on information and belief, the Debtors have indemnification claims against affiliates which are not being pursued, and there also is no mention in the disclosure statement of their existence or value or whether the debtors intend to pursue them. * There is no creditors committee in this bankruptcy, and therefore there is no one to investigate the value of Debtors' assets and the claims being released or not pursued, and the Disclosure Statement makes no mention of any investigation having been conducted by a special committee with experienced counsel and hence it is presumed that no such investigation took place. The Debtors do not appear to have investigated any of their avoidance or indemnification claims, and they certainly were not prosecuted. An independent investigation by an examiner is needed to determine the value of these claims. Alternatively, 47 East needs and is entitled to discovery on these issues, as well as other plan confirmation issues that may arise, and the timing of such discovery will need to be incorporated into the Plan confirmation process. * The Disclosure Statement does not accurately describe the New York action that 47 East is currently litigating against the Debtors (47 East 34th Street (NY), L.P. v BridgeStreet Worldwide, Inc., et al., Index No. 653057/2018, pending in the Appellate Division of the New York Supreme Court). It also makes statements of disputed fact that are the subject of the pending litigation in New York, which statements potentially negate 47 East's claims in New York State Court. * The Disclosure Statement lacks critical financial information regarding the Debtors and their Plan, including, inter alia, a liquidation analysis and a feasibility analysis, and contains insufficient information regarding the various classes of creditors and the funding of the Plan. Moreover, the Plan is patently unconfirmable, and hence the Disclosure Statement should not be approved. Among other things, the releases and exculpation clauses are overly broad. Counsel for 47 East 34th Street (NY), L.P.: Martin J. Weis, Esq. Ira N. Glauber, Esq. Yonit A. Caplow, Esq. DILWORTH PAXSON LLP 1500 Market St., Suite 3500E Philadelphia, PA 19102 Tel: (215) 575-7000 E-mail: mweis@dilworthlaw.com ycaplow@dilworthlaw.com About Domus BWW Funding Domus BWW Funding, LLC, and 1801 Admin, LLC, filed their voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Lead Case No. 22-11162) on May 3, 2022, listing up to $500,000 in assets and up to $50,000 in liabilities. Judge Eric L. Frank presides over the cases. The Debtors tapped Aris J. Karlis, Esq., at Karalis PC as bankruptcy counsel. Dinsmore & Shohl LLP, McGuireWoods LLP, Landis Rath & Cobb LLP, Perkins Coie LLP, Gateley Plc, Anderson Kill PC, and Dechert LLP serve as special counsel. DOTLESS LLC: Seeks to Hire Bilu Law PA as Bankruptcy Counsel ------------------------------------------------------------ Dotless, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Bilu Law, PA as counsel. The Debtor requires legal counsel to: (a) give advice with respect to the powers and duties of the Debtor in the continued management of its business operations; (b) advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; (c) prepare legal papers; (d) protect the interest of the Debtor in all matters pending before the court; and (e) represent the Debtor in negotiation with its creditors in the preparation of a plan. The hourly rates of the firm's counsel and staff are as follows: Partner $425 Associate Attorney $395 Paralegal/Legal Assistant $225 The Debtor agrees to deposit an initial retainer of $10,000. Nicholas Rossoletti, Esq., an attorney at Bilu Law, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Nicholas G. Rossoletti, Esq. Bilu Law, PA 2760 W. Atlantic Blvd. Pompano Beach, FL 33069 Telephone: (954) 596-0669 Facsimile: (954) 427-1518 Email: nrossoletti@bilulaw.com About Dotless LLC Dotless, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-19341) on November 13, 2023. In the petition signed by Aaron Pace, manager, the Debtor disclosed under $1 million in both assets and liabilities. Judge Mindy A. Mora oversees the case. Nicholas G. Rossoletti, Esq., at Bilu Law, PA serves as the Debtor's counsel. EAST ALLEGHENY SD: Moody's Affirms 'Caa1' Issuer & GOLT Ratings --------------------------------------------------------------- Moody's Investors Service has affirmed East Allegheny School District, PA's Caa1 issuer and general obligation limited tax (GOLT) ratings. The stable outlook was removed and the ratings have no outlook. Moody's maintains an A1 (fiscal agent) enhanced rating on all of the district's outstanding debt, which is unaffected by this action. The district has roughly $34.2 million in debt outstanding. RATINGS RATIONALE The Caa1 rating reflects the district's highly pressured financial position that will continue to be weak without major budget adjustments. The district's costs continue to increase while the school board has elected not to increase its property tax levy in 12 years, resulting in a persistently negative fund balance over that same period of time. The district faces a challenging economic environment, including low resident wealth and income levels and declining enrollment. While management expects relatively stable enrollment over the next two years, the district continues to face competition from outside cyber and charter schools. While leverage is moderate, the district has substantial deferred capital needs which will necessitate borrowing over the next two years. Governance is material to the district's credit quality. East Allegheny School District has elevated exposure to governance risks (G-4). Budget management is very weak, as exemplified by the district's inability to restore positive available fund balance and bring structural balance to its budget. Moreover, the district has unfavorable policy credibility and effectiveness, as its capture rate (the percentage of school-aged children within the district's boundaries who attend the district) is weak. The district's transparency and disclosure is in line with peers, and the institutional structure for all Pennsylvania school districts is solid. The lack of distinction between the district's issuer rating and the Caa1 rating on the district's GOLT debt is based on the district's general obligation full faith and credit pledge. The GOLT rating also reflects Pennsylvania school districts' ability to apply for exceptions to the cap on property tax increases for debt service and the Commonwealth's history of granting such exceptions. The district's A1 (fiscal agent) enhanced rating reflects Moody's current assessment of the Pennsylvania School District Intercept Program, which provides that state aid will be allocated to bondholders in the event that the school district cannot meet its scheduled debt service payments. The A1 (fiscal agent) enhanced rating on the Series A of 2018 bonds reflects the presence of language in the bond documents that requires the paying agent to trigger the state aid intercept prior to default. The A1 (fiscal agent) enhanced rating on the Series of 2021 reflects its direct-pay agreement with the commonwealth, in which the district has directed the treasurer of the commonwealth to automatically appropriate its state aid to the fiscal agent for the benefit of bondholders without any further notice required. For the Series of 2021 bonds, the state has agreed to withhold a portion of the commonwealth appropriations due to the district in advance of payments that are due to bondholders. As of audited fiscal 2022 (year-end June 30) financial statements, East Allegheny School District's state aid revenue provides more than sum sufficient debt service coverage. RATING OUTLOOK Moody's does not typically assign outlooks to local government with this amount of debt outstanding. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Significant revenue increase, such that deferred bill payments are reduced - Return to structural balance that moderates the current fund balance deficit or leads to material growth in reserves and liquidity - Upgrade of the commonwealth's rating and state aid intercept program rating (enhanced) FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Failure to provide for timely principal or interest payments on any debt obligation - Significant decline in enrollment - Downgrade of the commonwealth's rating and state aid intercept program rating (enhanced) LEGAL SECURITY All of the district's outstanding debt is secured by its general obligation limited tax pledge, which is subject to the limitations of Pennsylvania's Act 1 index. The district's debt is further enhanced by the Pennsylvania School Intercept Program. The intercept program is not a general obligation guarantee of the Commonwealth, and in fact, there have been times when the state has not distributed any aid to school districts, as was the case during the 2016 state budget impasse. However, with implementation of Act 85 in 2016, the state has ensured that intercept payments, for the benefit of bond debt service, will be made even in the absence of an appropriation budget. PROFILE East Allegheny School District is located in Allegheny County (Aa3 stable), just east of downtown Pittsburgh (A1 stable). The district serves 1,421 as of the current (2023-2024) school year and operates one elementary school and one junior/senior high school. The district provides grades 8-12 instruction for students of Duquesne City School District (not rated), which only provides K-7 instruction. METHODOLOGY The principal methodology used in these ratings was US K-12 Public School Districts Methodology published in January 2021. EAST BROADWAY: Court Confirms BOH's Plan of Liquidation ------------------------------------------------------- Judge David S. Jones has entered an order confirming Bank of Hope's Fourth Amended Chapter 11 Plan of Liquidation and approval of Fourth Amended Disclosure statement on a Final Basis Bank of Hope is authorized to take any and all actions and execute and deliver any and all agreements, instruments, and documents that they deem necessary and appropriate to effect and consummate the Plan and carry out this Order, including executing the Plan Administrator Agreement. The Plan Administrator Agreement is approved. The Plan's Exculpation Clause, Article VIII.B. is revised to read as follows: To the fullest extent permitted under sections 1123 and 1125 of the Bankruptcy Code and as provided herein, neither the City, BOH, nor any of their respective officers, directors, employees and other agents, financial advisors, attorneys, and accountants, or their respective successors-in-interest, who have been actually involved in the bankruptcy case, shall have any liability to any holder of any Claim or Interest for any act or omission between the Petition Date and the Effective Date in connection with or arising out of the negotiation, preparation, and pursuit of Confirmation of the Plan, the consummation of the Plan, the administration of the Plan, Plan solicitation, or the property to be distributed under the Plan, except for liability based upon actual fraud, willful misconduct or gross negligence as determined in a Final Order by a court of competent jurisdiction. For the avoidance of doubt, nothing in the Plan shall limit the liability of attorneys to their respective clients pursuant to Rule 1.8(h) of the New York Rules Professional Conduct (22 N.Y.C.R.R. § 1200) or affect any criminal enforcement action. Notwithstanding anything to the contrary in the Plan, GlassRatner Advisory & Capital Group, LLC, as Plan Administrator, is authorized to disburse funds pursuant to and in accordance with the provisions of the Plan to Debtor's creditors, after all claims are reconciled and any objections are decided. The Plan Administrator is not required to post a bond. Bank of Hope ("BOH") and the City proceeded as discussed during the March 23, 2023 hearing. BOH and the City reached out to the interested parties, as well as the Debtor, and requested their best and final offers by April 11, 2023. Each interested party timely submitted its best and final offer by the deadline. BOH and the City collectively determined that the improved offer from Broadway East Group, LLC was the highest and best offer. BOH and the City decided to go forward with the assignment to Broadway East Group, LLC as the Approved New Tenant. BOH thereafter filed the Plan in order to effectuate the transaction with Broadway East Group, LLC as the Approved New Tenant. As evidenced by the Certification of Ballots, the Plan was accepted by all voters thereon, and said voters comprised three impaired classes of creditors in Classes 1, 4A, and 4B, all of which voted to accept the Plan, with the Insider votes of Class 5 having been deemed to reject the Plan. Based upon the New Lease and the relevant terms in the Plan and Plan Supplement, Bank of Hope, the City and the Approved New Tenant will have sufficient funds to consummate the Plan. The Plan has been proposed in good faith, for proper purposes, and not by any means forbidden by law, and thus satisfies Section 1129(a)(3) of the Bankruptcy Code. In so finding, the Court has considered the totality of the circumstances of the chapter 11 case. The Plan was proposed with the purpose of liquidating the Debtor and maximizing the value for Debtor's stakeholders. The Plan implements a result that is consistent with the standards and goals of the Bankruptcy Code, including maximizing the value available for distributions and providing for the fair and equitable distributions to creditors, and is fair, just, and reasonable under the circumstances. Bank of Hope filed an administrative expense claim for its attorneys' fees and expenses in the amount of not less than $188,000.00 [Claim No. 13-1] relating to the preparation, development, filing and pursuit of confirmation of the plan through June 30, 2023. The Plan's Final Bar Date, which requires administrative claimants to file a request for payment of administrative expenses incurred after June 30, 2023 on or prior to the first business day that is 15 days following the Effective Date, is modified to the first business day that is 30 days following the Effective Date. All administrative expense claims incurred during this period must be filed and served on Bank of Hope by the Final Bar Date. The Court retains jurisdiction to allow or reject Administrative Expense claims, however no hearing is required if approval of the claim is on consent of the Bank, the City and the Approved New Tenant. About East Broadway Mall East Broadway Mall, Inc., operates a commercial mall located at 88 East Broadway in the City, County and State of New York. On March 1, 1985, the Company entered into a 50-year lease commercial lease, with the City through the New York City Department of General Services for use of land beneath the Manhattan Bridge. Upon execution of the lease, the Company expended more than $1 million to construct a mall on the land. East Broadway Mall, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-12280) on July 12, 2019. In the petition signed by its president, Grace Chan, the Debtor was estimated to have assets and debts of less than $50,000. The Debtor hired Sferrazza & Keenan, PLLC, as counsel, and The Carey Group LLC, as special counsel. ELDAN LLC: To Seek Plan Confirmation on Jan. 24 ----------------------------------------------- Judge August B. Landis has entered an order that the proposed Disclosure Statement of Eldan, LLC is approved on a conditional basis. Solicitation Packages, must be distributed to Holders of Allowed Claims in Class 1 (Secured Claims), Class 3 (General Unsecured Claims) and Class 4 (Equity Holders) in the Plan, which Classes are designate as Impaired under the Plan and entitled to vote to accept or reject the Plan. The Debtor is excused from distribution the Notice of Non-Voting Status to Holders of Allowed Claims in Class 2 (LOA Claims) as subordinated insiders. Unless an extension is granted to a creditor by Debtor, all Ballots will be properly executed, completed and the original thereof must be delivered to Debtor's counsel so as to be actually received by no later than 5:00 p.m. (Pacific Time) on January 17, 2024. The combined hearing on final approval of the Disclosure Statement and confirmation of the Plan will be held on January 24, 2024, at 1:30 p.m. (Pacific Time). Objections to approval of the Disclosure Statement and confirmation of the Plan will be filed and served no later than January 17, 2024. All replies to any objections to confirmation will be filed and served no later than January 17, 2024. The ballot summary and any briefs or declarations in support of confirmation will be filed on or before January 20, 2024. Amended Plan of Reorganization Eldan, LLC submitted an Amended Plan of Reorganization. Under the Plan, Class 4 consists of General Unsecured Claims. General unsecured claims are not secured by property of the estate and are not entitled to priority under Section 507(a) of the Bankruptcy Code. Class 3 claims consist of capital investments made by the investing beneficiaries of the Debtor, including the disputed claim of Eliahu Elezra, who asserts a claim of $5,000,000 based upon his initial investment into the Debtor. Elezra asserts a claim in the adversary that he was improperly removed as an equity holder of 50%. To the extent that Elezra's claim is valid, he would be classified as an insider and would be subject to subrogation until all other unsecured creditors have been paid in full. Elezra's equity interest was forfeited in May 2018 under the Amended Operating Agreement that required payment in full of the Elezra loans by May 31, 2018. Default of this provision resulted in forefeiture of all shares and interest in the Debtor over to the remaining members. Pursuant to the terms of the Elezra Settlement, Elezra's will have an allowed unsecured claim. The approved claim amount will not receive payment under the confirmed plan but will be satisfied by receiving a full release of personal liability for all loans of the Debtor as well as other loans outside of the bankruptcy estate, as set forth in the settlement agreements. The Elezra claim will be deemed withdrawn on the Effective Date of the confirmed Plan of Reorganization. There are no other know claim holders of general unsecured debts other than ongoing operating expenses. General unsecured claims amount to approximately $0 in undisputed claims. After payment of the Class 1 claims, the general unsecured creditors will be paid 100% of their allowed claim. Each Class 4 claimants receive a vote to either accept or reject the Plan, unless there is an objection to their claim. Class 4 is impaired. The Debtor will implement his Plan by having Tomer Itzhaki, a manager of the Debtor, continue to serve as a Plan Agent for payment of Claims pursuant to the Plan. Tomer Itzhaki will manage the Debtor's daily operations of the Property. Attorney for Debtor: Timothy P. Thomas, Esq. LAW OFFICE OF TIMOTHY P. THOMAS, LLC 1771 E. Flamingo Rd., Suite B-212 Las Vegas, NV 89119 Tel: (702) 227-0011 Fax: (702) 227-0334 E-mail: tthomas@tthomaslaw.com A copy of the Order dated December 8, 2023, is available at https://tinyurl.ph/MBwUc from PacerMonitor.com. A copy of the Plan of Reorganization dated December 8, 2023, is available at https://tinyurl.ph/fgobX from PacerMonitor.com. About Eldan LLC Eldan, LLC is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). It is the fee simple owner of a commercial property located at 5875 S. Rainbow, Las Vegas, having an appraised value of $7 million. Eldan filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 22-10589) on Feb. 21, 2022, listing $7,392,463 in assets and $3,623,919 in liabilities. Daniel Itzhaki, managing member, signed the petition. Judge August B. Landis oversees the case. Christopher P. Burke, Esq., at The Law Office of Christopher P. Burke, serves as the Debtor's legal counsel. ELITE ROOF: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Elite Roof Group, LLC 2467 E. Hill Grand Blanc, MI 48439 Business Description: The Debtor is a roofing contractor serving residential, commercial, and industrial clients. Chapter 11 Petition Date: December 14, 2023 Court: United States Bankruptcy Court Eastern District of Michigan Case No.: 23-31987 Judge: Hon. Joel D. Applebaum Debtor's Counsel: Peter T. Mooney, Esq. SIMEN, FIGURA & PARKER, PLC 5206 Gateway Centre #200 Flint, MI 48507 Tel: (810) 235-9000 E-mail: pmooney@sfplaw.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Matthew Camargo as sole member. A copy of the Debtor's list of 20 largest unsecured creditors is now available for download at PacerMonitor.com. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/L3MTXNA/Elite_Roof_Group_LLC__miebke-23-31987__0001.0.pdf?mcid=tGE4TAMA ESTUARY OYSTERS: Jodi Daniel Dubose Named Subchapter V Trustee -------------------------------------------------------------- The U.S. Trustee for Region 21 appointed Jodi Daniel Dubose, Esq., at Stichter, Riedel, Blain & Postler P.A. as Subchapter V trustee for Estuary Oysters, LLC. Ms. Dubose will be paid an hourly fee of $350 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Dubose declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Jodi Daniel Dubose, Esq. Stichter, Riedel, Blain & Postler P.A. 41 N. Jefferson Street, Suite 111 Pensacola, FL 32502 Phone: (850) 637-1836 Email: jdubose@srbp.com About Estuary Oysters Estuary Oysters, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-40469) on Dec. 1, 2023, with $100,001 to $500,000 in both assets and liabilities. Judge Karen K. Specie oversees the case. Michael Moody, Esq., at Michael H. Moody Law, P.A. represents the Debtor as bankruptcy counsel. EVENTIDE CREDIT: Hires Donlin as Claims Agent --------------------------------------------- Eventide Credit Acquisitions, LLC and BWH Texas LLC seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Donlin, Recano & Company, Inc. as notice, claims and balloting agent. Donlin will oversee the distribution of notices and will assist in the maintenance, processing, and docketing of proofs of claim filed in the Chapter 11 cases of the Debtors. The hourly rates of Donlin's professionals are as follows: Senior Bankruptcy Consultant $167 - $203 Case Manager $153 - $167 Consultant/Analyst $126 - $149 Technology/Programming Consultant $86 - $122 Clerical $40 - $50 The Debtors will provide Donlin a retainer in the amount of $15,000. Lisa Terry, a senior legal director at Donlin Recano & Company, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Lisa C. Terry Donlin, Recano & Company, Inc. 48 Wall Street New York, NY 10016 Telephone: (619) 346-1628 About Eventide Credit Acquisitions Eventide Credit Acquisitions, LLC, a Dallas-based company, filed voluntary Chapter 11 petition (Bankr. N.D. Tex. Lead Case No. 23-90007) on Sept. 6, 2023. On October 9, 3023, its affiliate, BWH Texas LLC, filed its voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code. In the petition signed by Matt Martorello, manager, Eventide Credit disclosed up to $100 million in both assets and liabilities. Judge Mark X. Mullin oversees the cases. The Debtors tapped Forshey Prostok as bankruptcy counsel and Donlin, Recano & Company, Inc. as notice, claims and balloting agent. FARFETCH LTD: Moody's Cuts CFR to Caa2, Under Review for Downgrade ------------------------------------------------------------------ Moody's Investors Service has downgraded to Caa2 from B3 the long term Corporate Family Rating of Farfetch Limited (Farfetch or the company), the leading global platform for the luxury fashion industry. Moody's also downgraded the company's probability of default rating to Caa2-PD from B3-PD and downgraded to B3 from B1 the rating of the $600 million senior secured first lien term loan borrowed by the company's subsidiary, Farfetch US Holdings, Inc. At the same time Moody's placed the ratings on review for downgrade. Previously, the outlook on both entities was stable. RATINGS RATIONALE Governance considerations in respect of the company's announcement[1] that it would not release third quarter 2023 results and that prior forecasts and guidance should no longer be relied upon were a key driver of the rating action. Moody's considers this has resulted in increased uncertainty about the sustainability of the company's capital structure. In addition, the rating action takes account of (1) the significant deterioration in Farfetch's share price over the past year or more, which, in Moody's opinion, will have a detrimental effect on the company's ability to access capital markets to support its liquidity; and (2) Moody's view that the luxury clothing market is experiencing soft demand as consumers in various parts of the world have pared back on discretionary spending, making it likely that the rating agency's previous base case forecasts for Farfetch for 2023 and 2024 will not be achieved. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade is unlikely given the ratings are on review for downgrade. Moody's review will focus on the company's future prospects, its liquidity, and the sustainability of its capital structure. Confirmation of the Caa2 CFR would likely require Moody's review resulting in the rating agency gaining comfort that the company will have sufficient liquidity for at least the next 12-18 months to give it time to grow its earnings to an extent that its capital structure can become sustainable. Conversely, a downgrade, potentially of several notches, is likely in the event that Moody's review concludes that dwindling liquidity is likely to result in a financial restructuring. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS Moody's considers the founder driven entrepreneurial culture to be important for governance considerations. The dual class voting structure means that the CEO, Mr Neves, holds over 70% of the voting rights (as of December 31, 2022), limiting the extent to which other shareholders can influence corporate matters. Moreover, Moody's believes that the broader shareholder base is particularly focused on upside potential. In combination, the rating agency feels there is more limited certainty that strategic decisions and financial policies will be balanced between the interests of shareholders and creditors than in the cases of more mature slower growth businesses. STRUCTURAL CONSIDERATIONS The B3 rating of the senior secured first lien term loan in the name of Farfetch US Holdings, Inc is two notches higher than the CFR. This reflects the loss absorption cushion provided by the unsecured and structurally subordinated Convertible Notes issued by Farfetch Limited. In its Loss Given Default calculations Moody's has used a 50% recovery rate assumption, applicable to capital structures with more than one class of debt. While the security package for the term loan comprises guarantees from other group companies, share pledges, and security interests over bank accounts, inter-group receivables and intellectual property, the rating agency notes the asset light nature of Farfetch's business. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Services published in November 2021. CORPORATE PROFILE London headquartered Farfetch Limited is the leading global platform for the luxury fashion industry, operating the Farfetch Marketplace which connects consumers around the world with over 1,400 brands, boutiques and department stores. The company's additional businesses include Browns and Stadium Goods, which offer luxury products to consumers, New Guards Group, a platform for the development of global fashion brands, and Farfetch Platform Solutions, which services enterprise clients with e-commerce and technology capabilities. The company is listed on the New York Stock Exchange and has a current market capitalisation of around $0.3 billion (compared with around $4 billion when Moody's initiated its rating in September last year). In the 12 months to June 2023 it generated revenues of $2.35 billion. FIRST QUANTUM: Fitch Gives 'B+' LongTerm IDR on Watch Negative -------------------------------------------------------------- Fitch Ratings has placed First Quantum Minerals Ltd.'s (FQM) Long-Term Issuer Default Rating (IDR) and senior unsecured rating of 'B+' on Rating Watch Negative (RWN). The Recovery Rating on the debt instruments is 'RR4'. The RWN follows the recent suspension of operations at the Cobre Panama mine due to a port blockade and a government order following Panama's Supreme court ruling that a law on the mine's new concession agreement is unconstitutional. Any material and protracted disruption to operations at Cobre Panama would negatively affect the company's financial profile, lead to a significant deterioration of its liquidity position and uncertainty on its ability to meet debt repayments due in 2025. It will also weaken geographic diversification, which could lead to a reassessment of Fitch's approach in determining the applicable Country Ceiling. Fitch expects to resolve the RWN once Fitch has greater clarity on prospects for the resumption of commercial operations and the refinancing of upcoming bonds due in April 2025, which may take place subsequent to six months in the future. KEY RATING DRIVERS Cobre Panama Disruption Detrimental to Ratings: Cobre Panama is a key asset to the company accounting for around 50% of FQM's EBITDA and 45% of its copper production in 2022. Under its base case Fitch assumes a six-month outage in 2024, which would entail EBITDA dropping below USD2 billion (versus USD2.4 billion in 2023) and EBITDA gross leverage rising to 3.8x (3.5x in 2023), although still below negative leverage sensitivities of 4x. A permanent loss of the mine would lead to a further deterioration of the company's financial profile and its business profile due to a reduction in diversification of earnings beyond Africa (Zambia). Resolution Uncertain: Given the widespread social unrest in Panama, the unconstitutionality ruling and the government order to close the mine there is no clear visibility as to when and if FQM will be able to re-open the mine. Fitch believes there is potential for a resumption of operations following national elections scheduled for May, where a change in government could lead to a renegotiation of the concession contract. However, Fitch notes that given the rapidly evolving political, legal and social situation, the timescale and outcomes are subject to considerable uncertainties over the coming months. Deteriorating Liquidity Position: Under a scenario of a months-long disruption to Cobre Panama, Fitch expects FQM's liquidity position to come under substantial pressure. Fitch estimates a cash position of USD1.1 billion at end-2023 and EBITDA of USD1.9 million in 2024, which Fitch believes will be sufficient to cover all capex, interest payments and maturities due in 2024. However, Fitch believes FQM will not have sufficient liquidity to repay its USD1.05 billion bond ahead of its due date in April 2025, without obtaining refinancing in some form, even after budget trimming and potential equity stake disposals. FQM has capacity to incur at least secured debt, which provides a path to 2025 bond refinancing. All new debt would be subject to the maintenance covenant in the facilities agreements. Covenant Breach Possible In Stressed Scenario: In a stress scenario of a permanent Cobre Panama closure, Fitch forecasts the group's Fitch-adjusted EBITDA net leverage to increase to well over 5x in 2024 (from 2.9x in 2023), which could breach the term loan and RCF facility covenant of net debt to EBITDA of 3.5x (USD1.4 billion streaming agreement for Franco-Nevada is not included into covenant calculation). If unresolved, the covenant breach may trigger an event of default across all its debt instruments. However, Fitch does not expect any covenant breach under its base case of a six-month closure. Budget Trimming Will Be Prioritised: In a scenario where Cobra Panama is suspended for a protracted period of time, FQM will focus on cutting operating costs and capex through the business where possible in order to maximize liquidity. Fitch estimates capex at Cobre Panama will be significantly reduced in 2024 while in care and maintenance, although Fitch assumes less capex flexibility at Zambian operations where significant outlays have already been committed to the Kansanshi S3 expansion. Applicable Country Ceiling Remains Panama: Given FQM's diversification of earnings from several jurisdictions, Fitch applies a multiple-countries approach to determine the applicable Country Ceiling for FQM, in this case Panama's at 'AA-'. Assuming that Cobre Panama is shut down only for six months in 2024, cash flows generated from Panama are likely to be sufficient to cover hard currency gross interest expense, which will support the applicability of Panama's Country Ceiling. Should production at Cobre Panama be halted for a very protracted period of time or indefinitely, Fitch would apply Zambia's Country Ceiling of 'B-' instead. ESG -- Exposure to Social Impact: A ramp up in widespread social unrest in Panama and growing opposition to FQM's Cobre Panama in recent months has accelerated a Supreme Court ruling that a new mining concession law for the mine is unconstitutional, and prompted the government to order the closure of the mine. The protests have led to a blockade at the mine port, preventing the import of coal needed to power the asset and leading to the suspension of operations in late November, which may have a material impact on the company's business and financial profile. This resulted in placement of the ratings on RWN and revision of ESG Relevance Score for Exposure to Social Impacts to '5' from '3'. DERIVATION SUMMARY FQM's peers include copper producers Freeport-McMoRan Inc. (BBB-/Positive), Hudbay Minerals Inc. (BB-/Stable) and precious metals producers like Endeavour Mining plc (BB/Stable). FQM and Freeport both focus on copper and are among the top 10 global producers. FQM is smaller with production of 775,859 tonnes in 2022 compared with Freeport's 1.9 million tonnes. FQM's medium-term cost position is in the third quartile while Freeport's assets on average are placed below the 50th percentile due to low-cost operations at its Grasberg mine. Freeport benefits from wider diversification across geographies with a more stable operating environment and more sizable assets with longer reserve life. Freeport's medium-term EBITDA gross leverage is below 2.0x. FQM has a stronger business profile than Hudbay due to a much larger scale and longer reserve life but a less competitive cost position. However, Hudbay operates in the lower-risk jurisdictions of Canada and Peru, and has some commodity diversification. Fitch expects Hudbay's EBITDA gross leverage to remain below 2.5x. Endeavour Mining, a gold miner in west Africa, is smaller than FQM (assuming current scale) but with a better cost position in the second quartile. Operations are spread across three countries, Senegal, Cote d'Ivoire and Burkina Faso. Burkina Faso has a very weak operating environment with many challenges, including security. Endeavour's rating balances its strong financial and business profiles, including a conservative financial policy of maintaining net debt/EBITDA below 0.5x through the cycle, with a weaker operating environment, reflecting the group's focus on west African countries. The applicable Country Ceiling is Cote d'Ivoire's 'BB'. KEY ASSUMPTIONS - Prices over 2023-2026 in line with Fitch price assumptions for copper, gold and nickel; - Six-month disruption to operations at Cobre Panama; - Reduced capex at Cobre Panama in 2024 with some re-phasing in 2025 and 2026; - No dividends from 2024; - No large debt-funded acquisitions over the next four years; - Existing royalties in Panama replaced by a minimum tax contribution of USD375 million payable in its forecast. RECOVERY ANALYSIS KEY RECOVERY ANALYSIS ASSUMPTIONS The recovery analysis assumes that FQM would be considered a going concern in bankruptcy and that it would be reorganised rather than liquidated. The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA upon which Fitch bases the valuation of the company. Its going-concern EBITDA estimate of USD2 billion assumes significant operational disruption followed by a moderate recovery. An enterprise value/EBITDA multiple of 4.5x was used to calculate the post-reorganization enterprise value, which factors in FQM's scale, growth prospects and exposure to Zambia and weak mining operating environment in Panama. FQM's senior secured RCF is assumed to be fully drawn. Secured debt reflected in the waterfall comprised a combined USD2.5 billion RCF and a term-loan bank facility, and a USD1.4 billion streaming agreement with Franco-Nevada related to the Cobre Panama project (at September 2023). Senior unsecured debt reflected in the waterfall was USD5.3 billion consisting of USD4.85 billion bonds and a USD423 million FQM Trident term loan (at September 2023). After deducting 10% for administrative claims and taking into account Fitch's Country-Specific Treatment of Recovery Ratings Criteria, its analysis resulted in a waterfall-generated recovery computation (WGRC) in the 'RR4' band, indicating a 'B+' instrument rating. The WGRC output percentage on current metrics and assumptions was 50%. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - The ratings are on RWN, and Fitch, therefore, does not expect a positive rating action at least in the short term. However, a restart of Cobre Panama and a clear path to the refinancing of the company's 2025 bond could lead to a removal of RWN and the affirmation of the rating with a Stable Outlook. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Prolonged operational disruption at Cobre Panama leading to EBITDA gross leverage sustained above 4.0x; - Material deterioration in liquidity and increasing refinancing risk - A significant reduction in the diversification of earnings caused by material and protracted disruption to operations in Panama; - Signs of a deteriorating operating environment in Zambia. LIQUIDITY AND DEBT STRUCTURE Deteriorating Liquidity: At end-September 2023, FQM's unrestricted cash balances amounted to USD1.1 billion and it had available USD1 billion of a committed undrawn RCF (with maturity in October 2025). Fitch estimates FQM should have sufficient liquidity to cover all capex, interest payments and maturities due next year but will experience a significant shortfall in 2025 unless it refinances its USD1.05 billion bond due in April of that year and extends its RCF. ISSUER PROFILE FQM is a medium-sized miner in the top 10 global copper companies (sixth largest in 2022 with 0.8mt of copper produced). It produces copper in the form of concentrate, cathode and anode, as well as gold, silver, zinc and nickel. Major assets are located in Zambia and Panama with smaller operations in Spain, Mauritania, Australia, Turkey and Finland. ESG CONSIDERATIONS First Quantum Minerals Ltd.'s ESG Relevance Score for Exposure to Social Impacts was revised to '5' from '3', which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in the placing of the company's ratings on RWN. This is due to the recent suspension of operations at Cobre Panama as a result of protesters blockading the mine port and leading to significant uncertainty as to the future operability of the mine. 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 ----------- ------ -------- ----- First Quantum Minerals Ltd. LT IDR B+ Rating Watch On B+ senior unsecured LT B+ Rating Watch On RR4 B+ FIVE POINT: Moody's Gives B3 Rating on New Senior Unsecured Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Five Point Operating Company, LP's proposed senior unsecured notes. The B3 corporate family rating and B3-PD probability of default rating assigned to Five Point Holdings, LLC, the parent holding company of Five Point Operating Company, LP (collectively Five Point), are not impacted by the proposed transaction. The company's speculative grade liquidity (SGL) rating remains SGL-2. The outlook is maintained at stable. The company's existing notes due 2025 can be exchanged for new notes and a pro rata $100 million of cash. The existing notes due 2025 will be stripped of substantially all restrictive covenants and certain events of default while the proposed notes will have more restrictive covenants. However, the B3 rating on the notes due 2025 that are not tendered is not impacted, since these notes and the new notes would be pari passu in a default scenario. Moody's views the proposed transaction as credit positive. Five Point is reducing its balance sheet debt by about 16% due to the cash component of the transaction, resulting in better leverage. Moody's projects that adjusted debt-to-EBITDA will be around 4.5x at year-end 2024. Reduced debt also gives Five Point some financial flexibility to contend with volatility in its revenue and resulting earnings and cash flow. In addition, Five Point will now have an extended maturity profile. The company's revolving credit facility expiration will revert to its stated maturity in April 2026, removing the revolver's springing maturity and essentially all refinancing risk in 2025. Moody's expects that Five Point will have the liquidity to redeem any remaining notes that do not get tendered, which come due in late 2025. The expected increase in interest expense of around $5 million in 2024 and 2025 is not material relative to Five Point's cash interest for the existing notes of about $49 million per year. Moody's projects adjusted EBIT-to-interest expense of nearly 2x by late 2024. RATINGS RATIONALE Five Point's B3 CFR reflects the company's limited scale, with essentially only one of its developments, Valencia, positioned for growth. This limited scale makes Five Point susceptible to the local economy and accentuates the volatility in land development, especially with regard to the predictability in earnings and cash generation. Despite being a publicly-traded company Five Point has concentrated ownership that can influence business decisions, including the long-term deployment of cash and capital. Moody's forecasts low debt leverage, with adjusted debt-to-book capitalization of 21% at year-end 2024, which provides an offset to Five Point's business model. Distributions received from unconsolidated entities should be sufficient to pay the company's cash interest payments for its senior unsecured notes. Further, Five Point should benefit from improving trends in new single-family home construction in 2024. Moody's projects good liquidity, supported by about $118 million of pro forma cash on September 30, 2023, net the cash used for the proposed refinancing transaction. The company has full access to a $125 million asset based revolving credit facility. Unencumbered land holdings further support Five Point's liquidity. The stable outlook reflects Moody's expectation that Five Point will continue to generate cash flow. Good liquidity, no material near-term debt maturities and some improving end market dynamics further support the stable outlook. The B3 rating on Five Point's senior unsecured notes, the same rating as the CFR, results from their position as the preponderance of debt in the company's capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING An upgrade of Five Point's ratings could ensue if end markets remain supportive of organic growth such that the company experiences a material increase in both revenue and consistent cash flow. Adjusted debt-to-book capitalization sustained below 30% and preservation of at least good liquidity would support upward ratings momentum. A downgrade could occur if Five Point's adjusted debt-to-book capitalization increases to above 40%. Negative ratings pressure may also transpire if the company experiences a weakening of operating performance or liquidity. An adoption of aggressive acquisition or financial policies could also be a detriment to Five Point's credit profile. The principal methodology used in this rating was Homebuilding and Property Development published in October 2022. Five Point, headquartered in Irvine, California, is an owner and developer of three mixed-use master-planned communities in California. Lennar Corporation (Baa2 stable) and Castlelake, L.P., through its affiliates, control about 39% and 17%, respectively, of the company's total voting rights. Five Point's revenue for the last twelve months ending September 30, 2023 is $110 million. FTX GROUP: IRS Tax Demands Could Reduce Payouts ----------------------------------------------- Steven Church of Bloomberg News reports that US officials will take money away from victims of the fraud-tainted crypto firm, FTX Trading Ltd. unless a judge rejects the government's demand for $24 billion in unpaid taxes, the bankrupt company said in a court filing. The two sides will be in court Tuesday, December 12, 2023, arguing over the best procedures to determine how much of the Internal Revenue Service claim is legitimate. FTX wants to set a quick schedule to estimate the claim; the IRS has argued that its audit is ongoing, so asking a judge to estimate how much FTX might owe in taxes is inappropriate. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 billion in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. FTX GROUP: Lawyer Says SBF Was 'Worst' Witness ---------------------------------------------- Ava Benny-Morrison of Law360 reports that Sam Bankman-Fried went off-script when he took the stand. That's the view of David Mills, the behind-the-scenes architect of the FTX co-founder's defense at trial. The once high-flying crypto mogul repeatedly veered away from his lawyers' strategy, including on how to handle prosecutors' tough questions on cross-examination. "He may be at the very top of the list as the worst person I've ever seen do a cross examination," says Mills, a Stanford Law School colleague and a close friend of Bankman-Fried's parents. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. GAV REST: Unsecureds to be Paid in Full with Interest in 5 Years ---------------------------------------------------------------- GAV Rest. Corp. submitted a First Amended Plan of Reorganization for Small Business dated December 5, 2023. This First Amended Plan of Reorganization proposes to pay creditors of the Debtor from available cash, proceeds of operations over time, and from a new value contribution from the equity owner of the Debtor. Non-priority unsecured creditors holding allowed class 3 claims will receive payment in full over a period of 5 years from the effective date. This Plan also provides for the payment in full of administrative, secured, and priority claims. Administrative claims will be paid in full on the effective date, or according to the terms of the obligation, or pursuant to agreement with the claimant. Priority creditors will be paid over 5 years from the effective date. Payments to all priority creditors will be made on a monthly basis. Class 1 consists of the Secured Claim of NYS Dept of Taxation. The amount of claim in this Class total $366,702. New York State shall retain its liens to the same extent and priority as existed on the Petition Date. The claim will be Paid paid in full including statutory interest in monthly installments paid over a period not exceeding 5 years from the order of relief. Payments due to New York State will be made by check made out to "The New York State Department of Taxation and Finance" and mailed to the following: Office of the NYS Attorney General, Attention: Leo V. Gagion, 28 Liberty Street, 17th Floor, NY, NY 10005. Class 3 consists of all general unsecured claims. Paid in full with statutory interest over a period not exceeding 5 years from the order of relief. The allowed unsecured claims total $28,982. Payments and distributions under the Plan will be funded by a $40,000 contribution by the Debtor's principal John Kolombos as well as operations of the Debtor over a period of 5 years. By signing this Disclosure Statement, the Debtor's principal represents that he has the funds required and available to fund the plan contribution. The Debtor's counsel Morrison Tenenbaum PLLC shall be the disbursing agent (the "Disbursing Agent") under the Plan. The new value contribution will be funded prior to the hearing on confirmation. If the Debtor and/or Plan Proponent defaults under the Plan after confirmation but prior to entry of a final decree, the Court shall have the authority to appoint a trustee or plan administrator to implement the Plan or take such other actions authorized by Section 1142 of the Bankruptcy Code. The failure by the Reorganized Debtor to make a payment to any creditor pursuant to the Plan shall be an Event of Default. If the Reorganized Debtor fails to cure an Event of Default within 30 days of written notice to the Reorganized Debtor, then creditors may take action in accordance with non-bankruptcy law to collect the balance of its claim without further order of the Bankruptcy Court. A full-text copy of the First Amended Plan dated Dec. 5, 2023, is available at https://urlcurt.com/u?l=mvyshU from PacerMonitor.com at no charge. Attorneys for the Debtor: Lawrence F. Morrison, Esq. Brian J. Hufnagel Morrison Tenenbaum, PLLC 87 Walker Street, Floor 2 New York, NY 10013 Tel: (212) 620-0938 Email: lmorrison@m-t-law.com About GAV Rest. Corp. GAV Rest. Corp. filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 23-10275) on Feb. 27, 2023, with up to $50,000 in assets and $100,001 to $500,000 in liabilities. On March 13, 2023, the case was transferred to the U.S. Bankruptcy Court for the Eastern District of New York under Case No. 23-40800. Judge Jil Mazer-Marino oversees the case. Lawrence F. Morrison, Esq., at Morrison Tenenbaum, PLLC, is the Debtor's legal counsel. GEO. J. & HILDA: Seeks to Hire Conroy Baran as Bankruptcy Counsel ----------------------------------------------------------------- The Geo. J. & Hilda Meyer Foundation seeks approval from the U.S. Bankruptcy Court for the Western District of Missouri to employ the firm of Conroy Baran, LLC to handle its Chapter 11 case. The hourly rates of the firm's counsel and staff are as follows: Robert Baran $295 Ryan E. Shaw $295 Paralegals $95 - $148 In addition, the firm will seek reimbursement for expenses incurred. Prior to the filing, the firm received $100,000 in fee advances from the Debtor. Robert Baran, a member at Conroy Baran, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert S. Baran, Esq. Ryan E. Shaw, Esq. Conroy Baran, LLC 1316 Saint Louis Ave., 2nd FL Kansas City, MO 64101 Telephone: (816) 616-5009 Email: rbaran@conroybaran.com rshaw@conroybaran.com About The Geo. J. & Hilda Meyer Foundation The Geo. J. & Hilda Meyer Foundation owns and operates a senior living community. The Debtor filed Chapter 11 petition (Bankr. W.D. Mo. Case No. 23-41685) on Dec. 4, 2023. In the petition signed by David Schmidt, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Brian T. Fenimore oversees the case. Conroy Baran, LLC serves as the Debtor's counsel. GEORGIA'S PERFECT: Cameron McCord Named Subchapter V Trustee ------------------------------------------------------------ The U.S. Trustee for Region 21 appointed Cameron McCord, Esq., at Jones & Walden, LLC, as Subchapter V trustee for Georgia's Perfect Solutions, LLC. Ms. McCord will be paid an hourly fee of $395 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. McCord declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Cameron McCord, Esq. Jones & Walden, LLC 699 Piedmont Avenue, NE Atlanta, GA 30308 Phone: (404) 564-9300 Fax: (404) 564-9301 Email: cmccord@joneswalden.com About Georgia's Perfect Georgia's Perfect Solutions, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-61994) on Dec. 4, 2023, with $1 million to $10 million in both assets and liabilities. The petition was filed pro se. Judge Lisa Ritchey Craig oversees the case. GOOD GAMING: Raises Going Concern Doubt --------------------------------------- Good Gaming, Inc., said in its Form 10-Q Report filed with the U.S. Securities and Exchange Commission for the three months ended Sept. 30, 2023, there is substantial doubt regarding the Company's ability to continue as a going concern for the next 12 months. As of Sept. 30, 2023, the Company had a working capital deficit of $293,818 and an accumulated deficit of $10,729,601. Good Gaming explained the continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. The Company's Auditor, Victor Mokuolu, CPA PLLC, previously expressed a going concern doubt opinion in an audit report included in the Company's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2022. Victor Mokuolu then said, "We have audited the accompanying consolidated balance sheets of Good Gaming, Inc. as of December 31, 2022, and December 31, 2021, the related consolidated statements of operations, stockholders' deficit, and cash flows for the years ended December 31, 2022, and December 31, 2021, and the related notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and December 31, 2021, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America. The Company's continuing operating losses, working capital deficiency, and accumulated deficit raise substantial doubt about its ability to continue as a going concern for a period of one year from the issuance of the financial statements." The Company has generated minimal revenues to date and has never paid any dividends, and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of Dec. 31, 2022, the Company had a working capital of $514,963 compared to $2,111,655 during the year ended Dec. 31, 2021. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. Good Gaming has gotten smaller since. As of Sept. 30, the Company had $351,607 in total assets against $530,844 in total liabilities, with $10,729,601 in accumulated deficit. As of Dec. 31, 202, the Company had $1,055,996 in total assets and $426,385 total liabilities. For the three months ending Sept. 30, 2023, the Company reported a net loss of $275,547 compared to a net loss of $482,994 for the same period in 2022. For the nine months ending Sept. 30, 2023, the Company reported a net loss of $982,741 compared to a net loss of $1,660,729 for the same period in 2022. For the 12 months ending December 31, 2022, the Company reported a net loss of $2,107,901 compared to a net loss of $338,408 for the 12 months ending December 31, 2021. A full-text copy of the Form 10-K/A Report is available at https://tinyurl.com/mpw8c2h6 About Good Gaming, Inc. Kennett Square, PA-based Good Gaming, Inc. is a tournament gaming platform and online destination targeting over 250 million E-sports players and participants worldwide who want to compete at the high school or college level. GOTO GROUP: Fitch Lowers LongTerm IDR to 'CCC+' ----------------------------------------------- Fitch Ratings has downgraded the Long-Term Issuer Default Ratings (IDR) of LMI Parent, L.P. and its subsidiary, GoTo Group, Inc. (GoTo Group, fka LogMeIn, Inc.) to 'CCC+' from 'B-'. The first lien debt has been downgraded one notch to 'B-' from 'B' and the recovery rating remains 'RR3'. The downgrade to 'CCC+' reflects concerns regarding the company's limited liquidity, which has been diminishing. Cash on the balance sheet has been declining as a result of the company's negative FCF generation in 2022 and Fitch expects FCF to be negative in 2023, which will further erode the company's cash position. In addition, Fitch believes the company's access to the $250 million revolver is restricted due to the company pushing up against its financial covenant for leverage. In addition, the company's revenues continue to show modest overall declines. Fitch previously stated that it would take negative rating action if it had liquidity concerns or if negative revenue growth was sustained. GoTo's credit profile benefits from a large diverse customer base of around 2.5 million small and medium business (SMB) customers, its market position, revenue scale, and the fact that there are no near-term debt maturities. These factors, along with its negative FCF, limited liquidity and high leverage are consistent with the 'CCC+' rating category. KEY RATING DRIVERS Limited Liquidity and Negative FCF: The company's cash position has been declining with a balance of $136 million as of the end of 3Q23, down from $170 million at the end of 2022 and $316 million at the end of 2021 (which benefited from a $198 million divestiture). The company's negative FCF has been a key driver of lower liquidity as well as the company's restricted ability to draw on its revolver. GoTo's FCF in 2022 was negative $55 million, and for the first nine months of 2023 was negative $17 million. Fitch forecasts negative FCF for 2023 and the company's ability to reverse the trend in 2024 is dependent on its ability to have stable or growing EBITDA, which may prove challenging. Fitch could take additional negative rating action if negative FCF persists or accelerates. Potential for a Covenant Violation: The company's ability to draw on its $250 million revolver due August 2025 is dependent on having its first lien net leverage ratio below 7.9x. Due to declining EBITDA, there is very limited covenant headroom. As of the end of 3Q23, the bank defined first lien net leverage ratio was 7.73x, down slightly from 7.86x at the end of 2Q23. There are no revolver borrowings. For the LTM ending 3Q23, Fitch calculates that leverage was 7.6x, up from 7.3x at the end of 2022 due to lower EBITDA generation. Fitch forecasts GoTo group to maintain leverage in the range of 7.0x to 8.0x throughout the rating horizon. Fitch adjusted EBITDA does not include changes in deferred revenues (which have been negative), which is the main driver of the agency's definition of leverage being below the bank definition of leverage for the LTM ending 3Q23, which is unusual. Continued Revenue Declines: The company's product offerings include innovative offerings as well as some legacy offerings that have seen ongoing revenue decline. The company's Core Collaboration segment offers GoToMeetings (web conferencing) and other GoTo solutions that have lost SMB customers and revenues to competitors. Revenues for this segment are expected to be down significantly in 2023. This segment did well in the early days of the pandemic and that favorable impact began modestly winding down in late 2021 and the pace of the decline has since accelerated. The company's Remote Support Group has also been showing revenue declines, but not to the extent of Core Collaboration. Both UCaaS and LastPass have shown growth, and to a lesser extent, Remote Support, but those revenue improvements have not been enough to offset declines in Core Collaboration. Highly Competitive Market: GoTo operates in a crowded competitive environment with large and small players that all compete for the same SMB customers. As competition has increased, GoTo has seen overall revenues decline modestly, largely due to lower results in its Collaboration for web conferencing. Fitch expects GoTo Group to continue facing intense competition across each of its core end markets, including from market leaders who are larger and have greater financial flexibility. While GoTo Group's strategy is focused on providing a comprehensive product platform to the SMB segment, it competes with other SMB focused competitors like 8x8; enterprise focused competitors like RingCentral and Vonage; enterprise solution companies with sizeable installed bases like Microsoft, which offers Teams; and Cisco, which offers Webex. Zoom is another significant competitor that serves all end markets from SMBs to large enterprise customers. Highly Recurring and Diversified Revenues: The majority of GoTo's revenues are subscription based. Additionally, it has a number of contracts that are annual or multi-year contracts and many of those contracts are paid for upfront. Consistent with the fragmented nature of the SMB segment it serves, the company has over 2.5 million paying customers with no customer accounting for more than 0.5% of revenues. Diversified Product Mix: GoTo Group has a variety of product offerings. For the first nine months of 2023, UCaaS (which is largely GoTo Connect) accounted for 34% of revenues and Core Collaboration was 15%. These two segments make up GoTo's Unified Core Collaboration (UCC) offerings. In addition, Remote Support Group accounted for 32% for the quarter's revenues and LastPass was 19%. The LastPass segment has been moved into its own silo and GoTo has been working to create this as a stand-alone entity since December 2021. DERIVATION SUMMARY GoTo Group's rating of 'CCC+' reflects the company's limited liquidity, high leverage and negative FCF. The company benefits from strong recurring revenues and EBITDA margins in the low 30's. The ratings also reflect Fitch's expectation that despite strong secular demand for UCaaS and network security, GoTo Group's revenues are expected to be negatively affected by the highly competitive landscape that the Core Collaboration segment faces. The company's leverage was 7.6x for the LTM ended 3Q23 and Fitch expects it to remain in the range of 7.0x to 8.0x over the rating horizon. GoTo Group has less financial flexibility than other peers in the software sector. Like other private equity owned issuers, Fitch believes that the company's focus is ultimately on ROE rather than debt reduction, and, furthermore, Fitch projects that GoTo may need access to additional capital to help with the company's liquidity. Fitch rates the IDRs of the LMI Parent, L.P, and its wholly-owned subsidiary, GoTo Group, Inc. on a consolidated basis, using the weak parent/strong subsidiary approach and open access and control factors, based on the entities operating as a single enterprise with strong legal and operational ties. KEY ASSUMPTIONS - Fitch assumes revenues decline in the low to mid-single digits in 2023 through 2025 before stabilizing. It is assumed that the decline from Core Collaboration cannot offset the modest growth in GoTo Group's other segments; - EBITDA margins remain in the low to mid 30's over the rating horizon; - Capex remains low and in the range of 3.5% to 4.0% over the rating horizon; - Fitch assumes FCF is negative in 2023 and in 2024, FCF is modestly positive due to lower floating interest rates; - Debt repayments are limited to mandatory amortization payments; - No assumptions are made for dividends or acquisitions. RECOVERY ANALYSIS RECOVERY ANALYSIS ASSUMPTIONS The recovery analysis assumes that GoTo Group would be reorganized as a going-concern entity in bankruptcy rather than liquidated. A 10% administrative claim is assumed. The recovery analysis also assumes pressure in the form of sustained customer churn at the Core Collaboration segment, which is assumed to continue to lose SMB customers to the competition such as Zoom, Microsoft Teams, Webex, 8x8, and RingCentral. As a result, Fitch assumes this causes adjusted EBITDA to decline to $380 million. Fitch applies a 6.0x multiple, down from 6.5x, to arrive at a going concern enterprise value (EV) just under $2.3 billion. The recovery multiple was lowered to reflect the decline in revenues and EBITDA for the company. TEV/EBITDA Multiple Rationale: An EV Multiple of 6.0x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: - Fitch's Bankruptcy Enterprise Values and Creditor Recoveries showed that bankruptcy case study exit multiples for technology peer companies ranged from 2.6x-10.8x. - Of these companies, only five were in the Software sector: Allen Systems Group, Inc. (8.4x), Avaya Inc. (2017: 8.1x and 2023: 7.5x); Aspect Software Parent, Inc. (5.5x), Sungard Availability Services Capital, Inc. (4.6x) and Riverbed Technology Software (8.3x). As a result, Fitch rateed the first lien credit facilities 'B-'/'RR3', one notch above GoTo Group's 'CCC+' IDR. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Positive FCF generation on a sustained basis; - Sustained revenue growth of mid-single digits, implying an overall stable market position; - Cash from operations less capex to total debt above 3% on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Revenue declines beyond single digit declines; - Accelerating negative FCF; - Lack of liquidity from the capital markets and the sponsor, which could hamper the company's ability to conduct operations. LIQUIDITY AND DEBT STRUCTURE Limited Liquidity: As of Sept. 30, 2023, GoTo Group had cash on the balance sheet of $136 million. The company has a $250 million revolver due August 2025 and Fitch believes access to this is restricted given a lack of cushion on the financial covenant for the first lien net leverage ratio (as defined by the bank agreement), which cannot exceed 7.9x. ISSUER PROFILE LMI Parent, L.P. is the parent of its wholly-owned subsidiary, GoTo Group, Inc. (GoTo Group, fka LogMeIn Inc.). GoTo Group focuses on unified communication and collaboration (through Unified Communication as a Service [UCaaS] and its collaboration solutions), identity access management, and remote support for the SMB market. 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 ----------- ------ -------- ----- GoTo Group, Inc. LT IDR CCC+ Downgrade B- senior secured LT B- Downgrade RR3 B LMI Parent, L.P. LT IDR CCC+ Downgrade B- GREATER LIGHT: Case Summary & Two Unsecured Creditors ----------------------------------------------------- Debtor: Greater Light Baptist Church of Sacramento d/b/a The Light Christian Church d/b/a Greater Light Church d/b/a Greater Light Baptist Church 7257 E. Southgate Drive Sacramento, CA 95823 Business Description: The Debtor is a tax-exempt religious organization. Chapter 11 Petition Date: December 13, 2023 Court: United States Bankruptcy Court Eastern District of California Case No.: 23-24467 Judge: Hon. Fredrick E. Clement Debtor's Counsel: Gabriel E. Liberman, Esq. LAW OFFICES OF GABRIEL LIBERMAN, APC 1545 River Park Drive., Ste 530 Sacramento, CA 95815 Tel: 916-485-1111 Fax: 916-485-1111 E-mail: attorney@4851111.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Pastor O.J. Swanigan as president/pastor. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DBC4ZRQ/Greater_Light_Baptist_Church_of__caebke-23-24467__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Two Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Internal Revenue Service $25,000 P.O. Box 7346 Philadelphia, PA 19101-7346 2. Liquidibee, LLC Loan $23,398 295 Madison Ave. 22nd Floor New York, NY 10017 GRIFFON GANSEVOORT: Court Approve Disclosures, Confirms Plan ------------------------------------------------------------ Judge Philip Bentley has entered an order that the Disclosure Statement of Griffon Gansevoort Holdings LLC is approved as containing adequate information. That the definition of "Bar Date" in paragraph 11 of the Plan is deemed amended to mean the last day to file Claims as fixed by Bankruptcy Court order. That in the event of a sale under the Plan pursuant to the Bidding and Auction Procedures annexed as Exhibit B to the Plan, before moving forward with such sale, the Debtor must obtain Bankruptcy Court approval for the dates, amounts and other terms necessary and or helpful to complete such Bidding and Auction procedures. That pursuant to sections 1129 and 1141 of the Bankruptcy Code, the Plan as amended is confirmed. Pursuant to Bankruptcy Code s 1146, that the transfer of the property at 55 Gansevoort Street, New York New York to Restoration Hardware, Inc. made in implementation of the Plan qualifies for the transfer tax exemption under section 1146(a) of the Bankruptcy Code, such that the filing of deeds and recording of mortgages shall not be subject to payment of any New York City Real Property Transfer Tax, the taxes due under Article 31 of the Tax Law of the State of New York State, transfer tax, stamp tax or similar tax. That each and every federal, state and local governmental agency or department shall be authorized to accept and record any and all documents and instruments necessary, useful or appropriate to effectuate, implement and consummate the transactions contemplated by the Plan, including, but not limited to, any recordable instrument of transfer or mortgage in connection with the Debtor's sale of 55 Gansevoort Street, New York, New York to Restoration Hardware, Inc., and any other related instruments contemplated under the Plan (collectively, the "Transfer Documents") presented by the Debtor or its agents, without the payment of any tax within the purview of section 1146(a) of the Bankruptcy Code. That no professionals shall be paid from sale proceeds or estate funds without having first obtained approval from the Court for their retention and compensation. That the Debtor shall file a notice of occurrence of the Plan's Effective Date on the Court's docket within 3 business days of the Effective Date having occurred. That the Debtor shall file status reports and quarterly post confirmation operating reports filed in compliance with United States Trustee operating guidelines every January 15th, April 15th, July 15th, and October 15th until a final decree has been entered closing the Debtor's chapter 11 case. About Griffon Gansevoort Holdings LLC Griffon Gansevoort Holdings, LLC owns a commercial building located at 55 Gansevoort St., New York, N.Y. Griffon filed Chapter 11 petition (Bankr. S.D.N.Y. Case No. 23-11771) on Nov. 6, 2023, with $50 million to $100 million in both assets and liabilities. Patrick McCann, vice president, signed the petition. Judge Philip Bentley oversees the case. Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP serves as the Debtor's legal counsel. HALMAR LLC: Unsecureds to be Paid in Full over 36 Months -------------------------------------------------------- Halmar, LLC, submitted a First Amended Disclosure Statement describing Subchapter V Plan of Reorganization dated December 7, 2023. The Debtor has employed Central Valley Commercial Broker to assist in locating tenants and the Debtor is currently negotiating a lease for the Zachary Property. Mr. Sarbaz will make equity contributions to fund the Plan to the extent rental income is not available or sufficient to make the Plan payments. On November 28, 2023, the Bankruptcy Court entered its Order granting IMAGE's motion for relief form the automatic stay as the High Street Property and the Debtor expects that IMAGE will exercise its foreclosure remedies pursuant to applicable state law. Class 1 consists of the Secured Claim of Image Finance LLC. Paid at the non-default rate of interest of 10%, amortized over 30 years, for 36 consecutive months commencing on the Effective Date, with a balloon payment fully due and payable 37 months after the Effective Date. The monthly payment will be $16,961.99, the balloon payment due in month 37 of the Plan will be $1,897,107.42. Since IMAGE has received relief from stay as to the High Street Property, the Debtor expects that IMAGE will conduct a non judicial foreclosure sale and that the Debtor will be relieved of its obligations under IMAGE's claims in the amount of $914,893.58 secured by a First Deed of Trust and $181,000 secured by a Second Deed of Trust against the High Street Property. To the extent IMAGE asserts a deficiency claim that is allowed by the Bankruptcy Court, such claim will be treated as a general unsecured claim. Meysam Ayoubi's secured claims against the High Street Property are junior to IMAGE's claims, therefore Debtor expects that upon foreclosure of the High Street Property by IMAGE, Mr. Ayoubi's claims will constitute a general unsecured claim and will be paid in class 3. The Debtor reserves its rights to continue to attempt to refinance the High Street Property until the time of a foreclosure sale. Class 2 consists of General Unsecured Claims. Paid in full with no interest over 36 months as follows: $4,000 per month commencing on the Effective Date for 36 months and the amount of $508,302.44 in month 37. The allowed unsecured claims total $652,302.44. The Debtor will fund the plan via its business income as set forth in the projections, to the extent rental income is insufficient the Debtor's principal Amir Sarbaz will make equity contributions to the Debtor to fund the Plan. A full-text copy of the First Amended Disclosure Statement dated December 7, 2023 is available at https://urlcurt.com/u?l=XH3EUN from PacerMonitor.com at no charge. Attorneys for the Debtor: Jeffrey S. Shinbrot, Esq. JEFFREY S. SHINBROT, APLC 15260 Ventura Blvd., Suite 1200 Sherman Oaks, CA 91403 Telephone: (310) 659-5444 Facsimile: (310) 878-8304 Email: jeffrey@shinbrotfirm.com About Halmar, LLC Halmar, LLC is a real estate development firm in Los Angeles, Calif. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-15032) on Aug. 5, 2023, with $4,300,000 in assets and $3,630,789 in liabilities. Amir Sarbaz, managing member, signed the petition. Judge Barry Russell oversees the case. Jeffrey S. Shinbrot, Esq., at Jeffrey S. Shinbrot, APLC, is the Debtor's legal counsel. HANJIN INT'L: Moody's Hikes CFR to Ba3 & Secured Term Loan to Ba1 ----------------------------------------------------------------- Moody's Investors Service has upgraded Hanjin International Corporation's (HIC) corporate family rating to Ba3 from B1. At the same time, Moody's has upgraded to Ba1 from Ba2 the backed senior secured rating on HIC's term loan due September 2025, which is guaranteed by HIC's parent, Korean Air Lines Co., Ltd. (KAL). Moody's has also maintained the positive outlook on HIC. "The rating upgrade is driven by the guarantor and parent KAL's robust operating performance and the enduring improvement in its capital structure and liquidity position," says Sean Hwang, a Moody's Vice President and Senior Analyst. "The positive outlook indicates further upgrade potential if KAL maintains an adequate financial profile following its potential acquisition of Asiana Airlines, Inc.," adds Hwang. RATINGS RATIONALE HIC's Ba3 CFR primarily reflects Moody's assessment of a high likelihood of support from the company's parent, KAL, when needed because KAL guarantees all of HIC's external debt. HIC's credit quality is therefore closely linked to KAL's, resulting in a three-notch uplift from HIC's standalone credit quality. Moody's expects that despite a moderate softening, KAL's earnings over the next 12-18 months will remain above pre-pandemic levels as its recovering passenger business will partly offset the moderating earnings from its cargo business. Solid demand for international travel and lingering capacity constraints resulting from limited new aircraft supply will continue to support adequate passenger yields during this period. At the same time, KAL will likely maintain its improved capital structure because its solid operating cash flow and large excess cash will allow it to fund its increasing aircraft-related capital spending without significant debt increases. The company drastically reduced its adjusted net debt to KRW6.3 trillion as of September 30, 2023 from KRW18.5 trillion as of December 31, 2019, based on its large equity offerings, asset sales and strong cargo earnings through the pandemic. Moody's estimates that KAL's adjusted debt/EBITDA will moderate slightly to 3.2x-3.4x over the next 12-18 months from around 3.0x for the 12 months ended September 30, 2023, mainly because of its moderating earnings. Its adjusted net debt/EBITDA will remain low at 1.6x-1.8x, compared with around 1.6x for the latest 12-month period. These financial metrics provide a significant financial buffer to absorb earnings volatility and the company's pending acquisition of Asiana, which has significantly higher leverage than KAL. Moody's estimates the combined airline company will have a pro forma adjusted debt/EBITDA of around 4.5x and pro forma adjusted net debt/EBITDA of around 3.5x in 2024-25. The estimated pro forma metrics would position the combined company strongly for the current rating category, supporting the positive outlook. That said, uncertainty remains around this estimate at this point, given the lack of clarity over the integration strategy and related costs, amid an ongoing delay in the regulatory approvals for the acquisition. KAL's credit quality continues to be underpinned by its leading position as Korea's largest flagship carrier and air cargo operator, and Moody's assessment that the company would benefit from governmental and institutional support when needed because of its significant importance to the Korean economy. HIC's Ba1 secured term loan remains two notches higher than the company's CFR, reflecting the first lien on the majority of HIC's assets, including mainly the Wilshire Grand Center (WGC), which significantly enhances recovery prospects for its term loan creditors. In terms of environmental, social and governance (ESG) considerations, HIC is exposed to (1) physical climate risks due to its geographically concentrated operations, (2) long-term societal risk stemming from potential changes in business travel and workplace flexibility, and (3) governance risks associated with the company's track record of high leverage and its concentrated ownership, although its parent's explicit support eases these risks. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade HIC's CFR and term loan rating if KAL maintains an adequate pro forma financial profile after its acquisition of Asiana, while continuing its strong support for HIC through guarantees. Credit metrics that would support the upgrade include KAL's adjusted debt/EBITDA (pro forma for the acquisition of Asiana) remaining below 4.5x-5.0x. Moody's could change the outlook on HIC to stable if KAL's credit quality weakens significantly because of higher debt-funded investment or weaker synergies from the Asiana acquisition than the agency currently expects, such that KAL's adjusted debt/EBITDA stays above 5.0x. A material deterioration in the company's liquidity and access to external funding would also pressure the ratings. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Hanjin International Corporation (HIC), a wholly-owned subsidiary of Korean Air Lines Co., Ltd. (KAL), owns the Wilshire Grand Center (WGC), a 73-story Class A mixed-use building in Los Angeles in the US. Korean Air Lines Co., Ltd. is a leading airline company in Korea. As of September 30, 2023, the company owned a fleet of 133 passenger aircraft and 23 cargo aircraft serving 120 destinations across 43 countries. HELLO BELLO: $65 Million Chapter 11 Sale Okayed ----------------------------------------------- Rick Archer of Law360 reports that Kristen Bell's baby company, Hello Bello, gets okayed for $65 million Chapter 11 sale. A Delaware bankruptcy judge on Monday, December 11, 2023, gave Hello Bello, a baby product brand started by actor Kristen Bell, permission to accept a $65 million bid for its assets from a private equity company, after it received no other offers. About Hello Bello Hello Bello(TM) -- https://hellobello.com/ -- makes premium and affordable baby products designed to eliminate the choice many parents have to make -- deciding between what's best for their kids and what's best for their budget. From diapers, shampoo, and sunscreen to organic multivitamins, laundry detergent, and wipes Hello Bello's products are carefully crafted with babies, parents, and the planet in mind. Hello Bello sought relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.) on Oct. 23, 2023. In its petition, it listed assets and liabilities of at least $100 million each. Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor LLP are serving as Hello Bello's legal counsel. Jefferies LLC is serving as investment banker and Emerald Capital Advisors is serving as financial advisor. Lowenstein Sandler LLP and Alvarez & Marsal North America, LLC, are serving as legal counsel and financial advisor, respectively, to Hildred Capital Management. HO1KB NORTH: Seeks Approval to Hire Blue Slate Accounting --------------------------------------------------------- HO1KB North LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Blue Slate Accounting, LLC. The Debtor requires an accountant to: (a) maintain accurate financial records; (b) file state and local taxes; (c) file past-due payroll tax returns and apply for tax benefits; (d) meet the Debtor's current tax obligations; (e) help reduce the Debtor's past-due tax liability; and (f) otherwise ensure the continued viability of the Debtor's business. The firm will charge $1,325 per month for its services except tax returns at the end of the year, and the transaction/postage fees passed through from the Bill pay software, which usually ranges about $75 per month. Lauri Paxton, CPA, a member at Blue Slate Accounting disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Lauri M. Paxton, CPA Blue Slate Accounting, LLC 642 W. New Castle St. Zelienople, PA 16063 Telephone: (724) 359-5022 Email: info@blueslateaccounting.com About HO1KB North LLC HO1KB North LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-22390) on Nov. 6, 2023. The petition was signed by Arthur R. Barbus, manager. The Debtor estimated up to $50,000 in assets and up to $1 million in liabilities. Judge Jeffery A. Deller oversees the case. The Debtor tapped Lawrence W. Willis, Esq., at Willis & Associates as counsel and Lauri M. Paxton, CPA, at Blue Slate Accounting, LLC as accountant. HOODSTOCK ENTERPRISES: Unsecureds Get Full Payment Plus Interest ---------------------------------------------------------------- Hoodstock Enterprises, LLC, submitted a First Amended Plan of Liquidation, dated Dec. 8, 2023. The Debtor is an Oregon limited liability company that owns farm and pasture land in Hood River, Oregon. Debtor's property was previously used for livestock grazing and pear crop production. Debtor is transitioning the use of the farm and intends to lease portions of the farm to horse trainers and for horse boarding/stables. Debtor believes the income from these activities will be sufficient to pay Debtor's ongoing expenses and debt service requirements. Debtor filed this case to prevent the repossession and sale of Debtor's real property, as the Debtor has a significant amount of equity in the property. Debtor believes it will be able to repay creditors in full. The final Plan payment is expected to be paid on the 60th month following confirmation of the Plan, which is anticipated to be February, 2029. This Plan of Reorganization (the Plan) under chapter 11 of the Bankruptcy Code (the Code) proposes to pay creditors of (the Debtor) from tenants who will rent portions of the Debtor's real property for horse stabling and equine therapy. Non-priority unsecured creditors holding allowed claims will receive distributions for 100% of their allowed claims. Under the Plan, Class 4 consists of all non-priority unsecured creditors not otherwise classified under the Plan. Class 4 is impaired. The Class 4 claims will be paid in full, plus interest at the federal judgment rate, as determined on the Effective Date. Such interest will accrue from the Petition date until the Class 4 Claims are paid in full. The Class 4 claims will be paid their pro-rata share of $1,500 every quarter until paid in full, with such payments to begin on the first day of the calendar month following the date that is six months after the Effective Date. As an example, if the Effective Date is February 15, 2024, quarterly payments to Class 4 would begin on September 1, 2024. Once the Class 1 and Class 2 claims, the quarterly payments that were being paid to those classes will be added to the amount of the Class 4 Claims. Debtor intends to implement the Plan by leasing a portion of its property to an equine therapy business, and another portion of its property to other tenants for horse boarding and pasture grazing. Debtor may also lease part of its property for vehicle storage and parking. The income to be generated through Debtor's operations is shown in the attached Exhibit 2. Debtor shall obtain a new loan to refinance its debts, or shall sell its real property, on or before the 5-year anniversary of the Effective Date. Of Attorneys for Debtor Hoodstock Enterprises, LLC: Nicholas J. Henderson, Esq. MOTSCHENBACHER & BLATTNER LLP 117 SW Taylor St., Suite 300 Portland, OR 97204 Tel: (503) 417-0500 Fax: (503) 417-0521 E-mail: nhenderson@portlaw.com A copy of the Plan of Liquidation dated December 8, 2023, is available at https://tinyurl.ph/Bnkys from PacerMonitor.com. About Hoodstock Enterprises Hoodstock Enterprises, LLC, is an Oregon limited liability company that owns farm and pasture land in Hood River, Oregon. The Debtor filed Chapter 11 petition (Bankr. D. Ore. Case No. 23-31080) on May 14, 2023, with $1 million to $10 million in assets and $100,001 to $500,000 in liabilities. Judge Teresa H. Pearson oversees the case. Nicholas J. Henderson, Esq., at Motschenbacher & Blattner, LLP, is the Debtor's legal counsel. HOUSEWORX INVESTMENTS: Asset Sale & Insurance Proceeds to Fund Plan ------------------------------------------------------------------- Houseworx Investments, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Washington a First Plan of Reorganization under Subchapter V dated December 5, 2023. The Debtor is solely in the business of purchasing properties and then selling those assets at a profit. The principal place of business for the Debtor is 110 W. 6th Ave., Ste. 268, Ellensburg, WA 98926. The principal place of business for the Debtor is 110 W. 6th Ave., Ste. 268, Ellensburg, WA 98926. Most assets of the Debtor are secured by creditors, Gol_Fly, LLC and 9th Hole Properties 1, LLC, secured creditors in the Debtor's bankruptcy case. Debtor's real property consists of the following, collectively referred to as the "Properties": * 11305 73rd Ave NE, Arlington, WA 98223; Lot 1, Parcel No. 00376500004601 ("Lot 1") * 11324 73rd Ave NE, Arlington, WA 98223; Lot 3, Parcel No. 00376500004603, Burned down in fire ("Lot 3") * 11404 73rd Ave NE, Arlington, WA 98223; Lot 4, Parcel No. 00376500004801, Damaged in fire/under construction ("Lot 4") * 11410 73rd Ave NE, Arlington, WA 98223; Lot 5, Parcel No. 00376500004802, Lot w/foundation hold dug ("Lot 5") * 333 Forest Glen Rd, Camano Island, WA Parcel No. R33130 117-4700, Plans & foundation hole dug ("Forest Glen") * XXX 108th St, Arlington, WA 98223, Parcel No. 30051200401600 ("108th") The parcels have an estimated value of $2,435,000.00 and an improved value of approximately $5,000,000.00. The Debtor filed this bankruptcy petition to stop the foreclosure proceedings and propose a plan of reorganization and provide a meaningful distribution to creditors. The funds to make the required Plan payments will be provided by the sale of the Debtor's real property and insurance proceeds. As provided in the court's interim cash collateral order, $250,00.00 of the Proceeds are to be paid to 9th Hole Properties 1, LLC and $250,000.00 is to be held subject to further order of this court. Debtor is asking that the full amount of the Proceeds held be used to improve and add value to Lots 3 and 4. Debtor anticipates at least $100,000.00 in unencumbered sale proceeds from the sale of the 108th property. This Plan provides for two classes of creditors: 1 class of Secured Claims, and 1 class of Unsecured Claims. Debtors believe that the sale of the Properties will maximize the amount Secured Creditors will receive for their Allowed Claims. Additionally, Unsecured Creditors holding Allowed Claims will receive a pro rata distribution from the proceeds of the sale of 108th property. The Debtor will distribute a cash payment to holders of Allowed Administrative Claims, Priority Tax Claims, and to the Holders of Allowed General Unsecured Claims within 30 days of the deposit of proceeds from the sale of 108th property. Class 2 consists of General Unsecured Claims. Except to the extent that a Holder of an Allowed General Unsecured Claim agrees, under the terms of a writing executed by such Holder, to less favorable treatment of such Allowed General Unsecured Claim, each Holder of an Allowed General Unsecured Claim shall receive from the Disbursing Agent, in full satisfaction, settlement, release and discharge of and in exchange for such Allowed General Unsecured Claim, a lump sum representing such Holder's pro rata share of the payments made by the Disbursing Agent as set forth in the Plan. The distribution to Holders of Allowed General Unsecured Claims shall be made from the proceeds of the 108th property after payment of the Allowed Administrative Claims and Allowed Priority Tax Claims required to be paid under the Plan, in the manner provided in the Plan. No interest shall accrue on unsecured claims after the filing of the bankruptcy case. Class 2 is impaired under the Plan. The payments required by the Plan to Secured Creditors will be made from the Debtor sale of one or more pieces of the Properties, during the Sale Period. The Debtor believes that sale of the Properties pursuant to the terms of this Plan will maximize the amount Secured Creditors will receive for their Allowed Claims. A full-text copy of the First Plan of Reorganization dated December 5, 2023 is available at https://urlcurt.com/u?l=lw4iYx from PacerMonitor.com at no charge. Debtor's Counsel: David A. Kazemba, Esq. OVERCAST LAW OFFICES - NCW, PLLC 23 S. Wenatchee Ave. Suite 320 Wenatchee, WA 98801 Tel: (509) 663-5588 Fax: (509) 662-5508 E-mail: dkazemba@overcastlaw.com About Houseworx Investments Houseworx Investments, LLC, owns six properties in Arlington and Camano Island, Wash., with a total value of $2.71 million. Houseworx Investments filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Wash. Case No. 23-01125) on Sept. 6, 2023, with $3,455,000 in assets and $3,163,548 in liabilities. Douglas A. Schreifels, member, signed the petition. Judge Whitman L Holt oversees the case. David A. Kazemba, Esq., at Overcast Law Offices - NCW, PLLC, is the Debtor's bankruptcy counsel. HRH FENCHAK: Taps Three Rivers Commercial Advisors as Realtor ------------------------------------------------------------- HRH Fenchak, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Three Rivers Commercial Advisors, LLC as realtor. The Debtor requires a realtor to effectuate the sale of its commercial real property located at 1121 11th Street, Conway, Pa. The firm will receive a 6 percent commission of the property's sale price. Jason Campagna, a member at Three Rivers Commercial Advisors, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jason Campagna Three Rivers Commercial Advisors, LLC 6 PPG Place, Suite 550 Pittsburgh, PA 15222 Telephone: (412) 535-8050 Email: threeriversadmin@svn.com About HRH Fenchak HRH Fenchak, LLC filed a Chapter 11 bankruptcy petition (Bankr. W.D. Pa. Case No. 23-21923) on September 11, 2023, listing under $1 million in both assets and liabilities. Judge Gregory L. Taddonio oversees the case. Christopher M. Frye, Esq., at Steidl & Steinberg, PC serves as the Debtor's counsel. HULL EQUITY: Case Summary & Five Unsecured Creditors ---------------------------------------------------- Debtor: Hull Equity, LLC 1902 Campus Place, Suite 9 Louisville, KY 40299 Business Description: Hull Equity is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: December 13, 2023 Court: United States Bankruptcy Court Western District of Kentucky Case No.: 23-32984 Judge: Hon. Alan C. Stout Debtor's Counsel: Tyler R. Yeager, Esq. KAPLAN JOHNSON ABATE & BIRD LLP 710 West Main Street Fourth Floor Louisville, KY 40202 Tel: (502) 416-1630 Fax: (502) 540-8282 Email: tyeager@kaplanjohnsonlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Robert E. Hull as member. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/HG3FQFI/Hull_Equity_LLC__kywbke-23-32984__0001.0.pdf?mcid=tGE4TAMA ICAHN ENTERPRISES: Moody's Affirms Ba3 CFR Following Refinancing ---------------------------------------------------------------- Moody's Investors Service has affirmed the Ba3 corporate family rating, Ba3-PD probability of default rating and Ba3 guaranteed senior unsecured debt ratings of Icahn Enterprises L.P. (IEP). The rating agency also assigned a Ba3 rating to the new $500 million of backed senior unsecured notes due 2029. Net proceeds of the issuance plus cash on balance sheet will be used to repay IEP's $1.1 billion 4.75% Backed Senior Notes due 2024. The ratings on the 2024 Senior Notes will be withdrawn upon repayment of the notes. The outlook is maintained stable. RATINGS RATIONALE The ratings affirmation reflects IEP's strong liquidity profile, sound track record of activist investing, and diverse portfolio holdings. However, the company's high market value-based leverage, concentrated ownership structure and key person risk tied to Carl Icahn continue to constrain its rating. The new issuance will have a minimal impact on the company's market-value based leverage which as of September 30, 2023 stood at about 40%. Although the offering will enhance IEP's already strong liquidity, Moody's expect coverage metrics to remain weak and consistent with Ba-rated Investment Holding Companies. IEP's opportunistic investing strategy has historically required large capital commitments and drawn on its liquid resources for new investments rather than deleveraging. The high reliance on majority owner, Carl Icahn, remains a risk and meaningful constraint to the company's ratings. Given the Chairman's personal wealth is tied to IEP's depositary units, a significant reduction in his ownership raises the possibility of voting out the General Partner. While it's highly unlikely, such a scenario could trigger a change of control that accelerates the repayment of IEP's debt. Currently, Mr. Icahn and his affiliates control approximately 85% of IEP depositary units. For such a scenario to occur, their holdings would have to fall below 25% and provided another entity or group acquires the remaining 75% of the units, and acts under IEP's limited partnership agreement to replace the GP with one unaffiliated with Mr. Icahn or his family. That said, Moody's view the recent restructuring of Mr. Icahn's personal loans in response to external activists as a positive development. The stable outlook on the ratings reflects the improving operating performance of the company's Energy segment as well as the recent actions taken to stabilize performance at its other portfolio companies. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The factors that could lead to an upgrade of IEP's ratings include: 1) market value-based leverage that is sustained below 30%; 2) a shift in the investment portfolio towards less concentrated positions of higher credit quality; or 3) improved dividend capacity at subsidiaries outside the energy segment. Conversely, IEP's ratings could be downgraded if: 1) there is a significant deterioration in valuations or credit strength of the operating subsidiaries; 2) a sustained increase in net debt; or 3) a significant decline in the liquidity sources of the holding company. The principal methodology used in these ratings was Investment Holding Companies and Conglomerates published in April 2023. INTOUCH FOOTWEAR: Seeks Conditional Approval of Disclosures ----------------------------------------------------------- Intouch Footwear, Inc. moves this court pursuant to 11 U.S.C. 1125(f), Federal Rule of Bankruptcy Procedure 3017.1, and Local Bankruptcy Rule 3017-2 for Conditional Approval of the Disclosure Statement, and for Setting a Combined Hearing on Final Approval of the Disclosure Statement and Plan Confirmation. In this case, Debtor is a small business and elected to file its case under Subchapter V of Chapter 11 of the Bankruptcy Code. Therefore, conditional approval procedures are appropriate for this case. The Debtor submits that the Disclosure Statement satisfies the criteria of Section 1125. It describes the Plan clearly and succinctly; it describes both the classification of claims and their treatment under the Plan; it informs each creditor, by name, what it will receive under the Plan and when it can expect to receive it; it communicates both how the Debtor fell into financial difficulties and how the Plan is expected to achieve viability for the Debtor in the future; and it explains why the Plan is superior to other alternatives. In short, the Disclosure Statement provides precisely the information that a "hypothetical reasonable investor" would want and need to know before voting on the Plan. Here, the Debtors' financial structure and the proposed Plan are very straightforward. The Debtors proposes to pay all of its creditors fully. Debtor's Plan only has three impaired classes of creditors. All impaired classes are getting paid fully. Specifically, the impaired class of unliquidated litigation claimants, is getting full payment pursuant to stipulated liquidated amounts of their claims on the effective date. The secured impaired creditor JPMorgan Chase Bank, N.A. is getting paid fully with interest agreed to by the creditor and Debtor. Finally, the impaired class of unsecured creditors is receiving full payment in 60 months. The Debtor further proposes to pay administrative claims in full by the Effective Date, except to the extent that further court approval of such claims is required. Debtor proposes that this Court set a final approval of disclosure statement and plan confirmation hearing sometime in early January. Debtor also requests that the court set a deadline for creditors to vote to accept or reject the Plan, and/or to object to the adequacy of the disclosure statement. Attorneys for Intouch Footwear, Inc: Vahe Khojayan, Esq. YK LAW, LLP 445 S. Figueroa Street, Ste 2280 Los Angeles, CA 90071 Tel: (213) 401-0970 Fax: (213) 529-3044 E-mail: vkhojayan@yklaw.us About Intouch Footwear Intouch Footwear, Inc. is a corporation engaged in wholesale importation and sale of footwear. The Debtor's business model involves sourcing and importing footwear from Southeast Asia, storing the inventory in its leased warehouses and selling the imported items to various retailers. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-15730) on Sept. 1, 2023. In the petition signed by John C. Lay, chief executive officer, the Debtor disclosed $2,388,947 in total assets and $3,924,149 in total liabilities. Judge Barry Russell oversees the case. Vahe Khojayan, Esq., at YK Law, LLP, represents the Debtor as legal counsel. IRONNET INC: Gets Court Okay for $10 Million DIP in Chapter 11 -------------------------------------------------------------- Yun Park of Law360 reports that defunct cybersecurity company IronNet received final approval for a $10 million debtor-in-possession financing package on Monday, December 11, 2023, in Delaware bankruptcy court, along with interim approval of the disclosure statement and debtor's solicitation process. About IronNet Inc. Founded in 2014 and headquartered in McLean, Va., IronNet, Inc. (NYSE: IRNT) -- https://www.ironnet.com/ -- is a global cybersecurity company that is transforming how organizations secure their networks by delivering the first-ever collective defense platform operating at scale. Employing a number of former NSA cybersecurity operators with offensive and defensive cyber experience, IronNet integrates deep tradecraft knowledge into its industry-leading products to solve the most challenging cyber problems facing the world today. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-11710) on Oct. 12, 2023. In the petition signed by Cameron Pforr, president and chief financial officer, IronNet, Inc. disclosed $77,389 in assets and $33,833,108 in liabilities. Debtor IronNet Cybersecurity Inc. listed $10 million to $50 million in estimated assets and $50 million to $100 million in estimated liabilities. Judge Brendan Linehan Shannon oversees the cases. The Debtors tapped Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel, Arnold & Porter Kaye Scholer LLP as general corporate counsel, and Stretto, Inc. as claims, noticing, and solicitation agent. Paul, Weiss, Rifkind, Wharton & Garrison LLP represents the DIP lenders as legal counsel. JACKSON CITY: Moody's Withdraws Ba2 Rating on System Revenue Bonds ------------------------------------------------------------------ Moody's Investors Service has confirmed the City of Jackson, MS's Baa3 Issuer, General Obligation and Special Obligation bond ratings. The outlook is stable. Previously, the ratings were on review for uncertain. The Ba2 ratings on the City of Jackson Water and Sewer System Revenue Bonds have been withdrawn due to lack of sufficient financial information on the utilities. This rating action concludes the review with direction uncertain that was initiated on October 12, 2023 due to lack of sufficient information for fiscal 2022. Moody's has received and reviewed unaudited financial statements for fiscal 2022 for the city's general fund and other funds excluding the water and sewer systems. No information for fiscal 2022 was provided for the water and sewer systems. As of the most recent audit, the City's debt totaled approximately $429 million, not all of which is rated by Moody's. RATINGS RATIONALE For the third consecutive year, the city has failed to produce a financial audit within one year of the close of the fiscal year. This governance and reporting shortcoming blunts the credit benefit that would otherwise be derived from the takeover of the water and sewer system by a court mandated Interim Third-Party Manager (ITPM). The appointment of the ITPM relieves the city of management and responsibility of the often troubled water and sewer system, which has over the years been a significant weight on the city's overall credit profile. However, the inability to produce a timely financial report indicates still weak managerial functions, even in absence of the burden of the water and sewer enterprises. The city has provided some unaudited fiscal 2022 data, which indicates generally positive financial operations including a $10.7 million surplus in the general fund and the total governmental funds. The provision of unaudited information does not absolve the city of the requirement to provide a full audit for fiscal 2022 and 2023. If audited financial information is not provided on a timely basis, Moody's will take appropriate rating action, which could include withdrawing of the issuers' ratings. The confirmation of the city's issuer rating is also reflective of its siceable economy and strong economic anchors including the state capitol, auto manufacturing and a large healthcare sector, which is the single largest source of jobs. These strengths are in contrast to gradual but long term population declines, low resident income and elevated poverty. The city's high-long term liabilities are a credit weakness highlighted by substantial pensions and debt and elevated fixed costs. The city's general obligation bonds are rated at the same level as the issuer rating because the bonds are backed by an annual ad valorem tax, levied against all taxable property in the city without legal limitation as to rate or amount. The Special Obligation bonds are rated at the same level as the issuer and general obligation bond ratings because of the non-contingent nature of the security, which consists of the city's unconditional and irrevocable pledge of to make payments to the Mississippi Development Bank per the contribution agreement for the benefits of the bonds. Moody's has decided to withdraw the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings. RATING OUTLOOK The stable outlook reflects the expectation that, free of the burden of water and sewer utilities, the city will have a greater probability of producing and maintaining balanced operations. The outlook also anticipates that the city will make necessary changes to improve its financial reporting and disclosure to result in timely audit publication. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -- Consistent operating balance resulting in steady growth of cash and reserves -- Strengthened financial management and reporting practices resulting in timely audit publication -- Material economic expansion resulting in a stronger tax base and resident wealth FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -- Operating deficits that materially weaken cash and reserves -- Failure to provide timely audited results for fiscal 2022 or 2023 -- Material economic deterioration LEGAL SECURITY The general obligation bonds are secured by an annual ad valorem tax, levied against all taxable property in the city without legal limitation as to rate or amount. The city's Special obligation bonds are an unconditional, irrevocable obligation of the city's General Fund per a contribution agreement with the Jackson Redevelopment Authority. PROFILE The City of Jackson is Mississippi's (Aa2 stable) capital and located in Hinds County in the southwestern portion of the state. Jackson is the largest city in Mississippi with a population of approximately 156,000. The largest industry sectors are health services, state government, retail trade and manufacturing. METHODOLOGY The principal methodology used in the issuer, general obligation, and lease ratings was US Cities and Counties Methodology published in November 2022. KAI LAND: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: KAI Land LLC 1405 Forest Drive Annapolis MD 21403 Chapter 11 Petition Date: December 13, 2023 Court: United States Bankruptcy Court District of Maryland Case No.: 23-19087 Judge: Hon. Michelle M Harner Debtor's Counsel: Donald Drescher, Esq. DRESCHER & ASSOCIATES, PA 10999 Red Run Blvd. Suite 205 PMB 224 Owings Mills, MD 21117 Tel: 410-484-9000 E-mail: rondrescher@drescherlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by David K. MacArthur as managing member. A copy of the Debtor's list of 20 largest unsecured creditors is now available for download at PacerMonitor.com. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/WZR42UI/KAI_Land_LLC__mdbke-23-19087__0001.0.pdf?mcid=tGE4TAMA LEGALSHIELD: Moody's Cuts CFR to B3 & Alters Outlook to Stable -------------------------------------------------------------- Moody's Investors Service downgraded Pre-Paid Legal Services, Inc.'s (dba "LegalShield") corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD. Moody's concurrently downgraded the ratings on the company's $75 million backed senior secured first lien revolver due 2026 and $1,000 million backed senior secured first lien term loan due 2028 to B2 from B1 and the rating on its $250 million backed senior secured second lien term loan due 2029 to Caa2 from Caa1. The outlook has been changed to stable from negative. The company is an Oklahoma-based provider of subscription-based online legal services. The ratings action reflects the company's high leverage that Moody's expects will remain around 6.5x through 2024 and its expectations for free cash flow to debt in the low single digit percentage area over the next 12-18 months. LegalShield's revenue is stable given the subscription nature of its services but growth will be limited to low single digits, and as a result deleveraging will be slow. The company's metrics are thus more compatible with a B3 CFR. RATINGS RATIONALE LegalShield's B3 CFR reflects: 1) the company's very high financial leverage with debt-to-EBITDA of 6.5x (Moody's adjusted) expected over the next 12 months; 2) limited end market and product offerings that is mainly legal services; and 3) a relatively modest revenue base of approximately $550 million expected for 2023. The ratings also reflects: 1) a predictable subscription based revenue stream from a large membership base and a business model that is less vulnerable to a deteriorating economic environment; 2) Moody's expectations for continued modest growth in memberships and revenues as a result of the company's marketing and retention strategies; 3) a diversified sales channel mix, including business solutions, network, and consumer direct; and, 4) a track record of solid free cash flow generation that has enabled moderate voluntary debt repayments and maintenance of good liquidity. LegalShield operates in the online legal services industry and enjoys good name recognition and brand awareness. The company's membership base has been stable over the past few years thus there is good visibility to revenue, supported by the highly recurring subscription nature of its revenue stream. The company has also invested in increasing the proportion of new sales that originates from the direct-to-customer channel and the benefits channel, which have a lower customer acquisition cost as compared to the network channel and as a result such subscriptions are more profitable. In the network channel plans and supplements are sold to individuals though an independent salesforce. LegalShield also operates in an industry that includes several service providers and barriers to entry can be low. Although other online legal service providers tend to specialize in select areas, there is some overlap with LegalShield. Moody's expects LegalShield to generate revenue growth in the 5% area over the next 12-18 months while EBITDA margins will be in the 30%+ area. The drivers for revenue growth include higher pricing for subscription and growth in new premium sales that exceeds any premium churn. Moody's also expects LegalShield to continue to generate good free cash flow, with free cash flow as a percentage of debt maintained around 4% over the next 12 to 18 months. Provided the company refrains from a debt funded acquisition or additional dividend recapitalization, Moody's expects debt-to-EBITDA financial leverage to decline to around 6.5x over the next 12 months, driven by earnings growth and some debt repayment. LegalShield's liquidity profile is considered as good, supported by a $75 million revolving credit facility which Moody's expects to be undrawn over the next 12-18 months, and over $80 million of cash on the balance sheet as of the end of 2023. Moody's also expects free cash flow to be around $40 million over the next 12-18 months assuming no additional distributions or acquisitions. Moreover, expects that if the company executes bolt-on acquisitions, they would be funded primarily with cash. The ratings for the individual debt instruments incorporate LegalShield's overall probability of default, reflected in the B3-PD, and the loss given default assessments for the individual instruments. The senior secured first lien credit facilities are rated at B2, one notch higher than the B3 CFR. The B2 senior secured first lien instrument rating reflects their relative size and senior position ahead of the senior secured second lien term loan that would drive a higher recovery for senior secured first lien debt holders in the event of a default. LegalShield's senior secured second lien term loan is rated at Caa2, which is two notches below the B3 CFR, reflecting its junior position in the capital structure. The stable outlook reflects Moody's expectations for revenue growth and slight deleveraging over the next 12 – 18 months that will be driven by a stable membership base, some pricing increases and churn rates that will be stable at around 2.5%. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if revenue and memberships grow over a multi-year period; the company exercises conservative financial policies with respect to shareholder distributions; and legal and regulatory risks remain manageable. Additionally, a ratings upgrade would require an improvement in financial metrics, including, adjusted debt-to-EBITDA sustained below 5.0x and free cash flow-to-debt of 5%. The ratings could be downgraded if memberships and revenues decline, resulting in deteriorating operating performance or liquidity and stress on key financial strength metrics, including debt-to-EBITDA, free cash flow-to-debt, or EBITA-to-interest coverage. Specifically, debt-to-EBITDA sustained above 8.0x, EBITA-to-interest sustained below 1.0x, or a material deterioration in free cash flow would cause negative rating pressure. An acceleration of aggressive financial policies, including increases in leverage to fund dividend payments, or legal or regulatory developments that have a material adverse effect on the company's business model or financial position, could also pressure the ratings. LegalShield, headquartered in Ada, Oklahoma, provides subscription-based legal insurance and identity theft protection solutions to businesses and individuals through an outsourced distribution and service model. LegalShield is majority owned by affiliates of private equity sponsor Stone Point Capital. The company generated revenue of $551 million for the trailing twelve months ended September 30, 2023. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. MATTHEWS TIMBER: Richard Preston Cook Named Subchapter V Trustee ---------------------------------------------------------------- Brian Behr, the U.S. Bankruptcy Administrator for the Eastern District of North Carolina, appointed Richard Preston Cook as Subchapter V Trustee for Matthews Timber Transport, LLC. Mr. Cook will be paid an hourly fee of $375 for his services as Subchapter V trustee. Mr. Cook declared that he does not have an interest materially adverse to the interest of the Debtor's estate, creditors and equity security holders. About Matthews Timber Matthews Timber Transport, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-03521) on Dec. 4, 2023, with $500,001 to $1 million in both assets and liabilities. Judge Pamela W. Mcafee oversees the case. Laurie B. Biggs, Esq., at Biggs Law Firm, PLLC represents the Debtor as bankruptcy counsel. MED PARENTCO: Moody's Alters Outlook on 'Caa1' CFR to Positive -------------------------------------------------------------- Moody's Investors Service changed MED ParentCo., LP.'s (dba "MyEyeDr") outlook to positive from stable. At the same time, Moody's affirmed MyEyeDr's ratings, including its Caa1 corporate family rating, its Caa1-PD probability of default rating, its B3 senior secured first lien bank credit facilities ratings and Caa3 senior secured second lien bank credit facility rating. The outlook change to positive reflects the significant improvement in MyEyeDr's performance and credit metrics as the company has pared back on acquisition activity to focus on operating performance improvements and has seen same store sales growth and margin expansion. The positive outlook also reflects that MyEyeDr has extended its revolver maturities. RATINGS RATIONALE MyEyeDr's Caa1 CFR reflects its high leverage, exposure to elevated interest costs and that its committed deferred acquisition payments and mandatory term loan amortization will constrain free cash flow over the next 12 to 18 months. Moody's expects continued financial performance strength in 2024 with debt/EBITDA improving to below 6.0x by year-end 2024 from 6.8x for the LTM ending September 30, 2023 and EBITA/Interest improving to about 1.25x from 1.15x over the same period. Moody's expects that the company will be able to meet its material deferred acquisition payments for 2023 (approximately $70 million) through balance sheet cash and improved cash flow from operations. However, the ratings are constrained by Moody's expectation for continued pressured free cash flow (after mandatory term loan payments) despite continued financial performance strength and earnings growth as a result of additional deferred payments in 2024. Moody's expects modest free cash flow in 2024 at approximately 1% of debt. The ratings incorporate governance risks, specifically the company's private equity ownership which has previously supported very high leverage which peaked at 9x at year end 2022 as a result of an aggressive debt-financed acquisition strategy. Positively, the company pared back its acquisition activity materially in 2023 and has focused on organic performance improvement. The ratings also reflect Moody's view that while e-commerce penetration in the optical retail sector will remain low, traditional optical retailers will face margin and market share pressure over time from growing online competition. Nevertheless, the credit profile is supported by the recession-resilient and growing demand for optometrist services and eyewear products due to aging demographics and the growing prevalence of myopia coupled with MyEyeDr's high proportion of more resilient insurance backed customers. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company substantially improves its free cash flow generation while maintaining positive comparable store sales growth and solid operating performance. Quantitatively, an upgrade would require EBITA/interest expense to be maintained above 1.25x and lease-adjusted debt/EBITDA to be maintained below 7.0x inclusive of adjustments for acquisitions. The ratings could be downgraded if liquidity deteriorates for any reason. The ratings could also be downgraded should probability of default increase for any reason including the inability to reduce leverage to a more sustainable level. MED ParentCo., LP. provides management services to MyEyeDr optometrists and their practices. MyEyeDr practices offer vision care services, prescription eyeglasses and sunglasses, and contact lenses. As of September 30, 2023, the company operated approximately 840 offices and generated approximately $1.375 billion of trailing twelve months revenue. MyEyeDr has been controlled by affiliates of Goldman Sachs Merchant Banking Division since August 2019. The principal methodology used in these ratings was Retail and Apparel published in November 2023. MORNINGSIDE MINISTRIES: Fitch Lowers IDR to 'BB', Outlook Stable ---------------------------------------------------------------- Fitch Ratings has downgraded to 'BB' from 'BB+' the series 2022 and 2020A bonds issued by the New Hope Cultural Education Facilities Finance Corporation on behalf of Morningside Ministries and Subsidiary (TX) (Morningside). Fitch has also downgraded Morningside's Issuer Default Rating (IDR) to 'BB'. The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Morningside Ministries and Subsidiary (TX) LT IDR BB Downgrade BB+ Morningside Ministries and Subsidiary (TX) /General Revenues /1 LT LT BB Downgrade BB+ The downgrade to 'BB' reflects the increase in long-term debt that Morningside will be incurring for the first phase of its independent living unit (ILU) expansion and for a healthcare repositioning project. The ILU expansion will take place on Morningside's Menger Springs campus and will include 80 new ILU apartments in the first phase. An additional 48 new ILU apartments in a potential second phase are under consideration. Though Fitch views the potential benefits of the ILU expansion favorably, the project entails construction and fill-up risks over a lengthy period of time, and only 29 of the 80 new ILUs (36%) in phase one have been reserved with 10% deposits. Morningside's healthcare repositioning project is taking place on the Meadows campus and entails the repositioning of 44 existing assisted living units (ALU) and 100 skilled nursing (SNF) beds to 43 ALUs, 18 memory care units, 48 long-term SNF beds and 24 transitional care SNF beds. Management expects a portion of the construction costs for the new SNF units to be covered by fundraising. However, most of the construction costs for phase one of the Menger Springs expansion and Meadows projects will be funded by a limited public offering debt transaction consisting of $58.5 million in permanent long-term fixed-rate debt and $29.5 million in temporary debt. The Stable Outlook reflects Fitch's view that benefits of improved marketability and core operating profitability from the projects counterbalance the risks associated with significantly increased leverage. SECURITY The bonds are secured by a pledge of all revenues, first mortgage on all assets, and a debt service reserve fund. KEY RATING DRIVERS Revenue Defensibility - bbb Adequate Overall Demand Morningside operates two life plan communities (LPCs): Menger Springs and the Meadows. Overall ILU occupancy was strong averaging 94% in 2022 and 97% through the first nine-months of 2023 (ended Sept. 30, 2023). This excludes the Meadows campus ILU cottages, which were taken offline to accommodate new greenhouse style nursing homes to be constructed as a part of the Meadows project. Management began marketing the expansion ILUs in mid-2023. Though pre-sales velocity is adequate, Fitch considers the currently low level of presales to be an asymmetric risk consideration constraining the overall rating, especially because entrance fees generated from the new units will be used to paydown temporary debt. Overall healthcare occupancy has been trending favorably. SNF occupancy has improved from a 66% average in 2022 to 79% through the interim period, and ALU and memory care have averaged over 90% in both 2022 and the interim period (excluding ALUs that were taken offline as a part of the Meadows project). Rate increases in monthly service fees at both Menger Springs and the Meadows campuses occur regularly. Weighted average entrance fees of Menger Springs' existing and new units are below the $590,000 median sales price of homes in its primary market area (through the first eight-months of 2023). The combined market assessment reflects favorable population growth and greater competition in the San Antonio market (the Meadows) balanced against the current lack of competition in Boerne, TX (Menger Springs). Forefront Living recently announced the development of a new campus with 193 ILUs near Menger Springs that is planned to open in September 2026, which could potentially have a negative effect on demand. Operating Risk - bb Weak Profitability The large majority of residents are on rental/fee for service contracts and the majority of ILU residents with entrance fee contracts have 90% refundable agreements with a limited amount of healthcare services. In 2020, Morningside began offering only non-refundable and 50% refundable contracts. Morningside's operating risk reflects weak profitability, elevated capex requirements, and adequate capital-related metrics. Morningside's core operating profitability has been unfavorable to budget in interim 2023 due to management's decision to take ALU sand cottages offline to prepare for the Meadows project. Fitch view's Morningside's operating ratio, net operating margin (NOM) and NOM-adjusted of 97.2%, 7.9% and 9.4%, respectively, through the interim period as unfavorable, especially given the prevalence of rental/fee-for-service residence agreements that should provide for stronger core operating profitability. Morningside's operating risk includes its relatively high Medicaid exposure, which has accounted for about 31% of SNF net revenues for the past five years. Healthcare revenue consistently makes up about a third of revenue. Fitch views the high exposure to SNF operations and Medicaid as an asymmetric additional risk consideration as Medicaid programs provide the lowest reimbursement rates among all payors for SNF services. Morningside's management team is developing strategies to align its Medicaid admissions with its charitable revenue to mitigate the downward pressure on operating risk. Morningside's capital spending has averaged only 78% of depreciation over the past five years, resulting in an average age of plant that has risen from 12.2 years at FYE18 to 17.8 years at Sept. 30, 2023. The healthcare repositioning project and ILU expansion will cause future spending to increase significantly. Fitch believes that both projects, once completed, will enhance Morningside's current marketing position. After the drawdown of the debt for the current projects, Morningside's debt position will be very elevated as revenue-only coverage of pro forma maximum annual debt service (MADS) was only 0.5x through the interim period. The feasibility study shows a pro forma revenue only MADS coverage below 1x through 2025, but a sound improvement to 1.2x in 2027, the first full fiscal year after the new ILUs are filled. Pro forma MADS on permanent debt amounts to about 25% percent of annualized revenues and pro forma permanent debt to net available measured an unfavorable 26.6x through the interim period. Fitch expects overall capital-related metrics to moderate over time as a result of the additional revenue and cash flow from the expansion projects. Financial Profile - bb High Debt Load/Thin Pro Forma Leverage Metrics Morningside had unrestricted cash/adjusted debt of about 40% and pro forma MADS coverage of 0.6x, as calculated by Fitch, at Sept. 30, 2023. MADS coverage of existing debt was only 1.01x as of Sept. 30, 2023 (on a rolling 12-month basis), but management expects to draw upon its coverage support fund to meet its coverage requirement by YE 2023. Based on Fitch's forward-looking scenario analysis stress case, which incorporates the current debt and phase one ILU expansion, Morningside's key leverage metrics remain somewhat modest. Fitch's base case scenario shows Morningside maintaining operating and financial metrics that are largely consistent with the current rating and with historical levels of performance over the next two years. Profitability deteriorates temporarily in 2025 as the organization ramps up nursing expenses and works to stabilize occupancy in its new SNF beds. Capital spending is expected to be high from 2023-2025 as management executes on its strategic projects. Fitch's forward look assumes a stress to reflect both operating and investment market volatility. Morningside's cash/adjusted debt and MADS coverage maintain levels consistent with the rating throughout Fitch's base case and remain resilient even under a stress case scenario. Days cash on hand (DCOH) remains consistently at or above 200 days through the base case, which is neutral to the rating outcome. Asymmetric Additional Risk Considerations Weak presales for the Menger Springs expansion and the high reliance on Medicaid constitute asymmetric risk considerations. Generally, a preconstruction presale target of 70% (with minimum 10% deposits) indicates sufficient demand to fill a project. Once the series 2023C limited public offering debt is fully drawn down, Morningside will have $29.5 million outstanding in temporary variable-rate bonds, which Fitch anticipates will be paid off with initial entrance fees from the new ILUs. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Weaker operating performance or project cost overruns that cause cash to adjusted debt to be consistently below 20%; - Decline in profitability such that operating ratios exceed 105% consistently; - Softening of ILU demand such that combined ILU occupancy falls below 88% with expectations to be sustained at that level. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Given Morningside's expected capex projects, a rating upgrade is unlikely over the Outlook period. PROFILE Morningside operates two senior living communities in the greater San Antonio, TX metropolitan area. Menger Springs is a retirement community consisting of 93 rental ILUs, 40 entrance fee ILU cottages, 68 entrance fee ILUs in the Overlook Expansion, 48 ALUs, 42 memory care units, and 40 SNF beds located in Boerne. The Meadows includes 105 rental ILU apartments, 39 ILU cottages, 44 ALUs, and 100 SNF beds in San Antonio. The large majority of residents are on rental/fee for service contracts, and ILU residents with entrance fee contracts are typically 90% refundable with a limited amount of healthcare services. While Fitch views the resulting lower entrance fee refund liability as favorable, the reduced interim cash flows and balance sheet softening cause some concern. Morningside deposited $3.55 million into a coverage support fund designed to allow Morningside to continue to meet its coverage covenant requirements while undergoing this contract conversion. Morningside also operates a home care service, mmCare LLC. In FY22 (Dec. 31 YE), Morningside had total operating revenue of $35.5 million. 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. MOTLEY MILL: Seeks Approval to Hire Tarbox Law PC as Legal Counsel ------------------------------------------------------------------ Motley Mill and Cube Corporation seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Tarbox Law, PC as legal counsel. The Debtor requires legal counsel to: (a) prepare legal papers; (b) advise the Debtor regarding preparation of operating reports, motions for use of cash collateral, and development of a Chapter 11 plan of reorganization; (c) advise the Debtor concerning questions arising in the conduct of the administration of the estate and concerning the trustee's rights and remedies with regard to the estate's assets and the claims of secured, preferred and unsecured creditors and other parties-in-interest; and (d) assist the Debtor with any and all sales of assets, closing of such sales, and distribution to creditors. Max Tarbox, Esq., at Tarbox Law, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Max R. Tarbox, Esq. Tarbox Law, PC 2301 Broadway Lubbock, TX 79401 Telephone: (806) 686-4448 Facsimile: (806) 368-9785 Email: tami@tarboxlaw.com About Motley Mill and Cube Corporation Motley Mill and Cube Corporation filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 23-50240) on Dec. 4, 2023. In the petition signed by James A. Gwinn, president, the Debtor disclosed $919,415 in total assets and $1,117,339 in total liabilities. Tarbox Law, PC, led by Max R. Tarbox, Esq., serves as the Debtor's counsel. NATURAL DISASTER: Seeks to Hire Modesto Bigas Mendez as Counsel --------------------------------------------------------------- Natural Disaster Proof Homes, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Modesto Bigas Mendez, Esq., an attorney practicing in Ponce, Puerto Rico, to handle its Chapter 11 case. Mr. Mendez will be billed at his hourly rate of $250, plus reimbursement for expenses incurred. The Debtor paid the attorney a retainer of $5,000. Mr. Mendez disclosed in a court filing that he is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Modesto Bigas Mendez, Esq. Modesto Bigas Law Office P.O. Box 7462 Ponce, PR 00732 Telephone: (787) 844-1444 Facsimile: (787) 842-4090 Email: mbiasmendez@gmail.com About Natural Disaster Proof Homes Natural Disaster Proof Homes, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.P.R. Case No. 23-03863) on Nov. 27, 2023. In the petition signed by Hector M. Rodriguez Edwards, president, the Debtor disclosed under $1 million in both assets and liabilities. Modesto Bigas Mendez, Esq., serves as the Debtor's counsel. NEXTPOINT FINANCIAL: U.S. Bankruptcy Court Recognizes CCAA Order ---------------------------------------------------------------- NextPoint Financial Inc. (OTC PINK: NACQQ) on Dec. 12, 2023, disclosed that the U.S. bankruptcy court has recognized and given effect to the previously announced order (the "CCAA Order") granted by the Supreme Court of British Columbia on October 31, 2023. The CCAA Order approved the going concern sale transaction (the "Transaction") under the previously announced transaction agreement entered into on October 27, 2023 (as amended from time to time, the "Transaction Agreement") among the Company, certain of its direct and indirect subsidiaries, and BP Commercial Funding Trust, Series SPL-X (the "Purchaser"). The closing of the Transaction is currently expected to occur on or before December 31, 2023, subject to the satisfaction or waiver of the remaining conditions to closing. Upon closing of the Transaction, the Community Tax and Liberty Tax business operations will continue in the ordinary course. As previously announced, on closing, there will be no recovery for the general unsecured creditors of the acquired entities, unless expressly classified as "Assumed Liabilities" under the Transaction Agreement. Liabilities that will not be retained will be transferred to newly formed corporations (the "ResidualCos"), along with excluded assets. The Company expects that there will not be any recoveries available for creditors or equity holders from the ResidualCos. About NextPoint Financial NextPoint is an all-inclusive marketplace for financial services empowering hardworking and underserved consumers and small businesses. NextPoint's primary business units are Liberty Tax, a leading provider of tax preparation services, and Community Tax, an effective advocate for tax debt resolution on behalf of customers. NOVVI LLC: Gets OK to Hire Donlin as Claims Agent ------------------------------------------------- Novvi, LLC, received approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Donlin, Recano & Company, Inc. as claims and noticing agent. The firm will, among other things, oversee the distribution of notices and will assist in the maintenance, processing and docketing of proofs of claim filed in the Debtor's Chapter 11 case. The hourly rates charged by the firm for professional services are as follows: Senior Bankruptcy Consultant $185 - $225 per hour Case Manager $170 - $185 per hour Consultant/Analyst $140 - $165 per hour Technology/Programming Consultant $95 - $135 per hour Clerical $40 - $50 per hour Donlin received an advance payment retainer in the amount of $15,000. Lisa Terry, senior legal director at Donlin, disclosed in a court filing that her firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. Donlin can be reached at: Lisa Terry Donlin, Recano & Company, Inc. 48 Wall Street, 22nd Floor New York, NY 10005 Email: Lterry@donlinrecano.com About Novvi LLC Novvi, LLC, a Delaware limited liability company, was formed in 2011 as a joint venture between Amyris, Inc. and Cosan US, Inc. to develop, produce, market and sell lubricant base oils from renewable feedstocks. Novvi filed Chapter 11 petition (Bankr. S.D. Texas Case No. 23-90906) on Dec. 3, 2023, with $10 million to $50 million in both assets and liabilities. Judge Christopher M. Lopez oversees the case. Okin Adams Bartlett Curry, LLP, is the Debtor's legal counsel. OAK PARENT: Moody's Withdraws 'Caa1' CFR Following Debt Repayment ----------------------------------------------------------------- Moody's Investors Service has withdrawn all of its ratings for Oak Parent, Inc. (Augusta Sportswear), including the Caa1 corporate family rating, Caa1-PD probability of default rating and the Caa1 senior secured bank credit facilities ratings. At the time of withdrawal the outlook was stable. RATINGS RATIONALE Moody's has withdrawn the ratings because all of Augusta Sportswear rated debts have been fully repaid. This follows the acquisition of Augusta Sportswear by Platinum Equity. In connection with the transaction closing, Augusta Sportswear has fully repaid its senior secured bank credit facilities, including the $347 million (outstanding amount) senior secured term loan due 2025. Headquartered in Augusta, Georgia, Oak Parent, Inc. (Augusta Sportswear), through its subsidiaries, manufactures and distributes youth team sports uniforms, dance apparel and related products serving customers in the United States. The company has been majority owned by Kelso & Company, a private equity firm, since 2012, and does not publicly disclose financial information. Revenue for the twelve months ended July 1, 2023 was less than $350 million. OUTERSTUFF LLC: S&P Lowers Issuer Credit Rating to 'SD' ------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based youth licensed sports apparel maker Outerstuff LLC to 'SD' (selective default) from 'CCC-'. S&P also lowered its issue-level rating on the company's $155 million term loan due Dec. 29, 2023, to 'D' from 'CCC-'. S&P affirmed its 'B-' issue-level rating on the asset-based lending facility because there are no cross defaults with the term loan facility. The company also extended the maturity of this facility to September 2027. The downgrade reflects the expected missed payment of the $14 million non-extended term loan due Dec. 29, 2023, where a default on the obligation is a virtual certainty. The company executed an amendment and extension of its term loan on Nov. 15, 2023. As part of the transaction, the company's founder and CEO Sol Werdiger contributed $30 million of common equity, which was used to pay down a portion of the term loan balance. After the paydown, the new term loan outstanding is $122 million, of which $108 million was extended to Dec. 31, 2027, but $14 million was not extended due to end-of-life fund limitations and matures on Dec. 29, 2023. The amendment includes a forbearance that forbears lenders from exercising rights and remedies with regard to the upcoming Dec. 29, 2023, maturity until the earlier of a termination event or Dec. 31, 2027. In S&P's view, this represents a default on the term loan because of the expected missed payment because the company did not meet its contractual obligation to pay principal and interest on the non-extended portion at maturity. S&P said, "Subsequently, we expect to raise our issuer credit rating on Outerstuff to 'CCC+'. Our expectation of the 'CCC+' rating reflects our belief that Outerstuff's capital structure remains unsustainable given its weak cash flow generation. However, we forecast modest improvements next year and some liquidity relief with the maturity extensions." PALMER SQUARE 2023-3: S&P Assigns BB- (sf) Rating on Class E Notes ------------------------------------------------------------------ S&P Global Ratings assigned its ratings to Palmer Square CLO 2023-3 Ltd./Palmer Square CLO 2023-3 LLC's floating-rate debt. The debt issuance is a CLO securitization governed by investment criteria and backed primarily by broadly syndicated speculative-grade (rated 'BB+' or lower) senior secured term loans. The transaction is managed by Palmer Square Capital Management LLC. This is Palmer Square Capital Management LLC's fourth CLO in 2023. The ratings reflect S&P's view of: -- The diversification of the collateral pool; -- The credit enhancement provided through subordination, excess spread, and overcollateralization; -- The experience of the collateral manager's team, which can affect the performance of the rated debt through portfolio identification and ongoing management; and -- The transaction's legal structure, which is expected to be bankruptcy remote. Ratings Assigned Palmer Square CLO 2023-3 Ltd./Palmer Square CLO 2023-3 LLC Class A-1, $300.00 million: AAA (sf) Class A-2, $25.00 million: AAA (sf) Class B, $55.00 million: AA (sf) Class C (deferrable), $30.00 million: A (sf) Class D (deferrable), $30.00 million: BBB- (sf) Class E (deferrable), $17.50 million: BB- (sf) Subordinated notes, $40.235 million: Not rated PARK RIVER: Moody's Lowers CFR to B3 & Alters Outlook to Stable --------------------------------------------------------------- Moody's Investors Service downgraded Park River Holdings, Inc.'s (dba PrimeSource) corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD. At the same time, Moody's downgraded the rating on senior secured 1st lien bank credit facility to B3 from B2 and the rating on the senior unsecured notes to Caa2 from Caa1. The outlook was changed to stable from negative. The downgrade reflects PrimeSource's elevated leverage, which is expected to remain above 6.5x through year-end 2024. Interest coverage, defined as EBITA-to-interest expense, is also expected to remain below 1.5x through year-end 2024. Credit metrics have been pressured due to weaker volumes and earnings levels from declining demand in both new construction and repair & remodeling end markets. The stable outlook considers the company's larger exposure to the more stable repair & remodeling end market and good overall liquidity profile. The outlook is also supported by PrimeSource's revenue scale of over $2.5 billion, solid EBITDA margin, expanding market position, and end market diversity. RATINGS RATIONALE PrimeSource's B3 CFR reflects the company's leveraged capital structure and high fixed charges. Year-over-year volume declines across product categories have contributed to high leverage, which stands at 7.5x adjusted debt-to-EBITDA for the last twelve months ending September 30, 2023. Moody's forward view includes limited organic growth, which incorporates moderate growth in new residential construction and stability in repair & remodeling, which is PrimeSource's largest end market. Fixed charges including cash interest, term loan amortization and operating and finance lease payments are over $200 million per year, significantly reducing cash flow. Competition among distributors also constrains credit quality. Despite maintaining a branded product portfolio, some of PrimeSource's products are available from other distributors, making it difficult to increase pricing significantly and maintain profitability on those products. Providing an offset to PrimeSource's leveraged capital structure and other credit challenges is good profitability. Moody's expects adjusted EBITDA margin in the range of 12-14% through 2024, which is a key credit strength. Margins have expanded sequentially through 2023 as inbound freight and other input costs declined, and Moody's expects this trend to continue at a more moderate pace with further procurement and operational initiatives. PrimeSource has also made progress in reducing its revolver borrowings using free cash flow generation, which has been supported by a decrease in inventory levels. Moody's views PrimeSource's liquidity as good, supported by expected free cash flow generation and revolver availability. Moody's expects PrimeSource to generate moderate free cash flow in 2024 after considering earnings growth counterbalanced by a high interest burden and modest working capital investment. The company's cash balance as of September 30, 2023, was $9 million. Further, liquidity is supported by the company's $750 million asset-based revolving credit facility with $591 million of borrowing base availability, of which $78 million is drawn as of September 30, 2023. Moody's expects the company to continue to repay borrowings using cash flow generation. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if PrimeSource exhibits solid organic growth, and the company deleverages such that adjusted debt-to-EBITDA approaches 6.0x and adjusted EBITA-to-interest expense is maintained near 2.0x. Preservation of good liquidity and more conservative financial policies would support upwards rating movement. The ratings could be downgraded if PrimeSource's adjusted debt-to-EBITDA fails to trend below 7.0x and EBITA-to-interest expense is sustained near 1.0x. A deterioration in liquidity, an aggressive acquisition with additional debt or significant shareholder return activity could result in downward rating pressure as well. The principal methodology used in these ratings was Distribution and Supply Chain Services published in February 2023. Park River Holdings, Inc., headquartered in Irving, Texas, is a specialty branded building products distributor. Clearlake Capital Group, L.P., through its affiliates, is the owner of PrimeSource. PDG HOLDINGS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: PDG Holdings One, LLC 620 Manor Dr. Pacifica CA 94044 Business Description: The Debtor is the owner of real property located at 620 Manor Dr., Pacifica, CA valued at $1.4 million. Chapter 11 Petition Date: December 14, 2023 Court: United States Bankruptcy Court Northern District of California Case No.: 23-30844 Judge: Hon. Dennis Montali Debtor's Counsel: Michael R. Totaro, Esq. TOTARO & SHANAHAN, LLP P.O. Box 789 Pacific Palisades, CA 90272 Tel: (888) 425-2889 Fax: (310) 496-1260 Email: Ocbkatty@aol.com Total Assets: $1,400,000 Total Liabilities: $1,026,519 The petition was signed by Andrea Lanette Ruth as managing member. The Debtor filed an empty list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6M7EL7Q/PDG_Holdings_One_LLC__canbke-23-30844__0001.0.pdf?mcid=tGE4TAMA PELOTON INTERACTIVE: Expects to Complete Restructuring Plan by June ------------------------------------------------------------------- Peloton Interactive, Inc., has said a restructuring plan that began in February 2022 is expected to be substantially implemented by the end of fiscal year 2024. In February 2022, the Company announced and began implementing a restructuring plan to realign the Company's operational focus to support its multi-year growth, scale the business, and improve costs. The Restructuring Plan originally included: (i) reducing the Company's headcount; (ii) closing several assembly and manufacturing plants, including the completion and subsequent sale of the shell facility for the Company's previously planned Peloton Output Park; (iii) closing and consolidating several distribution facilities; and (iv) shifting to third-party logistics providers in certain locations. In fiscal year 2023, the Company continued to take actions to implement the Restructuring Plan. In July 2022, the Company announced it was exiting all owned-manufacturing operations and expanding its current relationship with Taiwanese manufacturer, Rexon Industrial Corporation. Additionally, in August 2022, the Company announced the decision to (i) fully transition its North American Field Operations to third-party providers, including the significant reduction of its delivery workforce teams; (ii) eliminate a significant number of roles on the North America Member Support team and exit its real-estate footprints in its Plano and Tempe locations; and (iii) reduce its retail showroom presence. As a result of the Restructuring Plan, the Company incurred the charges shown in the following table, of which Asset write-downs and write-offs are included within Impairment expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The remaining charges incurred due to the Restructuring Plan are included within Restructuring expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company's fiscal year ends June 30. In connection with the Restructuring Plan, the Company committed to the closures of certain warehouse and retail locations, the discontinuation of manufacturing in North America, and the wind down of certain software implementation and development projects. Due to the actions taken pursuant to the Restructuring Plan, the Company tested certain long-lived assets (asset groups) for recoverability by comparing the carrying values of the asset group to estimates of their future undiscounted cash flows, which were generally the liquidation value, or for operating lease right-of-use assets, income from a sublease arrangement. Based on the results of the recoverability tests, the Company determined that during the three months ended September 30, 2023 and 2022, the undiscounted cash flows of certain assets (asset groups) were below their carrying values, indicating impairment. The assets were written down to their estimated fair values, which were determined based on their estimated liquidation or sales value, or for operating lease right-of-use assets, discounted cash flows of a sublease arrangement. In connection with the Restructuring Plan, the Company estimates that it will incur additional cash charges of approximately $30.0 million, primarily composed of lease termination and other exit costs, by the end of fiscal year 2024. Additionally, the Company expects to recognize additional non-cash charges of approximately $15.0 million during fiscal year 2024, primarily composed of non-inventory asset impairment charges in connection with the Restructuring Plan. Peloton has incurred operating losses each year since its inception in 2012. Available data show the Company's net loss since 2018: Fiscal Year Ended Net Loss June 30, ($ in Mil.) ----------------- ----------- 2023 $1,261.7 2022 $2,827.7 2021 $189.0 2020 $71.6 2019 $195.6 2018 $47.9 For the three months ended Sept. 30, 2023 -- i.e., the first three months of Fiscal 2024 -- Peloton posted a net loss of $159.3 million. As of Sept. 30, Peloton had $2.67 billion in total assets and $3.04 billion in total liabilities. Debt includes $989.1 million in 0% Convertible Senior Notes, net, and $691.2 million in term loan. In February 2021, the Company issued $1.0 billion aggregate principal amount of the Notes in a private offering, including the exercise in full of the over-allotment option granted to the initial purchasers of $125.0 million. The Notes were issued pursuant to an Indenture between the Company and U.S. Bank National Association, as trustee. The Notes are senior unsecured obligations of the Company and do not bear regular interest, and the principal amount of the Notes does not accrete. The net proceeds from this offering were $977.2 million, after deducting the initial purchasers' discounts and commissions and the Company's offering expenses. Each $1,000 principal amount of the Notes is initially convertible into 4.1800 shares of the Company's Class A common stock, which is equivalent to an initial conversion price of approximately $239.23 per share. The Notes will mature on February 15, 2026, unless earlier converted, redeemed, or repurchased. The Notes will be convertible at the option of the holders at certain times and upon the occurrence of certain events. On or after August 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder regardless circumstances. Upon conversion, the Company may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash, shares of the Class A common stock or a combination of cash and shares of the Class A common stock, at the Company's election, in the manner and subject to the terms and conditions provided in the Indenture. It is the Company's current intent to settle the principal amount of the Notes with cash. The term loan is provided under a Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks. The Second Amended and Restated Credit Agreement provides for a $750.0 million term loan facility, which will be due and payable on May 25, 2027 or, if greater than $200.0 million of the Notes are outstanding on November 16, 2025 -- Springing Maturity Condition -- November 16, 2025. The Term Loan amortizes in quarterly installments of 0.25%, payable at the end of each fiscal quarter and on the maturity date. New York-based Peloton Interactive, Inc., is the largest interactive fitness platform in the world with a loyal community of members, consisting of individuals who have a Peloton account through a paid Connected Fitness Subscription or a paid Peloton App Membership. The Company pioneered connected, technology-enabled fitness with the creation of its interactive fitness equipment -- Connected Fitness Products -- and the streaming of immersive, instructor-led boutique classes to its Members anytime, anywhere. The Company makes fitness entertaining, approachable, effective, and convenient while fostering social connections that encourage Members to be the best versions of themselves. PENNSYLVANIA REAL ESTATE: Gives Up Fashion District Control ----------------------------------------------------------- WHYY News reports that Philadelphia-based shopping mall operator Pennsylvania Real Estate Investment Trust -- otherwise known as PREIT -- filed for Chapter 11 bankruptcy protection, its second bankruptcy filing in three years. When it sought bankruptcy in March 2020, PREIT restructured about $2 billion in debt, including an unsecured loan approved by Wells Fargo Bank. This month, PREIT had more than $1 billion in debt it was in danger of defaulting upon, which prompted the bankruptcy and financial restructuring of its debt that comes with that process. Except this time, when the bankruptcy court process is over, PREIT won't likely be a publicly traded company on the stock market anymore but will be privately owned by investors. Either way, PREIT's shopping mall portfolio, which includes the beleaguered Center City Fashion District, has been prominent across the Delaware Valley. Its portfolio also includes the Cherry Hill Mall in New Jersey, Plymouth Meeting Mall, and Willow Grove Park, among others. The future plans for the Fashion District -- which may include a new $1.5 billion NBA arena for the 76ers -- is still in the works, according to a statement from 76 Place, the developer. That sentiment was retweeted by David Adelman, co-owner of the Philadelphia 76ers and chair of 76 Devcorp. "This does not affect our plans or ability to deliver a $1.5 billion world-class arena and residential building," according to the statement. In the marketing materials for the Fashion District, the new NBA basketball arena is mentioned on Macerich's website but no plans or contracts have appeared to have been shared with investors at this time. But what's clear is that the deal between Santa Monica-based Macerich Company and the Philly mall operator PREIT has changed as a result of the bankruptcy, U.S. Securities and Exchange Commission records show. Macerich Company is taking over the $350 million debt and the asset in addition to daily operations, records show. In January 2018, a joint partnership between PREIT and Macerich known as PM Gallery LP took out a $250 million loan to redevelop the Fashion District in Philly and to "repay capital contributions to the venture previously made by the partners." The $350 million plan to transform the then-Gallery mall into the Fashion District included more than $90 million in taxpayer dollars. More than half of that total was tied to a financing deal involving subsidies typically earmarked for economically depressed neighborhoods. Developers promised the retrofitted mall would generate nearly $200 million in new tax revenues over 20 years while bringing thousands of jobs. That was before the COVID-19 pandemic halted the economy, thrusting the U.S. brick-and-mortar retail market into a death spiral. In December 2020, the deal changed again, so PREIT was on the hook for 50 percent of that total $350 million loan after Macerich paid down $100 million to $250 million. In January 2023, the joint venture paid down another $26 million of the loan and extended the loan's maturity date to January 22, 2024. At the time, PREIT told investors it was unsure if it would be able to keep paying down the Fashion District debt if the loan comes due in full in January 2024. As of September 2023, $73.3 million was still owed to Wells Fargo, which included $36.7 million owed by PREIT. On December 9, 2023, PREIT transferred all of its ownership interests in the Fashion District to Macerich in exchange for the release of the debt payments. Macerich did not immediately respond to requests for comment for this news story. PREIT declined to comment on the Fashion District and deferred all inquiries to Macerich. The company noted that all its shopping malls will "remain open for business and will continue operations without interruption" during the bankruptcy court process. PREIT told investors that it expects to emerge from bankruptcy in February 2024. It touted that the bankruptcy enables the company to reduce its debt load by $880 million. If approved by the bankruptcy court judge, its 'diverse group of leading investors' led by New York City-based Redwood Capital Management LLC and Nut Tree Capital Management LP will have more control as a private business. Both of these new investors appear to be private equity hedge funds, which typically take otherwise financially distressed companies and seek ways to repay debt, such as selling real estate. PREIT's chairman and CEO blamed its failure to compete in the market successfully on the economic climate with higher than average interest rates and inflation. "Unusual economic conditions have limited the company's options with respect to its debt obligations as meaningful achievements on the operating front were met with inflation and rising interest rates," said Joseph F. Coradino, chairman and CEO of PREIT, in a news release. About Pennsylvania Real Estate Pennsylvania Real Estate Investment Trust is a Pennsylvania business trust founded in 1960 and one of the first equity real estate investment trusts ("REITs") in the United States. It has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. PREIT currently owns interests in 23 retail properties, of which 22 are operating properties and one is a development property. PREIT and certain of its affiliates filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware (Bankr. D. Del. Case No. 20-12737) on Nov. 1, 2020, and quickly emerged from bankruptcy in December 2020 after winning confirmation of its prepackaged Chapter 11 plan. On Dec. 10, 2023, Pennsylvania Real Estate Investment Trust again filed for chapter 11 protection (Bankr. D. Del. Case No. 23-11974). In the petition filed by Lisa Most, as executive vice-president and general counsel, the Debtor reports estimated assets between $500,000 and $1 million and estimated liabilities between $1 billion and $10 billion. In the previous Chapter 11 cases, the Debtors tapped DLA Piper LLP (US) LLP and Wachtell, Lipton, Rosen & Katz as their legal counsel, and PJT Partners LP as their financial advisor. Prime Clerk was the claims agent. In the new Chapter 11 cases, the Debtors tapped DLA Piper LLP (US), Wachtell, Lipton, Rosen & Katz and Dilworth Paxson LLP as legal counsel, and PJT Partners LP is serving as financial advisor. Kroll is the claims agent. PERSIMMON HOLLOW: Seeks to Hire Nperspective as Financial Advisor ----------------------------------------------------------------- Persimmon Hollow Brewing Company, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Nperspective Advisory Services, LLC as financial advisor. The Debtor requires a financial advisor to: (a) assist and advise the Debtor with the analysis of its business, business plan, and strategic and financial position; (b) assist and advise the Debtor in connection with obtaining financing and any sales or other dispositions of assets of the Debtor; (c) assist the Debtor in preparing schedules, operating reports, financial reports, and material pleadings in the Chapter 11 case; (d) assist with the formulation, evaluation, implementation of various options for a restructuring plan to be confirmed in the Debtor's case under the Bankruptcy Code; (e) assist the Debtor in negotiations with creditors, shareholders, landlords and other appropriate parties-in-interest; (f) provide financial advisory services to the Debtor in connection with valuation, financial projection of other analyses with respect to a restructuring plan; and (g) participate in hearings before the bankruptcy court with respect to matters upon which Nperspective has provided advice. Nperspective will charge $395 per hour for William Long, Jr., CPA, and $450 per hour for Gary Colbert. In addition, the firm will seek reimbursement for expenses incurred. The firm will also require a retainer of $15,000 which will be paid in two monthly installments of $10,000 and $5,000. William Long, Jr., CPA, a partner at Nperspective, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: William A. Long, Jr., CPA Nperspective Advisory Services, LLC 2202 N. Westshore Blvd., Suite 200 Tampa, FL 33607 Telephone: (813) 507-3600 About Persimmon Hollow Brewing Company Persimmon Hollow Brewing Company, LLC owns and operates a brewery and taproom in DeLand, Fla. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Banke. M.D. Fla. Case No. 23-04742) on November 10, 2023. In the petition signed by Robert Burnette, president and chief manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Grace E. Robson oversees the case. The Debtor tapped Richard R. Thames, Esq., at Thames | Markey as legal counsel and Nperspective Advisory Services, LLC as financial advisor. PGX HOLDINGS INC: Reaches $1.45 Million Deal With WARN Ex-Employees ------------------------------------------------------------------- Rick Archer of Law360 reports that counsel for credit repair company PGX Holdings told a Delaware bankruptcy judge Monday, December 11, 2023, that it has struck a $1.45 million deal with ex-employees claiming they were laid off with insufficient warning prior to the company's Chapter 11 filing. About PGX Holdings PGX Holdings, Inc. and affiliates are credit repair service providers, helping customers repair their credit and achieve their credit goals. PGX Holdings help consumers access and understand the information contained in their credit reports, ensure that the information contained in those reports is fair, accurate, and complete, and address other factors that may negatively impact their credit scores. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10718) on June 4, 2023. In the petition signed by Chad Wallace, chief executive officer and president, the Debtor disclosed up to $500 million in assets and up to $10 billion in liabilities. Judge Craig T. Goldblatt oversees the case. Kirkland and Ellis LLP, Kirkland and Ellis International LLP, and 300 North LaSalle represents the Debtor as bankruptcy counsel. The Debtors also tapped Klehr Harrison Harvey Branzburg LLP as local bankruptcy counsel, Alvarez & Marsal North America, LLC, as financial advisor, Greenhill and Co., LLC as investment banker, Kurtzman Carson Consultants LLC as notice and claims agent, and Landis Rath and Cobb as conflicts counsel. King & Spalding, LLP, and Morris, Nichols, Arsht & Tunnell LLP, serve as counsel to Blue Torch Finance LLC, as DIP Agent and Prepetition First Lien Agent, and the Prepetition First Lien Lenders. Clyde & Co US LLP, serves as special counsel to the DIP Agent, the Prepetition First Lien Agent, and the Prepetition First Lien Lenders. Proskauer Rose LLP, is counsel to Prospect Capital Corporation, in its capacity as DIP Lender and lender under the Prepetition First Lien Credit Agreement. Morris, Nichols, Arsht & Tunnell LLP, is local counsel to Prospect Capital. PHOENIX GUARANTOR: S&P Alters Outlook to Stable, Affirms 'B' ICR ---------------------------------------------------------------- S&P Global Ratings revised its rating outlook on Louisville, Ky.-based Phoenix Guarantor Inc.'s (d/b/a BrightSpring Health Services) to stable from positive and affirmed its 'B' long-term issuer credit rating. S&P also affirmed its 'B' issue rating on its senior secured facilities, and the 'CCC+' rating on its second-lien debt. S&P said, "The stable outlook reflects our expectation that BrightSpring will continue to generate strong revenue growth and maintain leverage between 5x-7x. We expect the ratio of free cash flow to debt will improve materially in 2024 to above 3%, following challenges in 2023." Although BrightSpring's debt leverage of about 6.5x-7x has remained relatively stable since its October 2021 S-1 filing, its cash flow has weakened due to growth in working capital and higher interest rates. Even with hedges on about $2 billion of its floating rate debt, BrightSpring's annual interest expense has risen by about $70 million from 2022 and $140 million from 2021, absorbing much of the company's cash flow and lowering its EBIDA interest coverage ratio to below 2x for 2023 from 2.9x in 2021. The pressure on cash flow generation is exacerbated by the company's focus on growth, with the company investing over $115 million in capital expenditures and acquisition annually in 2022 and 2023. S&P said, "Given the delay in the IPO, we are less certain about the timing and success of that occurring in the near term as well as whether proceeds will improve credit measures sufficiently to justify an upgrade. We believe the financial sponsor owners remain interested in pursuing an IPO; however, recent performance and volatility in capital markets could lead to further delays in an IPO. Moreover, given the increased pressure on cash flow generation, an upgrade would likely require deleveraging to below 5x, rather than our prior threshold of 5.5x, to achieve a ratio of cash flow to debt above 5%." The lower-margin pharmacy business has been growing more rapidly (averaging about 20% annually over 2021-2023) than the higher-margin health care services business (about 10% annually, or flat including the divestiture of Equus) weighing on gross margins and EBITDA margins. This is occuring despite some economies from increasing scale. The rapid growth in the pharmacy segment also contributed to the increase in working capital. The company's business model of offering diversified and complementary services continues to hold up relatively well compared to some less-diversified peers as many home and community health care providers have seen reimbursement pressures and labor inflation eroding margins. S&P said, "Going forward, we expect BrightSpring will disproportionately invest in growing its provider solutions business improving the company's margin profile. That said, in the process, we expect the company's exposure to reimbursement and labor pressures to grow over the next few years." The ratings are constrained by BrightSpring's below-average profitability relative to the broader health care services industry, significant reimbursement risk, relatively low barriers to entry in many of its offerings, and high debt leverage. S&P S&P said, "Although BrightSpring's margins have contracted year-over-year in both its pharmacy and provider solutions businesses, we continue to view the business as well managed. Contraction in its pharmacy segment is primarily attributable to high growth in its lower-margin Onco360 specialty pharmacy subsidiary. BrightSpring's provider solutions business has held up favorably to many peers who continue to struggle. Still with uncertainty in the reimbursement rate and other government-led efforts to control health care costs, we believe BrightSpring's competitive advantages over peers are modest." S&P said, "Absent an IPO, we expect leverage will decline from about 6.5x-6.7x for 2023 to slightly below 6x in 2024 and 2025. The company derives about one-third of total revenue from Medicare Part D (35.1% for 2022) and about 25% from Medicaid (23.4% for 2022). These concentrations expose the company to reimbursement risk as governments seek to control or reduce health care costs. However, we view this risk as slightly offset by the cost-saving nature of many of the services the company provides to "must serve" populations and in-home care settings. Each of BrightSpring's provider solutions subsectors is highly fragmented and competitive, with numerous local competitors. Barriers to entry are relatively low and there are few opportunities for differentiation in each segment. Still, BrightSpring's record for quality provides some differentiation when competing for and renewing larger contracts. "The stable outlook reflects our expectation that BrightSpring will continue to generate strong revenue growth and maintain S&P Global Ratings-adjusted debt leverage between 5x-7x. We expect the ratio of free cash flow to debt will improve materially in 2024 to above 3%, following challenges in 2023 related to one-time costs and inventory investments. "We could lower our ratings on BrightSpring if we expect free operating cash flow to debt to be sustained below 3%. "We could consider a higher rating if we expect the company to sustain adjusted leverage below 5x and free operating cash flow of at least 5% of debt. Based on our forecasts, between $500 million and $900 million of debt repayment would be needed to support an upgrade." PIEDRA MALA: Gets OK to Hire The Smeberg Law Firm as Counsel ------------------------------------------------------------ Piedra Mala Contracting, LLC received approval from the U.S. Bankruptcy Court for the Western District of Texas to employ The Smeberg Law Firm, PLLC to handle its Chapter 11 case. The hourly rates of the firm's counsel and staff are as follows: Ronald J. Smeberg and Other Attorneys $450 Associate Attorneys $300 Legal Assistants/Paralegals $175 Accounting Professionals $250 In addition, the firm will seek reimbursement for expenses incurred. Mr. Smeberg disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ronald J. Smeberg, Esq. The Smeberg Law Firm, PLLC 4 Imperial Oaks San Antonio, TX 78248 Telephone: (210) 695-6684 Facsimile: (210) 598-7357 Email: ron@smeberg.com About Piedra Mala Contracting Piedra Mala Contracting, LLC is a heavy civil soil stabilization contractor covering the State of Texas and specializing in soil stabilization of industrial and infrastructure projects. Piedra Mala Contracting sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Texas Case No. 23-51662) on Dec. 1, 2023. In the petition signed by Ben Lambrecht, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Michael M. Parker oversees the case. Ronald Smeberg, Esq., at The Smeberg Law Firm, PLLC represents the Debtor as legal counsel. PREMIER BRANDS: Moody's Ups CFR to Caa1 & First Lien Loan to Caa2 ----------------------------------------------------------------- Moody's Investors Service upgraded Premier Brands Group Holdings LLC's corporate family rating to Caa1 from Caa3 and probability of default rating to Caa1-PD from Caa3-PD. Concurrently, Moody's upgraded the company's backed senior secured first lien term loan rating to Caa2 from Caa3. The outlook is maintained at stable. The upgrades reflect Premier Brands' improved operating performance and liquidity. Year-to-date Q3 2023, revenue was down 6% driven by declines in jeanswear, but EBITDA grew 37% reflecting lower freight and product cost. In addition, faster than expected inventory reduction resulted in greater revolver paydown and improved excess availability than Moody's anticipated at the February 2023 credit facility extension. As a result, leverage decreased to 4.5x Moody's-adjusted debt/EBITDA as of September 30, 2023 and interest coverage was at 1.5x (EBITDA-Capex)/interest expense. Liquidity is adequate over the next 12-18 months, including modestly positive projected free cash flow, and good revolver availability and covenant cushion. RATINGS RATIONALE Premier Brands' Caa1 CFR reflects the company's high business risk as a relatively small apparel company with mature brands that lack meaningful direct-to-consumer presence. The company has significant exposure to the department store channel, which faces challenging demand trends. Governance considerations are also a limiting factor, specifically the company's previous distressed exchange and volatile operating performance. While demand has been strong in the jewelry and Kasper businesses (partly offset by weakness in jeanswear), Moody's expects weakening discretionary spending to result in moderately lower earnings in 2024 and an increase in leverage to over 5x. In addition, although overall liquidity is adequate, the company generates limited free cash flow. Supporting the rating is Premier Brands' portfolio of owned brands with a diversified range of products that includes jewelry and formal and casual women's apparel. The stable outlook reflects Moody's expectation for adequate liquidity and moderate earnings pressure in 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if liquidity improves, including solid free cash flow generation, continued good covenant cushion and a lack of near-term maturities. An upgrade would require stable or growing sales and earnings performance, such that Moody's-adjusted debt/EBITDA is maintained below 5.0x and (EBITDA-Capex)/interest expense is approaching 1.75x. The ratings could be downgraded if operating performance or liquidity deteriorates, including constrained revolver availability, or if the likelihood of default increases. Premier Brands Group Holdings LLC (Premier Brands) is a designer, wholesaler and brand licensor of denim including under the Gloria Vanderbilt brand, women's apparel including Kasper, and jewelry through Napier and lonna & lilly. Licensed brands include Anne Klein, Nine West and Bandolino. The company (formerly named Nine West Holdings, Inc.) emerged from Chapter 11 bankruptcy in 2019 under the majority equity ownership of CVC Credit Partners and Brigade Capital. Revenue for the twelve months ended September 30, 2023 was less than $1 billion. The principal methodology used in these ratings was Retail and Apparel published in November 2023. PROBITAS TECHNOLOGY: Seeks to Hire Cunningham as Bankruptcy Counsel ------------------------------------------------------------------- Probitas Technology, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to employ Cunningham, Chernicoff & Warshawsky, PC to handle its Chapter 11 case. The hourly rates of the firm's counsel and staff are as follows: Robert E. Chernicoff $450 Partners $400 - $450 Associate Attorneys $225 - $350 Paralegals $100 - $150 In the 90-day period prior to the filing of this petition, the Debtor paid the sum of $24,013.61. Robert Chernicoff, Esq., a shareholder at Cunningham, Chernicoff & Warshawsky, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert E. Chernicoff, Esq. Cunningham, Chernicoff & Warshawsky, PC 2320 North Second Street P.O. Box 60457 Harrisburg, PA 17106 Telephone: (717) 238-6570 About Probitas Technology Probitas Technology, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 23-02670) on Nov. 27, 2023. In the petition signed by Benjamin Williams, president, the Debtor disclosed up to $10 million in both assets and liabilities. Robert E. Chernicoff, Esq., at Cunningham, Chernicoff & Warshawsky, PC represents the Debtor as legal counsel. PROPERTY MASTERSHIP: Seeks to Hire Farsad Law Office as Counsel --------------------------------------------------------------- Property Mastership Excel, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of California to hire Farsad Law Office, P.C., as its bankruptcy counsel. The firm's services include: i. Advising the Debtor with respect to its powers and duties in the continued operation of its business and management of its property; ii. Taking necessary action to avoid any liens against the Debtor's property, if needed; iii. Assisting, advising and representing the Debtor in consultations with creditors regarding the administration of its Chapter 11 case, including the creditors holding liens on the property; iv. Advising and taking any action to stay foreclosure proceedings against any of the Debtor's property; v. Preparing legal papers; vi. Preparing a disclosure statement and plan of reorganization, and representing the Debtor at any hearing to approve the disclosure statement and confirm the plan; vii. Assisting, advising and representing the Debtor in any manner relevant to a review of any contractual obligations, and asset collection and dispositions; viii. Preparing documents relating to the disposition of assets; ix. Advising the Debtor on finance and finance-related matters and transactions relating to the sale of its assets; x. Assisting, advising and representing the Debtor in any issues associated with the acts, conduct, assets, liabilities and financial condition of the Debtor, and any other matters relevant to the case or to the formulation of a plan of reorganization; xi. Assisting, advising and representing the Debtor in the negotiation, formulation, preparation and submission of any plan of reorganization and disclosure statement; xii. Advising and assisting the Debtor with respect to resolving disputes with any creditor that may arise and providing other necessary services; xiii. Preparing status conference statements, and appearing at all court hearings as necessary, including status conference hearings before the court; and xiv. Obtaining the necessary court approval of the disclosure statement and soliciting ballots as necessary for plan confirmation. The hourly rates charged by the firm's attorneys and paralegals are as follows: Arasto Farsad $350 per hour Nancy Weng $350 per hour Paralegals $100 per hour In addition, the firm will seek reimbursement for work-related expenses incurred. The Debtor provided the firm with a retainer of $10,000, plus the Chapter 11 filing fee of $1,738. As disclosed in court filings, Farsad Law Office neither holds nor represents an interest adverse to the Debtor's estate. Farsad Law Office can be reached at: Arasto Farsad, Esq. Nancy Weng, Esq. Farsad Law Office, P.C. 1625 The Alameda, Suite 525 San Jose, CA 95126 Tel: 408-641-9966 Fax: 408-866-7334 Emails: farsadlaw1@gmail.com nancy@farsadlaw.com About Property Mastership Excel Property Mastership Excel, LLC, filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 23-51330) on Nov. 15, 2023, with $1 million to $10 million in both assets and liabilities. Michael Luu, managing member, signed the petition. The Debtor is represented by Farsad Law Office, P.C. RACE POINT X: S&P Lowers Class F-R Notes Rating to 'CCC+ (sf)' -------------------------------------------------------------- S&P Global Ratings lowered its rating on class F-R debt from Race Point X CLO Ltd., a U.S. CLO that is managed by Bain Capital Credit L.P. At the same time, S&P affirmed its ratings on the class A-1-R, B-1-R, B-2-R, C-1-R, C-2-R, D-R, and E-R debt. S&P also removed its ratings on the class E-R and F-R debt from CreditWatch, where S&P had placed them with negative implications on Oct. 24, 2023, primarily due to the decline in their overcollateralization (O/C) levels since S&P's rating actions in October 2021. The rating actions follow S&P's review of the transaction's performance using data from the October 2023 trustee report. Though the class A-1-R debt had received a total paydown of $24.59 million since the October 2021 rating actions that reduced its balance to 88.13% of its original issuance, all the trustee O/C ratios have declined. The changes in the O/C ratios per the October 2023 trustee report include: -- The class A/B O/C ratio decreased to 126.34% from 127.93% in July 2021, which we used for our October 2021 rating actions. -- The class C O/C ratio decreased to 117.39% from 118.87%. -- The class D O/C ratio decreased to 109.31% from 110.68%. -- The class E O/C ratio decreased to 104.80% from 106.12%. This decline is likely due to a combination of par losses and increased haircuts following exposure to 'CCC' collateral in excess of the minimum threshold. The portion of collateral obligations rated in the 'CCC' category has increased to $32.99 million according to the October 2023 trustee report from $29.20 million reported in July 2021. Though the increase seems modest in terms of dollar value, the portfolio is amortizing and hence, the exposure in terms of percentage increased to 8.66% in October (versus 7.59% in July 2021). Since this exposure continues to be higher than the threshold, the haircuts to the O/C ratios increased to $3.99 million from $0.10 million, which in turn, decreased the O/C ratios. Meanwhile, during the same period, collateral obligations rated in the default category have marginally decreased to $5.39 million from $5.56 million, which currently represent 1.39% of the underlying portfolio. However, S&P noticed since its last rating action that the transaction appears to have incurred some reduction in its portfolio par value based on the various trades to mitigate credit risk. S&P said, "All the above factors played a role in decreasing the credit support. We lowered the class F-R debt rating and removed it from CreditWatch negative because it was not passing the cash flow results at its previous rating. The lowered rating reflects our cash flow results, deteriorated credit quality of the underlying portfolio, and the decrease in credit support available to the class F-R debt. "On a standalone basis, the results of our cash flow analysis indicate a lower rating for the class F-R debt. However, our action considered its pure O/C ratio (O/C without any haircuts) of 103.70%, and our expectation that the continued paydowns of the class A-1-R debt could positively affect the junior tranches also. We do not believe that this class meets our threshold for 'CC' risk and but needs favorable conditions, and therefore, should be in the 'CCC' category as per our ratings definition. Further increases in defaults or par losses could lead to negative rating actions on the debt. "The affirmations on the classes A-1-R, B-1-R, B-2-R, C-1-R, C-2-R, D-R, and E-R debt reflect their passing cash flow results at the current rating levels and our view that the credit support available for each class is commensurate with the assigned rating level. "We also note that the results of the cash flow analysis indicate a higher rating on the class B-1-R, B-2-R, C-1-R, and C-2-R debt. Our rating actions reflect additional sensitivity runs that we considered to address the exposure of the portfolio to lower quality assets and assets trading at significantly lower than par. "In line with our criteria, our cash flow scenarios applied forward-looking assumptions on the expected timing and pattern of defaults, and recoveries upon default, under various interest rate and macroeconomic scenarios. In addition, our analysis considered the transaction's ability to pay timely interest and/or ultimate principal to each of the rated tranches. The results of the cash flow analysis--and other qualitative factors as applicable--demonstrated, in our view, that all of the rated outstanding classes have adequate credit enhancement available at the rating levels associated with these rating actions." Race Point X CLO Ltd. has transitioned its liabilities to three-month CME term SOFR as its underlying index with the Alternative Reference Rates Committee-recommended credit spread adjustment. S&P's cash flow analysis reflects this change and assumes that the underlying assets have also transitioned to a term SOFR as their respective underlying index. If the trustee reports indicated a credit spread adjustment on any asset, its cash flow analysis considered the same. S&P will continue to review whether the ratings assigned to the debt remain consistent with the credit enhancement available to support them and take rating actions as it deems necessary. Rating Lowered And Removed From CreditWatch Negative Race Point X CLO Ltd. Class F-R to 'CCC+ (sf)' From 'B- (sf)'/Watch Neg Ratings Affirmed And Removed From CreditWatch Negative Race Point X CLO Ltd. Class E-R to 'B+ (sf)' From 'B+ (sf)'/Watch Neg Ratings Affirmed Race Point X CLO Ltd. Class A-1-R: AAA (sf) Class B-1-R: AA (sf) Class B-2-R: AA (sf) Class C-1-R: A (sf) Class C-2-R: A (sf) Class D-R: BBB- (sf) RGP INC: Richardo Kilpatrick Named Subchapter V Trustee ------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed Richardo Kilpatrick, Esq., at Kilpatrick & Associates, P.C. as Subchapter V trustee for RGP, Inc. Mr. Kilpatrick will be paid an hourly fee of $375 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Kilpatrick declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Richardo I. Kilpatrick, Esq. Kilpatrick & Associates, P.C. 903 N. Opdyke Rd., Ste. C. Auburn Hills, MI 48326 Phone: (248) 377-0700 Fax: (248) 377-0800 Email: rkilpatrick@kaalaw.com About RGP Inc. RGP, Inc., doing business as Quality Team 1, is an ISO 9001:2008-registered company specializing in contract inspection, customer representation and launch support with a primary focus on the automotive industry. The company is based in Detroit, Mich. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-50578) on Dec. 1, 2023, with $2,092,222 in assets and $5,116,368 in liabilities. Bradley Williams, president, signed the petition. Judge Maria L. Oxholm oversees the case. Lynn M. Brimer, Esq., at Strobl, PLLC represents the Debtor as legal counsel. RKS ENTERPRISES: Seeks to Hire Keith Boyd as Bankruptcy Counsel --------------------------------------------------------------- RKS Enterprises, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Oregon to employ Keith Y. Boyd, PC to handle its Chapter 11 case. On November 22, 2023, the firm received a modest retainer of $6,700 from the Debtor. The Debtor has agreed to deposit the sum of $3,050 per month starting January 2024 until an additional retainer of $18,300 has been paid. The hourly rates of the firm's counsel and staff are as follows: Keith Y. Boyd $445 Melissa A. Arnold $185 Law Clerk $200 Legal Assistants $115 In addition, the firm will seek reimbursement for expenses incurred. Keith Boyd, Esq., the firm's principal, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Keith Y. Boyd, Esq. Keith Y. Boyd, PC 724 S. Central Ave., Suite 106 Medford, OR 97501 Telephone: (541) 973-2422 Facsimile: (541) 973-2426 Email: keith@boydlegal.net About RKS Enterprises RKS Enterprises, Inc. filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 23-62181) on Nov. 22, 2023. In the petition filed by Karen Summers, president, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Thomas M. Renn oversees the case. Keith Y. Boyd, PC serves as the Debtor's counsel. ROAD LION: Jodi Dubose Named Subchapter V Trustee ------------------------------------------------- Mark Zimlich, the U.S. Bankruptcy Administrator for the Southern District of Alabama, appointed Jodi D. Dubose as Subchapter V trustee for Road Lion Corporation. About Road Lion Road Lion Corporation filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Ala. Case No. 23-12841) on Dec. 1, 2023, with $500,001 to $1 million in both assets and liabilities. Judge Henry A. Callaway oversees the case. Anthony B. Bush, Esq., at The Bush Law Firm, LLC represents the Debtor as bankruptcy counsel. RODS CUSTOM: Gets OK to Hire Goodman Law Practice as Counsel ------------------------------------------------------------ Rods Custom Workroom, LLC received approval from the U.S. Bankruptcy Court for the District of Arizona to hire Goodman Law Practice, PLC to handle its Chapter 11 case. The hourly rates charged by the firm's attorneys and staff are as follows: Attorneys $350 – 395 per hour Paralegals $150 – 225 per hour Legal assistants $100 per hour Jacob Goodman, Esq., owner of Goodman Law Practice, disclosed in a court filing that he and his firm do not have any connection with the Debtor, creditors or any other party involved in the Debtor's bankruptcy case. Goodman Law Practice can be reached at: Jacob R. Goodman, Esq. Goodman Law Practice, PLC dba Rock Law Firm P.O. Box 28365 Tempe, AZ 85285-8365 Phone: 480-605-4409 Fax: (602) 491-2062 Email: Jacob@rocklawaz.com About Rods Custom Rods Custom Workroom, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Ariz. Case No. 23-08017) on Nov. 7, 2023, with up to $50,000 in both assets and liabilities. Michael Carmel of Michael W. Carmel, Ltd. serves as Subchapter V trustee. Judge Eddward P. Ballinger Jr. oversees the case. Jacob R. Goodman, Esq. of Goodman Law Practice PLC represents the Debtor as legal counsel. SHAGTASTIC ENTERPRISES: Case Summary & 18 Unsecured Creditors ------------------------------------------------------------- Debtor: Shagtastic Enterprises, Inc. DBA Newton Tire & Auto FDBA Heaton Auto DBA Main Street Automotive DBA Wilkins Investments, Inc. 1907 E. Main Street Russellville, AR 72801 Business Description: The Debtor offers automotive repair and maintenance services. Chapter 11 Petition Date: December 13, 2023 Court: United States Bankruptcy Court Eastern District of Arkansas Case No.: 23-13922 Judge: Hon. Phyllis M. Jones Debtor's Counsel: Vanessa Cash Adams, Esq. AR LAW PARTNERS, PLLC Plaza West Building 415 N. McKinley Street, Suite 830 Little Rock, AR 72205 Tel: 501-710-6500 Fax: 501-710-6336 E-mail: vanessa@arlawpartners.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Wilkins as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 18 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/O5SOELY/Shagtastic_Enterprises_Inc__arebke-23-13922__0001.0.pdf?mcid=tGE4TAMA SMOKE SHOWIN: Michael Markham Named Subchapter V Trustee -------------------------------------------------------- The U.S. Trustee for Region 21 appointed Michael Markham, Esq., as Subchapter V trustee for Smoke Showin' Catering, LLC. Mr. Markham, a partner at Johnson Pope Bokor Ruppel & Burns, LLP, 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. Markham declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Michael C. Markham, Esq. Johnson Pope Bokor Ruppel & Burns, LLP 401 E. Jackson Street, Suite 3100 Tampa, FL 33602 Phone: (727) 480-5118 Email: Mikem@jpfirm.com About Smoke Showin' Catering Smoke Showin' Catering, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-05461) on Dec. 1, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Catherine Peek McEwen oversees the case. Matthew B. Hale, Esq., at Stichter, Riedel, Blain & Postler represents the Debtor as legal counsel. SOHO OFFICES: Seeks Approval to Hire Frances Caruso as Bookkeeper ----------------------------------------------------------------- Soho Offices Suites, LLC, doing business as Select Office Suites, seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Frances Caruso, a bookkeeper based in New York. The Debtor requires a bookkeeper to: (a) prepare and review monthly operating statements and other financial reports or statements; and (b) render such other financial assistance or services as may be necessary in the Chapter 11 case. Ms. Caruso will be billed at her hourly rate of $75, plus reimbursement of expenses incurred. She also agreed to accept a retainer of $750 from the Debtor. Ms. Caruso disclosed in a court filing that she is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The professional can be reached at: Frances M. Caruso 45 Popham Road, 4F Scarsdale, NY 10583 About Soho Offices Suites Soho Offices Suites, LLC, doing business as Select Office Suites, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-11839) on Nov. 18, 2023. In the petition signed by its chief operating officer, Angela Olivo, the Debtor disclosed $2,451,967 in total assets and $2,433,463 in total liabilities. Judge Lisa G. Beckerman oversees the case. The Debtor tapped Douglas Pick, Esq., at Pick & Zabicki, LLP as legal counsel and Frances M. Caruso as bookkeeper. SPARTAN GROUP: Voluntary Chapter 11 Case Summary ------------------------------------------------ Lead Debtor: Spartan Group Holdings, LLC 6021 Connection Drive, Suite 200 Irving, TX 75039 Business Description: Spartan Group is a family of companies that provide dependable turnkey engineering, construction, and supply chain service solutions. Chapter 11 Petition Date: December 13, 2023 Court: United States Bankruptcy Court Eastern District of Texas Eight affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Spartan Group Holdings, LLC (Lead Case) 23-42384 Spartan Concrete Construction, LLC 23-42385 Spartan Engineering Services, LLC 23-42386 Spartan Equipment Leasing, LLC 23-42387 Spartan Fabrication Services, LLC 23-42388 Spartan Metals Distribution, LLC 23-42389 Spartan Reinforcing, LLC 23-42390 Spartan Valley Chili Road, LLC 23-42391 Judge: Hon. Brenda T. Rhoades Debtors' Counsel: Davor Rukavina, Esq. MUNSCH HARDT KOPF & HARR, P.C. 500 N. Akard St., Suite 4000 Dallas, TX 75201-6605 Tel: 214-855-7500 Email: drukavina@munsch.com Lead Debtor's Estimated Assets: $50 million to $100 million Lead Debtor's Estimated Liabilities: $100 million to $500 million The petitions were signed by Adrian J. Cano as chief executive officer. Copies of the Debtors' lists of 20 largest unsecured creditors are now available for download at PacerMonitor.com. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VGQSPEQ/Spartan_Group_Holdings_LLC__txebke-23-42384__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/V7AN6GY/Spartan_Concrete_Construction__txebke-23-42385__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/2WZMHOI/Spartan_Engineering_Services_LLC__txebke-23-42386__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/3PPVILY/Spartan_Equipment_Leasing_LLC__txebke-23-42387__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/YF5XLEI/Spartan_Fabrication_Services_LLC__txebke-23-42388__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/Y5G3J6Y/Spartan_Metals_Distribution_LLC__txebke-23-42389__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/ZX7OB2Q/Spartan_Reinforcing_LLC__txebke-23-42390__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/6OGU2DQ/Spartan_Valley_Chili_Road_LLC__txebke-23-42391__0001.0.pdf?mcid=tGE4TAMA SUNOPTA FOODS: Moody's Withdraws 'B2' CFR Following Debt Repayment ------------------------------------------------------------------ Moody's Investors Service has withdrawn all ratings for SunOpta Foods Inc. including the B2 corporate family rating and the B2-PD probability of default rating. At the same time, Moody's has withdrawn the B2 ratings assigned to the USD senior secured bank credit facilities, consisting of a $230 million ABL revolving credit facility expiring December 2025, $75 million delayed draw term loan due December 2025 and $20 million FILO term loan due April 2024. The SGL-3 Speculative Grade Liquidity Rating has also been withdrawn. At the time of withdrawal the outlook was stable. RATINGS RATIONALE Moody's has withdrawn the ratings because SunOpta Foods' debt previously rated by Moody's has been fully repaid. SunOpta Foods Inc., a subsidiary of SunOpta Inc., headquartered in Eden Prairie, Minnesota, US, is focused on plant-based food (fruit snacks and smoothie bowls) and beverages businesses (oat, almond, soy, other plant-based milks; nutrition beverages; broths; and teas), for sale to retail/private label customers, food service distributors and food manufacturers, primarily in the US. SUPOR PROPERTIES: Files Amendment to Disclosure Statement --------------------------------------------------------- BEB Bergen Ave, LLC, a New York limited liability company and a secured creditor of Supor Properties Bergen Avenue, LLC, submitted a First Amended Disclosure Statement in support of First Amended Plan of Liquidation dated December 7, 2023. The Plan provides for the liquidation of the Debtor's assets and distribution to Creditors and holders of Equity Interests in the Debtor. The Plan Proponent believes that the Plan provides the best and most prompt possible recovery to holders of Claims and Equity Interests in the Debtor. On November 3, 2023, the Secured Creditor filed a Motion for the Appointment of a Chapter 11 Trustee due to, among other things, the Debtor's failure to adequately prosecute the Case. At a hearing held on November 14, 2023, the Bankruptcy Court entered an order directing the United States Trustee to appoint a Chapter 11 Trustee. Pursuant to notice entered on November 15, 2023, the United States Trustee appointed Andrea Dobin as the Chapter 11 Trustee. After an initial investigation, the Chapter 11 Trustee filed her initial investigatory report on December 1, 2023 pursuant to which the Chapter 11 Trustee reported on the scope of her investigation to date and advised of her decision to support the confirmation of the Plan. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors and the equity holder: * Class 3 consists of General Unsecured Claims. After the payment in full of Allowed Secured Claims in Classes 1 and 2, Allowed Claims in Class 3 shall receive Pro Rata Distributions up to the full amount their Allowed Claims, plus simple interest at the Federal Judgment Rate. Such Pro Rata Distributions shall be made from the Proceeds of the sale of the Plan Assets. * Class 5 consists of Equity Interests. Holders of Equity Interests in the Debtor shall retain their Equity Interests; provided, however, that, effective as of the Effective Date, Section 9 of the Operating Agreement of the Debtor shall be deemed amended and restated in its entirety to read as provided on the Plan, which amendment and restatement shall remain effective until such time as there is no longer any Plan Administrator appointed pursuant to the terms, conditions, and provisions of the Plan, at which time Section 9 of the Operating Agreement of the Debtor shall revert to its existing language. After the payment in full of Allowed Secured Claims in Classes 1 and 2 and Allowed Claims in Classes 3 and 4, holders of Equity Interests in the Debtor shall receive Pro Rata Distributions of any remaining Proceeds from the sale of the Plan Assets. The Plan provides that all Leases will be rejected effective as of the Effective Date and for a process by which Bergen Avenue can be marketed for sale by the Plan Administrator to a Third Party without the non-paying affiliated and otherwise related Tenants remaining in possession of Bergen Avenue. The Plan contemplates a marketing and sale process of approximately 4 months from the Effective Date. Plan Expenses will be funded though the proceeds of the Plan Funding Advances and the Proceeds of the Plan Assets. As more fully described herein, and in the Plan, the Plan provides certain releases to the Secured Creditor in exchange for the Plan Funding Advances. Payments on account of Allowed Claims and, thereafter, Equity Interests in the Debtor will be made through Distributions of the Proceeds of the sale of the Plan Assets. The Plan appoints a Plan Administrator pursuant to Section 1142 of the Code. The Plan Administrator has assigned duties and responsibilities under the Plan, including, without limitation, the administration of all of the Plan Assets and the Proceeds, and, subject to the specific provisions of the Plan, shall have the authority to exercise all of the rights and powers of a debtor in possession granted pursuant to Section 1107 of the Code in connection with managing such duties and responsibilities and administering the Plan Assets and the Proceeds. The Bankruptcy Court will hold a hearing to consider the final approval of this Disclosure Statement and confirmation of the Plan on January 23, 2024. To be counted, ballots must be completed, signed, and returned so that they are received by no later than January 9, 2024, at 5:00 p.m. A full-text copy of the First Amended Disclosure Statement dated December 7, 2023 is available at https://urlcurt.com/u?l=lkPbpx from PacerMonitor.com at no charge. Counsel for BEB Bergen: Derek J. Baker, Esq. Brian M. Schenker, Esq. Lauren S. Zabel, Esq. REED SMITH LLP 506 Carnegie Center, Suite 300 Princeton, New Jersey 08540 Telephone: 609-987-0050 Fax: 609-951-0824 Email: dbaker@reedsmith.com bschenker@reedsmith.com lzabel@reedsmith.com About Supor Properties Supor Properties Bergen Avenue LLC is in the business of a multifaceted, unique technical industrial support facility provider in addition to its real estate, landlord business. The Debtor filed a Chapter 11 petition (Bankr. D.N.J. Case No. 23-15758) on July 5, 2023, with $0 to $50,000 in assets and $10 million to $50 million in liabilities. Joseph Supor III, authorized member, co-trustee of Marital Trust, signed the petition. Jay Meyers, Esq. of J. MEYERS PLLC, is the Debtor's legal counsel. SUPOR PROPERTIES: Seeks to Tap Tomei & Tomei as Bankruptcy Counsel ------------------------------------------------------------------ Supor Properties Bergen Avenue, LLC seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to employ Tomei & Tomei, PLLC to handle its Chapter 11 case. Jeffrey Tomei, Esq., a partner at Tomei & Tomei, agreed to waive the legal fee in this matter. Mr. Tomei disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey E. Tomei, Esq. Tomei & Tomei, PLLC 963 Post Avenue-2nd Floor Staten Island, NY 10302 Telephone: (718) 815-0700 Email: jtomeilaw@gmail.com About Supor Properties Supor Properties Bergen Avenue LLC is in the business of a multifaceted, unique technical industrial support facility provider in addition to its real estate, landlord business. The Debtor filed Chapter 11 Petition (Bankr. D.N.J. Case No. 23-15758) on July 5, 2023, with up to $50,000 in assets and up to $50 million in liabilities. Joseph Supor III, authorized member, co-trustee of Marital Trust, signed the petition. The Debtor tapped Jeffrey E. Tomei, Esq., at Tomei & Tomei, PLLC as legal counsel. TERRESTRIAL BREWING: Frederic Schwieg Named Subchapter V Trustee ---------------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed Frederic Schwieg, Esq., at Schwieg Law, as Subchapter V trustee for Terrestrial Brewing Company, LLC. Mr. Schwieg will be paid an hourly fee of $300 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Schwieg declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Frederic P. Schwieg, Esq. Schwieg Law 2705 Gibson Drive Rocky River, OH 44116-1815 Phone: (440) 499-4506 Email: fschwieg@schwieglaw.com About Terrestrial Brewing Company Terrestrial Brewing Company, LLC owns and operates a brewery located in the Battery Park neighborhood of Cleveland, Ohio. The Taproom houses an American-made, five-barrel brewhouse from Portland Kettle Works. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 23-14226) on Dec. 1, 2023, with up to $50,000 in assets and $1 million to $10 million in liabilities. Ryan G. Bennett, president, signed the petition. Judge Suzana Krstevski Koch oversees the case. Jonathan P. Blakely, Esq., represents the Debtor as legal counsel. TIKEHAU US V: S&P Assigns BB-(sf) Rating on $16.25MM Class E Notes ------------------------------------------------------------------ S&P Global Ratings assigned its ratings to Tikehau US CLO V Ltd./Tikehau US CLO V LLC's floating- and fixed-rate debt. The debt issuance is a CLO securitization governed by investment criteria and backed primarily by broadly syndicated speculative-grade (rated 'BB+' or lower) senior secured term loans. The transaction is managed by Tikehau Structured Credit Management LLC. The ratings reflect S&P's view of: -- The collateral pool's diversification; -- The credit enhancement provided through subordination, excess spread, and overcollateralization; -- The experience of the collateral manager's team, which can affect the performance of the rated debt through portfolio identification and ongoing management; and -- The transaction's legal structure, which is expected to be bankruptcy remote. Ratings Assigned Tikehau US CLO V Ltd./Tikehau US CLO V LLC Class A-1 $300.00 million: AAA (sf) Class A-2 $20.00 million: AAA (sf) Class B-1 $50.00 million: AA (sf) Class B-2 $10.00 million: AA (sf) Class C (deferrable) $30.00 million: A (sf) Class D (deferrable) $27.50 million: BBB- (sf) Class E (deferrable) $16.25 million: BB- (sf) Subordinated notes $51.50 million: Not rated TOSCA SERVICES: Moody's Lowers CFR & First Lien Term Loan to Caa1 ----------------------------------------------------------------- Moody's Investors Service downgraded Tosca Services, LLC's corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD, and the rating on its senior secured first lien term loan to Caa1 from B3. The outlook remains negative. The downgrade reflects the lack of sufficient credit metric improvement and a deteriorating liquidity position. "Liquidity and credit metrics are weak, while capital expenditures necessary to serve new business negatively affect free cash flow generation," said Scott Manduca, Vice President at Moody's. Governance considerations, including financial strategy and risk management and management credibility and track record, were a key driver to the rating action. RATINGS RATIONALE Tosca's Caa1 corporate family rating reflects the company's weak liquidity position, high leverage, low interest coverage, and lack of free cash flow. The company's revenue is relatively small at about $500 million, and the company competes against a larger rated competitor in the space. Debt leverage is high at over 7x's and capital expenditures represent close to 15% of annual revenue. Capital expenditures are necessary for pallet, container, and equipment needs in serving new business wins and negatively affects free cash flow generation. In addition, it usually takes about 12-24 months before the cash flow benefits of new business is fully realized. Therefore, Tosca relies heavily on its revolver for funding, which increases the amount of debt outstanding, and has limited ability through free cash flow generation to reduce absolute debt. The Caa1 CFR rating also reflects Tosca's product certification to transport perishable foods like meat, cheese, fresh produce, and eggs in the stable food and beverage end market. The company's pallets and containers offer a more ESG friendly option given their reuse and recyclability characteristics. The useful life of Tosca's products is about fifteen years, after which they can be ground up and made into new sustainable containers and pallets. The durability of these products compared to less sturdy alternatives provides a benefit to the customer in the form of less damage and waste of transported food items. In addition, Tosca's containers can be stacked and used as displays in the customers retail location providing efficiency in eliminating restacking or assembly of the products. Tosca's liquidity profile is weak. Moody's forecast the company will be reliant on its revolving credit facility in the normal course of business to fund growth capital expenditures needed to service new business wins. As of September 30, 2023, Tosca had $94 million drawn on its upsized $155 million ABL facility and cash of around $12 million. Moody's forecast free cash flow to be negative $24 million in 2023, and negative $22 million in 2024. The company's ABL revolver expires in October 2026 and its senior secured first lien term loan matures in August 2027, leaving a limited runway to improve credit metrics prior to necessary refinancing. The Caa1 rating on the term loan, the same as the CFR, reflects that secured debt comprises the majority of the capital structure. Moody's applied a one-notch positive override to its LGD model given the small size of the ABL revolver relative to the term loan. However, if there is an increase in the size of the ABL, the rating on the senior secured term loan will most likely be one-notch below the CFR. ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS Tosca's ESG credit impact score was changed to (CIS-5) representing increased governance risk in financial policy and risk management. Tosca's high leverage and weak liquidity raise the possibility of a debt restructuring, due to its heavy reliance on its ABL facility to fund operations. While the new CFO put in place about a year ago has been successful in executing operational cost efficiencies, more needs to be done as Tosca continues to generate negative free cash flow. Therefore, management credibility and track record risk has been increased reflecting the elevated execution risk to show solid evidence of positive free cash flow generation and less reliance on the ABL facility. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if there is improvement in free cash flow generation, maintenance of at least an adequate liquidity profile, and reduced reliance on the ABL facility to operate the business. Debt-to-EBITDA would also need to be sustained below 6.5x. The ratings could be downgraded if there is a further deterioration in liquidity and an increased likelihood of a debt restructuring. Headquartered in Atlanta, Georgia, Tosca Services, LLC manages, refurbishes and rents reusable plastic containers for the perishable food industry including case ready meat, eggs, cheese, poultry, seafood, and produce. Tosca has been owned by funds advised by the private equity firm Apax Partners since 2017. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. TRI-STATE PAPER: Taps US Realty Associates as Real Estate Agent --------------------------------------------------------------- Tri-State Paper, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ US Realty Associates, Inc. as real estate agent. The Debtor needs a real estate agent to prosecute the sale of its real property located at 4500 North Third Street in Philadelphia, Pennsylvania. The firm will receive a 6 percent commission of the property's gross sale price. Gregory Bianchi, vice president of US Realty Associates, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Gregory Bianchi US Realty Associates, Inc. 120-124 E. Lancaster Ave. Ardmore, PA 19003 Telephone: (215) 701-3840 About Tri-State Paper Tri-State Paper, Inc. is a Philadelphia-based merchant wholesaler of paper and paper products. Tri-State Paper filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 23-13237) on Oct. 27, 2023, with $1 million to $10 million in both assets and liabilities. John Petaccio, president, signed the petition. Judge Patricia M. Mayer presides over the case. Michael A. Cibik, Esq., at Cibik Law, PC represents the Debtor as bankruptcy counsel. TRIMAX MEDICAL: Seeks Approval to Hire Stone & Baxter as Counsel ---------------------------------------------------------------- Trimax Medical Management, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Georgia to employ Stone & Baxter, LLP as its legal counsel. The Debtor requires legal counsel to: (a) give advice regarding the powers and duties of the Debtor in the continued operation of the business and management of the Debtor; (b) prepare legal papers; (c) continue existing litigation, if any, to which the Debtor may be a party and conduct examinations incidental to the administration of its estate; (d) take any and all necessary actions for the proper preservation and administration of the Debtor's estate; (e) assist the Debtor with the preparation and filing of its statement of financial affairs and schedules and lists as are appropriate; (f) take whatever actions are necessary with reference to the use by the Debtor of its property pledged as collateral and to preserve the same for the benefit of the Debtor and secured creditors; (g) assert, as directed by the Debtor, all claims the Debtor has against others; (h) assist the Debtor in connection with claims for taxes made by governmental units; (i) assist the Debtor in preparation of its Plan of Reorganization and confirmation thereto; and (j) perform all other legal services for the Debtor as it may deem necessary. The hourly rates of the firm's counsel and staff are as follows: Attorneys $200 - $500 Paralegals/Research Assistants $135 In addition, the firm will seek reimbursement for expenses. David Bury, Jr., Esq., a partner at Stone & Baxter, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: David L. Bury, Jr., Esq. G. Daniel Taylor, Esq. Stone & Baxter, LLP 577 Mulberry Street, Suite 800 Macon, GA 31201 Telephone: (478) 750-9898 Facsimile: (478) 750-9899 Email: dbury@stoneandbaxter.com dtaylor@stoneandbaxter.com About Trimax Medical Management Trimax Medical Management, Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No. 23-51628) on Nov. 20, 2023. In the petition signed by Hugh F. Smisson, III, CEO, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Stone & Baxter, LLP serves as the Debtor's counsel. TRINET GROUP: Fitch Assigns 'BB+' First-Time IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has assigned TriNet Group, Inc. and its subsidiary, TriNet USA, Inc. (collectively, TriNet), a first-time Issuer Default Rating (IDR) of 'BB+'. In addition, Fitch has rated TriNet's secured revolving credit facility (RCF) 'BBB-'/'RR1' and senior unsecured notes 'BB+'/'RR4'. The Rating Outlook is Stable. The ratings reflect TriNet's strong market position, stable EBITDA and FCF generation. Subsequent to the company's increased shareholder-friendly actions, Fitch expects TriNet's leverage to be approximately 2.0x at FYE 2024 and remain between 2.0x and 2.4x through the rating horizon. The company's financial flexibility is strong, providing some cushion against insurance volatility and macroeconomic headwinds. The ratings also reflect Fitch's concerns about the company's exposure to the small and midsize business (SMB) market, financial strategies, rising medical costs, uncertainties surrounding insurance costs, direct correlation with economic cyclicality, and limited revenue diversification. Despite these factors, Fitch believes TriNet remains well positioned in the professional employer organization (PEO) industry. KEY RATING DRIVERS Stable Credit Profile: TriNet's rating reflects its stable EBITDA generation and strong competitive positioning in the highly fragmented human capital management (HCM) industry, placing it strongly among other Fitch-rated 'BB+' technology issuers. Historically, the company has operated with an EBITDA leverage profile below 1.0x, though its recently announced financial policy includes provisions to return approximately 75% of FCF to shareholders and to operate with leverage (as defined by TriNet) in the range of 1.5x-2.0x. Leverage to Remain Low: Historically, TriNet operated with leverage under 1.0x and with the company's significant share repurchase plan, which was largely funded with debt, Fitch sees leverage much higher than historical levels. TriNet completed $1 billion in share repurchases in August 2023 and this was 60% funded through debt, and the remaining 40% was from cash flows from operations. Fitch expects EBITDA leverage will be approximately 2.0x at the end of 2024 and it is projected to be in the range of 2.0x-2.4x through the rating horizon, with capacity to delever supported by FCF generation. Strong Financial Flexibility: TriNet's liquidity is strong with $245 million of unrestricted cash and short-term investments on its balance sheet at the end of September 2023. The company has recently amended its credit agreement to increase the capacity under the RCF from $500 million to $700 million, with $500 million remaining undrawn after the recent $1 billion share repurchase transaction. Fitch expects TriNet to generate a mid-single digit FCF margin to further support its liquidity and capital deployment strategy. SMBs Negatively Affect Retention: TriNet has historically experienced client attrition rates of about 20%, which is high compared with enterprise software peers, although somewhat in line with other software companies with SMB end market exposure. The company maintained its average retention rate during the pandemic, with some improvements in the recent quarters. The loss of clients is attributed to M&A activity or multi-vendor, alongside few SMB's bankruptcy cases. Fitch believes that TriNet will maintain its retention rates through the rating period, considering the majority of its clients operate in predominantly white collar industries, and the average client life of five years. Insurance Cost Volatility Risk: Fitch estimates TriNet's net insurance service revenues constitutes nearly half of total revenues. Trailing-12-month insurance cost ratio came in 1% higher due to increased insurance costs, driven by surging drug prices and increased health benefits utilization rates. Fitch expects insurance costs to be in the range of 88% to 89% of insurance revenues through the rating horizon. The number of medical claims, access to medical systems and services, and drug prices in any given period expose TriNet to volatility and uncertainty in the business. To manage health insurance risk, TriNet has the ability to reprice its book on an annual basis and also utilizes different tools such as credit assessments, algorithms to assess claims risk, and manages a deductible layer with third-party carrier partners. While Fitch believes the unexpected likelihood of very high claims still presents some credit risk to the company's future insurance business, distribution of risks between TriNet and the carriers safeguards the company from higher claim amounts. WSE Growth and Macroeconomic Headwinds: TriNet's revenues have a direct correlation with macroeconomic factors such as employment levels, GDP growth, wages, and government support for SMB's businesses. TriNet's higher number of average worksite employees (WSE) provides visibility to future revenue streams. Revenue declined by 2% in 3Q23 due to lower volume in WSE and lower health plan enrollment, which was partially offset by some service fee rate increases. WSE growth has been negatively affected by the tech sector, which has a lower headcount than in recent quarters. Over the rating horizon, Fitch projects revenue growth to range from flat to mid-single digits, reflecting modestly rising unemployment rates and macroeconomic uncertainties in the near term, offset by price realization and some stabilization in WSE growth after mid-2024. Cross-Sell Opportunities: Fitch believes TriNet benefits from cross-selling opportunities due to its broad portfolio and its ability to increase penetration of additional modules into the existing customer base, aided by recent acquisitions of Zenefits and Clarus R+D. TriNet's solutions support a wide range of HR functions including payroll, benefits, compliance, workers compensation, and risk mitigation, which the company is able to leverage by offering a centralized place to manage human capital. Competitive Landscape: The HCM industry is highly competitive and fragmented with competitors of various scales. The company provides HR employers with software tools that automate processes, including payroll and taxation processing, employee hiring and engagement, compliance and many more, encircling employee lifecycle management. Fitch expects continued growth in demand for HCM software as companies migrate to cloud-based solutions to automate administrative functions to reduce costs and time spent, while focusing more on strategic investment decisions. DERIVATION SUMMARY TriNet's 'BB+' Long-Term IDR reflects its strong market position as a PEO solution provider, historical growth profile and FCF generation. The company provides HCM solutions such as benefits, payroll, risk mitigation, and compliance, encircling employee lifecycle management. Fitch expects demand for HCM software to continue growing as companies migrate to cloud-based solutions to automate administrative functions to reduce costs and time spent, while focusing more on strategic investment decisions. Fitch projects the North American HCM software spend to grow at a low-teens CAGR for next five years. The PEO service market is led primarily by four public companies: Automatic Data Processing (ADP: AA-), TriNet (BB+), Insperity (NR) and Paychex (Oasis; NR). TriNet has maintained its position in the market by driving strong sales execution, making consistent investments in its technology platform, and through its vertical-focused go-to-market strategy. Unlike many peers that are vertical agnostic, TriNet is focused on core verticals with white collar clients constituting approximately 80%. Fitch considers this as an important positive factor to credit, considering the company's exposure to the SMB space. The company is small in scale when compared with large vendors such as Automatic Data Processing Inc. ADP is rated four notches higher since its revenues are four times larger than TriNet and its EBITDA margins are double. ADP's leverage is also well below 1.0x and it was 0.6x at the end of FY23 (fiscal year ends June 30) whereas TriNet is expected to have leverage of 2.0x-2.4x over the rating horizon. TriNet's strong position in the SMB market should enable the company to maintain growth that is consistent with industry growth. TriNet's revenue scale is larger than other HCM providers such as Paychex Inc., Paylocity Holding Corp., Paycom Software Inc., Insperity Inc., and Ceridian HCM Holding Inc. TriNet's market position, average customer life and financial structure are strong when compared with 'BB+' Fitch-rated peers. Limitations to the rating include the company's narrow revenue diversification (HCM focus), and uncertainty surrounding insurance service segment. While TriNet's profitability in the low-double digit range compares unfavorably with the peers due to high insurance costs associated with the insurance service segment, Fitch believes TriNet is well positioned in the 'BB+' category relative to these peers and other SMB-focused technology issuers rated by Fitch. Fitch rates the IDRs of the parent and subsidiary on a consolidated basis, using the weak parent/strong subsidiary approach and open access and control factors, based on the entities operating as a single enterprise with strong legal and operational ties. KEY ASSUMPTIONS - Organic revenue growth rate in mid-single digits; - Insurance cost ratio approximately 88%-89% through the rating period; - EBITDA margins normalized circa 10%; - Capex intensity 1% of revenue; - 75% return of FCF to shareholders annually via a combination of cash dividend and repurchases; - Fitch assumes aggregate debt-funded acquisitions of approximately $250 million through 2026. RECOVERY ANALYSIS The 'BBB-'/'RR1' long-term rating for the senior secured revolver reflects the current debt structure that consists of a $700 million senior secured revolver and Fitch's view on superior recovery in a default scenario. This notching uses Fitch's U.S. Corporates criteria for companies in the 'BB-' to 'BB+' rating categories. Fitch assesses the above first lien revolver to be Category 1, which is reserved for U.S.-based borrowers, as TriNet does not feature any limitations in Category 2, such as being ranked junior to ABL facilities, excessive fully drawn secured gross leverage being greater by 50% of the midpoint of the 'BB' category for the sector (gross leverage is 1.6x for FYE 2023 versus an allowable 4.0x), or other factors that do not apply to the company. The debt structure also consists of $900 million of senior unsecured notes. Per Fitch's U.S. Corporates criteria for companies in the 'BB- 'to 'BB+' rating categories, Fitch assigned a 'BB+'/'RR4' long-term issue rating to the above unsecured notes since these are junior to the senior secured revolving facility. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: An upgrade is unlikely given the limited revenue diversification and SMB exposure of the company. However, the ratings could be upgraded with: - EBITDA leverage sustained below 2.0x; - Improved HCM market position, as evidenced by revenue growth approaching double digits on a sustained basis; - Evidence of increased revenue diversification into multiple end-markets. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Higher than expected incremental debt-financed acquisitions or share repurchases that materially weaken the company's credit profile, leading to EBITDA leverage above 3.0x on a sustained basis; - Unexpectedly higher number of health claims or health care utilization, significantly exceeding Fitch's expectation of insurance cost ratio on a consistent basis; - Significant market share erosion as evidenced by contract loss, increased client churn, and lower revenue growth. LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: TriNet's liquidity is strong with $245 million of unrestricted cash and short-term investments on its balance sheet at the end of September 2023. The company has recently amended its credit agreement to increase the capacity under the RCF from $500 million to $700 million, with $500 million remaining undrawn after the recent $1 billion share repurchase transaction. Fitch expects TriNet to generate mid-single digit FCF margins to further support its liquidity and capital deployment strategy. Debt Structure: TriNet's debt consists of a first lien $700 million secured revolver due 2028, 3.5% unsecured notes due 2029, and 7.125% unsecured notes due 2031. ISSUER PROFILE TriNet Group, Inc. (NASDAQ: TNET) is a leading PEO (professional employer organization) and human resources information system (HRIS) service provider for small to mid-sized companies, serving over 335k Worksite Employees (WSE) and more than 210k HRIS users, as of Sept. 30, 2023. 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 ----------- ------ -------- TriNet Group, Inc. LT IDR BB+ New Rating senior unsecured LT BB+ New Rating RR4 TriNet USA, Inc. LT IDR BB+ New Rating senior secured LT BBB- New Rating RR1 VAN'S AIRCRAFT: Gets OK to Tap BMC Group as Claims Agent -------------------------------------------------------- Van's Aircraft, Inc. received approval from the U.S. Bankruptcy Court for the District of Oregon to employ BMC Group, Inc. as claims and noticing agent. BMC will oversee the distribution of notices and will assist in the maintenance, processing, and docketing of proofs of claim filed in the Chapter 11 case of the Debtor. The hourly rates of BMC's professionals are as follows: Clerical & Document Custody $25 - $45 Analysts/Case Support Associates $45 - $85 Technology/Programming $85 - $125 Consultants/Senior Consultants $85 - $125 Project Manager/Director $135 - $175 Prior to the petition date, the Debtor provided BMC a retainer in the amount of $65,000. Tinamarie Feil, president of BMC Group, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Tinamarie Feil BMC Group, Inc. 600 1st Avenue Seattle, WA 98104 Telephone: (206) 499-2169 Email: tfeil@bmcgroup.com About Van's Aircraft Van's Aircraft, Inc. is a designer and manufacturer of kit aircraft, with more than 10,000 flying aircraft and a wide selection of available models. Van's Aircraft sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 23-62260) on Dec. 4, 2023. In the petition signed by Donald L. Eisele, interim CFO, the Debtor disclosed up to $50 million in both assets and liabilities. Judge David W. Hercher presides over the case. The Debtor tapped Tonkon Torp LLP as legal counsel and Hamstreet & Associates, LLC as chief restructuring officer. BMC Group, Inc. is the noticing and claims agent. VAN'S AIRCRAFT: Seeks to Tap Tonkon Torp LLP as Bankruptcy Counsel ------------------------------------------------------------------ Van's Aircraft, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Oregon to employ Tonkon Torp LLP as its counsel. The firm will render these services: (a) advise the Debtor of its rights, powers, and duties in the continued operation and management of its business and property under Chapter 11 of the Code; (b) take all actions necessary to protect and preserve Debtor's bankruptcy estate; (c) advise Debtor concerning, and prepare on behalf of Debtor, all necessary legal papers, and review all financial and other reports required in connection with administration of this Chapter 11 case; (d) advise the Debtor with respect to, and assist in the negotiation and documentation of, financing agreements, debt and cash collateral orders, and related transactions; (e) review the nature and validity of any liens asserted against the Debtor's property and advise Debtor concerning the enforceability of such liens; (f) advise the Debtor regarding (i) its ability to initiate actions to collect and recover property for the benefit of its estate; (ii) any potential property dispositions; and (iii) executory contract and unexpired lease assumptions, assignments, and rejections, and lease restructuring and recharacterizations; (g) negotiate with creditors concerning a Chapter 11 plan; prepare the plan, disclosure statement, and related documents; and take the steps necessary to confirm and implement the plan; (h) provide such other legal advice or services; and (i) provide such other legal advice or services as may be required in connection with this Chapter 11 case. The hourly rates of the firm's counsel and staff are as follows: Timothy J. Conway, Partner $695 Michael Fletcher, Partner $535 Ava Schoen, Partner $510 Jeffrey Cronn, Partner $630 Melany Savitt, Partner $475 Spencer Fisher, Paralegal $290 Mr. Conway disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Timothy J. Conway, Esq. Michael W. Fletcher, Esq. Ava Schoen, Esq. Tonkon Torp LLP 888 SW Fifth Avenue, Suite 1600 Portland, OR 97204 Telephone: (503) 221-1440 Facsimile: (503) 274-8779 Email: tim.conway@tonkon.com michael.fletcher@tonkon.com ava.schoen@tonkon.com About Van's Aircraft Van's Aircraft, Inc. is a designer and manufacturer of kit aircraft, with more than 10,000 flying aircraft and a wide selection of available models. Van's Aircraft sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 23-62260) on Dec. 4, 2023. In the petition signed by Donald L. Eisele, interim CFO, the Debtor disclosed up to $50 million in both assets and liabilities. Judge David W. Hercher presides over the case. The Debtor tapped Tonkon Torp LLP as legal counsel and Hamstreet & Associates, LLC as chief restructuring officer. BMC Group, Inc. is the noticing and claims agent. VAN'S AIRCRAFT: Taps Hamstreet as Restructuring Advisor ------------------------------------------------------- Van's Aircraft, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Oregon to employ Hamstreet & Associates, LLC as restructuring advisor. The firm will provide financial and business advisory and consulting services to the Debtor, including assisting in the preparation of documents related to its Chapter 11 case, and assisting with accounting for and preparation of Rule 2015 monthly operating reports, as the Debtor may require. The hourly rates of the firm's professionals are as follows: Clyde A. Hamstreet $650 Mark Schmidt $560 Hannah Schmidt $495 Maren Cohn $495 Jeff Anspach $465 Lea Anne Doolittle $350 Martha Cohn $220 In addition, the firm will seek reimbursement for expenses incurred. Clyde Hamstreet, founder of Hamstreet & Associates, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Clyde A. Hamstreet Hamstreet & Associates, LLC 1 SW Columbia St., Suite 1000 Portland, OR 97258 Telephone: (503) 221-1440 Facsimile: (503) 546-6579 Email: chamstreet@hamstreet.net About Van's Aircraft Van's Aircraft, Inc. is a designer and manufacturer of kit aircraft, with more than 10,000 flying aircraft and a wide selection of available models. Van's Aircraft sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 23-62260) on Dec. 4, 2023. In the petition signed by Donald L. Eisele, interim CFO, the Debtor disclosed up to $50 million in both assets and liabilities. Judge David W. Hercher presides over the case. The Debtor tapped Tonkon Torp LLP as legal counsel and Hamstreet & Associates, LLC as restructuring advisor. BMC Group, Inc. is the noticing and claims agent. VIDEOTRON LTEE: Moody's Alters Outlook on 'Ba1' CFR to Positive --------------------------------------------------------------- Moody's Investors Service affirmed Videotron Ltee's Ba1 corporate family rating, Ba1-PD probability of default rating and Ba2 senior unsecured notes ratings, and changed the outlook to positive from stable. Moody's also lowered the company's speculative grade liquidity rating to SGL-3 from SGL-2. "The outlook changed reflects Moody's expectation for continued good operating performance and deleveraging", said Peter Adu, Moody's Vice President and Senior Credit Officer. "The liquidity rating was lowered because of debt maturities and spectrum funding in 2024, which will consume a sizeable portion of the company's liquidity", Adu added. RATINGS RATIONALE Videotron's Ba1 CFR benefits from: (1) its position as Canada's fourth largest telecommunications service provider, measured by revenue; (2) enhanced diversity of its wireless footprint with the Freedom Mobile acquisition; (3) a strong track record of execution, including competing well with larger peers; (4) Debt/EBITDA that is on track to fall below 3.25x by the end of 2024, supported by EBITDA growth and debt repayment (pro forma 3.3x for LTM Q3/2023 and 3.6x when the Freedom acquisition closed in April 2023); (5) positive revenue growth prospects despite macroeconomic headwinds; and (6) rational, oligopolistic competition, supported by a regulatory framework that generally favors facilities-based competition, provides the company with favorable bidding conditions for spectrum auctions, and restricts foreign ownership. The rating is constrained by: (1) its liquidity management that is not robust; (2) smaller scale relative to peers; (3) execution risks of managing ongoing pressure in its wireline/cable business while simultaneously expanding wireless capabilities; and (4) ongoing need to balance cash flow among network investments, spectrum purchases and dividend payments. Videotron has two classes of debt: (1) unrated secured revolving credit facility and unrated secured term loans; and (2) Ba2-rated unsecured notes. The unsecured notes are rated one notch below the CFR to reflect the increased level of secured debt that rank ahead of them in the capital structure following the Freedom acquisition. Videotron has adequate liquidity (SGL-3) in the next 12 months to November 30, 2024, with sources approximating C$2.46 billion while the company has uses of about C$1.66 billion in this time frame. Sources of liquidity include revolver availability of about C$1.84 billion, C$21 million of cash at September 30, 2023 and Moody's expects free cash flow in excess of C$600 million through the next twelve months. Videotron has a C$2 billion secured revolving credit facility that expires in July 2026, with availability of about C$1.54 billion at September 30, 2023. Videotron also has access to its parent, Quebecor Media Inc.'s C$300 million secured revolving credit facility that expires in July 2025. That facility was fully available at September 30, 2023. Uses of liquidity consist of about C$1.36 billion of debt maturities (net of swaps) and $299 million of 3800 MHz spectrum purchases. Moody's expects more than 30% cushion with financial covenants under the Videotron revolving credit facility over the next twelve months. Videotron has limited ability to generate liquidity from asset sales. The outlook is positive because Moody's expects the company to manage pressures in its wireline business, continue to expand its wireless business, including good execution on the Freedom assets and deleverage below 3.25x by the end of 2024. The positive outlook also assumes that the company will seek to improve its liquidity position while managing its debt maturities and spectrum purchases in 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Videotron commits to an investment grade rating through a publicly stated capital structure target and improves its liquidity management while sustaining Debt/EBITDA below 3.25x and free cash flow to debt in the high single digits. The ratings could be downgraded if Videotron faces challenges integrating the Freedom assets into its network, if revenue decline accelerates in certain cable/wireline businesses, or if it sustains Debt/EBITDA above 4x and free cash flow to debt below 0%. The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. Videotron Ltee, headquartered in Montreal, Quebec, is Canada's fourth largest telecommunications service provider that operates wireline and wireless businesses. The wireline business provides internet, conventional and specialty television, and voice while the wireless business provides voice and data. WABASH NATIONAL: Moody's Hikes CFR to Ba3 & Unsecured Notes to B1 ----------------------------------------------------------------- Moody's Investors Service upgraded Wabash National Corporation's corporate family rating to Ba3 from B1, probability of default rating to Ba3-PD from B1-PD and senior unsecured notes rating to B1 from B2. The outlook is maintained stable. Moody's also upgraded Wabash's speculative grade liquidity rating to SGL-1 from SGL-2. The upgrade of Wabash's ratings reflects the company's solid organic revenue growth and increasing profitability. This has reduced financial leverage and improved free cash flow. Wabash has a healthy backlog that enhances revenue visibility and Moody's expects the company's pricing discipline and ongoing productivity initiatives will mitigate the impact of a higher cost environment. The stable outlook reflects Moody's expectation that Wabash's revenue and profit margin will decline in 2024 from softening demand for new trailers. Although debt-to-EBITDA will rise, leverage is expected to remain below 2x throughout 2024. RATINGS RATIONALE Wabash has a solid position in the highly volatile truck trailer manufacturing market (Class 8). Deliveries of heavy duty trailers are outpacing order growth as Wabash's customers have experienced lower freight shipments in challenging macroeconomic conditions. Wabash's $1.9 billion backlog provides revenue visibility. However, Moody's expects revenue will decline in 2024 as dry van sales slow. Moody's then expects revenue to rebound in 2025 as dry van demand returns, complementing continued growth in truck bodies, tank trailers, and parts & services. Moody's expects Wabash's debt-to-LTM EBITDA to rise in 2024. However, leverage has declined significantly over the last two years to 1.2x at September 2023 from 3.9x at year-end 2021. Moody's also expects Wabash will have free cash flow of over $80 million in the next 12 months. Wabash also faces headwinds in terms of commodity price volatility and higher labor costs. Historically, the company has been successful in passing through increased raw material costs through to customers, although with a lag. The company has also moved to reprice long-term contracts on a quarterly basis to better align costs and protect margins. However, over the next year, Moody's expects EBITA margin to decline. Moody's also expects Wabash to continue to maintain conservative financial policies including balanced shareholder distributions. Wabash's liquidity is very good as reflected in its SGL-1 speculative grade liquidity rating. Liquidity is supported by an expectation of positive free cash flow of over $80 million over the next 12 months. Wabash's liquidity as of September 30, 2023 consisted of $103 million of cash and $344 million of availability under its revolving credit facility, net of $6 million in letters of credit and borrowing base limitations. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company increases its size and scale, sustains debt-to-EBITDA below 3x through the cycle, and sustains EBITA margin above 10%. In addition, maintenance of very good liquidity and a conservative financial policy due to the cyclical nature of the business are also important factors for an upgrade. The ratings could be downgraded if EBITA margin is sustained below 7% or debt-to-EBITDA approaches 4x. Ratings could also be downgraded if liquidity and financial conservatism are not maintained. The principal methodology used in these ratings was Manufacturing published in September 2021. Wabash National Corporation, based in Lafayette, Indiana, is a leading designer and manufacturer of truck and tank trailers, as well as related transportation equipment. The company also manufactures truck bodies. Revenue for the last 12 months ended September 30, 2023 was approximately $2.6 billion. WEWORK INC: Cleared to Use $650 Million DIP Loan as Collateral -------------------------------------------------------------- Clara Geoghegan of Law360 reports that bankrupt office space provider WeWork Inc. can use $650 million in debtor-in-possession financing as collateral, a New Jersey bankruptcy judge ruled Monday, December 11, 2023, which will allow it to renew and issue letters of credit required under leases during reorganization. About WeWork Inc. New York, NY-based WeWork Inc. is a global flexible workspace provider, serving a membership base of businesses large and small through its network of 779 Systemwide Locations, including 622 Consolidated Locations as of December 2022. WeWork Inc. and its affiliates sought relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 23-19865) on Nov. 6, 2023. In its petition, WeWork Inc. reported $19 billion of liabilities and $15 billion of assets. The Debtors are represented by Kirkland & Ellis LLP (Edward Sassower, Joshua Sussberg, Steven Serrejeddini, Ciara Foster, Oliver Pare, Josh Greenblatt, Jimmy Ryan, Connor Casas, William Arnault) and Cole Schotz PC (Michael Sirota, Warren Usatine, Felice Yudkin, Ryan Jareck) as legal counsel, Alvarez & Marsal North America LLC (Justin Schmaltz) as financial advisor, and PJT Partners LP (Paul Sheaffer) as investment banker. Softbank is represented by Weil Gotshal & Manges LLP (Gary Holtzer, Gabriel Morgan, Kevin Bostel, Eric Einhorn) and Wollmuth Maher & Deutsch LLP (Paul DeFilippo, James Lawlor, Steven Fitzgerald, Joseph Pacelli) as legal counsel and Houlihan Lokey Capital as financial advisor. The Ad Hoc Group of First Lien and Second Lien Lenders is represented by Davis Polk & Wardwell LLP (Eli Vonnegut, Elliot Moskowitz, Natasha Tsiouris, Jonah Peppiatt) and Greenberg Traurig LLP (Alan Brody) as legal counsel and Ducera Partners LLC as financial advisor. YELLOW CORP: Saia Will Buy 17 Terminals in Bankruptcy Sale ---------------------------------------------------------- Saia announced Dec. 5, 2023, that it is the winning bidder for 17 terminals of Yellow Corporation auctioned in connection with Yellow's pending Chapter 11 bankruptcy. Saia has agreed to pay a total of $235.7 million for Yellow terminals located in the following markets: Fresno, California; Seaford, Delaware; Augusta, Georgia; Bowling Green, Kentucky; Paducah, Kentucky; West Boston, Massachusetts; Grand Rapids, Michigan; Grayling, Michigan; Duluth, Minnesota; Owatonna, Minnesota; Trenton, New Jersey; Rochester, New York; Akron, Ohio; Youngstown, Ohio; Reading, Pennsylvania; Knoxville, Tennessee; and Laredo, Texas. "The addition of these new facilities furthers our multiyear strategy of expanding Saia's national terminal footprint and, as they are opened over time, they will enable us to provide better service to both new and existing customers," said Saia President and CEO Fritz Holzgrefe. The closing of the transaction is expected in the first quarter of 2024 and is subject to various conditions, including approval by the U.S. Bankruptcy Court for the District of Delaware of the sale and regulatory approvals. A hearing to seek court approval is expected on December 12, 2023. Saia intends to pay the purchase price with a combination of cash on hand and availability under its credit facilities. About Yellow Corporation Yellow Corporation -- http://www.myyellow.com/-- operates logistics and less-than-truckload (LTL) networks in North America, providing customers with regional, national, and international shipping services throughout. Yellow's principal office is in Nashville, Tenn., and is the holding company for a portfolio of LTL brands including Holland, New Penn, Reddaway, and YRC Freight, as well as the logistics company Yellow Logistics. Yellow Corporation and 23 affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow Corporation had $2,152,200,000 in total assets against $2,588,800,000 in total liabilities. The petitions were signed by Matthew A. Doheny as chief restructuring officer. The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel; Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel; Kasowitz, Benson and Torres, LLP as special litigation counsel; Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC, as investment banker; and Alvarez and Marsal as financial advisor. Epiq Bankruptcy Solutions is the claims and noticing agent. Milbank LLP serves as counsel to certain investment funds and accounts managed by affiliates of Apollo Capital Management, L.P. while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP serve as counsels to Beal Bank USA and the U.S. Department of the Treasury, respectively. On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped Akin Gump Strauss Hauer & Feld, LLP and Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller Buckfire as investment banker; and Huron Consulting Services, LLC, as financial advisor. ZAGACITY TECH: Seeks to Hire Tamarez CPA as Accountant ------------------------------------------------------ Zagacity Tech LLC, also known as Era Zagacity Tech LLC, seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Tamarez CPA, LLC as accountant. The Debtor requires an acocuntant to: (a) reconcile financial information to assist the Debtor in the preparation of monthly operating reports; (b) assist in the reconciliation and clarification of proof of claims filed and amount due to creditors; (c) provide general accounting and tax services; and (d) assist the Debtor and its counsel in the preparation of the supporting documents for the Chapter 11 reorganization plan. The hourly rates of the firm's professionals are as follows: Albert Tamarez-Vasquez, CPA, CIRA $165 CPA Supervisor $110 Senior Accountant $90 Staff Accountant $70 The firm also received a post-petition retainer of $5,000. Albert Tamarez Vasquez, CPA, owner of Tamarez CPA, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Albert Tamarez Vasquez, CPA Tamarez CPA, LLC 1519 Ave. Ponce De Leon, Suite 412 San Juan, PR 00909 Telephone: (787) 795-2855 Facsimile: (787) 200-7912 Email: atamarez@tamarezcpa.com About Zagacity Tech Zagacity Tech LLC distributes and sells technological products, home appliances, audio and TV, in the home and commercial lines. Zagacity Tech LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 23-03787) on November 17, 2023. The petition was signed by Nestor G. Cardona as president. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Debtor tapped Javier Vilarino, Esq., at Vilarino & Associates LLC as counsel and Albert Tamarez Vasquez, CPA, at Tamarez CPA, LLC as accountant. [^] BOOK REVIEW: A History of the New York Stock Market ------------------------------------------------------- Author: Robert Sobel Publisher: Beard Books Soft cover: 395 pages List Price: $34.95 https://ecommerce.beardbooks.com/beardbooks/the_big_board.html First published in 1965, The Big Board was the first history of the New York stock market. It's a story of people: their foibles and strengths, earnestness and avarice, triumphs and crash-and-burns. It's full of entertaining anecdotes, cocktail-party trivia, and tales of love and hate between companies and investors. Early investments in North America consisted almost exclusively of land. The few securities holders lived in cities, where informal markets grew, with most trading carried out in the street and in coffeehouses. Banking, insurance, and manufacturing activity increased only after the Revolution. In 1792, 24 prominent New York businessmen, for whom stock- and bond-trading was only a side business, met under a buttonwood tree on Wall Street and agreed to trade securities on a common commission basis. Five securities were traded: three government bonds and two bank stocks. Trading was carried out at the Tontine Coffee-House in a call market, with the president reading out a list of stocks as brokers traded each in turn. The first half of the 19th century was heady for security trading in New York. In 1817, the Tontine gave way to the New York Stock and Exchange Board, with a more organized and regulated system. Canal mania, which peaked in the late 1820s, attracted European funds to New York and volume soared to 100 shares a day. Soon, the railroads competed with canals for funding. In the frenzy, reckless investors bought shares in "sheer fabrications of imaginative and dishonest men," leading an economist of the day to lament that "every monied corporation is prima facia injurious to the national wealth, and ought to be looked upon by those who have no money with jealousy and suspicion." Colorful figures of Wall Street included Jay Gould and Jim Fisk, who in 1869 precipitated one of the worst panics in American financial history by trying to corner the gold market. Almost lynched, the two were hauled into court, where Fisk whined, "A fellow can't have a little innocent fun without everybody raising a halloo and going wild." Then there was Jay Cooke, who invented the national bond drive and, practically unaided, financed the Union effort in the Civil War. In 1873, however, faulty judgement on railroad investments led to the failure of Cooke & Co. and a panic on Wall Street. The NYSE closed for ten days. A journalist wrote: "An hour before its doors were closed, the Bank of England was not more trusted." Despite J. P. Morgan's virtual single-handed role in stemming the Knickerbocker Trust panic of 1907, on his death in 1913, someone wrote "We verily believe that J. Pierpont Morgan has done more harm in the world than any man who ever lived in it." In the 1950s, Charles Merrill was instrumental in changing this attitude toward Wall Streeters. His firm, Merrill Lynch, derisively known in some quarters as "We, the People" and "The Thundering Herd," brought Wall Street to small investors, traditionally not worth the effort for brokers. The Big Board closes with this story. Asked by a much younger man what he thought stocks would do next, J.P. Morgan "never hesitated for a moment. He transfixed the neophyte with his sharp glance and replied 'They will fluctuate, young man, they will fluctuate.' And so they will." Robert Sobel died in 1999 at the age of 68. A professor at Hofstra University for 43 years, he was a prolific historian of American business, writing or editing more than 50 books. This book may be ordered by calling 888-563-4573 or by visiting www.beardbooks.com or through your favorite Internet or local bookseller. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2023. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***