/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/240115.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 15, 2024, Vol. 28, No. 14 Headlines 1 STOP MONEY: Voluntary Chapter 11 Case Summary 1974 INVESTORS: Case Summary & Two Unsecured Creditors 1NONLY PHIMAR: Areya Holder Aurzada Named Subchapter V Trustee 1NONLY PHIMAR: Court OKs Interim Cash Collateral Access 23 INVESTMENTS: Seeks to Hire Regal Realtors as Real Estate Broker 2ND CHANCE: Selling San Bernardino Property to Winning Bidder 511 ALABAMA: Seeks to Hire Smith Conerly as Bankruptcy Counsel 921 EAST 84: Case Summary & One Unsecured Creditor ACE INSULATION: $2.5M Unsecured Claims to Recover $300K in Plan ADVANCE THERAPY: Seeks Cash Collateral Access AECOM: Moody's Upgrades CFR to Ba1 & Senior Unsecured Notes to Ba2 AFFINITY INTERACTIVE: S&P Downgrades ICR to 'B-', Outlook Stable ALAFIA HOLDINGS: Disposable Income to Fund Plan Payments ALASKA LOGISTICS: Court OKs Cash Collateral Access Thru Jan 18 ALPINE SUMMIT: Unsecureds to Get 0% in Liquidating Plan AMAG ENTERPRISES: Court OKs Interim Cash Collateral Access AMERICAN ROOFING: U.S. Trustee Unable to Appoint Committee AMICAS PIZZA: Joli Lofstedt Named Subchapter V Trustee ANTERO MIDSTREAM: Moody's Rates New $500MM Unsecured Notes 'Ba3' ANTERO MIDSTREAM: S&P Rates $500MM Senior Unsecured Notes 'BB' APEX NORTH: Court OKs Bid Rules for Sale of N.J. Property ATHERSYS INC: Seeks to Hire McDonald Hopkins as Bankruptcy Counsel B, C & D LAND: Case Summary & Nine Unsecured Creditors BAKERS RESIDENTIAL: Christine Brimm Named Subchapter V Trustee BAKERS RESIDENTIAL: Wins Interim Cash Collateral Access BALDWIN PATTIE: Thomas Richardson Named Subchapter V Trustee BARNES & NOBLE: Daniel Tisch Holds 5.2% Equity Stake BAYOU URGENT: Jarrod Martin Named Subchapter V Trustee BELLAREED CONSTRUCTION: Court OKs Cash Access on Final Basis BENNING & G STREET: Case Summary & Two Unsecured Creditors BIG VALLEY: Seeks to Hire Heather Search LTC as Tax Professional BIRD GLOBAL: Seeks Approval to Hire Ordinary Course Professionals BLUE DOLPHIN: Unit Signs Crude Oil Contract With MV Purchasing BLUE DOLPHIN: Veritex Agrees to Extend Forbearance Until March 29 BOULDER CANYON: UST Says Debtor Not Acting in Good Faith BRICK BY BRICK: Lincoln Capital Seeks Trustee Appointment BWB HOUMA: Files Emergency Bid to Use Cash Collateral CAPROCK MILLING: Gets OK to Sell Property by Online Auction CASTLE BLACK: Hearing on Sale of Miss. Property Set for Jan. 24 CHESAPEAKE ENERGY: Moody's Alters Outlook on 'Ba1' CFR to Positive CHESAPEAKE ENERGY: S&P Places 'BB' ICR on CreditWatch Positive CHOBANI GLOBAL: S&P Upgrades ICR to 'B', Outlook Stable CHOBANI LLC: Moody's Rates New $500MM Sr. Unsecured Notes 'Caa1' CNT HOLDINGS: Moody's Affirms 'B3' CFR & Alters Outlook to Positive COGECO COMMUNICATIONS: DBRS Confirms BB(high) Issuer Rating COJAM CONSTRUCTION: Taps Landair Property Advisors as Broker COMMUNITY HEALTH: Releases Early Tender Results for 8.000% Notes CONGREGATION KHAL: Case Summary & Five Unsecured Creditors CONTOUR PROPCO: Gets Court Nod to Sell Assets to AOF for $20.65MM CORE SCIENTIFIC: Plan & Disclosure Hearing Set for Jan. 16 DEL MONTE FOODS: S&P Lowers ICR to 'B-', Alters Outlook to Neg. DIRECTV FINANCING: Moody's Rates New $750MM Secured Notes 'Ba3' DIRECTV FINANCING: S&P Assigns 'BB' Rating on New Secured Notes DIRECTV: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable DMG SECURITY: Seeks Cash Collateral Access E-STONE USA: Seeks to Hire Johnson Pope Bokor Ruppel as Counsel EAGLE PROPERTIES: Gets OK to Sell Richmond Property to Clonbrook EBIX INC: Seeks to Hire Huron Consulting as Financial Advisor EDGE RIVER: Case Summary & 15 Unsecured Creditors EVOKE PHARMA: Registers Up to 14.6 Million Common Shares FALCON LOGISTICS: Charity Bird of Kaplan Named Subchapter V Trustee FALLING TIMBERS: Unsecureds to Split $15K in Subchapter V Plan FOLEY BUILDING: Court OKs Interim Cash Collateral Access FORGOTTEN BOARDWALK: Voluntary Chapter 11 Case Summary FRITOLANDIA Y ALGO: Seeks to Hire JPC Law Office as Attorney FROGGY FLATS: A SARE Debtor, Says Opportunity Bank FROGGY FLATS: U.S. Trustee Says Plan Disclosures Deficient FWAK LLC: U.S. Trustee Unable to Appoint Committee GALLERIA PAIN: Case Summary & 20 Largest Unsecured Creditors GRACE YOUTH: Hearing on Sale of Butler Property Set for Jan. 30 GRIES ASSOCIATES: Wins Cash Collateral Access on Final Basis H & H FAST: Seeks to Hire Bach Law Offices as Bankruptcy Counsel HARTMAN SPE: Unsecured Creditors Will Get 100% of Claims in Plan HEALTHCHANNELS INTERMEDIATE: Moody's Cuts PDR to 'D-PD' HELLO ALBEMARLE: Committee Taps Goldberg Weprin Finkel as Counsel HILTON GRAND: Fitch Gives BB+ Rating on New Term Loan & Sec. Notes HULL ORGANIZATION: Taps Durnil Realtors-Auctioneers as Broker ICR GROUP: Case Summary & Five Unsecured Creditors INNVANTAGE GROUP: Plan Filing Deadline Extended to Jan. 22 INSTANT BRANDS: Unsecureds' Recovery "Unknown" in Plan INTEGRITY TIRE: Voluntary Chapter 11 Case Summary J. MICHAEL SMITH: Hires Levis Law Firm as Bankruptcy Counsel JERSEY WHOLESALE: Voluntary Chapter 11 Case Summary JPM SUTTON: Unsecureds to Get 25 Cents on Dollar in Plan JUBILEE INVESTMENTS: Creditors to Get Proceeds From Liquidation KM DOVER: Case Summary & Five Unsecured Creditors LAKEVILLE FARMS: Gets OK to Hire RJ Montgomery as Appraiser LATIGO PROPERTIES: Michael Colvard Named Subchapter V Trustee LEFT TURN: Voluntary Chapter 11 Case Summary LEON INDUSTRIES: Seeks to Use Cash Collateral LIVINGSTON TOWNSHIP: Seeks to Hire Heritage Real Estate as Realtor LOBSTER BOYS: Seeks to Hire Archer & Greiner P.C. as Counsel M & T ELEVATIONS: Seeks to Sell Corsicana Property for $128,900 MAIDULSAFA LLC: Jolene Wee Named Subchapter V Trustee MAJESTIC COACH: Seeks to Hire Johnson & Johnson as Legal Counsel MICROTEK: Court OKs Deal on Cash Collateral Access MIWD HOLDCO II: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable MYRIE'S PETS: Hires Rountree Leitman Klein & Geer as Attorney NABORS GARAGE: Amends IRS Secured or Priority Tax Claim Details NB LOFT VUE: Files Amended Plan; Confirmation Hearing March 6 NICMAR INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors NUZEE INC: Bard Associates Reports 9% Equity Stake PALEO ON THE GO: Case Summary & 20 Largest Unsecured Creditors PARTNERS IN TECH: Hires Randall S. D. Jacobs as Legal Counsel PHUNWARE INC: Sabby Management, 2 Others Report 5.93% Equity Stake POLARIS OPERATING: Gets OK to Sell 'Masterson' Assets to Contango PRIZE MANAGEMENT: Wins Interim Cash Collateral Access R H INDUSTRIES: Taps C. Taylor Crockett as Bankruptcy Counsel R&J CLEANING: Unsecureds to be Paid in Full over 60 Months RC EMPIRE: Hires Nest Seekers International as Real Estate Broker RC EMPIRE: Seeks to Hire Martin R. Gropper CPA as Accountant RC EMPIRE: Seeks to Hire Shiryak Bowman as Bankruptcy Counsel RETROVISION LLC: Property Sale Proceeds to Fund Plan Payments RETROVISION LLC: Summit Says Disclosure Inadequate REYNOLDS CONSUMER: S&P Alters Outlook to Pos., Affirms 'BB' ICR RTECH FABRICATIONS: Seeks to Hire Musser Bros. as Auctioneer SAINT ANNE'S RETIREMENT: Fitch Cuts Rating on 2022/2020 Bonds to BB SANUWAVE HEALTH: Manchester MGMT., 4 Others Report Equity Stake SCH SHEET: Has Deal Cash Collateral Access SOLIMANO FRAMING: Hires Larson & Zirzow, LLC as Bankruptcy Counsel SOUTHWESTERN ENERGY: S&P Places 'BB+' ICR on CreditWatch Positive SPACE SHADOW: Unsecureds to Get 100 Cents on Dollar in Plan SPORTS INTERIORS: Seeks Cash Collateral Access STAGHORN OUTDOORS: Voluntary Chapter 11 Case Summary STERETT COMPANIES: Wins Cash Collateral Access Thru Jan 26 STONEYBROOK FAMILY: Files Emergency Bid to Use Cash Collateral SUPERIOR PLUS: DBRS Confirms BB(high) Issuer Rating TESSEMAE'S LLC: Hearing on Sale to PANOS Brands Set for Jan. 18 TGC SYSTEMS: Hearing on Sale to Clearview Set for Jan. 24 THREE NICKELS: Court Confirms Chapter 11 Plan TITAN CONCRETE: U.S. Trustee Appoints Creditors' Committee TOPPOP LLC: Gets Court Nod to Sell Equipment to ActionPak TURBO FINANCIAL: Nicole Nigrelli Named Subchapter V Trustee U.S. CREDIT: Case Summary & 20 Largest Unsecured Creditors URBAN ONE: Regains Nasdaq Compliance, Faces Mandatory Monitoring VALCOUR PACKAGING: Moody's Cuts CFR to Caa3 & Alters Outlook to Neg VPR BRANDS: TPB Named Exclusive HoneyStick Distributor in Canada WALL DECOR: Voluntary Chapter 11 Case Summary WC 6TH AND RIO: Husch Blackwel & Lowenstein Advise Limited Partners WEC US HOLDING: Fitch Assigns BB- Rating on Proposed Secured Loans WHATABRANDS LLC: Moody's Affirms B2 CFR, Outlook Remains Negative ZYDECO BREW: Voluntary Chapter 11 Case Summary ********* 1 STOP MONEY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: 1 Stop Money Shop LLC 1336 Lagrange Downs Rd Cordova, TN 38018 Case No.: 24-10108 Chapter 11 Petition Date: January 11, 2024 Court: United States Bankruptcy Court District of Nevada Debtor's Counsel: Michael J. Harker, Esq. LAW OFFICES OF MICHAEL J. HARKER 2901 El Camino Ave Suite 200 Las Vegas, NV 89102 Tel: 702-248-3000 Email: notices@harkerlawfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Tamara Dashawn Edwards as manager. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/EHMKIIY/1_STOP_MONEY_SHOP_LLC__nvbke-24-10108__0001.0.pdf?mcid=tGE4TAMA 1974 INVESTORS: Case Summary & Two Unsecured Creditors ------------------------------------------------------ Debtor: 1974 Investors, LLC 15700 Winchester Blvd Los Gatos, CA 95030 Business Description: 1974 Investors is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor is the owner of real property located at 18580 Allendale Avenue Saratoga, CA 95070, valued at $2.95 million. Chapter 11 Petition Date: January 11, 2024 Court: United States Bankruptcy Court Northern District of California Case No.: 24-50037 Judge: Hon. M Elaine Hammond Debtor's Counsel: Lars Fuller, Esq. THE FULLER LAW FIRM PC 60 N Keeble Avenue San Jose, CA 95126 Tel: (408) 295-5595 Email: admin@fullerlawfirm.net Total Assets: $2,950,000 Total Liabilities: $4,169,303 The petition was signed by Daniel Shaw as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KEQ5JVI/1974_Investors_LLC__canbke-24-50037__0001.0.pdf?mcid=tGE4TAMA 1NONLY PHIMAR: Areya Holder Aurzada Named Subchapter V Trustee -------------------------------------------------------------- The U.S. Trustee for Region 6 appointed Areya Holder Aurzada, Esq., at Holder Law as Subchapter V trustee for 1NOnly Phimar, LLC. Ms. Aurzada will be paid an hourly fee of $495 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Aurzada declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Areya Holder Aurzada, Esq. Holder Law 901 Main Street, Ste. 5320 Dallas, TX 75202 Office: 972-438-8800 Mobile: 817-907-4140 About 1NOnly Phimar 1NOnly Phimar, LLC, a company in Dallas, Texas, filed Chapter petition (Bankr. N.D. Texas Case No. 24-30017) on Jan. 1, 2024, with $1 million to $10 million in both assets and liabilities. Philip Levine, manager, signed the petition. Jason P. Kathman, Esq., at Spencer Fane represents the Debtor as legal counsel. 1NONLY PHIMAR: Court OKs Interim Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, authorized 1NOnly Phimar, LLC to use cash collateral, on an interim basis, in accordance with the budget, with a 20% variance. The Debtor requires the use of cash collateral for working capital, general corporate purposes, and costs of administering the Case. Pegasus Bank, N.A. asserts an interest in the Debtor's cash collateral. As previously reported by the Troubled Company Reporter, prior to the Petition Date, the Debtor entered into a Loan Agreement with the Prepetition Secured Lender, and in connection therewith executed, on June 3, 2019, a promissory note whereby the Debtor borrowed approximately $6.480 million. As of the Petition Date, Debtor asserts that it owes the Prepetition Secured Lender approximately $6.55 Million pursuant to the Prepetition Note. The Debtor has a sufficient equity cushion in its property to provide the Prepetition Secured Lender adequate protection. To the extent of diminution of the prepetition cash collateral as a result of such use of cash collateral, the Secured Creditor is granted continuing, valid, binding, enforceable, fully perfected, replacement liens and first priority security interests in the Debtor's presently owned or hereafter acquired properly and assets. As additional adequate protection of the Prepetition Secured Lender's interest in the Prepetition Collateral, and in addition to the Adequate Protection Liens, the Debtor will grant the Prepetition Secured Lender an allowed superpriority administrative expense claim under 11 U.S.C. section 507(b), with priority over every other claim allowable under 11 U.S.C. section 507(a), subject in all respects to the Carve-Out; provided that, the Superpriority Claim will apply to proceeds of any Avoidance Actions only if a Final Order granting such relief is subsequently issued by the Court. A final hearing on the matter is set for January 29, 2024 at 9:30 a.m. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=sjtJly from PacerMonitor.com. The Debtor projects total expenses, on a weekly basis, as follows: $25,928 for the week starting January 16, 2024; $12,029 for the week starting January 23, 2024; and $105,519 for the week starting January 30, 2024. About 1NOnly Phimar, LLC 1NOnly Phimar, LLC owns a full-service hotel, the IBAN Dallas Park Central Hotel, a member of the Trademark Collection by Wyndham, located at 8051 Lyndon B. Johnson Freeway, Dallas, Texas 75251. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-30017) on January 1, 2024. In the petition signed by Philip Levine, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Jason P. Kathman, Esq., at Spencer Fane, represents the Debtor as legal counsel. 23 INVESTMENTS: Seeks to Hire Regal Realtors as Real Estate Broker ------------------------------------------------------------------ 23 Investments, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Regal Realtors as its real estate broker. Regal will advise and represent the Debtor with respect to all marketing, advertising, and soliciting the Debtor's properties located at 4580 FM 3007 Scroggins, Texas 75480; 3119 I-30 Mesquite, Texas 75150; and 422 Columbia Drive, Rockwall, Texas 75032. The firm will render these services: a. meet and confer with owners of the Debtor to collect data; b. assemble a list of qualified strategic and financial buyers; c. commence solicitation process upon the Debtor's approval of a buyer list; d. conference with interested parties and pre-qualify them for further review; e. sign nondisclosure agreements elevating a pre-qualified party to a Potential Buyer status; f. coordinate preliminary due diligence review of appropriate materials; and g. at the Debtor's direction, assist with preparation of additional material to facilitate a successful closing. Regal will be compensated with 6 percent of the gross sales price. As disclosed in the court filings, Regal is a disinterested party, does not hold an interest adverse to this estate, and understands that there is a continuing duty to disclose any such adverse interest. The firm can be reached through: Justin Holland Regal Realtors 3125 Ridge Rd Rockwall, TX 75032 Phone: (972) 771-6970 About 23 Investments, LLC 23 Investments is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). 23 Investments, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-32911) on Dec. 6, 2023. The petition was signed by Steve Nabors as sole member. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Brandon Tittle, Esq. at Glast, Phillips & Murray, P.C. represents the Debtor as counsel. 2ND CHANCE: Selling San Bernardino Property to Winning Bidder ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved the sale of 2ND Chance Investment Group, LLC's real property to Luis Chang or his assignee. Mr. Chang, the winning bidder, offered the sum of $290,000 to acquire the property located at 3025 Glenview Avenue, San Bernardino, Calif. Cobra 28 No. 8, LP's $285,000 offer was selected as the back-up bid. In the event the winning bidder fails to close the sale, 2ND Chance may sell the property to Cobra 28 without further court order. About 2ND Chance Investment Group 2ND Chance Investment Group, LLC owns in fee simple title 13 real properties located in various locations in California and Washington having an aggregate value of $7.02 million. 2ND Chance Investment Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-12142) on Dec. 21, 2022. In the petition signed by its managing member, Rayshon A. Foster, the Debtor disclosed $7,221,261 in assets and $11,002,949 in liabilities. Judge Scott C. Clarkson oversees the case. Financial Relief Law Center, APC and Grobstein Teeple, LLP serve as the Debtor's bankruptcy counsel and financial advisor, respectively. The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee is represented by Goe Forsythe & Hodges, LLP. 511 ALABAMA: Seeks to Hire Smith Conerly as Bankruptcy Counsel -------------------------------------------------------------- 511 Alabama Ave, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Smith Conerly LLP as its bankruptcy counsel. The Debtor requires the firm to: (a) assist the Debtor in preparing schedules of assets and liabilities and statement of financial affairs; (b) provide legal advice with respect to the Debtor's powers and duties as a debtor-in-possession in the continued operation of its business and management of its property; (c) prepare and file all necessary motions, notices, and other pleadings necessary to sell some or substantially all of the Debtor's assets; (d) attend meetings and negotiate with representatives of the Debtor's creditors and other parties-in-interest; (e) assist the Debtor in reviewing and maintaining its executory contracts and unexpired leases, and negotiating with parties thereto; (f) prepare and pursue approval of a disclosure statement and confirmation of a plan of reorganization (or liquidation); (g) prepare on behalf of the Debtor all necessary applications, motions, answers, orders, reports and other legal papers; (h) review the nature and validity of liens asserted against the Debtor's property and advising the Debtor concerning the enforceability of any liens; (i) appear in Court on behalf of the Debtor and protect the interests of the Debtor before the Court; (j) prosecute and defend litigation matters and such other matters that might arise during this Chapter 11 case; and (k) perform all other legal services for the Debtor which may be necessary and proper in these proceedings. The standard hourly rates for Smith Conerly's partners, associates, and paralegals that are likely to perform work in connection with this Chapter 11 case are as follows: Partners $375 Associates $275 Paralegals $95 In addition, Smith Conerly will receive reimbursement for reasonable and documented out-of-pocket expenses incurred in connection with the services rendered to the Debtor. As of the petition date, Smith Conerly holds a retainer in the amount of $30,000 in connection with the Debtor's Chapter 11 case. Such retainer and the filing fee in this case were paid to Smith Conerly by check from the Debtor's pre-petition operating bank account. J. Nevin Smith, a partner of the law firm of Smith Conerly LLP, 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: J. Nevin Smith, Esq. SMITH CONERLY LLP 402 Newnan Street Carrollton, GA 30117 Telephone: (770) 834-1160 Facsimile: (770) 834-1190 E-mail: jsmith@smithconerly.com About 511 Alabama Ave, LLC 511 Alabama Ave, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-10032) on Jan. 5, 2024, listing up to $50,000 in assets and $500,001 to $1 million in liabilities. J. Nevin Smith, Esq. at Smith Conerly LLP represents the Debtor as counsel. 921 EAST 84: Case Summary & One Unsecured Creditor -------------------------------------------------- Debtor: 921 East 84 Street LLC 921 East 84th Street Brooklyn NY 11236 Brooklyn, NY 11224 Business Description: The Debtor is the owner of real property located at 921 East 84 Street Brooklyn NY 11236 valued at $499,000. Chapter 11 Petition Date: January 11, 2024 Court: United States Bankruptcy Court Eastern District of New York Case No.: 24-40148 Judge: Hon. Nancy Hershey Lord Debtor's Counsel: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 2799 Coney Island Avenue Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347) 342-3156 Email: alla@kachanlaw.com Total Assets: $529,000 Total Liabilities: $1,005,542 The petition was signed by Hillel Stein as president. The Debtor listed Bank Of America, POB 17054, Wilmington, DE 19884, as its sole unsecured creditor holding a claim of $506,542. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/4MGTI4Q/921_East_84_Street_LLC__nyebke-24-40148__0001.0.pdf?mcid=tGE4TAMA ACE INSULATION: $2.5M Unsecured Claims to Recover $300K in Plan --------------------------------------------------------------- Ace Insulation, Inc., filed with the U.S. Bankruptcy Court for the Northern District of California a Plan of Reorganization for Small Business dated January 8, 2024. Ace Insulation provides insulation services to homeowners, home builders, and contractors, and it performs both residential and commercial work. The vast majority of Ace Insulation's work comes via general contractors who engage Ace Insulation on projects. Dwaine and Dean McCoy founded the Debtor in 2011. Ace Insulation's corporate office is now located in Petaluma, California, and it has a second branch in Sacramento, California. Ace Insulation employs approximately 57 people, 36 in Petaluma and 21 in Sacramento. Ace Insulation's troubles date back several years, though they were not discovered until 2021, when Dwaine McCoy found out that prior management, including his brother, badly mismanaged the business, and did not keep current on a variety of company obligations, particularly payroll taxes owing to the IRS. Dwaine McCoy brought in new people to properly handle the Debtor's accounts and bill paying. He also hired an outside business to figure out what was owed to the IRS and work on a repayment program. Ace Insulation was struggling to keep up with its tax payments, and then it was hit by wage and hour lawsuits brought by multiple plaintiffs. While Ace Insulation did not feel the claims had merit, it did not have adequate funds to pay the legal fees to fully defend itself. Through state court counsel, Ace Insulation attempted to resolve the claims, but the effort was unsuccessful. Given the large tax claims and the pending litigation, Ace Insulation determined that filing bankruptcy was necessary if it was to have an opportunity to preserve its business and the jobs that come with it. This Plan of Reorganization proposes to pay creditors from current cash on hand and operations of the business in the future. Class 5 consists of non-priority unsecured creditors except those included in Classes 6 and 7. Debtor estimates the Class 5 claims at $2,500,000. The holders of Class 5 claims shall receive a pro rata share of the sum of $300,000 (the "Class 5 Pot"). Debtor will begin contributing to the Class 5 Pot by making 12 quarterly payments of $25,000, beginning on April 1, 2024. To the extent Debtor recovers funds on any of its retained claims, those recoveries net of costs of collection will be distributed to Class 5 creditors. At this time recovery is too uncertain to predict or estimate whether there will be any recovery beyond the Class 5 Pot. Holders of allowed Class 5 Non-priority Unsecured Claims are impaired and entitled to vote on the Plan. Class 6 consists of Non-priority unsecured claim of Isabel Avina. Avina has an unsecured claim for an unknown amount based upon a pre-petition auto accident involving one of Debtor's employees. Avina will not recover anything from the Debtor's estate but will be able to pursue her claim in state court, while limiting her recovery against the Debtor to the Debtor's available insurance proceeds. The holder of the Class 6 Non-priority Unsecured Claims is impaired and entitled to vote on the Plan. Class 7 consists of the non-priority disputed unsecured claim of Justin Bigby et al. The Class 7 claimants filed a 3-page claim asserting a claim of over $20,000,000 arising out of alleged Class and PAGA claims. The Class 7 claimants will have the option of accepting a payment of $50,000 on the Effective in full satisfaction of their claims. If the Class 7 claimants do not elect to accept the proposed payment, Debtor will object to the claims on various grounds. If Class 7 creditors ever establish an allowed claim, the Class will be entitled a recovery of 12% of its claims. The holder of the Class 7 Non-priority Unsecured Claims is impaired and entitled to vote on the Plan. Equity holders will not receive any economic recovery under the plan but shall retain their equity interests in the company and their treatment shall comply with Section 1124. The Plan will be funded from Debtor's ongoing operations. As evidenced in the projected budget attached to this Plan, Debtor will operate profitability and be able to make the Plan payments. Finally, Debtor asserts a claim against former officers and third parties arising out of their prepetition conduct. Any recovery on the claims against these parties will be used to make payments to creditors. A full-text copy of the Plan of Reorganization dated January 8, 2024 is available at https://urlcurt.com/u?l=Vutz4c from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Stephen D. Finestone, Esq. Ryan A. Witthans, Esq. Finestone Hayes LLP 456 Montgomery Street, Floor 20 San Francisco, CA 94104 Tel: (415) 421-2624 Fax: (415) 398-2820 Email: sfinestone@fhlawllp.com rwitthans@fhlawllp.com About Ace Insulation Ace Insulation, Inc., is a locally owned and operated home improvement company and spray insulation contractor. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-10495) on October 4, 2023. In the petition signed by Dwaine McCoy, president, the Debtor disclosed $2,789,026 in total assets and $7,383,101 in total liabilities. Stephen D. Finestone, Esq., at Finestone Hayes, LLP, is the Debtor's legal counsel. ADVANCE THERAPY: Seeks Cash Collateral Access --------------------------------------------- Advance Therapy Associates, Inc. asks the U.S. Bankruptcy Court for the District of New Jersey for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to: (a) maintain and preserve its assets; and (b) continue the operation of its business, including payment of payroll, payroll taxes, and insurance expenses as reflected in the Budget. The Debtor is indebted to the United States Small Business Administration in the approximate amount of $500,000. The Debtor further admits that the SBA Loan is secured by a validly recorded UCC-1 filing which creates a valid and subsisting first lien and security interest covering the Debtor's Inventory, Equipment, Negotiable Instruments, Chattel Paper, Accounts Receivable and General Intangibles of the business. As adequate protection for use of cash collateral, the Debtor will resume monthly contractual payments under the terms of the underling SBA loan documents in the amount of $2,494, with payments to commence on or about January 8, 2024 and then on the 8th day of each month thereafter. The SBA will be granted a replacement perfected security interest under 11 U.S.C. Section 361(2) to the extent the SBA's cash collateral is used by the Debtor, to the extent and with the same priority in the Debtor's post-petition collateral, and proceeds thereof, that the SBA held in the Debtor's pre-petition collateral. A copy of the motion is available at https://urlcurt.com/u?l=3ARRkK from PacerMonitor.com. About Advance Therapy Associates Inc. Advance Therapy Associates Inc. owns and operates outpatient physical & occupational therapy clinics in New Jersey. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 24-10256) on January 10, 2024. In the petition signed by Anurag Tripath, president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. AECOM: Moody's Upgrades CFR to Ba1 & Senior Unsecured Notes to Ba2 ------------------------------------------------------------------ Moody's Investors Service upgraded AECOM's corporate family rating to Ba1 from Ba2, its probability of default rating to Ba1-PD from Ba2-PD, and the rating on the senior unsecured notes to Ba2 from Ba3. The ratings on the senior secured bank credit facilities - including the senior secured revolving credit facility, senior secured term loan A, and senior secured term loan B - were affirmed at Baa3. The Speculative Grade Liquidity Rating (SGL) was upgraded to SGL-1 from SGL-2. The ratings outlook is stable. Moody's has revised the Social Issuer Profile Score ("IPS") for AECOM under its ESG framework to S-3 from S-4, along with a change in the component scores for human capital to 3 from 4, and health & safety to 2 from 3. The changes reflects AECOM's ability to utilize a globally diversified workforce, which is largely office based, to support its operations. "AECOM's CFR upgrade to Ba1 reflects a demonstration of continued organic revenue growth and margin improvement through internal initiatives, consistent free cash flow generation and deleveraging through EBITDA improvement", said Sandeep Sama, Vice President – Senior Analyst and lead analyst for AECOM, adding that "the presence of medium-term tailwinds along with the company's strategy to expand its share of the customer wallet should allow it to continue this trend going forward." RATINGS RATIONALE AECOM's Ba1 CFR reflects its large scale and solid position across diverse end markets as one of the largest and most diversified engineering, design, planning and construction management companies globally. The company's rating is also supported by its moderate leverage, consistent free cash flow generation and strong project backlog with moderate fixed price project exposure that is mostly concentrated in its design business, which carries relatively lower risk. AECOM's rating also reflects its modest level of funds from operations as a percent of outstanding debt and its plan to use all of its free cash flow for shareholder returns. AECOM has established a track record of consistent organic revenue growth under various macroeconomic conditions – driven by market share gains as well as its strategy to increase share of the customer wallet through its program management and advisory offerings. AECOM is a beneficiary of the expected multi-year infrastructure spending in the US resulting from the Inflation Reduction Act (IRA) and Infrastructure Investments & Jobs Act (IIJA), and global trends like energy transition and sustainability. Additionally, AECOM has consistently demonstrated its ability to improve margins through operational improvements and better execution, without relying on price increases. Moody's expects AECOM to continue the trend of revenue growth and margin expansion over the next 12-18 months, with strong free cash flow generation. While the majority of the free cash flow is expected to be allocated for shareholder returns, the company's leverage should further improve to mid-2.0xs as a result of EBITDA growth. AECOM's SGL-1 indicates very good liquidity. At September 30, 2023 AECOM had $1.26 billion of cash on hand and $1.15 billion of availability under its revolving credit facility due February 2026, implying a total liquidity of $2.4 billion. Moody's expects the company to generate strong free cash flow over the next 12-18 months, although a majority of that is likely to be used for shareholder returns. The company's credit agreement contains certain covenants including a maximum consolidated leverage ratio covenant of 4.0x, and a minimum consolidated interest coverage ratio covenant of 3.0x. Moody's expects AECOM to maintain ample cushion against these covenant thresholds over the next 12-18 months. AECOM's earliest maturity is in February 2026. AECOM's stable outlook reflects the expectation that the company's operating results will moderately improve over the next 12 to 18 months, with continued strong free cash flow generation, although it will be used for shareholder returns. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade AECOM's rating if it improves revenue scale, EBITA margins (based on Net Service Revenue) are sustained around mid-teens levels, leverage is sustained below 2.5x, interest coverage (EBITA / interest expense) is sustained above 6.0x, and the company gains greater financial flexibility through a predominantly unsecured debt capital structure, inclusive of the bank credit facility. Moody's could downgrade AECOM's rating if operating results deteriorate, putting pressure on margins, or if share repurchases or acquisitions result in leverage sustained above 3.5x, and interest coverage below 4.0x. A significant reduction in borrowing availability or liquidity could also result in a downgrade. Headquartered in Dallas, AECOM is a professional services firm providing engineering & design, planning and construction management services to the infrastructure, transportation, industrial, environmental, water, and government sectors. The company operates under two business segments: Americas (76% of fiscal 2023 revenue), and International (24%). AECOM generated about $14.4 billion of revenue during fiscal 2023 and had a design backlog of $21.4 billion as of September 30, 2023. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. AFFINITY INTERACTIVE: S&P Downgrades ICR to 'B-', Outlook Stable ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S. gaming operator Affinity Interactive to 'B-' from 'B'. S&P said, "At the same time, we lowered our issue-level rating on the company's senior secured notes due in 2027 one notch to 'B-' from 'B', in line with the lower issuer credit rating. "The stable outlook reflects our expectation for Affinity to maintain EBITDA that supports at least 1.5x coverage of interest expense and adequate liquidity to fund the Silver Sevens Casino renovations. "We expect Affinity's leverage to remain elevated above 6.5x through 2024. The downgrade reflects our expectation for sustained leverage exceeding 6.5x, caused by weakened operating performance, and a downward revision to our EBITDA forecast through 2024. Affinity's operating performance in 2023 was below our previous base-case expectations as a combination of high gas prices, renovations of its Midwest properties, and weather constrained visitation. At the same time, higher than expected labor, insurance, and utility expenses compressed EBITDA margin approximately 550 basis points below our base case. This led to leverage higher than forecast and significantly above the downgrade threshold for the previous 'B' rating. Adjusted last-12-months EBITDA margin was about 25% as of Sept. 30, 2023, compared to about 30% in the comparable 2022 period. In addition, the company's S&P Global Ratings-adjusted leverage was 7.6x, and we expect that Affinity ended the fiscal year with leverage above 7x and EBITDA interest coverage below 2x, both weaker than our downgrade threshold. "In 2024, we expect a lower EBITDA base due to the sale of the Rail City Casino in Sparks, Nev., and potential operating disruptions from renovations at the Silver Sevens Casino in Las Vegas, offset by higher revenue from its Midwest properties. Disruptive renovations were completed by December 2023. However, we also believe expenses will likely remain elevated. We forecast relatively flat EBITDA margin in 2024 compared to 2023. As a result, we do not believe the company will reduce leverage below the mid-7x to 8x area in 2024 and EBITDA interest coverage of 1.5x-2x. "We do not believe the sale of Affinity's Rail City Casino will reduce leverage. On Nov. 1, 2023, Affinity closed the sale to Truckee Gaming LLC. The terms of the transaction were not made public. Under Affinity's credit agreement, asset sale proceeds must be reinvested into the business or offered to bondholders to repurchase Affinity's senior secured notes at par. Although Affinity could use sale proceeds to repurchase the notes, we believe it will primarily invest them into the business, specifically the Silver Sevens Casino. The company recently announced a major renovation of the Silver Sevens including an expansion of the gaming floor and a refresh of food and beverage options. We expect the Silver Sevens project will commence in the second half of 2024." In addition, in June 2023, Affinity received a six-month extension on it $175 million dividend authorization from the Nevada Gaming Commission. As of Sept. 30, Affinity had distributed $125 million to Z Capital Partners LLC, its private equity fund owner. Therefore, liquidity may be weaker than expected if it used a portion of the Rail City proceeds for a distribution to Z Capital Partners in the fourth quarter. Affinity remains vulnerable to EBITDA volatility because of event risks, macroeconomic uncertainty, and competition. Affinity is somewhat vulnerable to adverse weather, particularly flooding, given the location of its St. Jo Frontier casino on the Missouri River and Mark Twain casino near the Mississippi River, both in Missouri. Most recently, results were impaired because of inclement weather at its Lakeside property in the second quarter of 2023 in addition to other weather constraints across its portfolio of properties throughout the year. In 2019, revenue and EBITDA were slowed by flooding on the Missouri River that resulted in damage to and temporary closure of the St. Jo Frontier. Furthermore, heading into 2024, consumer resiliency will be tested as high interest rates and dwindling excess savings weigh on consumer purchasing power. Although the shift in spending to experiences from products may continue, good regional gaming revenue and solid leisure spending in Las Vegas (which benefits Affinity's Silver Sevens) may begin to moderate if consumers' willingness to spend on travel and entertainment is hit by reduced accumulated savings, higher gas prices, or higher unemployment. Historically, severe declines during recessions have not hit regional gaming operators such as Affinity because they rely on nearby customers who drive to the properties. With fewer discretionary dollars, customers may opt to stay closer to home rather than travel to destination casinos. Affinity's Primm properties are particularly sensitive to high gas prices and competitive marketing from Southern California casinos. S&P said, "In addition, we believe Silver Sevens is vulnerable to volatility because of indirect competition from Las Vegas Strip properties. Given that the Silver Sevens targets value-oriented customers, we believe that when Las Vegas Strip properties discount rooms, the Silver Sevens becomes less attractive and its cash flow can drop. While some of these issues will likely not repeat, impact from severe weather and discounting on the Strip underscore some persistent operating risks. "The stable outlook reflects our expectation for Affinity to maintain EBITDA that supports at least 1.5x coverage of interest expense and adequate liquidity through the completion of the Silver Sevens renovations." Should macroeconomic conditions weaken, such that visitation and spending per visit are lower than expected or expenses increase significantly above its base case, S&P could revise the outlook to negative or lower the rating if: -- EBITDA declines more than 15% from S&P's base case and no longer supports interest coverage of at least 1.5x; or -- The company begins to deplete its excess cash balances or revolver availability. Higher ratings are unlikely over the next year given S&P's forecast for adjusted leverage to remain above 7x through 2024. It could raise the rating if: -- S&P expects Affinity to maintain adjusted leverage under 6.5x. Because its capital structure does not include prepayable debt, such improvement would need to result from better-than-expected EBITDA generation, which could occur if EBITDA outperforms S&P's base-case forecast. -- The company's financial policy is aligned with sustaining leverage below 6.5x. ALAFIA HOLDINGS: Disposable Income to Fund Plan Payments -------------------------------------------------------- Alafia Holdings III Inc. filed with the U.S. Bankruptcy Court for the District of Maryland a Subchapter V Plan dated January 8, 2024. The Debtor was founded in 2011 and commenced the business of commercial property leasing. It has been primarily engaged in leasing lots owned by it at 118 through 156 McPhail Street in Baltimore City, Maryland 21223. The Debtor suffered non-payment of rents to the tune of over $200,000 by its tenants during the Covid 19 pandemic and was a victim of environmental crime of illegal dumping on its property by its tenant as a result of which it suffered financial hardship and had to seek the protection of Chapter 11 of the Bankruptcy Code. During the term of this Plan, the Debtor shall submit the disposable income necessary for the performance of this Plan to the supervision and control of the Subchapter V Trustee or debtor for distribution to claimants as provided for under the Plan. If the plan is a consensual plan the debtor will supervise and control the disposable income and make plan payments under the plan. If the plan is non-consensual plan the Subchapter V Trustee will supervise and control the disposable income and make payments under the plan. The term of this Plan begins on the confirmation date of this Plan and ends on the 60th month subsequent to that date. The value of the property to be distributed under the plan during the term of the plan is not less than the Debtor's projected diposable income for that same period. The Plan provides for the payment of secured, administrative and priority claim in accordance with the Bankruptcy Code. Class 2 consists of the Allowed Secured Claim of Nick's Amusement Inc. Bank. This Class shall receive monthly payments of $2990 for 60 months. Impaired in that not rate of 16% is being paid instead of 24% default rate. Class 3 consists of the Claim of Ashman Investments and Mayor and City Council of Baltimore for real property tax in tax sale. Provision of $800 a month for 12 months was made in the projections. A full-text copy of the Subchapter V Plan dated January 8, 2024 is available at https://urlcurt.com/u?l=i3bA9N from PacerMonitor.com at no charge. Counsel to the Debtor: Chidi Onukwugha, Esq. Onukwugha & Associates 14440 Cherry Lane Court, Suite 112 Laurel, MD 20707 Telephone: (410) 336-2823 Email: attorneyonukwugha@gmail.com About Alafia Holdings Alafia Holdings III Inc. was founded in 2011 and commenced the business of commercial property leasing. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Md. Case No. 23-17234) on Oct. 8, 2023, with $500,001 to $1 million in assets and $100,001 to $500,000 in liabilities. Judge Michelle M. Harner oversees the case. Chidiebere Onukwugha of Onukwugha & Associates, LLC represents the Debtor as legal counsel. ALASKA LOGISTICS: Court OKs Cash Collateral Access Thru Jan 18 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington authorized Alaska Logistics, LLC to continue using cash collateral under the same terms and conditions in the Final Order, through January 18, 2024. The Debtor is directed to provide the same adequate protection and reporting to Banner Bank as provided in the Final Cash Collateral Order, except that the Debtor will not make the $18,200 adequate protection payment in January 2024. As previously reported by the Troubled Company Reporter, as adequate protection and for the Debtor's use of the cash collateral, Banner Bank, was granted replacement liens in the Debtor's post-petition cash, accounts receivable and inventory, and the proceeds of each of the foregoing, to the same extent and priority as any duly perfected and unavoidable liens in cash collateral held by Banner Bank as of the Petition Date. A hearing on the matter is continued to January 17, 2024 at 9:30 a.m. A copy of the order is available at https://urlcurt.com/u?l=vjZ3U5 from PacerMonitor.com. About Alaska Logistics LLC Alaska Logistics LLC transports materials and equipment of all sizes, shapes and types from Seattle to Western Alaska. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 23-11250) on July 7, 2023. In the petition signed by Allyn Long, general manager/president, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Christopher M. Alston oversees the case. Faye C. Rasch, Esq., at Wenokur Riordan PLLC, represents the Debtor as legal counsel. ALPINE SUMMIT: Unsecureds to Get 0% in Liquidating Plan ------------------------------------------------------- Alpine Summit Energy Partners, Inc. and Its Debtor Affiliates submitted a Revised Disclosure Statement for the Revised Liquidating Plan dated January 9, 2024. Following the Effective Date, the Debtors' assets will be placed in two liquidating trusts: the GUC Trust and the Lienholder Trust. The Liquidating Trustees will be responsible for taking the necessary and appropriate actions to liquidate the remaining assets of the Debtors' Estates, make Distributions to Holders of Allowed Claims, and to proceed with an orderly, expeditious, and efficient wind-down of the Debtors' Estates in accordance with the terms of the Plan. Class 3 consists of the Prepetition Credit Agreement Claims. The Prepetition Credit Agreement Claims are subject to the Challenge. Following the resolution of the Challenge by a Final Order, each Holder of the Prepetition Credit Agreement Claims shall receive in full and complete settlement, release, and discharge of such claim (other than any resulting Deficiency Claim and/or Diminution Claim of the Prepetition Lender), to the extent Allowed and not subordinated pursuant to the Challenge, Cash from the Lienholder Trust Assets in accordance with the Lienholder Trust Waterfall until the Allowed Prepetition Credit Agreement Claims are paid in full. This Class will receive a distribution of 73.9% of their allowed claims. Class 6 consists of General Unsecured Claims. Each holder of an Allowed General Unsecured Claim shall receive in full and complete settlement, release, and discharge of such claim, its Pro Rata share of the GUC Trust Assets once converted to Cash pursuant to the GUC Trust Waterfall. Class 6 is Impaired under the Plan. Holders of General Unsecured Claims are entitled to vote to accept or reject the Plan. This Class will receive a distribution of 0% of their allowed claims. The Plan constitutes a motion for the substantive consolidation of the Debtors and their respective Estates. By this Plan, the Debtors are hereby substantively consolidated pursuant to the fullest extent of the law and shall be treated as one entity for all purposes, including for purposes of voting on the Plan, confirming the Plan, and making Distributions pursuant to the Plan. Accordingly, voting on the Plan shall be conducted and counted on a consolidated basis. As a result of substantive consolidation, on the Effective Date, (a) the assets of the Debtors will be merged and/or treated as if they are merged for the purpose of paying Allowed Claims against the Debtors; (b) any Claim Filed or asserted against any of the Debtors will be deemed a Claim against all of the Debtors (and any duplication of claims arising from both primary operative documents and guaranty and/or other secondary obligations shall be eliminated and all such claims against the Debtors shall be treated as a single claim that eliminates such duplications); (c) all Intercompany Claims and Interests will be eliminated; (d) all transfers, disbursements, and Distributions whenever made will be deemed to be made by the substantively consolidated Debtors; and (e) any obligation of any of the Debtors will be deemed to be an obligation of each of the Debtors. On the Effective Date, the Lienholder Trust will be deemed created and effective without any further action by the Bankruptcy Court or any party. The Lienholder Trust shall be established for the primary purposes of reasonably maximizing the proceeds from liquidation of its assets (as applicable) for the benefit of the Lienholder Trust Beneficiaries, for making Distributions in accordance with the Plan and the Lienholder Trust Agreement, and for prosecuting and defending the Lienholder Trust Retained Causes of Action. The purpose of the Lienholder Trust shall be to liquidate and distribute Lienholder Trust Assets in accordance with the Lienholder Trust Waterfall after the Bankruptcy Court determines the priority and amount of the Statutory Lien Claims and the Prepetition Credit Agreement Claims pursuant to the Lien Determination Procedures Order. The Lienholder Trust shall have sole responsibility for (i) objecting to, resolving, or settling all Claims other than General Unsecured Claims and the Prepetition Credit Agreement Claims; and (ii) prosecuting and defending the Lienholder Trust Retained Causes of Action. For the avoidance of doubt, the Lienholder Trustee shall be required to prosecute and defend the Lienholder Trust Retained Causes of Action in a reasonable manner. Any settlement of the foregoing litigation shall require Bankruptcy Court approval. The GUC Trustee and Bank7 shall have standing to object to any proposed settlement of Claims or Causes of Action referenced in this paragraph. On the Effective Date, the Debtors, pursuant to the Plan, shall transfer all of the Lienholder Trust Assets to the Lienholder Trust for distribution (or prosecution and defense as applicable) in accordance with the Plan and the Lienholder Trust Agreement. All Distributions from the Lienholder Trust shall be funded first from unencumbered Lienholder Trust Assets (including any unencumbered property after the payoff of the DIP Facility), then pro rata from the Sales Proceeds of each well/lease. From and after the Effective Date, (i) the Lienholder Trust shall be solely responsible for prosecution and settlement of all Lienholder Trust Retained Causes of Action pursuant to the Plan, Confirmation Order, and Lienholder Trust Agreement, and (ii) the Lienholder Trust shall have exclusive rights, powers, and interests of the Estates to pursue, settle, or abandon such Lienholder Trust Retained Causes of Action. Any settlement by the Lienholder Trust of Lienholder Trust Retained Causes of Action shall require Bankruptcy Court approval. Confirmation of this Plan effects no settlement, compromise, waiver or release of any Lienholder Trust Retained Cause of Action unless this Plan or the Confirmation Order specifically and unambiguously so provides. The GUC Trustee is selected by the Debtors and the Committee. The appointment of the GUC Trustee shall be effective as of the Effective Date. Any successor GUC Trustee shall be appointed as set forth in the GUC Trust Agreement. The purpose of the GUC Trust shall be to (i) prosecute and liquidate any Retained Causes of Action; (ii) liquidate and distribute any remaining Cash after the payment of all Allowed Claims (other than General Unsecured Claims) by the Lienholder Trust; and (iii) object, resolve, or settle all General Unsecured Claims. Subject to the provisions of the GUC Trust Agreement, the GUC Trustee shall be entitled to exercise all powers and duties as set forth in the GUC Trust Agreement, including, but not limited to: (i) entering into and granting settlements, releases, and compromises, for which approval from the Bankruptcy Court shall not be required; and (ii) retaining professionals and advisors, attorneys and accountants, as the GUC Trustee deems appropriate and advisable, and to pay such professionals as professionals and expenses of administration of the GUC Trust, without the need for Bankruptcy Court approval or authorization. The Debtors are not contributing any cash to the GUC Trust under the Plan. The Committee believes that this failure to provide funding to the GUC Trust renders any benefits to unsecured creditors illusory. A copy of the Revised Disclosure Statement dated January 9, 2024, is available at https://urlcurt.com/u?l=azTzpk from Kroll, the claims agent. Counsel for the Debtors: Eric M. English, Esq. M. Shane Johnson, Esq. Megan Young-John, Esq. James A. Keefe, Esq. Jordan Stevens, Esq. PORTER HEDGES LLP 1000 Main St., 36th Fl. Houston, TX 77002 Tel: (713) 226-6000 Fax: (713) 226-6248 E-mail: eenglish@porterhedges.com sjohnson@porterhedges.com myoung-john@porterhedges.com jkeefe@porterhedges.com jstevens@porterhedges.com About Alpine Summit Energy Partners Alpine Summit Energy Partners Inc. and its affiliates develop, own, and operate oil and gas properties in several formations in Texas. Alpine Summit Energy Partners and its affiliates, including HB2 Origination, LLC, sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90739) on July 5, 2023. In the petition filed by Craig Perry, CEO and Chairman of Board of Directors, Alpine Summit Energy Partners estimated assets up to $50,000 and liabilities between $500,000 and $1 million. Affiliate Ageron Energy II, LLC estimated $100 million to $500 million in assets and $1 million to $10 million in liabilities. Affiliate HB2 Origination, LLC estimated $100 million to $500 million in assets and $50 million to $100 million in liabilities. Judge Marvin Isgur oversees the cases. The Debtors tapped Porter Hedges, LLP as counsel; Houlihan Lokey Capital, Inc. as investment banker; Huron Consulting Services, LLC as financial advisor; and White & Case LLP as special litigation counsel. Kroll Restructuring Administration, LLC is the claims agent. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Reed Smith, LLP as bankruptcy counsel and Huron Consulting Services, LLC as restructuring advisor. Ryan Bouley of Huron serves as chief restructuring officer. AMAG ENTERPRISES: Court OKs Interim Cash Collateral Access ---------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Georgia, Albany Division, authorized Amag Enterprises to use cash collateral on an interim basis in accordance with the budget, with a 15% variance. As of the Petition Date, the Magnolia State Bank f/k/a Bank of Eastman's claim totaled approximately $965,512 including principal and interest with interest continuing to accrue at a rate of $262.313 per day as evidenced by claim No. 9 pursuant to the U.S. Small Business Administration Note dated August 27, 2015, and executed by AMAG in favor of the Bank in the original principal amount of $1.1 million. These events constitute an "Event of Default": a. Failure of Debtor to abide by the terms, covenants, and conditions of the Order or the Budget; b. The use of Bank Cash Collateral for any purpose not authorized by the Order; or c. Conversion of the case to Chapter 7 or any other chapter of the Bankruptcy Code. As further adequate protection, the Debtor will make monthly payments to the Bank in the amount of $6,000, on or before January 15, 2024, and $3,500 due on or before February 23, 2024. As a condition of Debtor's use of Bank Cash Collateral and to the same extent of the validity and priority of the pre-petition liens granted to the Bank, the Bank is granted a continuing, additional first-priority replacement lien and security interest in and to all of the now existing or hereafter arising or after-acquired assets of the Debtor relating to Bank Cash Collateral, such that the amount of the Bank Cash Collateral will at all times equal but not exceed $54,400, the total sum of the prepetition cash collateral, to secure the Debtor's obligations to the Bank in accordance with 11 U.S.C. section 361. A continued hearing on the matter is set for February 27, 2024 at 10 a.m. A copy of the order is available at https://urlcurt.com/u?l=8dwtQN from PacerMonitor.com. About AMAG Enterprises AMAG Enterprises, LLC provides support activities for crop production. The company is based in Sycamore, Ga. The Debtor filed Chapter 11 petition (Bankr. M.D. Ga. Case No. 23-10627) on July 31, 2023, with $513,250 in assets and $1,970,991 in liabilities. Amanda G. Brock, sole member, signed the petition. Judge Austin E. Carter oversees the case. Daniel L. Wilder, Esq., at Emmett L. Goodman Jr, LLC is the Debtor's legal counsel. AMERICAN ROOFING: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The U.S. Trustee for Region 4 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of American Roofing Products, LLC. About American Roofing Products American Roofing Products, LLC filed a voluntary petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. W. Va. Case No. 23-20211) on Nov. 30, 2023. In the petition signed by John Blaker, member, American Roofing Products disclosed up to $10 million in both assets and liabilities. Judge B. McKay Mignault oversees the case. Joe M. Supple, Esq., at Supple Law Office, PLLC represents the Debtor as bankruptcy counsel. AMICAS PIZZA: Joli Lofstedt Named Subchapter V Trustee ------------------------------------------------------ The U.S. Trustee for Region 11 appointed Joli Lofstedt, Esq., as Subchapter V trustee for Amicas Pizza Microbrews & More, Inc. Ms. Lofstedt, a practicing attorney in Louisville, Colo., will be paid an hourly fee of $375 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Lofstedt declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Joli A. Lofstedt, Esq. P.O. Box 270561 Louisville, CO 80027 Phone: (303) 476-6915 Fax: (303) 604-2964 Email: joli@jaltrustee.co About Amicas Pizza Microbrews & More Amicas Pizza Microbrews & More, Inc. owns and operates a pizza restaurant offering wood-fired pies and craft beer in bright, laid-back digs. The company is based in Salida, Colo. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-16046) on December 29, 2023, with up to $10 million in both assets and liabilities. Christopher Bowers, president of the Debtor's Board of Directors, signed the petition. Judge Thomas B Mcnamara oversees the case. Jeffrey A. Weinman, Esq., at Allen Vellone Wolf Helfrich & Factor, P.C., represents the Debtor as legal counsel. ANTERO MIDSTREAM: Moody's Rates New $500MM Unsecured Notes 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Antero Midstream Partners LP's (Antero Midstream or AM) proposed $500 million backed senior unsecured notes due 2032. AM's other ratings, including its Ba2 corporate family rating, SGL-3 speculative grade liquidity rating (SGL) and stable outlook were unchanged. Net proceeds will be used to redeem outstanding borrowings on AM's revolving credit facility, which had $631 million outstanding as of January 3, 2024. RATINGS RATIONALE The proposed notes are rated Ba3, one notch below AM's Ba2 CFR and consistent with AM's existing senior notes ratings. The notching reflects the significant size of AM's secured revolving credit facility, which has an all-asset pledge and a priority-claim over substantially all of AM's assets. The new notes will rank equally in right of payment with existing senior unsecured notes and have similar upstream guarantee from AM's existing and future domestic subsidiaries. Antero Midstream's Ba2 CFR is supported by its growing and moderately large earnings base, declining financial leverage, and predominantly fee-based long-term contracted revenue from its primary customer, Antero Resources Corporation (Antero or AR, Ba1 stable). The company has historically maintained relatively stable operations and delivered reliable cash flow, and Moody's expect throughput volumes to remain solid and financial leverage to decline through 2025. AM's credit profile is constrained by its high reliance on a single counterparty for its natural gas and water volumes; geographic concentration in Appalachia; exposure to volumetric risks through mostly acreage dedication contracts; and indirect exposure to volatile natural gas prices which ultimately dictate upstream drilling and production levels. AM will continue to maintain adequate liquidity through 2024 which is captured in the SGL-3 rating. AM will have increased availability (roughly -1.1 billion) under its $1.25 billion revolving credit facility following the new notes offering. AM's stable rating outlook reflects its declining financial leverage as well as the operational stability and credit strength of its primary customer, Antero Resources. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING An upgrade could be considered if AM can sustain debt/EBITDA near 3x and distribution coverage above 1.1x. AM's ratings could be downgraded if debt/EBITDA rises above 4x or if Antero Resources' CFR is downgraded below AM's CFR level. Antero Midstream Partners LP is a wholly owned subsidiary of Antero Midstream Corporation, a midstream energy company based in Denver, Colorado. Antero Midstream Corporation owns and operates an integrated system of natural gas gathering pipelines, compression stations, processing and fractionation plants, and water handling and treatment assets in northwest West Virginia and southern Ohio. The principal methodology used in this rating was Midstream Energy published in February 2022. ANTERO MIDSTREAM: S&P Rates $500MM Senior Unsecured Notes 'BB' -------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '3' recovery rating to Antero Midstream Partners L.P.'s proposed $500 million senior unsecured notes due in 2032. The '3' recovery rating indicates its expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a default. The partnership will utilize proceeds for repayment of debt. S&P anticipates that will initially be for its revolver and repayment of the 2026 notes in the near term. The issuer credit rating on Antero Midstream is 'BB' with a positive outlook. APEX NORTH: Court OKs Bid Rules for Sale of N.J. Property --------------------------------------------------------- Apex North Broad, LLC received approval from the U.S. Bankruptcy Court for the District of New Jersey to solicit bids in connection with the sale of its real property in Elizabeth, N.J. Under the court-approved bid procedures, the deadline for potential buyers to place their bids on the property is on Feb. 7. From the pool of these bids, a stalking horse bidder will be selected. Notwithstanding the selection of a stalking horse bidder, Apex will continue to solicit bids through the Feb. 7 deadline. To be considered a qualified bidder, a potential buyer's bid must be at least higher than the stalking horse bid, plus any break-up fee by an initial increment of $100,000. Bidders are required to provide a cash deposit in an amount equal to 10% of the purchase price to be paid. An auction will be conducted on Feb. 14 if the company receives one or more offers by the bid deadline. At the auction, secured lender RCC Real Estate 9, LLC may credit bid up to the full amount of its lien. A sale hearing will be held five business days after the auction, subject to court availability. The proposed sale of the property by auction is authorized under Apex's Chapter 11 plan of liquidation, which was confirmed by the bankruptcy court on Dec. 4 last year. In the company's estimation, the value of the property is sufficient to pay all of its creditors in full through the liquidating plan. About Apex North Broad Apex North Broad, LLC, a company in Elizabeth, N.J., filed Chapter 11 petition (Bankr. D.N.J. Case No. 23-16137) on July 19, 2023, with $10 million to $50 million in assets and $1 million to $10 million in liabilities. Ephraim Diamond, chief restructuring officer, signed the petition. Judge John K. Sherwood oversees the case. Harry J. Giacometti, Esq., at Flaster Greenberg, PC is the Debtor's legal counsel. On December 4, 2023, the court confirmed the Debtor's Chapter 11 plan of liquidation. ATHERSYS INC: Seeks to Hire McDonald Hopkins as Bankruptcy Counsel ------------------------------------------------------------------ Athersys, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Ohio to hire McDonald Hopkins LLC as their counsel. The firm will render these services: a. advising the Debtors with respect to their powers and duties as Debtors in possession in the continued management and operation of their businesses and properties; b. advising and consulting on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; c. attending meetings and negotiating with representatives of creditors and other parties in interest; d. taking all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the Debtors' estates; e. preparing pleadings in connection with these chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; f. representing the Debtors in connection with obtaining authority to continue using cash collateral and postpetition financing; g. advising the Debtors in connection with any potential sale of assets; h. appearing before the Court and any appellate courts to represent the interests of the Debtors' estates; i. advising the Debtors regarding tax matters; and j. performing all other necessary legal services for the Debtors in connection with the prosecution of these chapter 11 cases. The hourly rates of the firm's counsel and staff are as follows: Members $395 - $1,035 Of Counsel $395 - $1,065 Associates $290 - $635 Paralegals $225 - $425 As of the Petition Date, McDonald Hopkins was holding $143,224.72 in an advance payment retainer. Nicholas Miller, a member of McDonald Hopkins, 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: Nicholas M. Miller, Esq. MCDONALD HOPKINS, LLC 300 N. LaSalle Street, Suite 1400 Chicago, IL 60654 Telephone: (312) 269-8000 Email: nmiller@mcdonaldhopkins.com About Athersys, Inc. Athersys is a clinical-stage biotechnology company developing novel and proprietary best-in-class therapies designed to extend and enhance the quality of human life. Athersys, Inc. and its affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-10043) on Jan. 5, 2024. The petitions were signed by Kasey Rosado as chief financial officer. At the time of filing, Athersys, Inc. estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Jessica E. Price Smith presides over the case. Nicholas Miller, Esq. at MCDONALD HOPKINS LLC represents the Debtors as counsel. B, C & D LAND: Case Summary & Nine Unsecured Creditors ------------------------------------------------------ Debtor: B, C & D Land & Timber LLC 2370 N. Elm Street Arcadia, LA 71001 Business Description: The Debtor owns and operates The Dawg House Sports Grill, a locally owned and operated eatery offering both dine in and take out options. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court Western District of Louisiana Case No.: 24-10048 Judge: Hon. John S. Hodge Debtor's Counsel: Robert W. Raley, Esq. ROBERT W. RALEY 290 Benton Spur Road Bossier City, LA 71111 Tel: 318-747-2230 E-mail: rwr@robertraleylaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Bert Davis, III as managing member. 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/E6OK2XI/B_C__D_Land__Timber_LLC__lawbke-24-10048__0001.0.pdf?mcid=tGE4TAMA BAKERS RESIDENTIAL: Christine Brimm Named Subchapter V Trustee -------------------------------------------------------------- Gerard Vetter, Acting U.S. Trustee for Region 4, appointed Christine Brimm, Esq., as Subchapter V trustee for Bakers Residential Experts Heating, Cooling, Plumbing and Electrical, LLC. Ms. Brimm, a practicing attorney in Myrtle Beach, S.C., will be paid an hourly fee of $350 for her services as Subchapter V trustee and an hourly fee of $150 for paralegal services. In addition, the Subchapter V trustee will receive reimbursement for work-related expenses incurred. Ms. Brimm declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Christine E. Brimm P.O. Box 14805 Myrtle Beach, SC 29587 Telephone: 803-256-6582 Email: cbrimm@bartonbrimm.com About Bakers Residential Bakers Residential Experts Heating, Cooling, Plumbing and Electrical, LLC, is an HVAC contractor in South Carolina. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. S.C. Case No. 24-00052) on January 5, 2024, with $141,700 in assets and $1,085,718 in liabilities. Franklin Felton, Sr., owner, signed the petition. Judge Elisabetta Gm Gasparini oversees the case. Kevin Campbell, Esq., at Campbell Law Firm, PA represents the Debtor as bankruptcy counsel. BAKERS RESIDENTIAL: Wins Interim Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina authorized Bakers Residential Experts Heating, Cooling, Plumbing and Electrical, LLC to use cash collateral, on an interim basis, in accordance with the budget, with a 10% variance. The Debtor requires the use of cash collateral for the operation of its business and payment of business expenses in the ordinary course. Breakout Capital, LLC and Fresh Funding Solutions, Inc may assert liens in and to some of the Debtor's personal property, including, but not limited to, the Debtor's accounts, receivables, and/or payment rights. As adequate protection, Breakout Capital, LLC and Fresh Funding Solutions, Inc. are granted replacement liens on post- petition Cash Collateral to the same extent, validity, and priority as their pre-petition liens on the Petition Date in all types and descriptions of collateral that were properly secured and perfected under the applicable, valid, and enforceable pre-petition loan documents, for any post-petition diminution in the pre-petition cash collateral. A further hearing on the matter is set for January 31, 2024 at 10:30 a.m. A copy of the order is available at https://urlcurt.com/u?l=U44S7g from PacerMonitor.com. About Bakers Residential Experts Bakers Residential Experts Heating, Cooling, Plumbing, and Electrical, LLC is an HVAC contractor in South Carolina. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. S.C. Case No. 24-00052) on January 5, 2024. In the petition signed by Franklin Felton, Sr., owner, the Debtor disclosed $141,700 in assets and $1,085,718 in total liabilities. Judge Elisabetta Gm Gasparini oversees the case. Kevin Campbell, Esq., at Campbell Law Firm, PA, represents the Debtor as legal counsel. BALDWIN PATTIE: Thomas Richardson Named Subchapter V Trustee ------------------------------------------------------------ The U.S. Trustee for Regions 3 and 9 appointed Thomas Richardson, Esq., at Lewis Reed and Allen, as successor Subchapter V trustee for Baldwin Pattie Drug Store, LLC. Mr. Richardson will be paid an hourly fee of $320 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Richardson declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Thomas C. Richardson, Esq. Lewis Reed and Allen 136 East Michigan Ave., Suite 800 Kalamazoo, MI 49007 Phone: 269-388-7600 Email: trichardson@lewisreedallen.com About Baldwin Pattie Drug Store Baldwin Pattie Drug Store, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Mich. Case No. 20-01025) on March 10, 2020, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge James W. Boyd oversees the case. The Debtor is represented by Bare & Clough, PC. BARNES & NOBLE: Daniel Tisch Holds 5.2% Equity Stake ---------------------------------------------------- In a Schedule 13G/A Report filed with the U.S. Securities and Exchange Commission, Daniel R. Tisch disclosed that as of December 31, 2023, he had sole voting power and sole investment power with respect to 2,781,993 shares of Common Stock of Barnes & Noble Education, Inc., including 1,506,993 shares registered in the name of TowerView LLC, 800,000 shares registered in the name of DT Four Partners II, LLC, and 55,000 shares registered in the name of Damial Foundation, Inc., or 5.2% of the 53,149,504 shares of the Issuer's Common Stock that were outstanding as of December 1, 2023. TowerView LLC and DT Four Partners II, LLC are Delaware limited liability companies the sole manager of which is Daniel R. Tisch. A full-text copy of the Report is available at http://tinyurl.com/386x6yks About Barnes & Noble Education Basking Ridge, New Jersey-based Barnes & Noble Education, Inc. ("BNED") is one of the largest contract operators of physical and virtual bookstores for college and university campuses and K-12 institutions across the United States. It is one of the largest textbook wholesalers, inventory management hardware and software providers that operates 1,289 physical, virtual, and custom bookstores and serve more than 5.8 million students, delivering essential educational content, tools and general merchandise within a dynamic omnichannel retail environment. As of July 29, 2023, BNED has $1,070,817,000 in total assets and $989,758,000 in total liabilities. BNED was previously warned that its liquidity level raised substantial doubt about its ability to continue as a going concern as of the year ended April 29, 2023, according to a TCR report dated Sept. 12, 2023. BNED's management believes that the expected impact on its liquidity and cash flows resulting from the debt amendments and the operational initiatives as outlined are sufficient to enable the Company to meet its obligations for at least the next 12 months and to continue to alleviate the conditions that initially raised substantial doubt. BAYOU URGENT: Jarrod Martin Named Subchapter V Trustee ------------------------------------------------------ The U.S. Trustee for Region 7 appointed Jarrod Martin, Esq., a practicing attorney in Houston, as Subchapter V trustee for Bayou Urgent Care, Inc. Mr. Martin will be paid an hourly fee of $600 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Martin declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Jarrod B. Martin, Esq. 1200 Smith Street, Suite 1400 Houston, TX 77002 Phone: 713-356-1280 Email: JBM.Trustee@chamberlainlaw.com About Bayou Urgent Care Bayou Urgent Care, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-35123) on December 29, 2023, with $500,001 to $1 million in assets and $100,001 to $500,000 in liabilities. Kevin S Wiley, Sr., Esq., at Wiley Law Group, PLLC represents the Debtor as bankruptcy counsel. BELLAREED CONSTRUCTION: Court OKs Cash Access on Final Basis ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Georgia, Atlanta Division, authorized Bellareed Construction & Remodeling, LLC to use cash collateral, on a final basis, in accordance with the budget. Greentree Advance asserts an interest in the Debtor's cash collateral. As adequate protection, the Debtor will provide the following adequate protection to Greentree during the Cash Collateral Term: a. All pre-petition liens of Greentree will continue until further order of the Court. b. The Debtor will continue to operate and maintain his business and properties in accordance with the Budget and the order. c. Adequate protection payments of $1,500 per month will be made to Greentree, beginning on February 1, 2024. A copy of the order is available at https://urlcurt.com/u?l=J8x1Dy from PacerMonitor.com. About Bellareed Construction & Remodeling, LLC Bellareed Construction & Remodeling, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-61726-wlh) on November 28, 2023. In the petition signed by Edward Karram, chief executive officer, the Debtor disclosed up to $50,000 in assets and up to $1 million. Judge Wendy L. Hagenau oversees the case. Douglas Jacobson, Esq., at Law Offices of Douglas Jacobson, LLC, represents the Debtor as legal counsel. BENNING & G STREET: Case Summary & Two Unsecured Creditors ---------------------------------------------------------- Debtor: Benning & G Street L.L.C. 4951 G Street, SE Washington, DC 20019 Business Description: Benning & G Street is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 11, 2024 Court: United States Bankrutpcy Court District of Columbia Case No.: 24-00010 Judge: Hon. Elizabeth L Gunn Debtor's Counsel: Janet M. Nesse, Esq. MCNAMEE HOSEA, P.A. 6404 Ivy Lane, Suite 820 Greenbelt, MD 20770 Tel: (301) 441-2420 Fax: (301) 982-9450 Email: jnesse@mhlawyers.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Yusuf Mosuro as president and managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/E7FWZ7Y/Benning__G_Street_LLC__dcbke-24-00010__0001.0.pdf?mcid=tGE4TAMA BIG VALLEY: Seeks to Hire Heather Search LTC as Tax Professional ---------------------------------------------------------------- Big Valley Builders, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Oregon to hire Heather Search LTC as its licensed tax professional. The services to be rendered by Heather Search include preparation of tax returns and assistance with bookkeeping. Compensation of the accountant shall be set upon application. Heather Search LTC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Heather Search HEATHER SEARCH LTC 2415 S Santiam Hwy Lebanon, OR 97355 Phone: (541) 258-5261 Email: heathersearch@gmail.com About Big Valley Builders, Inc. Big Valley Builders, Inc. is part of the residential building construction industry. Big Valley Builders, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 23-61913) on Oct. 18, 2023. The petition was signed by Crystal Smith as president. At the time of filing, the Debtor estimated $5,980,581 in assets and $5,169,520 in liabilities. Judge Thomas M. Renn oversees the case. Loren S. Scott, Esq. at THE SCOTT LAW GROUP represents the Debtor as counsel. BIRD GLOBAL: Seeks Approval to Hire Ordinary Course Professionals ----------------------------------------------------------------- Bird Global, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Florida to retain and compensate certain professionals utilized in the ordinary course of its businesses. The OCP's include: a. Coblentz Patch Duffy & Bass LLP 1 Montgomery St., Ste. 3000 San Francisco, CA 94104 Monthly fee: $10,000 b. Van Pelt, Yi & James LLP 1 First Street, Ste. 12 Los Altos, CA 94022 Monthly fee: $10,000 c. Shook Hardy & Bacon 2555 Grand Blvd. Kansas City, MO 64108 Monthly fee: $30,000 d. The Aguilera Law Group, APLC 23046 Avenida de la Carlota, Suite 300 Laguna Hills, CA 92653 Monthly fee: $10,000 e. KPMG LLC 500 Capitol Mall, Ste. 2100 Sacramento, CA 95814 Monthly fee: $7,000 f. Advantax Inc. 250 Westfield Drive, Ste. 202 Elgin, IL 60124 Annual fee: $1,791 About Bird Global, Inc. Bird Global, Inc., a micro-mobility operator, is an electric vehicle company dedicated to bringing affordable, environmentally friendly transportation solutions such as e-scooters and e-bikes to communities across the world. Bird Global, Inc. and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 23-20514) on December 20, 2023. In the petition signed by Christopher Rankin, chief restructuring officer, Bird Global disclosed up to $500 million in both assets and liabilities. Judge Laurel M. Isicoff oversees the case. Paul Steven Singerman, Esq., Jordi Guso, Esq., and Clay B. Roberts, Esq., at Berger Singerman LLP, represent the Debtor as legal counsel. Teneo Capital LLC is the Debtor's restructuring advisor. Epiq Corporate Restructuring, LLC serves as notice and claims agent. The Senior DIP Parties and Prepetition First Lien Parties, led by MidCap Financial Trust, are represented by Latham & Watkins LLP (James Ktsanes; John Lister; Hugh Murtagh). Covington & Burling LLP (Ronald A. Hewitt) represents the Junior DIP Agent, U.S. Bank. Venable LLP (Paul J. Battista) advises the Junior DIP Lenders and Participating Second Lien Parties. BLUE DOLPHIN: Unit Signs Crude Oil Contract With MV Purchasing -------------------------------------------------------------- Blue Dolphin Energy Company disclosed in a Form 8-K filed with the Securities and Exchange Commission that Lazarus Energy, LLC, a wholly-owned subsidiary of the Company, entered into a Crude Oil Contract with MV Purchasing, LLC. Under the Crude Supply Agreement, MVP will supply the Nixon facility with up to 100% of its capacity for crude oil at market prices. The initial term of the agreement commenced on Jan. 1, 2024 and will end on March 31, 2024. At the end of the initial term and each subsequent term, the agreement will automatically renew for a 90-day period. Each party may terminate the agreement upon 60 days' prior written notice. In addition to the Crude Supply Agreement, MVP entered into a Terminal Services Agreement with Nixon Product Storage, LLC, also a wholly-owned subsidiary of Blue Dolphin, effective Jan. 1, 2024, to store crude oil at the Nixon facility. The term of the TSA shall run in parallel with the Crude Supply Agreement. Further, the TSA will terminate automatically upon termination or expiration of the Crude Supply Agreement. Each of the Crude Supply Agreement and TSA also contain customary and typical general terms and conditions for transactions of this nature. About Blue Dolphin Headquartered in Houston, Texas, Blue Dolphin Energy Company -- http://www.blue-dolphin-energy.com-- is an independent downstream energy company operating in the Gulf Coast region of the United States. The Company's subsidiaries operate a light sweet-crude, 15,000-bpd crude distillation tower with approximately 1.2 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin was formed in 1986 as a Delaware corporation and is traded on the OTCQX under the ticker symbol "BDCO." Blue Dolphin Company disclosed in a Form 10-Q Report for the fiscal quarter ended September 30, 2023, that its management has determined certain factors may present substantial doubt about the Company's ability to continue as a going concern. These factors include significant current debt, which impacts the Company's ability to meet debt covenants, and historical working capital deficits. The Company's significant current debt is the result of certain third-party loan agreements being classified within the current portion of long-term debt on its consolidated balance sheets at September 30, 2023 and December 31, 2022. Excluding accrued interest, the Company had current debt of $38.4 million and $47.4 million as of September 30, 2023 and December 31, 2022, respectively. The Company's significant current debt at September 30, 2023 consisted of bank debt to Veritex and GNCU and investor debt to John Kissick. BLUE DOLPHIN: Veritex Agrees to Extend Forbearance Until March 29 ----------------------------------------------------------------- Blue Dolphin Energy Company disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange that the Lazarus Parties, together with Veritex Community Bank, entered into a Second Amendment to the Forbearance Agreement effective December 29, 2023. As previously disclosed, effective November 18, 2022, Lazarus Energy LLC, Lazarus Refining & Marketing LLC, Blue Dolphin Energy Company, Lazarus Energy Holdings LLC, and Jonathan Carroll (collectively, the "Lazarus Parties"), entered into a Forbearance Agreement with Veritex, relating to amounts owed by the Lazarus Parties to Veritex under the June 22 and December 4, 2015 loan agreements among the Lazarus Parties and Veritex. The Forbearance Agreement was set to terminate on September 30, 2023. On October 30, 2023, but effective September 30, 2023, the Lazarus Parties, together with Veritex, entered into a first amendment to the Forbearance Agreement. Under the First Amended Forbearance Agreement, Veritex agreed to forbear from exercising any of its remedies under the Loan Agreements in connection with existing defaults beginning on September 30, 2023 through and including December 29, 2023. Under the Second Amended Forbearance Agreement, Veritex agreed to forbear from exercising any of its remedies under the Loan Agreements in connection with existing defaults beginning on the Effective Date through and including March 29, 2024. Unless sooner terminated as stipulated under the Second Amended Forbearance Agreement, Veritex also agreed to forbear from testing the Borrowers' compliance with financial covenants and taking any action to exercise its rights and/or remedies with respect to Borrowers' compliance or non-compliance with financial covenants from the Effective Date through the Forbearance Termination Date. Carroll serves as Chief Executive Officer and President of Blue Dolphin. He also serves as President and is a majority owner of LEH. Together, Carroll and LEH owned approximately 83% of Blue Dolphin's common stock as of the filing date of this report. About Blue Dolphin Headquartered in Houston, Texas, Blue Dolphin Energy Company -- http://www.blue-dolphin-energy.com-- is an independent downstream energy company operating in the Gulf Coast region of the United States. The Company's subsidiaries operate a light sweet-crude, 15,000-bpd crude distillation tower with approximately 1.2 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin was formed in 1986 as a Delaware corporation and is traded on the OTCQX under the ticker symbol "BDCO." Blue Dolphin Energy Company disclosed in a Form 10-Q Report filed with the U.S. Securities and Exchange Commission for the fiscal quarter ended September 30, 2023, that its management has determined certain factors may present substantial doubt about the Company's ability to continue as a going concern. These factors include significant current debt, which impacts the Company's ability to meet debt covenants, and historical working capital deficits. BOULDER CANYON: UST Says Debtor Not Acting in Good Faith -------------------------------------------------------- Gerard R. Vetter, the Acting United States Trustee for Region Four, objects to confirmation of the Boulder Canyon, LLC's plan of reorganization and approval of the debtor's disclosure statement filed on November 24, 2023. On Feb. 24, 2023, the Debtor filed its schedules and statements (the "Original Schedules"). On April 6, 2023, the Debtor filed an amended Schedule E/F (the "First Amendment"). According to the Statement of Change, the Debtor deleted nine creditors. At the meeting of creditors, the Debtor's representative testified that these creditors were not creditors of the Debtor but creditors of other entities. One of the creditors deleted was Gloria Joyce. A review of the First Amendment shows that SG Services, LLC, which was identified as being removed, was still listed. Another creditor MSZ, LLC was added, and Spartanburg Holdings, LLC had the amount of the claim changed from $30,000 to unknown. On Nov. 24, 2023, the debtor filed a second amendment to Schedule E/F (the "Second Amendment"). A review of the Second Amendment shows Gloria Joyce was added back with a claim of $6,000. The Second Amendment also changed Jason May's amount of claim from $18,600 to unknown and now marks it as contingent, unliquidated, and disputed. The added creditor of MSZ, LLC on the First Amendment was changed to MSZ Group, LLC at a different address. The Second Amendment also deleted Roetzel who had been listed for unknown legal fees. Under the Plan, the only unsecured creditor shown to have a undisputed claim is Gloria Joyce. The source of payments to fund the plan are from five properties listed on Exhibit B to the Disclosure Statement, which the Debtor does not own but represents that it has an anticipated participation fees from the sale of these properties totaling $203,000. During the pendency of the Debtor's case, the Debtor has filed monthly operating reports that fail to disclose the source of the funds (by client) and identify the project for which monies were expensed. In the Disclosure Statement, the debtor fails to provide any information about the properties to include whether it has the authority to sell the properties without the owners' consent and how much the debtor has spent on each property postpetition. If the properties are not sold by a date certain, the Disclosure Statement provides that the properties will be sold at auction. However, it fails to disclose any details on how an auction would be conducted and whether the owners of the properties would agree for the properties to be sold at an auction. On page 9 of 15 of the Disclosure Statement, the Debtor states that it estimates that the allowed claims will be paid in full. However, without any discussion about how funds were received and expensed during the bankruptcy case, it cannot be determined whether the anticipated participation fees are reasonable. On page 5 of the Disclosure Statement, the Debtor shows it post-petition income and expenses. It is presumed some of the income is from participation fees. At the conclusion of the 9-month period shown, the debtor has a net profit of $821.44 with no payments being made to creditors listed in the Disclosure Statement and Plan. On page 14 of 15, the Debtor states that it anticipates receiving proceeds from the sale of 601 Converse Street. A goggle search indicates that this property was sold on June 5, 2023 for $140,000. Other properties listed on Exhibit B of the Disclosure Statement also appear to be listed for sale. The Disclosure Statement is silent regarding when these properties were listed, the amount they are listed for, any reductions to the listed price, and if they were sold, when they were sold. The UST has requested numerous information from the debtor since the meeting of creditors, and the debtor has failed to provide most of it. At the meeting of creditors, the debtor's representative testified that his computer's hard drive was damaged, but he had a backup which he was trying to have restored. At the 2004 examination of the debtor's representative, he stated he had a thumb drive with the Quick Book records. A copy of the thumb drive was requested. The Debtor was also requested to identify the names of the account holders on accounts to which funds had been transferred by the debtor pre-petition and for copies of bank statements for Arthur State Bank. None of the information has been provided. The Debtor filed the First and Second Amendments that made significant changes to creditors listed, but it is not clear what notice was provided to the creditors. The Plan provides for one undisputed creditor, who was deleted in the First Amendment and added back in the Second Amendment for a lesser amount. Creditors who had been listed in a manner that no proof of claim needed to be filed under Rule 3003 of the Bankruptcy Rules were changed in the Second Amendment. These actions indicate that the Debtor is not acting in good faith, the U.S. Trustee tells the Court. About Boulder Canyon Boulder Canyon, LLC, is a limited liability company in the business of purchasing and rehabilitating residential real estate. Boulder Canyon was formed by Dan Ray Kiely and Jason May. Boulder was formed in 2017 as a Florida limited liability company. Kiely is an individual who began investing in Florida real estate in 1970. Boulder Canyon, LLC, sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.S.C. Case No. 23-00258) on Jan. 27, 2023, with $50,001 to $100,000 in assets and $500,001 to $1 million in liabilities. Judge Elisabetta G.M. Gasparini oversees the case. The Debtor tapped Randy A. Skinner, Esq., at Skinner Law Firm, LLC, as bankruptcy counsel and William McKibbon, III, Esq., an attorney serving Greenville, S.C., as special counsel. BRICK BY BRICK: Lincoln Capital Seeks Trustee Appointment --------------------------------------------------------- Lincoln Capital Management, LLC, secured creditor of Brick by Brick Builds, Inc., asked the U.S. Bankruptcy Court for the Middle District of Florida to appoint a Chapter 11 trustee for Brick and its affiliated debtor, Crisscross Center Co. The Debtors share identical management and ownership. Robin Goris and Rimoun Goris collectively own 75% of both entities with each of their sons owning a 12.5% minority interest. Lincoln Capital is a Texas based construction and acquisition bridge lender, primarily engaged in providing short-term construction financing. In May 2021, Lincoln Capital and Debtors entered into loan agreements for the acquisition of certain undeveloped land in Land O' Lakes, Pasco County, Florida and the construction of a 38,000 square foot facility on the land to be used by Crisscross in connection with its co-working business. Over the past several months, the Debtors have mismanaged the co-working business, breached their obligations on secured loans, defaulted under an agreed court order and wasted cash collateral. As a result of the breached lending obligations, Lincoln Capital filed suit against Debtors in the Sixth Judicial Circuit Court of Pasco County, Florida, according to Lincoln Capital. In the state court lawsuit, Lincoln Capital sought appointment of a receiver. At the request of the Debtors, Lincoln Capital agreed to defer that request in consideration of the parties entering into an agreed sequestration order governing the reporting and use of the Debtors' revenues and expenses and directing the sequestration of net operating income for application to taxes and insurance. Debtors committed multiple defaults of the agreed sequestration order and failed to cure even after notice. Lincoln Capital argued that on December 7, 2023, the day before the state court was to select the receiver, the Debtors filed these Chapter 11 cases to prevent appointment of a receiver thereby leaving the bankruptcy estates (and the accompanying fiduciary duties) in the hands of the same individuals responsible for the mismanagement of the Debtors' affairs and the defaults under the agreed sequestration order. Lincoln Capital further asserted that the cases require appointment of an independent fiduciary to, at a minimum, (i) preserve the ongoing business concern; (ii) comply with the fiduciary obligations of a debtor in possession; and (iii) analyze for pursuit all Chapter 5 causes of action (which likely include claims against the principals of the Debtors). Appointment of an independent fiduciary will maximize the benefit for all of the estate's stakeholders. Attorneys for Lincoln Capital: Mark D. Hildreth, Esq. Shumaker, Loop & Kendrick, LLP P.O. Box 49948 Sarasota, Florida 34230-6948 Phone: 941-364-2747 Fax: 941-364-3999 Email: mhildreth@shumaker.com About Brick By Brick Builds Brick By Brick Builds, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-05564) on December 7, 2023, with up to $10 million in both assets and liabilities. Robin Goris, president, signed the petition. Judge Roberta A. Colton oversees the case. Stephanie B. Anthony, Esq., at Anthony and Partners, represents the Debtor as legal counsel. BWB HOUMA: Files Emergency Bid to Use Cash Collateral ----------------------------------------------------- BWB Controls, Inc. and BWB Houma Holdings, LLC ask the U.S. Bankruptcy Court for the Eastern District of Louisiana for authority to use cash collateral and provide adequate protection. Before the Petition Date, the Debtors used the factoring services of DARE and Accelerated, pursuant to the Pre-Petition Factoring Agreements by the Debtors, as assignor, and DARE Capital Partners LLC and Accelerated Payments Limited, as assignees and factors. To provide adequate protection to DARE and Accelerated for the Debtors' use of cash collateral, to the extent of a diminution in the value of the Pre-Petition Factoring Collateral, the Debtors seek authority to grant to DARE and Accelerated pari-pasu (a) firstranked, priority replacement liens on the same collateral constituting the Pre-Petition Factoring Collateral excluding Avoidance Actions, pursuant to 11 U.S.C. sections 364(c)(2), 364(c)(3), and 364(d), which liens will be subject and subordinate in priority only to those valid and perfected prepetition liens, if any, that are superior in rank to valid and perfected liens that secure the Pre-Petition Factoring Obligations, and (b) superpriority administrative claim status pursuant to 11 U.S.C. section 364(c)(1). MMG Investments IV, LLC has a lien on the real property and equipment owned by BWB Holdings. Business First Bancshares, Inc. d/b/a b1Bank filed a multiple indebtedness mortgaged dated April 25, 2019 on property located at 2193 Denley Road, Houma, LA, recorded in the official records for the Parish of Terrebonne at Book 307, Page 71, No. 1579911, On April 29, 2019, then effective December 29, 2022, conveyed the indebtedness to MMG. United Community Bank indebtedness is secured by a Commercial Security Agreement dated January 7, 2021 against all machinery and equipment and commercial guaranties dated January 7, 2021, signed by Seenu Kasturi Frederick D. Alexander, Courew Holdings, LLC and BWB Holdings. The Debtors desire to enter into Post-Petition Factoring Agreement with DARE and Accelerated. Additionally, under the Post-Petition Factoring Agreement, both DARE and Accelerated are entitled to recover all of its reasonable out of pocket expenses, including reasonable consultants, attorneys and paralegal fees, costs and expenses, incurred in connection with the Chapter 11 Cases. Both DARE and Accelerated will provide reasonably detailed invoices to the Debtors and any official committee of creditors, so a proper assessment of reasonableness can be made, in accordance with the Local Rules. A copy of the motion is available at https://urlcurt.com/u?l=I01ruu from PacerMonitor.com. About BWB Houma Holdings LLC BWB Houma Holdings LLC specializes in the design and manufacturing of pneumatically, hydraulically, and electrically operated surface safety components. The Debtor offers machining, milling, assembly and testing services to the upstream, midstream and downstream oil and gas industries. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. La. Case No. 24-10030) on January 9, 2024. In the petition signed by Edward A. LaBorde, president and CEO, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Meredith S. Grabill oversees the case. Douglas S. Draper, Esq., at Heller, Draper & Horn, LLC, represents the Debtor as legal counsel. CAPROCK MILLING: Gets OK to Sell Property by Online Auction ----------------------------------------------------------- CapRock Milling & Crushing, LLC received approval from the U.S. Bankruptcy Court for the Northern District of Texas to sell a property by auction. The company intends to sell the property –- a 966 Caterpillar Front-End Loader –- by online auction at Richie Brothers/Iron Plant. The minimum bid price for the property is $175,000. CapRock will use the net proceeds from the sale to pay rent to TPA Properties 8, LLC. Any amount remaining after payment of the currently due rent may be used by the company to make an advance payment to TPA. CapRock leases a warehouse from TPA in Baltimore, Md., where the company operates its business. The company is currently behind on post-petition rent for the warehouse in the amount of $136,376.90. About Caprock Milling & Crushing CapRock Milling & Crushing, LLC is engaged in grain and oilseed milling. The company is based in Amarillo, Texas. Caprock filed Chapter 11 petition (Bankr. N.D. Texas Case No. 23-20251) on Nov. 3, 2023, with $10 million to $50 million in assets and $1 million to $10 million in liabilities. Thomas Bunkley, member of Caprock, signed the petition. Judge Robert L. Jones oversees the case. The Debtor tapped Mullin Hoard & Brown, LLP as bankruptcy counsel; Charhon Callahan Robson & Garza, PLLC as special counsel; and William Hood & Company as investment banker. CASTLE BLACK: Hearing on Sale of Miss. Property Set for Jan. 24 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Tennessee is set to hold a hearing on Jan. 24 on the proposed sale of Castle Black, Inc.'s real property. The buyer, Irby Dobbins, offered $70,000 for the property located at 4957 Fleur de Lis, Olive Branch, Miss. The property is being sold "free and clear" of liens with any liens to attach to the sale proceeds. Castle Black will use the proceeds to pay real property taxes and the liens held by Bank of Fayette County and the Mississippi Department of Revenue. The sale price is not enough to pay all liens in full but the Mississippi Department of Revenue has agreed to have its claim paid under a Chapter 11 plan as a priority tax claim. About Castle Black Castle Black, Inc. owns in fee simple title seven properties located in Memphis, Tenn., valued at $1.48 million. Castle Black filed a petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 23-21064) on March 2, 2023, with $2,150,234 in assets and $5,314,032 in liabilities. James E. Bailey, III has been appointed as Subchapter V trustee. Judge M. Ruthie Hagan oversees the case. The Debtor is represented by the Law Offices of Toni Campbell Parker. CHESAPEAKE ENERGY: Moody's Alters Outlook on 'Ba1' CFR to Positive ------------------------------------------------------------------ Moody's Investors Service changed Chesapeake Energy Corporation's rating outlook to positive from stable. Moody's affirmed Chesapeake's Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating and Ba2 senior unsecured notes rating. Chesapeake's Speculative Grade Liquidity Rating (SGL) is maintained at SGL-1. Similarly, Moody's also affirmed the Ba2 assumed senior unsecured notes rating of Vine Energy Holdings LLC. Concurrently, Moody's changed Southwestern Energy Company's (Southwestern) rating outlook to positive from stable. Moody's affirmed Southwestern's Ba1 Corporate Family Rating (CFR), Ba1-PD Probability of Default Rating (PDR), Ba2 senior unsecured notes rating and NP Commercial Paper rating. Southwestern's Speculative Grade Liquidity Rating (SGL) is maintained at SGL-1. These rating actions follow an agreement reached by Chesapeake to merge with Southwestern in an all-stock transaction with a combined enterprise value of roughly $24 billion.[1] Following the merger, Nick Dell'Osso will be the combined company's CEO and its board of directors will initially be comprised of seven representatives from Chesapeake and four representatives from Southwestern. Each company's board of directors has approved the combination. Closing is targeted in the second quarter of 2024, subject to regulatory approvals and approvals from both Chesapeake and Southwestern shareholders, as well as other customary closing conditions. "Upon its combination with Southwestern, Chesapeake will gain basin intensification in its already established position in the Marcellus and Haynesville shale plays, with a considerably larger production base and deeper drilling inventory, which should enable enhanced drilling and operating efficiencies," commented Amol Joshi, Moody's Vice President and Senior Credit Officer. "The positive outlook points to the potential for an upgrade to Baa3 if the company can progress toward delivering on its debt reduction target and achieving synergies following the combination, and reduce its reserve replacement costs to generate more competitive returns on investment at mid-cycle natural gas prices." RATINGS RATIONALE Chesapeake's and Southwestern's positive rating outlooks reflect the considerable scale and efficiencies likely to be achieved through the combination, and Moody's expectation that the combined company's credit profile should improve due to post acquisition debt reduction and asset integration benefits through 2025 even as natural gas prices likely remain volatile. The combination will create the largest independent natural gas-focused E&P company with a diversified asset base in the premier natural gas focused supply basins in the US. While Southwestern has higher leverage than Chesapeake, the combination will be structured as an all-stock transaction and will not add any additional debt, supporting the Ba1 CFR. Chesapeake's leverage metrics will modestly weaken as a result of the combination. However, Moody's view the pro forma leverage metrics to be sound and supported by a larger and more resilient asset base. Chesapeake had over $700 million of cash on September 30, and the company is targeting over $1 billion of debt retirement by the end of 2025. This deleveraging supports the expected improvement in its credit profile on a pro forma basis. Chesapeake's management has stated its commitment to conservative financial policy through targeting leverage of less than 1x net debt to EBITDAX at a Henry Hub natural gas price of $3/Mcf. Moody's expects the combined company to continue to pursue sizeable shareholder returns including dividends and opportunistic share repurchases, with a variable dividend likely paying out 50% of excess free cash flow. The combined company's solid credit profile is supported by largely contiguous assets in prolific basins and the ability to generate consistent free cash flow before dividends, which will enhance its resilience and bolster its capacity to withstand negative credit impacts from carbon transition risks. While the financial performance of the company will continue to be influenced by industry cycles, compared to historical experience, Moody's expects future profitability and cash flow in this sector to be more volatile because global initiatives to limit adverse impacts of climate change will constrain the use of hydrocarbons and accelerate the shift to less environmentally damaging energy sources. The company's focus on natural gas does provide it with better positioning than its oil focused peers with respect to carbon transition risks. Chesapeake's senior unsecured notes are rated Ba2, one notch beneath the company's Ba1 CFR, reflecting the notes' junior priority claim on assets to borrowings under the secured revolving credit facility. The Vine Energy Holdings LLC notes are pari passu with Chesapeake's outstanding notes. Following the combination, Moody's expects the Southwestern senior unsecured notes (rated Ba2) to be made pari passu with Chesapeake's outstanding notes through legal assumption or cross-guarantees. If the revolving credit facility remains secured after the merger, Moody's notes that the senior unsecured notes ratings could be upgraded in-line with the Ba1 CFR in case of a substantial reduction in the size of the revolving credit facility and low expected revolver borrowings. However, the ultimate notching and rating outcome will be subject to the final revolver size, anticipated utilization and the final capital structure. If the revolver becomes unsecured, the notes ratings should be in-line with the CFR. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Chesapeake's ratings could be upgraded to Baa3 if following the closing of its merger with Southwestern, the combined company achieves planned debt reduction, captures anticipated synergies and reduces its finding and development costs to generate competitive returns on investment while delivering modest production and reserves growth. For an upgrade, the combined company should sustain retained cash flow (RCF) to debt above 50% and leveraged full-cycle ratio (LFCR) around 2x at mid-cycle natural gas prices. Ratings could be downgraded if the combined company generates meaningful negative free cash flow, LFCR approaches 1x, or RCF to debt falls below 30%. Significant debt-funded acquisitions or shareholder payouts could pressure the ratings. Oklahoma City, OK-based Chesapeake Energy Corporation is a large independent exploration and production company that is primarily focused on natural gas production from the Marcellus and Haynesville shale basins. Southwestern Energy Company is a US independent exploration and production company headquartered in Houston, Texas. The principal methodology used in these ratings was Independent Exploration and Production published in December 2022. CHESAPEAKE ENERGY: S&P Places 'BB' ICR on CreditWatch Positive -------------------------------------------------------------- S&P Global Ratings placed all its ratings on Oklahoma City-based natural gas producer Chesapeake Energy Corp., including its 'BB' issuer credit and 'BB' issue-level ratings, on CreditWatch with positive implications to reflect the likelihood of a two-notch upgrade following close of the acquisition, which S&P expects in the second quarter of 2024. Separately, S&P assigned a new management and governance (M&G) assessment of moderately negative to Chesapeake. This follows the Jan. 7 publication of S&P Global Ratings' revised criteria for evaluating the credit risks presented by an entity's M&G framework. The CreditWatch placement reflects S&P's view that Chesapeake's business risk will improve meaningfully as a result of the acquisition while leverage increases only modestly and remains low. Chesapeake has announced a deal to acquire natural-gas-focused peer Southwestern Energy Co. in an all-stock transaction valued at $11.5 billion, including $7.4 billion of equity, the assumption of $3.7 billion of Southwestern's long-term debt, and the paydown of amounts outstanding on Southwestern's credit facility ($388 million as of Sept 30, 2023). On a pro forma basis, Chesapeake's proved reserves will exceed 30 trillion cubic feet equivalent with third quarter 2023 pro-forma production of 7.9 billion cubic feet equivalent per day (excluding Eagle Ford volumes), making the company the largest natural gas producer in the U.S. and the third-largest publicly traded natural gas producer globally. The combined entity will hold over 1.8 million net acres in the onshore U.S., with an estimated over 5,000 drilling locations, providing over 15 years of drilling inventory. The assets will be focused in two areas: the Appalachian Basin (Marcellus shale) and Northwest Louisiana (Haynesville shale). While the combined entity will be larger than many 'BBB' rating category peers, it lacks hydrocarbon diversification, with natural gas accounting for over 90% of proved reserves and production. S&P said, "As a result, we expect profitability to be weaker than that of entities with higher liquids exposure, particularly under our midcycle price assumptions of $50 per barrel for West Texas Intermediate crude oil and $2.75 per million Btu for Henry Hub natural gas." Chesapeake expects to realize $400 million of operating and capital cost synergies by the end of 2026. With large acreage positions in the Appalachian Basin (Pennsylvania, Ohio, and West Virginia) and Haynesville shale in Louisiana, we expect the company to achieve meaningful operating capital and operation cost synergies. About 40% of the synergies will come from operating expenses, including general and administrative costs, and about 60% from improved capital efficiencies, including the ability to drill longer laterals. The combined entity's leading position in Haynesville shale positions it to be a key supplier of natural gas to the expanding liquefied natural gas export market. About 40% of the combined entity's production will be in Haynesville shale, near the U.S. Gulf Coast, which should allow it to diversify a portion natural gas sales over time to typically higher-priced international markets. Management's goal is to link up to 20% of its natural gas production to international markets via LNG exports. Despite the incremental debt, S&P expects leverage to remain low. S&P said, "Although the acquisition is initially leveraging to Chesapeake's stand-alone credit measures, we expect pro forma funds from operations to debt to remain above 125% over the next two years and the combined entity to generate positive discretionary cash flow. Although the company still expects to pay out base and variable dividends, we expect it to prioritize debt repayment and build cash, while meaningfully reducing share buybacks, until it brings net debt down to its $4.5 billion target. Management estimates that $4.5 billion would enable the company to maintain debt to EBITDA below 1x, even at $3/mmBtu Henry Hub natural gas." Separately, S&P Global Ratings assigned a new M&G modifier assessment of moderately negative to Chesapeake. S&P said, "The action follows the revision to our criteria for evaluating the credit risks presented by an entity's management and governance framework. The terms management and governance encompass broad oversight and direction conducted by an entity's owners, board representatives, and executive managers. These activities and practices can impact an entity's creditworthiness and, as such, the M&G modifier is an important component of our analysis. Our assessment of moderately negative points to certain management and governance weaknesses that weigh down creditworthiness, including a limited track record under its executive management team." Following the transaction, Chesapeake will expand its board of directors to 11 members: seven existing Chesapeake board members plus four from Southwestern. Chesapeake's CEO will be CEO of the combined entity. Other executive positions have not been disclosed. S&P will likely revisit its M&G assessment post close. S&P said, "The CreditWatch positive reflects the likelihood that we will raise our issuer credit and senior unsecured debt ratings on Chesapeake two notches to 'BBB-' upon close of the acquisition, assuming there are no material changes to our financial or operating assumptions. We expect to resolve the CreditWatch near close of the transaction, which we anticipate in the second quarter of 2024." CHOBANI GLOBAL: S&P Upgrades ICR to 'B', Outlook Stable ------------------------------------------------------- S&P Global Ratings raised all of its ratings on New York-based Greek yogurt producer Chobani Global Holdings LLC, including its issuer credit rating to 'B' from 'B-', and removed them from CreditWatch, where S&P placed them with positive implications on Dec. 6, 2023. S&P said, "At the same time, we assigned our 'CCC+' issue-level rating and '6' recovery rating to the company's proposed senior unsecured notes. The '6' recovery rating indicates our expectation for negligible (0%-10%, rounded estimate: 0%) recovery in the event of a default. We will withdraw our ratings on the 2025 notes once they are fully redeemed. "We raised our issue-level rating on the company's existing senior secured debt to 'B' from 'B-'. The '3' recovery rating indicates our expectation for meaningful (50%-70%, rounded estimate 55%) recovery in the event of a payment default. "We have assigned a new Management & Governance (M&G) assessment of moderately negative to Chobani. This assignment follows the Jan. 7 publication of S&P Global Ratings' revised criteria for evaluating the credit risks presented by an entity's M&G framework. "The stable outlook reflects our expectation that the company will successfully integrate the La Colombe acquisition and continue to generate FOCF while sustaining FFO cash interest coverage of above 2.5x." The upgrade reflects the company's ability to address its 2025 maturity and the closing of the La Colombe acquisition as planned in December 2023. The proposed refinancing transaction addresses its 2025 unsecured notes becoming current in April 2024. Subsequent to this transaction, the company's senior secured term loan will become its nearest major maturity, due in 2027. S&P believes Chobani will be able to complete this transaction with interest rates commensurate with maintaining FFO to cash interest coverage in the mid- to high-2x area, despite the higher interest rate environment. Although the acquisition increases leverage and debt service costs, S&P believes the company will steadily de-leverage since integration risk is low while good FOCF should restore FFO cash interest coverage above 2.5x within a year. S&P said, "Pro forma leverage increases to 7.5x with the LC acquisition (5x excluding our preferred equity debt adjustment) compared with 6x for the 12 months ended Sept. 30, 2023 (3.5x excluding preferred equity), but the company continues to have adequate pro forma FFO cash interest coverage in the mid 2x area. Moreover, the company should continue to reduce debt through healthy FOCF because capital expenditures (capex) should be more disciplined. The company has concluded the majority of its investments on enterprise resources planning (ERP) implementation across the organization and integration risk of LC is low, including our expectations for minimal one-time cash costs given that the company will be purchasing the La Colombe operating facility and running it stand-alone. "Historically, the company has spent over 6% of sales on capex, and we project fiscal 2023 capex will be closer to 3.5% of sales given much lower spending on ERP systems. We are projecting capex to be closer to 5% of sales over the next two years for increased investments in product innovations and distribution investments both at Chobani and LC. These levels of capex should nonetheless enable the company to continue generating well over $50 million of annual FOCF and enable adjusted debt to EBITDA to decline below 6.5x and FFO cash interest coverage to approach 3x within a year of the acquisition." Chobani's operating performance and margin expansion has exceeded our expectations, but the acquisition will temporarily reduce margins. Chobani has performed well for consecutive years, with stable adjusted EBITDA margins in the 5%-8% range while increasing revenue by double digits over this period. S&P had expected some organic revenue growth moderation for 2023 because Chobani is already a category leader in the relatively stable yogurt category. While revenue moderation has occurred, organic growth is still very healthy year to date, reflecting a combination of market share gains, less promotional activity, and continued expansion into adjacencies like oat milk and creamers. Trailing 12 months (TTM) revenue increased 17% year over year for the period ending Sept. 30, 2023. In addition, price increases and lower input cost inflation have improved its adjusted TTM EBITDA margin to around 18%, compared with around 11% in 2022. S&P is projecting pro forma EBITDA margins closer to 15% compared with 17.9% for the 12 months ended Sept. 30, 2023, since La Colombe is currently generating negative EBITDA due to a combination of price increases not having lapped input cost inflation and below-average distribution margins under the company's previous distributor that has since been replaced with Keurig Dr Pepper Inc. (KDP; BBB/Stable), which will have an approximate 5% equity stake in Chobani following the acquisition. As the consolidated entity fully laps input cost inflation and improves its distribution economies, EBITDA margins should exceed 15% by the end of 2024. S&P views the La Colombe acquisition as a modest diversification benefit to the company's product portfolio. LC is a small niche player that generates less than $200 million of revenue and currently generates negative EBITDA due to historical operational challenges. S&P said, "We expect the company will become profitable over the next 12 months because its recently signed sales and distribution agreement with KDP should expand its sales footprint meaningfully. Nevertheless, we expect LC's operating metrics impact on Chobani will be minimal in the near term." S&P Global Ratings assigned a new M&G assessment of moderately negative to Chobani. S&P said, "The action follows the revision to our criteria for evaluating the credit risks presented by an entity's management and governance framework. The terms management and governance encompass the broad range of oversight and direction conducted by an entity's owners, board representatives, and executive managers. These activities and practices can impact an entity's creditworthiness and, as such, the M&G modifier is an important component of S&P's analysis. "Our M&G assessment of moderately negative points to the company's history of negative free cash flow generation and debt-funded growth initiatives primarily driven by the decision making of its founder. The company has a history of high capex to build out its facilities for capacity expansion as well as new product lines. Although the company has generated good operating cash flow that has increased materially in recent years, this cash flow has typically been reinvested into additional capex for growth that, before recent years, had not always been evident. Moreover, such capex has generally occurred instead of reducing debt. We project 2023 will be the first year the company will generate significant FOCF as capex investments slow down, with no major debt-funded acquisitions on the horizon as the company integrates LC. "The stable outlook reflects our expectation that the company will successfully integrate the La Colombe acquisition and continue to generate FOCF while sustaining FFO cash interest coverage above 2.5x." S&P could lower the rating if FFO cash interest coverage fell below 2x on a sustained basis and FOCF turned negative. This could occur if: -- It did not successfully integrate LC and this caused operational disruptions in its core Chobani operations; or -- Its capital investment policies returned to its historical cadence and the company did not generate positive FOCF. S&P could raise its ratings on Chobani if it were able to sustain a FFO cash interest coverage ratio above 3x while continuing to generate positive discretionary FOCF sustained above $100 million. This could occur if: -- The company successfully integrated its LC acquisition, and LC began to generate positive profit contributions. -- Its core Chobani business continued to perform to expectations with stable margins and distribution expansion; and -- It managed its capital allocations more consistently to current levels without unexpected major new investments. CHOBANI LLC: Moody's Rates New $500MM Sr. Unsecured Notes 'Caa1' ---------------------------------------------------------------- Moody's Investors Service has assigned a Caa1 rating to Chobani, LLC's proposed $500 million senior unsecured notes due 2029. The proceeds, along with cash on hand, will be used to fund the redemption of the company's outstanding $530 million 7.5% senior unsecured notes due April 2025 and for general corporate purposes. All other ratings, including the company's B2 Corporate Family Rating and B1 senior secured debt rating, are unchanged. The outlook is stable. The offering is credit positive because it will extend Chobani's maturity profile and reduce gross debt modestly by $30 million without materially affecting cash interest expense or free cash flow. This rating action follows Moody's December 5, 2023 rating action that included upgrading Chobani's Corporate Family Rating to B2 from B3 with a stable outlook. Please see Moody's December 5, 2023 press release for details on the rationale for the upgrade. In line with Moody's expectations, Chobani closed on the acquisition of La Colombe in December 2023. RATINGS RATIONALE Chobani's B2 CFR reflects its high concentration in the highly competitive yogurt category, and execution risk associated with Chobani's high-paced innovation strategy, which is a key component of its plan for driving sales and earnings growth. The credit profile also reflects high governance risks including an aggressive financial policy and concentrated control by the founder who also holds key senior executive roles including the CEO and chairman positions. Chobani has historically operated with high financial leverage partly because of large debt funded investments and historically weak free cash flow. Chobani's credit metrics have improved over the last 12-18 months because of strong operating performance, with debt/EBITDA leverage declining to 3.5x (on a Moody's adjusted basis) as of September 30, 2023. The La Colombe acquisition will increase projected debt/EBITDA leverage to 5.0x by the end of 2023 and is a related party transaction since Chobani's CEO owned a majority of La Colombe. Thereafter, Moody's expects debt/EBITDA leverage to decline over the next 12-18 months. There is some downside risk to Moody's forecast because consumers remain pressured and the company could face volume pressure, pushback on pricing, higher milk costs, or an increased promotional environment that would negatively impact profitability. There is some cushion within the financial leverage expectations for the B2 CFR to absorb a modest decline in earnings. Chobani's credit profile is supported by its leading share in the US Greek yogurt category, strong brand equity that supports the company's expansion into adjacent categories, and good growth opportunities in the company's modern food categories, including oat milk and creamers. Chobani's very good liquidity is supported by positive projected free cash flow, a sizable cash balance, an undrawn revolver and limited debt repayment needs over the next 12 months. Chobani's cash balance of $165 million as of September 30, 2023 ($72 million pro forma for the La Colombe acquisition and the proposed refinancing transaction) and $142 million of availability on its $150 million revolver (net of $8 million letters of credit outstanding pro forma for the La Colombe acquisition) provide strong coverage of cash needs including term loan amortization. A $75 million receivables trade facility was undrawn as of September 30, 2023 and was last renewed on December 21, 2023. The $150 million revolver was amended in February 2023, with the maturity extended to February 2028 for $125 million of the commitment. The remaining $25 million commitment expires at the original maturity date of April 2024. The February 2028 extended maturity springs to 91 days prior to the earlier of the term loan maturity date (October 2027) and the stated maturity of the unsecured notes (April 2025). Pro forma for the refinancing of the 2025 notes and based on the current debt maturity profile, the revolver maturity would spring from February 2028 to July 2027 if the term loan maturity was not addressed by then. Moody's projects Chobani will generate more than $200 million of positive free cash flow in fiscal 2023 as a standalone entity. The forecast excludes the impact of the La Colombe acquisition because the acquisition closed towards the end of 2023. In 2024, Moody's projects free cash flow to decline to $150-$175 million, reflecting higher interest expense because of the $550 million of incremental debt to finance the La Colombe acquisition and still little expected profit contribution from the acquired business. Moody's also projects capital expenditures to increase in 2024 to support capacity expansion. Projected free cash flow will sufficiently cover the required $10 million annual term loan amortization (pro forma for the December 2023 term loan add on). The revolving credit facility contains a springing maximum first lien net leverage ratio covenant of 5.5x, tested only when more than 35% of the revolver commitment is utilized on the last day of any fiscal quarter period. The company had ample cushion within the covenant test as of September 30, 2023 and Moody's does not expect the covenant to be tested over the next 12 months. Moody's also projects the company will maintain good covenant cushion. Chobani has limited access to alternate liquidity because all material assets are fully encumbered through all-assets collateralization of first lien creditors. The credit agreement contains a carve-out for an accounts receivables basket used to collateralize the trade finance facility. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The stable outlook reflects Moody's expectation that Chobani will successfully integrate La Colombe and that earnings will continue to improve. The stable outlook also reflects Moody's expectation for debt/EBITDA leverage to decline below 5x over the next 12-18 months, and for Chobani to generate free cash flow of more than $150 million in 2024. A rating downgrade could occur if operating performance weakens due to revenue declines or significant EBITDA margin deterioration, liquidity deteriorates, free cash flow is not maintained at a comfortably positive level, or the financial policy becomes more aggressive. Quantitatively, a downgrade could occur if debt/EBITDA is above 6.0x. A rating upgrade could occur if Chobani improves product diversification, sustainably grows earnings supported by consistent revenue and EBITDA margin expansion, sustains debt/EBITDA below 4.5x and generates consistent and solid free cash flow. PRINCIPAL METHODOLOGY The principal methodology used in this rating was Consumer Packaged Goods published in June 2022. COMPANY PROFILE Chobani, LLC, based in New Berlin, New York, is a leading manufacturer of Greek yogurt, as well as other dairy and non-dairy milk products sold under the "Chobani" master brand. Chobani generated revenue of approximately $2.3 billion in the LTM period ended September 30, 2023. Chobani is majority owned by CEO and founder Hamdi Ulukaya. The Healthcare of Ontario Pension Plan ("HOOPP") is also a major investor. Chobani acquired La Colombe for $900 million in December 2023. 2023 projected revenue pro forma for the La Colombe acquisition is approximately $2.5 billion. CNT HOLDINGS: Moody's Affirms 'B3' CFR & Alters Outlook to Positive ------------------------------------------------------------------- Moody's Investors Service affirmed the B3 corporate family rating and B3-PD probability of default rating of CNT Holdings I Corp (dba "1-800 Contacts"). Concurrently, Moody's affirmed the B2 ratings on 1-800 Contacts' backed senior secured first lien bank credit facilities inclusive of the company's proposed $350 million backed senior secured first lien term loan add-on. Moody's also affimed the Caa2 rating on the company's backed senior secured second lien term loan. The outlook was changed to positive from stable. Proceeds from the $350 million incremental first lien term loan will be used to repay $150 million of the $315 million senior secured second lien term loan and to fund a $200 million distribution to shareholders. The outlook change to positive reflects Moody's expectation that 1-800 Contacts' will exhibit continued financial performance strength over the next 12-18 months which will more than offset the modest weakening in credit metrics following the debt financed dividend to shareholders. Pro forma for the transaction, Moody's estimates 1-800 Contacts debt/EBITDA will be 6.4x at year end 2023. Based upon Moody's forecasts for EBITDA growth, debt/EBITDA will reduce to approximately 5.60x and EBITA/interest will approach 1.75x by year-end 2024. The positive outlook also reflects 1-800 Contacts' very good liquidity including sizable positive free cash flow. Moody's expects approximately $110 million of free cash flow (outside of the $200 million dividend) and full availability on the proposed $135 million revolving credit facility. RATINGS RATIONALE 1-800 Contacts B3 reflects its high financial leverage and governance considerations specifically its aggressive financial policy under private equity ownership including debt financed shareholder distributions. Following its 2020 LBO, 1-800 Contacts carries a high debt load although financial leverage continues to improve with debt/EBITDA of about 5.8x for the twelve months ending September 30, 2023 down from a high of 8.7x in 2020. While leverage will increase modestly to about 6.4x as part of the latest debt financed dividend, Moody's anticipates leverage to decrease to about 5.6x by year-end 2024 driven by earnings growth. The company's credit profile also reflects its small scale relative to retail industry peers and the highly competitive and commoditized nature of the contact lens retail business. As a consumer facing company, 1-800 Contacts is exposed to social and environmental factors, including privacy, data protection, product and supply chain sustainability. Partially offsetting these challenges are the company's good brand name recognition, leading position as an online player and continued investment in innovation. Moody's also recognize the recession resilient nature of demand for contact lenses, as well as the growing e-commerce penetration and premiumization within the category. 1-800 Contacts has very good liquidity including positive free cash flow, good revolver availability and a lack of near-term maturities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded following continued solid revenue and earnings growth, maintenance of very good liquidity including robustly positive free cash flow as well as a demonstrated commitment to financial policies that support stronger credit metrics. Quantitatively, ratings could be upgraded if debt/EBITDA is sustained below 6.5x and EBITA/interest expense is sustained above 1.75x. The ratings could be downgraded if liquidity or earnings materially deteriorate or if the company's financial strategy becomes more aggressive. Quantitatively, ratings could be downgraded if debt/EBITDA is sustained above 7.5x or EBITA/Interest is sustained below 1.25x. CNT Holdings I Corp ("CNT" or "1-800 Contacts") is an online retailer and distributor of contact lenses in the US. The company is controlled by affiliates of Kohlberg Kravis Roberts & Co L.P. and generates roughly $1.365 billion in annual revenue. The principal methodology used in these ratings was Retail and Apparel published in November 2023. COGECO COMMUNICATIONS: DBRS Confirms BB(high) Issuer Rating ----------------------------------------------------------- DBRS Limited confirmed Cogeco Communications Inc.'s (Cogeco or the Company) Issuer Rating at BB (high) and its Senior Secured Notes & Debentures credit rating at BBB (low) with a recovery rating of RR1. All trends are Stable. The confirmations reflect Cogeco's solid operating performance in the Canadian market, but also acknowledge the highly competitive U.S. market that has posed challenges, particularly in Ohio, and a marginal increase in leverage on account of a debt-funded share acquisition. The Stable trends reflect the expectation that both the Canadian and U.S. operations will grow in the low-single digits, excluding the incremental investment required to launch mobile operations in both regions, likely in late F2024 or early F2025. The credit ratings consider the Company's established footprint in existing markets, the growth potential of the U.S. broadband segment Breezeline, and Cogeco's potential entry into the Canadian and U.S. mobile markets. The credit ratings also reflect intensifying competition, the risks associated with technological and regulatory changes, and the resources required to develop a successful wireless offering. Cogeco's F2023 earnings were driven by low-single-digit EBITDA growth at Cogeco Connexion, owing primarily to high-speed internet additions and the Company's acquisition of oxio (completed in March 2023), which offset weakness in Breezeline. Cogeco's F2023 consolidated revenue was $2.98 billion, up 2.9% year over year (YOY) or flat YOY on a constant-currency basis, driven by 3.4% growth at Cogeco Connexion and 2.3% growth at Breezeline. Breezeline faced a tough F2022 growth comparable of 30.7% YOY as the Company worked to integrate the WideOpenWest, Inc. (Ohio Broadband) acquisition and faced a highly competitive video and internet market. Adjusted EBITDA was $1.42 billion, up 2.0% YOY or -0.6% YOY on a constant-currency basis, reflecting growth in Cogeco Connexion. However, a challenging operating environment in the U.S. footprint related to a highly competitive video landscape, particularly in Ohio, partially offset this growth. The F2023 EBITDA margin was 47.6%, compared with 48.0% in the same period last year, in line with DBRS Morningstar's expectations. Looking ahead, Cogeco is focusing on its strategy to expand its service offering to include wireless access. Including the recent $190 million investment in 3800-megahertz (MHz) spectrum licenses, the Company has 100% broadband footprint coverage by wireless spectrum and invested approximately $587 million in spectrum licenses to date. While continued operating investment is still required over the near to medium term, DBRS Morningstar believes that Cogeco's earnings profile should ultimately strengthen if the Company is able to successfully enter the Canadian and/or U.S. mobile market. DBRS Morningstar forecasts F2024 revenue to be flat or slightly up in the low-single digits, with growth in both the Canadian and U.S. markets. In F2025, DBRS Morningstar expects revenue growth to strengthen to the low- to mid-single-digit growth range, including the launch of a wireless service. DBRS Morningstar expects F2024 and F2025 EBITDA to come under pressure as a result of modest top-line growth and investment in the wireless service offering. As a result, F2024 and F2025 EBITDA will likely be flat to slightly down before resuming meaningful growth in F2026. At year-end F2023, DBRS Morningstar's free cash flow (FCF), though lower YOY, was better than anticipated even though leverage was modestly higher than expected. DBRS Morningstar's operating cash flow was $1.10 billion in F2023 compared with $1.17 billion in F2022, reflecting slightly lower net income. Both capital expenditures and dividends increased YOY to $803 million (+7.8%) and $138 million (+6.2%), respectively. As a result, F2023 FCF (after dividends but before changes in working capital) was $120 million, down from $291 million in F2022. F2023 gross debt to EBITDA was 3.55 times (x), up from 3.36x in F2022 and modestly higher than DBRS Morningstar's estimate. In terms of liquidity, Cogeco ended F2023 with approximately $263 million in unrestricted cash and equivalents, $375 million available on its $750 million Canadian credit facility that matures in January 2028, and USD 150 million (CAD 199 million) on the Breezeline credit facility that matures in July 2024. DBRS Morningstar notes that the Company has a modest USD 25 million (CAD 34 million) maturity in 2024 and a USD 215 million (CAD 291 million) maturity in 2025. Looking ahead, DBRS Morningstar expects Cogeco's financial profile to remain supportive of the current credit ratings. This outlook incorporates the recently completed 3800 MHz spectrum license auction, continued network spending in both the Canadian and U.S. markets, and the purchase of Cogeco shares. Reflecting both the investment to support a wireless service in both Canada and the U.S. and the purchase of its shares, DBRS Morningstar expects Cogeco's consolidated leverage to remain at their current levels in F2024 and F2025 before beginning to decline slowly through DBRS Morningstar's forecast horizon starting in F2026. If wireline operating metrics deteriorate materially, the wireless service does not gain sufficient traction in the marketplace, and/or leverage moves structurally higher toward 3.5x to 4.0x, DBRS Morningstar may take a negative credit rating action on Cogeco's Issuer Rating. Conversely, if operating performance reflects the successful expansion of Cogeco's service offering and the Company is able to deleverage in a manner that sustains core or non-acquisition-driven leverage below 3.0x, DBRS Morningstar may take a positive credit rating action on Cogeco's Issuer Rating. Notes: All figures are in Canadian dollars unless otherwise noted. COJAM CONSTRUCTION: Taps Landair Property Advisors as Broker ------------------------------------------------------------ Cojam Construction, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Landair Property Advisors, LLC as its real estate broker. The firm will market and sell the Debtor's property located at 8-48 Astoria Boulevard, Astoria, NY 11102 -Block 513 and Lots 02, 03, 04. The firm will receive a commission equal to 4 percent of gross sales price. Alexandre Goulet, CEO at Durnil Realtors-Auctioneers, 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: Alexandre Goulet Landair Property Advisors, LLC 224 W 30th St New York, NY 10001 Phone: (646) 559-4700 Email: ag@landairnyc.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: Releases Early Tender Results for 8.000% Notes ---------------------------------------------------------------- Community Health Systems, Inc. announced the early tender results of the cash tender offer by its wholly owned subsidiary, CHS/Community Health Systems, Inc. (the "Issuer"), to purchase up to $985 million aggregate principal amount of the Issuer's outstanding 8.000% Senior Secured Notes due 2026, on the terms and subject to the conditions set forth in the Offer to Purchase Statement, dated Dec. 11, 2023, as amended. According to Global Bondholder Services Corporation, the depositary and information agent for the Tender Offer, as of 5:00 p.m., New York City time, on Dec. 22, 2023, $1,946,236,000 aggregate principal amount of the outstanding 2026 Notes were validly tendered and not validly withdrawn. As the aggregate principal amount of the 2026 Notes validly tendered and not validly withdrawn at or prior to the Early Tender Deadline exceeded the Tender Cap, the Company will accept such 2026 Notes for purchase on a prorated basis. The table below identifies the aggregate principal amount of 2026 Notes validly tendered (and not validly withdrawn) as of the Early Tender Deadline, the aggregate principal amount of 2026 Notes that will remain outstanding on the Early Payment Date (as defined below) and the approximate proration factor. CUSIP No.: 12543D BC3 U17127 AL2 Title of Security: 8.000% Senior Secured Notes due 2026 Aggregate Principal Amount Outstanding: $2,100,809,000 Aggregate Principal Amount Tendered as of the Early Tender Deadline: $1,946,236,000 Aggregate Principal Amount to be Accepted for Purchase: $985,000,000 Aggregate Principal Amount Remaining Outstanding: $1,115,809,000 Approximate Proration Factor: 50.6% The withdrawal deadline for the Tender Offer was 5:00 p.m., New York City time, on Dec. 22, 2023, and has not been extended. Accordingly, previously tendered 2026 Notes may not be withdrawn, subject to applicable law. The settlement date for 2026 Notes validly tendered as of the Early Tender Deadline and accepted for purchase was Dec. 28, 2023. On the Early Payment Date, the Company will pay the total consideration of $1,000 per $1,000 principal amount of 2026 Notes accepted for purchase plus accrued and unpaid interest from and including the interest payment date immediately preceding the Early Payment Date to, but not including, the Early Payment Date. The Issuer will accept for purchase the 2026 Notes validly tendered and not validly withdrawn as of the Early Tender Deadline on a prorated basis, in accordance with the Offer to Purchase. 2026 Notes not accepted for purchase as a result of proration will be rejected from the Tender Offer and will be returned to tendering holders at the Issuer's expense promptly following the earlier of the Expiration Time or the date on which the Tender Offer is terminated, in accordance with the Offer to Purchase. The Tender Offer is scheduled to expire at 5:00 p.m., New York City time, on Jan. 10, 2024, unless extended or earlier terminated by the Issuer. However, because the aggregate principal amount of the 2026 Notes validly tendered and not validly withdrawn as of the Early Tender Deadline exceeds the Tender Cap, the Issuer does not expect to accept for purchase any 2026 Notes tendered after the Early Tender Deadline. The Tender Offer is subject to the satisfaction or waiver of certain conditions as described in the Offer to Purchase. The complete terms and conditions of the Tender Offer are set forth in the Offer to Purchase and remain unchanged. The Issuer has retained Citigroup Global Markets Inc. to act as dealer manager in connection with the Tender Offer. Questions about the Tender Offer may be directed to Citigroup Global Markets Inc. at (800) 558-3745 (toll free) or (212) 723-6106 (collect). Copies of the Tender Offer documents and other related documents may be obtained from Global Bondholder Services Corporation, the depositary and information agent for the Tender Offer, at (855) 654-2015 (toll free) or (212) 430-3774 (collect), or by email at contact@gbsc-usa.com. 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. As of Oct. 25, 2023, the Company's subsidiaries own or lease 76 affiliated hospitals with over 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 Dec. 15, 2023, Moody's Investors Service downgraded CHS/Community Health Systems, Inc.'s Corporate Family Rating to Caa2 from Caa1. Moody's said 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. As reported by the TCR on Dec. 20, 2023, S&P Global Ratings raised its rating on Community Health Systems Inc. to 'CCC+' from 'SD' (selective default). S&P said, "We believe Community Health's capital structure is currently unsustainable. The company remains highly leveraged with S&P Global Ratings-adjusted debt to EBITDA of 8.4x. In addition, the company has not established a track record of sustained positive free cash flow generation. While we expect improved EBITDA margins and positive cash flow in 2024, leverage will remain high while the company has a significant interest burden and maturities starting in 2026." CONGREGATION KHAL: Case Summary & Five Unsecured Creditors ---------------------------------------------------------- Debtor: Congregation Khal Yesheos Yakov of Tertzal 38 Dover Terrace Monsey, NY 10952 Business Description: The Debtor is a tax-exempt religious organization. The Debtor is the owner of real property located at 38 Dover Terrace Monsey, NY 10952 valued at $1.03 million. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court Southern District of New York Case No.: 24-22033 Judge: Hon. Sean H. Lane Debtor's Counsel: Robert Lewis, Esq. ROBERT S LEWIS PC 53 Burd Street Nyack, NY 10960 Tel: (845) 358-7100 Email: Robert.lewlaw1@gmail.com Total Assets: $1,033,000 Total Liabilities: $524,070 The petition was signed by Levy Einhorn as trustee. 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/ZDYGF4Y/Congregation_Khal_Yesheos_Yakov__nysbke-24-22033__0001.0.pdf?mcid=tGE4TAMA CONTOUR PROPCO: Gets Court Nod to Sell Assets to AOF for $20.65MM ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada has given the owners of the Estancia Senior Living facility the green light to sell most of their assets to AOF Pacific Affordable Housing Corp. AOF offered $20.65 million for the assets used to operate the facility, a newly developed assisted living and memory care community in Fallbrook, Calif. The facility is owned and operated by Contour Propco 1735 S Mission, LLC and Contour Opco 1735 S Mission, LLC. AOF was the stalking horse bidder and the only qualified bidder at the court-approved auction held on Dec. 15 last year. Forbright Bank submitted a back-up credit bid in the amount of $18.5 pursuant to its rights as secured lender. Contour Propco and Contour Opco will use the proceeds from the sale to pay the outstanding principal balance and unpaid interest to Forbright Bank, which provided a $24 million loan to the companies to acquire the facility. Judge August Landis, who signed the order on Jan. 9, said the sale to AOF "will provide a greater recovery for creditors than would be provided by any other practical available alternative." The sale is an important component of the joint Chapter 11 plan of reorganization filed by the companies on July 6 last year. Pursuant to the terms of the plan, the companies' key restructuring transaction is to market and sell the facility and their assets by an auction. About Contour Propco and Contour Opco Contour Propco 1735 S Mission, LLC and Contour Opco 1735 S Mission, LLC filed Chapter 11 petitions (Bankr. D. Nev. Lead Case No. 23-12081) on May 23, 2023, with $10 million to $50 million in both assets and liabilities. Judge August B. Landis oversees the cases. Schwartz Law, PLLC represents the Debtors as bankruptcy counsel. Blanca E. Castro is the patient care ombudsman appointed in the Debtors' Chapter 11 cases. On July 6, 2023, the Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement. CORE SCIENTIFIC: Plan & Disclosure Hearing Set for Jan. 16 ---------------------------------------------------------- The Hon. Christopher M. Lopez of the U.S. Bankruptcy Court for the Southern District of Texas will hold a combined hearing on Jan. 16, 2024, at 10:00 a.m. (Prevailing Central Time) to consider final approval of the conditionally approved disclosure statement explaining the fourth amended joint Chapter 11 plan of reorganization of Core Scientific, Inc. and its Debtor Affiliates. Objections to the confirmation of the Amended Chapter 11 plan were due Jan. 11, 2024. As reported by the Troubled Company Reporter, Jan. 4, 2024, Core Scientific, Inc. disclosed in a Form 8-K Report filed with the Securities and Exchange Commission that on December 28, 2023, the U.S. Bankruptcy Court for the Southern District of Texas issued an order, among other things, conditionally approving the Disclosure Statement and Initial Disclosure Statement Supplement. The Company has reached agreements in principle concerning the material terms of the Restructuring and support for the Fourth Amended Plan with all of its key stakeholders. Such agreements are embodied in the Fourth Amended Plan. About Core Scientific Core Scientific, Inc. (OTCMKTS: CORZQ) is the largest U.S. publicly-traded Bitcoin mining company in computing power. Core Scientific, which was formed following a business combination in July 2021 with blank check company XPDI, is a large-scale operator of dedicated, purpose-built facilities for digital asset mining colocation services and a provider of blockchain infrastructure, software solutions and services. Core mines Bitcoin, Ethereum and other digital assets for third-party hosting customers and for its own account at its six fully operational data centers in North Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core was formed following a business combination in July 2021 with XPDI, a blank check company. In July 2022, one of the Company's largest customers, Celsius Mining LLC, filed for Chapter 11 bankruptcy in New York. With low Bitcoin prices depressing mining revenue to a record low, Core Scientific first warned in October 2022 that it may have to file for bankruptcy if the company can't find more funding to repay its debt that amounts to over $1 billion. Core Scientific did not make payments that came due in late October and early November 2022 with respect to several of its equipment and other financings, including its two bridge promissory notes. Core Scientific and its affiliates filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-90341) on Dec. 21, 2022. As of Sept. 30, 2022, Core Scientific had total assets of US$1.4 billion and total liabilities of US$1.3 billion. Judge Christopher M. Lopez oversees the cases. The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT Partners, LP as investment banker; and AlixPartners, LLP as financial advisor. Stretto is the claims agent. A group of Core Scientific convertible bondholders is working with restructuring lawyers at Paul Hastings. Meanwhile, B. Riley Commercial Capital, LLC, as administrative agent under the Replacement DIP facility, is represented by Choate, Hall & Stewart, LLP. On Jan. 9, 2023, the U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Willkie Farr & Gallagher, LLP as legal counsel and Ducera Partners, LLC as investment banker. The U.S. Trustee for Region 7 appointed an official committee of equity security holders. The equity committee is represented by Vinson & Elkins, LLP. DEL MONTE FOODS: S&P Lowers ICR to 'B-', Alters Outlook to Neg. --------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S.-based Del Monte Foods Inc. to 'B-' from 'B' and its issue-level rating on its $725 million first-lien term loan to 'B-' from 'B'. The recovery rating remains '4', reflecting its expectation for average (30%-50%; rounded estimate: 35%) recovery in the event of default. The negative outlook reflects the potential for a lower rating over the next year if the company's operating performance remains weak or deteriorates further, leading S&P to view Del Monte's capital structure as unsustainable. S&P has assigned a new Management & Governance (M&G) assessment of neutral to Del Monte Foods Inc. This assignment follows the Jan. 7 publication of S&P Global Ratings' revised criteria for evaluating the credit risks presented by an entity's M&G framework. The downgrade reflects Del Monte's significant operating underperformance through its highest seasonal quarter of fiscal 2024. For the quarter ended Oct. 29, 2023, Del Monte's revenues declined 2.3% due to a sharp 9.2% volume contraction, partially offset by higher price/mix contribution of 6.9%. Its S&P Global Ratings-adjusted gross margin declined to 21.7% from 30.8% in the prior-year period, while its EBITDA for the quarter dropped 54% versus 2023 and EBITDA margin declined to 7.9% from 16.8%. The large decline in profitability was a result of lower volumes due to category declines, higher input costs, and an intentional pullback in its non-branded business due to its lower margins. As a result, the company's leverage increased to about 11x from 5.1x in the same period in fiscal 2023. The company previously forecasted low-single-digits revenue growth and EBITDA expansion in fiscal 2024, enabling it to materially reduce its inventory levels following the seasonal build in the second quarter, generating positive free operating cash flow (FOCF) in fiscal 2024. This would have allowed Del Monte to reduce its ABL balances from $700 million at the end of the second quarter. However, the company acknowledged multiple misses relative to its prior forecast, including category softness, the decision to sacrifice volumes in the lower-margin, non-branded segment, and incremental costs associated with excess inventory. S&P said, "As a result, we revised our forecast downwards and now expect consolidated revenues to decline in 2024 versus our previous expectation of 4% growth. We also expect its inventory balances and ABL borrowings at the end of fiscal 2024 to remain higher than fiscal 2023. We forecast Del Monte will experience steep FOCF deficits (on an S&P-adjusted basis) in 2024 of more than $100 million after posting deficits of $441 million in fiscal 2023 and $48 million in fiscal 2022, as it continues to fund significantly higher-than-historical working capital levels." S&P expects Del Monte's profitability and cash flow generation to improve in fiscal 2025. However, the negative outlook reflects the potential for a lower rating if the company's operating performance and credit metrics remain weak. S&P said, "We previously expected it to maintain at least $230 million in S&P Global Ratings-adjusted EBITDA to sustain leverage around 5x. We now forecast S&P Global Ratings-adjusted EBITDA of about $130 million. This, combined with higher debt levels, will result in S&P Global Ratings-adjusted leverage increasing to about 11.3x for fiscal 2024 and remaining above 8x through fiscal 2026. We expect profitability to improve in fiscal 2025 as the company accelerates its cost reduction initiatives while continuing to increase market share in core categories. However, we will lower the ratings if we forecast lower profitability as a result of higher discounting or higher costs or an inability to reduce inventory due to lower-than-expected demand." Substantial borrowings on Del Monte's revolving credit facility and weak cash flow generation constrain its liquidity. Given the company's expectation of significantly higher peak ABL borrowings this year (more than $710 million) to fund fiscal 2025 inventory pack, the company executed an amendment to increase its ABL commitment to $750 million from $625 million in August 2023. The lender group also amended the credit agreement to exclude the requirement of a springing fixed-charge covenant through Oct 31, 2023. S&P said, "We view this proactive relief as prudent because availability fell and remains below the covenant threshold as of the end of the second quarter of fiscal 2024. The company is committed to right-sizing its inventory position and plans to cut inventory by 30%-40% in fiscal 2025. However, we forecast a high likelihood of the springing fixed-charge covenant to be tested over the upcoming quarters. Although we expect Del Monte to be in compliance with the covenant, we project the cushion will remain under 10% over the next few quarters." The company's excess inventory of shelf-stable products could lower the amount of inventory needed to produce in fiscal 2025 and ABL borrowings associated with it, which is a potential positive. As a result, S&P believes the company will be able to reduce leverage and generate positive FOCF in the second half of fiscal 2025 if it manages inventory levels accordingly. S&P also assigned its new management and governance (M&G) modifier assessment of 'Neutral' to Del Monte. S&P said, "The action follows the revision to our criteria for evaluating the credit risks presented by an entity's management and governance framework. The terms "management and governance" encompass the broad range of oversight and direction conducted by an entity's owners, board representatives, and executive managers. These activities and practices can impact an entity's creditworthiness and, as such, the M&G modifier is an important component of our analysis." The negative outlook reflects the potential for a lower rating over the next year if Del Monte's operating performance remains weak or deteriorates further, leading S&P to view its capital structure as unsustainable. S&P could lower its ratings on Del Monte any time within the next 12 months if the company's interest coverage remains below 1.5x. This could occur if: -- The company cannot manage its seasonal inventory needs and reduce its ABL balances, leading to continued high inventory balances and prolonged free cash flow deficits; -- Its covenant cushion remains tight or S&P believes the company could breach its covenant without a waiver or amendment; or -- Profitability deteriorates due to weaker demand, higher costs, and operational inefficiencies, which further pressure liquidity. S&P could take a positive rating action if Del Monte restores profitability and debt back to historical levels, resulting in leverage approaching 7x and interest coverage above 1.5x. This could occur if the company: -- Improves working capital by reducing its inventory levels, generating consistent free cash flow it uses it to pay down revolver borrowings; -- Demonstrates sustained organic growth by expanding its distribution and growing its branded retail business; and -- Successfully mitigates inflationary pressures, undertakes aggressive cost reduction actions, and improves EBITDA. DIRECTV FINANCING: Moody's Rates New $750MM Secured Notes 'Ba3' --------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to DIRECTV Financing, LLC's proposed new $750 million senior secured notes due 2030. The net proceeds from the senior secured notes issuance will be used to repay a portion of the amounts outstanding under the company's existing $3.2 billion first lien term loan B due August 2027. All other ratings including the company's Ba3 corporate family rating and stable outlook are unchanged. RATINGS RATIONALE DIRECTV's Ba3 CFR reflects its targeted financial policy of maintaining modest debt leverage of around 1.25x (Moody's adjusted) while generating still sizable but declining free cash flow. Secular demand pressures in linear TV and resulting subscriber losses make cost cutting a critical part of ensuring that DIRECTV is able to maintain solid cash flow generation levels to fund steady cash distributions to its joint venture owners. Operating cost efficiency efforts target G&A reductions, including customer service operations and the streamlining of customer acquisition costs, as well more disciplined maintenance capital investing. DIRECTV's total subscriber base, which continues to decline at near mid-teens rates on a year-over-year basis stood at 11.3 million as of September 30, 2023, down by a very significant 44.9% over 3.75 years from 20.4 million at year-end 2019. The company's significant scale and substantial programming content distribution does enable some negotiating advantage in content provider contract discussions versus peers. As a standalone entity after its carveout from AT&T Inc. (AT&T, Baa2 stable) in 2021, DIRECTV continues to optimize its business strategy as it seeks to revitalize the DIRECTV brand. This strategic focus includes slowing and stabilizing subscriber loss trends in the DIRECTV direct-broadcast-satellite (DBS) business to nearer industry levels and reducing churn to more sustainable levels in the 1.7% area. DIRECTV continues to strengthen its marketing efforts, including through digital efforts and lower subscriber acquisition cost end markets, and to lower other associated costs to support and boost EBITDA margins. Promotional offerings will be more disciplined and tailored going forward. Moody's believes success on retention initiatives will largely dictate success. While the recent end of DIRECTV's NFL Sunday Ticket contract contributed to a portion of consumer subscriber losses, the company's aggregate losses remain driven by general secular trends in consumer viewing behavior. The company benefits nominally from NFL commercial rights going forward where it benefits from distribution to more than 300,000 bars, restaurants and other businesses. Moody's expects DIRECTV to have a good liquidity profile supported by solid free cash flow generation and $474 million available for draw under its $500 million revolving credit facility as of September 30, 2023, given $26 million in undrawn letters of credit outstanding. The company also had cash on the balance sheet of $188 million as of September 30, 2023. Moody's expects that the company will maintain cash balances at sufficient levels to operate its business. The excess of the company's expected $1.0 billion to $1.5 billion of after tax annual free cash flow after any required debt repayments will likely be used in full to make distributions to the company's shareholders. The company has fully retired TPG Capital's (TPG) senior preferred equity and AT&T's junior preferred equity. The company's existing term loan amortizes 9% annually and includes a 50% excess cash flow sweep with first lien net leverage-based step-downs to 25% and 0%; a currently marketed proposed $1.25 billion extended term loan due 2029 will have the same terms. A currently marketed proposed extended revolving credit facility due 2028 will also have the same terms as the existing revolver, which includes a springing first lien net leverage ratio covenant of 2.25x which is tested when more than 35% of the revolver is drawn. Moody's expects the company to maintain substantial cushion under this covenant over Moody's forward outlook period. The proposed extended revolver will have one additional feature, a springing maturity to any remaining August 2027 maturities, if outstanding. DIRECTV's ESG Credit Impact Score of CIS-4 primarily reflects social risks as revenue and profits are generated from the company's US linear pay television distribution business. These negative, secularly-driven trends include consumers moving to direct-to-consumer video-on-demand services and terminating traditional linear bundled pay TV services such as those provided by DIRECTV. DIRECTV's governance exposure reflects the company's transparency regarding its financial policies, including specific credit metric targets. These policies reflect AT&T's guidance and influence, and are meaningfully conservative in scope. However, the company's go-forward business strategy remains unclear about investing for the necessary transition from its sizable linear bundled television distribution exposure currently. DIRECTV's management has a limited track record given that the company's separation from AT&T occurred only in late 2021. The board of directors lacks independence because all its four independent directors (out of nine total) are non-voting members only. AT&T and TPG share equal voting control despite AT&T's 70% economic stake, but AT&T's influence significantly reduces financial risk. The stable outlook reflects the constraint of the company's credit ratings at Ba3 due to substantial secular pressures on linear bundled television distribution in the US. The outlook also considers expectations that the company can reduce the pace of subscriber losses to lower double-digit percentage rates per year. While revenue and EBITDA are expected to remain under pressure, Moody's expects cost cutting efforts will aid the company's ability to generate annual free cash flow after tax of between $1.0 billion to $1.5 billion. With Moody's expectations of stable capital investing around a $500 million range annually, excess free cash flow after required debt repayments is anticipated to be primarily distributed to repay all of AT&T's remaining $4.2 billion of catchup equity by 2026, with forward excess cash flow then being divided between AT&T and TPG Capital (TPG) in accordance with their 70% and 30% equity economic stakes, respectively. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Given the secular pressures causing substantial subscriber declines within two of the company's businesses, DIRECTV Pay-TV and U-Verse, and weak subscriber trends in the DIRECTV Stream business, ratings are constrained at the Ba3 corporate family rating (CFR) level and therefore an upgrade is unlikely. However, over time an upgrade could occur if the company invests in new sustainable businesses such that it generates steady and material revenue growth and continues to maintain low debt leverage (Moody's adjusted). Ratings could be downgraded if secular pressures result in continued high or accelerating losses in subscribers and revenue such that the company cannot keep pace with the necessary debt reduction to sustain debt leverage (Moody's adjusted) below 2x. Additional ratings pressure could result if management amends its financial policy to a more aggressive posture or if the company becomes more controlled by private equity owners. Headquartered in El Segundo, CA, DIRECTV is a US pay TV distributor with the bulk of its subscribers accessing the company's product via DBS. DIRECTV had 11.3 million subscribers and $22.6 billion in revenue for the latest 12 months period ending September 30, 2023. The company's majority economic shareholder is AT&T and its sole minority shareholder is TPG; voting control is split on a 50/50 basis. The principal methodology used in this rating was Telecommunications Service Providers published in November 2023. DIRECTV FINANCING: S&P Assigns 'BB' Rating on New Secured Notes --------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '2' recovery rating to DirecTV Financing LLC's proposed secured notes due 2030. The '2' recovery rating indicates its expectation for substantial (70%-90%; rounded estimate: 70%) recovery in the event of payment default. The company plans to use the proceeds to refinance a portion of the existing $3.1 billion term loan B due 2027. S&P said, "Our 'BB-' issuer credit rating on parent DirecTV Entertainment Holdings LLC is unaffected by this leverage-neutral transaction. We view it favorably from a liquidity standpoint because it will smooth the company's maturity profile somewhat. We expect the company will continue to operate with debt to EBITDA of 1.0x-1.5x over the next year, which is strong for the rating. We recognize that management has been able to reduce costs effectively, resulting in healthy cash flow and better-than-expected EBITDA margins (about 26%) despite satellite TV subscriber losses of about 16% year over year. "The rating upside is currently constrained by challenging industry conditions as the addressable market for linear TV continues to shrink significantly. Key sports programming is becoming more widely available on streaming platforms, which we view as a negative development for DirecTV. We believe the company could struggle to expand its streaming platform considering other competitors such as YouTubeTV (which is owned by Google) may be willing to subsidize operating losses or operate at lower margins to gain scale and create value for other business segments. Separately, we also consider the potential for leverage to increase due to a strategic acquisition or shareholder returns in the longer term, given that private-equity firm TPG owns a 30% stake in the company." DIRECTV: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable --------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of DIRECTV Entertainment Holdings LLC (DIRECTV) and DIRECTV Financing, LLC (DIRECTV Financing) at 'BB+'. The Rating Outlook is Stable. Fitch has also affirmed the 'BBB-'/'RR1' ratings of DIRECTV Financing's first lien revolver and term loan as well as its senior secured first lien notes. The ratings reflect the company's scale as one of the largest multi-channel video programming providers in the U.S., strong cash flows and its conservative leverage profile. Concerns include the continued, industry-wide secular pressure on providers of traditional linear television as consumers have shifted a material portion of their video consumption to a variety of over-the-top streaming services. KEY RATING DRIVERS Proposed Refinancing: The company is looking to amend and extend its existing credit facility to extend the maturity of up to $1.25 billion of term loans from 2027 to 2029, as well as extend the revolver maturity by two years from 2026 to 2028. Fitch rates the amended and extended term loan facility 'BBB-'/ 'RR1' as the new tranche of loans are pari-passu to the existing term loan. The terms of the extended term loan will be substantially similar to those of the existing term loan. Scale: DIRECTV's video subscriber base (combined DIRECTV, U-verse, DIRECTV Stream) is the third largest traditional multi-channel video programming distributor (MVPD) in the U.S. with approximately 11.3 million subscribers at the end of 3Q23, behind Comcast which has 14.5 million video subscribers and Charter Communications, Inc. which has 14.4 million video subscribers. DIRECTV remains the largest on a video-only revenue basis, but has no broadband or other operations like its peers. Scale is a crucial element with MVPD operators as secular pressures weigh on costs, and scale benefits MVPDs with respect to programming costs, as it provides greater negotiating power with content providers and in retransmission consent negotiations with TV broadcasters. Subscriber Pressures: Secular pressures have resulted in declining subscribers of traditional linear television as a result of shifting consumer preferences and technology changes. The pandemic further accelerated the shift, increasing competition and the number of streaming options available to viewers. Although still significant, DIRECTV's subscriber loss rates have improved over the last few years, driven by lower churn, and were 585,000 in 3Q23 (losses peaked in 3Q19 at 1.35 million subscribers). 2023 net losses will also be negatively affected by the company's loss of residential rights for NFL Sunday Ticket in 2023. DIRECTV still retains commercial rights for Sunday Ticket. Execution on DIRECTV Stream: The next generation DIRECTV Stream product delivers video over a software-based video architecture and is a more robust linear TV offering than its prior iterations of over the top (OTT) direct-to- consumer products. For the next generation product, DIRECTV has reported high satisfaction rates and strong attach rates with broadband services. Successful execution on the deployment and growth of the DIRECTV Stream product will be a key risk factor for DIRECTV in mitigating secular subscriber losses in the traditional satellite-based DIRECTV product. DIRECTV Stream also provides bundling opportunities with AT&T, which owns 70% of DIRECTV, including in its wireline footprint where DIRECTV's video service can be readily bundled with high-speed data services over AT&T's fiber and IP-based broadband services. The companies entered into a series of commercial agreements, including product bundling & sales, when DIRECTV separated from AT&T in 2021. Financial Flexibility: Fitch expects FCF will be in the $1.0 billion-$1.5 billion range (after tax distributions) with annual capex intensity in the 2%-3% range going forward. Fitch does not believe the company would need to launch replacement satellites until around the end of the decade, but the agency has conservatively assumed slightly higher capex to include the related potential launch and the development costs. A shifting product mix will also benefit FCF as the subscriber acquisition costs (SAC) for the DIRECTV Stream product are well below the satellite product. The equipment cost for DIRECTV Stream is lower, and the product generally does not require a truck roll as customers can self-install the equipment. Conservative Leverage: Fitch expects EBITDA leverage of 1.2x at YE 2023. Fitch expects DIRECTV to remain conservatively capitalized along with AT&T's and TPG's commitment to manage target net leverage near 1x. In addition, Fitch assumes that AT&T would not sell down its equity stake after formation of the joint venture, as TPG recognizes the strategic benefit of AT&T as a partner. Parent/Subsidiary Linkage: Fitch links DIRECTV Entertainment Holdings LLC's IDR to AT&T Inc. (BBB+/Stable). DIRECTV's IDR is notched up one level from its stand-alone credit profile owing to low operational incentives, medium strategic incentives (due to DIRECTV's cash distributions) and low legal incentives. DERIVATION SUMMARY DIRECTV's publicly rated MVPD peers include Comcast Corp. (A-/Stable) and Charter Communications, Inc. (BB+/Stable). Comcast is rated higher than DIRECTV primarily due to significantly greater revenue size and segment diversification. With more than 11 million subscribers through the DIRECTV satellite TV, DIRECTV Stream and U-verse offerings, DIRECTV is the third largest U.S. MVPD behind Comcast and Charter. However, in Fitch's view, DIRECTV is more weakly positioned given its less competitive product offering that has disadvantaged it relative to MVPD peers that benefit from the ability to use bundling (mainly broadband services) to retain video subscribers. Charter's ratings also benefit from segment diversification, scale and higher FCF that is balanced against higher leverage metrics (near 4.5x) when compared with those of DIRECTV. DIRECTV is similar to DISH Network which also provides satellite TV services and virtual MVPD services through Sling TV. DISH has a lower scale with a customer base totaling approximately 9 million subscribers and operates with higher leverage. KEY ASSUMPTIONS - Revenues are expected to decline in the low double digits in 2023 and 2024 primarily due to declines in DIRECTV satellite subscribers and U-Verse subscribers, partly offset by higher ARPUs across all three platforms; - EBITDA margins are expected to be in the low-to-mid 20 percent range; - Fitch-calculated FCF (after tax distributions) is expected to range in $1.0 billion-$1.5 billion annually over the 2023-2026 range, with capex intensity in the low single digits; - Fitch assumes the company applies discretionary cash flow beyond the term loan amortization to additional debt repayments to maintain leverage, with further discretionary cash distributed to its owners. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Fitch does not anticipate an upgrade in the near term; however, following could result in a positive rating action: - Successful execution on initiatives to return to revenue/EBITDA growth; - EBITDA leverage maintained at 2.5x or less. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Prolonged declines in revenue and EBITDA, not offset by reductions in debt, leading to EBITDA leverage of 3.5x or greater; - Leveraging transactions, particularly in the absence of a credible deleveraging plan, or a more aggressive financial policy that leads to EBITDA leverage greater than 3.5x; - AT&T's ownership interest of DIRECTV falls below 51%. A reduction in AT&T's economic stake over time and changes to governance could lead to a rating action. LIQUIDITY AND DEBT STRUCTURE Solid Liquidity: Fitch expects the company to generate FCF in $1.0 billion-$1.5 billion range annually (after tax distributions). The company's liquidity is also supported by a $500 million revolving credit facility and cash balances. Owing to strong FCF generation, the facility is expected to be undrawn over Fitch's rating case forecast. The principal financial covenant in the RCF is a 2.25x springing first lien net leverage ratio, if the RCF is more than 35% drawn. FCF will be supported by low capex. Capital investment by DIRECTV is expected to be in 2%-3% range over the coming years as major investments in the video platform (DIRECTV Stream) have been completed. Fitch has conservatively included construction and launch costs of a potential satellite launch near 2027 timeframe leading to slightly elevated capex intensity of 3% in 2025 and 2026. As of Sept. 30, 2023, DIRECTV's capital structure consists of $3.7 billion of senior secured notes, a $3.2 billion first lien term loan, an undrawn $500 million RCF and $107 million of rolled over unsecured notes at DIRECTV Holdings, LLC. The debt is issued at DIRECTV Financing, LLC and is guaranteed by DIRECTV Financing HoldCo, LLC, a wholly owned subsidiary of DIRECTV. The company also has a three-year accounts receivable(A/R) securitization facility due in 2025 with up to $500 million of availability. At Sept. 30, 2023, the facility was fully drawn. Fitch expects the company will keep rolling over the A/R facility. The company is looking to amend and extend the maturity of a portion of its Term Loan B from 2027 to 2029, and extend the revolver maturity from 2026 to 2028. ISSUER PROFILE DIRECTV provides video entertainment services, consisting of the DIRECTV direct to home satellite business, U-verse video and DIRECTV Stream. The company is owned 70% by AT&T and 30% by TPG, but jointly controlled by both. 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 ----------- ------ -------- ----- DIRECTV Financing, LLC LT IDR BB+ Affirmed BB+ senior secured LT BBB- New Rating RR1 senior secured LT BBB- Affirmed RR1 BBB- DIRECTV Entertainment Holdings LLC LT IDR BB+ Affirmed BB+ DMG SECURITY: Seeks Cash Collateral Access ------------------------------------------ D.M.G. Security, Inc. asks the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to make its payroll and other operational expenses. The Debtor's primary contracts are with Chicago Transit Authority and Cook County providing essential security services to various locations throughout the City of Chicago. UNITED CAPITAL, claims a lien on the Debtor's accounts. Inventory and equipment. Etc., by virtue of a UCC-Financing Statement No. 20230623 filed June 23, 2023, particularly Debtor's contracts with 1) Chicago Transit Authority, 2) Steiner Security Services and 3) SkyTech Security Services. The Debtor is due a receivable from Chicago Transit Authority for service rendered and invoiced in the approximate amount of $90,000. As a result of delays in payments from the CTA and Cook County, the Debtor the Debtor fell behind on its payroll and other operational expenses resulting in the Debtor having to factor certain receivables to meet its payroll and pay its operational expenses. That CTA is due to pay the Debtor on its contract. The Debtor needs release of the funds from CTA to make payroll, which funds in part may constitute the cash collateral of UNITED. In order to provide UNITED adequate protection pursuant to 11 U.S.C. section 361, the Debtor has agreed to: (A) grant UNITED replacement liens on the Property and the proceeds of the Property and the proceeds of the Property to the same extent and with the same priority as its prepetition liens on the Property and the proceeds of the Property; (B) make periodic monthly payments of $2,000 pursuant to 11 U.S.C. section 362(d)(3); (C) limit its expenditures to the disbursements listed on the budget; (D) Enter into the Interim Order Authorizing the Debtor to Use Cash Collateral. A hearing on the matter is set for January 16, 2023. A copy of the motion is available at https://urlcurt.com/u?l=r9mr5f from PacerMonitor.com. About D.M.G. Security, Inc. D.M.G. Security, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-15180) on November 10, 2023. In the petition signed by Debra M. German, president, the Debtor disclosed up to $100,000 in assets and up to $500,000 in liabilities. Judge Donald R. Cassling oversees the case. William E. Jamison, Jr. Esq., at William E. Jamison & Associates, represents the Debtor as legal counsel. E-STONE USA: Seeks to Hire Johnson Pope Bokor Ruppel as Counsel --------------------------------------------------------------- E-Stone USA Corporation and affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to employ Johnson Pope Bokor Ruppel & Burns, LLP as its counsel. The firm will render these services: a. give the Debtors legal advice with respect to their duties and obligations as Debtors in Possession or "DIP"; b. take necessary steps to analyze and pursue any avoidance actions, if in the best interest of the estates; c. prepare on behalf of the Debtors the necessary motions, notices, pleadings, petitions, answers, orders, reports and other legal papers required in these Chapter 11 cases; d. assist the Debtors in taking all legally appropriate steps to effectuate compliance with the Bankruptcy Code; and e. perform all other legal services for the Debtors which may be necessary including closings of sales of the Debtors' assets. Edward Peterson, Esq., the main attorney in this engagement, will be paid at his hourly rate of $500. The firm received a pre-bankruptcy retainer of $85,000 from the Debtor. Mr. Peterson 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: Edward J. Peterson, Esq. JOHNSON POPE BOKOR RUPPEL & BURNS, LLP 401 E. Jackson Street, Ste. 3100 Tampa, FL 33602 Telephone: (813) 225-2500 Email: epeterson@jpfirm.com About E-Stone USA Corporation E-Stone USA Corporation sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-20805) on December 28, 2023. In the petition signed by Ilaria Di Landro, chief financial officer, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Edward J. Peterson, Esq, at Johnson, Pope, Bokor, Ruppel & Burns, LLP, represents the Debtor as legal counsel. EAGLE PROPERTIES: Gets OK to Sell Richmond Property to Clonbrook ---------------------------------------------------------------- Eagle Properties and Investments, LLC received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to sell its real property to Clonbrook Holdings, LLC. Clonbrook offered $244,750 for the property located at 3002 Williamsburg Road, Richmond, Va. The property is being sold "free and clear" of liens and interests. Fulton Bank is the holder of a first priority lien in an amount exceeding $242,000. Although it will not be paid in full, the bank consented to the sale on the condition that it receives all net proceeds, less a $10,000 carve-out for administrative and unsecured creditors. About Eagle Properties and Investments Eagle Properties and Investments, LLC is a Vienna Va.-based company engaged in leasing real estate properties. It owns 26 properties valued at $9.37 million. Eagle Properties and Investments filed Chapter 11 petition (Bankr. E.D. Va. Case No. 23-10566) on April 6, 2023, with $9,429,800 in total assets and $14,716,136 in liabilities. Amit Jain, manager, signed the petition. Judge Klinette H. Kindred oversees the case. The Debtor tapped the Law Offices of Sris, P.C. and N D Greene, PC. as bankruptcy counsels; Whiteford, Taylor & Preston, LLP as special counsel; and SC&H Group, Inc. as financial advisor and accountant. EBIX INC: Seeks to Hire Huron Consulting as Financial Advisor ------------------------------------------------------------- Ebix, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Huron Consulting Services LLC as its financial advisor. The firm's services include: a. meeting with the Debtors' management team, its CRO team, investment banker, and others to review the Business, its underlying financial information and reporting; b. obtaining the carve-out financial information for the Business prepared by the Debtors and its advisors and reconcile the reported carve-out information to consolidating public and/or audited sources of financial information for the Historical Period, specifically for EBITDA, deferred revenue, and working capital calculations; c. evaluating the Business' normalized and standalone EBITDA after carve out for the Historical Period (the "QOE EBITDA"); d. evaluating the Business' normalized and standalone deferred revenue after the carve out for the Historical Period; e. evaluating the Business' normalized and standalone working capital accounts consisting of accounts receivable and accounts payable after carve out for the Historical Balance Sheet Period; f. evaluating other balance sheet components for the normalized and standalone Business after carve out for the Historical Balance Sheet Period; g. preparing a written report summarizing our deliverables as the QOE Report, as defined in the Purchaser's APA; and h. performing such other services as may be agreeable to Huron in its sole discretion. The firm will be paid at these rates: Managing Director $1,025 to $1,400 per hour Senior Director $975 per hour Director $750 to $850 per hour Manager $650 per hour Associate $550 per hour John DiDonato, managing director at Huron, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: John C. DiDonato Huron Consulting Services, LLC 1166 Avenue of the Americans 3rd Floor, NY 10036 Tel: (212) 785-1900 About Ebix Inc. Ebix, Inc. is an international supplier of on-demand infrastructure software exchanges and e-commerce services to the insurance, financial, travel, cash remittances, and healthcare industries. Ebix and its affiliates sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 23-80004) on Dec. 17, 2023. In the petitions signed by their chief financial officer, Amit K. Garg, the Debtors disclosed $500 million to $1 billion in both assets and liabilities. Judge Scott W. Everett oversees the cases. The Debtors tapped Sidley Austin LLP as legal counsel; AlixPartners, LLP as financial advisor; and Jefferies LLC as investment banker. Omni Agent Solutions, Inc. is the claims, noticing, and solicitation agent. EDGE RIVER: Case Summary & 15 Unsecured Creditors ------------------------------------------------- Debtor: Edge River Incorporated DBA Grease Monkey 3750 Island Club Drive #5 North Port, FL 34288 Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court Middle District of Florida Case No.: 24-00163 Judge: Hon. Catherine Peek Mcewen Debtor's Counsel: David S. Jennis, Esq. DAVID JENNIS, PA D/B/A JENNIS MORSE 606 East Madison Street Tampa, FL 33602 Tel: (813) 229-2800 Email: ecf@JennisLaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Stephen T. Van Bergen as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 15 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SDF2BKI/Edge_River_Incorporated__flmbke-24-00163__0001.0.pdf?mcid=tGE4TAMA EVOKE PHARMA: Registers Up to 14.6 Million Common Shares -------------------------------------------------------- Evoke Pharma, Inc. has filed Amendment No. 3 to its Form S-1 filed with the U.S. Securities and Exchange Commission relating to its offering of 14,563,000 shares of its common stock and accompanying common warrants to purchase up to 14,563,000 shares of its common stock (the "Common Warrants"), at an assumed combined public offering price of $1.03 per share of common stock and accompanying Common Warrant (equal to the last sale price of its common stock as reported by The Nasdaq Capital Market on January 2, 2024). The Common Warrants have an exercise price per share equal to 100% of the price per share of the common stock sold in the offering, are exercisable immediately, subject to certain limitations, and will have a five-year term. The Company is also offering the shares of its common stock that are issuable from time to time upon exercise of the Common Warrants. Accordingly, the Company is offering to each purchaser whose purchase of shares of common stock in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of its outstanding common stock immediately following the consummation of this offering, the opportunity to purchase, if the purchaser so chooses, pre-funded warrants, in lieu of shares of common stock that would otherwise result in the purchaser's beneficial ownership exceeding 4.99% of its outstanding common stock. Subject to limited exceptions, a holder of Pre-Funded Warrants will not have the right to exercise any portion of its Pre-Funded Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, 9.99%, 14.99%, or 19.99%) of the number of shares of common stock outstanding immediately after giving effect to such exercise. Each Pre-Funded Warrant will be exercisable for one share of common stock at an exercise price of $0.0001 per share of common stock. The public offering price per Pre-Funded Warrant and accompanying Common Warrant, is equal to the public offering price per share of common stock and accompanying Common Warrant less $0.0001. Each Pre-Funded Warrant will be exercisable upon issuance and will expire when exercised in full. Evoke is also offering the shares of its common stock that are issuable from time to time upon exercise of the Pre-Funded Warrants. For each Pre-Funded Warrant Evoke sells, the number of shares of common stock it is offering will be decreased on a one-for-one basis. Because a Common Warrant is being sold together in this offering with each share of common stock and, in the alternative, each Pre-Funded Warrant to purchase one share of common stock, the number of Common Warrants sold in this offering will not change as a result of a change in the mix of the shares of its common stock and Pre-Funded Warrants sold. The shares of common stock or Pre-Funded Warrants, as applicable, and the accompanying Common Warrants, can only be purchased together in this offering but will be issued separately and will be immediately separable upon issuance. A full-text copy of the Report is available at http://tinyurl.com/3eb65zak About Evoke Pharma Headquartered in Solana Beach, California, Evoke Pharma, Inc. -- http://www.evokepharma.com-- is a specialty pharmaceutical company focused primarily on the development of drugs to treat GI disorders and diseases. The Company is developing Gimoti, a nasal spray formulation of metoclopramide, for the relief of symptoms associated with acute and recurrent diabetic gastroparesis. Evoke Pharma reported a net loss of $8.22 million for the year ended Dec. 31, 2022, compared to a net loss of $8.54 million for the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $7.85 million in total assets, $8.73 million in total liabilities, and a total stockholders' deficit of $873,775. In its Quarterly Report for the three months ended Sept. 30, 2023, Evoke Pharma said that there is substantial doubt about its ability to continue as a going concern for one year after the date the financial statements were issued. The Company has incurred recurring losses and negative cash flows from operations since inception and expects to continue to incur net losses for the foreseeable future until such time, if ever, that it can generate significant revenues from the sale of Gimoti. As of Sept0 30, 2023, the Company had approximately $6.0 million in cash and cash equivalents. The Company anticipates that it will continue to incur losses from operations due to commercialization activities. FALCON LOGISTICS: Charity Bird of Kaplan Named Subchapter V Trustee ------------------------------------------------------------------- The Acting U.S. Trustee for Region 8 appointed Charity Bird of Kaplan, Johnson, Abate, & Bird as Subchapter V trustee for Falcon Logistics, LLC. Ms. Bird will be paid an hourly fee of $300 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Bird declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Charity Bird Kaplan, Johnson, Abate, & Bird 710 W. Main Street, 4th Floor Louisville, KY 40202 Phone: (502) 540-8285 Email: cbird@kaplanjohnsonlaw.com About Falcon Logistics Falcon Logistics, LLC is a company based in Bowling Green, Ky., which operates in the general freight trucking industry. The Debtor filed Chapter 11 petition (Bankr. W.D. Ky. Case No. 24-10002) on Jan. 3, 2024, with $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Justin Powers, owner, signed the petition. Robert C. Chaudoin, Esq., at Harlin Parker represents the Debtor as legal counsel. FALLING TIMBERS: Unsecureds to Split $15K in Subchapter V Plan -------------------------------------------------------------- Falling Timbers Tree Service LLC filed with the U.S. Bankruptcy Court for the Middle District of Tennessee a Plan of Reorganization under Subchapter V dated January 8, 2024. The Debtor was formed in 2020, by Alyssa Waire who is a dental hygienist for her husband, Joseph Waire. Mr. Waire is the primary operator of the business, which performs all tree related services from trimming, tree removal, and stump grinding. Joseph Waire, as the primary employee of the Debtor, injured himself on the job and had to undergo shoulder surgery. The Debtor's cash flow as a result of this surgery has been delayed. These actions caused the Chapter 11 filing. This Plan of Reorganization proposes to pay the creditors of the Debtor from cash flow from business operations and future income of the Debtor. Non-priority unsecured creditors holding allowed claims will receive pro rata distributions from the ongoing cash flow of the debtor. Class 7 shall consist of the allowed unsecured claims not entitled to priority and not expressly included in the definition of any other class. The claims in this class shall be paid a pro-rate distribution of $15,000.00 commencing on the Effective Date of the plan, payable at the rate of $25.00 per month, until the total amount specified herein has been paid. The Debtor anticipates the funds to meet the plan payments shall come from the daily operations of the Debtor's tree cutting business. Except as otherwise expressly provided in the Plan, Confirmation of the Plan shall vest all the property of the Debtor's estate in the Debtor. A full-text copy of the Plan of Reorganization dated January 8, 2024 is available at https://urlcurt.com/u?l=3BZCY5 from PacerMonitor.com at no charge. Attorney for Debtor: Jay R. Lefkovitz, Esq. Steven L. Lefkovitz, Esq. Lefkovitz And Lefkovitz, PLLC 908 Harpeth Valley Place Nashville, Tennessee 37221 Phone: (615) 256-8300 Fax: (615) 255-4516 Email: slefkovitz@lefkovitz.com About Falling Timbers Tree Service LLC Falling Timbers Tree Service LLC performs all tree related services from trimming, tree removal, and stump grinding. The Debtor sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23 03700) on Oct. 9, 2023, listing $100,001 to $500,000 in both assets and liabilities. Judge Randal S Mashburn oversees the case. Steven L. Lefkovitz, Esq. at Lefkovitz And Lefkovitz, PLLC represents the Debtor as counsel. FOLEY BUILDING: Court OKs Interim Cash Collateral Access -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Illinois authorized Foley Building Maintenance, LLC to use cash collateral on an interim basis, in accordance with the budget, nunc pro tunc to September 28, 2023. As previously reported by the Troubled Company Reporter, the Debtor requires the use of the cash collateral to continue its business operations and to pay their regular daily expenses, including employees' wages, utilities, and other costs of doing business. The Debtor is indebted to Internal Revenue Service in the approximate amount of $65,983. The Debtor is also indebted to Illinois Department of Employment Security in the approximate amount of $18,508. To the extent the IRS and IDES have valid security interests in the cash collateral, adequate protection will be provided to them though the granting of replacement liens in any prepetition assets which were subject to their liens to the same extent, validity, priority, perfection, and enforceability as their interests in any assets to the extent of any diminution in value. A copy of the order is available at https://urlcurt.com/u?l=XHYXFB from PacerMonitor.com. About Foley Building Maintenance LLC Foley Building Maintenance LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ill. Case No. 23-30596-lkg) on August 29, 2023. In the petition signed by Jennifer Adams, managing member, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Laura K. Grandy oversees the case. J. D. Graham, Esq., at J. D. Graham, PC, represents the Debtor as legal counsel. FORGOTTEN BOARDWALK: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Forgotten Boardwalk Brewing, LLC 1940 Olney Ave. Unit 100 Cherry Hill, NJ 08003 Business Description: The Debtor is a wholesaler of beer, wine, and distilled alcoholic beverage. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court District of New Jersey Case No.: 24-10327 Debtor's Counsel: Douglas G. Leney, Esq. ARCHER & GREINER, P.C. 1025 Laurel Oak Road Voorhees, NJ 08043 Tel: 215-246-3151 E-mail: dleney@archerlaw.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Jamie Queli as CEO. 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/U23LPSY/Forgotten_Boardwalk_Brewing_LLC__njbke-24-10327__0001.0.pdf?mcid=tGE4TAMA FRITOLANDIA Y ALGO: Seeks to Hire JPC Law Office as Attorney ------------------------------------------------------------ Fritolandia y Algo Mas seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ JPC Law Office as its attorney. Fritolandia requires JPC Law Office to: a. advise the Debtor with respect to its duties, powers and responsibilities in the case under the laws of the U.S. and Puerto Rico in which the debtor in possession conducts its operations; b. advise the Debtor in connection with a determination on whether a reorganization is feasible and if not, help the Debtor in the orderly liquidation of its assets; c. assist the Debtor with respect to negotiations with creditors for the purpose of achieving a reorganization or an orderly liquidation; d. prepare necessary complaints, answers, orders, reports, memoranda of law and any other legal paper or document required in the above captioned case; e. appear before the Bankruptcy Court or any other court in which the Debtor asserts a claim, interest or defense related to the bankruptcy case; f. perform such other legal services for debtor as may be required in the proceeding or in connection with the operation of the Debtor's business including, but not limited to, notarial services; and g. employ other professional services, if necessary. JPC Law Office will be paid at the hourly rate of $200. JPC Law Office will be paid a retainer in the amount of $7,283. JPC Law Office will also be reimbursed for reasonable out-of-pocket expenses incurred. Jose M Prieto Carballo, partner of JPC Law Office, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. JPC Law Office can be reached at: Jose M Prieto Carballo, Esq. JPC LAW OFFICE P.O. Box 363565 San Juan, PR 00936-3565 Tel: (787) 607-2066 E-mail: jpc@jpclawpr.com About Fritolandia y Algo Mas Fritolandia y Algo Mas sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 24-00029) on Jan. 9, 2024, listing $50,001 to $100,000 in assets and $100,001 to $500,000 in liabilities. Jose M. Prieto Carballo, Esq., at JPC Law Office, serves as counsel to the Debtor. FROGGY FLATS: A SARE Debtor, Says Opportunity Bank -------------------------------------------------- Opportunity Bank of Montana objects to the Disclosure Statement for Plan of Liquidation filed by Froggy Flats, LLC on November 15, 2023. Opportunity Bank is a secured creditor in the case. Opportunity Bank timely filed its proof of claim on Nov. 11, 2023. Opportunity Bank has a perfected first-position security interest in the real property of the Debtor. In addition to the Deed of Trust, Opportunity Bank is secured by an assignment of rents and a commercial security agreement. As of the Petition Date, Opportunity Bank was owed $477,656. Opportunity Bank points out that the Plan lacks adequate information pursuant to 11 U.S.C. Sec. 1125. Although this Plan calls for the liquidation of the Debtor's real property, the deadline for the liquidation does not run until June of 2026. During the intervening years, the Debtor intends to, as its main objective, lease the property to East Glacier Motel Management, LLC who will operate the property as a motel. The Plan provides no information, whatsoever, about East Glacier Motel Management, LLC's financial condition or qualifications to operate and manage the property. It is unclear what resources, if any, East Glacier Motel Management, LLC, will contribute to the operations of the facility. Additionally, the plan does not identify what action, if any, the Debtor will take if East Glacier Motel Management, LLC, fails to make required lease payments. Given the close family relationship between the Lessor and Lessee it is very likely that Lessor will take no action to enforce the legal obligations of the Lessee in the event of Lessee's default. Opportunity Bank further points out that the proposed Plan cannot be confirmed without amendment. The Debtor in this case is a Single Asset Real Estate ("SARE") Debtor pursuant to 11 USC Sec. 101(51B). The Debtor qualifies as a SARE Debtor because (1) the real property owned by the Debtor consists of a single property or project; (2) substantially all of the Debtor's gross income is derived from leasing the real property; and (3) the Debtor is not involved in any other business other than operating the real property. The Debtor did not disclose in its petition that it is a SARE Debtor. Opportunity Bank intends to make a motion consistent with 11 USC 101(51B) to have Debtor designated as a SARE Debtor. * Typically, hotel operators are not considered SARE debtors. However, in the instant case, the Debtor does not operate a hotel. The Debtor is a Lessor under a single lease from which all or substantially all of its income is derived. The fact that the Lessee, East Glacier Motel Management, LLC, is a hotel operator is irrelevant. Attorneys for Creditor: Burt W. Ward, Esq. JACKSON, MURDO & GRANT, P.C. 203 N. Ewing St. Helena, MT 59601 Tel: (406) 513-1123 Fax: (406) 443-7033 E-mail: bward@jmgattorneys.com About Froggy Flats Froggy Flats, LLC, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mont. Lead Case No. 23-40050) on July 18, 2023. In the petition signed by William H. Stewart, member, the Debtor disclosed up to $1 million in both assets and liabilities. Judge Benjamin P. Hursh oversees the case. Gary S. Deschenes, Esq., at Deschenes & Associates Law Offices, serves as the Debtor's counsel. FROGGY FLATS: U.S. Trustee Says Plan Disclosures Deficient ---------------------------------------------------------- The Acting United States Trustee objects to Froggy Flats, LLC's Disclosure Statement for Plan of Liquidation, dated November 15, 2023. The UST points out that the Disclosure Statement and Plan, like the business, have difficulty discerning and communicating their true nature. There are two characterization-related issues in the Disclosure Statement and the Plan of Liquidation Dated Nov. 15, 2023 that warrant finding the Disclosure Statement does not contain adequate information. First, the Disclosure Statement and Plan are internally inconsistent as to whether Debtor's Plan is a liquidation or a reorganization plan. Second, the Debtor mischaracterizes the nature of its business throughout the Disclosure Statement, giving an inaccurate and inadequate picture of the Debtor's future financial health. The UST further points out that the Disclosure Statement does not provide adequate information regarding Debtor's ability to operate through the date of the Real Property sale: * Debtor's Plan, at least as stated in the Disclosure Statement and Plan, is designed to sell certain real property and motel furnishings to fund payments to Debtor's creditors. Though the Disclosure Statement identifies the real property as being located at 1107 MT Highway 49, East Glacier Park, Montana (the "Real Property"), the Plan simply refers to the Real Property as "Debtor's real property" throughout. The description in the Plan should be updated to include a more precise description of the Real Property and to eliminate the need for reference to the Disclosure Statement to interpret the Plan. * Per the Disclosure Statement and Plan, the Real Property will be marketed for just under two years, until September 30, 2025. If the Real Property has not sold by that time, an auctioneer will be engaged, and the Real Property will be auctioned by no later than June 15, 2026. Debtor will not pay any of its creditors, except for minimum payments to the Glacier County Treasurer (Class II), in the interim. Id. The Disclosure Statement and Plan, then, seek to have creditors wait for up to roughly two-and-a-half years to be paid, with the ultimate value of the sale being dependent on the Debtor's business continuing as a going concern at that time. See id. at 10 (indicating that, if the business closes, such "will decrease the likelihood of sale of the building if not negate any possibility of sale."). The UST asserts that the Liquidation Analysis' assumptions result in unreliable liquidation values: * There are at least two assumptions built into that language that likely skew the liquidation analysis, making it unreliable for "adequate information" purposes. * First, Debtor assumes the Chapter 7 trustee's fee would be 25% of some, unspecified, amount. The amount of a Chapter 7 trustee's fee in any hypothetical Chapter 7 case, however, would be based on the formula identified in § 326(a). Pursuant to that formula, only a Chapter 7 trustee's fee on the first $5,000 of moneys she disburses is calculated at a 25% rate. s 326(a). The fee is 10% on the next $45,000 disbursed by the trustee and 5% on the next $950,000 disbursed after that. Finally, the Chapter 7 trustee's fee is capped at 3% on any money disbursed over $1,000,000. The Chapter 7 trustee would not receive a flat "25% fee," then; her fees would be some lesser amount if Debtor's Liquidation Analysis calculated the trustee's fee as a straight 25% of all moneys disbursed. * Second, the UST questions the assumption that a Chapter 7 Trustee would close the Debtor's business. The business consists solely of receiving rent from a single lessee and then paying mortgages, real property taxes, and real property insurance premiums out of that rent. Debtor's business would not be difficult for a Chapter 7 Trustee to operate or present much liability to a Chapter 7 estate. As such, the Disclosure Statement's assumption that a Chapter 7 estate would only receive a distressed sale value for the Real Property may result in an unreasonably low calculation. According to UST, the Plan's Liquidation Analysis' values do not match real estate listings. Per the listings reviewed by the UST, the Real Property's "asking price" is $2,150,000. This is consistent with a representation by Debtor at its § 341 meetings of creditors that the Real Property had been listed for $2.1 million. Recognizing a real estate listing asking price is not necessarily determinative of fair market value, the nearly $1.5 million discrepancy between the Disclosure Statement's/Plan's valuation and the real estate asking price suggests the figures in the Liquidation Analysis are inadequate and do not provide parties adequate information. At the very least, if Debtor is actively marketing the Real Property for $2,150,000, it should say so in the Disclosure Statement so parties may consider that information while evaluating the Plan. The UST points out that the Disclosure Statement's reference to "disposable income" appears out of place in a non-Subchapter V Plan. Though the value of disposable income is a factor in determining whether a plan discriminates unfairly and is fair and equitable to non-accepting impaired unsecured creditor classes in a Sec. 1191(b) (non-consensual) Subchapter V plan cram-down context, disposable income does not play a similar (or any) role in a non-Subchapter V case. The reference to "disposable income," then, could be confusing to parties in the non-Subchapter V context. If Debtor has a purpose for including the disposable income language in the Disclosure Statement and Plan, it should specify what that purpose is. If the language is simply a holdover from another debtor's plan and does not apply to this non-Subchapter V case, it should be removed from the Disclosure Statement and Plan. The UST further points out that the Disclosure Statement and Plan do not disclose the identity of the Debtor's post-confirmation officers, directors, members, and/or insider employees (s 1129(a)(5)). The Disclosure Statement and Plan do not disclose the identity of any post-confirmation officers, directors, members, or insider employees. The Disclosure Statement and Plan appear to contemplate Debtor will continue to operate for up to roughly two-and-a-half years postconfirmation, until the Real Property and motel furnishings are sold. It is anticipated someone will be acting in the capacity of a member, officer, or director during that period. If so, those parties' identities, affiliations, and/or compensation must be disclosed under Sec. 1129(a)(5). About Froggy Flats Froggy Flats, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mont. Lead Case No. 23-40050) on July 18, 2023. In the petition signed by William H. Stewart, member, the Debtor disclosed up to $1 million in both assets and liabilities. Judge Benjamin P. Hursh oversees the case. Gary S. Deschenes, Esq., at Deschenes & Associates Law Offices serves as the Debtor's counsel. FWAK LLC: U.S. Trustee Unable to Appoint Committee -------------------------------------------------- The U.S. Trustee for Region 18 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of FWAK LLC. About FWAK LLC FWAK, LLC, a company in Seattle, Wash., filed its voluntary petition for Chapter 11 protection (Bankr. W.D. Wash. Case No. 23-12376) on Dec. 7, 2023, with as much as $1 million to $10 million in both assets and liabilities. Anne Marie Kreidler, managing member, signed the petition. Judge Marc L. Barreca oversees the case. Wenokur Riordan, PLLC serves as the Debtor's legal counsel. GALLERIA PAIN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Galleria Pain Physicians, PLLC 6700 West Loop South, #225, Bellaire, TX 77401 Business Description: Galleria Pain is a provider of health care services in Texas. Chapter 11 Petition Date: January 11, 2024 Court: United States Bankruptcy Court Southern District of Texas Case No.: 24-30130 Debtor's Counsel: Matthew E. McClintock, Esq. GOLDSTEIN & MCCLINTOCK LLLP 111 W Washington Street Suite 1221 Chicago, IL 60602 Tel: (312) 337-7700 Fax: (312) 277-2305 Email: mattm@goldmclaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Brent Callister as authorized representative. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OFNXG3I/Galleria_Pain_Physicians_PLLC__txsbke-24-30130__0001.0.pdf?mcid=tGE4TAMA GRACE YOUTH: Hearing on Sale of Butler Property Set for Jan. 30 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania is set to hold a hearing on Jan. 30 on the proposed sale of Grace Youth and Family Foundation's real property. Gary Neff, a resident of Butler, Pa., offered $130,000 for the property located at 420-430 McKean St. and 118 E. Quarry St., Butler, Pa. The property is being sold "free and clear" of liens, claims and encumbrances. The sale is not subject to a financing contingency. The sale of the property will fund Grace Youth's plan of reorganization and all creditors, with the exception of the subordinated claim of William Halle, are anticipated to be paid in full from the proceeds, according to Grace Youth's attorney, David Fuchs, Esq., at Fuchs Law Office, LLC. About Grace Youth Grace Youth and Family Foundation filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-21068) on May 18, 2023, with as much as $50,000 in assets and $500,001 to $1 million in liabilities. William Krieger, managing director at Gleason, has been appointed as Subchapter V trustee. Judge Deller oversees the case. The Debtor is represented by David L. Fuchs, Esq., at Fuchs Law Office, LLC. GRIES ASSOCIATES: Wins Cash Collateral Access on Final Basis ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Gries & Associates, LLC to use cash collateral on a final basis in accordance with the budget, with a 10% variance. CloudFund, Wynwood Capital, Global Funding Experts, Everest Business Funding, Smart Business, and Ultra Funding assert an interest in the Debtor's cash collateral. As adequate protection for the use of cash collateral, all creditors are credited replacement liens on all post-petition cash collateral and post-petition acquired property to the same extent, validity, and priority they possessed as of the Petition Date. The Replacement Liens will be deemed automatically valid and perfected with such priority as provided in the Order without any further notice or act by any party that may otherwise be required under any other law. Other holders of allowed secured claims with a perfected security interest in cash collateral will be entitled to a replacement lien in postpetition accounts receivable, contract rights, and deposit accounts to the same extent allowed and in the same priority as those interests held as of the Petition Date. As additional adequate protection the Debtor will segregate an additional $2,500 per month from operations in the event that a replacement lien does not provide sufficient adequate protection and a secured creditor requires further adequate protection. Such funds will be maintained in the Debtor in possession account. The Debtor will maintain insurance on all tangible assets of the estate and will provide written evidence of same to the United States Trustee. The adequate protection liens in cash collateral are subject in all respects to the carve out in an amount equal to the sum of (i) all fees required to be paid Subchapter V Trustee, or the United States Trustee under Section 1930(a) of title 28 of the United States Code plus interest at the statutory rate; (ii) all reasonable fees, costs, and expenses incurred by a trustee under Section 726(b) of the Bankruptcy Code; and (iii) to the extent allowed by the Court on an interim or final basis at any time, all unpaid fees, costs, and expenses of the professionals retained by the Debtor under 11 U.S.C. Section 327. A copy of the court's order is available at https://urlcurt.com/u?l=9cMizS from PacerMonitor.com. About Gries & Associates, LLC Gries & Associates, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-34224) on November 1, 2023. In the petition signed by Blaze Gries, owner, the Debtor disclosed up to $500,000 in both assets and liabilities. Judge Jeffrey P. Norman oversees the case. Robert C Lane, Esq., at the Lane Law Firm, represents the Debtor as legal counsel. H & H FAST: Seeks to Hire Bach Law Offices as Bankruptcy Counsel ---------------------------------------------------------------- H & H Fast Properties, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Bach Law Offices, Inc. as its counsel. The Debtor requires legal counsel to: (a) prepare a Chapter 11 plan and disclosure statement; (b) represent the Debtor in matters concerning negotiation with creditors; (c) examine and resolve claims filed against the estate; (d) prepare and prosecute adversary matters; and (e) represent the Debtor in matters before the bankruptcy court. The hourly rates of the firm's counsel are as follows: Paul M. Bach $425 Penelope N. Bach $425 The firm received an initial retainer in the amount of $5,500 including the filing fee of $1,738. Penelope Bach, Esq., an attorney at Bach Law Offices, disclosed in a court filing that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Penelope N Bach, Esq. BACH LAW OFFICES, INC. P.O. Box 1285 Northbrook, IL 60065 Telephone: (847) 564-0808 Facsimile: (847) 564-0985 Email: pnbach@bachoffices.com About H & H Fast Properties H & H Fast Properties, Inc., a Chicago-based company, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-16874) on December 18, 2023, with $1 million to $10 million in both assets and liabilities. Amanda Henderson, president, signed the petition. Judge Jacqueline P. Cox oversees the case. Paul M. Bach, Esq., at Bach Law Offices represents the Debtor as bankruptcy counsel. HARTMAN SPE: Unsecured Creditors Will Get 100% of Claims in Plan ---------------------------------------------------------------- Hartman SPE, LLC, filed with the U.S. Bankruptcy Court for the District of Delaware a Combined Disclosure Statement and Chapter 11 Plan dated January 8, 2024. The Debtor is a Delaware special purpose entity formed on July 19, 2018. As of the Petition Date, it held title to 35 Properties that included office, retail, and industrial properties with an estimated value of over $400 million. The Debtor is the sole owner of each Property. From the Petition Date to the date of this Combined Disclosure Statement and Plan, the Debtor sold 7 Properties for an aggregate, gross sales price of approximately $80.7 million. Sales will continue during the pendency of the Chapter 11 Case. On October 1, 2018, the Debtor closed on the Prepetition Loan in the principal amount of approximately $259 million. The Debtor, however, was unable to consummate the loan due to the improper cloud on title caused by the actions of Allen R. Hartman and the Hartman Minority Member that holds a 2.47% Interest in the Debtor. On March 20, 2023, the Hartman Minority Member and Allen R. Hartman filed Plaintiff's Original Petition in the District Court of Harris County Texas, commencing the State Court Lawsuit. The State Court Plaintiff's actions are particularly troubling since they were fully aware that the Prepetition Loan was in default and would mature on October 9, 2023. Despite this, the plaintiffs continued with their course of action, leaving the Debtor with no viable option other than to file for bankruptcy relief before the Prepetition Loan matured in order to preserve the purchase and sale agreements that were negotiated prior to the Petition Date. Because of this, in early September 2023, the Debtor's management team, together with its professionals, determined that a chapter 11 process that includes section 363 sales of property free and clear of all Liens, Claims, encumbrances, and other interests (including the cloud on title) was the best and most value maximizing path forward. Class 4 consists of Allowed General Unsecured Claims, including Intercompany Claims and Deficiency Claims. The allowed unsecured claims total $20,292,162. This Class will receive a distribution of 100% of their allowed claims. This Class is unimpaired. Except to the extent that a Holder of an Allowed General Unsecured Claim agrees to less favorable treatment, each Holder of an Allowed General Unsecured Claim shall, in exchange for full and final satisfaction, settlement, release, and discharge of such Claim, receive at the sole option of the Debtor either: * Payment in Cash in the full amount of an Allowed General Unsecured Claim plus interest on such Allowed General Unsecured Claim from the Petition Date to the date of payment at the Federal Judgment Rate, which payment shall occur on the later of (i) as soon as reasonably practicable after the Effective Date, but in no event later than 5 business days after the Effective Date (or if a General Unsecured Claim is Allowed after the Effective Date, on the date such General Unsecured Claim is Allowed or as soon thereafter as is reasonably practicable, but in no event later than 5 business days after such General Unsecured Claim is Allowed) or, (ii) if not then due, when such Allowed General Unsecured Claim is due in accordance with the terms and conditions of the particular transaction giving rise to such Allowed General Unsecured Claim; or * Such other treatment as would render such General Unsecured Claim otherwise Unimpaired pursuant to section 1124 of the Bankruptcy Code. Class 5 consists of Interest Holders. All Holders of Interests shall retain the Interests. Class 5 is Unimpaired, and all Holders of Class 5 Interest are conclusively deemed to accept this Combined Disclosure Statement and Plan and are not entitled to vote on this Combined Disclosure Statement and Plan. Distributions under this Combined Disclosure Statement and Plan will be funded from the Debtor’s Cash on hand, including funds from the Exit Facility, as of the Effective Date. Notwithstanding anything herein to the contrary, on the Effective Date, the Debtor shall establish and maintain a separate reserve account funded from Cash on hand and the Exit Facility in an amount of $20,292,162 (the "Class 4 Reserve"), which, for the avoidance of doubt, shall include interest on such Claims at Federal Judgment Rate from the Petition Date through the Effective Date. In addition, Debtor shall supplement the Class 4 Reserve on the first Business Day of each quarter following the Effective Date with additional accrued interest on the outstanding balance of the Class 4 Reserve. Separately, the Debtor may supplement the Class 4 Reserve from time-to-time as need to satisfy the Debtor's obligations under this Combined Disclosure Statement and Plan. Payments made to Allowed General Unsecured Claims shall be funded by the Class 4 Reserve; provided, however, that the foregoing shall not be construed as a cap or limitation on the source of funds payable to Holders of Allowed General Unsecured Claims. For the avoidance of doubt, the funds in the Class 4 Reserve shall be used solely to fund payments on account of Allowed General Unsecured Claims. Upon full satisfaction of Allowed General Unsecured Claims, the Class 4 Reserve may be closed, and the remaining funds paid to the Reorganized Debtor. A full-text copy of the Combined Disclosure Statement and Plan dated January 8, 2024 is available at https://urlcurt.com/u?l=cn3hbs from PacerMonitor.com at no charge. Counsel to the Debtor: William E. Chipman, Jr., Esq. Mark D. Olivere, Esq. CHIPMAN BROWN CICERO & COLE, LLP Hercules Plaza 1313 North Market St., Suite 5400 Wilmington, DE 19801 Tel: (302) 295-0191 Fax: (302) 295-0199 Email: chipman@chipmanbrown.com olivere@chipmanbrown.com -and- John E. Mitchell, Esq. Michaela C. Crocker, Esq. Yelena E. Archiyan, Esq. KATTEN MUCHIN ROSENMAN LLP 2121 North Pearl St., Suite 1100 Dallas, TX 75201 Tel: (214) 765-3600 Fax: (214) 765-3602 Email: john.mitchell@katten.com michaela.crocker@katten.com yelena.archiyan@katten.com . About Hartman SPE LLC Hartman SPE, LLC is a lessor of nonresidential buildings. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-11452) on Sept. 13, 2023. In the petition signed by David Wheeler, president, the Debtor disclosed up to $500 million in both assets and liabilities. Judge Mary F. Walrath oversees the case. Katten Muchin Rosenman LLP is the Debtor's legal counsel, and and Chipman Brown Cicero & Cole, LLP, is the Debtor's Delaware counsel. Epiq Corporate is the claims agent and administrative advisor. The Official Committee of Unsecured Creditors formed in the case tapped Fox Rothschild LLP as counsel, and Phoenix Management as financial advisor. HEALTHCHANNELS INTERMEDIATE: Moody's Cuts PDR to 'D-PD' ------------------------------------------------------- Moody's Investors Service downgraded HealthChannels Intermediate Holdco, LLC Probability of Default Rating to D-PD from Caa1-PD. Concurrently, Moody's downgraded the Corporate Family Rating to Caa3 from Caa1, the senior secured 1st lien term loan rating to Caa3 from Caa1 and changed the outlook to stable from negative. Moody's downgraded the PDR to D-PD as the rating agency considers recent term loan repurchases at a deep discount to par as a distressed exchange and therefore a default under Moody's definitions. Moody's will upgrade HealthChannels PDR to Caa3-PD in three business days. The rating action follows HealthChannels repurchases of the company's term loan at a deep discount to par, which Moody's views as a distressed exchange and thus a default. On a year-to-date basis through September 30, 2023, HealthChannels has repurchased approximately $19 million of its senior secured term loan (the company is mandated to repay 1 percent or approximately $3.5 million of term loan per year). The downgrade of HealthChannels ratings reflects Moody's view that the probability of another default remains high as refinancing risk remains elevated. Moody's expects continued pressure on the company's operating performance as the April 2025 maturity date for the senior secured term loan approaches. Social and governance risks are key drivers in this rating action. In terms of governance risks, continued term loan repurchases at a deep discount to par are considered a distressed exchange and therefore a default, which has negative implications for creditors as it relates to financial strategy and risk management. Social risks are prevalent as the need for scribes will be a challenge for the company with ongoing changes in demographic and societal trends. RATINGS RATIONALE HealthChannels' Caa3 Corporate Family Rating reflects the company's very narrow focus on the medical scribe industry. The ratings also reflect HealthChannels' high gross financial leverage with debt/EBITDA of approximately 7 times for the last twelve month period ended September 30, 2023. Moody's expects HealthChannels' gross financial leverage to remain elevated at approximately 7 times in the next 12 to 18 months. The company has moderate scale with revenues of approximately $250 million. HealthChannels is subject to customer concentration given that, while spread across multiples sites and markets, the company's top five customers account for over one-quarter of its revenues. The ratings are supported by HealthChannels market leading position within the medical scribe industry. HealthChannels ratings are also supported by its variable cost structure, which provides flexibility. Moody's expects HealthChannels to maintain a weak liquidity position over the next 12 months, assuming no further discretionary debt repurchases. As of September 30, 2023, HealthChannels has approximately $59 million of cash on hand. HealthChannels generates minimal free cash flow, especially in a higher interest rate environment. Moody's expects HealthChannels to generate slightly negative free cash flow in the next 12 months, which includes mandatory term loan amortization of approximately $4 million. The company no longer has access to a revolving credit facility and faces an April 2025 maturity date on its term loan. HealthChannels' senior secured first lien credit facility, comprised of a $385 million term loan (of which approximately $330 million is outstanding as of September 30, 2023), is rated Caa3, equivalent to the company's Caa3 CFR given the first lien bank loan constitutes all of the company's debt. The stable outlook reflects Moody's expectation that financial leverage will remain high and that refinancing risks will remain present increasing the probability of default. ESG CONSIDERATIONS HealthChannels CIS-5 indicates that the rating for HealthChannels is lower than it would have been if ESG risk exposures did not exist and that the negative impact is more pronounced than for issuers scored CIS-4. HealthChannels scores reflect its aggressive financial strategy and risk management and the risks associated with board structure, the majority ownership by a private equity sponsor, and continued term loan repurchases at a deep discount to par. HealthChannels social risk score (S-4, previously S-3) reflects exposure to demographic and societal trends including the demand and need for scribes in the future with growing technology innovation in healthcare. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if the company defaults on its financial obligations. An upgrade of HealthChannels ratings is currently unlikely but could arise if the company successfully refinances its term loan, such that its liquidity improves and probability of default decreases. Headquartered in Fort Lauderdale, FL, HealthChannels provides medical scribing services to hospitals and physician staffing companies. HealthChannels is majority-owned by private equity firm Vesey Street Capital Partners, LLC. The company generates annual revenues of approximately $250 million. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. HELLO ALBEMARLE: Committee Taps Goldberg Weprin Finkel as Counsel ----------------------------------------------------------------- The official committee of unsecured creditors of Hello Albemarle LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Goldberg Weprin Finkel Goldstein LLP as its counsel. The firm will render these services: (a) coordinate and attend the meetings of the Committee; (b) review relevant information relating to the property; (c) assist in the efforts to sell the property in a manner that maximizes value for creditors; (d) review and investigate prepetition transactions in which the Debtor and/or its insider(s) were involved; (e) investigate the claims of the senior lender; (f) file appropriate pleadings, motions and memorandums of law on behalf of the Committee; and (g) perform such other legal services for the Committee as may be necessary or proper in this proceeding. Goldberg will charge these hourly rates: Partners $685 Associates $500 Paralegals $110 Kevin Nash, Esq., at Goldberg, disclosed in a court filing that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Kevin J. Nash, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN, LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212) 221-5700 Fax: (212) 221-6532 Email: KNash@gwfglaw.com About Hello Albemarle LLC JG Albemarle, LLC and six other creditors of Hello Albemarle, LLC filed an involuntary Chapter 11 petition (Bankr. E.D.N.Y. Case No. 23-41326) against the company on April 19, 2023. The creditors are represented by Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein, LLP. Judge Nancy Hershey Lord oversees the case. HILTON GRAND: Fitch Gives BB+ Rating on New Term Loan & Sec. Notes ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB+'/'RR2' rating to Hilton Grand Vacations Borrower LLC (HGV) proposed senior secured term loan B and senior secured notes guaranteed by Hilton Grand Vacations, Inc. Fitch has also affirmed the 'BB' Issuer Default Rating (IDR) of Hilton Grand Vacations, Inc. and Hilton Grand Vacations Borrower LLC, secured revolver and term loan at 'BB+'/'RR2', as well as unsecured notes at 'BB'/'RR4'. The Rating Outlook is Stable. The rating assignment follows the announcement by HGV that it plans to acquire Bluegreen Vacations Holding Corporation for $1.5 billion. Fitch believes the acquisition is beneficial in terms of adding scale, increased FCF, expanded member reach, and potential cost and revenue synergies. The debt-funded transaction will increase EBITDA leverage slightly above sensitivities; however, Fitch expects it will quickly decrease over the forecast horizon. KEY RATING DRIVERS Bluegreen Acquisition: HGV announced that it intends to acquire Bluegreen Vacations Holding Corporation (BVH) for $75/share, or $1.5 billion total enterprise value, in a 100% cash transaction. This implies a 6.0x multiple when run-rate cost synergies are included. The rationale for the sale includes increased size and scale that should lead to costs savings and lower cost of capital, expansion of HGV's member reach and growth profile, potential to accelerate new buyer growth by taking advantage of BVH's high quality lead flow, increased FCF from potential cost savings and revenues synergies, and the ability to rebrand BVH resorts with the HGV brand and further leverage the Hilton relationship. HGV plans to issue secured debt to fund the acquisition, which will increase EBITDA leverage slightly above Fitch's downgrade sensitivities. Fitch expects FCF will be used to reduce debt to bring leverage within sensitivities over time. HGV deleveraged rapidly following its acquisition of Diamond Resorts. Variation From Published Criteria: Since the September 2023 committee, Fitch has created a variation for timeshare companies. Fitch's Corporate Rating Criteria calls for deconsolidation of the company's financial services (FS) operations and assumes a hypothetical capital injection to achieve the target standalone capital structure. A variation from Fitch's Corporate Rating Criteria was made as Fitch-adjusted EBITDA now incorporates income earned from the company's FS operations. Fitch considers the cash generated by HGV's wholly owned consumer financing subsidiary, which flows up directly to HGV, to be accessible, stable and sustainable. Therefore, its inclusion better depicts the company's true operating position as this cashflow supports HGV's ability to service debt and finance its operations. Recovery Criteria Revision: In October 2023, Fitch released new Recovery Criteria that included a change in the definition of debt that would reduce the relative ranking of HGV's first lien secured debt. Fitch initially provided a two-notch uplift from the Issuer Default Rating (IDR) of 'BB' to 'BBB-' for HGV's senior secured debt. The new criteria revision only allows for a one-notch uplift to 'BB+'. FCF Growth Driving Deleveraging: Strong growth in HGV's EBITDA and FCF since 2021 resulted in debt reduction and improved leverage metrics. Fitch's EBITDA leverage declined to 2.8x in 2022 from 5.3x in 2021 and is expected to remain in the low mid-3x range during the forecast horizon. Fitch's leverage calculation includes an adjustment to ensure proper capitalization of the company's captive finance operations, which is zero for 2023, given the abundant timeshare receivable assets over securitize receivable debt. HGV has a company-defined public net adjusted EBITDA/debt target of 2.0x-3.0x. HGV's net leverage as of Sept. 30, 2023 was 2.8x. Resiliency in Downturn: Despite a 71% drop in net sales of vacation ownership interests (VOI) in 2020, HGV generated positive FCF from recurring revenue sources, including consumer financing, club management and rental and property management fees. Recurring revenue represented 42% of total revenue in 2Q23. Low capital spending and the ability to manage inventory on a just-in-time basis provide flexibility during a downturn. Timeshare receivables experienced a default rate of 8.9% in 2021 and 6.3% in 2020, and reached 6.0% during the global financial crisis. In a default, HGV typically retains ownership of the VOI, which it can rent or sell to another customer. Thus, loan losses are relatively low despite high default rates. In addition, the weighted average FICO score of 734 out of a potential of 850 as of Sept. 30, 2023 is considered by Fitch to be of good quality. Well Positioned in a Competitive Industry: HGV is a top three timeshare operator based on owner families, which provides economies of scale and facilitates third-party marketing relationships. HGV is well positioned within the high-end spectrum of the timeshare industry and has a diversified portfolio of vacation ownership brands. The integration of Diamond Resorts broadens HGV's addressable market through an expanded regional network in the U.S. as well as a wider range of products and price points. HGV has exclusive rights to the Hilton name for the timeshare business on a 100-year license and has access to 158 million members in the Hilton Honors program, one of the industry's strongest loyalty programs. Loyalty programs are crucial for chains like Hilton, as the programs drive repeat business, which translates into repeat selling opportunities in timeshares. DERIVATION SUMMARY HGV's ratings reflect its leading position in timeshares, its strong brand affiliation and network and its robust liquidity due to limited near-term debt maturities. The discretionary and cyclical nature of timeshare sales balance the ratings. HGV is one of the nation's largest timeshare operators, with approximately 519,000 members in its system. Travel + Leisure Co. (TNL; BB-/Stable) is the largest, with 816,000 owner families, followed by Marriott Vacations Worldwide (VAC) with 700,000. HGV generates higher EBITDA than VAC and TNL and has a stronger EBITDA-to-FCF conversion rate. HGV's revenue is less diversified than that of TNL and VAC, which own the Resorts Condominium International and Interval International timeshare exchange networks, respectively. HGV's EBITDA leverage of 2.0x-3.0x is in line with TNL and VAC. Under Fitch's Corporate Rating Criteria, regarding treatment for corporate issuers with captive finance subsidiaries, Fitch calculates an appropriate target debt-to-equity ratio for the finance subsidiary based on its asset quality, funding and liquidity. If the finance subsidiary's target debt-to-equity ratio, based on Fitch's calculations, is lower than the actual ratio, Fitch assumes that the parent injects additional equity into the finance subsidiary to bring the debt-to-equity ratio to the appropriate target level. Fitch assumes that the corporate entity (HGV) funds the capital injection by an increase in gross debt, a reduction in cash, or a combination of the two. On an as-reported basis, Fitch considers the effect of this equity injection in its analysis of HGV's credit profile vis-a-vis an increase in gross debt. For HGV's captive finance subsidiary, Fitch calculates an appropriate target debt-to-equity ratio of 1.0x, in line with the actual ratio. As a result, Fitch did not adjust its calculation of adjusted leverage for HGV. Given HGV's strong FCF profile, Fitch expects cash will accumulate through the forecast years, despite an assumption of share buybacks. HGV has maintained strong cash and cash equivalents, which provides ample liquidity to fund working capital requirements. KEY ASSUMPTIONS - Assumptions are not pro forma for the Bluegreen acquisition. - Revenue and net VOI sales pro forma for the Diamond acquisition reach approximately 100% of fiscal 2019 levels by 4Q23, with flat to low-single-digit growth in the forecast; - EBITDA margins maintained at 22%-23% through 2025; - Financing income and expense not included in EBITDA; - Base interest rates applicable to the company's outstanding variable rate debt obligations reflect SOFR forward curve; - Inventory spending of $200 million annually through 2026; - Share buybacks of $300 million annually through 2026; - No material acquisitions or dispositions through 2026. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Greater diversification by business line or scale through material increase in owner families; - Adjusted EBITDA leverage sustaining below 2.5x; - Evidence of through-the-cycle sustainability in the company's capital-light inventory sources such that it does not materially affect HGV's financial flexibility and operational strategy. Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA leverage above 3.5x; - Severe disruption in the asset-based securities markets such that HGV needs to provide material support to its captive finance subsidiary; - Material decline in profitability, leading to EBITDA margins sustaining around 15%; - Consistently negative FCF. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity, Limited Near-Term Maturities: At 3Q23, HGV had $227 million in cash and cash equivalents on hand, and $866 million of available capacity, net of letters of credits, under its $1.0 billion revolving credit facility. The strength of HGV's liquidity profile is driven by a lack of meaningful near-term debt maturities. HGV also has $308 million of restricted cash. Because HGV relies on the asset-backed securities market to help fund its timeshare customer lending activities, Fitch notes that a significant economic downturn resulting in tightened credit markets could pressure HGV's securitization market access and potentially require it to support its finance subsidiary. This risk is mitigated by the company's $750 million receivable securitization warehouse facility, which HGV upsized from $450 million in May 2022, which had $750 million of available borrowing capacity as of Sept. 30, 2023. HGV completed a $293 million securitization on Aug. 10, 2023 at an overall weighted average coupon of 5.94% and an advance rate of 97%. Proceeds will be used to repay debt and other general corporate purposes. ISSUER PROFILE Hilton Grand Vacations, Inc. (NYSE: HGV) is a global timeshare company that develops, sells and manages timeshare resorts under the Hilton Grand Vacations brand. Criteria Variation Variation explained in depth in Key Ratings Drivers. 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 ----------- ------ -------- ----- Hilton Grand Vacations Borrower LLC LT IDR BB Affirmed BB senior secured LT BB+ New Rating RR2 senior unsecured LT BB Affirmed RR4 BB senior secured LT BB+ Affirmed RR2 BB+ senior secured LT BB+ New Rating RR2 Hilton Grand Vacations Inc. LT IDR BB Affirmed BB HULL ORGANIZATION: Taps Durnil Realtors-Auctioneers as Broker ------------------------------------------------------------- Hull Organization, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Kentucky to employ Durnil Realtors-Auctioneers, Inc. d/b/b Tranzon Asset Advisors as its broker for the sale of real property and improvements commonly identified as 830 and 834 Ohio Pike (SR 125), Cincinnati, Clermont County, Ohio. The firm will receive a commission equal to 6 percent of sales price. Edward Durnil, broker with Durnil Realtors-Auctioneers, 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: Edward D. Durnil Durnil Realtors-Auctioneers, Inc. d/b/b Tranzon Asset Advisors 1108A N Dixie Hwy Elizabethtown, KY 42701 Phone: (270) 769-0284 About Hull Organization Hull Organization, LLC is primarily engaged in renting and leasing real estate properties. The Debtor filed Chapter 11 petition (Bankr. W.D. Ky. Case No. 23-32983) on Dec. 13, 2023, with $1 million to $10 million in both assets and liabilities. Robert E. Hull, member, signed the petition. Judge Alan C. Stout oversees the case. Tyler R. Yeager, Esq., at Kaplan Johnson Abate & Bird, LLP represents the Debtor as legal counsel. ICR GROUP: Case Summary & Five Unsecured Creditors -------------------------------------------------- Debtor: ICR Group LLC 199 Lee Avenue, Suite 675 Brooklyn, NY 11211 Business Description: The Debtor is primarily engaged in rental and leasing vehicles. Chapter 11 Petition Date: January 11, 2024 Court: United States Bankruptcy Court Eastern District of New York Case No.: 24-40151 Judge: Hon. Jil Mazer-Marino Debtor's Counsel: Robert J. Spence, Esq. SPENCE LAW OFFICE, P.C. 55 Lumber Road Suite 5 Roslyn, NY 11576 Tel: 516-336-2060 Fax: 516-605-2084 Email: rspence@spencelawpc.com Total Assets: $1,491,000 Total Liabilities: $2,248,805 The petition was signed by Isaac Birnhack, managing member AEZ Rent A Car LLC, sole member of Debtor. 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/46DAPSQ/ICR_Group_LLC__nyebke-24-40151__0001.0.pdf?mcid=tGE4TAMA INNVANTAGE GROUP: Plan Filing Deadline Extended to Jan. 22 ---------------------------------------------------------- Judge David D. Cleary has entered an order that pursuant to 11 U.S.C. 1189(b), the time by which Innvantage Group, Inc. must file its Plan of reorganization in this matter is extended to Jan. 22, 2024. In seeking the extension, Innvantage Group explained that the Debtor's principal, James Stivers, has recently suffered from a number of medical issues that have necessitated significant amounts of time away from the Debtor's operations. Those medical issues include atrial fibrillation as well as severe back/hip pain the cause of which has yet to be determined but may require surgery. As such, Mr. Stivers has been unable to assist counsel recently in the formulation and specifics of the Debtor's Plan of reorganization. Notwithstanding the foregoing, the Debtor's operations otherwise indicate that a feasible Plan is viable in this matter. Accordingly, the Debtor is expected to have sufficient income to fund its Plan of reorganization. Due to the unforseen issues with the health of its principal, the Debtor is in need of additional time to prepare and file its Plan in this matter, and accordingly requests that the Court allow it an additional five weeks, to Jan. 22, 2024, to file its Plan. The Debtor's Plan may be completed prior to that time, but makes this request out of an abundance of caution and considering the approaching holidays. Innvantage Group prays that the Court issue an order extending the date by which it must file its Plan of reorganization in this matter to Jan. 22, 2024, and further providing to the Debtor's favor all such relief as is just and equitable. Counsel for Debtor: Timothy C. Culbertson, Esq. P.O. Box 56020 Harwood Heights, IL 60656 E-mail: tcculb@gmail.com About Innvantage Group Innvantage Group, Inc., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-12352) on Sept. 18, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge David D. Cleary oversees the case. Timothy C. Culbertson, Esq., is the Debtor's legal counsel. INSTANT BRANDS: Unsecureds' Recovery "Unknown" in Plan ------------------------------------------------------ Instant Brands Acquisition Holdings Inc. and Its Debtor Affiliates filed with the U.S. Bankruptcy Court for the Southern District of Texas a Combined Disclosure Statement and Joint Chapter 11 Plan of Reorganization dated January 8, 2024. Instant Brands Acquisition Holdings Inc. is a privately owned company that is the ultimate parent of 14 direct or indirect subsidiaries. Instant Brands enjoyed a broad customer base and a diversified lineup of products, with major manufacturing and distribution operations in North America and Asia. As of the Petition Date, Instant Brands owned almost 1,300 trademarks and patents around the world, and licensed trademarks from many globally recognized companies, including Disney and Sanrio. The combination of challenges over the past three years put significant pressure on Instant Brands' businesses. High interest rates, combined with the recent softening in consumer demand, coupled with suppliers severely tightening credit terms and more retailers shifting from the direct import distribution model to the domestic warehouse model, strained Instant Brands' liquidity and made its capital structure untenable. The Debtors commenced the Chapter 11 Cases in order to fix the Company's balance sheet and improve its liquidity position. After an exhaustive marketing and sale process, the Bankruptcy Court entered the Order (A) Approving Sale of Substantially All of the Debtors' Assets Free and Clear of Liens, Claims, Interests, and Encumbrances, (B) Authorizing the Debtors To Enter into and Perform their Obligations under the Asset Purchase Agreements and Related Documents, (C) Authorizing the Assumption and Assignment of Certain Contracts and Leases, and (D) Granting Related Relief (the "Sale Order") approving the sales of all or substantially all of the Debtors' assets relating to each the appliances business and the housewares business (the "Appliances Sale Transaction" and the "Housewares Sale Transaction" and, the sale process leading up to the entry into the Appliances APA and the Housewares APA, including the marketing of the Debtors' assets and the auction process with respect thereto, the "Sale Process"). While the Appliances Sale Transaction closed on November 8, 2023, the Debtors and the Housewares Buyers were unable to obtain the requisite regulatory approvals for the Housewares Sale Transaction within the "Outside Date" set forth in the Housewares APA. As a result, the Debtors terminated the Housewares APA in accordance with its terms and the Debtors and the Ad Hoc Group of Crossover Lenders, in consultation with the Creditors' Committee, worked together to formulate this Plan to facilitate a reorganization of the Debtors' housewares business via, among other things, the equitization of the Class 3 Prepetition Term Loan Claims. The Plan is the outcome of extensive negotiations among the Debtors and certain of their key stakeholders—including Holders of over 95% of the Class 3 Prepetition Term Loan Claims (who are expected to ACCEPT the Plan) and the Creditors' Committee—and provides a framework for, among other things, a significant reduction of the Company's prepetition funded indebtedness and an operational restructuring of the Company's housewares business to further advance the Company's efforts in positioning itself for long-term success. In doing so, the Plan contemplates (a) the equitization of over $390 million of the Class 3 Prepetition Term Loan Claims into 100% of the New Equity Interests in the Reorganized Debtors and (b) the distribution of Litigation Trust Interests, 85% to Holders of Class 3 Prepetition Term Loan Claims and 15% to Holders of Allowed Class 4 General Unsecured Claims (with such percentages subject to dilution from the repayment of the Litigation Trust Financing), in a Litigation Trust created to investigate and pursue possible Causes of Action, including Causes of Action against the Debtors' former controlling shareholders and certain of their affiliates. The Plan also seeks to maintain the status quo in connection with the Debtors' (y) pre-assignment matured property rights arising out of the Third-Party Indemnifications and (z) Insurance Contracts. All other Classes of Claims held by third-party creditors would be left Unimpaired under the Plan, while the Holders of Existing Interests would receive no consideration. Upon the effectiveness of the Plan, unless otherwise left Unimpaired, the Plan provides for the full and final discharge of Claims against and Interests in the Debtors and customary exculpation and release of certain claims and Causes of Action against various Persons held by the Debtors, their Estates, and those third parties that grant consensual releases under the terms of the Plan. The Plan also provides for committed secured exit financing sufficient to fund the Debtors' emergence from bankruptcy (including the payment of all Allowed Administrative Claims (including DIP Superpriority Claims, Professional Fee Claims, U.S. Trustee Fees, and Information Officer Fees), Other Secured Claims, Priority Tax Claims, and Other Priority Claims) and to provide working capital required by the Reorganized Debtors' businesses at emergence. Class 4 consists of all General Unsecured Claims. Each Holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of 15% of the Litigation Trust Interests (the "GUC Litigation Trust Interests"). Distributions of Litigation Trust Asset proceeds in respect of the GUC Litigation Trust Interests shall be made. Class 4 is Impaired by the Plan. The allowed unsecured claims total $43,777,331. The estimated recovery for General Unsecured Claims is between 0% and an Unknown %, according to the Disclosure Statement. All Existing Interests shall be cancelled, released, extinguished, or otherwise eliminated and Holders of such Existing Interests shall not receive any Plan Distributions or retain any interest in property on account of such Existing Interests. On the Effective Date, a liquidating trust (the "Litigation Trust"), which shall be administered by the Litigation Trustee pursuant to the Plan (including the Litigation Trust Agreement), shall be established, or, to the extent already established with the agreement of the Debtors, the Ad Hoc Group of Crossover Lenders, and the Creditors' Committee, ratified in all respects for the benefit of the Litigation Trust Beneficiaries. The Litigation Trustee and any other signatories thereto shall execute the Litigation Trust Agreement and shall take all other steps necessary to establish the Litigation Trust pursuant to and consistent with the Plan (including the Litigation Trust Agreement). A full-text copy of the Combined Disclosure Statement and Plan dated January 8, 2024 is available at https://urlcurt.com/u?l=bL574L from Epiq Corporate Restructuring, LLC, claims agent. Counsel to the Debtors: Charles A. Beckham, Jr., Esq. Arsalan Muhammad, Esq. David A. Trausch, Esq. HAYNES AND BOONE, LLP 1221 McKinney Street, Suite 4000 Houston, TX 77010 Tel: (713) 547-2000 E-mail: charles.beckham@haynesboone.com arsalan.muhammad@haynesboone.com david.trausch@haynesboone.com - and - Brian M. Resnick, Esq. Steven Z. Szanzer, Esq. Joanna McDonald, Esq. DAVIS POLK & WARDWELL LLP 450 Lexington Ave. New York, NY 10017 Tel: (212) 450-4000 E-mail: brian.resnick@davispolk.com steven.szanzer@davispolk.com joanna.mcdonald@davispolk.com About Instant Brands Instant Brands designs, manufactures and markets a global portfolio of innovative and iconic consumer lifestyle brands: Instant, Pyrex, Corelle, Corningware, Snapware, Chicago Cutlery, ZOID and Visions. Instant Brands Holdings Inc. and Instant Brands Inc., and their affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90716) on June 12, 2023. In the petition signed by Adam Hollerbach, chief restructuring officer, the Debtors disclosed up to $1 billion in both assets and liabilities. Judge David R. Jones oversees the case. Davis Polk & Wardwell LLP's Brian M. Resnick, Steven Z. Szanzer and Joanna McDonald serve as counsel to the Debtors. The Debtors also tapped Haynes and Boone, LLP as Texas counsel, Stikeman Elliott LLP as Canadian counsel, AlixPartners, LLP as financial advisor, Guggenheim Securities LLC as investment banker, and Epiq Corporate Restructuring, LLC as claims, noticing, agent, solicitation and administrative advisor. DLA Piper LLP (US) serves as counsel to the Official Committee= of Unsecured Creditors. Ropes & Gray LLP serves as counsel to the DIP Lenders, and Moelis & Company LLC and Ankura Consulting Group, LLC act as advisors to the Term DIP Secured Parties. Skadden, Arps, Slate, Meagher & Flom LLP and Norton Rose Fulbright and Norton Rose Fulbright Canada LLP serve as counsel and FTI Consulting as financial advisor to the ABL DIP Secured Parties. Kramer Levin Naftalis & Frankel LLP serves as counsel to Cornell Capital. INTEGRITY TIRE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Integrity Tire, LLC Attn: Jesse Zimmerman, President 93 Saulsbury Road Camden Wyoming, DE 19934 Business Description: Integrity Tire is a wheel and tire sales and service shop, located in Dover, Delaware. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court District of Delaware Case No.: 24-10038 Judge: Hon. Laurie Selber Silverstein Debtor's Counsel: Adam Hiller, Esq. HILLER LAW LLC 300 Delaware Avenue Suite 210, #227 Wilmington DE 19801 Tel: (302) 442-7677 Email: ahiller@adamhillerlaw.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Jesse Zimmerman as president. 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/ILXGSYA/Integrity_Tire_LLC__debke-24-10038__0001.0.pdf?mcid=tGE4TAMA J. MICHAEL SMITH: Hires Levis Law Firm as Bankruptcy Counsel ------------------------------------------------------------ J. Michael Smith Construction, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Georgia to employ Levis Law Firm, LLC as its counsel. The firm will render these services: (a) advise the Debtor with respect to its powers and duties; (b) prepare legal papers; (c) prepare pleadings and applications and conduct examinations incidental to the estate's administration; (d) take any and all necessary action to the proper preservation and administration of the estate; (e) assist the Debtor with the preparation and filing of a statement of affairs and schedules as appropriate; and (f) perform all other legal services for the Debtor. The firm received a retainer of $25,000. The hourly rates of the firm's counsel and staff are as follows: Attorneys $350 Paralegals $90 The firm received a retainer in the amount of $5,000. Jon Levis, Esq., a member at Levis Law Firm, 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: Jon A. Levis, Esq. LEVIS LAW FIRM, LLC Post Office Box 129 Swainsboro, GA 30401 Telephone: (478) 237-7029 Email: levis@merrillstone.com About J. Michael Smith Construction J. Michael Smith Construction, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No. 24-40005) on Jan. 2, 2024, listing up to $50,000 in assets and $50,001 to $100,000 in liabilities. Jon A. Levis, Esq. at the Levis Law Firm, LLC represents the Debtor as counsel. JERSEY WHOLESALE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Jersey Wholesale Tire Corporation 3143 Bordentown Avenue Bldg 7 Parlin NJ 08859 Business Description: The Debtor is a merchant wholesaler of motor vehicle and motor vehicle parts and supplies. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court District of New Jersey Case No.: 24-10343 Debtor's Counsel: Donald F. Campbell, Jr., Esq. GIORDANO, HALLERAN & CIESLA, P.C. 125 Half Mile Road Suite 300 Red Bank NJ 07701-6777 Tel: (732) 741-3900 Email: dcampbell@ghclaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Tortajada as CEO. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/QSEWG7Q/Jersey_Wholesale_Tire_Corporation__njbke-24-10343__0001.0.pdf?mcid=tGE4TAMA JPM SUTTON: Unsecureds to Get 25 Cents on Dollar in Plan -------------------------------------------------------- JPM Sutton LLC filed with the U.S. Bankruptcy Court for the Southern District of New York a Plan of Reorganization for Small Business dated January 8, 2024. Since 2020, the year operations commenced, the Debtor has been in the restaurant business. Debtor serves pizza and other Italian foods and provides both sitdown and takeout dining. Like many restaurants, Debtor's business was severely negatively affected as a result of the COVID pandemic. As a result of the pandemic, Debtor was required to be closed for a significant length of time. Currently, Debtor's business has rebounded and along with reductions in its labor expenses and increasing sitdown and take sales, Debtor believes that is and will be able to propose and carryout a success plan of reorganization. The Plan Proponent's projections show that the Debtor will have projected disposable income of $480,600.00. The final plan payment is expected to be paid on February 7, 2027. This Plan of Reorganization proposes to pay creditors of the Debtor from cash flow from operations. Class 3 consists of non-priority unsecured creditors. Creditor claims in this class will be impaired and receive about 25 cents on the dollar, in monthly cash payments during the 3-year period of the plan. The allowed unsecured claims total $354,788.00. The interests of Equity security holders of the Debtor will not be impaired and they will retain their current amount of equity interest in the Debtor. A full-text copy of the Plan of Reorganization dated January 8, 2024 is available at https://urlcurt.com/u?l=oHRyaW from PacerMonitor.com at no charge. About JPM Sutton JPM Sutton LLC, doing business as Coco Pazzeria, has been in the restaurant business since 2020. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. N.Y. Case No. 23-11615) on Oct. 10, 2023, with up to $50,000 in assets and $500,001 to $1 million in liabilities. Judge Lisa G. Beckerman oversees the case. Arthur A. Luger, Esq. represents the Debtor as legal counsel. JUBILEE INVESTMENTS: Creditors to Get Proceeds From Liquidation --------------------------------------------------------------- Jubilee Investments, LLC, filed with the U.S. Bankruptcy Court for the District of Arizona a Plan of Liquidation dated January 8, 2024. The Debtor is a Limited Liability Company registered in the State of Nevada. In 2005, Debtor acquired 3 parcels of real property, located on Acorn Drive in Kingman, Arizona (the "Properties"). At the time of acquisition, the parcels were raw land. Debtor's Manager, Renee Hurdle, oversaw the construction project and has since actively managed the Properties. Debtor's 3 mortgage accounts with the lender on the Properties, Zions Bancorporation, N.A., are delinquent. Zions scheduled Trustee's Sales of the Properties in 2023, and this bankruptcy case followed. This is a liquidating plan; the Debtor is not a going concern and does not intend to resume operations. Debtor is proposing to liquidate all 3 of the parcels of real property it owns, and to pay the related mortgage and property tax obligations in full upon the sale of each property. Debtor has no other pre petition creditors. The Properties are currently occupied by tenants, who are aware the homes will soon be marketed and sold. Debtor expects the properties will be sold within the next 1-4 months. This Plan of Liquidation proposes to pay creditors of the Debtor from the sale of assets. This Plan also provides for the payment of administrative and priority claims. Debtor does not believe any creditors hold priority tax claims against the Bankruptcy Estate, and no such Proofs of Claim have been filed. Similarly, Debtor does not believe any creditors hold non-priority general unsecured claims against the Bankruptcy Estate, and no such Proofs of Claim have been filed. Class 3 consists of Non-priority unsecured creditors. Non-priority unsecured creditors (if any) will be paid in full within 60 days after the Effective Date. Debtor knows of no creditors asserting a non-priority unsecured claim and no such Proofs of Claim have been filed. Membership in the Debtor shall remain unchanged. Debtor is proposing to liquidate all of its assets and pay all allowed claims in full from the proceeds of sale. Debtor has obtained the Court's permission to employ a real estate broker. Debtor's Real Estate Broker is working to confirm the square footage of the homes (there is a discrepancy between County Assessor records and previous MLS listings, which he expects will be resolved by January 19, 2024). Immediately thereafter, Debtor's Broker will list the 3 parcels of real property for sale on the Multiple Listing Service. A full-text copy of the Liquidating Plan dated January 8, 2024 is available at https://urlcurt.com/u?l=LUlYLu from PacerMonitor.com at no charge. About Jubilee Investments Jubilee Investments, LLC is a Limited Liability Company registered in the State of Nevada, which acquired 3 parcels of real property, located on Acorn Drive in Kingman, Arizona (the "Properties"). The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Ariz. Case No. 23-07159) on Oct. 9, 2023, with $500,001 to $1 million in both assets and liabilities. Judge Paul Sala oversees the case. German Yusufov, Esq., at Yusufov Law Firm, PLLC represents the Debtor as legal counsel. KM DOVER: Case Summary & Five Unsecured Creditors ------------------------------------------------- Debtor: KM Dover LLC 200 Reservoir Street, Suite 202 Needham Heights, MA 02494 Business Description: KM Dover is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 11, 2024 Court: United States Bankruptcy Court District of Massachusetts Case No.: 24-10053 Debtor's Counsel: Jesse Redlener, Esq. ASCENDANT LAW GROUP, LLC 2 Dundee Park Drive Suite 102 Andover, MA 01810 Email: jredlener@ascendantlawgroup.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kenton Chase as manager. 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/7O2WOZY/KM_Dover_LLC__mabke-24-10053__0001.0.pdf?mcid=tGE4TAMA LAKEVILLE FARMS: Gets OK to Hire RJ Montgomery as Appraiser ----------------------------------------------------------- Lakeville Farms LLC received approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to hire RJ Montgomery & Assoc., Inc. as its appraiser. The firm will appraise the Debtor's machinery, equipment, tools and vehicles. RJ Montgomery will charge a flat fee of $750 to cover time for research and to prepare the appraisal report. Richard J. Montgomery assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estate. RJ Montgomery can be reached at: Richard J. Montgomery R.J. MONTGOMERY & ASSOC., INC. 695 Amelia Street Plymouth, MI 48170 Tel: (734) 459-2323 Fax: (734) 459-2524 About Lakeville Farms, LLC Lakeville Farms, LLC specializes in the manufacture and distribution of kiln dried cooking wood and firewood. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-47202) on August 17, 2023. In the petition signed by Todd Jagiello, member, the Debtor disclosed $538,000 in total assets and $1,893,064. Judge Thomas J. Tucker oversees the case. Aaron J. Scheinfield, Esq., at Goldstein Bershad & Fried PC, represents the Debtor as legal counsel. LATIGO PROPERTIES: Michael Colvard Named Subchapter V Trustee ------------------------------------------------------------- The U.S. Trustee for Region 7 appointed Michael Colvard as Subchapter V trustee for Latigo Properties, Inc. Mr. Colvard will charge $400 per hour for his services as Subchapter V trustee and will seek reimbursement for work-related expenses incurred. Mr. Colvard 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 Colvard Weston Centre 112 East Pecan St., Ste. 1616 San Antonio, TX 78205 Email: mcolvard@mdtlaw.com Telephone: (210) 220-1334 About Latigo Properties Latigo Properties, Inc., doing business as The Latigo Group, is primarily engaged in renting and leasing real estate properties. The company is based in San Antonio, Texas. Latigo Properties filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Texas Case No. 24-50003) on Jan. 1, 2024, with $1 million to $10 million in assets and $500,000 to $1 million in liabilities. David B. Brigham, president, signed the petition. William B. Kingman, Esq., at the Law Offices of William B. Kingman represents the Debtor as bankruptcy counsel. LEFT TURN: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Left Turn, LLC f/d/b/a Aria Retirement and Investment Services, LLC 6975 Union Park Avenue Suite 600 Cottonwood Heights, UT 84047 Business Description: The Debtor is engaged in activities related to real estate. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court District of Utah Case No.: 24-20129 Judge: Hon. Peggy Hunt Debtor's Counsel: George B. Hofmann, Esq. COHNE KINGHORN, P.C. 111 E. Broadway, 11th Floor Salt Lake City, UT 84111 Tel: 801-363-4300 Fax: 801-363-4378 Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Scott Smithson as manager. 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/FR3EFWY/Left_Turn_LLC__utbke-24-20129__0001.0.pdf?mcid=tGE4TAMA LEON INDUSTRIES: Seeks to Use Cash Collateral --------------------------------------------- Leon Industries, LLC d/b/a US Glove Supply asks the U.S. Bankruptcy Court for the Western District of New York for authority to use cash collateral and provide adequate protection. As of the Petition Date, the Debtor was indebted to the following who is the only party that holds or may claim an interest in cash collateral: 1. M&T Bank (i) in the amount of approximately $2.2 million, pursuant to an Amended and Restated Note dated March 15, 2023 in the original principal amount of $2.120 million and Loan Agreement dated August 19, 2022 and (ii) in the amount of approximately $400,000, pursuant to a Business Access Line of Credit Note dated August 19, 2022 in the original principal amount of $400,00, the exact amounts of which are subject to review by the Debtor, the United States Trustee, or any other party in interest. The Debtor submits that M&T Bank currently holds a valid and perfected first lien against all of the Debtor's personal property, including all proceeds, as evidenced by certain UCC-1 Financing Statements filed on or about August 19, 2022 with the New York State Department of State. M&T Bank has consented to the Debtor's use of cash collateral pursuant to the budget, which covers the period from the Petition Date through March 20, 2024. As adequate protection, M&T Bank will be granted roll-over or replacement liens granting security to the same extent and with respect to the same assets as served as collateral for the Prepetition M&T Bank Lien, to the extent the cash collateral is actually used, without the need of any further recordation to perfect such liens or security interests. M&T Bank will also be granted monthly cash payments in the amounts of $3,700 and $20,000 on or before the 25th day and 1st day of each month, respectively. A copy of the motion is available at https://urlcurt.com/u?l=x3Of8l from PacerMonitor.com. About Leon Industries LLC Leon Industries LLC owns and operates a nitrile glove manufacturing facility in New York. The Debtor sought protection under Chpater 11 of the U.S. Bankruptcy Code (Bankr. W.D. N.Y. Case No. 23-11203) on December 13, 2023. In the petition signed by Jacomo Hakim, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Carl L. Bucki oversees the case. Arthur G. Baumeister, Jr., Esq., at BAUMEISTER DENZ LLP, represents the Debtor as legal counsel. LIVINGSTON TOWNSHIP: Seeks to Hire Heritage Real Estate as Realtor ------------------------------------------------------------------ Livingston Township Fund One, LLC filed an amended application seeking approval from the U.S. Bankruptcy Court for the Southern District of Mississippi to employ Christine Greenlee at Heritage Real Estate, LLC as real estate broker. The firm will market and sell the Debtor's real property located at 115 Livingston Church Road, Flora, MS 39071. The firm will be paid a commission of 6 percent of the sales price. As disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Christine Greenlee Heritage Real Estate, LLC 116 Livingston Church Rd. Flora, MS 39071 Tel: (601) 941-3035 About Livingston Township Fund One, LLC Livingston Township Fund One, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 23-02573) on Nov. 6, 2023, with $1 million to $10 million in both assets and liabilities. Michael Bollenbacher, managing member, signed the petition. Judge Jamie A. Wilson oversees the case. Eileen N. Shaffer, Esq., represents the Debtor as legal counsel. LOBSTER BOYS: Seeks to Hire Archer & Greiner P.C. as Counsel ------------------------------------------------------------ Lobster Boys LLC and affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Archer & Greiner, P.C. as its counsel. The firm's services include: (a) assisting the Debtors in connection with initial matters such as the preparation and filing of their petitions, schedules and statements; (b) assisting the Debtors in connection with matters such as use of cash collateral, budgeting, initial debtor interview; (c) providing documents and information to the US Trustee's office and parties in interest; (d) attending the 341a meeting; (e) assisting the Debtors with the preparation and filing of other necessary motions; (f) assisting the Debtors with the preparation of a restructuring plan or plans; (g) negotiating with parties in interest on a proposed plan or plans to restructure the Debtors' business interests and assets; (h) representing the Debtors in any matter, proceeding or hearing in the Bankruptcy Court, and in any action in other courts where the rights of the Debtors may be litigated or affected as a result of the bankruptcy cases; (i) advising the Debtors concerning the requirements of the Bankruptcy Code and Bankruptcy Rules and the requirements of the Office of the United States Trustee relating to the discharge of its duties under the Bankruptcy Code; and (j) performing such other legal services as may be required under the circumstances of these cases in accordance with the Debtors' powers and duties as set forth in the Bankruptcy Code, including assisting the Debtors with reports to the Court, monthly statements, fee applications or other matters. The firm will be paid at these rates: Partners $360 to $825 per hour Associates $320 to $495 per hour Paralegals $105 to $385 per hour Archer received a retainer from the Debtors in the total amount of $85,642. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Stephen Packman, Esq., a partner at Archer & Greiner, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Stephen M. Packman, Esq. Harrison H.D. Breakstone, Esq. Mariam Khoudari, Esq. ARCHER & GREINER, P.C. 1211 Avenue of the Americas, Suite 2750 New York, NY 10036 Phone: (212) 682-4940 Fax: (856) 795-0574 Email: spackman@archerlaw.com hbreakstone@archerlaw.com mkhoudari@archerlaw.com About Lobster Boys LLC Lobster Boys LLC is a lobster harvester and distributor. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. N.Y. Case No. 23-11986) on December 12, 2023. In the petition signed by Travis Maderia, member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Stephen M. Packman, Esq., at Archer & Greiner, PC, represents the Debtor as legal counsel. M & T ELEVATIONS: Seeks to Sell Corsicana Property for $128,900 --------------------------------------------------------------- M & T Elevations, LLC asked the U.S. Bankruptcy Court for the Northern District of Texas to approve the sale of its real property. The buyer, Angela Willis, offered $128,900 for the property located at 1105 E. Collin St., Corsicana, Texas. The property is being sold "free and clear" of liens and encumbrances. M & T Elevations will use the proceeds from the sale to pay the secured claim of Searchers Capital in the amount of $104,754.23 and the closing costs, with the remaining proceeds to be escrowed pending a determination of the amount, if any, owed to Rayon Contractors' Inc. Rayon Contractors' asserts a secured claim in the amount of $52,169.75. About M & T Elevations M & T Elevations LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-32858) on Dec. 4, 2023, with $500,001 to $1 million in both assets and liabilities. Frances Smith, Esq., at Ross, Smith & Binford, PC, serves as Subchapter V trustee. Judge Stacey G. Jernigan oversees the case. John Paul Stanford, Esq., at Quilling, Selander, Lownds, Winslett & Moser, P.C. represents the Debtor as legal counsel. MAIDULSAFA LLC: Jolene Wee Named Subchapter V Trustee ----------------------------------------------------- The U.S. Trustee for Region 2 appointed Jolene Wee of JW Infinity Consulting, LLC as Subchapter V trustee for Maidulsafa, LLC. Ms. Wee will be compensated at $615 per hour for work performed in 2024. In addition, the Subchapter V trustee will receive reimbursement for work-related expenses incurred. Ms. Wee declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Jolene E. Wee JW Infinity Consulting, LLC 447 Broadway 2nd Fl #502 New York, NY 10013 Phone: (929) 502-7715 Fax: (646) 810-3989 Email: jwee@jw-infinity.com About Maidulsafa LLC Maidulsafa, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. N.Y. Case No. 23-44868) on Dec. 29, 2023, with $1,000,001 to $10 million in assets and $500,001 to $1 million in liabilities. Judge Jil Mazer-Marino oversees the case. MAJESTIC COACH: Seeks to Hire Johnson & Johnson as Legal Counsel ---------------------------------------------------------------- Majestic Coach, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Tennessee to employ Johnson & Johnson, PC as its counsel. The firm's services include: a. advising the Debtor with respect to its powers and duties in the continued operation of its business and management of its property; b. assisting the Debtor in the preparation of its statement of financial affairs, schedules, statement of executory contracts and unexpired leases, and any papers or pleadings, or any amendments thereto that the Debtor is required to file in its Chapter 11 case; c. representing the Debtor in any proceeding that is instituted to reclaim property or obtain relief from the automatic stay imposed by Section 362 of the Bankruptcy Code or that seeks the turnover or recovery of property; d. providing assistance, advice and representation concerning the formulation, negotiation and confirmation of a plan of reorganization; e. providing assistance, advice and representation concerning any investigation of the assets, liabilities and financial condition of the Debtor that may be required; f. representing the Debtor at hearings or matters pertaining to its affairs; g. prosecuting and defending litigation matters and such other matters that might arise during and related to the case; h. providing counseling and representation with respect to the assumption or rejection of executory contracts and leases and other bankruptcy-related matters; i. representing the Debtor in matters that may arise in connection with its business operations, its financial and legal affairs, its dealings with creditors and other parties-in-interest and any other matters, which may arise during the bankruptcy case; j. rendering advice with respect to the myriad of general corporate and litigation issues relating to the cases, including, but not limited to, health care, ERISA, corporate finance, commercial matters, preparing legal papers and appearing in proceedings instituted by or against the Debtor; and k. providing other legal services. Johnson & Johnson will be paid at these rates: Curtis D. Johnson, Jr. $400 per hour Florence M. Johnson $400 per hour The firm received a retainer in the amount of $3,500. As disclosed in court filings, Johnson & Johnson and its attorneys are "disinterested" within the meaning of Section 101(4) of the Bankruptcy Code. The firm can be reached through: Curtis D. Johnson, Jr., Esq. JOHNSON & JOHNSON, PC Suite 1002, 1407 Union Avenue Memphis, TN 38104 Phone: (901) 725-7520 Email: cjohnson@johnsonandjohnsonattys.com About Majestic Coach, LLC Majestic Coach, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 23-25926) on Dec. 5, 2023, listing $100,001 to $500,000 in both assets and liabilities. Judge Denise E Barnett oversees the case. Curtis D. Johnson, Jr., Esq. at the Law Office Of Johnson And Brown, P.C. represents the Debtor as counsel. MICROTEK: Court OKs Deal on Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California authorized Microtek to use cash collateral on an interim basis, in accordance with its agreement with the U.S. Bank National Association. On May 4, 2023, Secured Creditor entered into the Loan Agreement. Pursuant to the Loan Agreement, Secured Creditor agreed to extend credit to the Debtor upon the terms and conditions contained therein for three separate loans. On May 4, 2023, Secured Creditor provided the Debtor with a loan in the principal amount of $1.4 million. Loan 1 is evidenced by, among other documents, the Term Note dated May 4,2023, in the original principal amount of $1.4 million. On May 4, 2023, Secured Creditor provided the Debtor with a revolving loan in the principal amount of up to $750,000. Loan 2 is evidenced by, among other documents, the Revolving Term Note dated May 4, 2023, in the original principal amount of $750,000. On May 4,2023, Secured Creditor provided the Debtor with an additional line of credit in the principal amount of $500,000. Loan 3 is evidenced by, among other documents, the Line of Credit Note dated May 4, 2023, in the original principal amount of $500,000. To secure the obligations owed to Secured Creditor under the Notes and Loan Agreement, on May 4, 2023, Debtor executed that certain Security Agreement in favor of Secured Creditor. Pursuant to the Security Agreement, the Debtor pledged to Secured Creditor all of its interests in "any and all personal property of the Debtor. Secured Creditor's interests in the Collateral were perfected pursuant to the filing of a UCC-1 Financing Statement, which was filed with the California Secretary of State on May 16, 2023, as File No. U230034799639. The parties agreed that the Debtor may use cash collateral to pay the reasonable, ordinary and necessary expenses for the maintenance and operation of the Debtor's business. The Debtor's right to use cash collateral will continue through and including 90 days from the date of the Secured Creditor signs the Stipulation, according to the terms set forth therein, unless such right terminates earlier upon the occurrence of a Default as defined in the Stipulation. As adequate protection, Secured Creditor will be granted a perfected and enforceable replacement lien in all of the Debtor's post-petition assets, cash collateral and DIP Accounts now owned or hereinafter acquired by the Debtor. As further adequate protection to Secured Creditor, the Debtor agrees to pay Secured Creditor the amount of $20,0000 per month, on the 25th of every month, beginning January 25, 2024. Secured Creditor's agreement to this amount of adequate protection will not be considered an admission or concession that this amount is adequate protection for the use of cash collateral for any period after the interim period covered by the Stipulation. A copy of the stipulation is available at https://urlcurt.com/u?l=YiwixU from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=4NBObg from PacerMonitor.com. About Microtek Microtek, a company in San Diego, Calif., provides a full range of design, engineering, and manufacturing solutions. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Calif. Case No. 23-03868) on Dec. 8, 2023, with $661,315 in assets and $6,245,168 in liabilities. Tri Le, president, signed the petition. Judge Christopher B. Latham oversees the case. Craig E. Dwyer, Esq., represents the Debtor as legal counsel. MIWD HOLDCO II: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed MIWD Holdco II LLC's and MIWD Holding Company LLC's (dba MITER Brands; MITER) ratings, including the companies' Long-Term Issuer Default Ratings (IDR) at 'BB-'. Fitch has also affirmed the 'BB+'/'RR2' rating on MIWD Holdco II LLC's senior secured term loan and 'BB-'/'RR4' rating on the company's senior unsecured notes. The Rating Outlook is Stable. MITER's IDR reflects its top-four position in the highly fragmented U.S. windows and doors market, strong profitability metrics and consistently strong FCF generation. MITER's credit metrics are strong for the 'BB-' IDRs, but Fitch expects the company's pursuit of sizable acquisition targets will result in leverage increasing from current levels. The IDRs also reflect the company's high exposure to the residential new construction market, concentrated product portfolio within a fragmented and competitive subsector, and limited geographic diversification. The company has made an unsolicited proposal to acquire PGT Innovations, Inc. (PGT) for about $3 billion. If the proposed acquisition of PGT is accepted, Fitch would review MITER's ratings to determine if the current ratings are appropriate for the revised capital structure and business profile. KEY RATING DRIVERS Strong Balance Sheet: Fitch-calculated EBITDA leverage (which does not include preferred equity as rated-entity debt) was 2.5x for the LTM ended Sept. 30, 2023. Fitch projects the company's EBITDA leverage to remain in the 2.5x to 3.0x range in 2024 and 2025, absent any transformational acquisitions. Management aims to maintain net leverage (excluding preferred equity) below 3.0x over the long term, but may exit this range for sizable acquisition opportunities. Fitch expects management to adhere to its leverage target on a long-term basis. Bid for PGT: MITER made an unsolicited proposal to acquire all the outstanding shares of PGT, a manufacturer and supplier of premium windows, doors and garage doors, for $41.50 per share in cash, a 58.4% premium over the closing price of PGT common stock on Oct. 9, 2023. This values PGT at approximately $3 billion or 11x LTM EBITDA (excluding synergies). PGT announced on Dec. 18, 2023 that it has entered into a definitive agreement to be acquired by Masonite International Corp. for $41.00 per share in cash and Masonite stock. PGT's board is reviewing MITER's proposal to determine if it is a superior proposal relative to the agreement with Masonite. Fitch will review the ratings if MITER's bid is accepted by PGT given Fitch's expectation that EBITDA leverage would approach or exceed the negative leverage sensitivity of 4.0x for the 'BB-' IDR. Fitch expects the acquisition of PGT would be financed with a combination of cash, debt and equity that would lead to EBITDA leverage situating around 4.0x. Similar to the Milgard acquisition in 2019, Fitch would expect the company to reduce leverage to its target within 18-24 months of the acquisition. Following a transformational acquisition, Fitch may loosen the positive rating sensitivity for MITER of EBITDA leverage sustained below 3.5x (from 3.0x currently) and the negative leverage sensitivity to above 4.5x (currently 4.0x) to reflect the modest risk reduction from increased scale and greater product and geographic diversification. Aggressive Growth Strategy: MITER has demonstrated its willingness to increase leverage to pursue transformational acquisitions, including its acquisition of Milgard in 2019 and its recent bid for PGT Innovations, Inc. Fitch views transformational acquisitions positively from a business profile standpoint as increased scale and product, customer and geographic diversification mitigate risk. However, sizable acquisitions also carry integration risk, which, along with higher leverage and more limited FCF generation, could jeopardize the current 'BB-' rating. If consummated, Fitch expects MITER's leverage would increase to around 4.0x at closing, similar to the Milgard acquisition. Weak Demand Environment: Fitch expects continued weakness in the operating environment for building products companies in 2024. MITER's 2023 performance exceeded Fitch's prior expectations as EBITDA margin is estimated to have contracted just 10-30bps despite a double-digit revenue decline. Fitch expects MITER's 2024 revenue to decline 4%-6% organically as improvement in residential construction volumes are offset by weakness in repair and remodel (R&R), in addition to modest price declines. Fitch expects EBITDA margin to contract about 175-225bps in 2024 to 21.0%-21.5%. Longer term, Fitch projects EBITDA margins to situate in the 20%-22% range, supporting FCF generation. Concentrated Product Portfolio: MITER's product portfolio is highly concentrated within vinyl windows. Fitch views the domestic windows market as highly susceptible to competitive pressures and earnings cyclicality, which weighs negatively on the credit profile. The company's product portfolio spans price points, and the company has a strong national market position, providing it with some competitive advantages relative to smaller peers. Cyclical End Markets: The company primarily sells its products into the residential new construction and R&R markets in the U.S. Management estimates that about 50% of sales come from the U.S. residential R&R market and the remaining 50% of sales come from the U.S. new residential construction market. The company's exposure to new residential construction demand is high relative to Fitch-rated building products peers and is expected to result in more volatile earnings and credit metrics through the cycle, though the balanced mix should mitigate some of the volatility. Fitch views R&R activity as a more stable end market through economic cycles relative to new construction. Strong Profitability and FCF: MITER generates strong EBITDA margins relative to similarly-rated peers and competitors within the windows and doors market. Fitch believes the company's margins reflect prudent cost management, focus on customer service and successfully executed M&A and integration under current ownership. Despite the risk that margins contract in a weaker demand environment, Fitch expects the company to maintain consistently positive FCF over the intermediate term due to the limited working and fixed capital needs of the business. Limited Geographic Diversity: The company operates within the United States and has sales exposure to all 50 states. The company operates through 10 domestic manufacturing facilities and three domestic internal supply facilities. Fitch views the company's geographic exposure as relatively concentrated relative to similarly-rated and higher-rated peers, which tend to have more international sales exposure. However, the company's strong national presence provides it with better diversity than lower-rated peers, which tend to be more concentrated within certain states. Ownership and Distributions: MITER is a majority-family owned and operated business with Koch Equity Development (KED) participating as a minority shareholder and holder of preferred equity. Fitch expects the company to opportunistically redeem preferred shares with FCF or debt proceeds and upstreamed cash from the operating entities during the rating horizon, to the extent allowable under the secured debt's restricted payment covenants. DERIVATION SUMMARY MITER's 'BB-' rating reflects its relatively strong market position in the U.S. domestic windows and doors market, its above-average profitability metrics, modest leverage levels, and concentrated product portfolio within a cyclical sector. The company is strongly positioned relative to 'B'-category Fitch-rated building products and distributor peers, including New AMI I (dba Associated Materials; B/Negative), Doman Building Materials Ltd. (Doman; B+/Stable), Chariot Holdings, LLC (dba Chamberlain; B-/Stable) and LBM Acquisition, LLC (LBM; B/Stable). MITER has stronger credit metrics, profitability metrics, and lower sales exposure to commodified product offerings than Doman and LBM. MITER's leverage levels and financial policy are more conservative than those of Associated Materials and Chariot. Compared with higher-rated investment-grade peers, MITER has significantly smaller scale, above-average exposure to new residential construction, a higher leverage tolerance and a more concentrated product portfolio, which are factors that weigh on the credit profile. Fitch applies its Parent and Subsidiary Linkage Rating Criteria to arrive at ratings for each entity in the group, using the Stronger Subsidiary (MIWD Holdco II LLC), Weaker Parent (MIWD Holding Company LLC) path. Fitch considers Holdco II a stronger credit profile than Holding Company due to the former's unrestricted access to group cash flows. MIWD Holding Company LLC is the issuer of the financial statements and has no operations and does not issue Fitch-defined debt. Fitch categorizes 'Legal ring-fencing' as 'Porous' under the criteria due to Holdco II's limitations on upstreaming dividends based on short-dated term loan documentation. Fitch considers 'Access & Control' 'Open' primarily due to Holding Company's direct ownership over Holdco II. Fitch assesses both the standalone credit profile of Holdco II and the consolidated group credit profile as 'BB-'. Therefore, no up notching of Holdco II applies and both Holding Company and Holdco II are rated 'BB-'. KEY ASSUMPTIONS - Revenue declines about 14% in 2023 and organic revenue declines 5% in 2024; - EBITDA margin contracts about 10-30bps in 2023 and 175-225bps in 2024 to 21.0%-21.5%; - Capex as a percentage of revenues remains in the 3.5%-4.0% range; - FCF margin of 5.5%-6.5% in 2023 and sustains in the mid- to high-single digit percentages over the intermediate term; - FCF applied toward M&A activity and preferred equity redemption during the rating horizon; - EBITDA leverage of 2.6x at YE 2023 and 2.7x at YE 2024 (excluding preferred equity and absent transformational acquisitions). RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Fitch's expectation that EBITDA leverage will be sustained below 3.0x; - The company improves the diversity of its business by meaningfully reducing its exposure to residential new construction activity, broadening its product offerings or significantly increasing its scale. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Fitch's expectation that EBITDA leverage will be sustained above 4.0x or EBITDA net leverage will be sustained above 3.5x; - Sustained deterioration in operating performance resulting in EBITDA margins contracting to the low-double digit percentages, resulting low-single digit FCF margins. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: MITER has an adequate liquidity position, supported by its readily available cash balance of $321.7 million and $101.9 million of availability under its $150 million ABL revolving credit facility as of Sept. 30, 2023. The company's nearest material maturity is not until December 2027, when its term loan comes due. The ABL is set to mature in December 2025 and Fitch expects the company will extend this facility during 2024, before it becomes current. Fitch expects the company's seasonal working capital usage to be limited and annual FCF generation to remain positive, further supporting MITER's liquidity position in the intermediate term. ISSUER PROFILE MITER Brands is one of the largest manufacturers of vinyl, aluminum, and fiberglass windows and patio doors in the U.S., selling its products into the new construction and R&R residential markets through third-party distribution. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch considers outstanding preferred equity issued by MIWD Holding Company LLC as non-debt of the rated entity, per Section 7 of Appendix 1: Main Analytical Adjustments under its Corporate Rating Criteria. Fitch considers the preferred shares a shareholder loan, as they are held by KED. Fitch determined that the presence of these preferred equity instruments does not increase the probability of default under rated-entity debt, resulting in the non-debt classification. Fitch adjusts historical reported EBITDA by adding back non-cash stock-based compensation expense, non-cash inventory step-up charges and one-time transaction fees to adjusted EBITDA. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- MIWD Holdco II LLC LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- senior secured LT BB+ Affirmed RR2 BB+ MIWD Holding Company LLC LT IDR BB- Affirmed BB- MYRIE'S PETS: Hires Rountree Leitman Klein & Geer as Attorney ------------------------------------------------------------- Myrie's Pets LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Rountree, Leitman, Klein & Geer, LLC as its attorneys. The firm's services include: a. giving the Debtor legal advice with respect to its powers and duties as Debtor-in-Possession in the management of its property; b. preparing on behalf of the Debtor as Debtor-in-Possession necessary schedules, applications, motions, answers, orders, reports and other legal matters; c. assisting in examination of the claims of creditors; d. assisting with formulation and preparation of the disclosure statement and plan of reorganization and with the confirmation and consummation thereof; and e. performing all other legal services for the Debtor as Debtor-in-Possession that may be necessary. The firm will be paid at these hourly rates: William A. Rountree, Attorney $595 Will B. Geer, Attorney $595 Michael Bargar, Attorney $535 Hal Leitman, Attorney $425 William Matthews, Attorney $425 David S. Klein, Attorney $495 Alexandra Dishun, Attorney $425 Elizabeth Childers, Attorney $395 Ceci Christy, Attorney $425 Caitlyn Powers, Attorney $325 Shawn Eisenberg, Attorney $300 Sharon M. Wenger, Paralegal $225 Elizabeth Miller, Paralegal $250 Megan Winokur, Paralegal $175 Jessica Dowdy-Clark $175 Catherine Smith, Paralegal $150 Law Clerk $175 The firm received a pre-petition retainer of $20,000 from the Debtor's principal, Maria Myrie. William Rountree, Esq., a partner at Rountree, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: William A. Rountree, Esq. ROUNTREE LEITMAN KLEIN & GEER, LLC Century Plaza I 2987 Clairmont Road, Suite 350 Atlanta, GA 30329 Tel: (404) 584-1238 Email: wgeer@rlkglaw.com About Myrie's Pets LLC Myrie's Pets LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-20025) on Jan. 9, 2024. At the time of filing, the Debtor estimated up to $50,000 in assets and $500,001 to $1 million in liabilities. Judge James R Sacca presides over the case. William A. Rountree, Esq. at Rountree Leitman Klein & Geer, LLC represents the Debtor as counsel. NABORS GARAGE: Amends IRS Secured or Priority Tax Claim Details --------------------------------------------------------------- Nabors Garage Doors LLC submitted a Fourth Modification to Plan of Reorganization dated January 8, 2024. Debtor filed its Plan of Reorganization on November 29, 2023. In accordance with Section 1193(a) of the Bankruptcy Code, Debtor hereby modifies the Plan. The changes do not materially and adversely affect the rights of any parties in interest which have not had notice and an opportunity to be heard with regard thereto. Section 4.1 of the Plan, Class 1 Secured or Priority Tax Claim of the Internal Revenue Service, is modified to include the following sentence: "The IRS will have through and including July 12, 2024 to amend or modify its proof of claim (i.e., Proof of Claim No. 18) regarding 941 taxes for tax period ending September 30, 2017 and December 31, 2017, and Debtor reserves and retains all rights to object to any proof of claim filed by the IRS." A full-text copy of the Fourth Modified Plan of Reorganization dated January 8, 2024 is available at https://urlcurt.com/u?l=88PVHi from PacerMonitor.com at no charge. Attorney for Debtor: Leslie M. Pineyro, Esq. JONES & WALDEN LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Phone: (404) 564-9300 Email: lpineyro@joneswalden.com About Nabors Garage Doors Nabors Garage Doors LLC has been operating since 2017 and was incorporated in Georgia in 2017 to provide installation, repairs, and servicing of garage doors and openers. The Debtor operates out of two locations: Alpharetta, Georgia, and Peachtree City, Georgia. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-58391-jwc) on August 31, 2023. In the petition signed by Serena Meador, sole member, the Debtor disclosed $500,000 in total assets and $10 million in liabilities. Judge Jeffery W. Cavender oversees the case. Leslie Pineyro, Esq., at Jones & Walden, LLC, represents the Debtor as legal counsel. NB LOFT VUE: Files Amended Plan; Confirmation Hearing March 6 ------------------------------------------------------------- Randy W. Williams, not individually but as Chapter 11 trustee of NB Loft Vue, DST and NB Vue Mac, DST, submitted a Combined Third Amended Disclosure Statement and Joint Plan of Liquidation for the Debtor dated January 9, 2024. The Plan is a liquidating plan. The Plan provides that the Trustee will administer and liquidate all remaining property of the Debtors, and will distribute the proceeds in accordance with the Plan and the priority scheme set forth in the Bankruptcy Code, subject to certain agreements by creditors to accept lesser treatment than set forth in the Bankruptcy Code. During the pendency of the Chapter 11 Cases, substantially all assets of the Debtors were liquidated. On the Effective Date, the Trustee will administer the Plan and wind down the Debtors' estates. As of the Effective Date of the Plan, the Trustee will be responsible for all payments and distributions to be made under the Plan to the Holders of Allowed Claims. Each Executory Contract and Unexpired Lease to which a Debtor is a party shall be deemed rejected. Actions Taken by Trustee Since His Appointment The Trustee took steps to monetize certain claims of the Debtors' estates for recovery of alleged ad valorem tax overpayments (on account of the Vue Mac property) to Harris County, Texas. On January 26, 2023, the Trustee filed a motion to transfer the ad valorem tax value reduction claims to Fannie Mae (which held a lien on such claims), for prosecution by Fannie Mae, in exchange for a 12.5% net recovery on any recoveries generated. Based on a potential tax savings (for the 2020 and 2021 tax years) of approximately $1.1 million, the Estates' potential share of recoveries may be in excess of $100,000. An order approving this motion was entered on February 17, 2023. Additionally, the Trustee has resolved several administrative expense claims filed by certain parties, thereby providing greater certainty as to the Estates' administrative claim pool. On June 27, 2022, an order was entered allowing the Administrative Expense Claim of Arbor Contract Carpet, Inc. against Loft Vue in the amount of $11,284.91. On June 27, 2022, an order was entered allowing the Administrative Expense Claim of BG Personnel, LP against Vue Mac in the amount of $32,547.01. Finally, the Trustee investigated whether there were additional claims and causes of action to be prosecuted against third parties, including but not limited to Nelson Partners, LLC. The Trustee reviewed the books and records provided to him, as well as consulted with creditors, such as Fannie Mae, and investors regarding the pre-petition business affairs of both Loft Vue and Vue Mac. The Trustee reviewed the public record regarding the status of other projects managed by Nelson Partners, LLC. Both Loft Vue and View Mac were on budgets monitored by Fannie Mae pre-petition. Both a review of the records and discussions with Fannie Mae led the Trustee to conclude that there were no meaningful preference actions to be brought related to transfers to pre-petition creditors. In addition, after consulting with potential litigation counsel, the Trustee concluded litigation against Nelson Partners, LLC faced difficult hurdles, the most significant being that Nelson Partners, LLC is already involved in extensive litigation regarding numerous other projects, such as those in Loft Vue and Vue Mac. Fannie Mae alone has sued them to recover tens of millions of dollars in deficiency judgments. At this time, the Trustee does not anticipate post confirmation litigation with Nelson Partners, LLC; however, to the extent the Estates have any claims or causes of action those will be preserved, in the event any party makes an offer to acquire the claims, if any, that the Estates may have. Nelson Partners, LLC is not being released from any claims as part of the Plan or the Plan process. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors and the equity holder: * Class VM4. On the applicable Distribution Date, each Holder of an Allowed General Unsecured Claim will receive its Pro Rata share of 50% of any net recovery from the Tax Value Claims payable to the Trustee, net of the Trustee's fees. * Class LV4. On the applicable Distribution Date, each Holder of an Allowed General Unsecured Claim will receive its Pro Rata share of $35,000.00 in cash that would otherwise be available for payment of Administrative Expense Claims. * Classes VM5 and LV5 consists of all Equity Interests in Vue Mac and Loft Vue, respectively. On the Effective Date, all Equity Interests in the Debtors shall be canceled. No Distribution shall be made on account of Equity Interests in the Debtors. On and after the Effective Date, the Debtors shall continue in existence for purposes of the following actions to be taken by the Trustee: (a) resolving Disputed Claims, (b) making distributions on account of Allowed Claims, (c) establishing and funding the Disputed Claims Reserves, (d) filing appropriate tax returns, (e) liquidating all assets of the Debtors and winding down the Estates, and (f) otherwise administering the Plan. A hearing to consider the final approval of the Disclosure Statement and confirmation of the Plan is scheduled for March 6, 2024 at 1:30 p.m. (the "Confirmation Hearing"). Objections to the final approval of the Disclosure Statement or objections to Confirmation of the Plan must be served on or before February 14, 2024. The Bankruptcy Court directed that, to be counted for voting purposes, ballots must be received by the Bankruptcy Court on February 14, 2024. A full-text copy of the Third Amended Disclosure Statement dated January 9, 2024 is available at https://urlcurt.com/u?l=uARSqb from PacerMonitor.com at no charge. Special Counsel for Randy W. Williams: Bruce J. Ruzinsky, Esq. Matthew D. Cavenaugh, Esq. Jackson Walker LLP 1401 McKinney, Suite 1900 Houston, TX 77010 Phone: (713) 752-4204 E-mail: bruzinsky@jw.com mcavenaugh@jw.com About NP Loft Vue and NB Vue Mac NP Loft Vue DST and NB Vue Mac DST sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 21-32292) on July 6, 2021, with as much as $50 million in both assets and liabilities. Patrick Nelson, the Debtors' authorized representative, signed the petition. Judge Marvin Isgur oversees the cases. The Debtors tapped Tucker Ellis, LLP and Munsch Hardt Kopf & Harr, P.C. as legal counsels, and O'Boyle Properties, Inc. as investment banker. Randy W. Williams is the Chapter 11 trustee appointed in the Debtors' cases. Jackson Walker, LLP, TPS-West, LLC and Ryan, LLC serve as the trustee's legal counsel, accountant and property tax consultant, respectively. NICMAR INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Nicmar Industries George R. Roberts Company 192 Biddeford Road Alfred ME 04002 Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court District of Maine Case No.: 24-20006 Judge: Hon. Michael A. Fagone Debtor's Counsel: Adam Prescott, Esq. BERNSTEIN SHUR SAWYER & NELSON, P.A. 100 Middle Street P.O. Box 9729 Portland ME 04101 Tel: 207-774-1200 Email: aprescott@bernsteinshur.com Total Assets as of Sept. 30, 2023: $5,386,007 Total Liabilities as of Sept. 30, 2023: $4,705,439 The petition was signed by Stephen J. Ray as president/trustee. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MNC4ZBA/Nicmar_Industries__mebke-24-20006__0001.0.pdf?mcid=tGE4TAMA NUZEE INC: Bard Associates Reports 9% Equity Stake -------------------------------------------------- In a Schedule 13D Report filed with the U.S. Securities and Exchange Commission on December 31, 2023, Bard Associates, Inc. reported beneficial ownership of 117,750 shares, representing 9% of NuZee Inc.'s common stock. The percentage is based on 1,312,289 shares of the Issuer's Common Stock outstanding as reported in the Issuer's 10-Q for the period June 30,2023 (filed August 11,2023), along with new shares issued as reported in 8-K's issued October 20, 2023 and November 15, 2023. A full-text copy of the report is available at http://tinyurl.com/3xmcbfbz About NuZee NuZee, Inc. (d/b/a Coffee Blenders) is a co-packing company for single-serve coffee formats that partners with companies to help them develop within the single-serve and private-label coffee category. Nuzee reported a net loss of $11.80 million for the year ended Sept. 30, 2022, a net loss of $18.55 million for the year ended Sept. 30, 2021, a net loss of $9.52 million for the year ended Sept. 30, 2020, and a net loss of $12.21 million for the year ended Sept. 30, 2019. In its Quarterly Report for the three months ended June 30, 2023, Nuzee disclosed that the Company has had limited revenues, recurring losses and an accumulated deficit. These items, according to the Company, raise substantial doubt as to its ability to continue as a going concern. PALEO ON THE GO: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Paleo On The Go, LLC 6152 126th Ave., Suite 502 Largo, FL 33773 Business Description: Paleo On The Go specializes in the food & beverages, food distributors areas. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court Middle District of Florida Case No.: 24-00155 Judge: Hon. Catherine Peek Mcewen Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 9301 West Hillsborough Avenue Tampa, FL 33615-3008 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: All@tampaesq.com Total Assets: $29,700 Total Liabilities: $1,451,126 The petition was signed by David J. Rohde as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/34GHGQI/Paleo_On_The_Go_LLC__flmbke-24-00155__0001.0.pdf?mcid=tGE4TAMA PARTNERS IN TECH: Hires Randall S. D. Jacobs as Legal Counsel ------------------------------------------------------------- Partners In Tech Services, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Randall S. D. Jacobs, PLLC as its bankruptcy counsel. The firm will render these services: a. assist and advise debtor relative to the administration of this proceeding; b. advise debtor with respect to its powers and duties as debtor-in-possession in the management of its assets; c. represent the Debtor before the Bankruptcy court; d. advise the Debtor on pending and prospective litigation it intends to file, including adversary proceedings and actions to collect upon its accounts receivable, hearings, motions, and decisions of the Bankruptcy court; e. review and advise the Debtor regarding applications, orders, and motions filed with the Bankruptcy court by third parties in this proceeding; f. attend meetings conducted pursuant to section 341(a) of the Bankruptcy Code and represent Debtor at all examinations; g. communicate with creditors and other parties in interest; h. assist Debtor in preparing all motions, applications, answers, orders, reports, and papers necessary to the administration of the estate; i. confer with other professionals retained by Debtor and other parties in interest; j. if necessary, negotiate and prepare Debtor's chapter 11 plan, related disclosure statement, and all related agreements and documents and take any necessary actions on Debtor's behalf to obtain confirmation of the plan; and k. perform all other necessary legal services and provide all other necessary legal advice to Debtor in connection with this chapter 11 case. Randall S. D. Jacobs, Esq., the primary attorney in this representation, will be paid at his hourly rate of $900 plus expenses. Mr. Jacobs 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: Randall S. D. Jacobs, Esq. RANDALL S. D. JACOBS, PLLC 30 Wall Street, 8th Floor New York, NY 10005 Telephone: (973) 226-3301 Facsimile: (973) 226-8897 Email: rsdjacobs@chapter11esq.com About Partners In Tech Partners In Tech Services, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-74484) on Nov. 29, 2023, with up to $50,000 in assets and $1,000,001 to $10 million in liabilities. Judge Alan S. Trust oversees the case. Randall S. D. Jacobs, Esq., at Randall S. D. Jacobs, PLLC represents the Debtor as legal counsel. PHUNWARE INC: Sabby Management, 2 Others Report 5.93% Equity Stake ------------------------------------------------------------------ In a Schedule 13G Report filed with the U.S. Securities and Exchange Commission, Sabby Management, LLC, Sabby Volatility Warrant Master Fund, Ltd. and Hal Mintz reported beneficial ownership of 10,006,584 shares of Phunware, Inc.'s common stock, representing 5.93% of the shares outstanding. Sabby Management and Mintz do not directly own any shares of Common Stock, but each indirectly owns 10,006,584 shares of Common Stock. Sabby Management, a Delaware limited liability company, indirectly owns 10,006,584 shares of Common Stock because it serves as the investment manager of Sabby Volatility. Mintz indirectly owns 10,006,584 shares of Common Stock in his capacity as manager of Sabby Management. A full-text copy of the report is available at http://tinyurl.com/2t2j9d3f About Phunware Headquartered in Austin, Texas, Phunware, Inc. -- http://www.phunware.com-- offers a fully integrated software platform that equips companies with the products, solutions, and services necessary to engage, manage, and monetize their mobile application portfolios globally at scale. Phunware reported a net loss of $50.89 million for the year ended Dec. 31, 2022, compared to a net loss of $53.52 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $45.46 million in total assets, $23.55 million in total liabilities, and $21.90 million in total stockholders' equity. In its Quarterly Report for the three months ended Sept. 30, 2023, Phunware reported that for the nine months ended September 30, 2023, the Company incurred a net loss of [$29,772,000] used [$15,869,000] in cash for operations and have a working capital deficiency of [$12,721,000]. These conditions raise substantial doubt about the Company's ability to meet its financial obligations as they become due. POLARIS OPERATING: Gets OK to Sell 'Masterson' Assets to Contango ----------------------------------------------------------------- Polaris Operating, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the Southern District of Texas to sell some of their assets to Contango Oil and Gas, LLC. Contango made a cash offer of $3.5 million for the companies' so-called Masterson assets in the Texas Panhandle, the core area of operations of the companies, which are comprised of working interests in the Red Cave Formation. The buyer also agreed to assume certain executory contracts and unexpired leases as part of the deal. Contango emerged as the winning bidder for the Masterson assets at the court-approved auction held on Dec. 15 last year. North Country Energy is the back-up bidder. At the Dec. 15 auction, Polaris also selected the winning bidder and back-up bidder for its assets also located in the Texas Panhandle, which are comprised of working interests in the Granite Wash Formation. The winning bidder for the so-called Mesa Vista assets is Mesa Vista Operating while the back-up bidder is Trek Resources, Inc. About Polaris Operating Polaris Operating, LLC and affiliates are privately held independent oil and gas companies focused on acquiring, optimizing, and developing conventional oil and gas properties with redevelopment and new development opportunities. The Debtors' core area of operations is in the Texas Panhandle, specifically in Moore, Potter and Roberts counties, where they own and operate hundreds of shallow oil and gas wells with a significant amount infrastructure including gathering systems, power lines, disposal wells, workover rigs and water trucks. Polaris and affiliates filed Chapter 11 petitions (Bankr. S.D. Texas Lead Case No. 23-32810) on July 28, 2023. In the petition signed by its chief executive officer, Christopher Czuppon, Polaris reported $10 million to $50 million in both assets and liabilities. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Okin Adams Bartlett Curry, LLP as legal counsel; SP Securities, LLC as investment banker; and Stout Risius Ross, LLC as restructuring advisor. Douglas J. Brickley of Stout Risius Ross serves as the Debtors' chief restructuring officer. Donlin, Recano & Company, Inc. is the notice, claims and balloting agent. PRIZE MANAGEMENT: Wins Interim Cash Collateral Access ----------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, authorized Prize Management, LLC to use cash collateral on an interim basis in accordance with the budget, with a 10% variance. The Debtor requires the use of cash collateral to make payment of ordinary operating expenses. The Debtor has represented that a UCC search at the North Carolina Secretary of State's web portal revealed the following UCC-1 filings which may reflect perfected liens on cash collateral: a. File # 20180107660B recorded October 19, 2018, in favor of First Bank, 355 N. Bilhen Street, Troy, NC 27371. The Debtor made an adequate protection payment of $5,000 on December 28, 2023, and tendered an additional adequate protection payment of $5,000 by company check to First Bank's counsel on January 4, 2024 prior to the hearing on the matter. Though it was not required to do so, the Debtor sent a wire transfer of the second $5,000 payment at the request of First Bank, and First Bank's counsel returned the $5,000 check to the Debtor. The Debtor is directed to make another payment to First Bank of $10,000 on or prior to February 4, 2024. As adequate protection, the Potential Secured Creditor is granted a post-petition lien on the Debtor's assets including cash and inventory to the extent of the use and to the extent that the pre-petition lien in the same type of collateral was valid, perfected, enforceable, and non-avoidable as of the petition date. The Debtor's use of cash collateral will expire or terminate on the earlier of: (i) February 5, 2024; (ii) the Debtor ceasing operations of its business; or (iii) the noncompliance or default of the Debtor with any terms and provisions of the Order. An interim hearing on the matter is set for February 5, 2024 at 12:30 p.m. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=SjlDnu from PacerMonitor.com. The Debtor projects $80,00 in income and $63,889 in total expenses for January 2024 About Prize Management, LLC Prize Management, LLC is a sand and gravel mining company which operates on the land owned by Sand Ridge Development Assn., Inc. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.C. Case No. 23-02681) on September 14, 2023. In the petition signed by Alton Williams, Jr., president, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Pamela W. McAffee oversees the case. William P. Janvier, Esq., at Stevens Martin Vaugh & Tadych, PLLC, represents the Debtor as legal counsel. R H INDUSTRIES: Taps C. Taylor Crockett as Bankruptcy Counsel ------------------------------------------------------------- R H Industries, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Alabama to employ C. Taylor Crockett, PC to serve as legal counsel in its Chapter 11 case. The firm will be paid at the rate of $450 per hour and reimbursed for out-of-pocket expenses incurred. The retainer fee is $7,500, plus $1,738 filing fee. C. Taylor Crockett, Esq., disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: C. Taylor Crockett, Esq. C. TAYLOR CROCKETT, PC 2067 Columbiana Road Birmingham, AL 35216 Tel: (205) 978-3550 Email: taylor@taylorcrockett.com About R H Industries LLC R H Industries, LLC filed a petition for Chapter 11 protection (Bankr. N.D. Ala. Case No. 24-00072) on Jan. 9, 2024, listing as much as $500,000 in both assets and liabilities. C. Taylor Crockett, PC serves as the Debtor's legal counsel. R&J CLEANING: Unsecureds to be Paid in Full over 60 Months ---------------------------------------------------------- R&J Cleaning Service, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Virginia a Plan of Reorganization for Small Business dated January 8, 2024. The Debtor is a Virginia corporation. Since 1991, the Debtor has been in the business of cleaning dialysis centers. The Debtor currently services approximately 145 dialysis facilities. The Debtor is owned by Robin Coyle and Jeremiah Coyle, Sr., who each own 50% of the Debtor's stock. The plan proponent's financial projections show that the Debtor will have projected disposable income of $508,516. The final Plan payment is expected to be paid in March 15, 2029. This Plan of Reorganization proposes to pay creditors of the Debtor from cash flow from operations and any recovery from the Debtor's claim against B&A Financial Solutions. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 100 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 3 consists of non-priority unsecured creditors. The claims of the non-priority unsecured creditors shall be paid in full, without interest, pro rata, over a period of 60 months, with the first payment to be made within 30 days of the effective date. The Class 3 claims are as follows: FC Marketplace, LLC ($142,992.65); National Funding, Inc. ($177,862.50); SBA/EIDL ($143,421.00); Global Merchant Cash, Inc. ($0.00, Disputed); and Robin and Jeremiah Coyle, Sr. ($0.00, Waived). To the extent that the Debtor receives a recovery from the B&A Claim, the Debtor shall pay 80% of the net recovery, pro rata, to the Class 3 creditors. Such payment shall be made within 30 days of final receipt/settlement. The 20% balance shall be retained by the Debtor for operations and capital improvements. Robin Coyle and Jeremiah Coyle, Sr., who each own 50% of the Debtor's stock, shall retain their equity interests. Payments under the Plan will be made with available cash, the Debtor's disposable income and 80% of the net recovery from the B&A Claim. On the effective date, all other Estate property shall revest in the Debtor. A full-text copy of the Plan of Reorganization dated January 8, 2024 is available at https://urlcurt.com/u?l=VJZ1vZ from PacerMonitor.com at no charge. Counsel for Debtor: David K. Spiro, Esq. Spiro & Browne, PLLC 2400 Old Brick Road Glen Allen, VA 23060 Tel: (804) 387-0186 Fax: (804) 836-1855 Email: dspiro@sblawva.com About R&J Cleaning Service, Inc. R&J Cleaning Service, Inc. has been in the business of cleaning dialysis centers. The Debtor filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 23-33476) on Oct. 9, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. David Spiro, Esq., at Spiro & Browne, PLC, is the Debtor's legal counsel. RC EMPIRE: Hires Nest Seekers International as Real Estate Broker ----------------------------------------------------------------- RC Empire Development, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Nest Seekers International as its real estate broker. The firm will render these services: a. list and market the property; b. engage with prospective purchasers; and c. show the property to prospective purchasers. Nest Seekers will seek compensation in the amount of 6 percent of the amount of the sale price of the Debtor's property located at 450 East 29th Street, Brooklyn, NY 11226. As disclosed in court filings, Nest Seekers is a disinterested entity as that term is defined in Sec. 101(14) of the Bankruptcy Code. The firm can be reached through: Marques Brown Nest Seekers International 505 Park Avenue New York, NY 10022 Phone: (516) 424-1248 Email: MarquesB@nestseekers.com About RC Empire RC Empire Development, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-74599) on Dec. 6, 2023, with $500,001 to $1 million in both assets and liabilities. Judge Alan S. Trust oversees the case. Btzalel Hirschhorn, Esq., at Shiryak, Bowman, Anderson, Gill & Kadochnikov, LLP represents the Debtor as legal counsel. RC EMPIRE: Seeks to Hire Martin R. Gropper CPA as Accountant ------------------------------------------------------------ RC Empire Development, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Martin R. Gropper CPA PC as its accountant. The firm will render these services: a. gather and verify all pertinent information required to compile and prepare monthly operating reports; b. prepare monthly operating reports for the debtor in this bankruptcy case; c. prepare any necessary reports pursuant to Rule 2015.3 of the Federal Rules of Bankruptcy Procedure regarding non-debtor businesses; d. prepare budgets and financial disclosures; e. assist the Debtor in administering this case; and f. render such additional services as the Debtor may require in this case. Gropper will bill its hourly rates as follows: Partner $350 per hour Senior Associate $200 per hour Bookkeeping $100 per hour Gropper is a disinterested entity as that term is defined in Sec. 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Martin Gropper Martin Groper CPA P.C. 200 Hempstead Ave. Lynbrook, NY 11563 Phone: (516) 872-3500 Email: Martin.gropper@groppercpa.com About RC Empire RC Empire Development, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-74599) on Dec. 6, 2023, with $500,001 to $1 million in both assets and liabilities. Judge Alan S. Trust oversees the case. Btzalel Hirschhorn, Esq., at Shiryak, Bowman, Anderson, Gill & Kadochnikov, LLP represents the Debtor as legal counsel. RC EMPIRE: Seeks to Hire Shiryak Bowman as Bankruptcy Counsel ------------------------------------------------------------- RC Empire Development, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Shiryak, Bowman, Anderson, Gill & Kadochnikov, LLP as its attorneys. The firm will render these services: (a) assist the Debtor in administering the Debtor's Chapter 11 case; (b) make such motions and court appearances or take such action as may be appropriate or necessary under the Bankruptcy Code; (c) take such steps as may be necessary for the Debtor to marshal and protect the estate's assets; (d) negotiate with the Debtor's creditors in formulating a plan of reorganization in this case; (e) draft and prosecute the confirmation of the Debtor's plan of reorganization in this case; and (f) render such additional services as the Debtor may require in this case. In addition to payment of the Chapter 11 filing fee, a payment of $30,000 will be paid by the Debtor to the firm from the proceeds of the sale of the subject property located at 450 East 29th Street, Brooklyn, NY 11226. As disclosed in court filings, Shiryak is a disinterested entity as that term is defined in Sec. 101(14) of the Bankruptcy Code. The firm can be reached through: Btzalel Hirschhorn, Esq. SHIRYAK, BOWMAN, ANDERSON, GILL & KADOCHNIKOV, LLP 8002 Kew Gardens, Suite 600 Kew Gardens, NY 11415 Telephone: (718) 263-6800 Facsimile: (718) 520-9401 Email: Bhirschhorn@sbagk.com About RC Empire RC Empire Development, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-74599) on Dec. 6, 2023, with $500,001 to $1 million in both assets and liabilities. Judge Alan S. Trust oversees the case. Btzalel Hirschhorn, Esq., at Shiryak, Bowman, Anderson, Gill & Kadochnikov, LLP represents the Debtor as legal counsel. RETROVISION LLC: Property Sale Proceeds to Fund Plan Payments ------------------------------------------------------------- Retrovision, LLC and 2580Rootriverparkway, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Wisconsin a Disclosure Statement describing Chapter 11 Plan dated January 9, 2024. Retro is a Wisconsin limited liability company formed in January 2013. It is a single asset real estate company holding title to real property located at 3424 W. Wisconsin Avenue, Milwaukee, WI 53208 known as the Harnischfeger House. RootRiver is a Wisconsin limited liability company formed in January 2017. It is a single asset real estate company holding title to real property located at 2580 Root River Pkwy, West Allis, WI 53227, a four-bedroom residential home located in the City of West Allis within Milwaukee County. Dr. Brian R. Teclaw is the sole member and manager of both Debtors. Dr. Teclaw formed the Debtors to purchase the real estate as investment properties. He intended to renovate them and then rent them out for income or, alternatively, sell them. They along with other real estate investments were his plan for retirement. As of August 14, 2023, Summit asserted that it was owed approximately $403,500 against the mortgage on the Harnischfeger House held by Retro. Summit asserted that it was owed approximately $204,000 against the mortgage on the real property held by Root River. The amounts included monies Summit paid for past due real estate taxes, insurance, attorneys' fees and the original foreclosure judgments plus interest. At sheriff sale, the Harnischfeger House was sold to Summit on a credit bid of $359,359.83. The Root River property was also sold to Summit at sheriff sale on a credit bid of $204,324. In February 2023, the Debtors obtained Comparable Market Analysis ("CMA") reports to determine the value of the real estate. The CMA report for the Harnischfeger House recommended a listing price of $950,500 with a high price of $1,200,000 and low of $749,900. The CMA report for the Root River property recommended a listing price of $433,143 with a high price of $480,000 and low price of $400,000. Based on the CMA reports, and amounts owed to Summit as of August 14, 2023, Retro and Root River hold equity interest in the real properties of $547,000 and $229,143 respectively. On August 21, 2023, prior to the foreclosure hearing, the Debtors filed voluntary petitions under chapter 11 of the Code in order to preserve their equity interest in the properties. Throughout the Case, the Debtors have continued to operate the Arena. The Debtors do not have any income to report during the case. The Debtors are single-asset-real estate companies without any tenants. The Debtors focus during the case has been in completing any necessary repairs to the real estate in anticipation of selling them. The Debtors have also conferred with various real estate brokers to market and sell the properties. Class 1 consists of the Secured Claims of Summit Credit Union. It filed a claim for $403,543.43 against Retro. It filed a claim for $204,577.19 in RootRiver. The Secured Claims are secured by first mortgages on the Debtors' real estate. The Plan treats both claims as fully secured based upon comparable market analysis the Debtor received February 2023. The Plan proposes to pay the Secured Claims in full from the future sale proceeds of the Wisconsin Avenue Property and Root River Property. Class 2 consists of Allowed General Unsecured Creditors. Allowed Claims of creditors in Class 2 consist of Allowed Unsecured Claims without priority. The Debtors estimates that the total amount for all Class 2 Creditors will be $3,024.88. Of which, the Debtors estimate $1,482.89 for Retro and $1,541.99 for RootRiver. Claimants shall receive their pro rata share of the sale proceeds after administrative claims, and Allowed Claims in Class 1 are paid in full from their respective collateral. It is projected that Class 2 Claimants shall be paid in full. The holders of interests in the Debtors shall retain their interests in the Debtors. However, interest holders shall receive no distributions from the Debtors unless the sales contemplated in the Plan are sufficient to pay in full Class 1, Class 2, any allowed priority tax claims, and all administrative claims. The Debtor will implement and fund this Plan through the sale of the Collateral. A full-text copy of the Disclosure Statement dated January 9, 2024 is available at https://urlcurt.com/u?l=zpNh5M from PacerMonitor.com at no charge. Attorneys for Debtors: Evan P. Schmit, Esq. Kerkman & Dunn 839 N. Jefferson St., Suite 400 Milwaukee, WI 53202 Telephone: (414) 277-8200 Facsimile: (414) 277-0100 Email: eschmit@kerkmandunn.com About Retrovision and 2580RootRiverParkway Retrovision, LLC, and 2580RootRiverParkway, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Wis. Lead Case No. 23-23769) on Aug. 21, 2023. At the time of the filing, Retrovision reported $1 million to $10 million in assets and $100,000 to $500,000 in liabilities while 2580RootRiverParkway reported $100,001 to $500,000 in both assets and liabilities. Judge Beth E. Hanan oversees the cases. Evan P. Schmit, Esq., at Kerkman & Dunn, is the Debtors' legal counsel. RETROVISION LLC: Summit Says Disclosure Inadequate -------------------------------------------------- Summit Credit Union objects to Retrovision, LLC and 2580RootRiverParkway, LLC's proposed Disclosure Statement filed November 20, 2023 in this case. The basis for Summit's objection includes, but is not limited to, the following grounds, pursuant to Fed. R. Bankr. P. 3017(a): 1. The proposed Disclosure Statement does not contain adequate information that would allow a hypothetical investors typical of the holder of claims or interests in this case, including Summit, that would enable such a hypothetical investor of the relevant class to make an informed judgment about the Debtors' proposed Chapter 11 Plan Debtors' proposed Disclosure Statement does not contain Adequate Information including but not limited to for the reasons set forth below. 2. Debtors' Disclosure Statement states that Debtors obtained Comparable Market Analysis ("CMA") reports to determine the value of the parcels of real estate that are subject to mortgage liens securing Summit's secured claims. Debtors claim that the CMA reports suggested a listing price of $950,500 for the Harnischfeger Property, with a high valuation of $1,200,00 and a low valuation of $749,900, and a listing price of $433,143 for the Root River Parkway Property, with a high valuation of $480,000 and a low valuation of $400,000. However, copies of these CMAs are not included with the Disclosure Statement. 3. In any case, a CMA reports is not a certified real estate appraisal, and Summit has good reasons to doubt that the CMA reports that Debtors obtained almost one year ago do not represent an accurate valuation of the properties. These reasons include but are not limited to the fact that the Debtors were not able to generate any bona fide offers to purchase either of the properties at the listing prices pursuant to those CMA reports. 4. Based on the above, the Debtor's statement in their proposed Disclosure Statement that they have equity of $547,000 in the Harnischfeger Property and $229,143 in the Root River Parkway Property is speculative and unsupported. Attorneys for creditor Summit Credit Union: Nolan T. Franti, Esq. MADDEN LAW GROUP, S.C. 116 S. Main Street Mayville, WI 53050 Tel: (920) 387-2300 Email: nfranti@getmadden.com About Retrovision and 2580RootRiverParkway Retrovision, LLC, and 2580RootRiverParkway, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Wis. Lead Case No. 23-23769) on Aug. 21, 2023. At the time of the filing, Retrovision reported $1 million to $10 million in assets and $100,000 to $500,000 in liabilities while 2580RootRiverParkway reported $100,001 to $500,000 in both assets and liabilities. Judge Beth E. Hanan oversees the cases. Evan P. Schmit, Esq., at Kerkman & Dunn, is the Debtors' legal counsel. REYNOLDS CONSUMER: S&P Alters Outlook to Pos., Affirms 'BB' ICR --------------------------------------------------------------- S&P Global Ratings revised its outlook on U.S.-based Reynolds Consumer Products Inc. to positive from stable and affirmed all of its ratings on the company, including its 'BB' issuer credit rating and 'BB+' issue-level rating on its senior secured debt. The '2' recovery rating on the senior secured debt its unchanged, indicating S&P's expectation for substantial (70%-90%; rounded estimate: 80%) recovery in the event of a payment default. S&P said, "We have assigned a new Management & Governance (M&G) assessment of neutral to Reynolds. This assignment follows the Jan. 7 publication of S&P Global Ratings' revised criteria for evaluating the credit risks presented by an entity's M&G framework. "The positive outlook reflects the potential that we will raise our rating on the company over the next few quarters if it achieves our forecast, including sustaining S&P Global Ratings-adjusted leverage of below 3.0x. "We expect Reynolds will maintain its current deleveraging momentum, supported by its improved profitability and the unwinding of its working capital, and reduce its S&P Global Ratings-adjusted leverage below 3x (in line with its publicly stated target)." After multiple years of headwinds stemming from input cost inflation, supply chain disruptions, rising labor costs, and--more recently--equipment-related problems in its aluminum milling facilities, the company is now largely on track to restore its profitability and credit metrics. This forecast is supported by declining commodity costs (mainly for aluminum and resin), which have eased from the peaks they reached in 2022, and the resolution of Reynolds' milling equipment disruptions. S&P said, "We now expect the company's S&P Global Ratings-adjusted leverage will decline to just below 3x as of the end of fiscal year 2023 after peaking at 4x during the quarter ended March 31, 2023. Further, we expect Reynolds will continue to benefit from input-cost deflation over the coming quarters while largely maintaining most of the pricing gains it implemented over the past few years, which will increase its annual S&P Global Ratings-adjusted EBITDA to about $650 million in 2023 and to about $700 million in 2024 (from $565 million in 2022)." The recent volume declines in the company's tableware segment and the loss of certain non-retail cooking and baking sales will partially offset the recovery in its profitability. Reynolds' tableware segment volumes declined by 7% and 11% in the second and third quarters of 2023, respectively, relative to the same periods the previous year because the category was pressured by higher-than-expected elasticities, especially following management's most recent pricing action (Reynolds has raised prices by about 30% cumulatively since 2019, which compares with the high-teens percent area in its other businesses). S&P said, "We expect the company will have to adjust its advertising and engage in promotions to arrest further volume declines in this segment. Additionally, Reynolds reported the loss of some non-retail cooking and baking segment product sales (food service pans and re-roll aluminum foil sold to industrial manufacturers and related companies), we estimate this was about $40 million of lost revenues in the fourth quarter of 2023. However, we believe the negative effect of the lost sales on its profitability will be minimal, given that the company has historically generated only marginal EBITDA from its non-retail sales." Deleveraging remains a priority for the company, which it will support with its strong FOCF generation and liquidity profile. Reynolds remains committed to its stated net leverage target of 2.0x-2.5x, which compares with its leverage of 3.1x as of Sept. 30, 2023. S&P said, "We expect the company will generate reported FOCF of about $440 million in 2023 and about $390 million in 2024 due to the expansion of its EBITDA and a normalization in its inventory levels. Therefore, we forecast Reynolds will reduce its gross debt further." The positive outlook reflects the potential that S&P will raise its rating on Reynolds over the next few quarters. S&P could revise its outlook on Reynolds to stable if it expects it will sustain S&P Global Ratings-adjusted leverage of above 3x. This could occur if: -- The company faces resurgent input-cost inflation that it is unable to largely offset with price increases and productivity improvements; -- It experiences prolonged supply chain, labor, logistics, and equipment-related disruptions; -- Management adopts more-aggressive financial policies, including substantial acquisitions, dividends, or share repurchases; or -- Consumers trade down to the company's private-label products, which carry materially lower profit margins. S&P could raise its rating on Reynolds if it reduces its S&P Global Ratings-adjusted leverage below 3x on a sustained basis. This could occur if: -- The company continues to restore its profitability by expanding its margin on its strong pricing, mix, and cost management; and -- It maintains a track record of conservative financial policies and uses its excess cash flow to reduce its debt. RTECH FABRICATIONS: Seeks to Hire Musser Bros. as Auctioneer ------------------------------------------------------------ Rtech Fabrications LLC seeks approval from the U.S. Bankruptcy Court for the District of Idaho to employ Musser Bros. Auctions and Real Estate as its auctioneer. The firm will provide the Debtor with auction services to auction all personal property of Debtor, which currently is not engaged in business. The auctioneer will receive 25 percent gross sales commission on all lots selling for $5,000 and below, and 15 percent gross sales commission on all lots selling for $5,001 and above, auctioneer will also collect a 10 percent Buyer's Premium on all lots sold from the purchasers. As disclosed in a court filing, Musser Bros. Auctions is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Musser Bros. Auctions and Real Estate 3125 Rickenbacker Drive Pasco, WA 99301 Phone: (509) 416-6060 About Rtech Fabrications Rtech Fabrications -- https://www.rtechfabrications.com -- is a restoration shop specializing in 67-72 GM trucks. Rtech Fabrications filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Court (Bankr. D. Idaho Case No. 21-20048) on Feb. 19, 2021. Randall T. Robertson, managing member, signed the petition. In the petition, the Debtor had estimated assets of between $1 million and $10 million and liabilities of less than $1 million. Judge Noah G. Hillen oversees the case. The Debtor tapped Elsaesser Anderson, Chtd. as legal counsel and CORE Accounting & Consulting as accountant. SAINT ANNE'S RETIREMENT: Fitch Cuts Rating on 2022/2020 Bonds to BB ------------------------------------------------------------------- Fitch Ratings has downgraded the rating on the following bonds issued by the Lancaster County Hospital Authority on behalf of Saint Anne's Retirement Community, PA (SARC) to 'BB' from 'BB+': - $12.54 million series 2022 revenue bonds; - $36.3 million revenue bonds, series 2020. Fitch has also downgraded SARC's Issuer Default Rating (IDR) to 'BB' from 'BB+'. The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Saint Anne's Retirement Community (PA) LT IDR BB Downgrade BB+ Saint Anne's Retirement Community (PA) /General Revenues/1 LT LT BB Downgrade BB+ The rating downgrade reflects the operating and financial market pressures that SARC has faced over the last several years, which has resulted in stagnant financial profile metrics at very weak levels. While SARC complied with its debt service coverage covenant in FY23 (YE June 30), it violated its liquidity covenant with 143 days cash on hand (DCOH) compared to a covenant of 150 DCOH, as operating pressures and financial market volatility caused its unrestricted cash to decline to $8.4 million at FYE23 compared to $9.5 million at FYE22 and a high of $12.6 million at FYE21. SARC is remedying the violation by providing quarterly statements of its liquidity position to the bond trustee and its next testing date is June 30, 2024. As a result of this liquidity decline, SARC's cash-to-adjusted debt was below 25% as of FYE23 and 1Q24, which is very weak for the rating category, underscoring the downgrade to 'BB'. The Stable Outlook reflects SARC's considerably improved debt burden following the refinancing of its series 2012 bonds during FY22, which has resulted in a strengthening of SARC's capital-related metrics, as well as considerably improved operating performance in the first three months of FY24. This improvement mitigates Fitch's concerns about SARC's high exposure to skilled nursing facility (SNF) revenues and Fitch notes favorably that SARC's reliance on Medicaid revenues has considerably declined over the last several years. Fitch expects SARC's revenue mix to continue to shift over time as the community invests in new independent living unit (ILU) construction. SECURITY The bonds are secured by a pledge of gross revenues of the obligated group, mortgage interest in certain properties and a master debt service reserve fund. KEY RATING DRIVERS Revenue Defensibility - 'bbb' Solid Occupancy, Moderately Competitive Market Area SARC is a single site life plan community (LPC) with a track record of solid demand, operating in a competitive market area of Lancaster County. An average of approximately 89% of SARC's ILUs were occupied from FY19 to FY23. ILU occupancy dipped to 78% in FY21; however, this was primarily attributable to the new Phase II units coming online, as well as the challenges related to the coronavirus pandemic. ILU occupancy recovered to 91% in FY22, 93% in FY23 and 95% in the quarter ended Sept. 30, 2023. The Phase II ILUs opened in February 2021 and are currently over 90% occupied. SARC's existing ILU cottages are currently 100% occupied, with deposits for two more cottages received and awaiting a construction start date. SARC has a waiting list of 168 prospective residents that is updated every two weeks. Similar to industry-wide trends, SARC's skilled nursing facility (SNF) occupancy has been pressured in the years following the pandemic. SARC does not utilize agency staff and management is now budgeting for 75% SNF occupancy to account for continued challenges. Fitch expects stable SNF occupancy over the next two years. With the opening of its new ILUs, SARC is making strides toward improving its revenue mix to be less reliant on its SNF beds, although SARC still derives the majority of its net revenues from its SNF. In FY23, SARC derived approximately 53.3% of its net revenues from its SNF, with 19.4% derived from its assisted living units (ALUs) and 25.7% from its ILUs, compared with 63.0%, 20.9% and 14.9%, respectively, in FY20. SARC's primary market area (PMA) is a 20-mile radius in Lancaster County, PA, from which it draws the majority of its residents. The PMA's economic and demographic characteristics are mixed, which makes its modest entrance fee and rental component affordable and appealing to a broad base of prospective residents and supportive of a moderate degree of pricing flexibility. The competitive landscape in Lancaster County is varied and mature. In addition to SARC, there are five other longstanding type-C LPCs in the PMA that provide a full scope of services. Operating Risk - 'bbb' Solid Operations, Moderated Debt Burden As a predominantly fee-for-service LPC, SARC has historically maintained solid core operations. Operations were significantly challenged in FY22 and FY23, with respective operating ratios of 113.7% and 104.3%, due to a wage adjustment SARC implemented as a staff recruitment/retention strategy and SNF occupancy that lagged budgeted expectations. However, SARC's operating performance has shown considerable improvement to 95.4% in the first three months of FY24 on the heels of improved ILU and personal care unit (PCU) census (100% as of Sept. 30, 2023). Fitch expects SARC's operations to stabilize at an improved level as its new ILUs fill and SNF census recovers to budgeted levels. SARC's capex has been robust, resulting in an improved average age of plant, to 12.6 years in FY23 compared to 16.3 years in FY19, supporting strong demand. SARC has focused its strategic capex on increasing its complement of ILUs, having added 84 new apartments that were funded with the proceeds of the series 2020 bonds and 50 new cottages that were funded with initial entrance fees. SARC has plans to build 20 more cottages on the property, but will pre-sell each unit to prior to construction. SARC's maximum annual debt service (MADS) more than doubled to $3.3 million in FY23 from $1.4 million in FY22 per stipulations in the series 2020 bond documents that SARC is tested on full MADS now that the newly constructed ILUs have reached 90% occupancy. Despite this escalation, SARC's capital-related metrics remain moderated compared to their historical levels, following the series 2022 bond issuance that refinanced the community's series 2012 bonds, and consistent with Fitch's 'bbb' assessment of SARC's operating risk, with revenue-only MADS coverage of 0.6x, MADS at 15.2% of revenue and 12.1x debt to net available as of FY23. SARC has actively managed its payor mix in its SNF to reduce its exposure to Medicaid, which historically averaged well above 25% of SNF net revenues but has improved significantly since FY21 to 17.4% in FY23. The Stable Outlook reflects Fitch's expectation that SARC's SNF payor mix will remain largely consistent with FY23 levels. Financial Profile - 'bb' Weakened Financial Cushion Despite considerable improvement in SARC's MADS coverage, the operational challenges and financial market volatility experienced in FY23 have weakened SARC's already slim financial cushion, with cash-to-adjusted debt declining to 23.7% from 24.3% in FY22 and a recent high of 29.5% in FY21. As a result of operational and financial market pressures, SARC's liquidity declined to 143 DCOH in FY23 from 173 days in FY22 and 237 days in FY21. This resulted in a liquidity covenant violation, which SARC is remedying as described above, but which is consistent with a 'weaker' asymmetric risk assessment to SARC's financial profile. While Fitch expects liquidity metrics to remain stable to improving over the next several years as it continues to execute on its strategic capital plan, this volatility has nevertheless thinned SARC's financial cushion to a point where its credit profile is no longer consistent with a 'BB+' rating, underscoring the downgrade to 'BB'. Despite the escalation in MADS, SARC's coverage was solid at 1.3x in FY23 and 1.5x as of Sept. 30, 2023. MADS coverage overall has improved since the refinancing of the series 2012 debt in 2021. Fitch expects MADS coverage to continue to improve SARC constructs and fills new ILU cottages, which should be additive to the community's cash flows. Asymmetric Additional Risk Considerations No asymmetric risk considerations are relevant to the rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Any further declines in SARC's liquidity will pressure the rating; - Failure to comply with SARC's DCOH or debt service coverage covenant at FYE24 could exact further rating pressure. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Positive rating action is unlikely over the Outlook period and ultimately would be predicated on significant improvement in SARC's liquidity position evidenced by sustained cash-to-adjusted debt above 25% in Fitch's stress case scenario and DCOH above 200. PROFILE SARC is a fee-for-service LPC located outside of Columbia, PA in the Township of West Hempfield, approximately 35 miles southwest of Harrisburg and 10 miles west of Lancaster. SARC is sponsored by the Religious Congregation of Sisters of the Adorers of the Blood of Christ, United States Region (ASC). SARC consists of 169 ILUs (119 apartments, 50 cottages), 51 PCUs, 51 memory care units and 58 SNF beds. SARC offers type-C contracts for its villas and cottages, with 30% refundable, 60% refundable and fully amortizing entrance fee plans available. For its ILU apartments, SARC offers primarily type-D (rental) contracts, which require a one-time community fee upon entry. Fitch calculates SARC's total operating revenues at about $21.1 million in FY23 (YE June 30). 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. SANUWAVE HEALTH: Manchester MGMT., 4 Others Report Equity Stake --------------------------------------------------------------- In a Schedule 13D/A filed with the Securities and Exchange Commission, the following entities and individuals reported beneficial ownership of shares of common stock of Sanuwave Health, Inc. as of December 30, 2023: Shares Percent Beneficially of Reporting Person Owned Class Manchester Management PR, LLC 472,022,067 33.70% Manchester Explorer, L.P. 418,022,067 29.84% Manchester Management Company, LLC 472,022,067 33.70% James E. Besser 474,272,067 33.86% Morgan C. Frank 454,964,873 32.48% The outstanding Shares figure reflects 1,400,639,885 Shares, which is comprised of two components: (i) 1,026,078,464 Shares outstanding as reported in the Issuer's 10-Q filed by the Issuer on November 9, 2023; and (ii) 374,561,421 Shares of the Issuer that the Reporting Persons may acquire on conversion, exercise or exchange of the Derivatives. A full-text copy of the Report is available at http://tinyurl.com/3e44wwvh About SANUWAVE Health Headquartered in Suwanee, Georgia, SANUWAVE Health, Inc. (OTCQB:SNWV) -- http://www.SANUWAVE.com-- is focused on the research, development, and commercialization of its patented, non-invasive and biological response-activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures. SANUWAVE's end-to-end wound care portfolio of regenerative medicine products and product candidates help restore the body's normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, aesthetic/cosmetic, and cardiac/endovascular conditions. SANUWAVE reported a net loss of $10.29 million for the year ended Dec. 31, 2022, compared to a net loss of $27.26 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $19.87 million in total assets, $60.88 million in total liabilities, and a total stockholders' deficit of $41.01 million. In its Quarterly Report for the three months ended Sept. 30, 2023, SANUWAVE expressed substantial doubt as to its ability to continue as a going concern. SANUWAVE said the recurring losses from operations, the events of default on the Company's notes payable, and dependency upon future issuances of equity or other financing to fund ongoing operations have raised substantial doubt as to its ability to continue as a going concern for a period of at least twelve months from the filing of the Form 10-Q. SCH SHEET: Has Deal Cash Collateral Access ------------------------------------------ SCH Sheet Metal, Inc. asks the U.S. Bankruptcy Court for the Eastern District of New York for authority to use cash collateral and provide adequate protection. The New York State Department of Taxation and Finance is the Debtor's secured creditor by virtue of tax warrants. Pursuant to the Tax Warrants the Secured Creditor possesses, among other things, a first priority lien on all of Debtor's personal property. The parties agreed that the Debtor may use cash collateral in accordance with the budget through the earlier of: a. upon the expiration of the term of the Budget unless extended by Secured Creditor in writing or otherwise extended by further Order of the Court. b. the date of the confirmation of any reorganization plan in the case: or c. upon Default, whichever occurs first, unless extended in writing by the Secured Creditor. which extension may be effected without further order of the Court, or unless the Secured Creditor will be paid irrevocably and in full. As adequate protection of the Secured Creditor's interest in the Prepetition Collateral, including, without limitation, the cash collateral, the Debtor will make monthly payments to the Secured Creditor in the amount of $1,000 on the 15th day of each month beginning November 15, 2023. The Secured Creditor will also be granted replacement liens lo the same extent, validity and priority that existed on the Petition Date, on all post-petition property of (he Debtor, subject to U.S. Trustee fees and any Clerk's filing fees. Any diminution in value of the Prepetition Collateral which cause all or any part of the Secured Creditor's liens or security interests in the Prepetition Collateral to become undersecured or unsecured will be deemed a claim entitled to priority pursuant to 11 U.S.C. section 507(b): junior in priority only to allowed fees and expenses of a hypothetical chapter 7 trustee in an amount not to exceed $10,000 in the event that the instant chapter 11 case is converted to one under chapter 7. These events constitute an Event of Default: a. a breach or default in any provision, term or condition of the Stipulation; b. the Debtor fails to make any required payment, including those to the Secured Creditor which are required by the Stipulation, on the date on which such payment becomes due; c. any representation or warranty of die Debtor made in this Stipulation being materially false; d. the Debtor makes a payment from cash collateral that is not part of the Budget; e. the Debtor's income varies below 20% or more of its projections in the Budget or expenses exceed the Budget by 20% in any category or 20% in the aggregate; f. The Stipulation being, modified, vacated, supplemented, amended or reversed, except with the Secured Creditor's consent, or the Debtor's filing of an application or motion with the Court for authority to do so without the Secured Creditor's consent; g. The entry of an Order converting or dismissing the chapter 11 case; h. The termination of all or substantially all of the Debtor's operations whether by voluntary acts or omissions of the Debtor, or otherwise. A hearing on the matter is set for February 8, 2024 at 10 a.m. A copy of the stipulation is available at https://urlcurt.com/u?l=jhi1UE from PacerMonitor.com. About SCH Sheet Metal, Inc. SCH Sheet Metal, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-72257) on June 23, 2023. The petition was signed by Cathi Houlihan as president. At the time of filing, the Debtor estimated$1 million to $10 million in both assets and liabilities. Judge Louis A. Scarcella oversees the case. Barry D. Haberman, Esq. at the LAW OFFICE OF BARRY D. HABERMAN represents the Debtor as counsel. SOLIMANO FRAMING: Hires Larson & Zirzow, LLC as Bankruptcy Counsel ------------------------------------------------------------------ Solimano Framing Group LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ Larson & Zirzow, LLC as its bankruptcy counsel. The Debtor requires legal counsel to: (a) prepare reports and other legal papers in connection with the administration of the Debtor's bankruptcy estate; (b) take all actions in connection with a plan of reorganization and related documents and such further actions as may be required in connection with the administration of the estate; (c) take all necessary actions to protect and preserve the Debtor's estate, including the negotiation of disputes in which the Debtor is involved, and the preparation of objections to claims filed against the estate; and (d) perform all other necessary legal services to prosecute the Debtor's bankruptcy case. The firm will be paid at these rates: Matthew C. Zirzow, Esq. $650 per hour Patricia Huelsman, Paralegal $275 per hour In addition, the firm will seek reimbursement for expenses incurred. Prior to the petition date, Larson & Zirzow received the total sum of $7,568.75 for work reviewing and analyzing the company's financial situation and preparing for the Chapter 11 Case, as well as related expenses, including the filing fee for the case. The firm currently holds a balance of $22,431.25 in its trust account Matthew Zirzow, Esq., an attorney at Larson & Zirzow, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Matthew C. Zirzow, Esq. Zachariah Larson, Esq. LARSON & ZIRZOW, LLC 850 E. Bonneville Ave. Las Vegas, NE 89101 Telephone: (702) 382-1170 Facsimile: (702) 382-1169 Email: mzirzow@lzlawnv.com zlarson@lzlawnv.com About Solimano Framing Group LLC Solimano Framing Group LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 24-10079) on Jan. 9, 2024. The petition was signed by Atilio Solimano, Jr., as co-managing member. At the time of filing, the Debtor estimated $500,000 to $1 million in assets and $1 million to $10 million in both assets and liabilities. Judge August B. Landis presides over the case. Matthew C. Zirzow, Esq. at LARSON & ZIRZOW, LLC represents the Debtor as counsel. SOUTHWESTERN ENERGY: S&P Places 'BB+' ICR on CreditWatch Positive ----------------------------------------------------------------- S&P Global Ratings placed its 'BB+' issuer credit rating and 'BB+' issue-level rating on independent oil and gas producer Southwestern Energy Co. on CreditWatch with positive implications. S&P said, "The CreditWatch positive placement reflects the likelihood that we will raise our ratings on the company following the close of the acquisition by one notch to 'BBB-', which we expect to occur in the second quarter of 2024. "We have also assigned a new Management and Governance (M&G) assessment of neutral to Southwestern. This assignment follows the Jan. 7 publication of S&P Global Ratings' revised criteria for evaluating the credit risks presented by an entity's M&G framework. "We placed all our ratings on Southwestern, including our 'BB+' issuer credit rating and 'BB+' issue-level rating on its unsecured debt, on CreditWatch with positive implications. "The CreditWatch placement reflects the likelihood that we will raise the ratings on Southwestern one notch to 'BBB-' following the close of its transaction with Chesapeake Energy. The transaction values Southwestern at about $11.5 billion, including the assumption of Southwestern's long-term debt, which stood at about $3.7 billion as of Sept. 30, 2023. Chesapeake plans to issue approximately $7.4 billion of new equity, assume $3.7 billion of existing Southwestern debt and paydown the amounts outstanding on Southwestern's credit facility ($388 million as of Sept. 30, 2023)." On Jan. 11, 2024, Oklahoma City-based oil and gas exploration and production company Chesapeake Energy Corp. announced it entered into an agreement to merge with Southwestern in a transaction valued at $11.5 billion, including $7.4 billion of equity, the assumption of $3.7 billion of Southwestern's long-term debt, and the paydown of amounts outstanding on Southwestern's credit facility ($388 million as of Sept. 30, 2023). Chesapeake shareholders will own about 60% of the company with Southwestern's existing shareholders owning the remaining 40%. The combined company targets net debt to EBITDA below 1x at $3.00/mmBtu (or $4.5 billion of net debt). The combined entity will be the largest independent natural gas producer in the U.S. and have dual operations in Appalachia and the Haynesville. The transaction is subject to customary closing conditions and regulatory approvals. S&P expects to resolve the CreditWatch placement when the acquisition closes, which we anticipate will occur in the second quarter of 2024. S&P Global Ratings assigned a new M&G modifier assessment of neutral to Southwestern. S&P said, "The action follows the revision to our criteria for evaluating the credit risks presented by an entity's management and governance framework. The terms management and governance encompass the broad range of oversight and direction conducted by an entity's owners, board representatives, and executive managers. These activities and practices can impact an entity's creditworthiness and, as such, the M&G modifier is an important component of our analysis. "Assuming the transaction is completed as proposed, we will likely raise our ratings by one notch on Southwestern to equalize them with our expected ratings on Chesapeake Energy." SPACE SHADOW: Unsecureds to Get 100 Cents on Dollar in Plan ----------------------------------------------------------- Space Shadow LLC filed with the U.S. Bankruptcy Court for the District of Nevada a Disclosure Statement for Small Business describing Chapter 11 Plan dated January 8, 2024. The Debtor is a Limited Liability Company. The Debtor has been operating the real property located at 249 N. Stephanie Street, Henderson, Nevada. This is a commercial retail building. Kayvoughn Moradi is the Manager-Member of the LLC. He has been receiving a manager fees around $5,000 to $7,000 based upon the funds available to pay. There were times when the manager would not get paid. The Debtor fell behind in its payments to the mortgage holder and they proceeded to commence foreclosure. There is substantial equity in the property so the Debtor filed to preserve the equity. This Plan of Reorganization proposes to pay creditors in full from the operation and sale of the real property of the Debtor. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 100 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 4 consists of General Unsecured Claims. Creditors will be paid in full within 30 days from the sale of the real property. Class 4 creditors include Nevada Power Company ($3,708.34); Republic Services ($3,264.19); BTI Consulting and Structural Engineers – Engineering Services ($3,600.00); Diamond Concrete – Services ($5,800.00); and Gonzalez Painting Services ($8,200.00). This Class is impaired. Equity interest holders will retain their interest in the Debtor Payments will be made from the current operating cash flow of the Debtor. In addition, the creditor has been seizing the rents. When the property sells, the creditor will be paid in full. A full-text copy of the Disclosure Statement dated January 8, 2024 is available at https://urlcurt.com/u?l=75nAJE from PacerMonitor.com at no charge. Counsel for the Debtor: David J. Winterton Esq. DAVID J. WINTERTON & ASSOC., LTD. 7881 W. Charleston Blvd., Suite 220 Las Vegas, NV 89117 Tel: (702) 363-0317 Fax: (702) 363-1630 Email: david@davidwinterton.com About Space Shadow LLC Space Shadow LLC in Henderson, NV, has been operating the real property located at 249 N. Stephanie Street, Henderson, Nevada. The Debtor filed its voluntary petition for Chapter 11 protection (Bankr. D. Nev. Case No. 23-14412) on October 9, 2023, listing as much as $1 million to $10 million in both assets and liabilities. Kayvoughn Moradi as managing member, signed the petition. Judge Hilary L. Barnes oversees the case. ANDERSEN & BEEDE serve as the Debtor's legal counsel. SPORTS INTERIORS: Seeks Cash Collateral Access ---------------------------------------------- Sports Interiors, Inc. asks the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral for insurance, utilities, rent, payroll, payments to post-petition vendors, and other miscellaneous items needed in the ordinary course of business. Bank Financial, National Association assert an interest in the Debtor's cash collateral, but not limited to cash, accounts receivable, inventory and cash equivalents to secure an indebtedness in the approximate amount of $436,000. On October 24, 2023, the Superior Court of Union County, New Jersey entered an Order of Judgment, in the action styled Mountainside Real Estate Assocs. V. Sports Interiors, Inc., et al., docket No. UNN-L-1673-18, which provided, among other things, for a monetary judgment in favor of the plaintiff and against the Debtor in the aggregate amount of $1.4 million. The Debtor attempted, without success, to settle with the plaintiff in the New Jersey Litigation after entry of the New Jersey Judgment. On October 26, 2023, the New Jersey Court issued a Writ of Execution with respect to the New Jersey Judgment. Thereafter, on January 2, 2024, the plaintiff in the New Jersey Litigation caused the Writ of Execution to be served upon a branch of Chase Bank in Elizabeth, New Jersey. As a result of the service of the Writ of Execution on the Chase Bank branch in Elizabeth, New Jersey, Chase Bank froze the Debtor's account at the branch in Illinois where the Debtor maintained a bank account. The entry of the New Jersey Judgment, the service of the Writ of Execution and the freezing of the Debtor's bank account were the triggering events for the filing of the Chapter 11 case. The Debtor proposes to use cash collateral and provide adequate protection to the Bank upon the following terms and conditions: A) The Debtor will permit the Bank to inspect, upon reasonable notice, within reasonable hours, the Debtor's books and records; B) The Debtor will maintain and pay premiums for insurance to cover all of its assets from fire, theft and water damage; C) The Debtor will, upon reasonable request, make available to the Bank evidence of that which purportedly constitutes its collateral or proceeds; D) The Debtor will properly maintain its assets in good repair and properly manage the business; and E) The Bank will be granted valid, perfected, enforceable security interests in and to the Debtor's post-petition assets, including all proceeds and products which are now or hereafter become property of this estate to the extent and priority of its alleged pre-petition liens, if valid, but only to the extent of any diminution in the value of such assets during the period from the commencement of the Debtor’s Chapter 11 case through the next hearing on the use of cash collateral. A hearing on the matter is set for January 17, 2024 at 10:30 a.m. A copy of the motion is available at https://urlcurt.com/u?l=7duZX1 from PacerMonitor.com. About Sports Interiors, Inc. Sports Interiors, Inc. sells and installs its liner system and metal halide lighting system for indoor tennis facilities. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-00297) on January 9, 2024. In the petition signed by Robert VanDixhorn, president, a director and a shareholder, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Deborah L Thorne oversees the case. David K. Welch, Esq., at BURKE, WARREN, MACKAY & SERRITELLA, P.C., represents the Debtor as legal counsel. STAGHORN OUTDOORS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Staghorn Outdoors LLC f/k/a Staghorn Outfitters 12401 E. 43rd Street, Ste. 100 Independence, MO 64055 Business Description: The Debtor manufactures and sells outdoor apparel and footwear. Chapter 11 Petition Date: January 11, 2024 Court: United States Bankruptcy Court Western District of Missouri Case No.: 24-40029 Judge: Hon. Cynthia A Norton Debtor's Counsel: Jonathan Margolies, Esq. SEIGFREID BINGHAM 2323 Grand Boulevard Suite 1000 Kansas City, MO 64108 Tel: (816) 265-4195 Email: jmargolies@sb-kc.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Matthew Gray as president/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/SWTVFMI/Staghorn_Outdoors_LLC__mowbke-24-40029__0001.0.pdf?mcid=tGE4TAMA STERETT COMPANIES: Wins Cash Collateral Access Thru Jan 26 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Kentucky, Owensboro Division, authorized Sterett Companies, LLC and affiliates to use cash collateral on an interim basis in accordance with the budget, through January 26, 2024. As previously reported by the Troubled Company Reporter, on October 29, 2020, the Debtors entered a credit and security agreement. The financial institutions party to the Prepetition Credit and Security Agreement are Rockland Trust Company, Huntington National Bank, and Webster Business Credit, a division of Webster Bank N.A., successor in interest to Webster Business Credit Corporation as Agent. As of the Petition Date, pursuant to the Prepetition Credit and Security Agreement, the Debtors were indebted to the Lenders in the principal amount of $67.023 million, plus accrued prepetition interest, fees, expenses and other amounts arising under the Prepetition Credit and Security Agreement. The Prepetition Obligations were secured by valid, enforceable, and perfected liens on and security interests encumbering substantially all assets of the Debtor. As adequate protection, the Agent was granted a lien, mortgage, and/or security interest in all of the Debtors' presently owned or hereafter acquired property and assets. The Adequate Protection Lien will be a senior first priority Lien on the Adequate Protection Collateral. In the event that the Adequate Protection Lien is insufficient, for any reason, as adequate protection of Agent's interests in the Adequate Protection Collateral, Agent for itself and for the ratable benefit of each Lender was granted a post-petition superpriority administrative expense claim against each of the Debtors. As further adequate protection, the Debtors was directed to provide to Agent, on behalf of the Lenders, a payment of $200,000 for the month of November consisting of (i) $125,000 payable the following payments: (i) on November 30, 2023, a payment of $75,000 constituting the remaining amount owed for the Interim Adequate Protection Payment; (ii) on December 1, 2023, an Adequate Protection Payment of $175,000 and on December 15 an Adequate Protection Payment of $175,000 and (iii) on January 2, 2024, an Adequate Protection Payment of $175,000 and on January 15, 2024 an Adequate Protection Payment of $175,000. A hearing on the matter is set for January 23, 2024 at 11 a.m. A copy of the order is available at https://urlcurt.com/u?l=1QPUuq from PacerMonitor.com. About Sterett Companies, LLC Sterett Companies, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Ky. Case No. 23-40625) on October 27, 2023. In the petition signed by William L. Sterett, III, CEO, the Debtor disclosed up to $50,000 in assets and up to $50 million in liabilities. Judge Charles R. Merrill oversees the case. Neil C. Bordy, Esq., at Seiller Waterman LLC, represents the Debtor as legal counsel. STONEYBROOK FAMILY: Files Emergency Bid to Use Cash Collateral -------------------------------------------------------------- Stoneybrook Family Dentistry asks the U.S. Bankruptcy Court for the Southern District of Florida, Orlando Division, for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to fund business operations and necessary expenses. Prior to the Petition Date, the Debtor obtained financing from the U.S. Small Business Administration, which is purportedly secured by a lien on the Debtor's cash and/or cash equivalents. The SBA may assert a first priority security interest in the Debtor's cash and cash equivalents by virtue of a UCC-l Financing Statement filed with the State of Florida on July 5, 2020. The outstanding balance owed to the SBA is approximately $150,000. In addition, The Huntington National Bank, United Community Bank and Highland Capital Corporation may assert an interest on Debtor's cash equivalents, which interests are inferior to those of the SBA. As adequate protection for the use of cash collateral, the Debtor proposes to grant the SBA and the inferior interests holding a replacement lien on its post-petition cash collateral to the same extent, priority, and validity as its pre-petition liens, to the extent its use of cash collateral results in a decrease in value of their interests. As demonstrated by the Budget, Debtor will continue to operate on a positive cash flow basis during the interim seven-week period. A copy of the motion is available at https://urlcurt.com/u?l=K11X4U from PacerMonitor.com. About Stoneybrook Family Dentistry, P.A. Stoneybrook Family Dentistry, P.A. specializes in cosmetic dentistry, invisalign, dental implants, pediatric dentistry, root canal therapy, and smile makeovers. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00076) on January 8, 2024. In the petition signed by Wendi K. Wardlaw, president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Tiffany P Geyer oversees the case. Daniel A. Velasquez, Esq., at Latham Luna Eden and Beaudine LLP, represents the Debtor as legal counsel. SUPERIOR PLUS: DBRS Confirms BB(high) Issuer Rating --------------------------------------------------- DBRS Limited confirmed the Issuer Rating of Superior Plus LP (Superior Plus or the Company) at BB (high) and the Company's Senior Unsecured Debentures rating at BB, with a recovery rating of RR5. All trends are Stable. The Issuer Rating confirmation is underpinned by the Company's leading market share position, strong brand strength, and a growing footprint in the energy distribution market, both in the United States and Canada. The Company has a weaker financial risk profile, driven in part by an aggressive leverage policy and increase in debt used to finance acquisitions, to an extent where lease-adjusted debt-to-EBITDA exceeded 4 times (x). The minus one-notch and RR5 recovery rating on the Senior Unsecured Debentures rating considers the large amount of senior secured debt that ranks in priority to the Senior Unsecured Debentures. The Stable trends are based on DBRS Morningstar's expectation that Superior Plus will deliver solid growth in earnings and operating cash flows, and the credit metrics will gradually strengthen over the forecast horizon to a level more commensurate with the current Issuer Rating. In May 2023, Superior Plus completed the acquisition of Certarus, a private energy distributor specializing in compressed and renewable natural gas, headquartered in Alberta, Canada, for a consideration of $840.5 million and financed with $353.2 million of debt and $487.3 million of equity. In addition to the consideration paid, Superior Plus assumed approximately $214.2 million in interest-bearing debt giving the acquisition an enterprise value of approximately $1,054.7 million. In the nine months ending September 2023, EBITDA (as determined by DBRS Morningstar) grew by 28.4% year over year (YoY) to $341 million, reflecting a strong wholesale propane market and growth in unit margins, but offset by weaker Canadian propane performance due to warmer weather in the first quarter, cost inflation, and increased corporate expenses primarily due to higher incentive plan costs due to fluctuations in Superior's share price compared to the prior comparable period, a higher insurance provision, costs related to onboarding the new CEO, and the impact of inflation on costs. Excluding the Certarus contribution, year-to-date (YTD) EBITDA grew by 10.3% YoY. YTD EBITDA margins improved from 12% to 14%, supported by the higher-margin Certarus integration and the Company's ability to pass some of the costs to its customers. YTD cash flow from operations before changes in working capital grew by 26.5% to $200 million, reflecting a strong earnings conversion, partially offset by higher interest expenses due to additional debt used to fund the acquisitions and higher average borrowing costs. Free cash flow (FCF) before working capital improved from a use of $36 million in the prior comparable period to a use of $13 million in the current period, due to stronger operational cash flows and a 10.6% decrease in shareholder dividends, offset by a 43% increase in capex to $104 million for strategic projects and the procurement of mobile storage units (MSUs) at Certarus. Overall, the Company's YTD financial performance supports the DBRS Morningstar EBITDA estimate of $580 million, with the seven months including the Certarus contribution. Looking ahead into 2024, DBRS Morningstar's forecast EBITDA for Superior Plus is expected to be approximately $650 million, reflecting full consolidation of the acquisitions made in 2023 and moderate growth in total revenue to levels above $4 billion, offset by cost inflation and an expectation that the Canadian propane segment will be moderately affected by divestitures in Ontario. EBITDA margins are expected to improve to 15% to 16% with the full integration of Certarus, which benefits from a lean business model and efficiency gains from its growing MSU base. Interest expenses are expected to remain elevated above $120 million (compared to $85 million in 2022) due to expectations that Superior Plus will not make a meaningful debt reduction in the near term. Cash flow from operations is expected to improve in line with earnings. Free cash flow before working capital is expected to be insignificant due to higher planned capex and a moderate growth in dividends. Changes in operational working capital are not expected to be a material source of cash flows for the Company in the forecast period. DBRS Morningstar anticipates a slowdown in acquisition activity in the medium term, save for small tuck-in acquisitions that are not expected to materially affect the financial profile. The gross lease-adjusted debt-to-EBITDA is expected to remain elevated at or near 4x in 2023 and 2024 and then gradually improve thereafter, albeit at a slow pace as the Company prioritizes strategic projects in order to maximize earnings. Lease-adjusted cash flow-to-debt is also expected to improve from 12% in 2022 to mid-to-upper teens in 2023 and 2024, reflecting a strong cash contribution from recent acquisitions and lower transaction-related costs. Overall, Superior Plus' strong business risk profile continues to support the current credit ratings. However, DBRS Morningstar could consider a negative rating action under the following conditions: (1) a weaker-than-expected performance or an increase in the level of indebtedness that would cause leverage metrics to deteriorate below what is considered acceptable within the current credit rating range for an extended period of time, particularly forecasted gross debt-to-EBITDA at or above 4.5x; and/or (2) a negative permanent shift in the business risk profile, such as loss of market position. Conversely, DBRS Morningstar would likely consider a positive rating action if the Company demonstrated a commitment to a materially stronger financial profile over a longer period, while maintaining a strong business risk profile. DBRS Morningstar notes that in this review the applicable rating methodology for Superior Plus LP is the "DBRS Morningstar Global Methodology for Rating Companies in the Merchandising Industry" rather than the "DBRS Morningstar Global Methodology for Rating Companies in the Services Industry," which was used in the prior annual review. There was no change in the credit ratings. Notes: All figures are in Canadian dollars unless otherwise noted. TESSEMAE'S LLC: Hearing on Sale to PANOS Brands Set for Jan. 18 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland is set to hold a hearing on Jan. 18 on the proposed sale of substantially all of the assets of Tessemae's LLC to PANOS Brands, LLC. Under the sale agreement, PANOS Brands offered $4.5 million for the assets and agreed to assume certain contracts as part of the deal. The assets to be purchased do not include accounts receivable of Tessemae's. The agreement requires that the sale be "free and clear" of liens, claims and interests. PANOS Brands' $4.5 million offer was selected as the winning bid at the auction conducted on Dec. 18 following the submission of more than 10 bids between PANOS Brands and the McDermott Group, which was comprised of the principals of Tesse DIP Fund I, LLC. McDermott Group's $4.75 million offer was designated as the back-up bid. The offer included accounts receivable as a purchased asset. Tessemae's will use a portion of the sale proceeds to pay the undisputed amount owed to the debtor-in-possession (DIP) lender upon closing. The balance of the sale proceeds will be used by the company for payment of administrative expenses and, upon court approval, funding of the company's Chapter 11 plan. About Tessemae's LLC Tessemae's, LLC is a flavor-forward food company that makes clean-label, organic salad dressing. The company is based in Baltimore, Md. Tessemae's filed Chapter 11 petition (Bankr. D. Md. Case No. 23-10675) on Feb. 1, 2023, with $1 million to $10 million in assets and $10 million to $50 million in liabilities. Demian Costa, chief strategy officer, signed the petition. The Debtor tapped Gary H. Leibowitz, Esq., at Cole Schotz, PC as legal counsel; Aurora Management Partners, Inc. as financial advisor; and B. Riley Securities, Inc. as investment banker. DIP lenders Tesse Fund I, LLC, MCDJR-Tesse, LLC and PMCDTESSE, LLC, are represented by Richard L. Costella, Esq., at Tydings & Rosenberg, LLP. TGC SYSTEMS: Hearing on Sale to Clearview Set for Jan. 24 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada is set to hold a hearing on Jan. 24 on the proposed sale of TGC Systems, LLC's assets to Clearview Consulting & Marketing, LLC. Clearview made a $300,000 offer for the assets, which include heavy equipment, tools, inventory, and executory contracts for works in progress. The assets are being sold "free and clear" of liens, claims and encumbrances. GrowGeneration Corp., a secured creditor, has consented to the sale of its collateral "free and clear" of its lien on the condition it receives all the proceeds from the sale. About TGC Systems TGC Systems, LLC is a company in Incline Village, Nev., which conducts business under the name Total Grow Control. TGC Systems filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-50783) on Oct. 23, 2023, with $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Jeanette McPherson, Esq., at Fox Rothschild, LLP, serves as Subchapter V trustee. Judge Hilary L. Barnes oversees the case. Kevin A. Darby, Esq., at Darby Law Practice represents the Debtor as bankruptcy counsel. THREE NICKELS: Court Confirms Chapter 11 Plan --------------------------------------------- Judge Jil Mazer-Marino has entered an order that the Plan of Three Nickels LLC, the provisions of which are incorporated in the order by reference as if set forth at length, is confirmed pursuant to Sec. 1129 and 1141 of the Bankruptcy Code. The Debtor will not be entitled to a discharge under Section 1141(d)(1) of the Bankruptcy Code. The rights afforded in the Plan will be in exchange for and in complete satisfaction and release of all Claims of any nature whatsoever, including any interest accrued thereon from and after the Petition Date, against the Debtor, its estate, or any of its assets or properties arising prior to the date of Confirmation to the extent, if any, permissible under Secs. 524 and 1141 of the Bankruptcy Code. Section 5.2(b) of the Plan is amended to read, in its entirety, as follows: The Allowed Administrative Expense Claims of the Professionals up to the amount of $82,500.00 (provided however that the Plan Administration Fund shall not be used to pay the fees or expenses of Professionals incurred in connection with any objection to Ocean Lender's Claim); To the extent that there is any deficiency/shortfall of available Cash to pay the $82,500 in full then Ocean Lender shall pay any deficiency/shortfall thereof on the Effective Date, and to the extent that there is any surplus Cash in the estate, including surplus cash collateral, after payment, the Plan Administrator and/or the Debtor shall pay such surplus Cash to Ocean Lender. About Three Nickels Three Nickels, LLC, is a New York limited liability company formed on March 27, 2007. The Debtor is the owner of certain real property located at 555 Ocean Avenue, Brooklyn, New York Block 501, Lot 17 (the "Property"). The Debtor sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-41456) on April 27, 2023, with as much as $50,000 in both assets and liabilities. Judge Jil Mazer-Marino oversees the case. The Debtor tapped Douglas J. Pick, Esq., at Pick & Zabicki, LLP, as legal counsel and MorrisAnderson & Associates, Ltd. as financial advisor. TITAN CONCRETE: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Titan Concrete, Inc. The committee members are: 1. Harlem River Concrete, Inc. 121 Wampum Lane West Islip, NY 11795 Attn: Anthony Valente, President Telephone: 516.805.2874 Email: avjenna@hotmail.com 2. McInnes USA, LLC c/o Fishkin Lucks LLP 500 Seventh Avenue, 8th Floor New York, NY 10018 Attention: Steven M. Lucks, Esq. Telephone: 973.536.2800 Email: slucks@fishkinlucks.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Titan Concrete Titan Concrete, Inc., a company in Carmel, N.Y., provides concrete and ready-mix services to commercial, industrial, residential and homeowner customers. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-35835) on Oct. 4, 2023, with $1 million to $10 million in both assets and liabilities. Samuel Dawidowicz serves as Subchapter V trustee. Judge Cecelia G. Morris oversees the case. Jeremy R. Johnson, Esq., at Polsinelli, PC represents the Debtor as legal counsel. Klestadt Winters Jureller Southard & Stevens, LLP and HBM Management Associates, LLC serve as the Debtor's bankruptcy and restructuring advisor, respectively. Marc Ross and Harry Malinowski of HBM serve as chief restructuring officers. TOPPOP LLC: Gets Court Nod to Sell Equipment to ActionPak --------------------------------------------------------- TopPop, LLC received approval from the U.S. Bankruptcy Court for the Eastern District of New York to sell equipment to ActionPak, Inc. ActionPak made a $1.5 million offer for the equipment, which was selected as the "highest and best offer." "The purchase price to be paid by buyer is fair and provides greater value to [TopPop's] estate than any other alternative," Judge Alan Trust said. Despite the adequate marketing of the equipment, TopPop did not receive any acceptable competing bid for the equipment, according to court filings. About TopPop LLC TopPop LLC, doing business as TopPop Packaging, operates a beverage manufacturing business in Amityville, N.Y. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-72310) on June 28, 2023, with $1 million to $10 million in assets and liabilities. Gerard Luckman, Esq., a partner at Forchelli Deegan Terrana, LLP, has been appointed as Subchapter V trustee. Judge Alan S. Trust oversees the case. Richard S. Feinsilver, Esq., at the Law Firm of Richard S. Feinsilver, is the Debtor's bankruptcy counsel. TURBO FINANCIAL: Nicole Nigrelli Named Subchapter V Trustee ----------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed Nicole Nigrelli, Esq., at Ciardi, Ciardi & Astin as Subchapter V trustee for Turbo Financial Improvement, LLC. Ms. Nigrelli will be paid an hourly fee of $400 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Nigrelli declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Nicole M. Nigrelli, Esq. Ciardi, Ciardi & Astin 1905 Spruce Street Philadelphia, PA 19103 Phone: (215) 557-3550 ext. 115 Email: nnigrelli@ciardilaw.com About Turbo Financial Improvement Turbo Financial Improvement, LLC filed Chapter 11 petition (Bankr. D. N.J. Case No. 23-21986) on Dec. 29, 2023, with up to $50,000 in assets and $500,001 to $1 million in liabilities. Brian Gregory Hannon, Esq., at the Law Office of Norgaard O'Boyle represents the Debtor as bankruptcy counsel. U.S. CREDIT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: U.S. Credit, Inc. 1060 Falmouth Road Suite C Hyannis, MA 02601 Business Description: U.S. Credit develops and administers custom lending programs for large retailers, point- of-sale platforms and educational institutions. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court District of Massachusetts Case No.: 24-10058 Debtor's Counsel: Charles R. Bennett, Jr., Esq. MURPHY & KING, PROFESSIONAL CORPORATION 28 State Street Suite 3101 Boston, MA 02109 Tel: (617) 423-0400 Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Stephen Galvin as president, chief executive officer. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FYGJRLQ/US_Credit_Inc__mabke-24-10058__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Connexus Credit Union Accounting $23,516,200 1 Corporate Drive Reconcilation Suite 700 and Asserted Wausau, WI 54401 Recourse Claim 2. First and Peoples Asserted Loan $9,410,000 Bank and Trust Sales, Accounting 1001 Diedrich Reconciliation Boulevard and Asserted Russell, KY 41169 Recourse Claim 3. Georgia's Own Accounting $4,867,000 Credit Union Reconcilation 100 Peachtree and Asserted Street, NW Recourse Claim Atlanta, GA 30303 4. Adrian Reed Lawsuit $3,500,000 17th Circuit Court of FL County of Broward 201 SE 6th Street Fort Lauderdale, FL 33301 5. First Bank of Alabama Asserted $1,279,000 120 North Street, East Recourse Claim; Talladega, AL 35160 Accounting Reconciliation 6. Noble Bank Asserted $749,500 1509 Quintard Avenue Recourse Claim; Anniston, AL 36201 Accounting Reconciliation 7. Thread Bank Accounting $669,000 210 East Main Street Reconciliation Rogersville, TN and Asserted 37857 Recourse Claim 8. Southern States Bank Asserted $521,000 615 Quintard Avenue Recourse Claim; Anniston, AL 36202 Accounting Reconciliation 9. Millennial Bank Asserted $326,000 20 Meadowview Drive Recourse Claim Birmingham, AL 35242 10. First Fidelity Bank Asserted $111,000 1400 Gault Avenue, North Recourse Claim; Fort Payne, AL Accounting 35967 Reconciliation 11. James Preston Asserted $90,000 Capital Group, LLC Recourse Claim; 8708 SW 61st Ave. Accounting Gainesville, FL Reconciliation 32608 12. Pathfinder Bank Accounting $71,000 214 West First Street Reconciliation Oswego, NY 13126 and Asserted Recourse Claim 13. Technical Support Professional $32,393 International Services 2 Hampshire Street, Suite 205 Foxboro, MA 02035 14. PHeaa Profesional $23,662 PO Box 64849 Services Baltimore, MD 21264 15. Arlington Financial Lawsuit $10,000 Consultants 49 N Federal Highway, Ste. 191 Pompano Beach, FL 33062 16. I - Service Lawsuit $10,000 315 N. Crescent Drive, Ste. 11 Beverly Hills, CA 90210 17. Centerville Gardens Lease $5,632 II, LLC 1471 Iyannough Road Hyannis, MA 02601 18. Larry Roorda, Lease $4,385 Trustee and Cynthia Roorda 2730 Ardisia Lane Naples, FL 34109 19. Coalition Cyber Policy Insurance $2,926 Attunde Insurance Services LLC 44 Wall Street, 22nd Floor New York, NY 10005 20. FCC Finance Professional $2,862 16479 Dallas Services Parkway, Suite 260 Dallas, TX 75001 URBAN ONE: Regains Nasdaq Compliance, Faces Mandatory Monitoring ---------------------------------------------------------------- Urban One, Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Commission that on January 4, 2024, the Company received notice from the Nasdaq Stock Market, LLC confirming that it has regained compliance with Nasdaq Listing Rule 5250(c) which requires listed companies to timely file all required periodic financial reports with the SEC. The Company filed its Quarterly Report on Form 10-Q for the period ended September 30, 2023 on December 22, 2023, bringing the Company into compliance with the Periodic Filing Rule. With the Company in compliance with the Periodic Filing Rule, Nasdaq has ceased any action to delist the Company's securities. While the Company is now in compliance with the Periodic Filing Rule, Nasdaq has informed the Company that it will be subject to a Mandatory Panel Monitor for one year, or until December 29, 2024. If, within the one-year monitoring period, the Company again fails to comply with the Periodic Filing Rule, the Company will not be permitted to provide the Nasdaq Staff with a plan of compliance with respect to that deficiency, nor will the Company be afforded a cure period. Instead, upon the Nasdaq Staff issuing a delist determination letter, the Company would then have an opportunity to request a new hearing with the initial Hearing Panel or a newly convened Hearing Panel if the initial Hearing Panel is unavailable. About Urban One Urban One, Inc., formerly known as Radio One, Inc., headquartered in Silver Spring, Md., is an urban-oriented multimedia company that operates or owns interests in radio broadcasting stations (32% of revenue as of LTM Q4 2022) generated by 66 stations in 13 markets, cable television networks (43% of revenue), an 80% ownership in Reach Media (9% of revenue), and ownership of Interactive One, its digital platform, as well as other internet-based properties (16% of revenue), largely targeting an African-American and urban audience. The Chairperson, Catherine L. Hughes, and President, Alfred C. Liggins III (Chairperson's son), maintain voting control and hold a significant ownership position. The company reported consolidated revenue of $485 million as of LTM Q4, 2022. Moody's Investors Service affirmed Urban One, Inc.'s B3 Corporate Family Rating, B3-PD Probability of Default Rating, and B3 senior secured notes rating. The speculative grade liquidity rating was upgraded to SGL-1 from SGL-2 reflecting very good liquidity. The outlook was changed to stable from positive. The affirmation of the CFR and stable outlook reflect Urban One's relatively high pro forma leverage (4.9x as of Q4 2022 pro forma for sale of the company's minority ownership position in MGM National Harbor, LLC (National Harbor) and including Moody's standard adjustments) as well as Moody's expectations that operating performance will decline in 2023 due to lower political advertising revenue in a non-election year and from lower cable TV revenue. Cable TV was a source of strength during the pandemic, but is likely to be pressured from lower ratings and a decline in subscribers as consumers continue to migrate to streaming services from cable TV. Social considerations were a key driver of the rating action, as Moody's expects the negative secular pressures in the cable TV division to increase as media consumption continues to migrate to streaming services. VALCOUR PACKAGING: Moody's Cuts CFR to Caa3 & Alters Outlook to Neg ------------------------------------------------------------------- Moody's Investors Service downgraded Valcour Packaging LLC's ("Valcour", rebranded as MRP Solutions) corporate family rating two notches to Caa3 from Caa1, and probability of default rating to Caa3-PD from Caa1-PD. Moody's also downgraded Valcour's senior secured first lien term loan two notches to Caa2 from B3 and its senior secured second lien term loan one notch to Ca from Caa3. The outlook has been changed to negative from stable. The downgrade and negative outlook reflect limited options to improve liquidity and comfortably service its highly leveraged capital structure without a significant improvement in cash flow generation. "Challenging market conditions, although expected to trend in a positive direction in 2024, have had a severely negative impact on liquidity, cash flow, and credit metrics. Rising interest costs and lack of cash flow generation elevates the risks of a restructuring or distressed exchange," said Scott Manduca, Vice President at Moody's. RATINGS RATIONALE Valcour's Caa3 CFR reflects the company's weak liquidity position, very high debt leverage, less than 1.0x interest coverage, and lack of cash flow generation. Due to the negative effect of rising interest rates on Valcour's floating rate capital structure, interest expense is more of a burden on funds from operations, which is already compromised by challenging market conditions. The company's revenue is small at about $200 million and its weak balance sheet eliminates the ability to finance initiatives to grow the business. The risk of a restructuring or distressed exchange is elevated over the next 12 to 18 months. Valcour benefits from a specialized product mix that has generated healthy EBITDA margins above 20%. Product innovation capabilities enable the company to meet the necessary formulation and stringent manufacturing criteria for tamper-proof caps and dispensers serving the stable and growing health and wellness end markets. Valcour produces over ten thousand SKU's and has procured long standing relationships with its customers. Moody's expects liquidity to be weak over the next 12 months. Proceeds of about $50 million obtained through a sale leaseback transaction in the second quarter of 2022 was largely depleted in 2023. Valcour ended the third quarter of 2023 with $3 million of cash and $27 million available on its $35 million ABL revolver (-$30 million borrowing base), expiring in October 2026, after accounting for $3 million of borrowings. In Moody's forecast for 2024, Moody's expect Valcour's end markets to trend positively, but will not experience a sharp recovery. Under this assumption, Moody's expect the company's funds from operations to remain negative in 2024, which will further increase reliance on the ABL to finance company operations. The first and second lien term loans do not mature until October 2028 and 2029, respectively, which softens refinancing risk. The Caa2 rating on the first lien term loan is one notch above the CFR, reflecting its superior position in the capital structure. While subordinated to the revolver, the first lien term loan benefits in a distressed scenario from loss absorption provided by the second lien term debt. The Ca rating on the second lien senior secured term loan reflects its effective subordination to both the first lien term loan and the revolver. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could downgrade the rating if there is an outright default, restructuring, or distressed exchange. Moody's could upgrade the rating if Valcour achieves a more sustainable capital structure. The company must also reduce reliance on the ABL to operate the business. Headquartered in Plattsburgh, NY, Valcour Packaging LLC, d/b/a "MRP Solutions", is a manufacturer of specialty caps, closures, and jars. The product portfolio includes child-resistant closures, continuous thread caps, dispensing closures, jars, and liner options. The company has been a portfolio company of Clearlake since September 2021. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers published in December 2021. VPR BRANDS: TPB Named Exclusive HoneyStick Distributor in Canada ---------------------------------------------------------------- VPR Brands has named Turning Point Brands Canada (TPB), as the Exclusive Master Distributor for VPR Brands' HoneyStick products in Canada. TPB is a specialty marketing and distribution firm, focused on building brands in the Canadian smoking, vaping and alternative products categories, HoneyStick is a lifestyle brand that combines the features of high-tech performance, dependability, and affordability. This strategic partnership marks a significant step in enhancing the distribution and accessibility of HoneyStick, an already renowned brand in the vaping industry, across the Canadian market. A New Era for HoneyStick in Canada Under this new alliance, HoneyStick will join the stable of global, segment-leading brands under TPB Canada's stewardship including icons such as Zig-Zag, Clipper, Choice Leaf, HMP, Rebound and Evolve. TPB Canada will revolutionize the distribution landscape for HoneyStick by consolidating ordering, logistics, and warehousing under one roof, thereby delivering unmatched efficiency and service excellence. Benefits of the New Partnership Arrangement: 1. Experienced Management: TPB Canada's management team have decades of proven experience growing brands in highly regulated categories. 2. Streamlined Ordering: A centralized ordering system simplifies the process for retailers and ensures a steady supply of products. 3. Best-In-Class Fulfillment: Optimized logistics solutions promise faster and more reliable product delivery across Canada. 4. Improved Availability: Right-sized operations guarantee better stock management and availability, reducing lead times significantly. 5. Improved Customer Support: The consolidation allows for superior customer service, benefiting retailers, end-consumers, and enhancing overall brand loyalty. Comments from the Leadership: "Mikail Fancy, Chief Operating Officer at Turning Point Brands Canada, commented, "We are thrilled to partner with VPR Brands and bring HoneyStick to a broader audience in Canada. Our expertise in marketing, sales, distribution, and logistics, combined with the quality and innovation of HoneyStick products, is a perfect match. We are committed to delivering exceptional service and support to our retailers and consumers." "Daniel Hoff, Chief Operating Officer at VPR Brands, added, "This partnership with Turning Point Brands Canada represents a significant milestone for HoneyStick in Canada. Their robust distribution network and proven track record in marketing, sales and customer service make them the ideal partner to enhance our brand’s presence and accessibility across the country." About VPR Brands Headquartered in Ft. Lauderdale, FL, VPR Brands, LP -- http://www.VPRBrands.com-- is company engaged in the electronic cigarette and personal vaporizer business. VPR Brands disclosed in a Form 10-Q Report for the quarterly period ended September 30, 2023, that substantial doubt exists about the Company's ability to continue as a going concern. According to VPR Brands, the Company has incurred losses since inception, including $128,029 during the nine months ended September 30, 2022, resulting in an accumulated deficit of $6,513,844 and working capital of $1,961,188 as of September 30, 2023. Moreover, the Company is in default in certain of its outstanding debt. WALL DECOR: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Wall Decor & More, LLC 18303 Old Perkins Rd. East Suite 401 Baton Rouge, LA 70810 Business Description: The Debtor is engaged in the business of marine cargo handling. Chapter 11 Petition Date: January 12, 2024 Court: United States Bankruptcy Court Middle District of Louisiana Case No.: 24-10021 Judge: Hon. Michael A Crawford Debtor's Counsel: Patrick S. Garrity, Esq. THE DERBES LAW FIRM, LLC 3027 Ridgelake Drive Metairie, LA 70002 Tel: (504) 837-1230 Fax: (504) 837-2214 Email: pgarrity@derbeslaw.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Mia M. Townsed as member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LJZI6YY/Wall_Decor__More_LLC__lambke-24-10021__0001.0.pdf?mcid=tGE4TAMA WC 6TH AND RIO: Husch Blackwel & Lowenstein Advise Limited Partners ------------------------------------------------------------------- The law firms Husch Blackwell LLP and Lowenstein Sandler LLP filed a verified statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure to disclose that in the Chapter 11 case of WC 6th and Rio Grande, LP, the firm represents the following equity security holders (collectively, the "Limited Partners"): 1. Sangreal Investments, LLC 3502 Sacred Moon Cove Austin, TX 78746 2. Independence Holdings I, LLC 4000 Balcones Dr Austin, TX 78731 The Limited Partners are independent entities and share a common interest as the majority holders of 75% of the limited partner interests in the Debtor, and 100% of the non-insider partnership interests in the Debtor. The Limited Partners have each engaged Husch Blackwell and Lowenstein Sandler and authorized them to represent the Limited Partners in connection with the Case. Husch Blackwell and Lowenstein Sandler do not own a claim against or interest in the Debtor or its representative bankruptcy case. Husch Blackwell and Lowenstein Sandler do not believe that their representation of the interests of either Limited Partner will create a conflict between or be adverse to the interests of the other Limited Partner. Counsel for the Limited Partners: HUSCH BLACKWELL LLP Jameson J. Watts, Esq. 111 Congress Ave., Ste. 1400 Austin, Texas 78701 Tel: (512) 472-5456 (main) Tel: (512) 479-1179 (direct) Facsimile: (512) 479-1101 Email: Jameson.watts@huschblackwell.com - and - LOWENSTEIN SANDLER LLP Phillip Khezri, Esq. 1251 Avenue of the Americas New York, New York, 10020 Tel: (212) 262-6700 E-mail: pkhezri@lowenstein.com About WC 6th and Rio WC 6th and Rio Grande, LP is a Single Asset Real Estate debtor debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-11040) on December 4, 2023, with $10 million to $50 million in assets and $1 million to $10 million in liabilities. Natin Paul, authorized signatory, signed the petition. Judge Shad Robinson oversees the case. Ron Satija, Esq. of HAYWARD PLLC represents the Debtor as legal counsel. WEC US HOLDING: Fitch Assigns BB- Rating on Proposed Secured Loans ------------------------------------------------------------------ Fitch Ratings has assigned 'BB-'/'RR3' senior secured ratings for WEC US Holdings Ltd.'s (formerly Brookfield WEC Holdings Inc.) proposed senior secured revolving credit facility and term loan. Fitch has also affirmed WEC US Holdings Ltd.'s asset-based lending (ABL) facility at 'BB+'/'RR1'. Fitch has also affirmed WEC US Holdings Ltd.'s Long-Term Issuer Default Rating (IDR) and senior secured debt at 'B+' and 'BB-'/'RR3', respectively. The Rating Outlook is Stable. In addition, Fitch has assigned WEC US Holdings Ltd.'s new parent company, Watt New Sub-Aggregator L.P., a 'B+' Long-Term IDR (collectively referred to as WEC; dba Westinghouse Electric Company). The ratings reflect Fitch's expectation that EBITDA leverage will reach 4.5x or lower in 2024, and the near future. This expectation is supported by recent order wins and a growing backlog that improve the visibility on the company's EBITDA expansion and deleveraging path. Fitch expects the company, under the new Brookfield Renewable Partners (BEP; BBB+/Stable) and Cameco ownership, to adopt a capital allocation and financial policy to pursue select bolt-on acquisitions, retain financial flexibility, and manage its leverage under 4.5x. Fitch has affirmed and withdrawn Brookfield WEC Holdings Sub-Aggregator LP's Long-Term IDR following the reorganization of the rated entity. KEY RATING DRIVERS Contract Wins Boost Visibility: WEC has successfully secured new orders, bolstered its backlog and improved long-term revenue visibility. As of Sept. 30, 2023, WEC orders entered reached $5.3 billion over the TTM from $3.2 million a year ago. WEC continues to gain market share in its nuclear fuel business as Eastern European countries look to expand their nuclear generation footprint, while also reducing their dependency on Russia. Nearly every utility operating a Water-Water Energetic Reactor (VVER) outside of Russia has now signed an agreement with WEC for fuel. High Recurring Revenue Base: Fitch expects WEC's operating plant services and nuclear fuel businesses to grow in the low-single digits in the medium term, offsetting a decline in energy system contributions, while also improving business stability. WEC benefits from a large installed base with about 85% of its revenues coming from its recurring, nondiscretionary nuclear fuel and operating plant services (OPS) businesses. Customer contracts are typically multi-year, with nuclear fuel contracts typically ranging from 10-15 years and outage services ranging from three to five years. The industry's high barriers of entry, regulatory requirements and long and costly switching process, coupled with the company's OEM status and technology content, also help keep customer retention high (95%+). BEP and Cameco Ownership: BEP and its institutional partners own a 51% stake in WEC, and Cameco owns the remaining 49% stake. The companies intend to remain long-term partners, with WEC's industry leadership and the critical role nuclear has as a zero-carbon technology. BEP and Cameco will each have three directors on the board. Following the ownership change, Fitch expects the company to maintain a more disciplined financial policy and keep distributions at moderate levels. According to management, the company will focus on sustainable long-term growth while prioritizing organic growth opportunities and managing to a conservative leverage profile. Fitch expects WEC to approach M&A in a balanced manner, targeting smaller bolt-on acquisitions with shareholder distributions, if any, funded by residual cash flow. Positive Nuclear Outlook: The outlook for nuclear power has improved in recent years, particularly after the Russian invasion of Ukraine. Policy is increasingly supportive of nuclear energy as it is seen as an energy alternative for countries seeking to balance security of supply while transitioning away from fossil fuels. In a report published October 2023, The International Energy Agency (IEA) also noted improved prospects for nuclear power in leading markets, with lifetime extensions of existing nuclear reactors in Japan, Korea, and the U.S., and significant capacity growth expected in China and the rest of Asia. Strong Financial Flexibility: WEC's flexibility is supported by expectations of solid liquidity and pre-dividend FCF generation. Fitch expects EBITDA interest coverage to be around 3x in 2023 and over the forecast period. WEC's coverage is stronger than the 'B' rating category midpoint for diversified industrial firms. Leading Market Position and Technology: WEC has a leading technology position in the commercial nuclear reactor space, with approximately half of the world's nuclear reactors running on its technology. These reactors were either built by WEC or other companies that licensed its technology. In the U.S. and Europe, the company has a top one or top two market position in nuclear plant services, benefiting from intellectual property, technical expertise, intense regulations, high switching costs and an extended fuel licensing process. The company also has a presence in China, where much of the world's upcoming growth in nuclear energy generation is expected, though there is a risk of increased competition from local firms. Parent Subsidiary Linkage (PSL): Fitch rates WEC on a standalone basis. Consistent with Fitch's approach with Brookfield affiliates, Fitch views Brookfield as financial investors and does not apply PSL linkage. DERIVATION SUMMARY WEC's ratings reflect its leading market position servicing the nuclear reactor market, strong technological capabilities, recurring demand-focused offering and prospects of improving profitability. These factors are weighed against its concentration in the nuclear energy market, execution risks associated with its growth strategies. Fitch expects WEC's EBITDA margins to be around 18%-19% through the forecast period. EBITDA interest coverage is strong for the category while leverage is consistent. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer: - 2023 revenues benefit from a full year of contribution from BHI and higher fuel volume. Sales growth is expected to moderate to low-single digit organic growth through the forecast with some variability largely due to fuel and outage cycles; - EBITDA margins of around 17% in 2023 and gradually improving to about 18%-19% as the company benefits from synergies with BHI and reported segment losses from the energy systems segment moderate in the latter part of the forecast period; - Restructuring and non-recurring deal costs remain elevated over the next couple of years. Catch-up pension contributions are made over the next few years; - Net leverage falls to around 4.0x over the forecast period, consistent with WEC's financial policies; - Capital intensity of around 4%-5%; - No large-scale transactions such as the sale of WEC or a large-scale acquisition is assumed; - Excess cashflow is distributed to shareholders; - Effective interest rate in the 7.0%-7.5% range through FY2026. RECOVERY ANALYSIS The recovery analysis for a hypothetical future bankruptcy assumes that WEC would be considered a going concern (GC) in bankruptcy, and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. The GC EBITDA estimate of $480 million reflects Fitch's view of a sustainable post-reorganization EBITDA level, upon which the agency bases the valuation of the company. It includes BHI after the divestiture of the power delivery business. The GC EBITDA reflects a conservative scenario where there is a long-term decline in the nuclear industry without incremental newbuilds, and the potential for significant liabilities arising from nuclear or environment incidents. The estimate also reflects Fitch's assumption that WEC can mitigate adverse conditions with additional cost reductions. An enterprise value multiple of 6x is used to calculate a post-reorganization valuation and reflects several factors. The recent bankruptcy exit multiple for WEC, based on the $3.8 billion purchase price by Brookfield (including transaction costs) was 9x and 7x based on fiscal 2017 and 2018 EBITDA, respectively. In addition, the 2018 acquisition of WEC's key competitor, Framatome, was completed at approximately 8x EBITDA and BHI was completed at 9x EBITDA, before synergies. The ABL facility and first-lien RCF are assumed to be fully drawn upon default. The ABL facility is senior to the first-lien RCF and term loans and was 71% drawn at the end of Sept. 30, 2023. The waterfall results in a 'RR1' recovery rating for the ABL facility of $200 million, representing outstanding recovery prospects. The waterfall also indicates a 'RR3' for the first-lien RCF of $200 million and term loan of $3.5 billion, corresponding to good recovery prospects. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - WEC adheres to a disciplined financial policy supporting EBITDA leverage maintained below 4.0x; - New contracts wins and renewals lead to a growing backlog that support EBITDA expansion. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Decline in backlog and contract renewals that erode earnings and cash flow stability; - An aggressive financial policy leads to EBITDA leverage maintained above 4.5x or EBITDA interest coverage sustained below 2.5x; - Higher than expected investments or losses from the energy systems business. LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: Fitch considers WEC's liquidity to be sufficient given the company's cash, revolver availability and pre-dividend FCF generation. As of Sep 30, 2023, WEC had liquidity of $251 million including $131 million of cash and equivalents and $120 million of availability on its RCF, including its ABL. ISSUER PROFILE Westinghouse Electric Company provides a variety of engineering services, nuclear fuel and various components for nuclear power plants globally. It was acquired out of bankruptcy by Brookfield Asset Management in 2018 and is now owned by BEP and Cameco. 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 ----------- ------ -------- ----- Brookfield WEC Holdings Sub-Aggregator LP LT IDR B+ Affirmed B+ LT IDR WD Withdrawn B+ WEC US Holdings Ltd. LT IDR B+ Affirmed B+ senior secured LT BB- New Rating RR3 senior secured LT BB+ Affirmed RR1 BB+ senior secured LT BB- Affirmed RR3 BB- Watt New Sub-Aggregator L.P. LT IDR B+ New Rating WHATABRANDS LLC: Moody's Affirms B2 CFR, Outlook Remains Negative ----------------------------------------------------------------- Moody's Investors Service affirmed Whatabrands LLC's B2 corporate family rating, B2-PD probability of default rating and B2 senior secured first lien term loan B and B2 senior secured revolving credit facility ratings. The outlook is maintained at negative. Proceeds from the proposed $340 million incremental senior secured first lien term loan B will be used to fund the partial redemption of the $469 million preferred equity outstanding as of October 2, 2023, and pay fees and expenses. The proposed term loan is fully fungible with the existing $2.3 billion senior secured first lien term loan B due 2028. The transaction will result in debt increasing by $340 million and pro forma debt/EBITDA rising to 6.3x from 5.7x for the last-twelve-month period ending October 2, 2023. However, the affirmation reflects Moody's expectation for continued strong operating performance from improved margins and new restaurant openings which are expected to drive EBITDA growth and deleveraging to 6.0x debt/EBITDA over the next 12 to 18 months given no absolute debt repayment is expected. The affirmation also considers the company's adequate liquidity which reflects Moody's expectation that free cash flow will be modest given Whatabrands' new restaurant openings, increased interest expense and dividends and the company's $200 million undrawn revolving credit facility. The outlook remains negative reflecting governance considerations particularly the increase in debt and leverage to fund a shareholder distribution and the risks presented by a weaker consumer environment which may prevent leverage from improving. RATINGS RATIONALE Whatabrands B2 CFR reflects its above-average unit volumes indicative of the company's strong brand awareness in its core market of Texas, a long track record of positive same-store sales, diversified day-part, and a predominate mix of off-premise sales. Following the transaction, interest coverage weakens but remains solid at 1.8x, from 2.0x, owing to approximately 68% of funded debt being swapped to fixed rate. Along with high leverage and private equity ownership, the ratings are also constrained by the company's modest scale in terms of number of units and geographic concentration in the state of Texas (75% of units). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, an upgrade over the next 12 to 18 months is unlikely. However, an upgrade would require solid revenue and earnings growth from healthy positive same-store sales and new restaurant openings that meet return expectations. An upgrade would also require debt/EBITDA maintained below 5.25x and EBIT/ interest above 2.0x times with good liquidity including generating free cash flow/debt of at least 5%. A downgrade could occur if liquidity deteriorates in any way including the sustained use of the revolving credit facility to support cash flow deficits or if substantial revolver availability is not maintained. A downgrade could also occur if Debt/EBITDA is sustained above 6.0x or EBIT/ interest is sustained below 1.5x. Whatabrands LLC, a wholly-owned subsidiary of Sunrise Group Holdings, LLC (Sunrise), owns the Whataburger fast food brand which operates and franchises roughly 1000 units (79% owned corporate units and 21% franchised units) in 14 states with the substantial majority (75%) in Texas. Sunrise is majority owned by funds affiliated with BDT Capital Partners and its founding owners. Annual revenue is about $3.1 billion. The principal methodology used in these ratings was Restaurants published in August 2021. ZYDECO BREW: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Zydeco Brew Werks of Ybor City, LLC 1902 E. 7th Ave. Tampa, FL 33605 Chapter 11 Petition Date: January 11, 2024 Court: United States Bankruptcy Court Middle District of Florida Case No.: 24-00130 Judge: Hon. Roberta A Colton Debtor's Counsel: Harley E. Riedel, Esq. STICHTER, RIEDEL, BLAIN & POSTLER, P.A. 110 E. Madison St. Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Email: hriedel@srbp.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by James P. Pepin as manager. 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/3PSI3LI/Zydeco_Brew_Werks_of_Ybor_City__flmbke-24-00130__0001.0.pdf?mcid=tGE4TAMA ********* 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. 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