/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/240524.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, May 24, 2024, Vol. 28, No. 144 Headlines 125 BROAD PARTNERS: Voluntary Chapter 11 Case Summary 17059 WANDERING: Case Summary & Three Unsecured Creditors 1719 CORCORAN: Property Sale Proceeds to Fund Plan Payments 257 WASHINGTON: Voluntary Chapter 11 Case Summary 72ND AVENUE: Wins Interim Cash Collateral Access AEROFABB LLC: Seeks to Extend Plan Exclusivity to June 5 ALEXANDRIA ADULT: Case Summary & One Unsecured Creditor ALTA EQUIPMENT: Moody's Rates New $500MM 2nd Lien Notes 'B3' AMERICAN WATER: Subsidiary Continues to Defend Jeffries Class Suit APPTECH PAYMENTS: Receives Nasdaq Deficiency Letter ASTRA ACQUISITION: Sixth Street Marks $43MM Loan at 59% Off ASTRA AQUISITION: BlackRock TCP Marks $27.8MM Loan at 71% Off AVENIR WELLNESS: Urish Popeck Raises Going Concern Doubt BANGL LLC: S&P Affirms 'BB-' ICR on Term Loan B Add-On BARTLEY INVESTMENTS: Case Summary & 20 Top Unsecured Creditors BEND ARCH: Unsecureds Will Get 50% of Claims over 120 Months BLACK OPS: Case Summary & 20 Largest Unsecured Creditors BOISE CASCADE: Moody's Alters Outlook on 'Ba1' CFR to Positive BRIGHT STEPS: Business Income to Fund Plan Payments CALIFORNIA RESOURCES: Fitch Rates Unsec. Notes Due 2029 'BB-' CALIFORNIA RESOURCES: Moody's Rates New Sr. Unsecured Notes 'B2' CARROLS RESTAURANT: S&P Withdraw 'B-' Issuer Credit Rating CHOICE MARKET: Court OKs Interim Cash Collateral Access COASTAL CONSTRUCTION: Case Summary & 11 Unsecured Creditors COMSERO INC: Unsecureds Will Get 11.7% of Claims in Plan CONG. BETH JOSEPH: Case Summary & Nine Unsecured Creditors CORDIAL LOGISTICS: Taps Sheehan & Associates as Bankruptcy Counsel CREAGER MERCANTILE: Seeks Cash Collateral Access CRUZIN AUTO: Court OKs Cash Collateral Access on Final Basis DESERT HEIGHTS: Moody's Rates Series 2024 Education Bonds 'Ba2' DYNATA LLC: Case Summary & 30 Largest Unsecured Creditors EAST WEST: S&P Alters Outlook to Stable, Affirms 'B-' ICR EDELMAN FINANCIAL: Moody's Rates New $575MM 2nd Lien Loan 'Caa2' EPICOR SOFTWARE: Moody's Rates New First Lien Loans 'B2' EQUALTOX LLC: Court OKs Cash Collateral Access Thru Aug 10 FORUM ENERGY: S&P Alters Outlook to Negative, Affirms 'B' ICR FORWARD AIR: Fitch Lowers LongTerm IDR to 'B', Outlook Stable GATES CORP: S&P Rates New $500MM Senior Unsecured Notes 'B+' GATES GLOBAL: Moody's Rates New $1.3BB Sr. Secured Term Loan 'Ba2' GLOBAL MEDICAL: S&P Raises ICR to 'B-' After Debt Modification GO DADDY: S&P Affirms 'BB' Issuer Credit Rating, Outlook Stable GOFOR INDUSTRIES: Trinity Capital Marks $200,000 Loan at 67% Off GOFOR INDUSTRIES: Trinity Capital Marks $9.7MM Loan at 55% Off GRAY TELEVISION: Fitch Alters Outlook on 'BB-' LongTerm IDR to Neg. GRAY TELEVISION: Moody's Rates New Senior Secured Debts 'Ba3' H&H ENTERPRISES: Court OKs Cash Collateral Access on Final Basis HIS STORY: Unsecured Creditors to Split $25K in Subchapter V Plan ICON AIRCRAFT: U.S. Trustee Unable to Appoint Committee IMA FINANCIAL: Moody's Affirms B3 CFR, Outlook Stable INH BUYER: BlackRock TCP Marks $7.3MM Loan at 25% Off JELD-WEN INC: Moody's Affirms Ba3 CFR & Ups Unsecured Notes to B1 JM WAYS: Bid to Use Cash Collateral Denied as Moot JOANN INC: S&P Upgrades ICR to 'B-' on Emergence From Bankruptcy LA HACIENDA: U.S. Trustee Unable to Appoint Committee LAND O'LAKES CAPITAL: Moody's Affirms 'Ba1' CFR, Outlook Stable LBM ACQUISITION: Moody's Rates New Secured 1st Lien Term Loan 'B3' LEONA TRANSPORTATION: Plan Exclusivity Period Extended to August 26 LYONS COMPANIES: Hires SC&H Group Inc. as Investment Banker NEXTCAR HOLDING: Trinity Capital Marks $4.5MM Loan at 46% Off ODYSSEY MARINE: Grant Thornton Raises Going Concern Doubt OLD SCHOOL: Unsecureds to Get Share of GUC Distribution Pool OMNIA PARTNERS: Moody's Alters Outlook on 'B2' CFR to Negative ONE MORE RECOVERY: Court OKs Cash Collateral Access on Final Basis OWENS-BROCKWAY GLASS: Moody's Rates New Sr. Unsecured Notes 'B2' PAIN MEDICINE: Case Summary & 20 Largest Unsecured Creditors PARK ROCK: Voluntary Chapter 11 Case Summary PENNYMAC FINANCIAL: Moody's Rates New $650MM Unsecured Notes 'Ba3' PLATINUM COACH: Plan Exclusivity Period Extended to September 3 PLEASANT HEIGHTS: Unsecureds Will Get 100% of Claims in 60 Months PRESBYTERIAN VILLAGE: Fitch Lowers IDR to 'BB-', Outlook Negative PROSOMNUS INC: Prepack Plan to Hand Company to Noteholders PROSOMNUS INC: U.S. Trustee Unable to Appoint Committee PROSPERITAS LEADERSHIP: Court OKs Cash Access on Final Basis REECE GREEN: Voluntary Chapter 11 Case Summary RELIABLE HEALTHCARE: Seeks to Extend Plan Exclusivity to August 16 RXO INC: S&P Lowers Issuer Credit Rating to 'BB', Outlook Stable SAM ASH: U.S. Trustee Appoints Creditors' Committee SENSATA TECHNOLOGIES: S&P Rates New $500MM Unsecured Notes 'BB+' STENSON LANDSCAPE: Unsecureds to Get $6,300 per Month over 5 Years STEWARD HEALTH: Seeks to Hire Ordinary Course Professionals STEWARD HEALTH: Seeks to Hire Weil, Gotshal & Manges as Counsel STORYFILE INC: Seeks $900,000 DIP Loan from Key 7 STRATEGIC PORK: Case Summary & 20 Largest Unsecured Creditors SUPPLY SOURCE: Files for Chapter 11 to Facilitate Sale SYNAPTICS INCORPORATED: Fitch Affirms 'BB' IDR, Outlook Stable SYRACUSE INDUSTRIAL: Fitch Ups Rating on 2016A/B PILOT Bonds to CC TALEN ENERGY: S&P Affirms 'B+' ICR on Repricing Transaction THERAPY BRANDS: Moody's Lowers CFR to Caa1 & First Lien Loans to B3 THRASIO LLC: BlackRock TCP Marks $40.9MM Loan at 65% Off THRIVE MERGER: S&P Affirms 'B-' ICR on Improved Operating Results TRI-STATE SOLUTIONS: Case Summary & 12 Unsecured Creditors UNDERGROUND SOLUTIONS: Case Summary & 19 Unsecured Creditors UNIVISION COMMUNICATIONS: S&P Rates New Senior Secured Debt 'B+' VESTA ENERGY: S&P Upgrades ICR to 'B-', Outlook Stable VESTOGE FREDERICK: Seeks to Extend Plan Exclusivity to August 19 VIVAKOR INC: Nasdaq Bid Price Compliance Restored WERNER FINCO: Moody's Hikes CFR to Caa1 & Alters Outlook to Stable WORKSPORT LTD: Recurring Losses Raise Going Concern Doubt WW INTERNATIONAL: 5 of 6 Proposals OK'd at Annual Meeting ZEBRA TECHNOLOGIES: Moody's Affirms 'Ba1' CFR, Outlook Stable ZEVRA THERAPEUTICS: 3 of 4 Proposals OK'd at Annual Meeting ZOE CLEANING: Unsecureds to Get Share of Income for 3 Years [^] BOOK REVIEW: The First Junk Bond ********* 125 BROAD PARTNERS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: 125 Broad Partners LLC 543 Bedford Avenue Brooklyn, NY 11211 Business Description: The Debtor is engaged in activities related to real estate. Chapter 11 Petition Date: May 22, 2024 Court: United States Bankruptcy Court Eastern District of New York Case No.: 24-42130 Judge: Hon. Elizabeth S Stong Debtor's Counsel: Jonathan S. Pasternak, Esq. DAVIDOFF HUTCHER & CITRON LLP 605 Third Avenue 34th Floor New York, NY 10158 Tel: 212 557 7200 Fax: 212 286 1884 Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by David Goldwasser as chief restructuring officer. The Debtor failed to attach 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/C5KBPFI/125_Broad_Partners_LLC__nyebke-24-42130__0001.0.pdf?mcid=tGE4TAMA 17059 WANDERING: Case Summary & Three Unsecured Creditors --------------------------------------------------------- Debtor: 17059 Wandering Wave LLC 17059 Wandering Wave Ave Boca Raton, FL 33496 Business Description: The Debtor is a Single Asset Real Estate as defined in 11 U.S.C. Section 101(51B). The Debtor is the owner of a real property located at 17059 Wandering Wave Ave, Boca Raton, FL valued at $2.35 million. Chapter 11 Petition Date: May 23, 2024 Court: United States Bankruptcy Court Southern District of Florida Case No.: 24-15073 Judge: Hon. Erik P. Kimball Debtor's Counsel: Susan D Lasky, Esq. SUSAN D. LASKY, PA 320 SE 18 Street Fort Lauderdale, FL 33316 Tel: 954-400-7474 Email: Jessica@SueLasky.com Total Assets: $2,350,005 Total Liabilities: $2,022,636 The petition was signed by Ivan Hyppolite as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/7TUADBQ/17059_Wandering_Wave_LLC__flsbke-24-15073__0001.0.pdf?mcid=tGE4TAMA 1719 CORCORAN: Property Sale Proceeds to Fund Plan Payments ----------------------------------------------------------- 1719 Corcoran Limited Liability Company filed with the U.S. Bankruptcy Court for the District of Columbia a Subchapter V Plan of Liquidation dated May 6, 2024. The Debtor is a District of Columbia limited liability company, ultimately controlled and managed by Justin Thornton. The Debtor's primary assets consist of 1717 Corcoran and 1719 Corcoran, each a 2-unit townhouse apartment located within blocks of the Dupont Circle metro station. The assets, as apartment buildings, are valued at $2 million each. Wilmington Savings asserts a $3,235,407.03 claim against the 1719 Building. US Bank asserts a $2,728,512.38 claim against the 1717 Building. Other creditors assert secured claims in junior position, but because such claims do not attach to any equity, those creditors are treated as unsecured. The Debtor estimates approximately $1.5 million in allowable general unsecured claims, after objections are filed. The Debtor disputes certain of the claims. The treatment in this Plan is in full and complete satisfaction of all of the legal, contractual, and equitable rights that each Holder of an Allowed Claim or Interest may have in or against the Debtor, the Estate or the Debtor's property. This treatment supersedes and replaces any agreements or rights those Holders have in or against the Debtor, the Estate or property of the Debtor or the Estate. Class 4 consists of all General Unsecured Claims. Each holder of an Allowed Class 4 Claim shall receive from the Debtor, in full and complete settlement, satisfaction and discharge of its Allowed Class 4 Claim, a pro rata portion of the Net Payments and Avoidance Action proceeds (such pro rata share to be paid after payment of the legal fees incurred by the Trustee, if any). Class 4 is impaired under this Plan and, therefore, Holders of Class 4 Claims are entitled to vote to accept or reject this Plan. Class 5 consists of the equity interests in the Debtor. The holders of the equity interest in the Debtor, Bansir Capital, LLC shall retain its 100% equity interest in the Debtor. Holders of equity interests in the Debtor are unimpaired and not entitled to vote on the Plan. All property of the Estate shall revest in the Debtor on the Effective Date, free and clear of all other liens, claims, interests and encumbrances, except for the liens specifically preserved or created by this Plan. After Class 2 Claimants have received $2 million from the sale of units in the 1719 Building and Class 3 Claimants have received $2 million from the sale of units in the 1717 Building, all remaining proceeds shall be paid to holders of administrative claims, and then to holders of priority claims, and then to holders of General Unsecured Claims. In order to maximize the value of the Properties, the Debtor will convert each Property into a 2-unit condominium, and sell each unit individually, free an clear of liens. After conversion to condominiums, the Debtor anticipates the following sale prices for the units: * 1717 Building, Unit 1: $2 million to $2.1 million * 1717 Building, Unit B: $950,000 to $1.1 million * 1719 Building, Unit 1: $1.3 million to $1.5 million * 1719 Building, Unit 2: $1.7 million to $1.9 million A full-text copy of the Subchapter V Liquidating Plan dated May 6, 2024 is available at https://urlcurt.com/u?l=rgDmtZ from PacerMonitor.com at no charge. Attorneys for the Debtor: Janet M. Nesse, Esq. Justin P. Fasano, Esq. MCNAMEE HOSEA, P.A. 6404 Ivy Lane, Suite 820 Greenbelt, MD 20770 Tel: (301) 441-2420 Email: jnesse@mhlawyers.com jfasano@mhlawyers.com About 1719 Corcoran Limited Liability Company 1719 Corcoran Limited Liability Company is a Washington, DC-based company engaged in activities related to real estate. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.D.C. Case No. 24-00034) on Feb. 6, 2024, with $1 million to $10 million in both assets and liabilities. Justin P. Fasano, Esq., at McNamee Hosea, P.A. represents the Debtor as legal counsel. 257 WASHINGTON: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: 257 Washington Avenue LLC 43 East 16th Street Brooklyn, NY 11226 Business Description: 257 Washington is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: May 22, 2024 Court: United States Bankruptcy Court Eastern District of New York Case No.: 24-71960 Judge: Hon. Alan S. Trust Debtor's Counsel: Gregg Star, Esq. THE STAR LAW FIRM P.C. 1301 Harbor Road Hewlett NY 11557 Tel: 516-399-7827 Email: gregg@thestarlawfirm.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Serabjit Sigh Malhotra as member. The Debtor failed to attach 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/5VQ5LCA/257_Washington_Avenue_LLC__nyebke-24-71960__0001.0.pdf?mcid=tGE4TAMA 72ND AVENUE: Wins Interim Cash Collateral Access ------------------------------------------------ The U.S. Bankruptcy Court for the District of Oregon authorized 72nd Avenue Property, LLC to use cash collateral, on an interim basis, in accordance with the budget. As adequate protection, the Prepetition Lender is granted a replacement lien on and security interest in the collateral in the same priority and to the same extent as its lien existed on the Petition Date which will not enhance or improve the secured position of the Prepetition Lender. The replacement lien and security interest granted will be automatically deemed perfected upon entry of the Order without the necessity of the Prepetition Lender taking possession of the collateral or filing financing statements or other documents. The Debtor will continue to maintain property and casualty insurance in an amount not less than the amounts maintained as of the Petition Date with the Prepetition Lender named as loss payee, and will provide the Prepetition Lender with proof of such insurance upon request. About 72nd Avenue Property, LLC 72nd Avenue Property owns new luxury apartments located at 11740 SW 72nd Avenue, Tigard, OR 97223. The subject property is a five story mixed-use building located on a 25,634-quare foot site. The Property has an appraised value of $17.8 million. 72nd Avenue Property, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ore. Case No. 24-31211) on April 30, 2024, listing $17,800,382 in assets and $14,626,199 in liabilities. The petition was signed by Richard Cassinelli as managing member. Judge Peter C. Mckittrick presides over the case. Theodore J. Piteo, Esq. at Michael D. O'Brien & Associates represents the Debtor as counsel. AEROFABB LLC: Seeks to Extend Plan Exclusivity to June 5 -------------------------------------------------------- aerofabb, LLC, asked the U.S. Bankruptcy Court for the Eastern District of North Carolina to extend its exclusivity period to file a chapter 11 plan of reorganization and disclosure statement to June 5, 2024. The Debtor claims that the time for filing the Plan of Reorganization and Disclosure Statement has not yet passed. The Debtor explains that it needs additional time to formulate and draft the Plan of Reorganization and Disclosure Statement. aerofabb, LLC is represented by: Stevens Martin, Esq. VAUGHN & TADYCH, PLLC 2225 W. Millbrook Road, Raleigh, NC 27612 Tel.: (919) 582-2300 Email: komalley@smvt.com About aerofabb LLC aerofabb, LLC, is a manufacturer of aftermarket aerodynamic components for both street/race application vehicles which has been supported and trusted by industry leading brands for over six years. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-00381) on Feb. 6, 2024. In the petition signed by Rich Fasanaro, owner/operator, the Debtor disclosed $500,000 in both assets and liabilities. Judge Joseph N. Callaway oversees the case. William P. Janvier, Esq., at Stevens Martin Vaughn & Tadych, PLLC, is the Debtor's legal counsel. ALEXANDRIA ADULT: Case Summary & One Unsecured Creditor ------------------------------------------------------- Debtor: Alexandria Adult Primary Care LLC 5249 Duke St., #1000 Alexandria, VA 22304 Business Description: Adult Primary is a healthcare company specializing in Internal Medicine. Chapter 11 Petition Date: May 23, 2024 Court: United States Bankruptcy Court Eastern District of Virginia Case No.: 24-10975 Debtor's Counsel: Diana Lyn Curtis Shutzer, Esq. FOX ROTHSCHILD LLP 2020 K Street, N.W. Suite 500 Washington, DC 20006 Tel: (202) 461-3100 Fax: (202) 461-3102 Email: dshutzer@foxrothschild.com Total Assets: $208,641 Total Liabilities: $1,307,627 The petition was signed by Kantha R. Stoll as founder. The Debtor listed Comcast Business, Attn: Bankruptcy Manager, P.O. Box 70219, Philadelphia, PA 19176 as its sole unsecured creditor holding a claim of $320 for internet and phone service. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/3VPPWKQ/Alexandria_Adult_Primary_Care__vaebke-24-10975__0001.0.pdf?mcid=tGE4TAMA ALTA EQUIPMENT: Moody's Rates New $500MM 2nd Lien Notes 'B3' ------------------------------------------------------------ Moody's Ratings assigned a B3 rating to Alta Equipment Group Inc.'s proposed offering of $500 million senior secured second lien notes. The company's other ratings, including its B2 corporate family rating, B2-PD probability of default rating, and B3 second lien senior secured rating are unaffected. The outlook is stable. Alta's speculative grade liquidity rating remains unchanged at SGL-3. Alta will use the proceeds from the notes offering, together with $163 million in new ABL borrowings and $69 million in new floor plan facility borrowings, to redeem $315 million of existing second lien secured notes and repay borrowings on the existing ABL and floor plan facilities. Alta also plans to upsize its ABL to $520 million from $485 million and upsize its floor plan facility to $90 million from $70 million. RATINGS RATIONALE Alta's B2 CFR reflects its modest size for a distributor that does not have national scale with annual revenue of roughly $1.9 billion. Alta also has supplier concentration risk with 47% of its new equipment, rental fleet, and replacement parts coming from five suppliers (Hyster-Yale, Volvo, Kubota, Doppstadt, and JCB). The company also has low operating margin relative to equipment rental peers because of its business mix that includes lower margin sales of new equipment. The company also has material handling system design and consulting services business lines that provide diversification from the equipment sale and rental business cycle. The stable outlook reflects Moody's expectation for top line growth near 5% in 2024 while profitability gradually improves and debt/EBITDA falls toward 3.5 times. The SGL-3 speculative grade liquidity rating reflects Moody's expectation that Alta will have adequate liquidity. Liquidity is supported by about $347 million of availability under the proposed $520 million ABL facility that will expire in 2029. Alta also has cash of about $6 million and Moody's expects free cash flow of around $30 million in 2024. Free cash flow includes the proceeds from equipment sales. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if Alta profitably grows its size and scale, debt-to-EBITDA is sustained below 3 times and EBITA-to-interest is sustained above 2 times. In addition, Alta will need to maintain good liquidity prior to an upgrade. The ratings could be downgraded if there is a dissolution of the partnership with any of the company's key suppliers, if debt-to-EBITDA will be sustained above 4 times, or EBITA-to-interest is sustained below 1 time. In addition, if the company's liquidity materially weakens or the company makes a large, debt funded acquisition the ratings could be downgraded. The principal methodology used in this rating was Distribution and Supply Chain Services published in February 2023. Headquartered in Livonia, Michigan, Alta Equipment Group Inc. (Alta) mainly distributes construction equipment and parts for more than 30 original equipment manufacturers. Sales of new and used equipment accounts for over half of annual revenue. The company also offers rentals, parts and services for the maintenance and repair of equipment, and material handling system design and consulting services. The company is publicly traded on the NYSE ("ALTG"). AMERICAN WATER: Subsidiary Continues to Defend Jeffries Class Suit ------------------------------------------------------------------ American Water Works Co. Inc. disclosed in its Form 10-Q Report for the quarterly period ending March 31, 2024 filed with the Securities and Exchange Commission on May 1, 2024, that the Company's subsidiary West Virginia-American Water Company (WVAWC) continues to defend itself from the Jeffries class suit in West Virginia Circuit Court in Kanawha County. On the evening of June 23, 2015, a 36-inch pre-stressed concrete transmission water main, installed in the early 1970s, failed. The water main is part of the West Relay pumping station located in the City of Dunbar, West Virginia and owned by the Company’s West Virginia subsidiary ("WVAWC"). The failure of the main caused water outages and low pressure for up to approximately 25,000 WVAWC customers. In the early morning hours of June 25, 2015, crews completed a repair, but that same day, the repair developed a leak. On June 26, 2015, a second repair was completed, and service was restored that day to approximately 80% of the impacted customers, and to the remaining approximately 20% by the next morning. The second repair showed signs of leaking, but the water main was usable until June 29, 2015, to allow tanks to refill. The system was reconfigured to maintain service to all but approximately 3,000 customers while a final repair was being completed safely on June 30, 2015. Water service was fully restored by July 1, 2015, to all customers affected by this event. On June 2, 2017, a complaint captioned Jeffries, et al. v. West Virginia-American Water Company was filed in West Virginia Circuit Court in Kanawha County on behalf of an alleged class of residents and business owners who lost water service or pressure as a result of the Dunbar main break. The complaint alleges breach of contract by WVAWC for failure to supply water, violation of West Virginia law regarding the sufficiency of WVAWC's facilities and negligence by WVAWC in the design, maintenance and operation of the water system. The Jeffries plaintiffs seek unspecified alleged damages on behalf of the class for lost profits, annoyance and inconvenience, and loss of use, as well as punitive damages for willful, reckless and wanton behavior in not addressing the risk of pipe failure and a large outage. In February 2020, the Jeffries plaintiffs filed a motion seeking class certification on the issues of breach of contract and negligence, and to determine the applicability of punitive damages and a multiplier for those damages if imposed. In July 2020, the Circuit Court entered an order granting the Jeffries plaintiffs' motion for certification of a class regarding certain liability issues but denying certification of a class to determine a punitive damages multiplier. In August 2020, WVAWC filed a Petition for Writ of Prohibition in the Supreme Court of Appeals of West Virginia seeking to vacate or remand the Circuit Court’s order certifying the issues class. In January 2021, the Supreme Court of Appeals remanded the case back to the Circuit Court for further consideration in light of a decision issued in another case relating to the class certification issues raised on appeal. In July 2022, the Circuit Court entered an order again certifying a class to address at trial certain liability issues but not to consider damages. In August 2022, WVAWC filed another Petition for Writ of Prohibition in the Supreme Court of Appeals of West Virginia challenging the West Virginia Circuit Court's July 2022 order, which petition was denied on June 8, 2023. On August 21, 2023, the Circuit Court set a date of September 9, 2024, for a class trial on issues relating to duty and breach of that duty. The trial will not find class-wide or punitive damages. The Company and WVAWC believe that WVAWC has valid, meritorious defenses to the claims raised in this class action complaint. WVAWC is vigorously defending itself against these allegations. American Water Works Company, Inc. is a water utility company based in Camden NJ. APPTECH PAYMENTS: Receives Nasdaq Deficiency Letter --------------------------------------------------- AppTech Payments Corp. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that on May 9, 2024, it received a deficiency letter from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market LLC notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company's common stock has been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). The Deficiency Letter has no immediate effect on the listing of the Company's common stock, and its common stock will continue to trade on The Nasdaq Capital Market under the symbol "APCX" at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until November 5, 2024, to regain compliance with the Minimum Bid Price Requirement. If at any time before November 5, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance. If the Company does not regain compliance with the Minimum Bid Price Requirement by November 5, 2024, the Company may be afforded a second 180 calendar day period to regain compliance. The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement, including initiating a reverse stock split. However, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq Listing Rules. About AppTech Payments Corp. AppTech Payments Corp., a Delaware corporation, is a Fintech Company headquartered in Carlsbad, California. AppTech utilizes innovative payment processing and digital banking technologies to complement its core merchant services capabilities. As of December 31, 2023, the Company had $8.35 million in total assets, $4.16 million in total liabilities, and $4.19 million in total stockholders' equity. San Diego, California-based DBBMcKennon, the Company's auditor since 2014, issued a "going concern" qualification in its report dated April 1, 2024, citing the Company's limited revenues and recurring losses from operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. ASTRA ACQUISITION: Sixth Street Marks $43MM Loan at 59% Off ----------------------------------------------------------- Sixth Street Specialty Lending, Inc has marked its $43,479,000 loan extended to Astra Acquisition Corp to market at $17,609,000 or 41% of the outstanding amount, as of March 31, 2024, according to a disclosure contained in Sixth Street's Form 10-Q for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission. Sixth Street is a participant in a Second Lien Loan to Astra Acquisition Corp. The loan accrues interest at a rate of 14.44% (SOFR + 9.14%) per annum. The loan matures in October 2029. Sixth Street said the loan is on non-accrual status as of March 31, 2024. Sixth Street is a Delaware corporation formed on July 21, 2010. The Company was formed primarily to lend to, and selectively invest in, middle-market companies in the United States. The Company has elected to be regulated as a business development company under the Investment Company Act of 1940. In addition, for tax purposes, the Company has elected to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. The Company is managed by Sixth Street Specialty Lending Advisers, LLC. On June 1, 2011, the Company formed a wholly owned subsidiary, TC Lending, LLC, a Delaware limited liability company. On March 22, 2012, the Company formed a wholly owned subsidiary, Sixth Street SL SPV, LLC, a Delaware limited liability company. On May 19, 2014, the Company formed a wholly owned subsidiary, Sixth Street SL Holding, LLC, a Delaware limited liability company. On December 9, 2020, the Company formed a wholly owned subsidiary, Sixth Street Specialty Lending Sub, LLC, a Cayman Islands limited liability company. Sixth Street is led by Joshua Easterly, Chief Executive Officer; and Ian Simmonds, Chief Financial Officer. The fund can be reach through: Joshua Easterly Sixth Street Specialty Lending, Inc 2100 McKinney Avenue, Suite 1500 Dallas, TX, 75201 Tel: (469) 621-3001 Astra Acquisition Corp. is a provider of cloud-based software solutions for higher educational institutions. ASTRA AQUISITION: BlackRock TCP Marks $27.8MM Loan at 71% Off ------------------------------------------------------------- BlackRock TCP Capital Corp has marked its $27,879,880 loan extended to Astra Acquisition Corp. to market at $8,085,165 or 29% of the outstanding amount, as of March 31, 2024, according to a disclosure contained in BlackRock TCP's Form 10-Q for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission. BlackRock TCP is a participant in a Second Lien Term Loan to Astra Acquisition Corp. The loan accrues interest at a rate of 14.44% (SOFR (Q) +9.14%, 0.75% FLOOR) per annum. The loan matures on October 25, 2029. BlackRock TCP, formerly known as TCP Capital Corp., is a Delaware corporation formed on April 2, 2012 as an externally managed, closed-end, non-diversified management investment company. The Company elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. BlackRock TCP is led by Rajneesh Vig, Chief Executive Officer; and Erik L. Cuellar, Chief Financial Officer. The fund can be reach through: Rajneesh Vig BlackRock TCP Capital Corp 2951 28th Street, Suite 1000 Santa Monica, CA 90405 Tel: (310) 566-1000 Astra Acquisition Corp. is a provider of cloud-based software solutions for higher educational institutions. AVENIR WELLNESS: Urish Popeck Raises Going Concern Doubt -------------------------------------------------------- Avenir Wellness Solutions, Inc. disclosed in a Form 10-K Report filed with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2023, that its auditor expressed substantial doubt about the Company's ability to continue as a going concern. Pittsburgh, Pa.-based Urish Popeck & Co., LLC, the Company's auditor since 2023, issued a "going concern" qualification in its report dated May 16, 2024, citing that the Company has suffered recurring losses from operations, has an accumulated deficit, negative stockholders' equity, a working capital deficit, and expects future losses. These conditions raise substantial doubt about its ability to continue as a going concern. Avenir Wellness said, "As of December 31, 2023, we had an accumulated deficit of approximately $123.4 million and a working capital deficit of approximately $10.5 million. Our operating activities consume the majority of our cash resources. We anticipate that we will continue to incur operating losses and negative cash flows from operations, at least into the near future, as we execute our commercialization and development plans and strategic and business development initiatives." "Our ability to continue as a going concern is dependent on our obtaining adequate capital to fund operating losses until we establish a sufficient revenue stream to consistently generate operating profits. We are continually analyzing our current costs and are attempting to make additional cost reductions where possible. We expect that we will continue to generate losses from operations throughout 2024. "Historically, we have had operating losses and negative cash flows from operations which cast significant doubt upon our ability to continue as a going concern. As such, we needed to raise capital to fund our operations. This need may be adversely impacted by uncertain market conditions and changes in the regulatory environment. We have previously funded our losses primarily through the issuance of common stock and/or promissory notes, combined with or without warrants, and cash generated from our product sales and research and development and license agreements. There can be no assurance that funds will be available on terms acceptable to us or will be enough to fully sustain operations. We believe the funds available through potential financings will be sufficient to meet the Company's working capital requirements during the coming year. If we are unable to raise sufficient additional funds, we will have to develop and implement a plan to extend payables, reduce expenditures, or scale back our business plan until sufficient additional capital is raised to support further operations. "We will require additional funds to implement the growth strategy for our business. We intend to continue funding our losses primarily through the issuance of common stock and/or borrowings, and cash generated from our product sales and license agreements. There can be no assurance that funds will be available on terms acceptable to us or will be enough to fully sustain operations." A full-text copy of the Company's Form 10-K is available at https://tinyurl.com/yjd7duum About Avenir Wellness Sherman Oaks, Calif.-based Avenir Wellness Solutions, Inc., including its wholly owned subsidiary, The Sera Labs, Inc., is a broad platform technology company focusing on the development of nutraceutical formulation and delivery technologies in novel dosage forms to improve efficacy and enhance wellness. As of December 31, 2023, the Company has $2.6 million in total assets, $12.5 million in total liabilities, and $9.9 million in total stockholders' deficit. BANGL LLC: S&P Affirms 'BB-' ICR on Term Loan B Add-On ------------------------------------------------------ S&P Global Ratings affirmed its 'BB-' issuer credit rating on BANGL LLC. At the same time, S&P affirmed its 'BB-' issue-level ratings on BANGL's senior secured debt. The '3' recovery rating on the term loan indicates its expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. The negative outlook on BANGL reflects S&P's expectation that the company will have elevated leverage in 2024 as it continues the construction of GtoS, resulting in S&P Global Ratings-adjusted debt to EBITDA of over 8x in 2024. BANGL will fully fund the remaining capex on the GtoS expansion with additional debt, resulting in elevated credit metrics over the next 12 months. BANGL continues to work on its GtoS expansion, which will add an additional 250 miles of new pipeline to move its product from Gardendale to Sweeney. Currently, BANGL utilizes third-party volume leases on the pipeline to move the volumes. The expansion plan also includes increasing BANGL's capacity on the mainline pipe, construction of a lateral pipeline on the Delaware system, and a new pump station in Orla, Texas. Thus far, construction on the project has been on time and within budget, and S&P does not expect delays in the completion, with a targeted in-service date of January 2025. Operational issues at the customer plant level resulted in lower volumes than previously expected through the first quarter of 2024. Certain customers, including MPLX and WTG, experienced operational issues and plant maintenance, causing gas that would have been processed at their facilities to be temporarily offloaded. As a result, recovered natural gas liquid volumes were below S&P's previous expectations. S&P expects these issues will be resolved by the second half of 2024, bolstered by MPLX's Preakness II plant coming online in June 2024. The operational issues caused a reduction in volumes under temporary and low-margin offloan arrangements, limiting the financial impact. S&P said, "We expect S&P Global Ratings-adjusted EBITDA of $75 million-$85 million in 2024, improving to $150 million-$160 million in 2025. This compares with our previous expectation of S&P Global Ratings-adjusted EBITDA of about $100 million in 2024 and $140 million-$150 million in 2025. 2024 forecasts are affected by our revision to volume assumptions, as well as the exclusion of any credit for future rate step-ups not recognized until 2025. We expect the company will fully utilize debt to complete the GtoS expansion project, rather than our previous assumption of a balanced mix of debt and equity. "As a result, we now expect S&P Global Ratings-adjusted debt to EBITDA of above 8x in 2024, improving to 3.5x–4.0x in 2025 once the GtoS volumes come online. BANGL's liquidity cushion will be minimal over the next 12 months as the majority of capex spend on the project occurs over the next year to complete the construction on the expansion project. As a result, we expect the company will have a material free operating cash flow deficit in 2024, improving to surplus free operating cash flow in 2025. "The negative outlook on BANGL reflects our expectation that it will maintain S&P Global Ratings-adjusted debt to EBITDA of over 8x in 2024. We expect its credit metrics to be elevated over the next 12 months as the company completes its expansion project. We expect debt to EBITDA will improve to 3.5x-4.0x by the second half of 2025 as BANGL benefits from increased volumes on its system." S&P could consider a downgrade if S&P Global Ratings-adjusted debt to EBITDA above 4.5x. This could occur if: -- Delays and material cost overruns occur, resulting in the need for additional capital spending that it wholly funds with debt; or -- BANGL underperforms our current expectations such that EBITDA does not improve in 2025. S&P said, "We could revise the outlook to stable if the planned expansion project is completed on time and in budget, resulting in additional volumes and increased cash flow on the pipeline, such that we expect BANGL to maintain S&P Global Ratings-adjusted debt to EBITDA below 4.5x in the second half of 2025. "Environmental factors are a negative consideration in our credit rating analysis of BANGL. Its transportation volumes and utilization could be impaired due to energy transition pressures affecting the midstream industry, including BANGL's counterparties not meeting their volume obligations." BARTLEY INVESTMENTS: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Bartley Investments, LTD 9785 SW 143 Street Miami, FL 33176 Business Description: Bartley Investments owns 12 rental properties in Tampa Villa South, Tampa, Florida valued at $8.68 million. Chapter 11 Petition Date: May 23, 2024 Court: United States Bankruptcy Court Middle District of Florida Case No.: 24-029528 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 Email: All@tampaesq.com Total Assets: $8,764,925 Total Liabilities: $3,703,633 The petition was signed by Allan N. Bartley as general partner. 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/SSGF7IY/Bartley_Investments_LTD__flmbke-24-02952__0001.0.pdf?mcid=tGE4TAMA BEND ARCH: Unsecureds Will Get 50% of Claims over 120 Months ------------------------------------------------------------ Bend Arch Petroleum Inc. filed with the U.S. Bankruptcy Court for the Northern District of Texas a Plan of Reorganization under Subchapter V dated May 6, 2024. The Debtor filed this case in order to prevent a foreclosure by one of its secured lenders, First State Bank of Graham. The Debtor was unable to fully service its debt as Debtor's gas well operator encountered non-compliance issues with the Texas Railroad Commission and was prevented from working the oil wells. Since the Debtor believes the value of the property securing the First State Bank of Graham liens is higher than its claim, Debtor initiated the instant case to protect the value of the estate. The Plan is a Plan of Reorganization. The Debtor will continue its business after Confirmation of this Plan. The Debtor intends to plug and abandon certain wells to sell for its salvage value. The Debtor also intends to work over 10 wells initially to begin operations with a new well operator. Debtor has also contemplated selling additional wells after they are in working condition to maximize return to the estate. The Debtor scheduled total non-priority Unsecured Claims of $1,572,684.21. Under this Plan, all Secured Creditors will receive payment of 100% of their Allowed Claims, and Unsecured Creditors will receive 50% of their Allowed Claims. Therefore, pursuant to the liquidation analysis all Creditors will receive at least as much under this Plan as they would in a Chapter 7 liquidation. Class 12 consists of Allowed General Unsecured Claims. Class 12 Claimants shall be paid 50% of their Allowed Claims over 120 months from the Effective Date, without interest. These Claims will be paid in equal monthly installments commencing on the first day of the first month following the Effective Date and continuing on the first day of each month thereafter. These Claims are Impaired, and the holders of these Claims are entitled to vote to accept or reject the Plan. Class 13 Equity Interests shall be retained. The Debtor intends to make all payments required under the Plan from available cash and income from the business operations of the Debtor. A full-text copy of the Plan of Reorganization dated May 6, 2024 is available at https://urlcurt.com/u?l=UGoIZi from PacerMonitor.com at no charge. Attorneys for the Debtor: Joyce W. Lindauer, Esq. Kerry S. Alleyne, Esq. Guy H. Holman, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Telephone: (972) 503-4033 Facsimile: (972) 503-4034 Email: joyce@joycelindauer.com About Bend Arch Petroleum Inc. Bend Arch Petroleum Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-40417) on Feb. 5, 2024, listing $1 million to $10 million in both assets and liabilities. The petition was signed by Johnnie Lee Bitters as president. Judge Mark X. Mullin presides over the case. Joyce W. Lindauer, Esq. at Joyce Lindauer, Attorney represents the Debtor as counsel. BLACK OPS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Black Ops Construction, LLC 2100 Angelia M Street Fayetteville, NC 28312 Business Description: Black Ops is a family-owned and operated fence company offering full-service residential and commercial fencing. The Company provides an array of fencing from wood, aluminum, vinyl, chain-link, farm, pool, privacy fencing, and more. Chapter 11 Petition Date: May 22, 2024 Court: United States Bankruptcy Court Eastern District of North Carolina Case No.: 24-01713 Judge: Hon. Joseph N. Callaway Debtor's Counsel: Danny Bradford, Esq. PAUL D. BRADFORD, PLLC 455 Swiftside Drive Suite 106 Cary, NC 27518-7198 Tel: (919) 758-8879 Fax: (919) 803-0683 Email: dbradford@bradford-law.com Total Assets: $902,742 Total Liabilities: $1,693,083 The petition was signed by April Merrill 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/UTLG5AQ/Black_Ops_Construction_LLC__ncebke-24-01713__0001.0.pdf?mcid=tGE4TAMA BOISE CASCADE: Moody's Alters Outlook on 'Ba1' CFR to Positive -------------------------------------------------------------- Moody's Ratings affirms Boise Cascade Company's Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating, and Ba2 rating on its senior unsecured debt and revised outlook to positive from stable. The SGL-1 speculative grade liquidity rating remains unchanged. "The positive outlook reflects Moody's expectations that the company will maintain strong credit metrics despite the projected housing market weakness," said Anastasija Johnson, senior analyst at Moody's. "In addition, expansion of the engineered wood production capacity and growth of general line distribution have strengthened earnings and cash flow profile, while an unsecured capital structure would support an upgrade." RATINGS RATIONALE Boise Cascade's rating reflects its conservative balance sheet (negative net debt as of March 31, 2024) and financial policies that will keep credit metrics strong despite ongoing weakness in the housing markets. The rating also reflects strong market position in engineered wood product (EWP) manufacturing and improving earnings profile with increased EWP capacity over the last 5 years and growth in non-commodity building products distribution, such as doors and millwork. Moody's expect debt/EBITDA as adjusted by Moody's to remain below 1x in both 2024 and 2025, even as EBITDA declines in 2024 from 2023 levels amid weaker wood products pricing and flat volumes. Leverage has fluctuated between 2.4x and 0.4 x in the last five years and with EWP prices currently above 2019 levels Moody's do not expect metrics to deteriorate in the intermediate term. The rating is supported by conservative financial policies with the net leverage target of less than 2x. Even with lower earnings in 2024 Moody's expect the company to remain free cash flow generative due to low interest expense, low regular dividends and manageable capital expenditure levels. The company's strong balance sheet and positive free cash flow generation provide some flexibility for special dividends (paid in the last 4 years) and share repurchases, while maintaining strong liquidity. The credit profile is constrained by concentration in wood products and wood products distribution with inherent pricing and earnings volatility and low operating margins in the distribution business that drives the majority of sales. Boise Cascade generates lower, but more stable operating margins than most of its wood product manufacturing peers. Boise Cascade's lower margin distribution business (EBITDA margin of about 5.9% in LTM March 2024) is a cost plus margin business, which provides significantly more earnings stability than most wood product industry peers. The stability of the distribution business is enhanced with its very broad product lines, which includes commodity products (about 38% of distribution sales) like plywood, oriented strandboard (OSB) and lumber; EWP (23% of distribution sales) and other products (39% of distribution sales) which include siding, composite decking, doors, metal products, roofing and insulation. The distribution business is also an important outlet for the company's internally manufactured products. In addition, the credit profile benefits from good market positions (a leading US producer of plywood and engineered wood products (EWP) and wholesale building materials distributor) and vertical integration (veneer production for EWP in plywood facilities and 60% of wood products sold through its own distribution business). The cyclical business profile and secured capital structure constrain the rating. Boise Cascade has strong liquidity (SGL-1) with roughly $1.3 billion of liquidity sources and no near-term mandatory debt repayments. The company had $890 million of cash on hand as of March 2024. The company has a $400 million ABL revolver due September 2027 with $396 million in availability (net letters of credit) as of March 2024. The revolver and term loan have a 1.0x fixed charge coverage covenant if availability falls below 10% of the revolver commitment or $40 million. Moody's do not expect the covenant to be tested as the company has significant headroom under the covenant. The company's ABL and term loan are secured by substantially all assets excluding property and equipment, leaving room for alternative liquidity sources. The positive outlook reflects expectations that Boise Cascade will maintain strong credit metrics despite ongoing housing market weakness. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade: -- An unsecured capital structure and the company's public commitment to maintain investment-grade policies -- Increased diversification away from the cyclical US home construction and repair/remodeling end markets or growth in higher priced engineered wood product business and more stable distribution business -- The company maintains strong liquidity and conservative financial policies, provided adjusted debt/EBITDA is sustained below 3x and (RCF-Capex)/Adjusted Debt is maintained above 12% based on Moody's forward view of financial performance Factors that could lead to a downgrade: -- Significant deterioration in the company's liquidity and operating performance -- Changes in financial management policies that would materially pressure the company's balance sheet -- Adjusted debt/EBITDA exceeds 4x (0.7x LTM as of March 2024) or (RCF-Capex)/Adjusted Total Debt approaches 5% (13.8% LTM as of March 2024) based on Moody's forward opinion of sustained metrics Boise Cascade is a vertically-integrated building products public company headquartered in Boise, Idaho. Boise Cascade manufactures engineered wood products (EWP) and plywood (collectively its wood products segment) and is a wholesale distributor of a broad line of building materials, including siding, composite decking and about 60% of the wood products that it manufactures. The principal methodology used in these ratings was Paper and Forest Products published in December 2021. BRIGHT STEPS: Business Income to Fund Plan Payments --------------------------------------------------- Bright Steps Therapy, LLC filed with the U.S. Bankruptcy Court for the Southern District of Mississippi a Subchapter V Plan of Reorganization dated May 6, 2024. The Debtor business was established in Poplarville, Mississippi in 2020. Its primary business is physical and occupational therapy in the Poplarville and Hattiesburg, Mississippi areas. The Covid-19 pandemic in conjunction with trying to expand into the Hattiesburg market led the Debtor to acquire a number of merchant cash advances which subsequently affected the Debtor's day to day cash flow. The Debtor has taken steps to cut back expenses and improve billing which has lowered monthly expenses and led to more accounts receivable being collectable instead of non-collectable. As of 2024, the Debtor's most recent profit and loss statements show a profit between $15,000.00 and $20,000.00. General Unsecured Creditors will receive the Debtor's projected disposable income over the life of the Plan. Payments to Unsecured Creditors shall be made on the first, second, third, fourth and fifth anniversary dates of the effective date of the Plan. Unsecured liabilities total $530,806.24 ($52,655.77 in allowed claims). As the Debtor's cash flow indicates, the means for execution and implementation of the Plan will be derived from the Debtor's income it receives in exchange for providing physical and occupational therapy services to the public. A full-text copy of the Subchapter V Plan dated May 6, 2024 is available at https://urlcurt.com/u?l=4Mkc0I from PacerMonitor.com at no charge. Attorney for the Debtor: Nicholas T. Grillo, Esq. GRILLO LAW FIRM 607 Corinne Street, Ste. A3 Hattiesburg, MS 39401 Tel: (769) 390-7935 Email: grillolawms@gmail.com About Bright Steps Therapy Bright Steps Therapy, LLC, is a company in Poplarville, Miss., which offers physical therapy and occupational therapy services. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Miss. Case No. 24-50150) on Feb. 6, 2024, with up to $50,000 in assets and $1 million to $10 million in liabilities. Marcus R. Houston, owner and operator, signed the petition. Judge Katharine M. Samson oversees the case. Nicholas T. Grillo, Esq., at Grillo Law Firm, is the Debtor's bankruptcy counsel. CALIFORNIA RESOURCES: Fitch Rates Unsec. Notes Due 2029 'BB-' ------------------------------------------------------------- Fitch Ratings has assigned a 'BB-'/'RR3' rating to California Resources Corporation's (CRC, B+/Stable) proposed senior unsecured notes due 2029. CRC intends to use net proceeds from this offering, borrowings under the revolving credit facility and cash on hand to extinguish the outstanding debt at Aera Energy, LLC (Aera) following the close of the merger which is expected in 2H24. Fitch believes that the proposed notes offering is deleveraging in nature, maintains the company's simple capital structure and extends the company's average maturity. CRC's ratings reflect the scale-enhancing Aera transaction, its large, low-decline asset base with exposure to Brent pricing, conservative capital structure, forecast sub-1.5x mid-cycle leverage, expectations of positive FCF through the rating horizon and proactive hedging program that limits downside price risks. These factors are partially offset by the company's high cost structure, which limits economic drilling prospects, and exposure to California's stringent regulatory environment which could disrupt permitting, drilling and financing options and will still persist following the transaction's close in 2H24. KEY RATING DRIVERS Credit-Neutral, Scale-Enhancing Merger: Fitch believes CRC's all-stock merger with Aera is neutral to the credit profile. The transaction is attractively priced at a 2.6x enterprise value (EV)/EBITDAX multiple and will materially increase scale with about 74,000 barrels of oil equivalent per day (mboepd) of oil-weighted, low-decline production in California. Management reported pro forma production of about 160mboepd (78% oil) at Dec. 31, 2023 and proved reserves of around 605mmboe (90% proved developed) with exposure to five of the largest oil fields in the state. Fitch recognizes the pro forma scale benefits for the company, but CRC will still be exposed to California's stringent regulatory environment which could impact drilling and permitting options in the near and medium term. Enhanced FCF; Synergy Opportunities: Fitch expects the merger will nearly double the company's FCF generation and the complementary nature of the assets provides achievable synergy opportunities. The company has also identified $150 million of annual synergy potential through lower operating costs, capital efficiencies, G&A reductions and optimization of field infrastructure which Fitch believes are achievable in the near term. Fitch expects CRC will continue to allocate its FCF toward shareholders via its fixed dividend and increased $1.35 billion share repurchase program and toward its CM businesses while maintaining a conservative capital structure. Near-Term Hedging Protection: Fitch views the pro forma company's strong near-term hedges positively and will help solidify FCF generation. About 80% of the pro forma company's oil production will be hedged at attractive Brent prices at around $70/bbl, which will reduce downside price risks. Fitch expects hedging will continue, albeit potentially at lower levels, because CRC's credit facility requires minimum hedging of 50% to 0% with leverage above 2.0x or below 1.5x, respectively. Sub-1.5x Mid-Cycle Leverage: Fitch-calculated gross debt/EBITDA is forecast to remain below 1.0x in 2024 and 1.5x through the remainder of the forecast given the company's conservative capital structure. Merger Accelerates Carbon Management (CM) Initiatives: Fitch believes the merger will accelerate the company's CM initiatives through the addition of surface rights and pore space. CRC continues to advance its CM businesses, driving management's goal of reliable, safe and ESG-driven operations. The company's strategic joint venture (JV) with Brookfield Renewable also helps advance CRC's energy transition strategy, substantially lowers risks in its CM funding needs and should help reach the JV's goals of first carbon dioxide injection by the end of 2025 and five million metric tons of carbon dioxide storage per annum (200 million metric tons of total carbon dioxide storage capacity) by the end of 2027. Fitch's base-case scenario includes the company's expected capital investments, but does not include any revenues from CRC's CM businesses given the uncertainty around timing and magnitude of cash flows along with the potential for separation of the E&P and CM businesses. California Regulatory Considerations: California has adopted some of the most restrictive regulations on in-state produced energy as the state shifts toward cleaner, more renewable forms of energy. The state has established limits on greenhouse gas (GHG) emissions, which decline annually to a target of at least 40% below the 1990 level by 2030. This is in addition to the established policy toward becoming carbon neutral by 2045. While there is a need to drill in California to meet the excess demand for oil and gasoline in the state, Fitch cautions that regulatory and legislative actions in the state could disrupt drilling, permitting and financing options for the company. DERIVATION SUMMARY Management reported pro forma production of about 160mboepd (78% oil) at Dec. 31, 2023. The company will be larger than Canadian producer MEG Energy Corp. (BB-/Stable; 104mboepd [100% bitumen]), similar in size to Baytex Energy Corp. (BB-/Stable; 151mboepd in 1Q24) and SM Energy Company (BB-/Stable; 145mboepd in 1Q24), but smaller than Permian Resources Corporation (BB/Positive; 320mboepd in 1Q24) CRC's realized prices are typically higher than peers given the exposure to premium Brent pricing and the low-decline asset base leads to lower capital intensity versus peers. This is partially offset by the company's high cost structure, which results in lower Fitch-calculated unhedged cash netbacks compared to Fitch's aggregate peer average. KEY ASSUMPTIONS - Brent oil prices of $80/bbl in 2024, $70/bbl in 2025, $65/bbl in 2026 and 2027 and $60/bbl thereafter; - Henry Hub prices of $2.50/mcf in 2024, $3.00/mcf in 2025 and 2026 and $2.75/mcf thereafter; - Management reported pro forma production of about 160mboepd (78% oil) at Dec. 31, 2023; - Measured increases to shareholder returns; - Announced Aera merger closes in 2H24. RECOVERY ANALYSIS KEY RECOVERY RATING ASSUMPTIONS - The recovery analysis assumes that CRC would be reorganized as a going-concern in bankruptcy rather than liquidated. - Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach Fitch's projections under a stressed case price desk, which assumes Brent oil prices of $50 in 2024, $35 in 2025, $45 in 2026, $48 in the long term. The Fitch-calculated GC EBITDA was increased to $625 million following the announced transaction and reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation, which reflects the decline from current pricing levels to stressed levels and then a partial recovery coming out of a troughed pricing environment. Fitch believes a weakened pricing environment would lead to production declines, reduce the borrowing base availability and materially erode the liquidity profile. An EV multiple of 3.00x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: The historical bankruptcy case study exit multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.2x and a median of 5.4x. The multiple reflects the expectation that the value of CRC's oil producing properties will decline given the company's high cost structure and reduction in capex to preserve liquidity. The multiple also considers the stringent California regulatory environment and highly concentrated market which severely limits the number of potential buyers and valuation for the assets. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. The revolver is assumed to be 90% drawn upon default with the expectation that commitments would be reduced during a redetermination. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' recovery for the first lien reserve-based lending credit facility (RBL) and a recovery corresponding to 'RR3' for the senior unsecured notes. The RBL is assumed to be fully drawn upon default. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Diversification through meaningful EBITDA generation from CM or other non-E&P business lines; - Material E&P diversification outside of California; - FCF generation that supports the liquidity profile and limited borrowings under the RBL; - Commitment to conservative financial policy resulting in mid-cycle EBITDA leverage sustained below 1.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Unfavorable regulatory actions that result in material production declines and/or weakened profitability; - Deteriorating liquidity profile, including material revolver borrowings and inability to generate positive FCF; - Mid-cycle EBITDA leverage sustained above 2.0x. LIQUIDITY AND DEBT STRUCTURE Strong Liquidity: Pro forma the notes issuance, Fitch expects CRC to maintain strong liquidity through meaningful availability under its revolving credit facility, cash on hand and forecast strong FCF generation. The liquidity profile is further supported by CRC's strong hedge book providing downside price protection. ISSUER PROFILE California Resources Corporation is an integrated public E&P company that operates solely in California. The company is also investing in its carbon capture and storage (CCS) businesses and other emissions reducing projects. DATE OF RELEVANT COMMITTEE 07 February 2024 ESG CONSIDERATIONS CRC has an ESG Relevance Score of '4' for Exposure to Social Impacts due to the oil and gas sector regulatory environment in California and its exposure to social resistance, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. 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 ----------- ------ -------- California Resources Corporation senior unsecured LT BB- New Rating RR3 CALIFORNIA RESOURCES: Moody's Rates New Sr. Unsecured Notes 'B2' ---------------------------------------------------------------- Moody's Ratings assigned a B2 rating to California Resources Corporation's (CRC) proposed senior unsecured notes. CRC's existing ratings are unchanged, including the B1 Corporate Family Rating, B1-PD Probability of Default Rating, SGL-2 Speculative Grade Liquidity Rating (SGL) and B2 rating on the existing senior unsecured notes. The rating outlook is stable. Proceeds from the new notes issuance will be used in connection with refinancing Aera Energy LLC's (Aera) debt. "CRC's proposed notes issuance will refinance a portion of the debt to be incurred as part of the Aera Energy LLC transaction on a long term basis, thereby negating the need to use the committed bridge facility to complete the acquisition," stated James Wilkins, Moody's Vice President. RATINGS RATIONALE The proposed senior unsecured notes are rated B2, one notch below the B1 CFR, given their unsecured claim to the company's assets and the lower priority ranking of the unsecured notes compared to obligations under the company's secured revolving credit facility (unrated). The proposed notes will rank pari passu with the existing senior unsecured notes due 2026. In connection with the Aera merger, CRC will increase the size of its reserves based revolving credit facility to $1.1 billion. The proceeds from the proposed notes, existing cash balances and drawings under the revolving credit facility will refinance Aera's existing debt. CRC's B1 CFR reflects the positive impact the pending Aera Energy LLC merger will have on its scale, financial profile and cash flow generation. Aera will add to CRC's production, the proportion of oil in CRC's production mix and cash flow at a time when CRC expects the development of its Kern County assets to be constrained by delays into 2025 in the drilling permitting process. The Aera business will also add to CRC's potential low carbon business with additional CO2 sequestration storage capacity as well as carbon capture and sequestration (CCS), direct air capture (DAC) and solar projects. The equity funding of the purchase price and modest existing debt at Aera will leave CRC with a strong balance sheet. However, the regulatory risk CRC is exposed to as an exploration and production company with all of its operations in California continues to be a constraint on its credit rating as the numerous and ongoing changes to the regulation of oil and gas operations and related legal challenges pose significant risk for the company's cash flow. CRC has high operating costs associated with its enhanced oil recovery operations compared to E&P companies in other US basins. Moody's expects production volumes on CRC's legacy assets to decline following the merger until it is able to secure permits to drill new wells. The company benefits from its large scale and legacy production with significant infrastructure as the largest operator in California. CRC's well-defined, mature asset base, which has a shallow decline rate of 11% – 13% per year, and the predominately oil reserves (about 85% of pro-forma production is liquids) in multiple California basins are positives. The SGL-2 Speculative Grade Liquidity (SGL) Rating reflects Moody's expectation that CRC will have good liquidity well into 2025, supported by cash flow from operations and its revolving credit facility due July 2027. Moody's expects CRC will limit its capital spending such that it does not materially outspend internally generated cash flow. After CRC meets certain conditions, including the closing of the Aera merger, the revolver borrowings base will increase to $1.5 billion (from $1.2 billion currently) and commitments will increase to $1.1 billion (from $630 million currently). Moody's expects the company will have ample headroom under its credit facility's financial covenants – a maximum total net leverage ratio of 3.0x and minimum current ratio of 1.0x. The existing senior unsecured notes mature in February 2026. The company has a $500 million bridge financing facility to refinance a portion of Aera's debt, but the bridge facility will not be needed following the issuance of the proposed senior unsecured notes. The stable outlook reflects Moody's expectation that CRC will generate positive free cash flow, maintain relatively stable production volumes and seamlessly integrate the Aera acquisition. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if the company is able to secure necessary permits and resume drilling activity to sustain production levels and lessen declines in proved reserves. Retained cash flow to debt above 40 percent that can be sustained at mid-cycle prices, positive free cash flow and more visibility to the capital requirements for carbon management projects would also be necessary to support an upgrade. The ratings could be downgraded if retained cash flow to debt falls below 15 percent, production volumes decline or liquidity weakens. The principal methodology used in this rating was Independent Exploration and Production published in December 2022. California Resources Corporation, headquartered in Long Beach, California, is an exploration and production firm operating exclusively in California. CARROLS RESTAURANT: S&P Withdraw 'B-' Issuer Credit Rating ---------------------------------------------------------- S&P Global Ratings withdrew its 'B-' issuer credit rating on Carrols Restaurant Group Inc. This follows Restaurant Brands International Inc.'s (BB/Positive/--) acquisition of Carrols, which was completed on May 16, 2024. At the same time, S&P discontinued its 'B+' and 'CCC' issue-level ratings on Carrols' senior secured and senior unsecured debt, respectively, since all of the company's rated debt facilities have been fully repaid. CHOICE MARKET: Court OKs Interim Cash Collateral Access ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Choice Market Holdings, Inc. and affiliates to use cash collateral, on an interim basis, in accordance with the budget. As adequate protection, City wide Bank, the U.S. Small Business Administration, Ampla, LLC, and any other party claiming an interest in cash collateral are granted a post-petition lien on all post-petition assets and income derived from the operation of the Debtors' business and assets, to the extent that the use of the cash results in a decrease in the value of the Secured Creditors' interest in its pre-petition collateral pursuant to 11 U.S.C. Section 361(2). All replacement Adequate Protection Liens will hold the same relative priority to assets as did the pre-petition liens; Authorization to use cash collateral will automatically terminate without further order from the Court if an Event of Default occurs and remains uncured for more than five days following the delivery of written notice from any of Secured Creditors to Debtors' counsel noticing the occurrence such Event of Default. These events that constitute an "Event of Default": 1. The Debtors fail to perform any of their obligations in accordance with the terms of the Interim Order (including adherence to the Budget); 2. The Debtors fail to file a chapter 11 plan on or before 90 days following the Petition Date. 3. The Debtors file a motion seeking to create any post-petition liens or security interests, other than those granted or permitted pursuant to the Interim Order. 4. The entry of an order in any court reversing, staying, vacating or modifying the terms of the Interim Order. 5. A chapter 11 trustee or examiner with expanded powers (but not a Subchapter V trustee) is appointed in the chapter 11 case. 6. The chapter 11 case is dismissed. 7. The chapter 11 case is converted to a case under chapter 7. A final hearing on the matter is set for June 6, 2024 at 2 p.m. A copy of the order is available at https://urlcurt.com/u?l=UqupgV from PacerMonitor.com. About Choice Market Holdings, Inc. Choice Market Holdings, Inc. owns and operates Choice Market grocery and convenience store locations in Denver, Colorado. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 24-12394) on May 6, 2024. In the petition signed by Michael Fogarty, as president, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Joseph G. Rosania Jr. oversees the case. Jeffrey S. Brinen, Esq., at KUTNER BRINEN DICKEY RILEY PC, represents the Debtor as legal counsel. COASTAL CONSTRUCTION: Case Summary & 11 Unsecured Creditors ----------------------------------------------------------- Debtor: Coastal Construction Group, LLC 235 Hickory Lane Unit B Bayville, NJ 08721 Business Description: The Debtor is a building finishing contractor. Chapter 11 Petition Date: May 22, 2024 Court: United States Bankruptcy Court District of New Jersey Case No.: 24-15203 Debtor's Counsel: Daniel Straffi, Jr., Esq. STRAFFI AND STRAFFI LLC 670 Commons Way Toms River, NJ 08755 Tel: (732) 341-3800 Email: bkclient@straffilaw.com Total Assets: $292,642 Total Liabilities: $1,407,570 The petition was signed by Dean Rado as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 11 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/4RMGCJQ/Coastal_Construction_Group_LLC__njbke-24-15203__0001.0.pdf?mcid=tGE4TAMA COMSERO INC: Unsecureds Will Get 11.7% of Claims in Plan -------------------------------------------------------- Comsero, Inc. d/b/a m.c. Squares filed with the U.S. Bankruptcy Court for the District of Colorado a Plan of Reorganization dated May 6, 2024. The Debtor is a Delaware corporation headquartered in Thornton, Colorado and engaged in business manufacturing and selling reusable office products, including reusable sticky notes, white boards, and calendars. The Debtor was formed in 2013 by Anthony Franco with the goal of producing economically friendly, reusable products that promote organization and productivity for modern office spaces. Over the years, the Debtor expanded its product offerings, and further expanded business operations by partnering with retailers and entering into a distributing partnership with Amazon. In 2021, the Debtor experienced technical issues with its inventory listings on Amazon, which resulted in a majority of the Debtor's products either being removed from search results or de prioritized in the search results. The Debtor turned to short term financing to maintain operations while working through the technical issues, but technical issues took significantly longer to be resolved than originally anticipated. The short term loans proved to have substantial repayment terms that the Debtor struggled to afford while its sales remained depressed. While the Debtor was eventually able to resolve the technical issues, the Debtor had to rebuild its brand recognition through e-commerce search algorithms, resulting in a slow recovery for the Debtor. As a result of the ongoing financial difficulties, the Debtor filed its voluntary petition for relief pursuant to Chapter 11, Subchapter V of the Bankruptcy Code on December 18, 2023. On January 31, 2024, the Debtor filed an Application to Employ New Mill Capital Holdings, LLC to act as the auctioneer for the Debtor and sell the assets in its Thornton, Colorado location and further sought authority to conduct an auction of the assets. On March 18, 2024, the Court entered an Agreed Order Partially Approving the Application to Employ and Compensate New Mill Capital Holdings, LLC, and an Order Approving the Stipulation Among Comsero, Inc, Amazon Capital Services, Inc., and Old Vine – Pinnacle Associates, LLC, authorizing the Debtor to sell its assets, with all liens to attach to the proceeds of the sale. New Mill conducted the sale in early April, 2024, and realized proceeds in the amount of $184,095.00 before application of the commission. On May 7, 2024, the Debtor filed a Motion to Authorize Distribution of Proceeds. Classes 10 is comprised of the Allowed General Unsecured Claims holding unsecured claims against the Debtor. Class 10 shall be treated and paid as follows: * Class 10 shall receive a pro-rata distribution equal 100% of the Debtor's Net Revenue calculated on a quarterly basis for a 4 year period beginning on the later of: 1) the date on which Administrative Expense Claims are paid in full; or 2) the one (1) year anniversary of the Effective Date of the Plan ("Class 10 Plan Term"); * Commencing on the first day of the second calendar quarter following the commencement of the Class 10 Plan Term and continuing each quarter thereafter, the Debtors shall set distribute an amount equal to (100%) of the prior quarter's Net Revenue. By way of example, if the Plan is confirmed in July 2024, and Administrative Expense Claims in the following year, the Class 10 Plan Term shall commence in July 2025, and the first distribution shall be made on October 1, 2025 based on the combined Net Revenue generated from July 2025 through September 2025; * Based on the Debtors' projections, the Debtors estimate that Trade Creditor Claims will receive approximately 11.7% on account of their claims. Upon request by any party in interest, the Debtors shall provide a quarterly financial statement, including amounts disbursed to creditors in accordance with the Plan; * The Debtors shall be entitled to retire the entire obligations to Class 10 Creditors at any time during the first two years of the Trade Creditor Term by making a single pro rata distribution of $110,000, less amounts previously disbursed to unsecured creditors; and * In addition to the amounts, Class 10 shall receive 50% of the amounts recovered for claims arising under Chapter 5 after payment of attorney fees, cost of litigation, and cost of recovery. Class 11 is comprised of the holders of common shares existing as of the Petition Date. Class 11 is impaired by the Plan. On the Effective Date of the Plan, Class 11 interest holders shall retain all interests held on the Petition Date subject to the dilution of such shares as contemplated by this Plan. It is anticipated that after dilution, Class 11 interest holders will hold a total of approximately 5% of the common stocks in the Debtor. As evidenced by the projections, the Debtor anticipates that its income will be positive each year of the Plan, and will generate sufficient revenue to meet its obligations under the Plan. As set forth on the Liquidation Analysis, if the Debtor's case were converted to a case under Chapter 7, the Debtor's remaining assets would be sold in satisfaction of Amazon's secured claim. The liquidation value of the assets would be reduced due to the liquidation sale, and would result in minimal funds to unsecured creditors. In contrast, the Debtor's Plan will provide for recovery of approximately 11.7% to unsecured creditors. A full-text copy of the Plan of Reorganization dated May 6, 2024 is available at https://urlcurt.com/u?l=Fwd1Vn from PacerMonitor.com at no charge. Attorneys for the Debtor: Keri L. Riley, Esq. KUTNER BRINEN DICKEY RILEY, P.C. 1660 Lincoln Street, Suite 1720 Denver, CO 80264 Tel: (303) 832-2910 Email: klr@kutnerlaw.com About Comsero, Inc. Comsero, Inc., a Denver-based start-up, creates magnetic, dry erase products as an alternative to disposable sticky notes. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 23-15959) on December 22, 2023, with $906,316 in assets and $3,336,200 in liabilities. Anthony Franco, chief executive officer, signed the petition. Judge Michael E. Romero oversees the case. Keri L. Riley, Esq., at Kutner Brinen Dickey Riley, PC represents the Debtor as legal counsel. CONG. BETH JOSEPH: Case Summary & Nine Unsecured Creditors ---------------------------------------------------------- Debtor: Cong. Beth Joseph Joseph Zwi Dushinsky Congregation Beth Joseph Zwi Dushinsky 135 Ross Street Brooklyn, NY 11211 Business Description: The Debtor is a tax-exempt religious organization. Chapter 11 Petition Date: May 22, 2024 Court: United States Bankruptcy Court Eastern District of New York Case No.: 24-42127 Judge: Hon. Elizabeth S. Stong Debtor's Counsel: Joel M. Shafferman, Esq. SHAFFERMAN & FELDMAN LLP 137 Fifth Avenue 9th Floor New York, NY 10010 Tel: (212) 509-1802 Email: shaffermanjoel@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Theodore Welz as chief restructuring officer. A full-text copy of the petition containing, among other items, a list of the Debtor's nine unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CB3NRYI/Cong_Beth_Joseph_Joseph_Zwi_Dushinsky__nyebke-24-42127__0001.0.pdf?mcid=tGE4TAMA CORDIAL LOGISTICS: Taps Sheehan & Associates as Bankruptcy Counsel ------------------------------------------------------------------ Cordial Logistics, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of West Virginia to hire Sheehan & Associates, PLLC as its counsel. The Debtor requires legal counsel to: a. give advice with respect to the Debtor's powers and duties and the administration of the Debtor's estate, and assist in the preparation of a Chapter 11 plan of reorganization; b. prepare legal papers; c. represent the Debtor at court hearings; d. investigate and institute any proceedings relating to transactions between the Debtor and its creditors; and e. provide other necessary legal services. The Debtor agreed to compensate the firm's attorneys at the rate of $425 per hour and paralegals at the rate of $125, plus expenses. The retainer fee is $16,262. As disclosed in court filings, Sheehan does not represent any interest adverse to the Debtor or its estate. The firm can be reached through: Martin P. Sheehan, Esq. SHEEHAN & ASSOCIATES, PLLC 1 Community St., Ste 200 Wheeling WV 26003 Tel: (304) 232-1064 Fax: (304) 232-1066 Email: SheehanBankruptcy@WVDSL.net SheehanParalegal@WVDSL.net About Cordial Logistics, LLC Cordial Logistics is part of the general freight trucking industry. Cordial Logistics, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D.W.V. Case No. 24-00232) on May 1, 2024, listing $2,666,475 in assets and $2,813,872 in liabilities. The petition was signed by David Cordial as owner. Martin P. Sheehan, Esq. at Sheehan & Associates, P.L.L.C. represents the Debtor as counsel. CREAGER MERCANTILE: Seeks Cash Collateral Access ------------------------------------------------ Creager Mercantile Co. asks the U.S. Bankruptcy Court for the District of Colorado for authority to use cash collateral and provide adequate protection, until such time as the Court schedules a final hearing on the matter. The Debtor requires the use cash collateral to continue its business operations post-petition and maintain their operations and properties. In approximately June 2020, the Debtor entered into a Note and Security Agreement with the U.S. Small Business Administration for a COVID-19 Economic Injury Disaster Loan (EIDL) loan with the original principal balance of $150,000. The loan is secured by substantially all assets of the Debtor. SBA filed a UCC financing statement on June 3, 2020 at reception no. 20202055055. The Debtor estimates the amount owed to the SBA on the Petition Date to be approximately $146,883. The Debtor is current on its payments to the SBA. In 2019, the Debtor agreed to pledge its assets as collateral on behalf of a related entity to an individual named Russell Cowan. Mr. Cowan is a family friend and loaned funds to a related entity called Maxwell Distributors, LLC. The estimated amount owed by Maxwell to Mr. Cowan is approximately $30,000. Mr. Cowan's note is secured by the Debtor's accounts, inventory, proceeds, and other intangible assets. Mr. Cowan perfected his security interest by filing a UCC-1 financing statement with the Colorado Secretary of State on September 11, 201 9 at reception number 2192082081. Toyota Industries Commercial Finance, Inc. filed two UCC financing statements related to the purchase of a forklift and new shelving for the Debtor's move in 2023. The statements were recorded at reception numbers 20232039628 on April 24, 2023 and 2024020163 on March 5, 2024. The total debt owed to Toyota is approximately $270,000 and the value of the collateral securing the claim is approximately $350,000. These security interests are limited to Toyota's purchase money security interests and the Debtor does not believe that this creditor has an interest in the Debtor's cash or revenue. American Express Bank, FSB filed a UCC financing statement on August 13, 2014 at reception number 2014076365 secured by all assets of the Debtor. The debt owed to American Express is approximately $21,095. Associated Wholesale Grocers, Inc. filed a UCC financing statement on October 28, 2016 at reception number 20162098278 secured by the Debtor's assets. The debt owed to this creditor is approximately $180. Based upon records filed with the Colorado Secretary of State, LEAF Capital Funding, LLC may claim a secured interest in the Debtor's assets. However, the Debtor's records do not show any amounts owed to this creditor and believes that any debt related to a prior security interest has been paid in full. The Debtor is providing notice to all entities with UCC financing statements on record with the Colorado Secretary of State. The Colorado Department of Revenue may also assert an interest based on unpaid excise and sales taxes in the amount of approximately $1.878 million. The Debtor will provide the Secured Creditors with a post-petition lien on all postpetition accounts receivable and contracts and income derived from the operation of the business and assets, to the extent that the use of the cash results in a decrease in the value of the Secured Creditors' interest in the collateral pursuant to 11 U.S.C. section 361(2). All replacement liens will hold the same relative priority to assets as did the pre-petition liens. The Debtor will keep all of the Secured Creditors' collateral fully insured in an amount consistent with pre-petition coverage. Should the Debtor default in the provision of adequate protection, the Debtor's approved use of cash collateral will cease and the Secured Creditors will have the opportunity to obtain further relief from the Court, on notice to the Debtor. A copy of the motion is available at https://urlcurt.com/u?l=QBEk0G from PacerMonitor.com. About Creager Mercantile Co. Creager Mercantile Co. is a a wholesale grocery distributor. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 24-12652-KHT) on May 16, 2024. In the petition signed by Donald Creager, president, the Debtor disclosed $10 million in both assets and liabilities. Jeffrey S. Brinen, Esq., at Kutner Brinen Dickey Riley PC, represents the Debtor as legal counsel. CRUZIN AUTO: Court OKs Cash Collateral Access on Final Basis ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Texas, Sherman Division, authorized Cruzin Auto, LLC to use cash collateral, on a final basis, in accordance with the budget, with a 10% variance. The Debtor requires the use of cash collateral to, among other things, fund payroll obligations and pay other operating expenses. As adequate protection of Secured Lenders' interest, if any, in the cash collateral pursuant to 11 U.S.C. Sections 361 and 363(e) to the extent of any diminution in value from the use of the Collateral the Court grants Secured Lenders replacement security liens on and replacement liens on all of the Debtor's Equipment, Inventory and Accounts, whether such property was acquired before or after the Petition Date. The Replacement Liens will be equal to the aggregate diminution in value of the respective Collateral, if any, that occurs from and after the Petition Date. The Replacement Liens will be of the same validity and priority as the liens of Secured Lenders on the respective prepetition Collateral. The Replacements Liens will be subject and subordinate to: (a) professional fees and expenses of the attorneys, financial advisors and other professionals retained by any statutory committee if and when one is appointed; and (b) any and all fees payable to the United States Trustee pursuant to 28 U.S.C. Section 1930(a)(6), the Subchapter V Trustee, and the Clerk of the Bankruptcy Court. A copy of the order is available at https://urlcurt.com/u?l=Q6wLmS from PacerMonitor.com. About Cruzin Auto, LLC About Cruzin Auto, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code(Bankr. E.D. Tex.Case No. 24-40884) on April 17, 2024. Judge Brenda T Rhoades oversees the case. Robert T DeMarco, Esq., at DEMARCO MITCHELL, PLLC, represents the Debtor as legal counsel. DESERT HEIGHTS: Moody's Rates Series 2024 Education Bonds 'Ba2' --------------------------------------------------------------- Moody's Ratings has assigned an initial Ba2 rating to Desert Heights Charter Schools, AZ's $13.6 million Educational Facility Revenue and Refunding Bonds (Desert Heights Charter School Project), Series 2024. The bonds are issued on behalf of the school by The Industrial Development Authority of the City of Sierra Vista. This will be the school's only outstanding long term debt. The outlook is stable. RATINGS RATIONALE The Ba2 initial rating is supported by the school's long operating history with multiple charter renewals and steady financial performance, with no plans to grow or substantially alter its operations. The rating also considers the school's low liquidity at only 58 days operations (as of fiscal 2023) despite good financial margins in recent years and fiscal 2023 earnings providing ample 1.9 times coverage of the projected maximum annual debt service (MADS) requirement; projected MADS is substantially declining due to an extension of the maturity schedule associated with the refunding transaction. Additionally, the school's leverage is somewhat elevated though it will continue to gradually decline as there are no material amounts of additional debt planned. Finally, the rating also considers the school's fair competitive profile with healthy academic performance and stable enrollment though the student waitlist is quite small and population growth in the surrounding area is modest. Governance is a key driver of all initial rating actions for charter schools. Desert Heights governance structure is similar to other charter schools in Arizona. The organization is governed by a five member board comprised of community members with varied experience, including finance, mental health, and real estate. The school is chartered by the State of Arizona, which has a supportive and transparent authorizer framework. The school has strong prospects for continued charter authorization. RATING OUTLOOK The stable outlook reflects Moody's expectation that the demand profile for the school is unlikely to change in the near term as the surrounding area is fully developed. Moody's also expect that future liquidity increases will be gradual, though a faster than expected improvement could result in upward rating action. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING -- Increased demand that results in a substantial waitlist -- Boosted liquidity, particularly if days cash on hand exceeds 100 days FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING -- Substantial amount of additional debt, particularly if coverage is materially diluted -- Loss of enrollment that begins to impact financial margins LEGAL SECURITY The bonds are payable from a pledge of state per pupil operating revenues provided by the direct transfer of these funds from the state to the Trustee to fund debt service. Additional security is provided by a debt service reserve fund (funded at MADS) and a first deed of trust on the two school facilities. USE OF PROCEEDS Bond proceeds will be used for a roofing project and to repay previously issued debt to reduce annual debt service expense by way of maturity extension and interest rate reduction. PROFILE Desert Heights Charter Schools operates two facilities serving the Glendale suburb of Phoenix, AZ. The school serves an enrollment of 902 students in grades K-12. METHODOLOGY The principal methodology used in this rating was US Charter Schools published in April 2024. DYNATA LLC: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: Dynata, LLC Survey Sampling International, LLC 4 Research Dr., Suite 300 Shelton, CT 06484 Business Description: The Debtors and their non-debtor affiliates are a global data platform company in the business of providing business-to-business insights to market research firms, brands, media and advertising agencies, and investment firms, amongst others. Specifically, the Debtors provide its clients the ability to collect data for market research studies via surveys completed by members enrolled in the Debtors' online panels. Members are recruited from loyalty programs or through online advertising, affiliate marketing, and social media channels. The Debtors also perform market research, data collection and processing, and client relationship management services. Chapter 11 Petition Date: May 22, 2024 Court: United States Bankruptcy Court District of Delaware Nineteen affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Dynata, LLC (Lead Case) 24-11057 New Insight Holdings, Inc. 24-11058 New Insight Intermediate Holdings, Inc. 24-11059 Dynata Holdings Corp. 24-11060 Research Now Group, LLC 24-11061 SSI/Opiniology Interco LLC 24-11062 IPinion, Inc. 24-11063 Research Now, Inc. 24-11064 SSI Holdings, LLC 24-11065 New Insight International, Inc. 24-11066 Imperium LLC 24-11067 inBrain, LLC 24-11068 Apps That Pay, LLC 24-11069 inBrain Holdings, LLC 24-11070 Branded Research, Inc. 24-11071 ScreenLift.io, LLC 24-11072 Research Now DE I, LLC 24-11073 Research Now DE II, LLC 24-11074 Instantly, Inc. 24-11075 Judge: Hon. Thomas M. Horan Debtors' Counsel: Edmon L. Morton, Esq. Kristin L. McElroy, Esq. Matthew B. Lunn, Esq. Shella Borovinskaya, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: emorton@ycst.com mlunn@ycst.com sborovinskaya@ycst.com kmcelroy@ycst.com - and - Jeffrey D. Pawlitz, Esq. Andrew S. Mordkoff, Esq. Erin C. Ryan, Esq. Amanda X. Fang, Esq. WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, New York 10019 Tel: (212) 728-8000 Fax: (212) 728-8111 Email: jpawlitz@willkie.com amordkoff@willkie.com eryan@willkie.com afang@willkie.com Debtors' Restructuring Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC 755 W. Big Beaver Road, Suite 650 Troy, MI 48084 Debtors' Investment Banker: HOULIHAN LOKEY, INC. 245 Park Avenue New York, NY 10167 Debtors' Notice, Claims, Solicitation & Balloting Agent: KROLL RESTRUCTURING ADMINISTRATION LLC 55 East 52nd Street, 17th Floor New York, NY 10055 Estimated Assets (on a consolidated basis): $1 billion to $10 billion Estimated Liabilities (on a consolidated basis): $1 billion to $10 billion The petitions were signed by Steven Macri as chief financial officer. A full-text copy of the Lead Debtor's petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DYJR75Q/Dynata_LLC__debke-24-11057__0001.0.pdf?mcid=tGE4TAMA Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Cint USA Inc Trade Payable $1,562,429 205 E 42nd St 19th Floor New York, NY 10017 United States Attn: Giles Palmer Title: Chief Executive Officer Phone: (504) 264-5820 Email: giles.palmer@cint.com 2. Prime Insights Group LLC Trade Payable $782,637 8 The Green Ste R Dover, DE 19902 United States Attn: Benjamin Ritzka Title: Chief Executive Officer Email: b.ritzka@rika-netmarketing.com 3. Amazon Web Services Trade Payable $779,350 410 Terry Avenue North Seattle, WA 98109-5210 United States Attn: Adam Selipsky Title: Chief Executive Officer Phone: (800) 522-6645 Email: aselipsky@amazon.com 4. Make Opinion GmbH Trade Payable $770,501 Fredersdorfer Str 11 10243 Berlin, Germany Attn: Christoph Maiwald Title: Chief Executive Officer Phone: 49 30 629370810 Email: cmaiwald@makeopinion.com 5. BitBurst GmbH Trade Payable $738,871 Lerchenweg 3 40789 Monheim am Rhein, Germany Attn: Jan Asbach Title: Chief Executive Officer & Co-founder Phone: 49 1526 0000000 Email: jan.asbach@bitburst.net 6. Innovate MR, LLC Trade Payable $409,057 23679 Calabasas Road #1038 Calabasas, CA 91302 United States Attn: Lisa Wilding-Brown Title: Chief Executive Officer Phone: (888) 229-6664 Email: lisa@innovatemr.com 7. DISQO, Inc. Trade Payable $366,845 400 N Brand Blvd 6th Fl Glendale, CA 91203 United States Attn: Armen Adjemian Title: Chief Executive Officer & Co-founder Phone: (818) 287-7633 Email: armen@disqo.com 8. SHI International Corp Trade Payable $335,254 290 Davidson Ave. Somerset, NJ 08873 United States Attn: Thai Lee Title: President and CEO Phone: (888) 764-8888 Email: thai_lee@gs.shi.com 9. Salesforce.com Trade Payable $310,638 Salesforce Tower 415 Mission Street 3rd Floor San Francisco, CA 94105 United States Attn: Marc Benioff Title: CEO Phone: (800) 664-9073 Email: marcb@salesforce.com 10. Borderless Access Panels Trade Payable $290,016 1455 NW Leary Way Suite 400 Seattle, WA 98107 United States Attn: Ruchika Gupta Title: CEO/Founder Phone: +91 80 4931 3800 Email: ruchika.gupta@borderlessaccess.com 11. Hilton Honors Trade Payable $272,457 7930 Jones Branch Drive McLean, VA 22102 United State Attn: Christopher J. Nassetta Title: President & Chief Executive Officer Phone: (888) 446-6677 Email: chris.nassetta@hilton.com 12. WebMD Trade Payable $269,574 395 Hudson Street Third Floor New York, NY 10014 United States Attn: Robert N. Brisco Title: Chief Executive Officer Phone: (212) 624-3700 Email: bob.brisco@internetbrands.com 13. WorldOne, Inc. Trade Payable $263,437 200 Park Avenue South Ste 1310 New York, NY 10003 United States Attn: Peter Kirk Title: Chief Executive Officer Phone: (866) 910-6279 Email: peter.kirk@sermo.com 14. SS Holdings Group, LLC Trade Payable $239,742 101 Wood Avenue South Iselin, NJ 08830 United States Attn: Reed Cundiff Title: Chief Executive Officer Phone: (732) 906-1122 Email: reed.cundiff@schlesingergroup.com 15. Leadgency Performance B.V. Trade Payable $216,409 Koperweg 11J 2401 LH Alphen aan den Rijn, Netherlands Attn: Kimberley Van Der Helm Title: Global Account Director Phone: 31 (0)88 323 2015 Email: kimberley@leadgency.com 16. Language Connect LLP Trade Payable $208,431 115 Broadway New York, NY 10006 United States Attn: Quentin Naylor Title: Chief Executive Officer Phone: +44 20 7940 8100 Email: qnaylor@languageconnect.net 17. Arroyo Media Trade Payable $179,972 530 S Lake St #250 Pasadena, CA 91101 United States Attn: Brendan Cronin Title: COO Phone: (213) 632-9885 Email: brendan@arroyomedia.com 18. Unimrkt Response Inc Trade Payable $176,177 98 Cuttermill Road Suite 466 Great Neck, NY 11021 United States Attn: Kanishk Sheel Title: Co-Founder & Managing Director Phone: (646) 712-9302 Email: kanishk.sheel@unimrkt.com 19. Arbela Technologies Corporation Trade Payable $174,280 6100 W. Plano Parkway Suite 1800 Plano, TX 75093 United States Attn: Charlotte McCormick Title: President Phone: (404) 596-5383 Email: charlotte.mccormick@argano.com 20. MaxBounty ULC Trade Payable $173,406 PO Box 17039 Ottawa, K4A 4W8 Canad Attn: Matt McEvoy Title: Chief Executive Officer Phone: (613) 834-3955 Email: mattm@maxbounty.com 21. Conclave Market Trade Payable $169,173 Research Pvt. Ltd. C Block Sahaj Avenue Ahmedabad Gujarat, 380051 India Attn: Mayank Pandey Title: Executive Vice President Phone: 91 8826254440 22. Paradigm Sample, LLC Trade Payable $160,117 921 Port Washington Blvd Suite 11 Port Washington, NY 11050 United State Attn: Cyrus Deyhimi Title: CEO Phone: (877) 277-8009 Email: cyrus@paradigmsample.com 23. dataSpring Inc Trade Payable $158,136 3506 W. Montague Avenue Suite 101 N Charleston, SC 29418 United States Attn: Kathy Johnson Title: Vice President Phone: (843) 824-0908 Email: kjohnson@dataspringinc.com 24. Prodege, LLC Trade Payable $156,383 2030 E Maple Avenue Suite 200 El Segundo, CA 90245 United States Attn: Josef Gorowitz Title: Founder & President Phone: (310) 294-9599 Email: josef.gorowitz@prodege.com 25. Clear Link Technologies Trade Payable $145,014 42 Future Way Draper, UT 84020 United States Attn: James Harrison Title: President Phone: (877) 698-0218 Email: james@clearlink.com 26. Elicit Research and Trade Payable $131,448 Insights Inc 140 Broadway New York, NY 10005 United States Attn: Sumit Gupta Title: Co-Founder and Director Email: sumit@elicitresearch.com 27. Quest Global Research Group Inc Trade Payable $118,506 125 Lakeshore Road East #305 Oakville, ON L6J 1H3 Canad Attn: Greg Matheson Title: Managing Partner Phone: (416) 860-0404 Email: gmatheson@questmindshare.com 28. M3 USA Corporation Trade Payable $114,911 501 Office Center Drive Suite 410 Fort Washington, PA 19034 United States Attn: Aki Tomaru Title: Chief Executive Officer Phone: (202) 293-2288 Email: atomaru@usa.m3.com 29. TechGenies LLC Trade Payable $106,172 2100 N Greenville Ave Richardson, TX 75082 United States Attn: Ahmad Al-Amine Title: CEO & Co-Founder Phone: (855) 643-6437 Email: aalamine@techgenies.com 30. Shiftsmart Inc. Litigation Undetermined C/O: Michelman & Robinson, LLP Attn: Ashley N. Moore, Matthew E. Yarbrough 300 Crescent Court, Suite 1700 Dallas, TX 75229 United States Attn: Aakash Kumar Title: Founder & Chief Executive Officer Phone: (817) 271-3604 Email: aakash@shiftsmart.com EAST WEST: S&P Alters Outlook to Stable, Affirms 'B-' ICR --------------------------------------------------------- S&P Global Ratings revised its outlook to stable from negative and affirmed its 'B-' issuer credit rating on the joint design manufacturer and design and services provider, East West Manufacturing LLC. S&P said, "We also affirmed our 'B-' issue-level and '3' recovery rating on East West's revolving credit facility (RCF) and first-lien term loan. "The stable outlook reflects our expectation that East West's new customer wins, EBITDA margins in the high-single-digit percent area, positive FOCF generation, and adequate liquidity will help it sustain its capital structure despite high leverage and volatile end customer demand. "We expect East West will maintain leverage below 8x in 2024 despite flat end-customer demand and one-time restructuring costs. East West saw weak end customer demand from its largest customers hamper its topline such that its organic revenue declined by high-single-digit percent in 2023. To offset that revenue decline, East West focused on improving its profitability. East West undertook pricing initiatives over the past few years that allowed for it to pass on higher component costs to its customers. It also undertook a cost-savings plan to right size its cost structure to match the weaker demand. Due to these actions, East West was able to improve its EBITDA margins more than 300 basis points (bps) to the low-10% area in 2023. Lastly, East West received sponsor equity contribution for its acquisition of Eastprint in the second quarter of 2023, adding Eastprint's EBITDA to its business operations. All of these factors allowed East West to decrease its leverage from the mid-9x area in 2022 to mid-6x area in 2023. "For East West, we expect its large customers' demand will remain muted in 2024 as those customers continue to digest its products in this current macroeconomic environment. We expect that new logos will offset some of the weaker demand for its large customers such that East West will likely see flat revenue growth in 2024. East West also undertook a cost-savings plan around facility and personnel consolidation in the fourth quarter of 2023 that will likely hamper its EBITDA generation with one-time restructuring costs in early 2024. However, we believe that those one-time costs will roll off during the year to keep East West's EBITDA margins in the high-single-digit percent area in 2024. While East West's leverage will increase, its stable EBITDA margins will help keep its leverage around the high-6x area in 2024. "Due to improved working capital monetization and stable EBITDA margins, we expect East West will continue to generate positive FOCF in 2024. Like many smaller electronic manufacturing services (EMS) providers, the semiconductor supply chain shortage elevated East West's inventory throughout 2021 and 2022, leading it to generate slightly negative FOCF in 2022. The semiconductor supply chain issues hampered the company's ability to deliver its completed products on time. However, as semiconductor supply chain shortage improved in 2023, East West was able to work down its inventory levels to monetize its working capital. Due to its higher EBITDA margin profile and working capital monetization, East West was able to generate more than $15 million of FOCF in 2023. "While we expect East West to have lower EBITDA generation in 2024, we still expect it to generate positive FOCF. East West entered into interest rate swaps in first quarter of 2024, which we expect will keep its interest expense stable over the next two years. It has also been focused on improving working capital (such as taking customer deposits) and its account receivables, in addition to continuing to work down its inventory. We expect that working capital sources will be similar to 2023, such that East West will be able to generate more than $8 million of FOCF in 2024. "We believe East West has sufficient liquidity to handle the inherently volatile EMS market and tough macroeconomic conditions. We note that East West has no draw on its $40 million revolver, leading to around $58 million of total liquidity as of the fourth quarter of 2023, which we believe will help it maintain its mandatory debt obligations if there is additional volatility to its credit metrics. Even when East West's EBITDA margins dropped to the mid-single-digit percent area in 2022 on semiconductor supply chain issues, East West managed its operating cash flow better than other small technology hardware companies, such that it only saw modestly negative FOCF generation and no large draw on its revolver. We believe that East West could have lower liquidity and still manage its business operations given the fixed interest expense from the swaps and $2.75 million debt amortization payments. "The stable outlook reflects our expectation that East West's new customer wins, EBITDA margins in the high-single-digit percent area, positive FOCF generation, and adequate liquidity will help it sustain its capital structure despite high leverage and volatile end customer demand. "We could lower the rating if we believe East West's capital structure is unsustainable. This could be due to a large decline in customer demand, prolonged semiconductor supply chain constraints, or a tougher macroeconomic environment such that East West sees negative FOCF after debt service. We could also consider a downgrade if total liquidity approaches $20 million. "While unlikely over the next 12 months, we could raise the rating if we expect East West will maintain leverage below 6x and FOCF above $20 million without the aid of working capital monetization. We would need to believe the company could maintain these levels through volatility in operating metrics, acquisitions, and shareholder returns. This could occur if large end-customer demand improved, and the company further expanded its EBITDA margin profile as a result of its cost-saving initiatives. "Governance factors are a moderately negative consideration in our credit rating analysis of East West, as is the case for most rated entities owned by private-equity sponsors. We believe the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of its controlling owners. This also reflects private-equity owners' generally finite holding periods and focus on maximizing shareholder returns." Social and environment factors are neutral to S&P's analysis of East West. EDELMAN FINANCIAL: Moody's Rates New $575MM 2nd Lien Loan 'Caa2' ---------------------------------------------------------------- Moody's Ratings has assigned a Caa2 rating to The Edelman Financial Engines Center, LLC's $575 million backed senior secured second lien term loan due October 2028, the net proceeds of which will be used to refinance the $575 million existing second lien term loan due in July 2026, also rated Caa2. This transaction is leverage neutral. Moody's also assigned a B2 rating to Edelman's proposed 2028 backed senior secured revolving credit facility which replaces the current 2026 revolving credit facility. Edelman's B3 corporate family rating and B2 senior secured first lien term loan rating remain unchanged. The rating outlook remain unchanged at stable. RATINGS RATIONALE Edelman's B3 CFR rating reflects the company's high leverage, the sensitivity of its revenue to equity market volatility and the ongoing risk from debt-funded recapitalizations. Moody's notes that in 2023, Edelman's financial profile strengthened as Moody's adjusted debt-to-EBITDA improved to 6.4x from 7.2x, driven by a combination of stronger financial markets - particularly equity markets - good cost control and lower marketing spend reflecting its transition from high cost radio marketing to low cost digital marketing. The improvement in Edelman's financial profile also reflects increased Wealth Planning (retail) customer acquisition through its Workplace (Employee Planning) segment. Moody's expects modest additional leverage reductions in 2024 if financial market conditions remain supportive. The stable outlook reflects Moody's view that the consistent performance in the Wealth Planning business will be sustained with continued organic growth driven by growth in employee planning and as well as incrementally better results from digital marketing as that sales channel gains traction. Flows in the Workplace business should improve in 2024 as Moody's does not expect a repeat of the loss of two fairly large sponsors. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The factors that could lead to an upgrade of Edelman's rating include: 1) debt-to-EBITDA sustained below 5.5x; 2) high single-to double-digit revenue growth rate; or 3) pre-tax income margin above 15% on a consistent basis. Conversely, Edelman's ratings could be downgraded if: 1) debt-to-EBITDA above 7.5x for a sustained period; 2) declines in customer acquisition rates and retention rates as well as fee rates or 3) sustained weakening of the company's liquidity profile. The principal methodology used in these ratings was Asset Managers Methodology published in November 2019. EPICOR SOFTWARE: Moody's Rates New First Lien Loans 'B2' -------------------------------------------------------- Moody's Ratings affirmed Epicor Software Corporation (CD&R)'s (Epicor) B2 Corporate Family Rating and B2-PD Probability of Default Rating. In addition, Moody's assigned a B2 rating to the new $270 million senior secured first lien revolver due 2029 (New Revolver), $325 million senior secured first lien delayed draw term loan due 2031, and $2,770 million senior secured first lien term loan due 2031 (New First Lien Term Loan). The outlook remains stable. Epicor plans to use the net proceeds of the New First Lien Term Loan to refinance the existing first lien term loans ($1,858 million term loan C and $500 million term loan D) and the $400 million senior secured second lien floating rate notes due 2028 (Second Lien Notes). Epicor is also replacing the existing senior secured first lien revolver due 2025 with the New Revolver. Lastly, the amendments to the credit agreement will provide Epicor with a $325 million senior secured first lien delayed draw term loan due 2031 and a $200 million senior secured second lien delayed draw term loan. Under certain conditions, the New Revolver and New First Lien Term Loan may survive a change in Epicor's ownership. Following full repayment, Moody's will withdraw the ratings on the existing senior secured first lien revolver due 2025, the existing first lien term loans ($1,858 million term loan C and $500 million term loan D), and the Second Lien Notes. RATINGS RATIONALE Epicor's B2 CFR incorporates the company's high leverage, with free cash flow (FCF) to debt of 3.7% (twelve months ended December 31, 2023, Moody's adjusted), and aggressive financial policies. Moody's expects that Epicor will be acquisitive, which could result in leverage remaining at elevated levels should the company utilize its revolver to fund its purchases. Epicor holds a leading market position as a provider of enterprise resource planning (ERP) software solutions to a diverse range of mid-market customers. Epicor maintains strong niche positions within certain manufacturing, distribution and retail verticals. The credit profile also recognizes Epicor's high renewal rates, and thus revenue visibility, from maintenance and subscription revenues as customers are reluctant to change ERP software providers. The stable outlook reflects Moody's expectation that Epicor will generate mid to upper single digit percent annual growth in both revenues and EBITDA (Moody's adjusted) over the next 12 to 18 months. With the increasing profitability, FCF to debt (Moody's adjusted) will steadily improve toward the mid single digits percent level. The stable outlook accommodates a moderate level of debt funded acquisitions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings for Epicor could be upgraded if free cash flow (FCF) to debt (Moody's adjusted) is sustained above 8%. The ratings could be downgraded if FCF to debt (Moody's adjusted) is below 3% on other than a temporary basis. Liquidity is good, supported by an estimated $112 million of cash at close of the debt refinancing, a $270 million revolving credit facility (undrawn) and FCF of $80 million annually over the next 12 to 18 months. The company uses a large portion of its FCF for acquisitions and employee stock purchases though amounts can vary significantly in any period. The company has a $100 million receivables purchase agreement, which had $74 million of borrowings outstanding as of March 31, 2024. Epicor Software Corporation (CD&R) is a leading provider of enterprise application software for midsized companies. The company had revenues of approximately $1.1 billion in the twelve months ended March 31, 2024. Epicor has acquired or merged with several companies, including Activant Solutions, Inc in 2011. Epicor is owned by private equity firm Clayton, Dubilier & Rice (CD&R), which acquired Epicor from private equity group KKR in October 2020. The principal methodology used in these ratings was Software published in June 2022. EQUALTOX LLC: Court OKs Cash Collateral Access Thru Aug 10 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, authorized Equaltox, LLC to use cash collateral, on a final basis, in accordance with the budget, with a 15% variance, through August 10, 2024. The Debtor requires the use of cash collateral for operating expenses and professional fees. The entities that assert, or may assert, an interest in all or a portion of the Debtor's cash collateral are: (a) Blue Cross of California d.b.a. Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company; (b) Sunwest Bank; (c) California Statewide Certified Development Corporation; and (d) First Citizens Bank & Trust. The court said during the Cash Collateral Period, any unused amount for any given line item in the Budget for a particular week shall carry forward and can be used in later weeks, and anyamounts budgeted for a given line item in a particular week may be spent at an earlier time provided the total amount spent for such line item does not exceed the total amount budgeted for that line item with the 15% variance. Regarding the payments set forth in the Budget to Sunwest Bank, California Statewide Certified Development Corporation, and First Citizens Bank & Trust, the Debtor reserves all rights with respect to the application of such payments to interest or principal under the Bankruptcy Code. If and to the extent that, as of the petition date, Anthem, Sunwest, CSCDC, and/or First Citizens hold a duly perfected, unavoidable, and valid lien in all, or a portion of, the Debtor's cash, and such cash, as opposed to unencumbered cash, is actually used by the Debtor post-petition, then such entity will receive a replacement lien in the Debtor's post-petition cash, in the same extent, validity, and priority up to the amount of the cash collateral existing as of the petition date. A copy of the order and the Debtor's budget is available at https://urlcurt.com/u?l=2hR9AR from PacerMonitor.com. The Debtor projects total uses of cash, on a weekly basis, as follows: $82,855 for the week ending May 25, 2024; $82,855 for the week ending June 1, 2024; $82,855 for the week ending June 8, 2024; $82,855 for the week ending June 15, 2024; and $82,855 for the week ending June 22, 2024. About Equaltox, LLC Equaltox, LLC is a full service reference laboratory that can provide almost any type of blood testing. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 8:23-bk-12243) on October 27, 2023. In the petition signed by Sulaiman Masood, member and manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Scott C. Clarkson oversees the case. Robert S. Marticello, Esq., at Smiley Wang-Ekvall, LLP, represents the Debtor as legal counsel. FORUM ENERGY: S&P Alters Outlook to Negative, Affirms 'B' ICR ------------------------------------------------------------- S&P Global Ratings revised the outlook to negative from stable and affirmed the 'B' issuer credit rating on Forum Energy Technologies Inc., a Houston-based oilfield products and services provider. S&P said, "At the same time, we affirmed the 'B+' issue-level rating on the company's senior secured notes. The '2' recovery rating is unchanged, reflecting our expectation for meaningful (70%-90%; rounded estimate: 80%) recovery of principal to creditors in the event of a payment default." Forum faces elevated refinancing risk for its $134 million of 9% senior secured notes due in August 2025, which it must repay or refinance by May 2025 to avoid triggering the springing maturity covenant on its asset-backed lending (ABL) credit facility. S&P said, "The negative outlook reflects the risk that we could lower our ratings on Forum if it is unable to address its August 2025 debt maturity in a timely manner. "We believe there is heightened refinancing risk around Forum's August 2025 debt maturity given its reliance on free operating cash flow (FOCF) and ABL availability. "Forum intends on repaying the remaining $134 million of its 9% senior secured notes due in August 2025 before year-end 2024, using a combination of cash from its balance sheet, ABL availability, and anticipated positive FOCF. As of March 31, 2024, the company had about $49 million in cash and $72 million of availability under its ABL credit facility. We forecast positive FOCF of about $60 million in the remainder of 2024 and $70 million in 2025. Under our current assumptions, the company would have sufficient liquidity to repay its August 2025 notes by year-end 2024. However, we believe liquidity could tighten, particularly if the company does not reach our FOCF expectations and given the high amount it would have drawn on its ABL facility. The company must repay or refinance these notes by May 2025 to avoid the maturity on the ABL facility springing forward to that date from September 2028. "We expect Forum's credit measures will strengthen over the next 12-24 months, supported by its acquisition of Variperm Energy Services. "Forum closed on its $196 million acquisition of Variperm in January 2024. It financed the deal using a combination of $150 million of cash and two million shares of Forum's common equity (valued at about $46 million at the time of deal announcement). Forum funded the cash portion with cash on hand and borrowings on the ABL credit facility, in addition to a $60 million seller term loan. Forum intends to repay the seller term loan by mid-2025 using FOCF, ahead of its three-year maturity, given the steep rate increase the loan bears in year two when it steps up to 17% from 11%. Nonetheless, we anticipate improving cash flows and credit measures in 2024 and 2025, compared with prior years, driven largely by international drilling activity. We expect average funds from operations (FFO) to debt of 35%-40% in 2024 and 2025, and debt to EBITDA of about 2.1x over the same period. "The negative outlook reflects the risk that we could lower our ratings on Forum if it cannot address its August 2025 debt maturity in a timely manner, which could result in its credit facility maturity springing forward to May 2025 and pressure its liquidity position. The company's current plan to repay the August 2025 notes relies on positive FOCF and credit facility availability. We expect positive FOCF of about $60 million in 2024 and $70 million in 2025, and anticipate average FFO to debt of 35%-40% and debt to EBITDA of about 2.1x over the next two years. "We could lower our rating on Forum if it is unable to address its debt maturity in a timely manner or if its liquidity deteriorates. This would most likely occur if the company is unable to reach its FOCF guidance, which would most likely be driven by lower demand from customers as a result of lower commodity prices affecting E&P activity levels. "We could revise the outlook to stable if the company refinances or repays its August 2025 notes and maintains adequate liquidity." FORWARD AIR: Fitch Lowers LongTerm IDR to 'B', Outlook Stable ------------------------------------------------------------- Fitch Ratings has downgraded Forward Air Corporation's and Clue Opco, LLC's (collectively FWRD) Long-Term Issuer Default Ratings (IDRs) to 'B' from 'BB-'. The Rating Outlook is Stable. Fitch has also downgraded Clue Opco's senior secured credit facilities and notes to 'B+'/'RR3' from 'BB'/'RR3'. The downgrade reflects Fitch's expectation that FWRD's financial flexibility and leverage will deteriorate more deeply than previously expected in 2024 with a longer timeline to recovery. Fitch forecasts EBITDA interest coverage around the mid-1x and EBITDA leverage over 7.0x in 2024 before improving to around 2.0x and 5.0x, respectively, in 2025, a level more consistent with the 'B' rating. The forecast incorporates operating execution, modest sequential improvement in operating earnings in both legacy FWRD and the Omni business, and moderation of one-time costs. Fitch believes the near-term covenant risk to be manageable given the expected cash flow improvement, an undrawn credit facility, and long-dated maturities. Fitch also considers the prioritization of deleveraging-focused capital allocation and suspension of dividend payments. Divestitures are moving into focus in 2024 and could support deleveraging but are not currently assumed in Fitch's rating case. Despite the downward trend in Q1 24 performance, the Stable Outlook incorporates a moderate cushion to the rating and potential for notable financial profile improvement with execution in line with FWRD's expectations. KEY RATING DRIVERS Diminished Financial Flexibility: Fitch expects FWRD's financial flexibility to weaken in 2024, including negative FCF generation approaching $100 million in the year. However, prospects for returning to positive FCF generation in 2025 are good with the expectation of lower one-time transaction costs (over $50 million in Q1 24), realization of merger synergies (around $30 million incremental to 2024), and assumption of moderate sequential organic growth in revenue and operating profit through 2024. Fitch believes FWRD has an adequate near-term liquidity profile, supported by its cash balance. It currently has access to an undrawn $340 million revolving credit facility though the maintenance financial covenant (only directly applies to the revolver) will likely be near the maximum net leverage threshold of 6.0x (5.5x at LTM Q1 24, as calculated by the company). Management noted it expects to remain in compliance in Q2 24. In Fitch's view, covenant risk is moderated by the expected improvement in its cash flow profile coupled with an undrawn credit facility and long-dated maturities. Execution Key to Ratings Trajectory: Execution on profitability initiatives and organic growth recovery will be key to determining rating trajectory. Sustained challenges executing on planned 2024 cost synergies and failure to turn the Omni business sustainably profitable would likely drive negative FCF. Fitch believes these risks are moderated by the line of sight to cost synergies, newly assumed operational control of the Omni business, turnaround runway provided by FWRD's liquidity position and lack of near-term debt obligations. Operational execution in line with FWRD's previously stated synergy estimates and solid organic growth and earnings recovery would likely drive a notably stronger cash flow profile than Fitch currently projects. Fitch recognizes there is potential for the combined company's value proposition, direct-to-customer access and adding a premium less-than-truckload (LTL) network to Omni, to strengthen its market position. Strategic Emphasis on De-Risking: Management has accelerated its portfolio review and believes that divestitures will occur in 2024. However due to the uncertainty of scale, valuation and timing Fitch has not incorporated divestitures in its forecast. Fitch expects proceeds would be used for debt repayment, supporting an improvement in credit metrics. FWRD installed a new CEO in Q1 2024 and Fitch believes management will be focused on nurturing customer relationships in addition to aforementioned operational and cost actions. The company also affirmed prioritizing deleveraging and de-risking the capital structure. Fitch expects to further evaluate any new strategic plans and likelihood of execution. Weaker Coverage, Leverage Metrics: Fitch forecasts EBITDA interest coverage to be near the mid-1.0x and EBITDA leverage in excess of 7.0x in 2024. While the metrics are weak for 'B' rating level Fitch expects a notable improvement largely driven by higher operating profit, supporting EBITDA coverage reaching 2.0x and EBITDA leverage in the low-5.0x in 2025. Weak metrics are moderated by FWRD's adequate liquidity profile and long-dated debt maturities to manage through a turnaround. Fitch expects FWRD to direct substantially all FCF, toward debt repayment until it makes considerable progress against its leverage target. Fitch assumes preferred shares will be converted to common equity or paid-in-kind given the incentive for common shareholders to approve the conversion or otherwise slow debt repayment and reduce financial flexibility. Integration Synergies Progressing: Fitch assumes about $70 million of EBITDA cost synergies realized within the first three years after the combination, largely reflecting the potential for OMNI to leverage FWRD's LTL network. A net incremental $25 million of EBITDA from revenue synergies is forecast in a four-year period, reflecting cross-sell opportunities and the ability to capture wholesale margin from new OMNI revenue. Fitch believes integration risks are moderated by the asset-light nature of OMNI. Freight Conditions Steadier: FWRD and the broader freight market have been in a cyclical downturn since mid-2022; however, intermodal and truckload freight conditions are expected to see some signs of improvement in late 2024, corresponding to a continued exit of truckload capacity. FWRD's LTL business has been performing relatively well, realizing both rate and volume growth in Q1 2024. Fitch views FWRD's freight markets as cyclical, but that large and well-established operators tend to exhibit comparative resiliency as economic conditions improve. Prior to start of the downcycle, freight rates, particularly airfreight, ocean freight and intermodal, were unusually high due to supply chain bottlenecks and Fitch expects these businesses to be sustainably smaller as those markets normalize from temporary pandemic-driven highs. Service Quality Supports Market Position: FWRD historically differentiated itself from common LTL operators by focusing on expedited or high value freight where premium quality service levels are able to capture outsized margins. Execution on general rate increases and new business wins in Q1 24 are early indications that the company remained dedicated to service quality despite challenging economic conditions. FWRD is the largest operator in this segment. While Fitch views competitive barriers in freight forwarding as relatively lower than operating an LTL network, which requires the ability to replicate and operate a large physical network, the Omni purchase adds direct retail access, which opens up half of the estimated $15 billion expedited LTL market. At this point, Fitch views the combination as neutral-to-positive to FWRD's business profile. DERIVATION SUMMARY Fitch compares FWRD with other trucking and transportation companies such as XPO, Inc. (BB+/Stable), STG Logistics (B-/Negative), and TFI International. The combined FWRD business includes LTL and freight forwarding, similar to the LTL heavy XPO and TFI operations, while STG is an intermodal services provider stretching drayage, rail brokerage and logistics. FWRD's focus on premium and expedited freight, which requires a higher degree of network speed and premium service quality, while XPO and TFI move more traditional freight. XPO and TFI are larger peers (top five) within the broader LTL market and benefit from large geographic networks within the U.S. and Canada. Fitch expects XPO's EBITDA and EBITDAR leverage to be in the low 3.0x in 2024, following its purchase of Yellow Corporation assets, before trending toward the mid-2.0x in 2025. TFI's leverage historically is managed in the mid-1.0x to low-2.0x and demonstrated capacity to manage at this level through occasional large acquisitions. STG's financial flexibility and credit metrics are relatively weak, reflecting the high exposure to the intermodal market, with EBITDA interest coverage under 1.0x in 2024 before recovering to the mid-1.0x in 2025. STG's cash flow will negative in 2024, tightening financial flexibility. KEY ASSUMPTIONS - Revenue in the $2.6 billion to $2.7 billion range in 2024, including Omni since acquired. Underlying growth of the combined business accelerates by around 5% in 2025 and 2026 reflecting recovering freight markets and some operational improvement; - EBITDA margin of nearly 8% in 2024, up from 5% in Q1 2024 with modest underlying improvement of around 100bps and 200bps of synergy contribution; - Incremental EBITDA from cost and revenue synergies rise to $70 million to $95 million per year over the 2025-2026 timeframe and heavily weighted toward cost savings; - No cash dividends are paid on the preferred or common shares; - No divestitures assumed; - FWRD remains committed to deleveraging, including debt repayment as the primary focus of FCF and divestitures over the next few years. RECOVERY ANALYSIS The recovery analysis assumes that FWRD would be reorganized as a going concern (GC) in bankruptcy rather than liquidated. Fitch assumed a 10% administrative claim. Fitch estimates FWRD's GC EBITDA at $250 million. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch based the enterprise valuation. This estimate reflects a persistently weak and competitive freight environment and/or significant customer loss. Fitch assumes FWRD would receive a GC recovery multiple of 5.5x in this scenario. The multiple is applied to the GC EBITDA to calculate a post-reorganization enterprise value (EV). Ultimately FWRD's 5.5x multiple is driven by the company's market strength in expedited LTL, scale of its operating network, devaluation of the Omni business and comparable EV valuations among logistics providers. Fitch's recovery scenario assumes FWRD's $340 million revolver is fully drawn. These assumptions generate a 'B+' rating and an 'RR3' Recovery rating for the senior secured debt. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Establishment and progress against long-term operating plans that sustainably improves FCF margin to 5% or higher; - EBITDA interest coverage is sustained above 3.0x; - Gross debt repayment supports EBITDA leverage sustained below 4.0x. Factors that could, individually or collectively, lead to negative rating action/upgrade: - Challenges executing on operational initiatives that leads to EBITDA margins sustained below the low-double digits and FCF margin in the low-single digits or below; - EBITDA interest coverage sustained below 2.0x; - The liquidity position weakens as indicated by a material reduction in access to revolver availability; - EBITDA leverage sustained above 5.0x or FWRD faces challenges addressing near-term leverage covenant requirement. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch believes FWRD has a sufficient liquidity position including $152 million of unrestricted cash on the balance sheet ($20 million restricted for letters of credit), and an undrawn $340 million revolving credit facility. FWRD has a long-dated maturity profile with term loan amortization of 1% per year prior to the revolver first maturing in 2029. Equity-Like Preferred Shares: The holders of the preferred shares have a material equity interest, which aligns their interest with other common equity. Fitch believes these interests will remain aligned and does not view the preferred shares as materially heightening default risk. ISSUER PROFILE FWRD is a leading asset-light freight and logistics company that provides less-than-truckload, final mile, truckload and intermodal drayage services across the U.S., Canada and Mexico. Omni is a freight forwarding and supply chain company that provides a range of domestic, expedited, air and ocean forwarding services. 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 ----------- ------ -------- ----- Forward Air Corporation LT IDR B Downgrade BB- Clue Opco LLC LT IDR B Downgrade BB- senior secured LT B+ Downgrade RR3 BB GATES CORP: S&P Rates New $500MM Senior Unsecured Notes 'B+' ------------------------------------------------------------ S&P Global Ratings assigned its 'B+' issue-level rating and '5' recovery rating to Gates Corp.'s (Gates) proposed $500 million senior unsecured notes due 2029. The '5' recovery rating indicates its expectation for modest recovery (10%-30%; rounded estimate: 25%) in the event of a payment default. The company plans to use the proceeds from these notes--along with those from its previously announced $1.3 billion term loan--to repay its existing term loan B-3 ($1.233 billion outstanding as of March 31, 2024) due 2027 and its existing senior unsecured notes due 2026 ($568 million outstanding), which are issued by Gates Global LLC. S&P said, "We plan to withdraw our ratings on Gates' existing revolving credit facility, term loan B-3, and unsecured notes once the transaction closes and it repays the debt. "The planned refinancing is largely debt for debt and does not materially affect our forecast credit measures. We also expect the refinancing will extend the company's maturities, which we view favorably." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's simulated default scenario assumes a payment default in 2028 due to a sustained economic downturn that reduces customer demand for new vehicles, intense pricing pressure from competitors, and execution challenges related to the ramp-up of new technologies and product offerings. -- S&P believes that if Gates were to default, it would remain a viable business because of its diversified customer base and cost-competitive global footprint. Therefore, S&P believes its debtholders would achieve the greatest recovery value through a reorganization rather than a liquidation. -- S&P said, "We assume that foreign entities are non-guarantors and comprise 74% of total value. We also assume that these foreign entities pledge 65% of their equity as collateral to senior secured lenders. We assume the remaining 35% of equity from foreign entities is unencumbered and would be available to unsecured claims, which consist of senior unsecured notes and deficiency claims of the senior secured debt. We note that some foreign entities are subsidiaries of a parent guarantor, Gates Industrial Holdco Limited, and not direct subsidiaries of the issuing entity, Gates Corp." Simulated default assumptions -- Simulated year of default: 2028 -- EBITDA multiple: 5.5x -- EBITDA at emergence: $324 million -- Jurisdiction: U.S. -- Debt amounts include six months of accrued interest that S&P assumes will be owed at default. -- Collateral value includes asset pledges from obligors plus equity pledges from nonobligors. -- S&P assumes an 85% draw on the cash flow revolver at default. Simplified waterfall -- Net enterprise value at default (after 5% administrative costs): $1.69 billion -- Valuation split (obligors/nonobligors): 26%/74% -- Collateral value available to first-lien debt: $1.26 billion ($440 million guarantor/$815 million non-guarantor) -- Non-collateral value available to first-lien debt: $291 million -- Secured first-lien debt claims: $2.28 billion --Recovery expectations: 50%-70% (rounded estimate: 65%) -- Non-collateral value available to deficiency claims: $439 million -- Total unsecured claims including secured deficiency claims: $1.54 billion -- Senior unsecured debt claims: $519 million --Recovery expectations: 10%-30% (rounded estimate: 25%) GATES GLOBAL: Moody's Rates New $1.3BB Sr. Secured Term Loan 'Ba2' ------------------------------------------------------------------ Moody's Ratings assigned a Ba2 rating to Gates Global LLC's planned $1.3 billion 7-year senior secured term loan B5. The company's other ratings, including its Ba3 corporate family rating, Ba3-PD probability of default rating, Ba2 senior secured bank credit facilities and B2 senior unsecured rating are unaffected. The outlook is stable. The company's speculative grade liquidity ("SGL") rating was unchanged at SGL-1. Gates will use the proceeds from the new facilities, together with $500 million of new unsecured debt that has not yet been issued and $25 million of cash, to refinance the company's existing $1.2 billion first lien term loan due 2027, repay $568 million of existing senior unsecured notes due 2026 and pay fees and expenses associated with the transaction. RATINGS RATIONALE Gates' Ba3 CFR reflects the company's strong presence in the highly engineered industrial components market with a focus on manufacturing power transmission and fluid power units. The company benefits from its large scale, brand strength and dominant position as a supplier across diverse industrial end markets. Gates has a substantial aftermarket presence (about 64% of revenue) that supports EBITDA margin around 20% and good cash flow. However, Gates is exposed to highly cyclical end markets such as oil & gas, agriculture and construction. Moody's expects revenue growth to remain under pressure and decline 2-4% in 2024 from sluggish demand. Debt-to-EBITDA was 3.5 times at March 31, 2024. Moody's expects Gates' liquidity will be very good, as reflected in the SGL-1 speculative grade liquidity rating. The company had a sizeable cash balance of about $522 million at March 31, 2024. In addition, Gates will have full availability on the $500 million revolving credit facility that will expire in 2026. Moody's expects the company to generate $270 million in free cash flow in 2024, which should be more than ample to help offset seasonal working capital swings and fund small bolt-on acquisitions. The stable outlook reflects Moody's expectation of steady demand in the company's business that will enable Gates to generate positive free cash flow that can support debt repayment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if debt-to-EBITDA is sustained below 3.25 times and EBITA-to-interest approaches 5.0 times. Moody's would also expect maintenance of a conservative financial policy, including a prudent approach to returns to shareholders. Maintenance of very good liquidity would also be required for a rating upgrade. A ratings downgrade would be driven by debt-to-EBITDA sustained above 4 times or EBITA-to-interest below 3.0 times. Debt funded acquisitions, share buybacks, or shareholder distributions that increase leverage or weaken liquidity could also lead to a downgrade. The principal methodology used in this rating was Manufacturing published in September 2021. Gates Global LLC, located in Denver, Colorado, is a leading global manufacturer of power transmission belts, fluid power products and critical components used in diverse industrial and automotive applications. The company is a wholly-owned subsidiary of Gates Industrial Corporation PLC (NYSE: GTES), which was formed at the time of its IPO in January 2018. Gates Global LLC is 27.6% owned by The Blackstone Group L.P. GLOBAL MEDICAL: S&P Raises ICR to 'B-' After Debt Modification -------------------------------------------------------------- S&P Global Ratings raised the issuer credit rating to 'B-' from 'SD' (selective default) on air and ground medical transport service provider Global Medical Response Inc. (GMR). The outlook is stable. At the same time, S&P assigned a 'B-' issue-level rating and '3' recovery rating to the company's senior secured term loan and senior secured exchange notes, both due in 2028. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 55%) recovery for lenders in the event of a payment default. S&P's stable outlook reflects its expectation of more than sufficient operating cash flow to cover GMR's fixed costs over the next 12-24 months. The transaction extends GMR's maturities and reduces its cash interest expense. The company extended all of its senior secured debt to October 2028 and repaid the second-lien debt. This eliminated the refinancing risk associated with the 2025 maturities and gives the company additional leeway to continue improving its profitability and cash flow ahead of its next refinancing cycle. Incremental cash interest associated with the extended senior secured debt is more than offset by the elimination of the second-lien debt interest. GMR issued $962 million of new 15% PIK preferred equity and will use the proceeds to repay the second-lien debt, reduce its first-lien term loan by about $191 million, and add about $99 million cash to the balance sheet. S&P said, "While we view the preferred equity as debt-like and include it in our credit metrics, the replacement of cash interest with PIK and decreased first-lien debt will substantially improve free operating cash flow (FOCF). We anticipate that at current base rates, the transaction would improve FOCF by roughly $60 million on an annual basis. "GMR outperformed our expectation for revenue growth, profitability, and cash flow over the past 12 months; we expect it will generate sustainably positive FOCF.GMR's revenue increased 4.4% in 2023, versus our expectation for roughly flat growth. The company undertook several strategic initiatives to improve operational efficiency, including strategic market exits, corporate cost reductions, and contract renegotiations that resulted in rate increases. This was further helped by a moderate alleviation in labor and fuel costs. In 2024, GMR plans to exit more unprofitable markets and noncore businesses. We expect this will reduce revenue 8%, but with a further 100-130 basis points (bps) improvement in EBITDA margin. In addition to better-than-expected profitability in 2023, GMR significantly improved receivables collections, returning to day sales outstanding from before the COVID-19 pandemic. This resulted in substantial working capital inflow and better-than-expected fixed-cost coverage. While we expect working capital will revert to an outflow in 2024, improved profitability and reduced cash interest expense will offset the impact to cash flow. "GMR remains exposed to external factors such as adverse weather, fixed costs, and regulatory pressures. The emergency air transport industry is exposed to earnings volatility from weather that could require GMR to ground its aircraft. These conditions include extreme weather, dense fog, low clouds, lightning, heavy rain, snow, etc. GMR mitigated some of this risk with its diversification into emergency ground transportation. However, GMR has pulled back from some non-emergent ground operations due to lower margins. Thus, due to its high EBITDA dependence on air transport, we expect substantial exposure to weather-related cancellations and groundings. This is exacerbated by a predominantly fixed-cost business model because its pilots, clinical crews, and aircraft must remain idle or be diverted to another base. Furthermore, GMR continues to be exposed to regulatory changes such as the potential Veterans Administration reimbursement reduction, which could constrain revenues as early as 2025. "Our stable outlook reflects our expectation that GMR will continue to generate more than sufficient operating cash flow to cover its fixed costs over the next 12-24 months. "We could lower our ratings on GMR within the next 12 months if we believe operating cash flow would decline such that the company would not cover mandatory capital expenditure, debt amortization, and principal portion of lease payment for a sustained period." This could occur if: -- The VA reimbursement rate reduction is greater than expected and implemented in 2025; -- GMR faces accelerate wage inflation and other elevated operating costs that erode profitability; and -- Interest rates remain high throughout the forecast. While unlikely over the next 12 months, S&P could raise its ratings on GMR if it expects: -- Adjusted debt to EBITDA (including the preferred shares) to decline below 6x; -- Adjusted FOCF to debt to be sustained above 5%; and -- More clarity regarding the timing and impact of the VA rate adjustment. S&P said, "Governance is a moderately negative consideration in our analysis of GMR. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of controlling owners, in line with our view of most rated entities owned by private-equity sponsors. Our assessment also reflects the generally finite holding periods and a focus on maximizing shareholder returns." GO DADDY: S&P Affirms 'BB' Issuer Credit Rating, Outlook Stable --------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '3' recovery rating to Go Daddy Operating Co. LLC's (GoDaddy) proposed term loan B. At the same time, S&P affirmed its 'BB' issuer credit rating on GoDaddy. The stable outlook reflects S&P's expectation that GoDaddy will maintain S&P Global Ratings-adjusted debt leverage in the high-2x to low-3x range as it continues to expand and executes its shareholder-return strategy over the next 12 months. Go Daddy announced that it plans to issue a 7-year $1 billion term loan B-7 to refinance its existing $722 million term loan B-4 due 2027 and a portion of its $1.748 billion term loan B-6 due 2029. S&P expects the leverage-neutral transaction will improve the company's maturity profile and reduce its interest expense. S&P said, "The affirmation reflects our expectation that GoDaddy's strong business momentum and cash flow generation will provide it with sufficient flexibility to maintain its share repurchase strategy without weakening its credit quality. The company targets net leverage of between 2x and 4x (which incorporates changes in its deferred revenue). Therefore, our rating incorporates our expectation that GoDaddy could increase its net leverage as it deploys excess cash for acquisitions or shareholder returns. Pro forma for the refinancing, we expect the company's leverage will remain unchanged at 2.9x. Despite GoDaddy's ongoing share repurchases, we expect its debt leverage will stay in the high-2x area over the next 12 months supported by a mid-single-digit percent expansion in its organic revenue, an improving EBITDA margin, and strong free cash flow generation. "The company's leverage could increase if it engages in significant debt-financed acquisitions over the next two to three years. Nevertheless, even if GoDaddy engages in a large acquisition, we expect it would fund the transaction in a balanced manner such that it maintains leverage within management's target range. "We expect the company's expansion will be fueled by an accelerating improvement in its application and commerce revenue. In the first quarter of 2024, GoDaddy increased its application and commerce revenue by 13% on rising demand, improved pricing, and the bundling of solutions and products. The company also benefited from good adoption of its payment solutions, given that it reported reaching $2 billion in annualized gross payments volume (GPV) from its existing customers. Furthermore, GoDaddy expanded its core revenue by 4% on better-than-expected demand for domains in its primary and secondary markets, increased pricing in the primary market, and a higher average transaction value in the secondary market. "We forecast the company will likely increase its S&P Global Ratings-adjusted EBITDA margin in 2024 as it benefits from improving operating leverage. While the shift in GoDaddy's sales mix will be a modest headwind for its gross margin, we forecast it will expand its S&P Global Ratings-adjusted EBITDA margin by approximately 150 basis points (bps)-200 bps in 2024. While the accelerating expansion in the company's application and commerce revenue at a higher profit point will act as a tailwind for its margin, we expect this will be partially offset by the increase in its transactional business (payments), which features a lower gross margin. Furthermore, we forecast a reduction in GoDaddy's restructuring and one-time expenses. "The stable outlook reflects our expectation that GoDaddy will maintain S&P Global Ratings-adjusted debt leverage in the high-2x to low-3x range as it continues to expand and executes its shareholder-return strategy over the next 12 months." GOFOR INDUSTRIES: Trinity Capital Marks $200,000 Loan at 67% Off ---------------------------------------------------------------- Trinity Capital Inc has marked its $200,000 loan extended to GoFor Industries, Inc to market at $65,000 or 33% of the outstanding amount, as of March 31, 2024, according to a disclosure contained in Trinity Capital's Form 10-Q for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission. Trinity Capital is a participant in a Secured Loan to GoFor Industries, Inc. The loan accrues interest at a rate of 0% (Variable interest rate Prime + 7.0% or Floor rate 10.3%) per annum. The loan was scheduled to mature last May 10, 2024. Trinity said the loan is on non-accrual status as of March 31, 2024 and is therefore considered non-income producing. Trinity Capital is an internally managed, closed-end, non-diversified management Investment Company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended. Trinity Capital has elected to be treated, currently qualifies, and intends to continue to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes. Trinity Capital is led by Kyle Brown, Chief Executive Officer, President and Chief; and Michael Testa, Chief Financial Officer and Treasurer. The fund can be reach through: Kyle Brown Trinity Capital Inc 1 N. 1st Street, Suite 302 Phoenix, AZ 85004 Tel: (480) 374 5350 GoFor provides reliable, affordable and timely delivery of goods to customer and job sites. GOFOR INDUSTRIES: Trinity Capital Marks $9.7MM Loan at 55% Off -------------------------------------------------------------- Trinity Capital Inc has marked its $9,760,000 loan extended to GoFor Industries, Inc to market at $4,414,000 or 45% of the outstanding amount, as of March 31, 2024, according to a disclosure contained in Trinity Capital's Form 10-Q for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission. Trinity Capital is a participant in a Secured Loan to GoFor Industries, Inc. The loan accrues interest at a rate of 2.5% (Variable interest rate Prime + 8.8% or Floor rate 12.0%) per annum. The loan matures on February 1, 2026. The loan is on non-accrual status as of March 31, 2024 and is therefore considered non-income producing. Trinity Capital is an internally managed, closed-end, non-diversified management Investment Company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended. Trinity Capital has elected to be treated, currently qualifies, and intends to continue to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes. Trinity Capital is led by Kyle Brown, Chief Executive Officer, President and Chief; and Michael Testa, Chief Financial Officer and Treasurer. The fund can be reach through: Kyle Brown Trinity Capital Inc 1 N. 1st Street, Suite 302 Phoenix, AZ 85004 Tel: (480) 374 5350 GoFor provides reliable, affordable and timely delivery of goods to customer and job sites. GRAY TELEVISION: Fitch Alters Outlook on 'BB-' LongTerm IDR to Neg. ------------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook for Gray Television, Inc. (Gray) to Negative from Stable. Fitch has affirmed Gray's Long-Term Issuer Default Rating (IDR) at 'BB-' and its senior secured issue ratings at 'BB+' /'RR2', also affirmed the company's senior unsecured debt at 'BB-'/'RR4'. Fitch has assigned a 'BB+' /'RR2' rating to Gray's new first-lien senior secured term loan and notes. The Recovery Rating for the senior secured debt is revised to 'RR2' from 'RR1', because the recently contracted A/R Securitization facility ranking contractually and structurally ahead of the first lien senior secured debt. The Negative Outlook reflects Fitch's view that margin erosion coupled with high debt balances will persist for the company, with last eight quarters annualized (L8QA) EBITDA leverage remaining above 5.5x through 2026. Gray experienced substantial EBITDA margin erosion throughout 2023 and into Q1'24, resulting in L8QA EBITDA leverage above 6.5x as of March 31, 2024. KEY RATING DRIVERS Persistently High Leverage: In recent years, Gray accumulated acquisition-related debt in an effort to diversify its broadcasting and media asset base. After the last acquisition in 2021, Gray's pro forma L8QA EBITDA leverage peaked at around 6.5x. Since then, leverage has remained at high levels due to the new $300 million A/R securitization facility; the linear advertising recession in 2023, which was partially offset by the relative resilient retransmission performance; and higher-than-expected payroll costs. This drove L8QA EBITDA margin down to 30.5% by the end of March 2024, from mid-thirties percent in prior years. Gray is well positioned to monetize this political year with highly contested U.S. Presidential, Gubernatorial, Senate and House races in markets where Gray has a strong presence. Gray has historically excelled at monetizing political ad revenues per TV Household. It significantly outperformed its peers during the last two political years in 2020 and 2022 with $18.1 and $14.7 revenue dollars per household. Gray's market position and platform allow it to effectively monetize political ad revenues, which could result in a substantial recovery in EBITDA margins, enabling a stronger path to deleveraging. Fitch expects Gray to continue prioritizing its deleveraging strategy, driving EBITDA leverage closer to the sensitivities range in the next 12-18 months, via higher EBITDA margin, opportunistic debt repurchases, and debt repayments with free cash flow. Strong Television Portfolio: On a consolidated basis, Gray covers 36% of U.S. television households. Its strong portfolio of assets includes #1 ranked stations in 80 of its 114 markets (approximately 70%) and #2 ranked stations in another 20 (approximately 18%). Station ranking is important to advertisers, especially for political advertising, with the #1 or #2 ranked stations garnering a significant portion of political revenues directed at local television broadcasters. Gray is the second largest U.S. broadcaster by revenue and number of markets. Its large scale allows strengthens its national advertising sales and improves its negotiating position in retransmission and affiliate renewals. Gray network affiliations are weighted toward CBS and NBC. Fitch expects Gray will reduce station acquisitions due to the 39% national audience reach cap. Advertising Exposure: Advertising revenues accounted for roughly 49% of Gray's average two-year total proforma revenues, excluding revenues from political advertisements. However, this is down significantly from the mid-60% range in 2017, primarily due to growth in retransmission revenues. Fitch expects Gray's reliance on advertising to continue declining, which would better position the company to navigate through weaker advertising markets. While overall ad market expectations may improve, Fitch expects legacy mediums to continue losing share to digital ones. Recent Headwinds and Advertising Recession: The diversified media industry has faced significant macroeconomic and operating headwinds over the past four years. This culminated in a linear advertising recession from 2H22 into 4Q23 and the writer's and actor's strikes in 2023, which impacted content creation. The introduction of multiple competing digital content distribution platforms accelerated viewership fragmentation and was a further drag on linear advertising. Although digital advertising has recovered, linear weakness continued into 4Q23. Fitch expects linear media, including cable networks, to recover slowly although becoming increasingly hyper-cyclical and continue losing share to digital. Linear Network Secular Threats: Fitch's ratings recognize the threats to linear cable networks as the long-term secular decline of subscribers to multichannel video programming distributors (MVPD) continues. Despite the relative strength of the networks' content and franchises, Fitch expects cash flow generation and margins will remain under long-term pressure. However, over the near term these networks are likely to continue to benefit from their dual-stream revenue profile and FCF generation characteristics. Solid FCF Generation: TV broadcasters typically generate significant amounts of FCF due to high operating leverage and minimal capex requirements. Fitch expects Gray to continue generating FCF over the rating horizon given the significant bi-annual growth in political advertising and increasing retransmission revenue. Viewer Fragmentation: Gray continues to face the secular headwinds present in the TV broadcasting sector including declining audiences amid increasing programming choices, with further pressures from direct to consumer (DTC) internet-based television services. However, Fitch expects that local broadcasters, particularly those with higher-rated stations, will remain relevant and capture audiences that local, regional and national spot advertisers seek. Fitch also views positively the increasing inclusion of local broadcast content in DTC offerings. Growth in DTC subscribers could provide incremental revenues and offset declines of traditional MVPD subscribers. However, Fitch does not believe penetration will be material for Gray over the near term, particularly given the company's predominance in smaller and medium-sized markets. In addition, Fitch expects linear subscriber losses to persist in the low- to mid-single digit range. DERIVATION SUMMARY Gray's 'BB-' IDR reflects its smaller scale and higher leverage relative to the larger and more diversified media peers like Paramount Global (BBB-/Negative) and Warner Bros. Discovery, Inc. (BBB-/Stable). Gray's ratings reflect the company's high leverage, which is offset by its enhanced scale and competitive position. Gray is the second largest U.S. station group by revenue and U.S. TV household reach. It also maintains the highest broadcast revenue per television household owing to its strong portfolio of highly ranked television stations. Gray has the first- or second-ranked television stations in approximately 89% of its 114 markets served. Highly ranked stations typically garner a larger share of the local and political advertising revenues in their markets. Gray also has a favorable mix of affiliated stations weighted toward CBS, NBC and ABC. Although Gray has a similar leverage profile as The E.W. Scripps Company (B/Stable), it benefits from more number one or number two ranked stations and has significant exposure in political battleground areas. Gray's Fitch-calculated EBITDA margins are at the upper end of the peer group. KEY ASSUMPTIONS - Core advertising revenue modestly growing at a low single-digit in FY2024 driven by consistent and solid demand for local content, various professional sporting events at local, national and global levels including the 2024 Olympic Games, and a recovering demand from national advertisers. For the last four years of the projection, core advertising revenue growth gradually increases from low single-digit to mid-single digit rate by FY2028, signaling a recovering and modest expansion in the industry, after the recessionary market conditions during FY2023. - Political advertising revenue effectively flat or around the same level than in FY2020, driven by the presidential election demand but also by significant senate, house and gubernatorial races in Gray's key markets. For FY2026, a mid single-digit revenue growth vs. the last non-presidential election year (i.e. FY2022), and a relatively flat presidential political year in FY2028 vs. FY2024. - Gross retransmission revenue with a low single-digit decrease in FY2024 and FY2025, driven by the net effect of consistent decrease in subscriptions, partially offset by rate increases. For the last three years of the projection, retransmission rates reflecting a low single-digit revenue growth per year, driven by an ongoing but sluggish decline in subscriptions offset by rate increases, supported by a resilient and loyal viewership all year. - EBITDA margin during FY2024 at 33%, reflecting a full consolidation of past acquisitions including margin gains as result of achieved synergies and cost-savings but also fully benefiting from the presidential political year with races at local, state and federal levels. For the rest of the projection, EBITDA margins fluctuating between mid-twenties and mid-thirties percent reflecting continuing pressure on labor costs offsetting with political cycle revenue and low-single digit organic growth. - Capex intensity (percentage of total revenue) ranging around 3.25% to 3.90% throughout the projection. - Common dividends increasing from $45 million in FY2024 to $80 million by the end of the projection. - Gray successfully refinanced its $1.2 billion of senior secured Term Loan E and of its senior unsecured notes due 2026 in 2024 with a mix of debt and cash on balance ($750 million first lien senior secured Term Loan F, $1.0 billion of first lien senior secured bonds, $100 million draw under the revolver and cash on hand). - New first lien senior secured bonds issued in 2027 and 2028 to refinance its $750 million of unsecured notes due 2027 and the outstanding Term Loan D due 2028. The $300 million A/R Securitization facility is assumed to be refinanced and extended to 2029. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch does not expect any near-term positive rating momentum given the elevated leverage; - Significant EBITDA margin gains and debt repayment driving, L8QA EBITDA Leverage below 4.5x; - Fitch expects the Negative Outlook to stabilize with a sustained L8QA EBITDA Leverage ranging around 5.5x - 5.0x, as result of an effective monetization strategy throughout the political cycle, reflecting significant and sustainable margin gains while maintaining an adequate liquidity position with a reasonable reduction of debt from internal free cash flow generation within 12 to 18 months. Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Failed monetization strategy evidencing a persistent margin erosion and decreased FCF generation, hindering further deleveraging; - L8QA EBITDA Leverage not approaching 5.5x over the next 12 to 18 months. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of March 31, 2024, Gray's liquidity position was $753 million supported by $134 million in cash on balance and $619 million of availability under the recently upsized $625 million revolver facility under its existing credit agreement. The company does not have any significant maturity until 2026, when the $1.2 billion Term Loan E, a non-extending tranche of the revolver about $73 million and the $700 million 5.875% senior unsecured notes are due. Over the last four years, Gray averaged about $260 million of free cash flow per year, demonstrating a resilient business strategy that enables it to navigate through the non-political cycle. Fitch's expectation is for the company to continue generating robust FCF in excess of $200 million per year. Refinancing of Term Loan E and Unsecured Notes due 2026 with New Senior Secured Debt: Gray intends to opportunistically refinance the existing $1.2 billion senior secured Term Loan E and of its senior unsecured notes due 2026 with proceeds from a new $750 million Term Loan F due 2029, a new $1.0 billion first lien (ranking pari-passu with the credit facilities) secured notes and about $100 million draw under its recently extended revolver due 2027, which is also expected to be upsized to $680 million as part of the refinancing. Fitch expects the transaction to be leverage neutral. Debt Structure: Fitch rates Gray's senior secured credit facilities 'BB+', which is two notches higher than the IDR as they are secured by substantially all of Gray's assets, while the unsecured notes are rated at the issuer level. The new A/R Securitization facility was established at a wholly-owned special purpose subsidiary, although the facility does not have a recourse to Gray, the company provided a performance guarantee for the benefit of the parties. Fitch does not rate the A/R Securitization facility nor the $650 million Series A Preferred Stock held by Retirement Systems of Alabama. Fitch has determined that the Series A preferred stock receives 0% equity credit, and it is included in Fitch's leverage calculations together with the securitization facility in accordance with established criteria. ISSUER PROFILE Gray is the second largest U.S. television broadcaster, measured by total revenues and markets served. The company also owns video program production, marketing and digital businesses including Raycom Sports, Tupelo-Raycom, and RTM studios. 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 ----------- ------ -------- ----- Gray Television Inc. 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+ GRAY TELEVISION: Moody's Rates New Senior Secured Debts 'Ba3' ------------------------------------------------------------- Moody's Ratings assigned Ba3 ratings to Gray Television, Inc.'s new senior secured debts comprising a $750 million guaranteed first-lien term loan F due 2029 (the "Term Loan F") and $1 billion guaranteed first-lien notes due 2029 (the "First-Lien Notes"). Gray's B2 Corporate Family Rating, Ba3 ratings on the existing senior secured debts, Caa1 ratings on the senior unsecured notes and stable outlook remain unchanged. Net proceeds plus a draw under the senior secured revolving credit facility (RCF) will be used to refinance and extend the maturities of the existing $1.15 billion outstanding senior secured term loan E due January 2, 2026 (the "Term Loan E") and $700 million 5.875% senior notes due July 15, 2026. The new Term Loan F and First-Lien Notes are expected to be pari passu, and issued by the same borrower, secured by the same collateral package, guaranteed by the same guarantors, and contain the same terms and conditions as Gray's existing senior secured first-lien credit facilities. In conjunction with this transaction, Gray has received commitments to upsize its $552.5 million guaranteed first-lien RCF tranche due December 31, 2027 to $680 million via a fungible add-on. Upon closing, the company intends to terminate the $72.5 million guaranteed first-lien RCF tranche due December 1, 2026 (the "2026 RCF Tranche"). Moody's expects to withdraw the Ba3 ratings on the Term Loan E and 2026 RCF Tranche when the refinancing transaction is completed. The assigned ratings are subject to review of final documentation and no material change in the size, terms and conditions of the transaction as advised to Moody's. RATINGS RATIONALE Gray's B2 CFR is supported by the company's quasi-national footprint and scale across its network of broadcast stations, their significant reach and strong market positions. Gray is one of the largest US broadcasters with 171 owned and operated network affiliated TV stations across 114 markets of which roughly 70% are large or mid-sized markets. The company's revenue model benefits from a mix of recurring retransmission fees that historically helped to offset the inherent volatility of traditional advertising revenue. Over the next several years, Moody's expects retransmission revenue growth will be challenged in the low-single digit percentage range as the rate of subscriber losses outpaces annual fee increases, which constrains the rating. In even numbered years, revenue benefits from material political advertising spend, especially during presidential election years, which can mask pressure in retransmission revenue, but also boosts EBITDA. During election years, Gray generates solid free cash flow (FCF), which declines during non-election years. The B2 CFR is constrained by the ongoing structural decline in linear TV core advertising as non-political TV advertising budgets continue to erode in favor of digital media. Moody's expects Gray's linear TV core ad revenue will continue to be pressured over the rating horizon, which could worsen during periods of weak CPM (cost per thousand impressions) pricing and/or deteriorating macroeconomic conditions. To offset these challenges and diversify its operations, Gray has invested in new technologies, businesses (e.g., Atlanta Assembly, a media production "studio city" in Georgia) and over-the-top (OTT) distribution, however this burdens cash flows given their lower margin profile and creates operational risk in the short-term until these assets become profitable. The rating also reflects a somewhat aggressive financial policy and tolerance for high financial leverage. The stable outlook reflects the structural and secular pressures in Gray's business and Moody's view that the company's credit metrics are appropriately positioned within the B2 CFR. At FYE 2023, Gray's total debt to two-year average EBITDA was 6.3x (Moody's adjusted). Moody's expects leverage to improve to the 5.6x-5.8x region by the end of 2024 as political advertising revenue in a presidential election year boosts EBITDA. The improvement will also be aided by Gray's commitment to repay debt with excess cash flow and proceeds from asset sales. However, as political advertising recedes in 2025 and retransmission revenue growth remains pressured, Moody's expects leverage to rise to the 5.75x-6x range at the end of next year. Moody's normalizes the effect of political advertising by evaluating two-year averages for Moody's adjusted financial leverage ratios. Over the next 12-18 months, Moody's expects Gray will maintain very good liquidity as reflected in the SGL-1 Speculative Grade Liquidity rating. At March 31, 2024, LTM FCF (defined by Moody's as cash flow from operations less capex less dividends) totaled approximately -$50 million, cash and cash equivalents were $134 million and the two-tranche $625 million RCF was undrawn. Last year, FCF experienced pressure due to slowing growth in core advertising spend, absence of political ad revenue in a non-election year and higher capital expenditures. However, in 2024, Moody's expects that Gray will generate positive FCF of around $450 million to $550 million driven by high margin political advertising revenue in a presidential election year and normalization of capex. Moody's anticipates that the bulk of FCF will be used for investments and debt repayments/repurchases. In May, the board approved a $250 million debt repurchase program through December 31, 2025. ESG CONSIDERATIONS Gray's ESG credit impact score is CIS-4, chiefly driven by governance and social risks. CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. The credit impact score reflects increasing exposure to governance risk, influenced by financial strategy and risk management given the somewhat aggressive financial policy, characterized by debt-financed acquisitions and a tolerance for high financial leverage. Governance risk is also driven by management credibility and track record, and the concentration of voting rights held by the Howell-Robinson family and affiliates, with about 40% voting control. Elevated social risks include demographic and societal trends associated with changes in consumers' video consumption. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Gray sustains leverage comfortably well below 4.75x (Moody's adjusted on a two-year average EBTIDA basis) and FCF to debt above 6% (Moody's adjusted on a two-year average FCF basis). Gray would also need to: (i) exhibit organic revenue growth and stable-to-improving EBITDA margins on a two-year average basis; (ii) adhere to conservative financial policies; and (iii) maintain at least good liquidity to be considered for an upgrade. Ratings could be downgraded if Gray's leverage was sustained above 6x (Moody's adjusted on a two-year average EBITDA basis) as a result of weak operating performance or more aggressive financial policies. A downgrade could also arise if FCF to debt was sustained below 3% (Moody's adjusted on a two-year average FCF basis) or Gray experienced deterioration in liquidity or covenant compliance weakness. Headquartered in Atlanta, GA, Gray Television, Inc. is a multimedia broadcast company that currently owns and operates television stations across 114 markets reaching 36% of US households (25% including the 50% UHF discount). In roughly 90% of its markets, the company operates the #1 or #2 ranked station. Gray is publicly traded with the Howell-Robinson family and affiliates of the late J. Mack Robinson collectively owning approximately 11% of combined classes of common stock. The dual class equity structure provides these affiliated entities with around 46% voting share. Revenue for the twelve months ended March 31, 2024 totaled approximately $3.3 billion. The principal methodology used in these ratings was Media published in June 2021. H&H ENTERPRISES: Court OKs Cash Collateral Access on Final Basis ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Florida, Panama City Division, authorized H&H Enterprises of PC BCH LLC DBA Sandbar to use cash collateral, on a final basis, in accordance with the budget. The Debtor is directed to pay the U.S. Small Business Administration monthly interim payments in the amount of $741 on the First of each Month, commencing June 1, 2024, and continuing until otherwise modified by the Plan of Reorganization or entry of an Order from the Court. The Debtor is also ordered to pay Fox monthly interim payments in the amount of $741 on the 15th of each month, commencing May 15, 2024, and continuing until otherwise modified by the Plan of Reorganization or entry of an Order from the Court. Fox will be deemed to have an allowed secured claim in the amount of $127,875. Fox will file a proof of claim asserting this position which the Debtor agrees not to object to. A copy of the order is available at https://urlcurt.com/u?l=2nqZml from PacerMonitor.com. About H&H Enterprises of PC BCH LLC DBA Sandbar H&H Enterprises of PC BCH LLC DBA Sandbar filed its voluntary petition for relief under Chapter 11 of the Bankrutpcy Code (Bankr. N.D. Fla. Case No. 24-50032) on March 6, 2024, listing $165,486 in assets and $1,086,708 in liabilities. The petition was signed by Craig K Harris as MGRM. Judge Karen K. Specie oversees the case. Michael Austen Wynn, Esq. at Wynn & Associates PLLC represents the Debtor as counsel. HIS STORY: Unsecured Creditors to Split $25K in Subchapter V Plan ----------------------------------------------------------------- His Story Development LLC filed with the U.S. Bankruptcy Court for the Eastern District of Texas a Plan of Reorganization under Subchapter V dated May 6, 2024. The Debtor was organized for the specific purpose to produce and present the theatrical presentation of His Story: The Musical, a contemporary pop/rock/rap lyrical story of Jesus at a long-term venue in Grandscape Texas, in the The Colony, Texas. The Debtor acquired a state-of-the art 1300 seat theater tent to serve as a destination location for a long-term theatrical run. Unfortunately, the production had to close after a short run of only six weeks. With no more performances, the tents and supporting equipment and furnishings sat unused at the Grandscape location. The Debtor attempted to find alternative uses for the facility to generate cash flow, but all efforts were unsuccessful. The Debtor has ceased all operations and will have no future earnings. Along with filing its bankruptcy schedules and statement of financial affairs and appearing at the meeting of creditors on March 7, 2024, the Debtor has filed applications to employ its counsel Quilling Selander, Lownds, Winslet and Moser, PC and to engage Rosen Systems to conduct a liquidation auction of some of its assets. Rosen Systems conducted an auction of all of the Debtor's equipment and furnishings between March 7 to 14, 2024. The Debtor received $24,834.28 from the auction. The Debtor also filed a motion to sell the tents for $185,000 including the 1300 seat tent and several smaller tents and accessories. The sale of the tents saved the Debtor the cost of removing the tents itself estimated to be at least $100,000 – and the cost of storage as well as relieving the Debtor of the obligation to maintain expensive insurance. At the time this Plan, those funds were being held in escrow pending the successful and complete removal of the tents from Grandscape. The Debtor filed the instant case in order to orderly liquidate its assets and distribute the proceeds to its creditors. This Plan provides an orderly manner to satisfy, or otherwise, distribute the sale proceeds to the Debtor's creditors. The Debtor believes that the terms of this Plan will maximize distributions to the creditors of the Debtor. The Class 4 Claims include all General Unsecured Claims, the unsecured portion of the Class 2 and Class 3 claimants, and all other Claims not specifically provided for elsewhere herein. The Class 4 claims of unsecured creditors are impaired and shall receive a pro rata share of the $25,000 carved out of the secured claimants' interest in the Debtor's assets. Within 30 days of the sale of the last property, the Debtor shall prepare a schedule of the remaining unpaid Class 4 claims and calculate payment on a pro rata basis and deliver the payment schedule to the members of Class 4 with notice of the amount each Class 4 claimant shall be paid with instructions to file objections, if any, within 30 days of the mailing of the payment schedule. Once the objection period has run, and there are no unresolved objections, the Debtor shall disburse the sale proceeds per the schedule to the Class 4 claim holders. Class 5 consists of Interest Holders. Holders of Interests in the Debtor shall retain such Interests following the Effective Date and shall receive a distribution only in the event that all senior claims are paid in full with interest. The Class 5 Interest Holders do not vote on the Plan. As of the Effective Date, all Assets of the Debtor shall be vested in the Debtor. The Assets shall be vested in the Debtor free and clear of all Liens, Claims, rights, Interests, and charges, except as expressly provided in this Plan. The Debtor has liquidated all of its physical assets resulting in cash and received total sale proceeds of $243,091.48. The obligations under the Plan shall be funded by distribution of the cash and sale proceeds of all assets of the Debtor. The only remaining assets of the Debtor consists of the "Intangible Rights." A full-text copy of the Subchapter V Plan dated May 6, 2024 is available at https://urlcurt.com/u?l=f7dzyk from PacerMonitor.com at no charge. Attorneys for the Debtor: John Paul Stanford, Esq. QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C. 2001 Bryan Street, Suite 1800 Dallas, TA 75201 Tel: (214) 880-1805 Fax: (214) 871-2111 Email: jstanford@qslwm.com About His Story Development His Story Development, LLC, a company in West Palm Beach Fla., filed Chapter 11 petition (Bankr. E.D. Texas Case No. 24-40288) on February 6, 2024, with as much as $1 million to $10 million in both assets and liabilities. Bruce Lazarus of Evergreen Five LLC, the managing member of His Story Development, signed the petition. Judge Brenda T. Rhoades oversees the case. Quilling, Selander, Lownds, Winslett & Moser, P.C. serves as the Debtor's legal counsel. ICON AIRCRAFT: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- The U.S. Trustee for Region 3 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of ICON Aircraft, Inc. About ICON Aircraft ICON Aircraft, Inc., is an aircraft design and manufacturing company focused on the creation of consumer-friendly, safe, and technologically advanced aircrafts that make the adventure of flying more accessible to mainstream consumers. The Company's flagship production aircraft -- the ICON A5 -- is an amphibioussport plane. ICON Aircraft was founded in 2006 in response to the Federal Aviation Administration's ("FAA") establishment of the light-sport aircraft ("LSA") category and the sport pilot license ("SPL") class. ICON Aircraft and three of its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Lead Case No. 24-10703, Bank. D. Del.) on April 4, 2024. On the petitions signed by Thomas M. McCabe as chief restructuring officer, the Debtors reported $100 million to $500 million in estimated assets and $100 million to $500 million in estimated liabilities. Hon. Craig T. Goldblatt presides over the cases. The Debtors tapped Young Conaway Stargatt & Taylor LLP and Sidney Austin LLP as bankruptcy counsel. Stretto, Inc., is the Debtors' claims and noticing agent. IMA FINANCIAL: Moody's Affirms B3 CFR, Outlook Stable ----------------------------------------------------- Moody's Ratings has affirmed the B3 corporate family rating and B3-PD probability of default rating of IMA Financial Group, Inc. (IMA). The rating agency also affirmed the B3 ratings on IMA's $190 million senior secured revolving credit facility and its $905 million ($891 million outstanding) senior secured term loan. The company plans to reprice and add $125 million to the term loan, which is due in November 2028. IMA will use net proceeds of the add-on to help fund acquisitions, for general corporate purposes, and to pay related fees and expenses. The rating agency also assigned a B3 rating to the company's new $200 million senior secured revolving credit facility due in August 2028. Moody's will withdraw the rating from the existing revolver when the transaction closes. The rating outlook for IMA is stable. RATINGS RATIONALE Moody's said the ratings affirmation reflects IMA's good regional presence as a middle market insurance broker offering property and casualty insurance and employee benefits products and services mainly in the western and southwestern US. IMA has good diversification across clients, producers and insurance carriers and has expertise in sectors such as real estate, construction and energy. The company has grown rapidly in recent years through a combination of acquisitions and good organic growth. IMA remains focused on building scale and improving EBITDA margins. These strengths are offset by IMA's high financial leverage, low interest coverage, significant cash outflows to pay contingent earnout liabilities and integration risk associated with debt-funded acquisitions. Other challenges include IMA's modest scale relative to other rated insurance brokers, and its geographic concentration where the top four states account for a majority of revenue. The company's financial leverage is high for its rating category with modest interest coverage, leaving little room for error in managing its existing and newly acquired operations. Like other brokers, IMA also faces potential liabilities arising from errors and omissions in the delivery of professional services. For the 12 months through March 2024, IMA's pro forma financial leverage (per Moody's calculations) remained well above 7x, with low interest coverage and free cash flow metrics. Moody's expects that IMA will reduce its pro forma debt-to-EBITDA ratio below 7x, and maintain (EBITDA – capex) interest coverage and free-cash-flow-to-debt ratios in the low single digits over the next few quarters. These metrics reflect Moody's accounting adjustments for operating leases, contingent earnout liabilities, and run-rate EBITDA from acquisitions. The company is majority owned by its employees and minority owned by three private equity firms. The company's minority investors would likely provide additional support if needed, in Moody's view. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade of IMA's ratings include: (i) increased scale and geographic diversification, (ii) debt-to-EBITDA ratio below 5.5x, (iii) (EBITDA – capex) coverage of interest exceeding 2.0x, (iv) free-cash-flow-to-debt ratio exceeding 5%, and (v) successful integration of acquisitions. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio remaining above 7x, (ii) (EBITDA – capex) coverage of interest below 1.2x, (iii) free-cash-flow-to-debt ratio below 2%, or (iv) disruptions to existing or newly acquired operations. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in February 2024. Based in Denver, CO, IMA ranks among the 25 largest US insurance brokers based on 2022 revenue, according to Business Insurance. The company distributes commercial and personal property and casualty insurance, employee benefits and retirement products to midsize and large businesses and individuals. For the 12 months through March 2024, IMA generated total commissions and fees of $634 million. INH BUYER: BlackRock TCP Marks $7.3MM Loan at 25% Off ----------------------------------------------------- BlackRock TCP Capital Corp has marked its $7,393,627 loan extended to INH Buyer, Inc. to market at $5,567,401 or 75% of the outstanding amount, as of March 31, 2024, according to a disclosure contained in BlackRock TCP's Form 10-Q for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission. BlackRock TCP is a participant in a First Lien Term Loan (1.5% Exit Fee) to INH Buyer, Inc. The loan accrues interest at a rate of 12.41% (SOFR (Q) +7%, 1% FLOOR) of per annum. The loan matures on June 28, 2028. BlackRock TCP, formerly known as TCP Capital Corp., is a Delaware corporation formed on April 2, 2012 as an externally managed, closed-end, non-diversified management investment company. The Company elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. BlackRock TCP is led by Rajneesh Vig, Chief Executive Officer; and Erik L. Cuellar, Chief Financial Officer. The fund can be reach through: Rajneesh Vig BlackRock TCP Capital Corp 2951 28th Street, Suite 1000 Santa Monica, CA 90405 Tel: (310) 566-1000 Danbury, Conn.-based IMS Health, Inc. provides critical sales and other market intelligence primarily to pharmaceutical and biotech companies. JELD-WEN INC: Moody's Affirms Ba3 CFR & Ups Unsecured Notes to B1 ----------------------------------------------------------------- Moody's Ratings affirmed JELD-WEN, Inc.'s Ba3 corporate family rating, Ba3-PD probability of default rating, and the company's Ba2 senior secured term loan B rating. At the same time, Moody's upgraded JELD-WEN's senior unsecured notes ratings to B1 from B2. The SGL-2 Speculative Grade Liquidity Rating remains unchanged. The rating outlook is maintained at stable. The CFR affirmation reflects JELD-WEN's solid positioning in the rating category given its robust scale and strong market position in the window and door market, its conservative approach to balance sheet management, including deleveraging focus and a prudent long term net debt to EBITDA target, as well as absence of shareholder friendly returns or acquisitions as the company focuses on operating margin growth, efficiencies and productivity improvements. JELD-WEN is experiencing soft conditions in its repair and remodeling market in North America as well as in its residential and commercial markets in Europe, weighing on its top line and credit metrics. However, the rating action reflects Moody's expectation that over the next 12 to 18 months the company's operating margins will improve through a variety of strategic initiatives and lead to adjusted debt to EBITDA declining below 4.0x. In addition, Moody's expects that over this time period the company will maintain good liquidity, generate solid free cash flow, and experience positive tailwinds from the new residential construction market in the US. The senior unsecured note ratings upgrades to B1 from B2 reflect the declining amount of secured debt in the capital structure through term loan amortization, and the resulting lower loss absorption by the unsecured notes. RATINGS RATIONALE JELD-WEN's Ba3 CFR is supported by: 1) its strong market position as a leading manufacturer of doors and windows in its North American and European end markets; 2) large revenue base of $4.2 billion as of the last twelve months ended March 30, 2024, with global scale and geographic diversification of sales across about 70 countries; 3) financial policy that is geared toward conservative debt leverage with a net debt to EBITDA target of 2.0 to 2.5x; and 4) long-term strategies directed at productivity enhancements, cost reductions, and product pricing to support profitability improvement. At the same time, JELD-WEN's credit profile is constrained by: 1) the cyclicality of the end markets served, particularly the new residential construction segment; 2) competition and significant pricing volatility inherent to the building products sector, inflationary input cost pressures, and weaker operating margins compared to peers; 3) long-term risks related to an acquisitive growth strategy, which presents integration challenges, and to shareholder-friendly activities in the form of share repurchases, although neither is expected in the near term; and 4) risks related to the company's litigation proceedings. The stable outlook reflects Moody's expectation that over the next 12 to 18 months the company will improve its operating margin profile through cost reduction strategies and delever below 4.0x adjusted debt to EBITDA, while maintaining good liquidity. JELD-WEN's SGL-2 Speculative Grade Liquidity Rating reflects Moody's expectation that the company will maintain good liquidity over the next 12 to 15 months. Liquidity is supported by $234 million of cash at March 30, 2024, Moody's expectation of solid free cash flow, significant availability under the company's $500 million ABL revolving credit facility expiring in July 2026, and a covenant-lite structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if adjusted debt to EBITDA is sustained below 3.5x, adjusted EBITA to interest coverage is above 4.5x, and adjusted EBITA margin improves materially. In addition, the upgrade will take into consideration the company's financial policy, acquisition strategy, industry conditions, and liquidity. The ratings could be downgraded if the company's adjusted debt to EBITDA is sustained above 4.5x, adjusted EBITA to interest is sustained below 3.0x, operating margin declines or if liquidity weakens meaningfully. The principal methodology used in these ratings was Manufacturing published in September 2021. JELD-WEN, Inc. is a vertically integrated manufacturer of interior and exterior doors and windows across different price points for the new residential construction, repair and remodeling, and nonresidential building markets in North America and Europe. In the last twelve months ended March 30, 2024, JELD-WEN generated about $4.2 billion in revenue. JM WAYS: Bid to Use Cash Collateral Denied as Moot -------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana, New Albany Division, denied as moot the motion to use cash collateral filed by JM Ways, LLC d/b/a Skyline Chili as the case has been dismissed on May 17, 2024. A copy of the order is available at https://urlcurt.com/u?l=fE2eVD from PacerMonitor.com. About JMWays LLC JMWays LLC owns a building located on leased land having a current value of $1.2 million. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-90970) on October 6, 2023. In the petition signed by William Jacobs, managing partner, the Debtor disclosed $1,357,890 in assets and $1,545,419 in liabilities. Judge Andrea K. Mccord oversees the case. Weston E. Overturf, Esq., at Kroger, Gardis & Regas, LLP, represents the Debtor as legal counsel. JOANN INC: S&P Upgrades ICR to 'B-' on Emergence From Bankruptcy ---------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based creative retailer Joann Inc. to 'B-' from 'D'. The outlook is negative. At the same time, S&P assigned its 'B-' issue-level rating and '4' recovery rating (30% – 50%; rounded estimate: 30%) to the company's $154 million exit term loan issued by Needle Holdings LLC. The negative outlook reflects the risk that S&P could lower its rating on Joann over the next 12 months if its turnaround efforts falter, diminishing its prospects to generate positive free operating cash flow (FOCF). The upgrade of Joann Inc. reflects the company's lower debt and interest burden and our expectations for improving operating results. The company's post-emergence capital structure consists of a $500 million asset-based lending (ABL) revolver, $100 million first-in-last-out (FILO) loan facility, and a $154 million exit term loan, representing a reduction of over $500 million in debt compared to prepetition levels. S&P said, "As a result, we forecast the company's interest burden will be reduced by about $45 million this year compared to fiscal 2024 (ended Feb. 3, 2024). We expect the company's turnaround initiatives, which includes rightsizing corporate expenses and renegotiating contracts with suppliers, will improve profitability over the next two years." S&P said, "Notwithstanding better credit metrics, we believe Joann's liquidity will be constrained over the near term. In the lead up to its Chapter 11 filing, the company's vendors withheld merchandise receipts over concerns of being repaid. While vendors were ultimately unimpaired, inventory receipts deteriorated sharply. We expect Joann will heavily rely on its ABL facility this year as it rebuilds its inventory position to healthier levels. We anticipate Joann's cash flow generation will improve this year due to less interest expense and improving profitability, but still forecast a cash flow deficit approaching $35 million this year, before turning positive in fiscal 2026. In our view, the company has limited cushion to absorb additional setbacks in its turnaround initiatives. As a result of these operational and financial risks, we apply a negative comparable ratings analysis modifier. "We expect revenue will continue to contract over the next two years due to weak consumer demand and store closures. Joann's comparable store sales contracted 4% in fiscal 2024, representing its third consecutive year of declining sales, as lower demand for its craft technology, non-Halloween seasonal and home decor products offset better results in its textiles categories. On a nominal basis, Joann generated net sales in fiscal 2024 that were slightly below fiscal 2012 levels. Notably, Joann did not close any of its stores as part of the reorganization. While less than 5% of stores are unprofitable on a stand-alone basis, its store base is less productive than peers in our view. We anticipate the company will close about 15-25 underperforming stores annually over the next two years as leases expire." The company's technology investments have strengthened its e-commerce performance, which is partially offsetting the weak long-term sales trends in the company's brick-and-mortar business. E-commerce sales represented about 13% of total sales in fiscal 2024, and we anticipate online sales will grow to account for roughly 15% of total sales over the next two years. Joann's depth and breadth of needle arts merchandise is an important differentiator to other pure e-commerce competitors. However, the channel migration to online will weigh on margins given associated freight expense and store occupancy deleveraging. S&P said, "Despite topline challenges, we expect operating margins will improve due to cost control initiatives. S&P Global Ratings-adjusted EBITDA margin improved 120 basis points in fiscal 2024 to 10.2%. This was due to lower freight and fuel costs, lower clearance expenses and improved product mix, partially offset by higher labor costs and other expenses related to Joann's turnaround initiatives. The company has expanded its Focus, Simplify, Grow initiatives and expects about $256 million in savings. Our forecast projects S&P Global Ratings-adjusted EBITDA margins will continue to expand to the mid- to high-teen percent area over the next two years due to higher merchandise margins, lower store labor, and reduced corporate expenses. Nevertheless, we expect Joann will need to lower prices to increase traffic, win over inflation-weary customers, and stay competitive in an increasingly promotional environment. "Improved S&P Global Ratings-adjusted credit metrics give Joann greater bandwidth to turnaround its operating performance. Following its debt reduction through Chapter 11, we project Joann's S&P Global Ratings-adjusted leverage will decline more than four turns to 4.2x by fiscal year-end 2025. We also project S&P Global Ratings-adjusted funds from operations (FFO) to debt will improve to nearly 14% this year from 2% at fiscal year-end 2024. The company received almost $110 million in new capital during bankruptcy to support its operations with the remainder consisting of outstanding payables. Joann's exit financing facility matures in April 2028, while its ABL and FILO facilities mature in June 2027. In our view, the company will need to meaningfully improve operating performance to successfully refinance its capital structure into a more sustainable long-term option. "The negative outlook reflects the risk that we could lower our rating on Joann over the next 12 months if profitability improvements lag our expectations, resulting in continued free operating cash flow deficits and deteriorating liquidity." S&P could lower its rating on Joann if S&P views the company's capital structure as unsustainable. This could occur if: -- The company is unable to improve its operating margins and generate positive FOCF; or -- Liquidity tightens leaving limited cushion for potential setbacks on turnaround initiatives. S&P could revise its outlook to stable if: -- Operating performance improves, including stabilizing sales trends and higher operating margins, leading to better FOCF; and -- Liquidity improves as the company reduces the outstanding amount drawn under its ABL facility. S&P said, "Governance factors are a moderately negative consideration in our ratings analysis. Management's strategic initiatives have been unsuccessful in addressing years of declining customer traffic. The company has relied on cost-cutting and scaled back capital investments to ameliorate its persistent cash flow deficits. Additionally, the company has operated without a permanent, full-time CEO since May 2023." LA HACIENDA: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The U.S. Trustee for Region 3 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of La Hacienda Mobile Estates, LLC. About La Hacienda Mobile Estates La Hacienda Mobile Estates, LLC is primarily engaged in renting and leasing real estate properties. La Hacienda sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bank. D. Del. Case No. 24-10984) on May 9, 2024, with $1 million to $5 million in both assets and liabilities. The petition was signed by Matt Davies as managing member. The Hon. Karen B. Owens presides over the cases. The Debtors tapped Ashby & Geddes, P.A. as bankruptcy counsel. LAND O'LAKES CAPITAL: Moody's Affirms 'Ba1' CFR, Outlook Stable --------------------------------------------------------------- Moody's Ratings affirmed the Ba1 rating on Land O'Lakes Capital Trust I's ("LOL Trust") 7.45% capital securities maturing in March 2028. LOL is a financing subsidiary of parent company Land O'Lakes, Inc. (Land O'Lakes). The outlook remains stable. The rating affirmation reflects Land O'Lakes' good scale and market position in diversified agricultural-related businesses that continue to produce relatively stable earnings. Operating cash flow generation coupled with a conservative financial policy contribute to low 2.3x debt-to-EBITDA leverage as of the 12 month period ended March 31, 2024. The company also maintains good liquidity to manage operating performance volatility. The affirmation also reflects Moody's expectation that debt-to-EBITDA leverage will be maintained below 3.0x at the end of each fiscal year. In addition, Moody's expects that Land O'Lakes will experience low single-digit annual revenue growth in the next two years and that the EBITDA margin will remain steady in the low-to-mid single digits. Moody's is forecasting Land O' Lakes dairy segment to experience low single digit operating profit growth in the next 12 to 18 months driven by improved margins in dairy ingredients offset by increased advertising and promotional activity. Operating profit in the feed segment is also forecasted to grow in the low single digits, driven by growth in lifestyle feed offset by continued pressures in the livestock feed segment as a result of declining cattle herds. Lastly, Moody's is forecasting a slight decline in operating profits in the crop inputs segment as a result of lower expected volumes due to likely delays in farmers making planting decisions based on the outlook for corn and soybean prices. RATINGS RATIONALE Land O'Lakes Capital Trust I's Ba1 preferred stock rating reflects that the preferred stock is subordinated to Land O'Lakes, Inc.'s senior debt. The preferred stock represents an interest in the assets of Land O'Lakes Capital Trust I whose sole asset is junior subordinated debt that is issued by Land O'Lakes, Inc. Land O'Lakes, Inc.'s credit profile reflects its good market position in three sizable segments, which diversity helps produce relatively stable consolidated earnings despite volatility within the segments. Land O'Lakes also benefits from economies of scale that translates into lower supply costs for its members and more efficient marketing for its members' milk. The credit profile reflects Land O'Lakes ability to elect to reduce payments to members in order to conserve cash needed for debt service in a stress scenario. Liquidity is good and near-term debt maturities are manageable. Land O'Lakes' credit quality is constrained by the low margin commodity nature of the majority of its businesses with operating margins around 2-3%. Earnings are also subject to volatility related to commodity prices on both the sale and supply sides of the business, farm income, and uncontrollable factors such as weather. The credit profile is also constrained by a complex governance structure that could impede quick decision making. In addition, as a cooperative, the company has limited access to equity capital markets. Moody's expects Land O'Lakes will maintain a relatively conservative leverage policy including low leverage. The business is capital intensive and low leverage ensures investment flexibility and helps manage the inherent volatility in agricultural commodity businesses. The cooperative structure nevertheless creates risk because any excess earnings above reinvestment needs are typically distributed to shareholders or used to redeem the interests of members that leave the coop. This limits the buildup of cash that could otherwise be utilize to repay debt or fund future investments. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's view that the company will maintain moderate financial leverage and manage costs to partially mitigate the downturn in cattle herds. The stable outlook also incorporates Moody's view that the company will maintain good liquidity to manage working capital needs and the volatility in agricultural markets. Ratings could be downgraded if there is a deterioration in operating performance or liquidity, there is a shift in industry fundamentals, regulation, or the cooperative governance structure or membership levels that adversely affects Land O'Lakes business. Acquisitions that increase business risk, debt / EBITDA sustained above 3.0x, or leverage debt-to-EBITDA leverage that increases over time or rises more meaningfully above 3.0x over the course of the year could also lead to a downgrade. Ratings could be upgraded if the company continues to focus on effectively managing core businesses to produce consistent revenue and earnings growth, there is a significant reduction in cash flow volatility, and debt / EBITDA is sustained below 2.0x. The principal methodology used in this rating was Protein and Agriculture published in November 2021. Land O'Lakes is a large agricultural cooperative that provides an extensive line of agricultural supplies (seed and crop protection products) and services to farmers under its Winfield brand. It also produces a full line of dairy based consumer, foodservice, and food ingredient products. Some of these products are marketed under well-known brand names including "LAND O'LAKES". The cooperative also produces animal feed for both the commercial and consumer markets. It sells its animal feed products (other than dog and cat food) under brand names including Purina. Revenues were $16.3 billion for the 12 months ending March 31, 2024. LBM ACQUISITION: Moody's Rates New Secured 1st Lien Term Loan 'B3' ------------------------------------------------------------------ Moody's Ratings assigned a B3 rating to LBM Acquisition, LLC's (dba US LBM) proposed senior secured first lien term loan due 2031. US LBM's B3 corporate family rating and B3-PD probability of default rating are not affected. The B3 rating on US LBM's existing senior secured first lien term loan due 2027, the Caa2 rating on its senior unsecured notes and the Caa2 rating on the senior unsecured notes issued by BCPE Ulysses Intermediate, Inc. (BCPE), US LBM's parent holding company, are also not affected. The outlook remains unchanged at stable. Moody's expects the terms and conditions of the proposed senior secured term loan to be similar to US LBM's existing rated senior secured term loan. The term loans will be pari passu. Proceeds from the new term loan will go towards terming out most of the borrowings ($552 million on March 31, 2024) under the company's asset based revolving credit facility (unrated) and to pay related fees and expenses in essentially a leverage-neutral transaction. The proposed term loan may be upsized, with the additional funds used to term out potentially the remaining borrowings under the revolving credit facility and to paydown US LBM's existing term loan. Moody's views the proposed transaction as credit positive, adding to liquidity and reducing refinancing risk in 2027 at which time the revolving credit facility and the balance of the term loan matures. The net change in interest is not material relative to US LBM's cash interest payments of about $380 million for 2023. RATINGS RATIONALE US LBM's B3 CFR reflects the company's corporate governance, which is the greatest credit challenge at this time. Also, US LBM retains a levered capital structure, with adjusted debt-to-EBITDA of 4.3x by year-end 2024. Material expansion of operating margins is difficult to achieve due to intense competition and reliance on commodity-like products, which are easily available from other distributors. Providing an offset to these challenges is good operating performance, with adjusted EBITDA margin sustained in the range of 10% - 12% through 2024. Good liquidity is a credit strength. These factors and end market dynamics that support some growth also supports US LBM's credit profile. Moody's projects US LBM maintaining good liquidity, generating decent cash flow (excluding dividend payments) each year and having sufficient availability under its revolving credit facility. Revolver availability pro forma for the proposed transaction is in excess of $1 billion, after considering practically no borrowings, letter of credit issuance, and the borrowing based formula. The stable outlook reflects Moody's view that US LBM will continue to perform well. Good liquidity, no material near-term debt maturities and some improving end market dynamics further support the stable outlook. The B3 ratings on US LBM's senior secured term loans, the same rating as the corporate family rating, results from its subordination to company's revolving credit facility but priority claim relative to the senior unsecured notes. The Caa2 ratings on the senior unsecured notes, two notches below the corporate family rating, results from their subordination to the company's considerable amount of secured debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING A ratings upgrade could occur if end markets remain supportive of organic growth such that adjusted debt-to-EBITDA is sustained below 4.5x and adjusted interest coverage, measured as adjusted EBITA-to-interest expense, is above 3x. Upwards rating movement also requires preservation of at least good liquidity and predictable financial policies regarding capital deployment. A ratings downgrade could occur if adjusted debt-to-EBITDA is above 6.5x or adjusted interest coverage is trending towards 1x. Negative ratings pressure may also transpire if the company experiences weakening of liquidity or adopts more aggressive dividend policies. US LBM, headquartered in Buffalo Grove, Illinois, is a North American distributor of building materials. Bain Capital Private Equity, LP and Platinum Equity, through their respective affiliates own 47% each of US LBM. Management controls the remaining 6%. The principal methodology used in this rating was Distribution and Supply Chain Services published in February 2023. LEONA TRANSPORTATION: Plan Exclusivity Period Extended to August 26 ------------------------------------------------------------------- Judge Elizabeth S. Stong of the U.S. Bankruptcy Court for the Eastern District of New York extended Leona Transportation Inc.'s exclusive periods to file its plan of reorganization and disclosure statement to August 26, 2024. As shared by Troubled Company Reporter, the Debtor herein, is a transportation corporation, which suffered severely during the Covid-19 pandemic. Debts on several loans and credit lines accumulated, while the Debtor was unable to operate at full capacity. In order to reorganize its debts and allow for feasible debt repayment terms, the Debtor sought Chapter 11 bankruptcy protection. The Debtor needs an additional time to negotiate the resolution of the claim filed by U.S. Small Business Administration, to draft the settlement agreement, thereafter to obtain Court approval of the mutually reached terms and to file a plan of reorganization, incorporating settlement terms reached by the parties and offering treatment to remaining Creditors of the estate. Further, the Debtor needs additional time to negotiate the cure terms with respect to the rent arrears with the Landlord. Leona Transportation Inc., is represented by: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 About Leona Transportation Leona Transportation, Inc. filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 23-41546) on May 3, 2023, with as much as $1 million in both assets and liabilities. Judge Elizabeth S. Stong oversees the case. The Debtor tapped the Law Offices of Alla Kachan, P.C. as bankruptcy counsel and Wisdom Professional Services, Inc. as accountant. LYONS COMPANIES: Hires SC&H Group Inc. as Investment Banker ----------------------------------------------------------- The Lyons Companies, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Kentucky to employ SC&H Group, Inc. as its investment banker. SC&H would be engaged to provide customary advisory and transaction-related consultation services in connection with a possible sale under Section 363 of the Bankruptcy Code. SC&H will provide its merger and acquisition, asset sale(s), capital raising, financial restructuring and related advisory services related to the Debtor, its business, or its assets and liabilities. The firm will be compensated as follows: Transaction Fees. The Debtor shall pay to SC&H a Transaction Fee in connection with any Closing(s): (i) In the event the Debtor completes a Sale, a fee (the "Sale Fee") to be paid upon the Closing, subject to Court approval, of any Sale as described immediately below, subject to the limitation in section (vi) below regarding Big Shoulders Capital, Iroquois Industrial Group, and their affiliates (collectively, "Big Shoulders"): For a Transaction with Total Consideration: a. Less than or equal to 5 million $300,000, or b. Greater than $5 million but less than $8 million $400,000, or c. Greater than or equal to $8 million $400,000 plus 5 percent of Total Consideration above $8 million (ii) In the event the Debtor completes a Financing, a fee (the "Financing Fee"), to be paid upon the Closing of any Financing, and subject to section (v) below, equal to the greater of $300,000 or the sum of: a. 2 percent of the gross amount of funded or committed indebtedness that is secured by a first lien including, without limitation, debtor-in-possession financing; plus b. 3 percent of the gross amount of funded or committed indebtedness that (1) is secured by a second or more junior lien, (2) is unsecured and/or (3) is subordinated; plus c. 5 percent of the gross amount of any funded or committed preferred or common equity, convertible or otherwise equity-linked securities or obligations. (iii) The minimum for any Sale Fee or Financing Fee shall be $300,000 (the "Minimum Transaction Fee"), subject to the limitation in section (vi) regarding Big Shoulders which could reduce this amount by 1/3 to $200,000. (iv) In the event the Debtor completes a Restructuring, a fee (the "Restructuring Fee") equal to $300,000, payable upon the Closing of the Restructuring including, without limitation, the confirmation and effectiveness of a Plan of Reorganization. However, if SC&H has earned a Sale and/or Financing Fee, any Restructuring Fee will be limited to $75,000. (v) The Debtor and SC&H acknowledge that more than one of a Sale Fee, a Financing Fee, and a Restructuring Fee may be earned and payable to SC&H pursuant to the provisions herein, provided, however, that if the Debtor sells the Business or substantially all of its assets as a going concern and subsequently files a plan of liquidation, only a Sale Fee would be due and no Restructuring Fee would be payable. Further, to the extent that a Sale Fee and a Financing Fee are both earned, then the amount of the Financing Fee shall be reduced so that it is calculated as only the sum of the following formula which may be less than $300,000: a. 2 percent of the gross amount of funded or committed indebtedness that is secured by a first lien including, without limitation, debtor-in-possession financing; plus b. 3 percent of the gross amount of funded or committed indebtedness that (1) is secured by a second or more junior lien, (2) is unsecured and/or (3) is subordinated; plus c. 5 percent of the gross amount of any funded or committed preferred or common equity, convertible or otherwise equity-linked securities or obligations. (vi) Notwithstanding anything to the contrary, in all instances SC&H's Sale Fee and Minimum Transaction Fee shall be reduced by 1/3 if Big Shoulders makes an offer to purchase substantially all of the Debtor's assets within ten days of the date of the Engagement Letter, and Big Shoulders closes on that offer at the same price as originally set forth in the offer. The Debtor will pay all of SC&H's reasonable and documented out-of-pocket expenses provided, however, that aggregate reimbursements shall not exceed $20,000 without the Debtor's prior written approval. Matt LoCascio, a principal at SC&H Group, disclosed in a court filing that his firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Matt LoCascio SC&H Group, Inc. 910 Ridgebrook Rd. Sparks, MD 21152 Tel: (410) 403-1500 Email: mlocascio@schgroup.com About Lyons Companies, LLC The Lyons Companies, LLC has been providing advanced custom metal fabrication services and high-quality industrial and appliance products to companies throughout North America. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Kent. Case No. 24-30684) on March 15, 2024. In the petition signed by Steven Huff, CEO and member, the Debtor disclosed up to $50 million in both assets and liabilities. April A. Wimberg, Esq., at DENTONS BINGHAM GREENEBAUM, represents the Debtor as legal counsel. NEXTCAR HOLDING: Trinity Capital Marks $4.5MM Loan at 46% Off ------------------------------------------------------------- Trinity Capital Inc has marked its $4,573,000 loan extended to NextCar Holding Company, Inc to market at $2,462,000 or 54% of the outstanding amount, as of March 31, 2024, according to a disclosure contained in Trinity Capital's Form 10-Q for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission. Trinity Capital is a participant in a Secured Loan to NextCar Holding Company, Inc. The loan accrues interest at a rate of 5.3% (Variable interest rate Prime + 5.8% or Floor rate 9.0%) per annum. The loan was scheduled to mature June 30, 2024. The loan is on non-accrual status as of March 31, 2024 and is therefore considered non-income producing. Trinity Capital is an internally managed, closed-end, non-diversified management Investment Company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended. Trinity Capital has elected to be treated, currently qualifies, and intends to continue to qualify annually as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes. Trinity Capital is led by Kyle Brown, Chief Executive Officer, President and Chief; and Michael Testa, Chief Financial Officer and Treasurer. The fund can be reach through: Kyle Brown Trinity Capital Inc 1 N. 1st Street, Suite 302 Phoenix, AZ 85004 Tel: (480) 374 5350 Santa Monica-based NextCar Holding Company, Inc. specializes in offering short-term vehicle subscriptions. It acquired the Autonomy.com domain name and related intellectual property from Micro Focus International in England on undisclosed terms. ODYSSEY MARINE: Grant Thornton Raises Going Concern Doubt --------------------------------------------------------- Odyssey Marine Exploration, Inc. disclosed in a Form 10-K Report filed with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2023, that its auditor expressed substantial doubt about the Company's ability to continue as a going concern. Tampa, Fla.-based Grant Thornton LLP, the Company's auditor since 2023, issued a "going concern" qualification in its report dated May 17, 2024, citing that the Company incurred net operating losses during the year ended 2023, and as of December 31, 2023, the Company's current liabilities exceeded its current assets by $26.6 million, and its total liabilities exceeded its total assets by $85.9 million. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. Odyssey said, "We have experienced several years of net losses and may continue to do so. We have experienced a net loss in every fiscal year since our inception except for 2023 and 2004. We had net income in 2023 of $1.5 million only as a result of a gain recognized on debt extinguishment. Our net losses were $23.1 million in 2022. Our ability to generate net income or positive cash flows for the following twelve months is dependent upon financings, our success in developing and monetizing our interests in mineral exploration entities, generating income from contracted services or collecting on amounts owed to us." "Our 2024 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects. We continually plan to generate new cash inflows through the monetization of our receivables and equity stakes in seabed mineral companies, financings, syndications or other partnership opportunities. If cash inflow ever becomes insufficient to meet our projected business plan requirements, we would be required to follow a contingency business plan based on curtailed expenses and fewer cash requirements. On December 1, 2023, we entered into the December 2023 Note Purchase Agreement with institutional investors pursuant to which we issued and sold to the investors the December 2023 Notes in the principal amount of up to $6.0 million and the December 2023 Warrants to purchase shares of our common stock. We issued December 2023 Notes in the aggregate amount of $3.75 million and related warrants on December 1, 2023, and December 2023 Notes in the aggregate amount of $2.25 million and related warrants on December 28, 2023. On May 3, 2024, we received a payment of approximately $9.4 million arising from a residual economic interest in a salvaged shipwreck. The balance of the proceeds from the December 2023 Notes and a portion of the proceeds received in May 2024, together with other anticipated cash inflows, are expected to provide operating funds through at least the third quarter of 2024. "Our consolidated non-restricted cash balance at December 31, 2023 was $4 million. We have a working capital deficit at December 31, 2023 of $26.6 million. The total consolidated book value of our assets was approximately $22.8 million at December 31, 2023, which includes cash of $4 million. The fair market value of these assets may differ from their net carrying book value. The factors raise substantial doubt about our ability to continue as a going concern." A full-text copy of the Company's Form 10-K is available at https://tinyurl.com/2s8ce9ue About Odyssey Marine Odyssey Marine Exploration, Inc. and subsidiaries is engaged in deep-ocean exploration. Our innovative techniques are currently applied to mineral exploration and other marine survey and contracted services. Its corporate headquarters are in Tampa, Florida. As of December 31, 2023, the Company has $22.8 million in total assets, $108.7 million in total liabilities, and $85.9 million in total stockholders' deficit. OLD SCHOOL: Unsecureds to Get Share of GUC Distribution Pool ------------------------------------------------------------ Old School Power, LLC filed with the U.S. Bankruptcy Court for the Eastern District of Texas a Plan of Reorganization dated May 6, 2024. Old School Power was formed in July 2021 to purchase and develop certain oil and gas assets located in Southwest Oklahoma. The Debtor purchased its oil and a gas assets with the understanding that a waterflood would be necessary to improve pressure in the formation, and expectation that its operator (and its members/managers) would execute and effectuate such waterflood. Over the next two years, the Debtor's members invested millions of dollars into the oil and gas assets under the auspices that Fulcrum was implementing the waterflood. In the fall of 2023, after investing millions of dollars, the Debtor became aware for the first time that Fulcrum had not in fact implemented the waterflood, and instead had merely been re injecting formation water. Due to the lower than expected production (due to no waterflood), the Debtor was not able to produce sufficient oil and gas to create enough revenue to pay operating expenses and the amounts owed on the CanAm Note. In mid 2023, the Debtor began attempting to negotiate with Ouelette to no avail. In November 2023, recognizing that neither he nor CanAm had recorded a lien in Jackson County where the assets are located, Ouelette filed a UCC-1 Financing Statement in Jackson County. In December 2023, Ouelette sued the Debtor in Denton County Texas state court on the CanAm Note. After additional attempts to negotiate and settle with Ouelette failed, the Debtor filed this case in order to address its balance sheet and invest new capital to perform the waterflood necessary to obtain the production it expected when it originally purchased the assets. Class 4 consists of all Allowed General Unsecured Claims against Old School Power. Except to the extent that a Holder of an Allowed General Unsecured Claim and the Debtor or Reorganized Debtor agree to less favorable treatment, each Holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of the GUC Distribution Pool, in full and final satisfaction of such claims, paid annually, with the first payment occurring on or before the date that is 60 days after the one year anniversary of the Effective Date (the "First GUC Distribution Date"), a second distribution occurring on the date that is one year after the First GUC Distribution Date, and a third distribution occurring on the date that is two years after the First GUC Distribution Date. The Class 4 Claims of the General Unsecured Creditors are Impaired. The allowed unsecured claims total $1,016,549.15. Class 5 consists of the Equity Interests in Old School Power. Holders of Equity Interests in Old School Power shall retain their interests in Old School Power. The Class 5 Claims of Equity Interests in Old School Power are Unimpaired, and they are not entitled to vote. Except as otherwise provided in this Plan, the Debtor shall continue to exist after the Effective Date as the Reorganized Debtor in accordance with the applicable laws of the state of Texas. On or after the Effective Date, without prejudice to the rights of any party to a contract or other agreement, the Reorganized Debtor may, in its sole discretion, take such action as permitted by applicable law and the Reorganized Debtor's organizational documents as the Reorganized Debtor may determine is reasonable and appropriate. Within 180 days of the Effective Date, the Reorganized Debtor shall commence a pilot waterflood of acreage generally described as the "Walls Leases." Within 60 days of the Effective Date, the members of the Reorganized Debtor shall execute the appropriate and necessary documents to effectuate the terms of the Exit Facility. A full-text copy of the Plan of Reorganization dated May 6, 2024 is available at https://urlcurt.com/u?l=3Yu9Gv from PacerMonitor.com at no charge. Counsel for the Debtor: Jason P. Kathman, Esq. SPENCER FANE LLP 5700 Granite Parkway, Suite 650 Plano, TX 75024 (972) 324-0300 – Telephone (972) 324-0301 – Facsimile Email: jkathman@spencerfane.com About Old School Power, LLC Old School Power, LLC is a Texas entity. The Debtor owns various oil wells, related equipment, and production from wells located in Jackson County, Oklahoma. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-40275) on February 5, 2024. In the petition signed by J. Michael Issa, manager, the Debtor disclosed up to $1 million in both assets and liabilities. Jason P. Kathman, Esq., at Spencer Fane, represents the Debtor as legal counsel. OMNIA PARTNERS: Moody's Alters Outlook on 'B2' CFR to Negative -------------------------------------------------------------- Moody's Ratings affirmed OMNIA Partners, Inc.'s (OMNIA) corporate family rating at B2 and probability of default rating at B2-PD. At the same time, Moody's also affirmed OMNIA Partners, LLC's upsized backed senior secured first lien bank credit facility at B2. The outlooks for both OMNIA and OMNIA Partners, LLC were changed to negative from stable. As part of an equity recapitalization transaction, the company plans to issue $320 million of fungible senior secured first lien bank credit facility and $240 million of a new second lien term loan (not rated). The proceeds from the debt issuance as well as a portion of balance sheet cash will be used to fund a $778 million dividend to OMNIA's private equity owners and other shareholders, and pay transaction-related fees. "The debt funded dividend further weakens OMNIA's financial leverage (pro forma debt to EBITDA on Moody's-adjusted basis) to about 7.5x (fiscal 2023) from about 5.5x following the recent leveraging Premier B&I acquisition, and is expected to remain elevated (around 6x) over the next 12-18 months with little buffer for any potential operational underperformance" said Mikhil Mahore, Moody's analyst. The negative outlook reflects sustained elevated leverage and limited buffer in OMNIA's B2 credit metrics. Moody's expect OMNIA will maintain solid revenue growth and healthy profit margins, such that financial leverage reduces to below 6x and interest coverage to above 2x by the end of 2025. Moody's may consider stabilizing the outlook if leverage approaches 6x and interest coverage approaches 2x in the next 12 to 18 months. RATINGS RATIONALE OMNIA's B2 CFR rating benefits from: (1) the ongoing transition of public and private sector groups to group purchasing organizations (GPOs) for savings; (2) healthy EBITDA margins, complemented by an asset-light business model supporting free cash flow generation; (3) long-term contracts and high customer retention rate of over 95%; and (4) very good liquidity. The company's rating is constrained by: (1) high leverage (expected at 6.6x in 2024) and weaker interest coverage (around 1.9x in 2024); (2) exposure to volume fluctuations given small scale; and (3) concentration in providing procurement efficiencies to the public sector as a GPO. OMNIA has very good liquidity. Stoces total about $500 million, consisting of company's expectation of around $75 million cash following the transaction, Moody's expectation of about $120 million in free cash flow in the four quarters through June 2025 and full availability under OMNIA Partners, LLC's upsized $300 million first lien revolving credit facility due 2028. Uses are limited to about $21 million in mandatory debt amortizations, before consideration of the excess cash flow sweep. The revolver has a springing maximum first lien net leverage covenant when drawings exceed 40% of the total commitment with which Moody's expect the company to remain in compliance over the next 12 months. The company has limited sources of alternate liquidity. OMNIA Partners, LLC's senior secured first lien revolving credit facility due in 2028 and senior secured first lien term loan due in 2030 are rated B2, same as OMNIA's CFR. The facilities are guaranteed by OMNIA and its operating subsidiaries and secured by substantially all of the company's domestic assets. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company sustains Debt/EBITDA below 4x, EBITDA/Interest above 3x, demonstrates a conservative financial policy track record, and maintains a strong liquidity profile. The ratings could be downgraded if the company faces deterioration in revenue, earnings or operating margins, debt/EBITDA remains above 6x, EBITDA/interest is below 1.5x or liquidity becomes weak. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Headquartered in Franklin, TN, OMNIA Partners, Inc. is a leading GPO serving state and local public agencies, educational institutions and corporate clients in the US through its subsidiaries (OMNIA Partners, Public Sector and OMNIA Partners, Private Sector). ONE MORE RECOVERY: Court OKs Cash Collateral Access on Final Basis ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, authorized One More Recovery, LLC to use cash collateral, on a final basis, in accordance with the budget, with a 10% variance. The Debtor's Secured Lenders are Fora Financial, Velocity Capital Group, and Channel Partners. Secured Lenders assert they are secured by a lien on and security interest in substantially all of the Debtor's Equipment, Accounts and Inventory. As adequate protection for the use of cash collateral, the Secured Lenders are granted replacement security liens on and replacement liens on all of the Debtor's Equipment, Inventory and Accounts, whether such property was acquired before or after the Petition Date. As additional adequate protection for the Secured Lenders, the Debtor will escrow and hold in trust for the benefit of the Secured Lenders 11% of its gross revenue pending the Final Hearing. The Replacement Liens will be equal to the aggregate diminution in value of the respective Collateral, if any, that occurs from and after the Petition Date. The Replacement Liens will be of the same validity and priority as the liens of Secured Lenders on their prepetition Collateral. The Replacements Liens will be subject and subordinate to: (a) professional fees and expenses of the attorneys, financial advisors and other professionals retained by any statutory committee if and when one is appointed; and (b) any and all fees payable to the United States Trustee pursuant to 28 U.S.C. section 1930(a)(6), the Subchapter V Trustee, and the Clerk of the Bankruptcy Court. Velocity will have an allowed secured claim in the amount of $135,021 secured by accounts and the proceeds thereof to the extent of the pre-petition agreements by and between the Debtor and Velocity and any applicable security interests granted therein and perfected by virtue of a subsequent pre-petition UCC-1 Financing Statement. The Debtor will remit payment to Velocity at the rate of $7,500 per month, commencing June 1, 2024, and continuing thereafter until the Allowed Velocity Claim is paid in full. A copy of the order is available at https://urlcurt.com/u?l=If3Mot from PacerMonitor.com. About One More Recovery LLC One More Recovery LLC is a towing service provider in Texas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-30808) on March 22, 2024. In the petition signed by Tana Patterson, owner, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Stacey G. Jernigan oversees the case. Robert T DeMarc, Esq., at DEMARCO MITCHELL, PLLC, represents the Debtor as legal counsel. OWENS-BROCKWAY GLASS: Moody's Rates New Sr. Unsecured Notes 'B2' ---------------------------------------------------------------- Moody's Ratings assigned a B2 rating to the proposed senior unsecured notes issued by Owens-Brockway Glass Container, Inc., a subsidiary of O-I Glass, Inc. ("O-I"). O-I's Ba3 corporate family rating, Ba3-PD probability of default rating, the Speculative Grade Liquidity rating (SGL) of SGL-1, and the instrument ratings of O-I's subsidiaries all remain unchanged. The outlook is stable. The note proceeds will be used to consummate the redemption of the existing senior unsecured notes at Owens-Brockway Glass Container, Inc. that will mature in 2025. Any remaining proceeds may be used for general corporate purposes. Moody's expects the proposed notes to be pari passu with Owens-Brockway Glass Container, Inc.'s existing unsecured notes. "Moody's view this as a leverage neutral, refinancing transaction although the proceeds will temporarily increase the group's total debt on a gross basis until the existing notes mature in 2025," said Motoki Yanase, VP - Senior Credit Officer at Moody's. RATINGS RATIONALE The B2 rating on the senior unsecured notes at Owens-Brockway Glass Container, Inc. reflects their structural subordination to the senior unsecured debt at OI European Group B.V. The notes do benefit from guarantees by Owens-Illinois Group, Inc. and certain domestic subsidiaries. However, the notes do not benefit from guarantees from foreign subsidiaries, including O-I European Group B.V., which generate the majority of the group's cash flow. Owens-Brockway Glass Container Inc.'s senior unsecured notes are contractually subordinated to the group's senior secured credit facilities, including the revolver and the term loans, which are not rated by Moody's. O-I's Ba3 CFR reflects the company's (i) leading market position as the largest glass packaging company in the world (measured by revenue and volume), (ii) broad manufacturing presence with 69 manufacturing facilities across 19 countries, (iii) high exposure to defensive end markets (beer, soft drinks, spirits, and food), and (iv) strategic relationships with blue chip customers. In addition, the rating is supported by O-I's revenue, EBITDA and operating free cash flow visibility with about 55% of sales being under long-term contracts, and which include provisions for raw material and energy costs pass-through. At the same time, Moody's rating takes into consideration the company's debt leverage, European exposure, product concentration risk, and low growth. The stable outlook reflects Moody's expectation that O-I will grow revenue organically, improve profitability and generate free cash flow that can be used to control total debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if adjusted debt-to-EBITDA is below 4.0x, EBITDA-to-interest coverage is above 5.5x, and free cash-to-debt is above 7.5%. The ratings could be downgraded if adjusted debt-to-EBITDA is above 4.75x, EBITDA-to-interest coverage is below 4.5x, and free cash-to-debt is below 5.0%. The principal methodology used in this rating was Packaging Manufacturers: Metal, Glass and Plastic Containers published in December 2021. Headquartered in Perrysburg, Ohio, O-I Glass, Inc. is a global glass packaging company. For the twelve months that ended in March 2024, O-I generated about $6.9 billion in revenues. PAIN MEDICINE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The Pain Medicine & Rehabilitation Center, Professional Corp. 357 Tanger Blvd. Ste. 201B Seymour IN 47274 Business Description: The Debtor offers treatment for neck pain, back pain, chronic pain, nerve pain & joint pain. Chapter 11 Petition Date: May 23, 2024 Court: United States Bankruptcy Court Southern District of Indiana Case No.: 24-90519 Judge: Hon. Andrea K Mccord Debtor's Counsel: KC Cohen, Esq. KC COHEN, LAWYER, PC 1915 Broad Ripple Ave. Indianapolis IN 46220 Tel: 317-715-1845 Fax: 636-8686 Email: kc@esoft-legal.com Total Assets: $184,672 Total Liabilities: $3,982,926 The petition was signed by Anthony Alexander as president. 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/TBV2PJY/The_Pain_Medicine__Rehabilitation__insbke-24-90519__0001.0.pdf?mcid=tGE4TAMA PARK ROCK: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Park Rock Group LLC 930 White Horse Pike Absecon, NJ 08201 Business Description: Park Rock Group LLC Chapter 11 Petition Date: May 23, 2024 Court: United States Bankruptcy Court District of New Jersey Case No.: 24-15246 Debtor's Counsel: Christopher S. Martone, Esq. MARTONE & ASSOCIATES, LLC 2500 Lemoine Avenue Fort Lee, NJ 07024 Tel: 201-944-5004 Email: MARTONELAW@GMAIL.COM Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Frank Muradov as managing member. The Debtor failed to attach 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/SACLUWI/Park_Rock_Group_LLC__njbke-24-15246__0001.0.pdf?mcid=tGE4TAMA PENNYMAC FINANCIAL: Moody's Rates New $650MM Unsecured Notes 'Ba3' ------------------------------------------------------------------ Moody's Ratings has assigned a Ba3 rating to PennyMac Financial Services, Inc.'s (PFSI) proposed $650 million backed long-term senior unsecured notes maturing 2030. The notes will be guaranteed on an unsecured basis by each of PFSI's existing and future domestic subsidiaries, including Private National Mortgage Acceptance Co, LLC (Private National) and PennyMac Loan Services, LLC, subject to certain exclusions. The company intends to use net proceeds from the offering to partially pay down its secured mortgage servicing rights (MSR) funding facilities. PFSI's outlook is stable. RATINGS RATIONALE Moody's views the proposed transaction as a modest credit positive because the financing will reduce the company's reliance on secured MSR financing, increasing its financial flexibility. Given the difficult operating environment for non-bank mortgage companies over the last two years, PFSI had increased its reliance on secured MSR financing, like many of its peers. PFSI's ratio of secured debt to total corporate debt rose to 60% as of September 30, 2023 from 42% as of year-end 2021, but subsequently fell back to 44% as of March 31, 2024 as the company completed a $750 million senior unsecured offering in December 2023. As of March 31, 2024, PFSI had $2.0 billion outstanding of secured MSR funding, which it intends to partially pay down with net proceeds of the unsecured note offering. As such, overall corporate leverage will remain at current levels but pro forma the transaction, the company's ratio of outstanding secured debt to total corporate debt ratio will fall to around 29%, a credit positive. As of March 31, 2024, PFSI's capitalization, as measured by tangible common equity (TCE) to adjusted tangible managed assets (TMA, excluding Ginnie Mae loans eligible for repurchase), was 23.2%. PFSI's Ba2 corporate family rating (CFR) reflects the company's track record of strong operational performance and franchise position supporting its solid profitability, strong capital levels and experienced management team. PFSI's Ba3 backed long-term senior unsecured debt rating is based on the company's Ba2 CFR and the application of Moody's Loss Given Default for Speculative-Grade Companies methodology and model. The one-notch differential between PFSI's Ba3 backed long-term senior unsecured debt rating and Ba2 CFR is reflective of the ranking of senior unsecured obligations in PFSI's capital structure. PFSI's stable outlook is reflective of Moody's expectation that the company will be able to maintain above peer profitability, minimize operational risk from past rapid growth, and maintain solid capital levels while continuing to strengthen its franchise positioning and maintain its liquidity profile over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if PFSI strengthens its solid financial performance, whereby Moody's expects that long-term through-the-cycle profitability as measured by net income to average assets will average at least 4.0%. In addition, the company would need to maintain strong capital levels as measured by TCE to adjusted TMA above 20.0%, continue to strengthen its franchise positioning, particularly in the direct-to-consumer and broker origination channels, and improve its funding structure by reducing its reliance on corporate secured debt. The ratings could be downgraded if PFSI's financial performance deteriorates; for example, if net income to managed assets is expected to remain below 3.0%, or if leverage increases such that PFSI's TCE to adjusted TMA falls below and is expected to remain below 17.5%. In addition, PFSI's backed senior unsecured bond rating and Private National's issuer rating could be downgraded if the portion of secured debt to total corporate debt increases and remains above 65%; under this scenario, Moody's would expect the loss on senior unsecured obligations in the event of default to be materially higher. The principal methodology used in this rating was Finance Companies Methodology published in November 2019. PLATINUM COACH: Plan Exclusivity Period Extended to September 3 --------------------------------------------------------------- Judge Elizabeth S. Stong of the U.S. Bankruptcy Court for the Eastern District of New York extended Platinum Coach Limousine Inc.'s exclusive period to file a chapter 11 plan of reorganization and disclosure statement to September 3, 2024. As shared by Troubled Company Reporter, the Debtor needs an additional time to negotiate the resolution of the claim filed by U.S, Small Business Administration, to draft the settlement agreement, thereafter to obtain Court approval of the mutually reached terms and to file a plan of reorganization, incorporating settlement terms reached by the parties and offering treatment to remaining Creditors of the estate. The Debtor and the U.S. Small Business Administration are currently negotiating the terms of the stipulation and order for use of cash collateral. Further, the Debtor filed a motion to reclassify the claim of the U.S. Small Business Administration. Thus, the Debtor needs an additional time to proceed with the reference motion. Platinum Coach Limousine Inc. is represented by: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 About Platinum Coach Limousine Platinum Coach Limousine Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-41666) on May 12, 2023, listing under $1 million in both assets and liabilities. Gregory Novak, president, signed the petition. Judge Elizabeth S. Stong oversees the case. The Debtor tapped the Law Offices of Alla Kachan, PC as legal counsel and Wisdom Professional Services Inc. as accountant. PLEASANT HEIGHTS: Unsecureds Will Get 100% of Claims in 60 Months ----------------------------------------------------------------- Pleasant Heights, Inc. filed with the U.S. Bankruptcy Court for the District of New Jersey a Small Business Plan of Reorganization dated May 6, 2024. The Debtor is a New Jersey Corporation that owns real property located at 498-500 Rt. 94 S, Fredon, NJ 07860 (Block 1602 - Lot 3 and Lot 3.03B ("Property"). One Lot, which is encumbered by a mortgage, consists of a single family residence in which Charlotte Collaso resides. The unencumbered lot is a tree farm which does not generate any income but provides tax relief to the Debtor. The Collaso family through the Debtor has owned the Property for close to 70 years taking title back on November 10, 1956. The bankruptcy was filed as an emergency because the Debtor was facing the loss of the Property by the Sussex County Sheriff on February 7, 2024, as part of the pending mortgage foreclosure by Bank of New York pending in the Superior Court of New Jersey, Sussex County, Chancery Division. As Debtor itself has nominal revenue, the Debtor's plan is being funded entirely from contributions from The Collaso family of which Charlotte Collaso is the President and managing agent of the Debtor. On the first day of the month immediately following the effective date of the plan Debtor shall commence making payments to Administrative Creditors, the Class #1 Creditor, Bank of New York Mellon Trust Company, N.A. and the Class #2 Creditor Fredon Township Tax Collector. After Debtor's Administrative Creditors are satisfied in full Debtor shall commence making payments to Priority Tax Claims and the general unsecured creditors with 100% distribution. Class 3 consists of General Unsecured Claims. This claim is comprised of a priority portion and a general unsecured portion. As there are no other general unsecured creditors the entire general unsecured claim shall be paid together with the priority claim. This Class shall be paid $220.04 per month for 60 months with 11.5% interest rate. Payments to commence after administrative claims have been satisfied in full. The allowed unsecured claims total $10,005.38. This Class will receive a distribution of 100% of their allowed claims. Class 4 consists of Equity Interest holders Charlotte Collaso (66 & 2/3%) and David Collaso (33 & 2/3%). All Equity Interest Holders shall retain their equity interest in the same % as listed in the description. The Debtor's Plan will be funded through monetary contributions from the Collaso family. On Confirmation of the Plan, all property of the Debtor, tangible, and intangible, including, without limitation, licenses, furniture, fixtures and equipment, will revert, free and clear of all Claims and Equitable Interests except as provided in the Plan, to the Debtor. The Debtor expects to have sufficient cash on hand to make the payments required on the Effective Date. A full-text copy of the Plan of Reorganization dated May 6, 2024 is available at https://urlcurt.com/u?l=BXdaR0 from PacerMonitor.com at no charge. Attorney for the Debtor: Scott D. Sherman, Esq. MINION & SHERMAN 33 Clinton Road, Suite 105 West Caldwell, NJ 07006 Phone: (973) 559-5791 About Pleasant Heights Pleasant Heights, Inc. is a New Jersey Corporation that owns real property located at 498-500 Rt. 94 S, Fredon, NJ 07860 (Block 1602 - Lot 3 and Lot 3.03B ("Property"). The Debtor filed voluntary Chapter 11 petition (Bankr. D.N.J. Case No. 24-11146) on Feb. 6, 2024, with $500,001 to $1 million in both assets and liabilities. Scott D. Sherman, Esq., at Minion & Sherman represents the Debtor as legal counsel. PRESBYTERIAN VILLAGE: Fitch Lowers IDR to 'BB-', Outlook Negative ----------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) for the Presbyterian Villages of Michigan Obligated Group (PVM OG) to 'BB-' from 'BB'. Fitch has also downgraded the following PVM OG bonds to 'BB-' from 'BB': - $17.8 million series 2020A revenue bonds issued by the Public Finance Authority (Wisconsin); - $28.2 million of series 2015 revenue bonds issued by the Michigan Finance Authority. The Rating Outlook is Negative. Entity/Debt Rating Prior ----------- ------ ----- Presbyterian Villages of Michigan Obligated Group (MI) LT IDR BB- Downgrade BB Presbyterian Villages of Michigan Obligated Group (MI) /General Revenues/1 LT LT BB- Downgrade BB The downgrade reflects persistent operating losses, which have ultimately resulted in a debt service coverage covenant violation for fiscal 2023 as well as a drain on liquidity. This decrease will likely result in a missed liquidity covenant of below 90 DCOH (test date of June 30, 2024). PVM's operating ratios weakened to 118% at FYE 2023 and, while improving, remain strained at 111.8 at March 31, 2024. DSCR for 2023 was .08x, well below the required 1.20x covenant and resulted in a covenant violation. Fitch does not expect PVM to meet its 90 DCOH covenant requirement on June 30, 2024 either. In response to the default and expected default, PVM has engaged Plante Moran to develop a new operating plan focused on expense controls and that may include the divestiture of non-performing business lines and significant staff reductions. This plan will be presented to the bondholders and to Huntington bank as part of PVM's efforts to secure a forbearance agreement in order to release its 2023 audit with an unqualified opinion. The plan is expected by the end of May, 2024. The Negative Outlook reflects the execution risk involved in PVM's strategies to contain costs, which have accelerated meaningfully in recent years due in part to agency use and other labor costs. While PVM's overall revenue and occupancy trajectory have exhibited signs of improvement in recent months, the Negative Outlook also reflects the risks related to achieving more sustainable operating results while simultaneously addressing the near-term need to secure forbearance on debt requirements as PVM proceeds. SECURITY The bonds are secured by a pledge of unrestricted receivables, a mortgage on certain properties and a debt service reserve fund. KEY RATING DRIVERS Revenue Defensibility - bbb Mixed Market Assessments The 'bbb' assessment is supported by a relatively steady and solid level of occupancy across the OG, more recently bolstered by continued fill at the East Harbor campus' new rental ILU expansion. The PVM OG includes two contrasting campuses: East Harbor and Westland. Westland primarily targets middle to low-income residents due to its socioeconomically challenged primary service area. Conversely, East Harbor is in a stronger market area with more favorable demographic characteristics, helping to anchor the 'bbb' assessment. While competitors are present in the broader area, competition is somewhat limited in the communities immediately surrounding Westland and East Harbor. Both East Harbor and Westland are similar in unit size, but East Harbor contributes significantly more in revenue and margin to the overall PVM enterprise. Combined overall occupancy for the OG, including the Harbor Inn expansion units was a relatively solid 89% on March 31, 2023. Occupancy for the 96 rental ILU expansion on the East Harbor campus has slowly climbed to 84% at the end of Q1 '24 from 64% in Q2 23 and remains behind projections. The protracted ILU expansion fill at the Harbor Inn campus has contributed to ongoing cost containment pressure. PVM OG mostly offers rental contracts, limiting exposure to local housing market volatility. Rate increases have occurred regularly, however increases in 2022 and 2023 were below inflation, possibly indicating softening pricing flexibility. Operating Risk - bb Pernicious Operating Pressure Fitch's 'bb' assessment of PVM OG's operating risk reflects its nominal historical operating performance within the context of its predominantly rental contract mix. From FY 2019 through 2021, cost containment was soft with an average operating ratio, net operating margin (NOM) and NOM-adjusted margin of 100.6%, negative 1.1% and negative 0.8% respectively. Increased labor costs have pressured these ratios further with an operating ratio and NOM- adjusted margin for 2023 of 118%, and negative 13. % respectively. While Fitch expects PVM to stem operational losses in the long-term as it implements its strategy, the timeline to realize stronger results is very likely to exceed the two-year Outlook period. This coupled with its assessment that PVM carries an additional asymmetric risk consideration reflecting the high relative level of Medicaid revenue, underscores the 'bb' operating risk assessment and is integral to its assessment of execution risk. PVM OG actively pursues grant revenue from governmental agencies and runs contribution campaigns to increase its operating revenue and fund large capital projects. Over the past five years other operating revenue has comprised between 14% and 32% of total revenue. Fitch views this revenue as accretive but volatile. PVM OG has a history of good capital investment, balanced against a somewhat elevated average age of plant of about 17 years. PVM OG reported it has no additional debt or major capex plans; rather it is considering restructuring its assets and business model to best preserve future viability. Recent years of elevated spending should support some easing of capital outlays as PVM executes on its strategic efforts, and its capital-related metrics from should remain consistent and sufficient to absorb routine capital needs in the context of its current operating plans. Financial Profile - bb Weak Financial Profile PVM financial profile exhibits some strain related to an erosion in balance sheet strength, though there are no additional debt plans to elevate concerns. The stress of filling the Harbor Inn expansion along with continued labor and inflationary pressures have eroded PVM's balance sheet liquidity to approximately $15 million in 2023, or 30% cash-to-adjusted debt at YE 2023. This is a noted drop from $23 million and 44% cash to adjusted debt in 2021. Fitch calculated MADS coverage, which includes PACE revenue and has been consistent with the weak assessment, averaging approximately 1.2x over the past five years. Management reported 99 DCOH for 2023 which marginally exceeds the 90 DCOH covenant required minimum. The next liquidity testing date is June 30, 2024. As PVM's DCOH is well below Fitch's 200 DCOH threshold to assess relative liquidity, Fitch incorporates an asymmetrically 'weaker' consideration in its 'bb assessment of PVM's financial profile. Management reported a DSCR of .08x for 2023. The shortfall was primarily driven by operating losses from low occupancy, agency usage and high corporate overhead. Approximately 35% of PVM's $67 million in debt is held by Huntington bank. The missed DSCR for 2023 is considered an Event of Default, for which PVM is currently seeking forbearance. Fitch expects this will successfully enable the "unqualified" release of the fiscal 2023 audited financial statements, expected in August 2024. Asymmetric Additional Risk Considerations PVM's operating risk profile incorporates a weaker asymmetric consideration, due to a payor mix that is heavily dependent on governmental reimbursement with Medicaid revenue generally exceeding 25% of net revenues over the past several years. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Failure to secure a forbearance agreement or waiver from creditors for covenant violations; - Cash-to-adjusted debt sustained below 30%; - MADS coverage below 1x; - Operating ratios above 105%; - Deterioration in combined ILU occupancy below 70%. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Waiver or forbearance agreement with expected cash-to-adjusted debt stabilizing above 45%; - Improved and sustained operating performance, with an operating ratio at or below 105%; - MADS coverage consistently above 1.2x; - Occupancy at the Harbor Inn expansion sustained above 86%. PROFILE PVM OG is an aging services network and is headquartered in Southfield, MI. It consists of PVM Corporate, the PVM Foundation, continuing care retirement communities in Westland and Chesterfield (East Harbor), Weinberg Green Houses and Presbyterian Village North (which owns 13 acres of undeveloped land and a general partner and limited partner interest in two Low Income Housing Tax Credit non-OG entities). The two PVM OG campuses total 385 independent rental units (including Harbor Inn), 116 assisted living units (ALU) and 102 skilled nursing (SNF) beds. With the issuance of the series 2020 bonds, PVM OG added the following entities: - Harry and Jeanette Weinberg Green Houses (WGH) at Rivertown located in Detroit. PVM is the sole member of WGH. WGH was completed in 2017 and consists of 21 studio apartments; - Harbor Inn, Chesterfield Township, Michigan. Presbyterian Village East is the sole member of Harbor Inn. The capital project that the bonds will primarily fund will support Harbor Inn which added 96 independent living apartments and ranch homes on the Village of East Harbor campus. PVM OG also has an ownership interest in approximately 2,021 ILUs and ALUs through nonobligated entities and an equity interest in two Program of All-Inclusive Care for the Elderly (PACE): PACE Southeast Michigan and PACE Central Michigan. PVM manages 486 ILUs and ALUs for which it does not have an ownership interest. All PVM owned and managed properties are in Michigan. PVM OG recorded $36 million in operating revenue in fiscal 2023 (Dec. 31 year-end). Sources of Information In addition to the sources of information identified in Fitch's applicable criteria specified below, this action was informed by information from Lumesis. 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. PROSOMNUS INC: Prepack Plan to Hand Company to Noteholders ---------------------------------------------------------- ProSomnus, Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that on May 7, 2024, the Company voluntarily entered into a Restructuring Support Agreement with certain of its existing affiliates and subsidiaries and certain sponsoring Senior Noteholders and Subordinated Noteholders. As set forth in the RSA, the Company and the Sponsoring Noteholders have agreed to the principal terms of a voluntary restructuring of the Company and the filing of a pre-negotiated chapter 11 plan of reorganization. Although the Company intends to pursue the Restructuring in accordance with the terms set forth in the RSA, there can be no assurance that the Company will be successful in completing the Restructuring, whether on the same or different terms than those provided in the RSA. The material terms of the Plan are set forth in the restructuring term sheet attached to the RSA, which terms include, among other things: * An aggregate of $20 million of potential capital to the Company, including through a debtor-in-possession facility and a potential new-money equity capital raise, while also retaining existing amounts due to customers, critical vendors, equipment lenders and trade creditors; more specifically: * The Sponsoring Noteholders have committed to provide the DIP Credit Agreement, which will consist of (i) $7 million in new money debtor-in-possession loans and (ii) the "roll-up" of (a) $4 million of obligations under the previously disclosed prepetition bridge notes and (b) $2 million of obligations under the Senior Secured Notes, in each case, on the terms set forth in the Definitive Documents. The DIP Credit Agreement is expected to provide the Company Parties with sufficient liquidity to complete the Restructuring. The new money portion of the DIP Credit Agreement will be available in two draws, with $2.5 million available upon interim approval of the DIP Credit Agreement by the United States Bankruptcy Court for the District of Delaware. * General Unsecured Claims will be paid in the ordinary course of business during and after the restructuring; and * On the Plan Effective Date, the Company expects to consummate a new-money equity capital raise in an amount of at least $9 million which will be offered for participation by the Sponsoring Noteholders and certain other third-party investors, subject to other terms as set forth in the RSA; and * On the effective date of the Plan, ProSomnus, Inc. will issue a single class of equity interests that will be distributed pro rata to the Subordinated Secured Noteholders, subject to dilution on account of the management incentive plan, the New Money Common Equity, and certain other fees, premiums, and/or other terms as set forth in the RSA; * Following the Plan Effective Date, Reorganized ProSomnus may establish a customary management equity incentive plan; * On the Plan Effective Date, there will be no recovery for holders of other equity interests in the Company; and * Confirmation of the Plan is anticipated, but not guaranteed, to occur within 90 days of filing the chapter 11 cases with the Court involving certain of the Company Parties. In accordance with the RSA, each Sponsoring Noteholder agreed, among other things, to: * So long as its vote was properly solicited in accordance with the United States Code, vote to accept the Plan; * Negotiate in good faith the Definitive Documents; and * Not take any action inconsistent with the RSA, Term Sheet, confirmation or consummation of the Plan. In accordance with the RSA, the Company Parties agreed, among other things, to: * Support and complete the Restructuring Transactions contemplated under the RSA, Term Sheet, and Plan Related Documents; * Negotiate in good faith the Definitive Documents; * Take all necessary and appropriate actions in furtherance of the Restructuring; * Complete the Restructuring and all Restructuring Transactions; and * Comply with each Case Milestone. Certain of the transactions shall be subject to approval by the Court pursuant to the Chapter 11 Cases. Subject to the approval of the Court, the Company, as borrower, and certain of the Company's direct and debtor-subsidiaries, as guarantors, expect to enter into that certain senior subordinate secured debtor-in-possession term loan agreement with the lenders from time to time party thereto and Wilmington Savings Fund Society, F.S.B., as administrative agent and collateral agent, on the terms and conditions set forth therein. Pursuant to the DIP Credit Agreement, the DIP Lenders have agreed, upon the terms and conditions set forth therein, including the approval of the Court, to make available to the Company a senior subordinate secured debtor-in-possession term loan credit facility in the aggregate principal amount of $13 million, as described above. Borrowings under the DIP Credit Agreement will be used to: (a) fund the Chapter 11 Cases, (b) make certain other payments as more fully provided in the Court orders relating to the approval of the DIP Credit Agreement, and (c) provide working capital for the DIP Loan Parties during the pendency of the Chapter 11 Cases, all in accordance with an approved budget (subject to the permitted variances) and as otherwise provided therein. The obligations under the DIP Credit Agreement will be secured by liens on substantially all of the real and personal property of the DIP Loan Parties, subject to certain exceptions. The DIP Liens will be senior to the liens securing the Subordinated Notes obligations and junior to the liens securing the Senior Notes obligations. Borrowings under the DIP Credit Agreement will be due on November 7, 2024, or the earliest to occur of certain specified termination events. The interest rate on borrowings under the DIP Credit Agreement will be the prime rate plus 9.00%. The DIP Credit Agreement includes customary negative covenants for debtor-in-possession loan agreements of this type, including covenants limiting the Company and its restricted subsidiaries' ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans, advances or guarantees, engage in mergers, consolidations, sales of assets and acquisitions and pay dividends and distributions, in each case subject to customary exceptions for debtor-in-possession loan agreements of this type. The DIP Credit Agreement also includes customary representations and warranties, affirmative covenants and events of default. Certain restructuring-related events are also events of default, including, but not limited to, the dismissal by the Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Code, the appointment of a trustee pursuant to chapter 11 of the Code, and certain other events related to the impairment of the DIP Lenders' rights or liens granted under the DIP Credit Agreement. In connection with the Chapter 11 Cases, the DIP Loan Parties filed a motion seeking Court approval of their entry into and performance under the DIP Credit Agreement and use of cash collateral, as well as certain related relief. The DIP Loan Parties expect that the Court will grant such motion on an interim basis on or about May 9, 2024. The DIP Loan Parties will seek the Court's approval of such motion on a final basis in the coming weeks. The Company previously issued convertible notes to investors, including the Sponsoring Noteholders and the DIP Lenders, under the Indentures. Certain Sponsoring Noteholders and DIP Lenders also participated in the Company's offering of its Series A Convertible Preferred Stock and accompanying warrants to purchase its common stock in September 2023. Furthermore, one of the Sponsoring Noteholders is an affiliate of Spring Mountain Capital, which is a private investment management firm where Jason Orchard, a member of the Company's board of directors, is a Managing Director. About ProSomnus Inc. ProSomnus, Inc., f/k/a LAAA Merger Corp., is an innovative medical technology company that develops, manufactures, and markets its proprietary line of precision intraoral medical devices for treating and managing patients with obstructive sleep apnea. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case 24-10972) on May 7, 2024, with $26,287,000 in assets as of Dec. 31, 2023 and $52,888,000 in liabilities as of Dec. 31, 2023. Brian B. Dow, chief financial officer, signed the petitions. Judge John T. Dorsey presides over the case. The Debtors tapped Shanti M. Katona, Esq., at POLSINELLI PC as legal counsel; and GAVIN/SOLMONESE LLC as financial advisor. The law firms of Kilpatrick Townsend & Stockton LLP and Morris James LLP represent the Ad Hoc Crossover Group of Convertible Noteholders. PROSOMNUS INC: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- The U.S. Trustee for Region 3 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of ProSomnus, Inc. About ProSomnus Inc. ProSomnus, Inc., formerly known as LAAA Merger Corp., is an innovative medical technology company that develops, manufactures, and markets its proprietary line of precision intraoral medical devices for treating and managing patients with obstructive sleep apnea. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case 24-10972) on May 7, 2024, with $26,287,000 in assets as of Dec. 31, 2023 and $52,888,000 in liabilities as of Dec. 31, 2023. Brian B. Dow, chief financial officer, signed the petitions. Judge John T. Dorsey presides over the case. The Debtors tapped Shanti M. Katona, Esq. at Polsinelli PC as legal counsel; and Gavin/Solmonese LLC as financial advisor. PROSPERITAS LEADERSHIP: Court OKs Cash Access on Final Basis ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, authorized Prosperitas Leadership Academy, Inc. to use cash collateral on a final basis in accordance with the budget. As previously reported by the Troubled Company Reporter, the Debtor was permitted to use cash collateral to pay: (a) the amounts expressly authorized by the Court, including payments to the United States Trustee for quarterly fees; (b) the current and necessary expenses set forth in the budget; and (c) the additional amounts as may be expressly approved in writing by the Creditor. As adequate protection, Black Business Investment Fund was granted a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as its pre-petition lien, without the need to file or execute any documents as may otherwise be required under applicable nonbankruptcy law. The Debtor was directed to maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the Creditor. A copy of the Court's order is available at https://urlcurt.com/u?l=wg7oqF from PacerMonitor.com. About Prosperitas Leadership Academy, Inc. Prosperitas Leadership Academy, Inc. is a public charter school for residents of Orange County, California. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02443) on June 21, 2023. In the petition signed by Michael Spence, Board president, the Debtor disclosed $2,009,763 in assets and $2,533,820 in liabilities. Judge Grace E. Robson oversees the case. Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC, represents the Debtor as legal counsel. REECE GREEN: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Reece Green and Sons Logging LLC 410 County Road 230 Clanton, AL 35045-6646 Chapter 11 Petition Date: May 21, 2024 Court: United States Bankruptcy Court Middle District of Alabama Case No.: 24-31116 Judge: Hon. Christopher L. Hawkins Debtor's Counsel: Anthony Brian Bush, Esq. THE BUSH LAW FIRM, LLC 3198 Parliament Cir Ste 302 Montgomery AL 36116 Tel: (334) 263-7733 Email: abush@bushlegalfirm.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Alfred M. Green as managing member. The Debtor failed to attach 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/AGFCGJQ/Reece_Green_and_Sons_Logging_LLC__almbke-24-31116__0001.0.pdf?mcid=tGE4TAMA RELIABLE HEALTHCARE: Seeks to Extend Plan Exclusivity to August 16 ------------------------------------------------------------------ Reliable Healthcare Logistics, LLC asked the U.S. Bankruptcy Court for the Western District of Tennessee to extend its exclusivity period to file a chapter 11 plan of reorganization and disclosure statement, and obtain acceptance thereof to August 16 and October 15, 2024, respectively. Reliable is a Tennessee limited liability company. Its primary business location is 4105 S. Mendenhall, Memphis, TN 38115. Reliable is a third-party logistics provider. Reliable's primary business is warehousing pharmaceuticals and medical healthcare goods and supplies for its customers, who are national vendors of such items, shipping such items to its customers' customers throughout the country. The Debtor has been engaged in discussions with its counsel and with other parties in interest with respect to a Plan of Reorganization. Subsequent to filing the petition, the Debtor has rejected leases in San Antonio, Texas, Boca Raton, Florida and Pompano Beach, Florida. Additionally, the Debtor has vacated a warehouse in Reno, Nevada for which its lease was terminated prior to the Petition date. The Debtor had anticipated filing a Subchapter V plan on April 18, but with the amendment of its petition to a traditional chapter 11 case, the Debtor needs additional time to draft a disclosure statement and to draft a plan as the requirements of confirmation of a regular Chapter 11 differ significantly from a Subchapter V plan. Additionally, the Debtor needs additional time to stabilize its business following the rejection of certain warehouse leases since the filing of the case, to analyze claims filed against the estate and determine whether certain claims should be objected to prior to confirmation, and to negotiate with creditors. The Debtor avers that it is more likely than not that the Debtor will be able to confirm a plan within the requested extension period. The proposed extension is reasonable under all the facts and circumstances of the case and is in the best interest of the estate and the creditors. The required extension will not prejudice creditors. Reliable Healthcare Logistics, LLC is represented by: Michael P. Coury, Esq. GLANKLER BROWN, PLLC Suite 400, 6000 Poplar Avenue Memphis, TN 38119 Tel: (901) 576-1886 Email: mcoury@glankler.com About Reliable Healthcare Logistics Reliable Healthcare Logistics, LLC is an independent 3PL recognized for developing cost effective, innovative supply chain solutions for complex logistics requirements in regulated industries. With over 650,000 total square feet, its 9 Reliable facility locations are dedicated to the secure and proper storage of pharmaceutical products, including prescription and over-the counter-medications, as well as providing services for medical device manufactures, cosmetics, human and animal health and wellness companies. The company is based in Memphis, Tenn. Reliable Healthcare Logistics filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Tenn. 24-20252) on January 19, 2024, with $1 million to $10 million in both assets and liabilities. Mike Kattawar, Sr., chief strategic officer, signed the petition. Judge Jennie D. Latta oversees the case. Michael P. Coury, Esq., at Glankler Brown, PLLC represents the Debtor as legal counsel. RXO INC: S&P Lowers Issuer Credit Rating to 'BB', Outlook Stable ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on RXO Inc. to 'BB' from 'BB+' and its issue-level rating on its unsecured notes to 'BB' from 'BB+'. S&P's '3' recovery rating on the notes is unchanged, indicating its expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a default. S&P said, "The stable outlook reflects our expectation that RXO will maintain credit metrics commensurate for the current rating. We also see limited risk that the freight markets will deteriorate materially from current levels. "We expect RXO's FFO to debt will remain below 30% until 2026 amid a prolonged freight downturn. Weaker demand and excess trucking capacity have kept freight rates at trough levels and we do not expect they will materially improve before the end of 2024. RXO's freight rates began softening in the third quarter of 2022 before dropping by about 25%-30% year over year (YoY) in 2023 and about 15% YoY in the first quarter of 2024. The low rates and softer conditions in the freight market have reduced the company's brokerage gross profit per load. While RXO expanded its brokerage volumes over this period, the increase has not been sufficient to offset the headwinds from the lower-rate environment, causing its FFO to decline by about 60% to $115 million in 2023. "Given that market conditions remain subdued, we expect the company will generate only about $130 million of FFO in 2024, with S&P Global Ratings-adjusted FFO to debt in the low-20% area. It's unclear when RXO's volumes and pricing will materially improve. However, we currently expect market conditions could begin to recover, albeit gradually, by late 2024, which would enable the company to improve its FFO to debt to the high-20% area by 2025. We also believe RXO will benefit from its strong technological capabilities and continuous pursuit of structural cost take-outs, which it has yet to fully benefit from due to the associated restructuring and integration costs it incurred to achieve them. "We believe increased spot loads, along with a rebound in freight trucking rates in 2025, will support an improvement in RXO's earnings and cash flow. Despite the expansion in its volumes, the company's profitability is currently constrained by it gross profit per load, which declined amid the soft freight market conditions and a sharp normalization in freight rates since early 2022. Given our expectation that the removal of capacity from the market will lead to a normalization in the supply-demand imbalance by late 2024/early 2025, we anticipate this will support an increase in freight rates and enable RXO to generate a higher gross profit per load on its expanded spot volumes." On the other hand, the tightening of supply will increase the cost of purchased transportation. While the company can pass through these increased input costs to its customers through its spot pricing, the profit per load for its contract volumes could tighten further until the next bid cycle when management is able to renegotiate to capture better pricing terms. S&P said, "Therefore, we believe the pace and shape of RXO's recovery will be critical to determine the effect on its earnings. We also anticipate that any prolonged delays in the freight market's recovery would negatively affect the company's credit metrics." S&P expects that RXO will improve its leverage toward its stated net leverage targets. The company's reported net leverage of 2.9x (S&P Global Ratings-adjusted leverage of 3.7x) as of Mar. 31, 2024, exceeded its stated net leverage target of 1.0x-2.0x. RXO's leverage has increased due primarily to the sharp deterioration in its EBITDA, and thus its FFO, amid a prolonged period of weak freight market conditions. In turn, the company's reduced FFO has led it to generate less cash flow, which has prevented it from reducing its net debt. Nonetheless, RXO has prioritized deleveraging over shareholder returns and recently repaid its $100 million term loan facility. Accordingly, the company has had a fairly minimal cash balance of less than $10 million over the past two quarters. However, RXO's recent $100 million upsizing of its $500 million revolving credit facility will provide it with ample liquidity to absorb the negative working capital swings that we typically see in the freight brokering industry when rates begin to rise. Nonetheless, we expect the company's draws on its revolving facility will be fairly limited and primarily used to offset the temporary cash flow shortfalls from negative working capital. S&P expects RXO will remain disciplined and focused on improving its metrics and not initiate any shareholder returns until it achieves its net leverage targets. S&P said, "The stable outlook reflects our expectation that RXO will maintain credit metrics commensurate for the current rating. We also see limited risk that the freight markets will deteriorate materially from current levels. We expect the company will gradually improve its metrics over the next 24 months as the freight market recovers, enabling it to expand its profitability and cash flow generation." S&P could lower its ratings on RXO over the next 12 months if its credit metrics weaken further, including FFO to debt declining and remaining below 20% on a sustained basis. This could occur if: -- Current freight market conditions persist for even longer than S&P currently anticipates; or -- The company pursues significant debt-funded acquisitions or shareholder returns. S&P could raise its ratings on RXO over the next 12 months if it increases its FFO to debt substantially above 30% on a sustained basis and S&P believes it can maintain this metric through future periods of industry weakness. This could occur if: -- Freight market conditions improve faster and more significantly than S&P currently expects, leading to increased earnings; or -- The company's proprietary technology supports a greater-than-expected expansion in its volumes and margin. SAM ASH: U.S. Trustee Appoints Creditors' Committee --------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Sam Ash Music Corporation and its affiliates. The committee members are: 1. Yahama Corporation of America Attn: Brandy Ostrom 6600 Orangethorpe Avenue Buena Park, CA 90620 Phone: 714-522-9454 2. Bosch Security Systems, Inc. Attn: Steve Grapenthien 1800 West Central Road Mt. Prospect, IL 60056 Phone: 224-232-3446 3. Hoshino USA, Inc. Attn: Jill Cohen 1726 Winchester Road Bensalem, PA 19020 Phone: 215-638-8670 ext. 140 4. SLJ Realty LLC Attn: George Albero 1385 Broadway, 16th Floor New York, NY 10018 Phone: 212-417-9246 5. Roland Corporation U.S. Attn: Joe Van Sauers P.O. Box 910921 Los Angeles, CA 90091-0921 Phone: 323-890-3720 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 Sam Ash Sam Ash and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Lead Case No. 24-14727) on May 8, 2024, with $100 million to $500 million in assets and $100 million to $500 million liabilities. Jordan Meyers as chief financial officer signed the petition. Hon. Stacey L. Meisel presides over the cases. The Debtors tapped Cole Schotz P.C. as legal counsel; SierraConstellation Partners LLC as financial advisor; and Capstone Capital Markets, LLC as investment banker. SENSATA TECHNOLOGIES: S&P Rates New $500MM Unsecured Notes 'BB+' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating and '4' recovery rating to Attleboro, Mass.-based supplier of sensor-based solutions Sensata Technologies Inc.'s proposed $500 million senior unsecured notes due 2032. The '4' recovery rating indicates S&P's expectation for average (30%-50%; rounded estimate: 45%) recovery in the event of a payment default. Sensata Technologies Inc. is a subsidiary of Sensata Technologies B.V., which will guarantee the notes. The company plans to use the proceeds from this issuance, along with cash on hand, to redeem its existing $700 million senior unsecured notes due 2025. As such, S&P views the transaction as net leverage neutral. Given that this refinancing transaction won't materially affect the company's credit metrics, its ratings and outlook are unchanged. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors S&P's simulated default scenario assumes a payment default occurring in 2029 stemming from a cyclical downturn in the U.S. accompanied by softness in the European market and a significant correction in Asia. This combination of events decreases auto production volumes and prices, causing the company's sales to drop and its annualized EBITDA to decline sharply. Simulated default assumptions -- Year of default: 2029 -- EBITDA at emergence: $397 million -- EBITDA multiple: 6x Simplified waterfall -- Gross enterprise value: $2,383 million -- Administrative expenses: $119 million -- Net enterprise value: $2,264 million -- Obligor/nonobligor valuation split: 71%/29% -- Total collateral value for secured debt: $2,034 million -- Total first-lien debt: $646 million --Recovery expectations: 90%-100% (rounded estimate: 95%) -- Total unsecured debt: $3,276 million --Recovery expectations: 30%-50% (rounded estimate: 45%) Note: All debt amounts include six months of accrued interest. STENSON LANDSCAPE: Unsecureds to Get $6,300 per Month over 5 Years ------------------------------------------------------------------ Stenson Landscape & Irrigation, Inc. filed with the U.S. Bankruptcy Court for the Eastern District of Texas a Plan of Reorganization dated May 6, 2024. The Debtor is a small landscape business that faced a decline in revenue coupled with a large EIDL Loan from the SBA taken out in order to stem COVID related losses. Those events prompted the filing of this bankruptcy case with the hopes being able to resolve its cash flow issues. The Plan provides for a reorganization and restructuring of the Debtor's financial obligations. The Plan provides for a distribution to Creditors in accordance with the terms of the Plan from the Debtor over the course of 5 years from the Debtor's continued business operations. Class 3 consists of non-priority unsecured Claims. Each holder of an Allowed Unsecured Claim in Class 3 shall be paid by Reorganized Debtor from an unsecured creditor pool, which pool shall be funded at the rate of $6,300 per month. Payments from the unsecured creditor pool shall be paid quarterly, for a period not to exceed 5 years (20 quarterly payments) and the first quarterly payment will be due on the 20th day of the first full calendar month following the last day of the first quarter. The Debtor estimates the aggregate of all Allowed Class 3 Claims is less than $378,000 based upon Debtor's review of the Court's claim register, Debtor's bankruptcy schedules, and anticipated Claim objections. This Class is impaired. Class 4 consists of the holders of Allowed Interests in the Debtor. The holder of an Allowed Class 4 Interest shall retain their interests in the Reorganized Debtor. The Debtor proposes to implement and consummate this Plan through the means contemplated by Sections 1123 and 1145(a) of the Bankruptcy Code. From and after the Effective Date, in accordance with the terms of this Plan and the Confirmation Order, the Reorganized Debtor shall perform all obligations under all executory contracts and unexpired leases assumed in accordance with Article 6 of this Plan. A full-text copy of the Plan of Reorganization dated May 6, 2024 is available at https://urlcurt.com/u?l=dxug4n from PacerMonitor.com at no charge. Attorneys for the Debtor: Robert T. DeMarco, Esq. Michael S. Mitchell, Esq. DeMarco Mitchell, PLLC 1255 W. 15th Street, 805 Plano, TX 75075 Telephone: (972) 578-1400 Facsimile: (972) 346-6791 Email: robert@demarcomitchell.com mike@demarcomitchell.com About Stenson Landscape & Irrigation Stenson Landscape & Irrigation, Inc. is a small landscape business. The Debtor filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 24-40243) on Feb. 1, 2024. In the petition signed by Tracy Terrell Doyle, president, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Brenda T. Rhoades oversees the case. DeMarco Mitchell, PLLC serves as the Debtor's counsel. STEWARD HEALTH: Seeks to Hire Ordinary Course Professionals ----------------------------------------------------------- Steward Health Care System LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to retain professionals utilized in the ordinary course of business. The Debtor needs ordinary course professionals to perform services for matters unrelated to this Chapter 11 case. The Debtor seeks to pay OCPs 100 percent of the fees and expenses incurred. The Debtor does not believe that any of the ordinary course professionals have an interest materially adverse to it, its estates, creditors, or other parties in interest in connection with the matter upon which they are to be engaged. The OCP's include: Cooley LLP 101 California Street, 5th Floor, San Francisco, CA 94111-5800 -- Legal Crowe LLP P.O. Box 71570, Chicago, IL 60694-1570 -- Accounting Draffin Tucker LLP P.O. Box 71309, Albany, GA 31708-1309 -- Financial Services Gjersett & Lorenz LLP 2801 Via Foftuna, Suite 500, Austin, TX 78746 -- Financial Services Husch Blackwell LLP P.O. Box 790379, St. Louis, MO 63179-0379 -- Legal Jackson Lewis P.C. P.O. Box 416019, Boston, MA 02241-6019 -- Legal Locke Lord LLP 2200 Ross Avenue, Suite 2800, Dallas, TX 75201 -- Legal Principals Property Tax Advisors LLC 11625 Custer Road, Suite 110-231, Frisco, TX 75035 -- Accounting Ryan LLC P.O. Box 848351, Dallas, TX 75284-8351 -- Accounting Sidley Austin LLP 1 South Dearborn Street, Chicago, IL 60603 -- Legal Todd & Weld LLP 1 Federal Street, Boston, MA 02110 -- Legal Winston & Strawn LLP 2121 North Pearl Street, Suite 900, Dallas, TX 75201 -- Legal AAFCPAs 50 Washington Street, Westborough, MA 01581 -- Accounting Adelanto Healthcare Ventures 401 W. 15th Street, Suite 840, Austin, TX 78701 -- Financial Services Bowditch & Dewey, LLP 311 Main Street, P.O. Box 15156, Worcester, MA 01615-0156 -- Legal Breazeale, Sachse & Wilson, L.L.P. P.O. Box 3197, Baton Rouge, LA 70821-3197 -- Legal Connor & Hilliard, P.C. 1350 Main Street, Walpole, MA 02081 -- Legal Davidoff Consulting Inc. 102 Louise Road, Chestnut Hill, MA 02467 -- Legal DeForest Koscelnik & Berardinelli 436 7th Avenue, 30th Floor Pittsburgh, PA 15219 -- Legal Embark Consulting LLC 333 1st Avenue, Dallas, TX 75226 -- Accounting Fox Rothschild LLP 2000 Market Street, 20th Floor, Philadelphia, PA 19103 -- Legal GLE Consulting Inc. 1350 S. Calle Marcus, Palm Springs, CA 92264 -- Accounting Gray Robinson P.O. Box 3068, Orlando, FL 30802-3068 -- Legal Hachey Urbanoski LLC 92 State Street, Floor 2, Boston, MA 02109-2004 -- Legal Holland & Hart LLP 800 W. Main Street, Suite 1750, Boise, ID 83702 -- Legal Johnson O’Connor 101 Edgewater Drive, Suite 210, Wakefield, MA 01880 -- Accounting José A. Herrera & Associates Advocates 51 Triq San Kristofru Valletta, Malta VLT 1462 -- Legal Kyler, Kohler, Ostermiller & Sorensen, LLP P.O. Box 599, Salt Lake City, UT 84110-0599 -- Lobbying Lash & Goldberg LLP Miami Tower 100 S.E. 2nd Street, Suite 1200, Miami, FL 33131 -- Legal Law Offices of Thomas Reed 326 Clark Road, Brookline, MA 02445 -- Legal Mamo TCV Advocates Palazzo Pietro Stiges 103, Strait Street Valetta VLT 1436 Malta -- Legal Miliman Inc. 1301 5th Avenue, Suite 3800, Seattle, WA 98101-2635 -- Actuarial Northwind Strategies LLC P.O. Box 364, Raynham, MA 02767 -- Lobbying Oliver Wyman Actuarial Consulting LLC P.O. Box 5160, New York, NY 10087 -- Actuarial Public Policy Partners LLC 322 W. Roosevelt Street, Phoenix, AZ 85003 -- Lobbying Ray Quinney & Nebeker P.C. P.O. Box 45385, Salt Lake City, UT 84145-0385 -- Legal Riemer & Braunstein LLP 100 Cambridge Street, Floor 22, Boston, MA 02114 -- Legal Sims Funk, PLC 3322 W. End Avenue, Suite 200, Nashville, TN 37203 -- Legal Stevenson Barrett LLP 21 Merchants Row, 5th Floor, Boston, MA 02109 -- Legal Tabico Consulting LLC 322 Boot Legger Road, Morganton, GA 30560 -- Financial Services The Factor Inc. 2929 S.W. 3rd Avenue, Suite 410 Miami, FL 33129 -- Lobbying The Suffolk Group, LLC 24 School Street, Boston, MA 02108 -- Lobbying Thompson Bowie and Hatch LLC P.O. Box 4630, Portland, ME 04112-4630 -- Legal Twohig Kaplan 25 Pender Street, Boston, MA 02132-3209 -- Legal Willis Towers Watson LLC 800 N. Glebe Road, Floor 10, Arlington, VA 22203 -- Actuarial About Steward Health Care Steward Health Care System LLC owns and operates the largest private physician-owned for-profit healthcare network in the U.S. Headquartered in Dallas, Texas, Steward's operations include 31 hospitals in eight states, approximately 400 facility locations, 4,500 primary and specialty care physicians, 3,600 staffed beds, and nearly 30,000 employees. Steward Health Care provides care to more than two million patients annually. Steward and 166 affiliated debtors filed a Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No. 24-90213) on May 6, 2024, in the U.S. Bankruptcy Court for the Southern District of Texas, and the Honorable Christopher M. Lopez oversees the proceeding. Weil, Gotshal & Manges LLP is serving as the Company's legal counsel. AlixPartners, LLP is providing financial advisory services to the Company, and John Castellano of AlixPartners is serving as the Company's Chief Restructuring Officer. Lazard Freres & Co. LLC, Leerink Partners LLC, and Cain Brothers, a division of KeyBanc Capital Markets Inc. are providing investment banking services to the Company. McDermott Will & Emery is special corporate and regulatory counsel for the company. Kroll is the claims agent. STEWARD HEALTH: Seeks to Hire Weil, Gotshal & Manges as Counsel --------------------------------------------------------------- Steward Health Care System LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Weil, Gotshal & Manges LLP as their counsel. The firm will provide these services: a. take all necessary actions to protect and preserve the Debtors' estate; b. prepare on behalf of the Debtors, as Debtors in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estate; c. take all necessary actions in connection with the Debtors' postpetition restructuring process, any Chapter 11 plan and related disclosure statement, and all related documents, and such further actions as may be required in connection with the administration of the Debtors' estate; d. take all necessary actions to protect and preserve the value of the Debtors' estate; and e. perform all other necessary legal services in connection with the prosecution of this Chapter 11 Case; provided, however, that to the extent Weil determines that such services fall outside the scope of services historically or generally performed by Weil as lead Debtors's counsel in a bankruptcy case or as set forth in the next bullet, Weil will file a supplemental declaration. The firm will be paid at these rates: Partners $1,595 to $2,350 per hour Associates $830 to $1,470 per hour Paraprofessionals $350 to $595 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. In accordance with Appendix B-Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the following is provided in response to the request for additional information: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Weil has represented the Debtors since January 2024. Paragraph 19 herein discloses the billing rates used by Weil from January 1, 2024 through the Petition Date, subject to annual adjustment. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Weil is developing a prospective budget and staffing plan for these Chapter 11 cases. Weil and the Debtorss will review such budget following the close of the budget period to determine a budget for the following period. Ray C. Schrock, Esq., a partner at Weil, Gotshal & Manges LLP, 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: Ray C. Schrock, Esq. WEIL GOTSHAL & MANGES, LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 Email: gabriel.morgan@weil.com About Steward Health Care Steward Health Care System LLC owns and operates the largest private physician-owned for-profit healthcare network in the U.S. Headquartered in Dallas, Texas, Steward's operations include 31 hospitals in eight states, approximately 400 facility locations, 4,500 primary and specialty care physicians, 3,600 staffed beds, and nearly 30,000 employees. Steward Health Care provides care to more than two million patients annually. Steward and 166 affiliated debtors filed a Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No. 24-90213) on May 6, 2024, in the U.S. Bankruptcy Court for the Southern District of Texas, and the Honorable Christopher M. Lopez oversees the proceeding. Weil, Gotshal & Manges LLP is serving as the Company's legal counsel. AlixPartners, LLP is providing financial advisory services to the Company, and John Castellano of AlixPartners is serving as the Company's Chief Restructuring Officer. Lazard Freres & Co. LLC, Leerink Partners LLC, and Cain Brothers, a division of KeyBanc Capital Markets Inc. are providing investment banking services to the Company. McDermott Will & Emery is special corporate and regulatory counsel for the company. Kroll is the claims agent. STORYFILE INC: Seeks $900,000 DIP Loan from Key 7 ------------------------------------------------- StoryFile, Inc. asks the U.S. Bankruptcy Court for the Southern District of New York for authority to use cash collateral and obtain postpetition financing. The Debtor seeks to obtain post-petition financing from Key 7 Investment Company, pursuant to and in connection with a superpriority loan in the aggregate amount of up to $900,000 of which (i) an initial draw amount of $300,000 will be made available to be drawn in a single drawing upon entry of the Order and satisfaction of the other applicable conditions set forth therein and in the DIP Loan Agreement and (ii) an additional amount of up to $600,000 will be funded as provided in the DIP Loan Agreement. The interest rate of the DIP Facility is Prime + 2%. The Debtor is responsible for payment of Lender's out of pocket expenses up to $25,000 incurred in the negotiation and preparation of the DIP Facility and use of cash collateral documentation. The DIP facility is due and payable on the earliest to occur of: (i) September 30, 2024; (ii) the closing date following entry of one or more final orders approving the sale of all or substantially all of the assets belonging to the Borrower in the Chapter 11 Case, (iii) the acceleration of any outstanding amount owed to Lender following the occurrence of an uncured Event of Default, (iv) entry of an order by the Court in the Chapter 11 Case either (a) dismissing such case or converting such Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code, or (b) appointing a Chapter 11 trustee or an examiner with enlarged powers relating to the operation of the business of the Borrower (i.e., powers beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code), in each case without the consent of Lender; or (iv) the confirmation of a Chapter 11 Plan of Reorganization by the Borrower. Not including trade debt, StoryFile's prepetition creditors include: (i) U.S. Small Business Association pursuant to a loan agreement dated July 11, 2020, in the amount of $126,000, of which $126,000 in principal remains outstanding as of the Petition Date. While SBA filed a UCC Financing Statement, UCC 1, with the Office of the California Secretary of State, SBA has not filed a UCC 1 financing statement with the Delaware Secretary of State and because the Debtor is a Delaware entity and has never been a California entity, SBA is unsecured. (ii) Lender, pursuant to a Convertible Promissory Note dated April 21, 2022 in the principal amount of $1.5 million. As of April 30, 2024, the outstanding principal and interest balance owed to Lender was no less than $2.1 million. The indebtedness owed to Lender is secured by all of the Debtor's assets pursuant to a Security Agreement effective December 28, 2022 and is perfected by the filing of an UCC Financing Statement, UCC 1, with the Delaware Department of State on April 13, 2023; and (iii) Blythe Global Advisors LLC, pursuant to an engagement agreement dated July 17, 2022 in the principal amount of $198,928, of which $138,929. While Blythe filed a UCC 1 financing statement with the California Secretary of State on December 7, 2023, Blythe has not filed a UCC 1 financing statement with the Delaware Secretary of State and because the Debtor is a Delaware entity and has never been a California entity, Blythe is unsecured. The value of the collateral is insufficient to secure the indebtedness owed to the Lender and it is estimated that the first lien of Lender is partially secured. Accordingly, only Key 7 Investment Company is entitled to adequate protection. The Debtor has not made payments on any of the Pre-Petition Loan Debt since on or about April 12, 2024. The Debtor anticipates providing adequate protection to Lender in the form of replacement liens, superpriority administrative expense clams, and monthly payments in the amount of $3,122. The protections given to the Lender are subject to a carve-out of (A) the costs and administrative expenses permitted to be incurred by any Chapter 7 Trustee under 11 U.S.C. Section 726(b) pursuant to an order of the Court following any conversion of the chapter 11 case in an amount not to exceed $25,000; (b) the fees and expenses projected in the Budget and incurred by the Debtor's professionals or professionals of an unsecured creditors committee (if any) prior to a Termination Event or Event of Default as defined in the Order and the DIP Loan Agreement plus up to $50,000 in the aggregate to pay any allowed fees and expenses incurred by the Debtor's professionals following a Termination Event; and (c) payment of fees pursuant to 28 U.S.C. section 1930. A copy of the motion is available at https://urlcurt.com/u?l=1DGssN from PacerMonitor.com. About StoryFile, Inc. StoryFile, Inc. is a developer of a conversational video interactive platform designed to give storytellers to have the opportunity to tell their narratives and experiences in their own words. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. N.Y. Case No. 24-22398) on May 5, 2024. In the petition signed by James Fong, interim CEO, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Sean H. Lane oversees the case. Gabriel Del Virginia, Esq., at the LAW OFFICE OF GABRIEL DEL VIRGINIA, represents the Debtor as legal counsel. STRATEGIC PORK: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Strategic Pork Solutions, LLC 126 S. Broadway Wells, MN 56097 Business Description: Strategic Pork owns three properties in Minnesota having a total current value of $887,000. Chapter 11 Petition Date: May 23, 2024 Court: United States Bankruptcy Court District of Minnesota Case No.: 24-31355 Judge: Hon. Katherine A. Constantine Debtor's Counsel: David C. McLaughlin, Esq. FLUEGEL ANDERSON MCLAUGHLIN & BRUTLAG 129 2nd Street NW Ortonville, MN 56278 Tel: 320-839-2549 E-mail: dmclaughlin@fluegellaw.com Total Assets: $1,092,000 Total Liabilities: $3,442,545 The petition was signed by Steve Hargis as president. 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/WAMRB4Q/Strategic_Pork_Solutions_LLC__mnbke-24-31355__0001.0.pdf?mcid=tGE4TAMA SUPPLY SOURCE: Files for Chapter 11 to Facilitate Sale ------------------------------------------------------ Hospeco Brands Group on May 22 disclosed that it has entered into an asset purchase agreement with Supply Source Enterprises, comprised of The Safety Zone and Impact Products operations. Hospeco Brands Group is a United States-based, full-line manufacturer of wiping solutions, personal care, odor control, cleanroom, safety, and specialty products to serve building management, industrial and manufacturing, food service, education, healthcare and life sciences, hospitality, and wellness markets. SSE is a leader in the sourcing and supply of cleaning and safety products. Tom Friedl, president of Hospeco Brands Group's parent company, Tranzonic, said, "We are excited to bring SSE into the Hospeco Brands Group family. This will be a win for our customers as well as the customers, vendors, and employees of SSE. Hospeco Brands Group has a proven track record growing through acquisition in our core markets, including cleaning and safety, so we are well-positioned to complete this transition smoothly and efficiently for all parties involved." Under the terms of the APA, Hospeco Brands Group, through its parent company, Tranzonic, will serve as the "stalking horse bidder" in a court-supervised sale process. To facilitate the sale process, SSE has filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code. SSE intends to conduct the sale process pursuant to section 363 of the Bankruptcy Code. Accordingly, the APA is subject to higher or better offers and bankruptcy court approval, among other conditions. Hospeco Brands Group leadership expects that, if Hospeco Brands Group is deemed to be the highest or best bidder for the assets, the transaction will be completed mid-summer. About Hospeco Brands Group Hospeco Brands Group brings more than a century of know-how and innovation to cleaning, protecting, and caring for public spaces -- workplaces, offices, schools, restaurants, stores, and more -- and caring for the people who work in and patronize these facilities. About Supply Source Enterprise Headquartered in Cleveland, Ohio, Supply Source Enterprises is a virtual manufacturer of branded and private label personal protective equipment and janitorial, safety, hygiene and sanitation products. H.I.G. Capital acquired the company in 2020 in a private equity deal. Supply Source Enterprises, Inc. and four affiliates, including SSE Buyer, Inc., filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-11054) on May 21, 2024, the Hon. Brendan Linehan Shannon presiding. Supply Source estimated assets of $50 million to $100 million and liabilities of $100 million to $500 million. The Debtors owe $60 million under an asset-backed loan to ACF Finco I LP and $80 million under a term loan facility to Ares Capital Corporation. The petitions were signed by Laura Marcero as vice president. McDermott Will & Emery LLP and Potter Anderson & Corroon LLP serve as co-counsel. Thomas Studebaker at Triple P RTS, LLC (a Portage Point affiliate) serves as Chief Restructuring Officer. Kurtzman Carson Consultants is the noting and claims agent. TZ SSE Buyer LLC is identified as the stalking horse bidder. SYNAPTICS INCORPORATED: Fitch Affirms 'BB' IDR, Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed Synaptics Incorporated's Long-Term Issuer Default Rating (IDR) at 'BB', as well as its first lien senior secured term loan at 'BBB-'/'RR1' and senior unsecured notes at 'BB'/'RR4'. The Rating Outlook is revised to Stable from Positive. The Outlook revision reflects the decline in Synaptics' revenue and EBITDA in fiscal 2024 YTD and corresponding increase in EBITDA leverage, which is forecast to be over 6x at fiscal YE 2024. The prior Positive Outlook had been driven by its expectations of leverage sustaining below 2.5x due to growth in end markets. Synaptics' ratings and Stable Outlook reflect its positive through the cycle FCF profile, volatility of results, expected EBITDA leverage improvement to below 3x during the forecast period, cash position and end-market growth opportunities in its core Internet of Things (IoT) segment. KEY RATING DRIVERS Significant Leverage Increase in 2024: Fitch forecasts Synaptics EBITDA leverage to be 6.4x at its June 2024 fiscal year end, followed by EBITDA-driven improvements through the forecast period to below 3.0x as demand normalizes. Synaptics' leverage has increased significantly in fiscal 2024 from 2.3x at fiscal YE23, which is partially attributable to customers continuing to work through excess inventory, weaknesses in the semiconductor market, enterprise capital spending trends emphasizing datacenters, as well as a stretched personal computer (PC) refresh cycle. Fitch expects the resulting 37% decline in revenues YoY through fiscal 3Q24 YTD to translate to a decline from EBITDA margins of 32% in fiscal 2023 to 16% at YE fiscal 2024. Large, less variable R&D and SG&A costs contribute to the volatility in EBITDA margin, which correspondingly would expand quickly as revenues return to what Fitch considers a more mid-cycle level. Conservative Leverage Target: Synaptics targets gross leverage of 1.5x, which agnostic of business profile factors, is strong for the 'BB' rating category. The company has maintained financial flexibility during this period of heightened leverage and has kept a cash balance of approximately $0.8 billion on its balance sheet. Fitch forecasts net EBITDA leverage of 0.4x at fiscal 2024 year-end. Synaptics could reduce leverage if needed through discretionary debt repayments, so a failure to decrease leverage over the longer-term would signal a lack of commitment to their 1.5x target. The company has not bought back any shares YTD through 3Q24, instead prioritizing financial flexibility. At or near a 1.5x EBITDA leverage level, Synaptics would be adequately positioned to absorb the effects of a potential debt-financed acquisition on its credit profile. This is consistent with its strategy to be in a financial position to add leverage to its balance sheet for opportune acquisitions. At its current leverage level, there is no room in Synaptics' credit profile to absorb a levering M&A transaction and maintain a 'BB' rating. Demand Volatility: Synaptics is exposed to cyclical consumer electronics device markets where component suppliers experience frequent volatility, given variability in consumer spending and tastes, short product lead times and annual product refreshes. The company is exposed to intermittent supply/demand imbalances. Volatility within Synaptics' credit profile dampens the benefits of its profitability, which even under a forecast trough of 16% at fiscal 2024 YE, is relatively high for the 'BB' rating category. Structural Market Growth Opportunities: Synaptics is positioned to take advantage of growth in end markets and product applications in its core IoT segment that represents 17% of YTD fiscal 3Q24 sales. A material increase in core IoT sales mix should reduce operating volatility, diversify the customer base and provide meaningful FCF contributions. Through the Cycle FCF Generation: Synaptics generated positive FCF every year since 2008, and Fitch forecasts positive FCF generation in 2024 and cumulative FCF approaching $0.8 billion through fiscal 2027. FCF generation benefits from a low capital expense business structure that outsources all manufacturing and generally ships directly from the manufacturer, along with shareholder distributions that are flexible in the form of buybacks. Synaptics' consistent FCF strengthens its balance sheet and, at a more typical leverage level, improves its capacity to supplement organic growth with opportune M&A. Additionally, it provides improved visibility on the company's capacity to reduce leverage with discretionary debt repayments. Product Leadership: Synaptics' product portfolio is broad and includes a history of product leadership in multiple markets. It holds leading positions within many key areas, including PC fingerprint sensors and touchpads, video interfaces in laptop docking stations and video adaptors. Synaptics maintains strong positions in mobile touch and display drivers, components for voice assistants, and automotive infotainment displays. Opportunities for product leadership through outsized pricing power are limited by the sector's competitive attributes. Long-term competitive advantages are limited due to low switching costs, including the risk of original equipment manufacturer (OEM) customers pursuing in-house design and component production, technology risks from continually evolving device interface technologies and intense competition for design slots. Customer Concentration: Synaptics' growth in less concentrated end markets and emerging product areas augments its customer diversification. In fiscal 2023, 37% of its revenue was attributable to five OEM customers. Customer concentration is likely to continue due to the scale of the company's OEM customers in PC, mobile and automotive markets, but Fitch expects its effects to decrease as the core IoT segment grows as a percentage of sales mix. DERIVATION SUMMARY Synaptics' profitability, measured by its EBITDA margin, remains a strength of its credit profile, although Fitch forecasts that it will decline to 15.9% at fiscal YE 2024. Synaptic is typically more comparable with Entegris, Inc. (BB/Stable, EBITDA margin forecast 28.5% at YE 2024). However, it still comes in above TTM Technologies, Inc. (BB/Stable, EBITDA margin 13.1% at fiscal YE 2023) for the same period. Each of these 'BB' rated peers has some level of cyclicality, with Synaptics having the most pronounced. It leads the other companies in FCF generation, as demonstrated by an FCF margin of approximately 13% forecast for its fiscal 2024 compared with 1.2% and 3.2% for TTM and Entegris at their most recent respective yearends. Higher-rated semiconductor market-related peers Microchip Technology Inc. (Microchip, BBB/Positive) and NXP Semiconductors N.V. (BBB+/Stable) have materially larger scale than Synaptics. They generated FCF in their most recent fiscal years of $2.4 billion and $1.8 billion respectively, compared to approximately $100 million forecast for Synaptics in fiscal 2024. Microchip and NXP have high profitability levels with EBITDA margins of 50.8% and 40.9%, respectively, for their most recent year ends, which is higher than Synaptics'. Like Synaptics, Microchip's financial policy exhibited opportunistic elements historically with a willingness to exceed leverage targets in pursuit of M&A. Microchip maintains a net leverage target of 1.5x, which is above Synaptics' 1.5x gross leverage target, but it is supported by a stronger market position and greater scale. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer Include - Fiscal 2024 revenues remain pressured by weakness in enterprise and consumer spending declining approximately 29% YoY. Customer inventories and market spending begins to improve in 2025 and through the remainder of the forecast. Revenue growth is driven by organic growth making up lost gains in the enterprise and automotive segments before settling in mid-single digit growth, and accelerating sales in the IoT segment, resulting in IoT contributing near 30% of sales mix by fiscal 2027. - EBITDA margins in 2024 informed by YTD performance of approximately 16%. Margins begin to normalize in fiscal 2025 returning to excess of 30% in later years of the forecast with customer inventory normalized, declining contributions from the lower gross margin mobile segment and a stable operating expense base. - Capex increases to over 3.5% of revenue in 2024 due YoY revenue decline forecast. It normalizes at between 2.5%-3.0% of revenue, in line with historic performance and the practice of outsourcing manufacturing during the remainder of forecast period; - No share repurchases in 2024. Repurchases of $100 million-$200 million annually during the remainder of forecast period with the existing share repurchase program extended past 2025. No common or special dividends paid; - Partially debt-funded acquisitions within the core IoT segment closing in fiscal 2027 with total consideration of $500 million, completed at 3.5x enterprise value/revenue; - Base interest rates applicable to the company's outstanding variable rate debt obligations reflects the current SOFR forward curve declining from 5.3% to 4.0% in fiscal 2027. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage sustained below 2.5x; - FCF margins sustained above 20%; - Core IoT sales mix trending to over 30% leading to greater customer diversity. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Inability to meaningfully reduce leverage either through EBITDA growth or debt repayment towards 3.0x in fiscal 2025; - Longer term EBITDA leverage sustained above 3.0x; - Revenue declines YoY in fiscal 2025; - FCF margins sustained below 10%. LIQUIDITY AND DEBT STRUCTURE Preserving Strong Liquidity: Synaptics historically has held, relative to its operational needs, a large cash balance, which at its fiscal 3Q24 was $828 million. This level of cash provides Synaptics flexibility to support actions such as potential M&A financing or discretionary deleveraging. Liquidity is further supported by Synaptics' $250 million revolving credit facility, which was undrawn at March 2024. Forecast FCF between $100 million to $300 million annually through the rating horizon, which benefits from a low capital intensity business structure, reduces refinancing risk for Synaptics' undrawn credit facility maturing 2026, as well as $600 million term loan and $400 million unsecured notes maturing in 2028 and 2029 respectively. ISSUER PROFILE Synaptics develops semiconductor solutions that enable people to interact with electronic devices. Products offerings include connectivity, audio, high-definition video, touch controllers, display drivers, fingerprint sensors and touchpads solutions. 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 ----------- ------ -------- ----- Synaptics Incorporated LT IDR BB Affirmed BB senior unsecured LT BB Affirmed RR4 BB senior secured LT BBB- Affirmed RR1 BBB- SYRACUSE INDUSTRIAL: Fitch Ups Rating on 2016A/B PILOT Bonds to CC ------------------------------------------------------------------ Fitch Ratings has upgraded the following Syracuse Industrial Development Agency, New York (SIDA) bonds to 'CC' from 'C': - Approximately $198.8 million payments in lieu of taxes (PILOT) revenue refunding bonds, series 2016A (Carousel Center Project); - Approximately $10.6 million PILOT revenue refunding bonds, taxable series 2016B (Carousel Center Project); - Approximately $54 million PILOT revenue bonds, taxable series 2007B (Carousel Center Project). Entity/Debt Rating Prior ----------- ------ ----- Syracuse Industrial Development Agency (NY) [Carousel Center PILOT] Syracuse Industrial Development Agency (NY) /Property Assessment - PILOT/1 LT LT CC Upgrade C The upgrade reflects Fitch's assessment that an eventual default is probable, though not immediately forthcoming. The rating is based on Fitch's view that that the PILOT bonds will continue to be paid from net operating income (NOI) of the Carousel Center mall in Syracuse, NY, which Fitch estimates provided 1.1x coverage of maximum annual debt service on the PILOT revenue bonds for the year ended fiscal, 2023. Fitch anticipates that the NOI will continue to experience pressures due to the overall decline in the performance of non-trophy malls, which is attributed to slower revenue growth and rising expenses. This situation is exacerbated by declining consumer demand in the retail sector, inflationary costs, and a shift in spending from goods to services, which is anticipated to further impact weaker malls. Retailers are expected to adjust their space requirements, with some closing stores and others expanding, resulting in minimal net change in total occupancy. The 'CC' rating also considers the significant 81% drop in the Carousel Center's appraisal values since 2014, which reflects reduced mall activity. The value of the mall experienced a 17% decrease in July 2023 (to $133 million) compared to May 2022, which remains well below the subordinate mortgage loans securitized as commercial mortgage pass-through certificates (CMBS). The rating also considers the credit risks tied to the subordinate CMBS loans, which are now subject to a CMBS modification agreement with Wells Fargo (A+/Stable). The agreement stipulates that the mall must achieve increasing annual NOI targets through 2027. Failure to meet these targets could result in the CMBS loan not being extended past its current expiration date of June 6, 2024, which could ultimately result in the property entering receivership. Fitch believes the PILOT bond debt service will continue to be paid from property taxes in the near term even if the loan is not extended beyond June 6. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A decline in NOI and inability to cover debt service on the PILOT revenue bonds. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - The ongoing recovery of the mall, which may be reflected in an improving NOI and increased debt service coverage on the bonds; - A solid indication of the mall's value increasing relative to all of the debt outstanding. DEDICATED TAX SECURITY The bonds are secured by PILOTs on the original or 'legacy' Carousel Center mall payable to SIDA by the Carousel Center Company LP (the Carousel Owner) pursuant to a PILOT agreement as well as by interest earnings on debt service reserves. The debt service reserve funds total 125% of average annual debt service. DEDICATED TAX KEY RATING DRIVERS Mall operations have weakened, which is evidenced by a compound average growth rate of -8.2% in net operating income since 2014. NOI increased by 1.9% in 2023 compared to 2022, but the results are well below pre-pandemic NOI in 2019 by -46%. NOI in 2023 covers the maximum annual PILOT debt service by 1.1 times or 1.7x annual debt service. Fitch believes that MADs coverage could fall below 1.1x coverage in the near term given the flat to declining NOI trend. SIDA has no material exposure to mall's operating risks. As such, Fitch has not assigned an Issuer Default Rating (IDR), and there is no related cap on the PILOT bond rating. PROFILE Destiny USA is a roughly 2 million square foot regional shopping center in Syracuse, NY. The mall opened in 1990 as the Carousel Center. It is owned by a subsidiary of Pyramid Company of Onondaga, which is part of the Pyramid Companies established in 1969. Pyramid has a senior obligation to pay PILOTs equal to debt service on the PILOT revenue bonds. Mall tenants are obligated to pay their share of PILOTs to Pyramid, an obligation that is absolute and unconditional. Pyramid's PILOT payment is secured by PILOT mortgages granted by both Pyramid and the SIDA on the original mall (the PILOT mortgages do not extend to the mall expansion project completed in 2012). The lien provided by the PILOT mortgages is similar to those by taxing authorities, offering foreclosure as a remedy. The senior obligation of the PILOTs, on par with property taxes, ensures that support funding and any proceeds from foreclosure will be allocated first to the PILOTs before the excess is utilized for underlying mortgage claims. The Carousel Center carries a $300 million mortgage loan and a $130 million mortgage on the expansion project, securitized as CMBS. The special servicer of the CMBS is Wells Fargo & Co (IDR A+/Stable). The presence of a CMBS servicer remains an important rating consideration, given its role in advancing the PILOT payments in the event of a NOI deficiency, and the PILOT's strong lien position in the mall's debt structure. Pyramid entered into a standstill agreement, which included a moratorium on monthly debt service payments and an extension of the loan until June 6, 2022. Before the expiry, the borrower secured two one-year loan extensions through June 6, 2024 with options for further extensions through June 6, 2027. Pyramid is in the process of confirming an extension for the loan through June 6, 2025. Each loan extension is subject to achieving certain financial hurdles including the required NOI thresholds, which are expected to increase each year through 2027. The servicer for the CMBS loans for the mall reported that the appraisal value as of July 2023 of the Carousel Center was $133 million, about 31% of the outstanding CMBS loans (Carousel and Expansion projects). TALEN ENERGY: S&P Affirms 'B+' ICR on Repricing Transaction ----------------------------------------------------------- S&P Global Ratings affirmed its ratings on Talen Energy Supply LLC (Talen), including its 'B+' long-term issuer credit rating (ICR); and its 'BB' issue-level rating on the company's senior secured term loan B (TLB), senior secured notes, senior secured term loan C (TLC), and senior secured revolving credit facility (RCF). The '1' recovery rating on the senior secured debt, which indicates its expectation of very high recovery in the event of a default, is unchanged. The positive outlook reflects the potential for an upgrade after the completion of pending development milestones associated with Talen's data center sale. An upgrade will also require confidence that Talen can sustain debt to EBITDA below 4.0x and free operating cash flow to debt (FOCF to debt) of more than 10% through S&P's forecast period. The repricing transaction reflects the bullish sentiment in the power sector, which is experiencing a strong resurgence. On May 8, 2024, Talen completed the repricing of its TLB and TLC, reducing the spread on the facilities by 100 basis points to 3.5% annually. The repricing transaction also modified the interest rate floor on the facilities to 0% from 0.5%. In addition to the pricing changes, Talen obtained amendments to the term loan facilities (increasing capacity for dispositions, restricted payments, and investments), including a one-time waiver that alleviated the requirement to prepay the term loans from the asset sale proceeds of its ERCOT fleet (1.7 gigawatts [GW]). S&P said, "Although we consider the repricing of the loans a credit positive, the lack of debt paydown from the ERCOT asset sale transaction proceeds is contrary to our expectations. When Talen announced the sale, and given the terms and conditions of the term loan facilities (the requirement to prepay term loans under an asset sale event), we anticipated the company would reduce some debt to compensate for the loss of earnings from the ERCOT fleet, as well as the increased risk from its near-full concentration in the Pennsylvania-New Jersey-Maryland (PJM) Interconnection. After the ERCOT asset sale transaction, 97% of Talen's capacity is in the PJM, compared with 86% before the sale. In addition, Susquehanna, Talen's most significant asset, now represents an even bigger share (two-thirds or more) of the company's overall EBITDA during our outlook period. "However, we believe the long-term value creation at Susquehanna through the power purchase agreement (PPA) with Amazon Energy and the sale of carbon-free attributes are credit-accretive developments that provide a strong offset against concentration risks, and improve the company's cash flow profile, on balance. The contracted cash flows provide valuable upside to Susquehanna over and above the nuclear production tax credit (PTC), meaningfully expanding its earnings and financial capacity, at least over the next 10 years. The PPA also highlights the relevance and significance of baseload and clean power, attributes that are very difficult to find in combination and at economic terms. The unregulated power sector is seeing a strong rebound on the back of growing load expectations spurred by electrification, the rise of artificial intelligence, onshoring, shrinking base-load supply, and increasingly volatile grids due to the expanding representation of intermittent generation in the overall supply mix. Reflecting the bullish sentiment across the sector, which for a long time has been muted by price backwardation and weak market signals, investor appetite has been strong and credit spreads for power-related risk have compressed. Share prices of various independent power producers (IPP) are also trading at record levels, rising rapidly over the past year. What is different this time is that the strength is demand driven, rather than a result of a commodity cycle, which generally dissipates within a shorter time frame. S&P views this momentum as highly favorable for the IPPs, including Talen, whose shares are also trading on the OTC (and have risen sharply since emergence), and is aspiring to list on a national exchange this year. The recently announced U.S. EPA rules are creating long-term uncertainty for thermal generators. On April 25, 2024, the U.S. Environmental Protection Agency (EPA) announced final carbon pollution standards for existing coal-fired and new gas-fired plants. The action is intended to curb greenhouse gas emissions by aiming to achieve a 90% carbon pollution control rate from these types of facilities. The EPA's emission guidelines would require the use of carbon capture and sequestration technologies, which can be applied directly to the power plants. Affected power plants are required to demonstrate compliance between 2030-2032. The EPA rules, if implemented, could be detrimental to the long-term viability of coal and natural gas-fired generation. None of Talen's thermal assets have carbon-abatement capabilities, which have very high deployment costs and are not fully proven at scale at this stage. That said, Talen has converted its Montour facility (1.5 GW) from coal to natural gas, which will be the primary fuel for the plant. Similarly, Brunner Island (1.4 GW) also can run on natural gas, as an alternative to coal. These conversions should help drive down the emission intensity of the plants and provide a mitigant against the tighter rules. Talen's Colstrip facility (222 megawatts on a net ownership basis) is at a much higher risk from stricter emission standards and environmental regulations, given the asset's high dispatch nature. The plant operates in the Western Electricity Coordinating Council (WECC) and has been a key source of non-nuclear energy cash flows for the company (about 8%-10% of total cash flow). In addition to the announced EPA rules, Colstrip is also subject to the recently revised, and more stringent, Mercury and Air Toxic Standards (MATS), under which the plant (along with 33 other identified coal-fired facilities across the country) will have to upgrade its filterable particulate matter (fPM) control technology in order to meet the new standard by July 2027. Given Colstrip's economic profile and profitable operations, S&P expects Talen will likely invest in the required technology to continue long-term operations at the plant. The rules announced by the EPA are already facing legal hurdles. Multiple U.S. states, trade groups, and industry constituents have sued the EPA, and given the opposition and legal obstacles, S&P also see a reasonable likelihood the rules will be deferred or watered down from their existing form. The upsizing of the share buyback program is credit neutral. On its first-quarter 2024 earnings call, Talen said that it would upsize its share buyback program capacity to $1 billion from $300 million. The program runs through 2025, and to date, Talen has repurchased about $38 million of shares. S&P said, "We consider the credit impact of the share buybacks as neutral. Talen reported an unrestricted cash position of $1.3 billion as of May 6, 2024. The amount includes the $723 million in estimated net proceeds the company received from the ERCOT asset sale transaction. In addition, the company expects to receive $300 million from the data center sale later this year, which will further build its available cash. With no identifiable growth projects or investments, and the business being free-cash positive, we do not view the buyback as negative given available liquidity and the company's base business remaining largely intact. We also believe Talen has other asset-monetization opportunities, such as the sale of its coin mining operations. Under such a scenario, we think the company would likely expand the scope of its capital return plans and pass along the excess cash to its shareholders. "The positive outlook reflects our expectation that Talen's earnings and leverage profile will improve given the incremental revenue streams from the PPA with Amazon Energy, as well as the long-term and contracted sale of carbon-free attributes. Although the lack of debt reduction from ERCOT asset sale transaction proceeds dilutes the effect of these positive developments, we believe that, on balance, Talen's cash flow profile has improved. Based on our forward-looking view of the energy and capacity markets at this stage, we forecast Talen's adjusted debt-to-EBITDA ratio at around 4.0x-4.3x (or better) for 2024 and 2025, improving to about 3.6x-3.8x in 2026. "We would revise the outlook to stable if we believed that Talen would not be able to sustain adjusted debt to EBITDA of less than 4.0x, or FOCF to debt of more than 10%, over the long term. Factors that could lead to such an outcome include a material decrease in power prices and energy spreads or depressed capacity prices, both of which could negatively affect the company's non-nuclear fleet. In addition, unforeseen operating failures at Talen's assets would also result in revenue and cash flow loss. Given Susquehanna's significant contribution to Talen's earnings, any extended forced outages or technical problems could meaningfully weaken EBITDA and cash generation. "We will revisit the outlook and could raise the rating after the completion of the pending development milestones associated with the data center sale. An upgrade would also require confidence that Talen's adjusted debt to EBITDA will remain below 4.0x, and FOCF to debt above 10%, through our outlook period." THERAPY BRANDS: Moody's Lowers CFR to Caa1 & First Lien Loans to B3 ------------------------------------------------------------------- Moody's Ratings downgraded Therapy Brands Holdings LLC's Corporate Family Rating to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. Concurrently, Moody's downgraded the company's senior secured first lien bank credit facilities ratings, which consists of a $40 million revolver due 2026, a $235 million term loan due 2028, and a $60 million delayed draw term loan due 2028 to B3 from B2. Moody's also downgraded the company's senior secured second lien bank credit facilities ratings, which consists of a $95 million second lien term loan due 2029 and a $40 million second lien delayed draw term loan due 2029 to Caa3 from Caa2. Moody's has maintained the stable outlook. The rating action reflects Moody's expectation for diminishing margins and negative free cash flow over the next 12 -18 months, which will result in a deteriorating liquidity position. The company will pursue a comprehensive integration of its products and software platforms, which can generate substantial long-term savings but also increases near term operational risks. RATINGS RATIONALE Therapy Brand's Caa1 CFR reflects the company's very high financial leverage, small size and negative free cash flow generation. As of the last twelve months ended December 31, 2023, the company's debt-to-EBITDA was approximately 10x (Moody's adjusted). Leverage increased following the full draw of the company's first and second lien delayed draw term loan ("DDTL"), $60 and $40 million respectively, in November of 2022. Proceeds were used towards an acquisition and cash to the balance sheet. Moody's expects the company's EBITDA margins to contract during the next 12 months as it increases its investment in executing its go to market and consolidation strategies during 2024 and into 2025, causing debt-to-EBITDA to remain very high and free cash flows to remain negative during the next 12 to 18 months. Moody's views the company's efforts to generate better operating efficiencies and cross selling opportunities by integrating its product set and migrating to one platform as a strategic positive, however the means to do so will keep debt-to-EBITDA leverage higher for longer, and diminish liquidity by further pressuring free cash flow generation in a high interest rate environment. Additionally, customer software platform and product migrations can present risks of increased churn. The rating also reflects governance risks stemming from its concentrated ownership structure and control by the private equity owner, which has resulted in aggressive financial policies with a tolerance for high debt-to-EBITDA leverage and a history of debt-funded acquisitions, along with the potential for debt-funded shareholder distributions. The credit profile benefits from Therapy Brands' profitability, with EBITDA margins over 25% (including Moody's adjustments), and a relatively stable revenue base, supported by software-as-a-service (SaaS) subscriptions. The company's software supports integrated practice management, revenue cycle management, electronic health records and payment solutions for health practitioners providing mental health and rehabilitation services. Also supporting the credit profile is the company's adequate (albeit diminishing) liquidity position with a healthy cash balance, originated from the delayed draw term loans, and full availability under its revolving credit facility, which Moody's views as sizable given the company's small scale. The stable outlook reflects Moody's expectation for negative free cash flow and very high debt/EBITDA over the next 12 to 18 months. However the company will have a sizable cash balance to absorb the expected cash usage as it spends on its strategic plan to improve efficiency across multiple areas of the business during the next 12 to 18 months. The outlook also reflects the company's aggressive financial policy, which includes the potential for additional debt funded acquisitions or other shareholder-friendly actions that could further constrain credit quality. Moody's considers Therapy Brand's liquidity as adequate, supported by the company's $43 million cash balance as of March 31, 2024 and fully available $40 million revolver, which Moody's views as sizable given the company's small scale. The company has no near term debt maturities. The revolver is not expected to be drawn during 2024 due to its healthy cash balance, however Moody's expect cash levels to decrease during the next 12 months while the company increases investment spending and continues to generate negative free cash flow as its high debt load and interest burden persists. The revolver is subject to a springing first lien net leverage covenant of less than 9.5x when the drawn amount exceeds $16 million. Moody's expects Therapy Brands would maintain covenant compliance if tested. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if 1) revenue scale increases, resulting in market share and customer expansion with expectations of growth sustained at over 5%; 2) debt to EBITDA decreases to below 8.0x; 3) free cash flow is expected to remain positive over time and liquidity improves. The ratings could be downgraded if 1) revenue growth is less than 5%; 2) EBITDA margins decline further than expected, 3) debt to EBITDA remains above 8.0x longer term; or 4) liquidity weakens. The B3 rating assigned to the senior secured 1st lien revolving credit facility, term loan and delayed draw term loan ratings, one notch above the Caa1 CFR, is driven by the Caa1-PD probability of default rating (PDR) and a Loss Given Default (LGD) assessment of LGD3, their priority lien position ahead of and the loss absorption benefit provided by the junior ranking debt. The Caa3 rating assigned to the senior secured 2nd lien term loan and delayed draw term loan, two notches below the Caa1 CFR, is driven by the Caa1-PD PDR and an LGD assessment of LGD5, reflecting their ranking junior to and first loss position with respect to the company's senior secured 1st lien obligations. Therapy Brands, founded in 2013 and headquartered in Birmingham, AL, is a provider of integrated software-as-a-service solutions including, EHR (electronic health record), PMS (practice management solutions) RCM (revenue cycle management) and payment solutions to the mental health, behavioral health and rehabilitation markets. The company is majority owned by Kohlberg Kravis Roberts & Co. Inc. (KKR), a New York based private equity firm, with a significant minority ownership held by Providence Strategic Growth. Revenues for last twelve months ended December 31, 2023 were $146 million. The principal methodology used in these ratings was Software published in June 2022. THRASIO LLC: BlackRock TCP Marks $40.9MM Loan at 65% Off -------------------------------------------------------- BlackRock TCP Capital Corp has marked its $40,936,031 loan extended to Thrasio, LLC to market at $14,327,611 or 35% of the outstanding amount, as of March 31, 2024, according to a disclosure contained in BlackRock TCP's Form 10-Q for the quarterly period ended March 31, 2024, filed with the Securities and Exchange Commission. BlackRock TCP is a participant in a First Lien Term Loan to Thrasio, LLC. The loan accrues interest at a rate of 14.59% (SOFR (Q) +9.26%,1% FLOOR) per annum. The loan matures on December 18, 2026. BlackRock TCP, formerly known as TCP Capital Corp., is a Delaware corporation formed on April 2, 2012 as an externally managed, closed-end, non-diversified management investment company. The Company elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. BlackRock TCP is led by Rajneesh Vig, Chief Executive Officer; and Erik L. Cuellar, Chief Financial Officer. The fund can be reach through: Rajneesh Vig BlackRock TCP Capital Corp 2951 28th Street, Suite 1000 Santa Monica, CA 90405 Tel: (310) 566-1000 Thrasio LLC -- https://www.thrasio.com -- specializes in buying Amazon third-party private label businesses. Its portfolio includes Angry Orange pet odor eliminators and stain removers, Wise Owl Outfitters camping and outdoor gear, and more than 200 other Amazon and ecommerce brands. Thrasio was co-founded in 2018 by Joshua Silberstein. THRIVE MERGER: S&P Affirms 'B-' ICR on Improved Operating Results ----------------------------------------------------------------- S&P Global Ratings affirmed the 'B-' issuer credit rating and issue-level ratings on Thrive Merger Sub LLC (d/b/a Therapy Brands). The negative outlook reflects the risk that its future top-line growth and EBITDA margins will not be sufficient to offset the impact from higher interest expense and other potential outflows. S&P believes this would result in sustained free cash flow deficits, leading us to assess the capital structure as likely unsustainable. S&P said, "Our rating on Therapy Brands reflects our expectation for temporary cash flow deficits to continue in 2024 with significant improvement in 2025, well ahead of maturities or any liquidity tightness. Performance in 2023 was slightly ahead of our expectations with top-line growth of about 7% and S&P Global Ratings-adjusted EBITDA margins improving by more than 500 basis points (bps) to about 24%. However, the company was affected by some working capital outflows, and continues to be burdened by high interest costs, which led to a cash flow deficit of about $12 million for the year. "For 2024, the company intends to focus on internal investments, consolidating its platforms, migrating its customer base, and to a lesser extent, on marketing efforts and back-office operations. Given the internal focus on products in 2024, we think revenue growth will be in the 2%-3% area, increasing to mid- to high-single digits in 2025. We expect these investments to burden EBITDA margins in 2024 by about 500 bps, and we do not expect the company to return to 2023 margin levels until the second half of 2025, as the level of investment declines and operating results reflect the scaling business. As a result, we believe cash flows will be pressured in 2024 leading to a deficit of about $10 million-$15 million, before returning to about break-even in 2025. "The outlook also reflects the potential for execution risk to affect our base-case. We believe modest underperformance can have an outsized impact on Therapy Brand's metrics given its small scale with $30 million-$40 million in EBITDA. In our view, a macroenvironment that remains challenged and an intense competitive landscape could limit Therapy's ability to achieve a level of growth necessary to meet its expense structure. Even within its relatively niche end market, Therapy must compete with numerous providers, some of which offer a more robust solution set and have greater capital resources. For example, SimplePractice, a competing product to TheraNest, spends significantly more on marketing, including Google search engine, and has a much larger customer base. As such, we believe that for Therapy to remain competitive, it will likely need to continue investing in its products and marketing, which could limit its ability to grow margins as revenue increases. Additionally, the company has brought on many new additions to its management team over the past year, which adds additional expenses to an already strained income statement. We think the company must both execute on its growth plan and manage expenses to get to a sustainable level of EBITDA in 2025. "We expect adequate liquidity over the next 12 months with no significant near-term debt maturities. As of March 2024, Therapy Brands had a cash balance of approximately $43 million and full availability under its $40 million revolving credit facility (RCF) due in May 2026. The company can use its liquidity position to support expected free operating cash flow deficit in 2024 of about $10 million to $15 million with some cushion for underperformance and a potential small deficit in 2025. We think the company has limited capacity for an acquisition funded with the revolver or cash on the balance sheet. The company does not face any significant upcoming debt maturities, including about $288 million first-lien term loan commitments maturing in 2028, and $135 million second-lien term loan commitments maturing in 2029. If cash flows do not meet our expectations and the company is slow to extend its revolver, liquidity could be pressured in mid-2025. "The negative outlook reflects the risk that its future top-line growth and EBITDA margins will not be sufficient to offset the impact from higher interest expense and other potential outflows. We believe this would result in sustained free cash flow deficits, likely leading us to assess the capital structure as likely unsustainable. "Governance factors are a moderately negative consideration in our credit rating analysis. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision making that prioritizes the interests of the controlling owners, in line with our view of the majority of rated entities owned by private-equity sponsors. Our assessment also reflects the generally finite holding periods and a focus on maximizing shareholder returns." TRI-STATE SOLUTIONS: Case Summary & 12 Unsecured Creditors ---------------------------------------------------------- Debtor: Tri-State Solutions of Maryland, LLC 9701 Apollo Drive Suite 100 Upper Marlboro MD 20774 Business Description: The Debtor is part of the non-residential building construction industry. Chapter 11 Petition Date: May 22, 2024 Court: United States Bankruptcy Court District of Maryland Case No.: 24-14375 Debtor's Counsel: Daniel Staeven, Esq. FROST LAW 839 Bestgate Drive Suite 400 Annapolis MD 21401 Tel: 410-497-5947 Email: daniel.staeven@frosttaxlaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Herman Barber, III, as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 12 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/A6AMJSI/Tri-State_Solutions_of_Maryland__mdbke-24-14375__0001.0.pdf?mcid=tGE4TAMA UNDERGROUND SOLUTIONS: Case Summary & 19 Unsecured Creditors ------------------------------------------------------------ Debtor: Underground Solutions LLC d/b/a Underground Communications 2403 Elizondo St Simi Valley, CA 93065 Business Description: Underground Solutions specializes in providing cutting-edge underground communication services. The Company specializes in delivering top-tier fiber optic services that enhance connectivity experience. Chapter 11 Petition Date: May 23, 2024 Court: United States Bankruptcy Court Central District of California Case No.: 24-10578 Judge: Hon. Ronald A. Clifford III Debtor's Counsel: Steven R. Fox, Esq. THE FOX LAW CORPORATION INC. 17835 Ventura Blvd #306 Encino, CA 91316 Tel: 818-774-3545 Fax: 818-774-3707 Email: SRFox@foxlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Javier Junior Esqueda as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 19 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/5GTTTCI/Underground_Solutions_LLC__cacbke-24-10578__0001.0.pdf?mcid=tGE4TAMA UNIVISION COMMUNICATIONS: S&P Rates New Senior Secured Debt 'B+' ---------------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue-level rating and '3' recovery rating to Univision Communications Inc.'s proposed $500 million senior secured notes due 2031 and $500 million senior secured term loan due 2029. The '3' recovery rating indicates its expectation of meaningful (50%-70%; rounded estimate: 65%) recovery for lenders in the event of a payment default. The company plans to use the proceeds from the proposed debt issuances to repay a portion of its senior secured term loan due in 2026 ($1.9 billion outstanding). S&P's 'B+' issuer credit rating and stable outlook on Univision are unchanged because the proposed transaction will not affect its net leverage. VESTA ENERGY: S&P Upgrades ICR to 'B-', Outlook Stable ------------------------------------------------------ S&P Global Ratings raised the issuer credit rating on Calgary-based exploration and production (E&P) company Vesta Energy Ltd. to 'B-' from 'CCC+', and removed all ratings from CreditWatch with positive implications, where they were placed on March 21, 2024. At the same time, S&P raised the issue-level rating on the company's second-lien secured notes to 'B+' from 'B'. The second-lien recovery rating remains '1', reflecting its expectation for very high (90%-100%; rounded estimate: 95%) recovery in the event of default. The stable outlook reflects S&P's expectation that Vesta will generate strong credit measures and maintain adequate liquidity over the next two years, supported by relatively favorable oil prices, above average profitability, and moderate production growth. The recently completed credit facility extension alleviates Vesta's near-term liquidity risk. On April 30, 2024, Vesta successfully extended the maturity date of its C$170 million revolving credit facility (RCF) to April 30, 2026. As of March 31, 2024, the company had about C$55 million drawn on the facility. S&P views the extension of this facility beyond its two-year (2024-2025) forecast period as effectively alleviating any near-term liquidity risk associated with the company's relatively small operating scale. Additionally, the company's C$197.6 million second-lien secured notes do not mature until Oct. 15, 2026. A highly competitive cost structure and moderate production growth helps offset Vesta's narrow operational scale. Vesta's cost structure reflects the favorable conditions of the East Shale Basin, which has one of the highest light oil-weighted resources densities across the Duvernay Basin and is a thick over-pressure reservoir with high total organic content, favorable mineralogy, and low water saturation. S&P said, "We also anticipate production will increase moderately by the mid- to high-single-digit percent over our forecast period from just under 13,000 barrels of oil (boe) per day in 2023 to more than 14,000 boe per day in 2025. We expect this will further support the company's absolute profitability, which consistently ranks in the top quartile of the global E&P peer group on a unit earnings before interest and taxes (EBIT) basis." Vesta's above-average profitability helps offset some of the cash flow and leverage volatility inherent in a company with a relatively limited operational scale. S&P said, "We expect Vesta will maintain adequate liquidity and generate strong financial metrics over the next 24 months. We continue to project strong cash flow generation over our forecast period, with S&P Global Ratings-adjusted FFO averaging just over C$240 million for 2024 and 2025, largely supported by the continued strength in oil prices and Vesta's moderate production growth, competitive cost structure, and above-average profitability relative to peers. Accordingly, we expect S&P Global Ratings-adjusted FFO to debt will average about 80% and debt to EBITDA will be about 1.1x over our forecast period. "While we anticipate almost all of Vesta's free operating cash flow (FOCF) will be used to fund organic production growth, we would expect this growth spending will be managed within internal cash flow generation if oil prices weakened. Additionally, the company has about C$115 million of availability on its revolving credit facility as of March 31, 2024, which in tandem with the flexibility to reduce growth spending, will likely ensure the company maintains adequate liquidity over our forecast period. "Further rating upside is constrained by the company's limited scale and financial-sponsor ownership. While we project moderate production growth over the forecast period, Vesta's production scale will continue to represent the smallest production base of all rated North American E&P companies. In our view, the relatively small scale amplifies Vesta's exposure to unanticipated adverse market or operational events. Further, Vesta's majority private-equity ownership constrains any improvement to the company's financial risk profile regardless of actual or projected balance-sheet strength. As such, Vesta's business risk profile--specifically its operational scope and scale--would need to materially strengthen to support a higher rating. For example, we expect 'B'-rated light oil producer Teine Energy Ltd., which also benefits from an above-average profitability assessment, will produce more than 40,000 boe per day this year. "The stable outlook reflects our view that Vesta will generate strong credit measures and maintain adequate liquidity over the next two years supported by relatively favorable oil prices and moderate production growth. Specifically, we project the company will generate S&P Global Ratings-adjusted FFO to debt of about 80% in 2024 and 2025." S&P would lower the rating if: -- Liquidity becomes constrained such that sources are insufficient to meet the company's maintenance capital spending requirements and financial obligations; or -- The company is unable to manage its credit facility and debt maturities to limit refinancing risk. S&P said, "We believe Vesta's liquidity could weaken if commodity prices fell below our expectations without a corresponding decrease in spending, or if capital spending is significantly above our base-case scenario estimates. "We believe the company's credit profile and our rating will remain constrained by Vesta's limited scale, narrow operational and geographic focus, and private equity-sponsored ownership." Nevertheless, S&P could raise the rating if the company: -- Materially expands its operational scope and scale; -- Maintains adequate liquidity; and -- Continues to generate positive free operating cash flow. VESTOGE FREDERICK: Seeks to Extend Plan Exclusivity to August 19 ---------------------------------------------------------------- Vestoge Frederick MD, LLC asked the U.S. Bankruptcy Court for the District of Maryland to extend its exclusivity period to file a chapter 11 plan of reorganization and obtain acceptance thereof to August 19 and October 18, 2024, respectively. The Debtor is a Maryland limited liability company with its corporate headquarters located in Ashburn, Virginia. The Debtor owns various subdivided building lots located in the City of Frederick, Maryland, known as Lots 1-2, Lots 18-24, and Lots 33-38, Section One, Birdseye View Estates; Lots 3-11 and Lots 25-29, Section One, Birdseye View Estates; Lots 12-17 and Lots 30 32, Section One, Birdseye View Estates; Lots 1-5 and Lots 17-21, Section One, Bowers Park; and Lots 6-16, Section One, Bowers Park (the "Lots"). The events precipitating this chapter 11 filing are a combination of economic factors, including inflation and increased building costs, exceeded budgets, the entry of the Snyder Mechanic's Lien, and the impracticability of proceeding under the Drees Agreement. The Debtor explains that the reorganization proceeding was filed for the purpose of rejecting the Drees Agreement and the Devlan Agreement, avoiding the Snyder Mechanic's Lien, restructuring the Romney debt, and negotiating a potential transaction with Drees or finding another partner to develop the Lots, or, alternatively, selling the Lots free and clear of liens, claims, and encumbrances. Admittedly, this is not a large or overly complicated case. However, the Debtor has worked expeditiously to reject certain executory contracts, avoid Snyder's mechanic's lien, and negotiate with prospective purchasers of the Property. The Debtor asserts that it continues to negotiate with prospective purchasers of the Property and expects that it will select a stalking horse and run a sale process. The Debtor believes it is prudent to preserve its exclusive right to file a plan while it works through the issues relating to the sale of the Property. The Debtor believes that good cause exists to grant the Motion and extend the Debtor's Exclusive Periods to file a proposed plan and solicit acceptances thereto. Vestoge Frederick MD, LLC is represented by: Brent C. Strickland, Esq. WHITEFORD, TAYLOR & PRESTON L.L.P. 111 Rockville Pike, Suite 800 Rockville, MD 20852 Tel: (410) 347-9402 Email: bstrickland@whitefordlaw.com About Vestoge Frederick MD Vestoge Frederick MD, LLC is engaged in activities related to real estate. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 24-10536) on January 22, 2024, with $10 million to $50 million in assets and $1 million to $10 million in liabilities. Ramesh Kalwala, Member Vestoge Frederick MD, LLC, signed the petition. Brent C. Strickland, Esq. at WHITEFORD, TAYLOR & PRESTON L.L.P. represents the Debtor as legal counsel. VIVAKOR INC: Nasdaq Bid Price Compliance Restored ------------------------------------------------- Vivakor, Inc. announced that it has received notice from The Nasdaq Stock Market informing the Company that, after having a closing bid price at or greater than $1.00 per share for 10 consecutive business days from April 19 to May 2, 2024, the Company has regained compliance with the minimum closing bid price requirement under Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market, and that the matter is now closed. About Vivakor Inc. Coralville, Iowa-based Vivakor, Inc. is a socially responsible operator, acquirer and developer of technologies and assets in the oil and gas industry, as well as related environmental solutions. Currently, the Company's efforts are primarily focused on operating crude oil gathering, storage and transportation facilities, as well as contaminated soil remediation services. As of Dec. 31, 2023, the Company had $71.23 million in total assets, $54 million in total liabilities, and $17.24 million in total stockholders' equity. Houston, Texas-based Marcum LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 16, 2024, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. WERNER FINCO: Moody's Hikes CFR to Caa1 & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Ratings upgraded Werner FinCo LP's (Werner) corporate family rating to Caa1 from Caa2 and probability of default rating to Caa1-PD from Caa2-PD. Moody's also upgraded the company's senior secured notes to B3 from Caa1, senior secured junior notes to Caa2 from Caa3, and senior unsecured notes to Caa3 from Ca. The outlook is changed to stable from negative. "Werner's upgrade to Caa1 and stable outlook reflect the company's improved operating performance with volume stabilizing and margins improving. The company's leverage has declined meaningfully from almost 10x at time of its refinancing in early 2023 to near 7x a year later," said Justin Remsen, Moody's Assistant Vice President. "Despite the company's meaningful improvement in results, its ability to generate free cash flow will continue to be challenged by elevated costs including interest, taxes, and finance leases," added Remsen. RATINGS RATIONALE Werner's Caa1 CFR reflects the company's high leverage and weak free cash flow. The rating also reflects cyclical end markets, where the residential construction market can contract quickly and have an acute impact on the company's financial profile. Werner's profitability is also vulnerable to volatile raw material costs including steel and aluminum. The company has customer concentration with The Home Depot, Inc. (A2 stable) and Lowe's Companies, Inc. (Baa1 stable) representing a material portion of sales. These retailers are high-volume purchasers with strong bargaining power. Strengths include the company's leading market position for its products, especially Werner-branded ladders, jobsite storage and truck boxes. The company also has a track record of developing innovative products that fulfill needs in the marketplace. Moody's forecasts that Werner will have weak liquidity over the next 12 to 18 months. As of March 31, 2024, Werner had $92 million of total liquidity available, including $22 million cash and $70 million availability under the company's million asset-based lending (ABL) revolver. Moody's anticipates increased reliance on the ABL as the company generates negative free cash flow of about $15 million in 2024 and 2025. Moody's projects Werner will maintain limited cushion under the ABL's fixed charge coverage ratio over the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Werner operates with debt-to-EBITDA below 6.25x, EBITA-to-interest above 1.5x and positive free cash flow. An upgrade would also be predicated on an improved liquidity profile. The ratings could be downgraded if the company's operating performance or liquidity deteriorates. EBITA-to-interest maintained below 1.0x could also result in a downgrade. Finally, a downgrade would likely result if the likelihood of a restructuring resulting in a reduction in recovery prospects for creditors or a default increase. Werner, headquartered in Itasca, Illinois, is a global manufacturer and distributor of ladders, jobsite storage and truck and van tool storage products and other equipment used in the construction industry. For the twelve months that ended March 2024, the company generated $1.2 billion in sales. Triton Partners, through its affiliates, is primary owner of Werner. The principal methodology used in these ratings was Manufacturing published in September 2021. WORKSPORT LTD: Recurring Losses Raise Going Concern Doubt --------------------------------------------------------- Worksport Ltd. disclosed in a Form 10-Q Report filed with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2024, that there is substantial doubt about its ability to continue as a going concern within the next 12 months. As of March 31, 2024, the Company had $3,536,980 in cash and cash equivalents. The Company has generated only limited revenues and has relied primarily upon capital generated from public and private offerings of its securities. Since the Company's acquisition of Worksport in fiscal year 2014, it has never generated a profit. As of March 31, 2024, the Company had an accumulated deficit of $52,027,834. During the three months ended March 31, 2024, the Company had net losses of $3,714,657 (2023 - $3,523,270). As of March 31, 2024, the Company had working capital of $2,901,401 (December 31, 2023 – $1,956,894) and had an accumulated deficit of $52,027,834 (December 31, 2023 - $48,313,177). The Company has not generated profit from operations since inception and to date has relied on debt and equity financing for continued operations. The Company's ability to continue as a going concern is dependent upon the ability to generate cash flows from operations and obtain equity or debt financing. The Company intends to continue funding operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements in the long term. There can be no assurance that the steps management is taking will be successful. Despite the Company having mostly completed its purchasing of large manufacturing machinery, operational costs are expected to remain elevated and, thus, further decrease cash and cash equivalents. Concurrently, the Company intends to continue its ramp-up of manufacturing and increasing sales volumes in 2024, which should mitigate the effects of operational costs on cash and cash equivalents; this view is supported by the fact that the manufacturing facility of the Company was completed for initial production output in 2023 and has started to generate revenue in the third quarter of 2023. The Company has successfully raised cash, and it is positioned to do so again if deemed necessary or strategically advantageous. During the year ended December 31, 2021, the Company, through its Reg-A public offering, private placement offering, underwritten public offering, and exercises of warrants, raised an aggregate of approximately $32,500,000. On September 30, 2022, the Company filed a shelf registration statement on Form S-3, which was declared effective by the SEC on October 13, 2022, allowing the Company to issue up to $30,000,000 of common stock and prospectus supplement covering the offering, issuance and sale of up to $13,000,000 of common stock that may be issued and sold under an At The Market Offering Agreement dated September 30, 2022, with H.C. Wainwright & Co., LLC, as the sales agent. Pursuant to the ATM Agreement, HCW is entitled to a commission equal to 3% of the gross sales price of the shares of common stock sold. As of March 31, 2024, the Company has sold and issued 604,048 shares of common stock in consideration for net proceeds of $780,356 under the ATM Agreement. On November 2, 2023, the Company consummated a registered direct offering pursuant to which the Company issued 1,925,000 shares of common stock and 1,575,000 pre-funded warrants to an institutional investor for a total net proceeds of $4,261,542. Concurrently with the registered direct offering, the Company issued the same institutional investor 7,000,000 warrants in a private sale. The warrants are exercisable for 7,000,000 shares of common stock for $1.34 per share six months after issuance and until five and a half years from the issuance date, subject to beneficial ownership limitations as described in the warrants. The Company registered the 7,000,000 shares of common stock underlying the warrants on a Form S-1 (333-276241) which was declared effective by the SEC on December 29, 2023. On March 20, 2024, the Company consummated a registered direct offering pursuant to which the Company issued 2,372,240 shares of common stock and 1,477,892 pre-funded warrants to the same institutional investor as in the Company's registered direct offering on November 2, 2023, for a total net proceeds of $2,629,083. Concurrently with the registered direct offering, the Company issued the institutional investor 7,700,264 warrants in a private sale. The warrants are exercisable for 7,700,264 shares of common stock for $0.74 per share six months after issuance until five and a half years from the issuance date, subject to beneficial ownership limitations as described in the warrants. The Company registered the 7,700,264 shares of common stock underlying the warrants on a Form S-1 (333-278461) which was declared effective by the SEC on April 8, 2024. To date, the Company's principal sources of liquidity consist of net proceeds from public and private securities offerings and cash exercises of outstanding warrants. Management is focused on transitioning towards revenue as its principal source of liquidity by growing existing product offerings as well as the Company's customer base. The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus maintain sufficient cash balances for planned operations or future business developments. Future business development and demands may lead to cash utilization at levels greater than recently experienced. The Company may need to raise additional capital in the future. However, the Company cannot provide assurances it will be able to raise additional capital on acceptable terms, or at all. A full-text copy of the Company's Form 10-Q is available at https://tinyurl.com/22pyyfpt About Worksport Ltd. West Seneca, N.Y.-based Worksport Ltd., through its subsidiaries, designs, develops, manufactures, and owns intellectual property on a portfolio of tonneau cover, solar integration, portable power station, and NP (Non-Parasitic), Hydrogen-based green energy products and solutions for the automotive aftermarket accessories, power storage, residential heating, and electric vehicle-charging industries. As of March 31, 2024, the Company has $27,290,843 in total assets, $8,390,124 in total liabilities, and $18,900,719 in total shareholders' equity. WW INTERNATIONAL: 5 of 6 Proposals OK'd at Annual Meeting --------------------------------------------------------- WW International, Inc. held its 2024 Annual Meeting on May 9, 2024. At the meeting, the Company's shareholders: (1) elected Denis F. Kelly and Julie Rice to serve as Class II directors for a term of three years expiring at the Company's 2027 annual meeting of shareholders and until their successors have been duly elected and qualified or until the earlier of their resignation, removal, retirement, disqualification or death; (2) elected Tara Comonte and William H. Shrank, M.D. to serve as Class I directors for a term of two years expiring at the Company's 2026 annual meeting of shareholders and until their successors have been duly elected and qualified or until the earlier of their resignation, removal, retirement, disqualification or death; (3) ratified the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for fiscal 2024; (4) approved the amendment to the Company's Amended and Restated Articles of Incorporation to adopt a majority voting standard in uncontested elections of directors. The Second Amended and Restated Articles of Incorporation retain the plurality voting standard in contested elections of directors. Effective May 13, 2024 the Company amended and restated its Amended and Restated Articles of Incorporation to delete Section D of Article III thereof to reflect the cancellation of the Company's previously outstanding Series A Preferred Stock and implement additional immaterial technical and conforming changes. The Company also amended and restated its Amended and Restated Bylaws to update and expand certain procedural and informational requirements for shareholder nominations for election of directors or proposals of business at the Company's shareholder meetings pursuant to the Company's "advance notice" provisions, including updates to reflect the adoption of "universal proxy" rules as set forth in Rule 14a-19 under the Securities and Exchange Act of 1934, as amended. The Amended and Restated Bylaws also delete certain obsolete provisions relating to the equity ownership of the Company's former controlling shareholder and implement additional immaterial technical and conforming changes. (5) did not approve the amendment to the Company's Amended and Restated Articles of Incorporation to delete various provisions related to the Company's former controlling shareholder that are no longer applicable; and (6) approved, on an advisory basis, the Company's named executive officer compensation. About WW International Headquartered in New York, WW International Inc. is a technology company at the forefront of weight health, grounded in nutritional and behavior change science. The Company is powered by its weight loss and weight management programs, its award-winning app and its commitment to tailoring solutions for its members to improve their weight health, including providing medical weight management treatment via access to clinician-prescribed weight management medications and related support through the WeightWatchers Clinic affiliated practices. WW International reported a net loss of $112.25 million in 2023 following a net loss of $256.87 million in 2022. * * * As reported by the TCR on March 13, 2024, S&P Global Ratings downgraded New York-based WW International Inc.'s ICR to 'CCC+' from 'B-'. S&P said the negative outlook reflects the possibility that S&P could lower its rating on WW if it is unable to improve its performance and it envisions a default occurring in the subsequent 12 months. ZEBRA TECHNOLOGIES: Moody's Affirms 'Ba1' CFR, Outlook Stable ------------------------------------------------------------- Moody's Ratings affirmed Zebra Technologies Corporation's (Zebra) Ba1 Corporate Family Rating and Ba1-PD Probability of Default Rating. Moody's also affirmed Zebra's and Zebra Diamond Holdings Limited's, a subsidiary of Zebra, Ba1 senior secured bank credit facility rating. Moody's assigned a Ba2 rating to Zebra's proposed senior unsecured notes. The Speculative Grade Liquidity (SGL) rating under Zebra is upgraded to SGL-1 from SGL-2. The outlook for both Zebra Technologies Corporation and Zebra Diamond Holdings Limited remains stable. RATINGS RATIONALE The Ba1 CFR reflects Zebra's leading positions in core businesses, including mobile computing, data capture, barcode printing, and services. Moreover, Zebra's longstanding customer relationships and large installed base of products provide recurring supplies and services revenues. This supports underlying organic growth, augmented by capability enhancing acquisitions, particularly in the areas of machine vision, industrial automation and software. Since the end of 2015 (the first full year following the company's acquisition of Motorola Solutions, Inc.'s Enterprise business), Zebra has increased revenues to as high as $5.8 billion in 2022, although moderating to $4.4 billion in the LTM period ended March 30, 2024 driven by cyclical end market demand. The credit profile is constrained by Zebra's propensity for M&A, which in some cases has resulted in material increases in leverage. Zebra has made nine acquisitions since 2018 for total net consideration of approximately $2.2 billion. Most recently in 2022, Zebra acquired Matrox Electronic Systems Ltd. (Matrox), a developer of advanced machine vision components and software, for $881 million in cash. With an amendment to its credit facility in the same year, funded debt balances increased to about $2 billion at year end from just under $1 billion at the end of 2021. Added debt along with cyclically driven sales declines in 2023 resulted in leverage increasing to about 3.5x. Moody's expects leverage to decrease to below 3x in 2024 and low-2x by 2025. When leverage falls below the downgrade trigger of 3x, Zebra has some added flexibility to pursue further acquisitions and weather more elongated business cyclicality. Moody's would expect that Zebra will remain committed to de-leveraging back to its targeted leverage of 1.5x-2.5x reported net debt to EBITDA. Zebra benefits from good underlying growth within its core capabilities including enterprise mobile computing, data capture, industrial printing and associated support services. Core growth of 4%-5% along with high-single digit growth in adjacencies and double digit growth in the company's identified expansion areas including fixed industrial scanning, warehouse automation and software, supports long term organic growth of 5%-7%. However, growth can be cyclical, as evidenced by near term results. While the company has relatively diversified end market exposure, it is guiding towards growth of between 1% and 5% for this year, following a nearly 21% decline in 2023. Zebra's end markets have seen a sharp pullback in demand, with mobile computing particularly hard hit, amplified by distributor destocking activity. While these trends will improve this year, Zebra will operate at a lower revenue base than compared to 2021 and 2022. The stable outlook reflects Moody's expectation that revenues will increase in the low single digit percent this year while improving to mid-single digit next year, with improving margins as the company benefits from cost actions and improved operating leverage. Moody's also expects that Zebra will continue to balance its capital allocation across shareholder return, acquisitions, and debt repayment to maintain leverage within its target range (1.5x - 2.5x reported net debt to EBITDA) inclusive of the proposed notes. In addition, in 2024, Zebra should return to healthy, positive free cash flow as margins improve and given the company completed its final settlement payment. In June 2022 Zebra entered into a license and settlement agreement with Honeywell International Inc., resolving patent-related litigation, agreeing to pay $360 million in eight quarterly installments, concluding Q1 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Zebra generates consistent revenue growth above the low single digit percentage range with expanding EBITDA margins, increasing free cash flow, and debt to EBITDA maintained at less than 2x (Moody's adjusted). Zebra would also need to maintain very good liquidity and a balanced financial policy as well as refrain from debt-financed returns to shareholders or frequent sizable debt financed transactions. Ratings could be downgraded if revenues fail to grow in line with the industry or if margins weaken. Ratings could also be downgraded if Moody's expects that debt to EBITDA will be sustained above 3x (Moody's adjusted). Instrument ratings reflect both Zebra's Ba1-PD Probability of Default Rating and the average expected loss of individual debt instruments in a default scenario. The Ba1 ratings on the Revolver and Term Loans A are in line with the Ba1 Corporate Family Rating (CFR) given a 1st lien on collateral and loss absorption of the proposed unsecured notes, which are rated Ba2, one notch below the CFR. Zebra's receivables financing facilities benefit from a first-priority security interest in U.S. domestically originated accounts receivable. The SGL-1 reflects Zebra's very good liquidity supported by the company's reduced reliance on the revolver and improved headroom with the financial maintenance leverage covenant. Moody's expects improved internal liquidity generation in 2024 with free cash of approximately $600 million, on improved top line and margin and the final settlement payment having been made in Q1 2024. Liquidity is supplemented by the $1.5 billion revolving credit facility terminating in 2027, which had availability of about $1.3 billion at March 30, 2024. Zebra had $127 million in cash at March 30, 2024. Pro forma to the notes offering, Zebra will have nearly full availability under its revolver and approximately $350 million in cash. Moody's expects Zebra will maintain ample cushion to the credit facilities' two financial maintenance covenants (3.25x secured net leverage and 3.00x consolidated interest coverage) over the next 12 months. Based in Lincolnshire, IL, Zebra Technologies Corporation is a provider of mobile computers, barcode scanners, radio frequency identification devices (RFID) and specialized printers serving retail/ecommerce, manufacturing, transportation and logistics, healthcare, and other industries. Revenues were $4.4 billion for the LTM period ended March 30, 2024. The principal methodology used in these ratings was Diversified Technology published in February 2022. ZEVRA THERAPEUTICS: 3 of 4 Proposals OK'd at Annual Meeting ----------------------------------------------------------- Zevra Therapeutics, Inc. convened its 2024 Annual Meeting of Stockholders on May 13, 2024, during which the stockholders voted to: * elect three Class III directors to the Company's board of directors to hold office until the 2027 annual meeting of stockholders; * ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2024; * approve, on an advisory and non-binding basis, the compensation of the Company's named executive officers; and * approve amendments to the Company's Amended and Restated 2014 Equity Incentive Plan. Of the 41,850,494 shares outstanding as of the March 22, 2024 record date, at least 31,194,215 shares, or 74.54%, were present or represented by proxy at the 2024 Annual Meeting. At the 2024 Annual Meeting, each of Thomas D. Anderson, Neil F. McFarlane, and Alvin Shih, M.D. was elected as a director of the Company. The stockholders of the Company also ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2024, and approved, on an advisory and non-binding basis, the compensation of the Company's named executive officers. The stockholders of the Company did not approve the amendments to the Company's Amended and Restated 2014 Equity Incentive Plan. About Zevra Therapeutics Celebration, Fla.-based Zevra Therapeutics, Inc. is a rare disease company combining science, data, and patient needs to create transformational therapies for diseases with limited or no treatment options. Its mission is to bring life-changing therapeutics to people living with rare diseases. With unique, data-driven development and commercialization strategies, the Company is overcoming complex drug development challenges to make new therapies available to the rare disease community. As of December 31, 2023, the Company had $172.3 million in total assets, $110.5 million in total liabilities, and $61.9 million in total stockholders' equity. Orlando, Florida-based Ernst & Young LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 1, 2024, citing that the Company has sustained recurring losses and negative cash flows from operations, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. ZOE CLEANING: Unsecureds to Get Share of Income for 3 Years ----------------------------------------------------------- Zoe Cleaning Services, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Indiana a Small Business Plan of Reorganization dated May 6, 2024. Zoe owns and operates a contract commercial cleaning company which provides routine janitorial services as well as property damage restoration. Zoe was incorporated in 2001 as an Indiana corporation. Zoe is located in Greenwood, Indiana. Zoe's assets consist of personal property such as accounts, accounts receivable, equipment, machinery, computer, phones, cameras, misc. electronic equipment, and 6 vehicles used in the business. Zoe's sole shareholder is Gregory Huffman. Zoe continues to market its business to increase its revenue and has worked to reduce its overhead expenses. All Claims arising from the past or present debt of the Debtor shall be bound by the provisions of this Plan. This Plan combines the classification, allowance, and treatment of Claims. Class 7 consists of General Unsecured Claims. The unsecured creditors shall receive a pro-rata share of the disposable income of the Debtor commencing on the one-year anniversary of the Confirmation Date and continuing annually thereafter for two additional years. The Debtor believes there are 7 parties with valid, unsecured Claims against the Debtor totaling $314,745.24 plus the deficiency claims of the under-secured creditors. Gordon Plumbing, Inc. filed a Proof of Claim 14 for $12,697.00; however, it did not attach any supporting documentation. The Debtor disputes any claim of Gordon Plumbing, Inc. Class 7 claims are impaired, and holders of Allowed Unsecured Claims are entitled to vote. Gregory Huffman shall continue as the sole shareholder of Zoe. The source of funds used in this Plan for payments to creditors shall be the net annual income of the Debtor for three years resulting from continued, normal business operations of the Debtor's business. The Debtor shall contribute all net disposable income toward Plan payments; however, Debtor shall reserve a portion of the net income to fund a reserve. A full-text copy of the Plan of Reorganization dated May 6, 2024 is available at https://urlcurt.com/u?l=sMzQ5P from PacerMonitor.com at no charge. Attorneys for the Debtor: Jeffrey M. Hester, Esq. HESTER BAKER KREBS LLC One Indiana Sq. Suite 1330 Indianapolis IN 46204 Tel: (317) 833-3030 Email: jhester@hnkfirm.com About Zoe Cleaning Services Zoe Cleaning Services, Inc., owns and operates a contract commercial cleaning company which provides routine janitorial services as well as property damage restoration. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No. 24-00507) on Feb. 5, 2024, with $100,001 to $500,000 in assets and $1 million to $10 million in liabilities. Judge Jeffrey J. Graham oversees the case. David R. Krebs, Esq., at Hester Baker Krebs, LLC, is the Debtor's legal counsel. [^] BOOK REVIEW: The First Junk Bond ------------------------------------ Author: Harlan D. Platt Publisher: Beard Books Softcover: 236 pages List Price: $34.95 http://www.beardbooks.com/beardbooks/the_first_junk_bond.html Only one in ten failed businesses is equal to the task of reorganizing itself and satisfying its prior debts in some fashion. This engrossing book follows the extraordinary journey of Texas International, Inc. (known by its New York Stock Exchange stock symbol, TEI), through its corporate growth and decline, debt exchange offers, and corporate renaissance as Phoenix Resource Companies, Inc. As Harlan Platt puts it, TEI "flourished for a brief luminous moment but then crashed to earth and was consumed." TEI's story features attention-grabbing characters, petroleum exploration innovations, financial innovations, and lots of risk taking. The First Junk Bond was originally published in 1994 and received solidly favorable reviews. The then-managing director of High Yield Securities Research and Economics for Merrill Lynch said that the book "is a richly detailed case study. Platt integrates corporate history, industry fundamentals, financial analysis and bankruptcy law on a scale that has rarely, if ever, been attempted." A retired U.S. Bankruptcy Court judge noted, "[i]t should appeal as supplementary reading to students in both business schools and law schools. Even those who practice.in the areas of business law, accounting and investments can obtain a greater understanding and perspective of their professional expertise." "TEI's saga is noteworthy because of the company's resilience and ingenuity in coping with the changing environment of the 1980s, its execution of innovative corporate strategies that were widely imitated and its extraordinary trading history," says the author. TEI issued the first junk bond. In 1986 it achieved the largest percentage gain on the NYSE, and in 1987 suffered the largest percentage loss. It issued one of the first bonds secured by a physical commodity and then later issued one of the first PIK (payment in kind) bonds. It was one of the first vulture investors, to be targeted by vulture investors later on. Its president was involved in an insider trading scandal. It innovated strip financing. It engaged in several workouts to sell off operations and raise cash to reduce debt. It completed three exchange offers that converted debt in to equity. In 1977, TEI, primarily an oil production outfit, had had a reprieve from bankruptcy through Michael Milken's first ever junk bond. The fresh capital had allowed TEI to acquire a controlling interest of Phoenix Resources Company, a part of King Resources Company. TEI purchased creditors' claims against King that were subsequently converted into stock under the terms of King's reorganization plan. Only two years later, cash deficiencies forced Phoenix to sell off its non-energy businesses. Vulture investors tried to buy up outstanding TEI stock. TEI sold off its own non-energy businesses, and focused on oil and gas exploration. An enormous oil discovery in Egypt made the future look grand. The value of TEI stock soared. Somehow, however, less than two years later, TEI was in bankruptcy. What a ride! All told, the book has 63 tables and 32 figures on all aspects of TEI's rise, fall, and renaissance. Businesspeople will find especially absorbing the details of how the company's bankruptcy filing affected various stakeholders, the bankruptcy negotiation process, and the alternative post-bankruptcy financial structures that were considered. Those interested in the oil and gas industry will find the book a primer on the subject, with an appendix devoted to exploration and drilling, and another on oil and gas accounting. Dr. Harlan D. Platt is a professor of Finance at D'Amore-McKim School of Business at Northeastern University. He is a member of the Board of Directors of Millennium Chemicals Inc. and is on the advisory board of the Millennium Liquidating Trust. He served as the Associate Editor-Finance for the Journal of Business Research. He received a Ph.D. from the University of Michigan, and holds a B.A. degree from Northwestern University. This book may be ordered by calling 888-563-4573 or by visiting www.beardbooks.com or through your favorite Internet or local bookseller. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2024. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***