/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/240722.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 22, 2024, Vol. 28, No. 203 Headlines 124 PENN RESIDENCE: Unsecureds Will Get 100% of Claims in Plan 291 GRANT AVE: Case Summary & Four Unsecured Creditors 4011-4090 NW 34TH: Seeks to Extend Plan Exclusivity to September 13 9300 WILSHIRE: AES Redondo Files Competing Plan A.W. BROWN: S&P Withdraws 'B+' Rating on 2016/2017 Revenue Bonds A1 TRANSPORT: Case Summary & Nine Unsecured Creditors AB BROTHERS: Case Summary & Eight Unsecured Creditors ADVENTURE ENVIRONMENTAL: Seeks to Extend Exclusivity to August 12 AHEAD DB: S&P Rates $1,212MM First-Lien Term Loan Due 2031 'B' ALEXA & ROGER: Amends Unsecureds & Secured Lender Claim Details ALLEN MEDIA: S&P Cuts ICR to 'CCC+' on Elevated Refinancing Risk ALPINE HOSPITALITY: Case Summary & Two Unsecured Creditors ALTERNATIVE LOGISTICS: Case Summary & 20 Top Unsecured Creditors AMERGENT HOSPITALITY: Voluntary Chapter 11 Case Summary ART BUILDINGS: Case Summary & Two Unsecured Creditors ATLANTIC HILLS: Seeks to Extend Plan Exclusivity to September 30 BACM 2017-BNK3: Fitch Affirms 'B-sf' Rating on Class F Certificates BIOXCEL THERAPEUTICS: Estimates $1.1MM Net Revenue in Fiscal Q2 CARLOS A. ROJAS: Amends U.S. Bank Secured Claims Pay Details CBDMD INC: Submits Compliance Plan to NYSE American CLEVELAND-CLIFFS: S&P Alters Outlook to Stable, Affirms 'BB-' ICR CMG MEDIA: S&P Lowers ICR to 'CCC+' on Elevated Refinancing Risk COMTECH TELECOM: Registers 1.4M Shares for Resale by Investors ELETSON HOLDINGS: Files Amendment to Disclosure Statement EUROASIA PRODUCTS: Unsecureds to Split $2,500 over 3 Years FINANCE OF AMERICA: Sets July 25 Effective Date for 1-for-10 Split FITNESS INTERNATIONAL: S&P Rates Incremental Term Loan 'B+' FREIRICH FOODS: Seeks to Extend Plan Exclusivity to October 31 FTX TRADING: Plan Exclusivity Period Extended to August 3 GIRARD HOUSE: Case Summary & 20 Largest Unsecured Creditors GUANELLA PASS: Ongoing Operations to Fund Plan Payments HADAD DESIGN: Case Summary & 20 Largest Unsecured Creditors HAOB HORIZONTAL: Case Summary & 20 Largest Unsecured Creditors HERITAGE 10: Claims Will be Paid from Property Refinance HEYCART INC: Unsecureds Will Get 3.8% of Claims over 5 Years HOT CRETE: Seeks to Extend Plan Exclusivity to October 7 IRON SPRINGS: Unsecureds Will Get 100% of Claims in Plan JDL HVAC SERVICES: Unsecureds to Get Share of Income for 3 Years KLX ENERGY: Estimates Net Loss of Up to $11MM in Fiscal 2024 LBB ACQUISITION 1: Voluntary Chapter 11 Case Summary LBB ACQUISITION: Voluntary Chapter 11 Case Summary LBB LAKE OSWEGO: Voluntary Chapter 11 Case Summary LBB PROGRESS: Voluntary Chapter 11 Case Summary LEEWARD RENEWABLE: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable LIDO 10: Case Summary & Four Unsecured Creditors META MATERIALS: Completes $10MM Authentication Business Sale MOJITO CLUB: Unsecured Creditors Will Get 20% of Claims in Plan MOZART CAFE: Case Summary & 19 Unsecured Creditors NEELY GROUP: Plan Exclusivity Period Extended to October 14 NEW ORLEANS ARCHDIOCESE: Bankr. Advisors Get Derivative Immunity NEW ORLEANS ARCHDIOCESE: Disabled Kids' Lawsuit Exempt from Stay NOEL RUIZ NURSERY: Property Sale Proceeds to Fund Plan NOVENO LLC: Voluntary Chapter 11 Case Summary ORCHARD PARK: Case Summary & 10 Unsecured Creditors ORYX MIDSTREAM: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable PARK 28 PARTNERS: Voluntary Chapter 11 Case Summary PDK LLC: Case Summary & 20 Largest Unsecured Creditors PENN CENTER: Asset Sale Proceeds to Fund Plan Payments PERASO INC: Anticipates Q2 Revenue of $4.2 Million in Fiscal Q2 PIONEER HEALTH: Files Amended Plan; Confirmation Hearing July 25 QBS PARENT: Fitch Hikes LongTerm IDR to 'B-', Outlook Stable QUEST SOFTWARE: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR QUINTO LLC: Voluntary Chapter 11 Case Summary RA CUSTOM: Amends Several Secured Claims Pay Details RODAN & FIELDS: S&P Lowers ICR to 'D' on Missed Interest Payments SBG BURGER: Seeks to Extend Plan Exclusivity to August 14 SERINDEEP INTERNATIONAL: Voluntary Chapter 11 Case Summary SEXTO LLC: Voluntary Chapter 11 Case Summary SHIFT TECHNOLOGIES: Unsecureds Owed Under $2K to Recover 7.25% SM ENERGY: S&P Assigns 'BB-' Rating on New Senior Unsecured Notes SPIRIT AIRLINES: Lowers Fiscal Q2 Revenue to $1.28 Billion SPIRIT AIRLINES: Welcomes Richard Wallman to Board of Directors STAR PARENT: S&P Affirms 'B' ICR, Outlook Positive STRATHCONA RESOURCES: Fitch Affirms B+ LongTerm IDR, Outlook Stable TERRAFORM LABS: Unsecureds to Get Share of GUC Pool in Plan TERRAFORM POWER: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable THERMOGENESIS HOLDINGS: Boyalife to Seize Equity Following Default UMERAH FAMILY: Unsecureds to Get Share of Creditors' Trust VERTEX ENERGY: Updates Fiscal Q2 Financial and Operational Outlook W 72 STREET: Voluntary Chapter 11 Case Summary WASTE PRO: Fitch Assigns 'B+' LongTerm IDR, Outlook Stable WESTERN OIL: Case Summary & 20 Largest Unsecured Creditors [^] BOND PRICING: For the Week from July 15 to 19, 2024 ********* 124 PENN RESIDENCE: Unsecureds Will Get 100% of Claims in Plan -------------------------------------------------------------- 124 Penn Residence LLC filed with the U.S. Bankruptcy Court for the Eastern District of New York a Plan of Reorganization dated July 3, 2024. The Debtor owns real estate and associated rights located at 124 Penn Street, Brooklyn, New York. Class 2 is the Allowed Unsecured Claim of Joseph Goldberger. Mr. Goldberger has filed a claim in which he alleges his claim to be $5,444,994.27 pursuant to an agreement which provides for an arbitration of any disputes in accordance with the rules of Beth Din (Jewish Law providing for a Binding Arbitration). The Debtor and Mr. Goldberger shall go into a Beth Din arbitration proceeding in accordance with the provisions of the agreement which arbitration proceeding shall be determinative of the disposition of such creditor's claims provided that the Arbitration shall not modify the provisions of treatment of Class 1. Such Class is impaired and may vote on the Plan. This Class will receive a distribution of 100% of their allowed claims. This Class is impaired. Class 3 is the equity interest of Mr. Perlmutter. The amount to be deposited on or prior to the confirmation Date into the Debtor’s attorneys IOLA Escrow Account of (i) all deficiency amounts consisting of the difference between all income earned from the 2 rental apartments of the Real Property less all operating expenses to be paid by the Debtor for a period of 36 months from the Effective Date until the conclusion of the 36-month period at which time a balloon payment is due to the Debtor, as such deficiency amounts are adjusted each 6 months to reflect changes in either the income or expenses; (ii) all unpaid United States Trustee fees as of the Confirmation date and (iii) all administrative obligations including, but not limited to, fee applications of professionals retained by Court Order and any other required obligations of the Debtor as of the Confirmation Date. The Debtor shall complete the renovation of the Real Property. The Debtor shall rent out the 2 tenant spaces at a projected rental of approximately $11,000 per month for both. The Debtor shall make payments to the Mortgagee in the monthly amount set forth in this Plan. The Debtor shall advise Mr. Perlmutter of the deficiency amounts necessary to cover the current expenses due over the 36-month period covered to pay Class 1. The Debtor shall continue to operate in its activities and shall continue to own the Real Property. A full-text copy of the Plan of Reorganization dated July 3, 2024 is available at https://urlcurt.com/u?l=ZNXnpA from PacerMonitor.com at no charge. Counsel for the Debtor: Leo Fox, Esq. 630 Third Avenue - 18th Floor New York, NY 10018 Tel: (212) 867-9595 Email: leo@leofoxlaw.com About 124 Penn Residence LLC 124 Penn Residence LLC is primarily engaged in renting and leasing real estate properties. 124 Penn Residence LLC in Brooklyn NY, filed its voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 24-40559) on Feb. 6, 2024, listing as much as $1 million to $10 million in both assets and liabilities. Israel Perlmutter as sole member-manager, signed the petition. Judge Jil Mazer-Marino oversees the case. LAW OFFICE OF LEO FOX serves as the Debtor's legal counsel. 291 GRANT AVE: Case Summary & Four Unsecured Creditors ------------------------------------------------------ Debtor: 291 Grant Ave., LLC 291 Grant Avenue Jersey City, NJ 07305 Business Description: 291 Grant Ave. is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court District of New Jersey Case No.: 24-17173 Judge: Hon. John K Sherwood Debtor's Counsel: Stephen B. McNally, Esq. MCNALLYLAW, LLC 93 Main Street Suite 201 Newton, NJ 07860 Tel: 973-300-4260 Fax: 973-300-4264 Email: steve@mcnallylawllc.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Mendel Deutsch as authorized representative of the Debtor. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/4ZI2VLQ/291_Grant_Ave_LLC__njbke-24-17173__0001.0.pdf?mcid=tGE4TAMA 4011-4090 NW 34TH: Seeks to Extend Plan Exclusivity to September 13 ------------------------------------------------------------------- 4011-4090 NW 34th Street LLC asked the U.S. Bankruptcy Court for the Southern District of Florida to extend its exclusivity periods to file a plan of reorganization and obtain acceptance thereof to September 13 and November 12, 2024, respectively. The Debtor is a single asset real estate company which owns and operates an 18-unit commercial shopping center in Lauderdale Lakes, FL. The Debtor intends to file a plan of reorganization that will provide, inter alia, for payment to holders of allowed claims, over time, in an amount that would pay the holders of allowed claims in full. In this case, cause exists for extending the exclusivity and solicitation periods, as follows: * This case is moderately complex due to the number of creditors, amounts owed to creditors, and the dispute between the Debtor and disputed creditor IPG International Products Group Inc. regarding both IPG's entitlement to any claim against the Debtor and the amount of such a claim, should be Court find the Debtor has an obligation to IPG. * Additional time is necessary to prepare and negotiate a plan of reorganization and prepare adequate information. * There exists good faith progress toward reorganization. * The Debtor is paying its bills as they become due. * The Debtor has demonstrated reasonable prospects for filing a viable plan. * The Debtor is not seeking an extension of exclusivity in order to pressure creditors to submit to the Debtor's reorganization demands. Rather, the Debtor feels that it would lead to an efficient and smooth plan confirmation process. 4011-4099 NW 34th Street, LLC is represented by: Christian Somodevilla, Esq. LSS LAW 2 South Biscayne Boulevard, Suite 2200 Miami, FL 33131 Telephone: (305) 894-6163 Facsimile: (305) 503-9447 Email: cs@lss.law About 4011- 4099 NW 34th Street 4011- 4099 NW 34th Street, LLC is the owner of real property located at 4011-4090 NW 34th Street, Lauderhill, Fla., valued at $2 million. 4011- 4099 NW 34th Street filed Chapter 11 petition (Bankr. S.D. Fla. Case No. 23-19421) on Nov. 16, 2023. In the petition signed by Jose Gaspard Morell, an authorized officer, the Debtor disclosed $2,054,566 in total assets and $590,001 in total liabilities. Judge Corali Lopez-Castro oversees the case. The Debtor tapped Zach B. Shelomith, Esq., and Christian Somodevilla, Esq., at LSS Law as bankruptcy counsel and Hal Levenberg at Yip Associates as accountant. 9300 WILSHIRE: AES Redondo Files Competing Plan ----------------------------------------------- Creditor AES Redondo Beach, L.L.C. filed with the U.S. Bankruptcy Court for the Central District of California a Disclosure Statement and Plan of Reorganization for 9300 Wilshire, LLC dated July 4, 2024. The Debtor is reportedly organized as a limited liability company organized under the laws of the State of Delaware. Before this case was commenced on the Petition Date, the Debtor reportedly was in the business of developing real estate. The Debtor, described as a Delaware limited liability company, has disclosed during the pendency of the Chapter 11 Case that it is a real estate investment and development company with stated direct ownership interests in commercial property located in Santa Monica and Beverly Hills, California, and leasehold interest (as lessee and sublandlord) in an office building in Beverly Hills. AES is the holder of certain claims against the Debtor in Class 5A and 5B of the Plan that are secured by certain real estate property located at 1100 N. Harbor Blvd, Redondo Beach, CA 90277 (the "Redondo Property"). The Redondo Property is comprised of approximately fifty acres of industrial property located at 1100 N. Harbor Drive in Redondo Beach upon which is located an approximately 1,310-megawatt natural gas-fired generating facility (the "Facility"). AES originally acquired the Redondo Property from Southern California Edison Company ("SCE") on May 15, 1998, pursuant to an Asset Sale Agreement, dated November 22, 1997, by and between SCE and AES Corporation. AES has operated the Facility since its acquisition until December 31, 2023, when the Facility ceased operations. The Debtor filed this Chapter 11 Case on February 21, 2023, just hours before a nonjudicial foreclosure sale of the Redondo Property was scheduled to occur in accordance with California law. As noted in the Debtor's Plan, the threat of such foreclosure was the factor that is most notably responsible for precipitating the Debtor's chapter 11 filing. The Plan, if Confirmed, will leave all claims and equity interests unimpaired pursuant to the Bankruptcy Code upon the occurrence of the Effective Date. Although the Debtor is sure to disagree, the Plan does not suffer from what AES believes are a multitude of crippling defects that permeate the Debtor's proposed chapter 11 plan filed on July 1, 2024 (the "Debtor's Plan"). Turning to what is easily confirmable, the proposed Plan by AES does not hinge on speculative litigation or any other feasibility concerns. AES intends to fund the Plan so holders of Allowed Claims entitled to cash distributions can be paid in full on or promptly after the Effective Date. To this end, the following provides a summary of the key economic terms and procedures for the implementation of the Plan: * All holders of General Unsecured Claims in Class 2 of the Plan that are Allowed will be unimpaired under the Bankruptcy Code and paid in full in cash by AES, unless otherwise agreed by AES and the applicable holder, as soon as reasonably practicable after the Effective Date. Holders of Allowed General Unsecured Claims shall also receive accrued interest at the Federal Judgment Rate (5.14%) calculated from the Petition Date through the Effective Date. According to the Debtor, the aggregate amount of the Allowed General Unsecured Claims is estimated to be in the range of $750,000 and $1 million. Based on AES's review of the proofs of claim filed in the Chapter 11 Case and the Debtor's scheduled claims, the amount of Allowed General Unsecured Claims is estimated to total approximately $489,537.98; * All holders of Administrative Claims, Tax Claims, and Other Priority Claims in Class 1 of the Plan, that are Allowed will be unimpaired under the Bankruptcy Code and paid in full in cash by AES, unless otherwise agreed by AES and the applicable holder, as soon as reasonably practicable after the Effective Date. Administrative Claims includes Professional Claims representing the accrued professional fees and expenses of the Debtor's professionals, that have been employed in the Chapter 11 Case. The estimated amount of Allowed Tax Claims is $4,410.34, and the estimated amount of Allowed Other Priority Claims in Class 1 is $0.00. AES has estimated the amount of Allowed Administrative Claims at $50,000 if the Debtor, as shall be expected, continues to pay the estate's accrued Administrative Claims in the ordinary course of business. * Except for AES's secured claims in Class 5A and 5B that are discussed below, all holders of other secured claims in Class 3 and Class 4 of the Plan that are Allowed shall be unimpaired under the Bankruptcy Code and, at the Debtor's option, shall (i) receive payment in full from the Debtor, its equity holders, or the co obligors on such debt; (ii) be cured by the Debtor (or its co-obligors or equity holders) and reinstated; or (iii) the Debtor's interest in the property collateral securing such claims shall be tendered to the secured party; * Based on the estimated aggregate amounts of Allowed Administrative Claims, Tax Claims, Other Priority Claims in Class 1, and General Unsecured Claims in Class 2, certain conditions precedent to the occurrence of the Effective Date of the Plan require that the aggregate amount of (i) Allowed Administrative Claims shall not exceed $800,000; (ii) Allowed Tax Claims shall not exceed $35,000; (iii) Allowed Other Priority Claims in Class 1 shall not exceed $10,000; and (iv) Allowed General Unsecured Claims in Class 2, shall not exceed $1.2 million. Each of the forgoing conditions precedent to the Effective Date with respect to the aggregate amount of Allowed Claims reflects a sizable cushion to reduce unforeseen impediments to the occurrence of the Effective Date of the Plan and to help ensure that holders of Allowed Claims are promptly paid in full. * Pursuant to the terms of the Plan, AES will fund distributions to holders of Allowed Administrative Claims, Tax Claims, Other Priority Claims in Class 1, and General Unsecured Claims in Class 2, and AES's agreement to fund such distributions is not contingent upon the outcome of the Sale of the Redondo Property. In exchange for this agreement, AES shall be provided an Allowed AES Administrative Claim in the amount of AES's distributions to the forgoing creditors under the Plan. The AES Administrative Claim shall be entitled to distributions from the Debtor's interest in any proceeds from Sale of the Redondo Property (either under a 363 Sale or a Foreclosure Sale) that exceed the net of the costs of sale and payment in full of the AES Class 5B Secured Claim (or the satisfaction of such AES Class 5B Secured Claim by credit bid). If there are no such excess proceeds from the Sale, the AES Administrative Claim shall be waived; and * On and after the Effective Date, Section XI.E of the Plan provides for the Debtor's release of all Causes of Action against the Released Parties, which is defined to include AES, the AES Plan Administrator, and/or the Disbursement Agent. Further, on and after the Effective Date, Section XI.F of the Plan provides for the release and exculpation of the Exculpated Parties in connection with Causes of Action, if any, related to (among other things) acts or omissions regarding the Chapter 11 Cases and the preparation of the Combined DS and Plan. Exculpated Parties is defined to include the Debtor, AES, the AES Plan Administrator, and/or the Disbursement Agent. The AES Secured Claims are deemed unimpaired under the Plan pursuant to the proposed disposition of the Redondo Property in one of the following two ways set forth in Plan. In any event, to the extent it is contended that AES is not technically made whole under the Plan as a result of, among other things, funding distributions under the Plan as the Plan sponsor, AES consents to such to the treatment of its claims under the Plan and votes to approve the Plan. AES shall be deemed a qualified bidder in connection with the 363 Sale or Foreclosure Sale (as applicable, the "Sale") and shall be permitted to credit bid the AES Class 5B Secured Claim pursuant to the Plan. The Sale of the Redondo Property, whether pursuant to a 363 Sale or a Foreclosure Sale, shall not be "free and clear" of, and shall remain subject to, the Environmental DOT pursuant to the AES Class 5A Secured Claim. Class 2 consists of General Unsecured Claims. Holders of General Unsecured Claims in Class 2 are unimpaired. Each holder of an Allowed unsecured claim that is not (a) an Administrative Claim; (b) Tax Claim; or (c) Other Priority Claim in Class 1 (collectively, the "General Unsecured Claims"), except to the extent that a holder of an Allowed General Unsecured Claim agrees to less favorable treatment, shall receive the following as soon as practicable after the Effective Date in full and complete settlement, release and discharge of, and in exchange for its Allowed General Unsecured Claim, payment of its Allowed Claim in full (100%) in cash with interest at the Federal Judgment Rate from the Petition Date to the Effective Date. Though the closing of the Sale of the Redondo Property is a condition precedent under the Plan, the Sale of the Redondo Property is not necessary as a source of funds for AES to sponsor and fund distributions to holders of Allowed Administrative Claims, Allowed Tax Claims, Allowed Other Priority Claims in Class 1, and Allowed General Unsecured Claims in Class 2, pursuant to the terms of the Plan. AES, as the Plan sponsor, has agreed to fund distributions as soon as practicable after the Effective Date of the Plan to holders of Allowed Claims (i.e., Allowed Administrative Claims, Allowed Tax Claims, Allowed Other Priority Claims in Class 1, and Allowed General Unsecured Claims in Class 2). The maximum amount of AES's funding obligations to holders of Allowed Claims represent conditions precedent to the occurrence of the Effective Date in the Plan. A full-text copy of the Disclosure Statement dated July 4, 2024 is available at https://urlcurt.com/u?l=T8FyHk from PacerMonitor.com at no charge. Attorney for AES Redondo Beach: MORGAN, LEWIS & BOCKIUS LLP Craig A. Wolfe, Esq. 600 Anton Blvd., Ste. 1800 Costa Mesa, CA 92626-7653 T: 714.830.0600 / F: 714.830.0700 Email: craig.wolfe@morganlewis.com About 9300 Wilshire 9300 Wilshire, LLC, is a Beverly Hills-based company engaged in activities related to real estate. 9300 Wilshire filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-10918) on Feb. 21, 2023, with $100 million to $500 million in assets and $50 million to $100 million in liabilities. Leonid Pustilnikov, 9300 Wilshire's manager, signed the petition. Judge Ernest M. Robles presides over the case. The Debtor tapped Victor A. Sahn, Esq., at Greenspoon Marder, LLP as bankruptcy counsel and Rutan & Tucker, LLP as special counsel. A.W. BROWN: S&P Withdraws 'B+' Rating on 2016/2017 Revenue Bonds ---------------------------------------------------------------- S&P Global Ratings withdrew its 'B+' underlying rating on Arlington Higher Education Finance Corp., Texas' series 2016 and 2017 education revenue bonds, issued for A.W. Brown Leadership Academy (A.W. Brown), as a result of a legal defeasance of the bonds on June 28, 2024. The series 2016A, 2017A, and 2017B revenue bonds, with about $21.5 million outstanding as of June 30, 2023, were a general obligation of A.W. Brown, secured by gross revenue, which consists primarily of per pupil funding, and a first mortgage lien on the academy's land and facilities. According to agreement documents, IDEA Public Schools acquired the facilities, debt, and students from A.W. Brown as of June 28, 2024, and before the bond payment due date in August 2024. S&P said, "We understand that A.W Brown is expected to surrender its charter by July 31, 2024. We also understand that the Texas Education Agency has awarded A.W. Brown's real and personal property as well as its charter to IDEA, which is expected to assume operations beginning in August 2024. "The 'AAA' long-term program rating reflects our view of A.W. Brown's participation in the Texas Permanent School Fund Bond Guarantee Program, which provides the security of a permanent fund of assets that the school may use, if necessary, to meet debt service obligations." A1 TRANSPORT: Case Summary & Nine Unsecured Creditors ----------------------------------------------------- Debtor: A1 Transport Network, Inc. 6049 SW 128 Ct Miami, FL 33183 Business Description: The Debtor operates in the general freight trucking industry. Chapter 11 Petition Date: July 20, 2024 Court: United States Bankruptcy Court Southern District of Florida Case No.: 24-17287 Judge: Hon. Robert A Mark Debtor's Counsel: Jeffrey N. Schatzman, Esq. SCHATZMAN & SCHATZMAN, P.A. 9990 S.W. 77th Ave Penthouse 2 Miami, FL 33156-8115 Tel: (305) 670-6000 Email: jschatzman@schatzmanlaw.com Total Assets: $106,290 Total Liabilities: $1,222,479 The petition was signed by Ivan Antigua Escobar as president. 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/XQD6YWA/A1_Transport_Network_Inc__flsbke-24-17287__0001.0.pdf?mcid=tGE4TAMA AB BROTHERS: Case Summary & Eight Unsecured Creditors ----------------------------------------------------- Debtor: AB Brothers USA Inc. 6049 S.W. 128th Court Miami, FL 33183 Business Description: The Debtor operates in the general freight trucking industry. Chapter 11 Petition Date: July 20, 2024 Court: United States Bankruptcy Court Southern District of Florida Case No.: 24-17288 Judge: Hon. Robert A Mark Debtor's Counsel: Jeffrey N. Schatzman, Esq. SCHATZMAN & SCHATZMAN, P.A. 9990 S.W. 77th Ave Penthouse 2 Miami, FL 33156-8115 Tel: (305) 670-6000 Email: jschatzman@schatzmanlaw.com Total Assets: $593,418 Total Liabilities: $1,050,153 The petition was signed by Johania Tomas Diaz as president. A full-text copy of the petition containing, among other items, a list of the Debtor's eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UCNAX2I/AB_Brothers_USA_Inc__flsbke-24-17288__0001.0.pdf?mcid=tGE4TAMA ADVENTURE ENVIRONMENTAL: Seeks to Extend Exclusivity to August 12 ----------------------------------------------------------------- Adventure Environmental, Inc., asked the U.S. Bankruptcy Court for the Southern District of Florida to extend its exclusivity periods to file a plan of reorganization and obtain acceptance thereof to August 12 and October 9, 2024, respectively. The Debtor claims that it has a number of unresolved contingencies. Since the filing of the first Motion to Extend, the Debtor and City National have made significant progress in reaching an agreement regarding potential modified terms for the Main Street Lending Loan, but require additional time to finalize the details for same. The Debtor submits that it has a reasonable prospect for filing a viable plan of reorganization because it has a positive cash flow, which will be sufficient to provide a substantial distribution to creditors. Furthermore, the Debtor has vast experience in land and sea environmental restoration and disaster response and has secured bids on numerous projects which have either recently begun or will begin in the near future. As such, the Debtor's monthly income will increase from the projects as they are completed. The Debtor asserts that this request is being made to ensure its continued management of its business affairs and continued negotiation with its creditors, as well as to preserve the Debtor's possibility of reorganization and going concern value for the benefit of creditors. Adventure Environmental, Inc. is represented by: Christian Somodevilla, Esq. LSS Law 2 South Biscayne Boulevard, Suite 2200 Miami, FL 33131 Telephone (305) 894-6163 Facsimile (305) 503-9447 About Adventure Environmental Adventure Environmental, Inc., was founded in 1997 as a State of Florida Corporation that has been awarded and successfully completed hundreds of government and private contracts throughout the Country for: coastal environmental restoration of seagrasses, mangroves and wetlands; marine contracting involving dredging, canal & waterway stabilization/erosion control, commercial diving and barge/crane work; marine debris/derelict vessel salvage and removal; oil spill response and contingency planning; exotic and nuisance vegetation removal and control from land and sea; disaster response services; water quality monitoring and improvements; heavy equipment operation/earthwork/site preparation; and general construction. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-19328) on Nov. 13, 2023. In the petition signed by J. Gregory Tolpin, vice president and secretary, the Debtor disclosed $10,582,122 in assets and $13,253,968 in liabilities. Judge Corali Lopez-Castro oversees the case. Timothy S. Kingcade, Esq., at KINGCADE, GARCIA & MCMAKEN, P.A., is the Debtor's legal counsel. AHEAD DB: S&P Rates $1,212MM First-Lien Term Loan Due 2031 'B' -------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '3' recovery rating to Ahead DB Holdings LLC's proposed $1,212 million first-lien term loan due 2031. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. With this transaction, the company is effectively repricing and combining its existing $612 million term loan and $600 million loan. S&P said, "We view the proposed issuance as leverage neutral. While Ahead DB's S&P Global Ratings-adjusted leverage, pro forma for its acquisition of CDI, remains above our downgrade threshold, we believe its strong operating performance since the merger, future operating prospects (even with some moderation in bookings activity), and integration of CDI (with its faster-than-anticipated realization of business and cost synergies) continue to support our expectation it will deleverage to about the 6.5x area by the end of fiscal year 2024. Additionally, through the repricing, we estimate the company will likely reduce its annual cash interest payments by about $6 million, which will benefit its cash flow generation prospects." S&P said, "All of our other ratings on Ahead DB, including our 'B' issuer credit rating, are unchanged. The negative outlook continues to reflect the potential that we will lower our ratings if the company's S&P Global Ratings-adjusted leverage remains above 6.5x for 12 months following the close of the transaction." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's simulated default scenario assumes a payment default occurring in 2027 because weak economic conditions lead to a cutback in IT maintenance spending and system upgrades. These conditions would also lead to prolonged shipping delays and chip shortages, difficulty fulfilling orders, inefficient research and development and product-support spending, and competitive pricing pressures. -- In S&P's analysis, it values the company as a going concern because we believe that would maximize its value to its creditors. -- S&P applied a 6x EBITDA multiple to its assumed distressed emergence EBITDA to derive our estimated gross recovery value. -- The valuation multiple is consistent with those S&P uses for similar IT service and value-added reseller companies with similar business risk profile assessments. -- Based on the proposed issuance, S&P's recovery analysis now assumes a capital structure comprising the proposed $1,212 million first-lien term loan, $400 million of senior unsecured notes due 2028, a $140 million revolving credit facility due in 2029, and a $175 million accounts receivable (AR) securitization facility due 2026. Simulated default assumptions -- Simulated year of default: 2027 -- Emergence EBITDA: $165 million -- EBITDA multiple: 6x -- Jurisdiction: U.S. -- Revolving credit facility: 85% drawn at default Simplified waterfall -- Net enterprise value (after 5% administrative costs): $939 million -- Valuation split (obligors/nonobligors): 100%/10% -- Priority AR securitization claims: $103 million -- Collateral value available to first-lien debt claims: $836 million -- Secured first-lien debt claims: $1.31 billion --Recovery expectations: 50%-70% (rounded estimate: 60%) -- Unsecured Secured debt claims: $413 million -- Pari passu secured (deficiency) claims: $475 million --Recovery expectations: 0%-10% (rounded estimate: 0%) ALEXA & ROGER: Amends Unsecureds & Secured Lender Claim Details --------------------------------------------------------------- Secured Lender Fairbridge Strategic Capital LLC, submitted a Disclosure Statement in connection with Chapter 11 Plan, as Modified, for Alexa & Roger Inc., dated July 3, 2024. In the opinion of the Plan Proponent, the treatment of Claims under the Plan provides a greater recovery for Creditors than that which is likely to be achieved under alternative reorganization plans or the liquidation of the Debtor under Chapter 7 of the Bankruptcy Code. Class 3 consists of the Secured Lender Claim. On the Closing Date, subject to the Secured Lender's right to credit bid at the Sale; in full satisfaction, release and discharge of the Secured Lender Allowed Claims, each Claim, the holder of the Secured Lender Claim shall receive a Cash distribution from the Sale Proceeds, after full payment of all Statutory Fees, Allowed Administrative Claims, and the Allowed Claims in Classes 1 and 2, up to the full Allowed amount of the Allowed Lender Secured Claim (calculated through the Closing Date). The Class 3 Secured Lender's Secured Claim is Impaired, and the Secured Lender is entitled to vote to accept or reject the Plan. This Class is impaired. Class 4 consists of General Unsecured Claims. Subject to the provisions of Article 7 of the Plan with respect to Disputed Claims, in full satisfaction, release and discharge of Class 4 General Unsecured Claims, the holder of such Claims shall receive the following treatment: on the Effective Date, or as soon as possible after such Claims become Allowed Claims, each holder of a Class 4 General Unsecured Claim shall receive from the Disbursing Agent, unless otherwise agreed in writing between the Plan Proponent and the holder of such Claim, its Pro Rata payment of $25,000 from the GUC Contribution. The allowed unsecured claims total $73,697.46. Class 4 Claims are Impaired. On the Effective Date, all Interest Holders shall retain the value of their Interests that may exist as to any remaining balance of Cash, if any, after payment in full of all Allowed Claims and Classes of Claims against the Debtor. Interests of Equity shall not be extinguished, and the Debtor shall remain responsible for either managing or winding down its own affairs, without interfering with the Disbursing Agent's performance under the Plan. Payments under the Plan will be paid from either the Sale Proceeds, Cash turned over by the Debtor to the Disbursing Agent, and/or Cash to be contributed by Secured Lender. The Sale Transaction will be implemented pursuant to sections 363 and 1123(a)(5)(D) of the Bankruptcy. Prior to or on the Effective Date, the Property shall be sold to the Purchaser, pursuant to sections 363(f), 1123(a)(5)(D), and 1141(c) of the Bankruptcy Code free and clear of all Liens, with any such Liens, Claims and encumbrances to attach to the Sale Proceeds and disbursed in accordance with the provisions of the Plan. Secured Lender shall have the right, but not the obligation, to provide for an assignment of its Mortgage and an assumption by Purchaser in connection with the Sale Transaction. Except as set forth elsewhere in the Plan, all distributions to be made on the Effective Date shall be transferred to the escrow account of the Disbursing Agent at the closing of the Sale Transaction. Only in the event that Secured Lender or its designee is the Purchaser of the Property by credit bid, or if the Sale Proceeds are insufficient to pay the full amount of the Allowed Administrative Claims, Professional Fee Claims, Priority Tax Claims, Class 1 Claims, Class 2 Claims, Class 3 Claims, and Class 4 Claims, Secured Lender shall deliver to the Disbursing Agent for distribution pursuant to the provisions of the Plan Cash in an amount sufficient to pay the full amount of the Allowed Administrative Claims, Professional Fee Claims, Priority Tax Claims, Class 1 Claims, Class 2 Claims, and the GUC Contribution. The Plan Proponent contemplates seeking approval of a sale of the Property, on a private sale basis, to Yoel Detsch and Brenda Deutsch (or an LLC where both individuals own a majority interest) for $2,650,000.00. The Property will be sold free and clear of all Liens (except permitted encumbrances as determined by the Purchaser. A full-text copy of the Modified Disclosure Statement and Plan dated July 3, 2024 is available at https://urlcurt.com/u?l=7KfylP from PacerMonitor.com at no charge. Attorneys for Secured Lender Fairbridge: Sahn Ward Braff Koblenz Coschignano PLLC Andrew Roth, Esq. Joel M. Shafferman, Esq. 333 Earle Ovington Blvd Ste 601, Uniondale, New York 11553 About Alexa & Roger Alexa & Roger Inc. owns a mixed use, non-owner occupied, commercial building (store and two apartments) located at 381 Myrtle Avenue, Brooklyn, N.Y., having a comparable sale value of $3.4 million. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-44441) on Dec. 1, 2023, with $1 million to $10 million in both assets and liabilities. Roger A. Bradshaw, president, signed the petition. Judge Jil Mazer-Marino oversees the case. Richard S Feinsilver, Esq., represents the Debtor as legal counsel. ALLEN MEDIA: S&P Cuts ICR to 'CCC+' on Elevated Refinancing Risk ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Los Angeles-based media company Allen Media LLC to 'CCC+' from 'B-', its issue-level rating on its first-lien debt to 'B-' from 'B+', and its issue-level rating on its second-lien debt to 'CCC-' from 'CCC'. At the same time, S&P revised its recovery rating on the company's first-lien debt to '2' from '1'. S&P's '6' recovery rating on the second-lien debt is unchanged. S&P said, "The negative outlook reflects the potential that we will lower our ratings on Allen Media if we envision a default in the next 12 months, which could occur if its operating performance and financial trends remain challenged. Alternatively, we could lower our rating if the company pursues a subpar debt repurchase or exchange, which we would likely view as tantamount to a default." Allen Media's operating performance has been weaker than expected. The downgrade reflects the company's weaker credit metrics and negative free operating cash flow (FOCF) generation over the past year, which--coupled with the elevated interest rate environment--has led S&P's to view its capital structure as unsustainable. Allen Media's revenue in a non-political year slowed and its EBITDA declined over the past 12 months, which caused it to generate a FOCF deficit of $82 million and increased its leverage to 13.2x for the 12 months ended March 31, 2024. The company's performance also weakened its liquidity position because it has almost fully drawn down its $100 million revolver due February 2025. S&P said, "We expect management's cost-cutting measures, as well as the benefits from political advertising in the second half of the year, will likely enable the company to repay its revolver when it matures. As of March 31, 2024, Allen Media had $52.7 million of cash on its balance sheet and $99.9 million of borrowings outstanding on its revolver. The company recently announced $100 million of cost-cutting initiatives, which we expect will bolster its EBITDA and cash flow generation and improve its liquidity position over the next 12 months. We also forecast Allen Media will improve its EBITDA and cash flow generation in the second half of the year supported by increased political advertising for the 2024 election. Over the next three quarters, we forecast the company will generate $65 million-$75 million of FOCF and estimate it will end 2024 with $120 million-$130 million of cash on its balance sheet, which will likely enable it to repay its revolver (while retaining a small amount of cash) when it matures in February." The company faces elevated refinancing risk associated with its substantial debt burden. Allen Media has $99.9 million of outstanding borrowings on its revolver due Feb. 15, 2025, $840 million of senior secured debt maturing Feb 15,2027, and $630 million of senior unsecured notes due Feb 15,2028. The yields on the debt across the company's capital structure have also continued to increase since the beginning of 2024. S&P said, "If Allen Media needed to refinance its significant debt load at current market yields, we believe it would be highly unlikely that it could generate positive FOCF. Therefore, we believe the company is dependent on favorable business, financial, and economic conditions to meet its financial obligations, including a sustained recovery in the broader cable industry, an accelerated expansion in advertising and retransmission revenue, and a greater-than-forecast decline in interest rates." S&P said, "The negative outlook reflects the potential that we will lower our ratings on Allen Media if we envision a default in the next 12 months, which could occur if its operating performance and financial trends remain challenged. Alternatively, we could lower our rating if the company pursues a subpar debt repurchase or exchange, which we would likely view as tantamount to a default." S&P could lower its rating on Allen Media if: -- Its operating performance deteriorates further such that S&P no longer expects it will be able to make its fixed-charge payments, including its interest payments, and repay the revolver when it comes due in February 2025; or -- S&P expects the company will face a payment default or pursue a debt restructuring over the next 12 months. S&P could raise its rating on Allen Media if it successfully refinances its 2027 and 2028 debt maturities at rates that position it to generate consistently positive FOCF and comfortably maintain EBITDA interest coverage of greater than 1.5x. This could happen if the company successfully executes its growth plan to generate materially higher free cash flow and interest rate coverage. ALPINE HOSPITALITY: Case Summary & Two Unsecured Creditors ---------------------------------------------------------- Debtor: Alpine Hospitality, Inc. 6210 Tower Road Denver, CO 80249 Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court District of Colorado Case No.: 24-14064 Judge: Hon. Joseph G Rosania Jr. Debtor's Counsel: Jeffrey S. Brinen, Esq. KUTNER BRINEN DICKEY RILEY PC 1660 Lincoln Street, Suite 1720 Denver, CO 80264 Tel: 303-832-2400 Email: jsb@kutnerlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Wanda Bertoia as president. A copy of the Debtor's list of two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/E24CYGQ/Alpine_Hospitality_Inc__cobke-24-14064__0003.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ETFEF3Y/Alpine_Hospitality_Inc__cobke-24-14064__0001.0.pdf?mcid=tGE4TAMA ALTERNATIVE LOGISTICS: Case Summary & 20 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Alternative Logistics, LLC 1 Chestnut Street, Suite 222 Nashua, NH 03060 Business Description: Alternative Logistics is a veteran-owned third party logistics (3PL) company based in Nashua, New Hampshire. Alternative Logistics provides order processing and fulfillment, warehousing, inventory management and purchasing, shipping, accounts receivable, product handling, and call center services. Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court District of New Hampshire Case No.: 24-10503 Judge: Hon. Bruce A Harwood Debtor's Counsel: Eleanor Wm. Dahar, Esq. VICTOR W. DAHAR PROFESSIONAL ASSOCIATION 20 Merrimack Street Manchester, NH 03101 Tel: (603) 622-6595 Fax: (603) 647-8054 Email: vdaharpa@att.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Leo White 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/RN7IK5Q/Alternative_Logistics_LLC__nhbke-24-10503__0001.0.pdf?mcid=tGE4TAMA AMERGENT HOSPITALITY: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Amergent Hospitality Group, Inc. 7529 Red Oak Ln Charlotte NC 28226 Business Description: The Debtor operates a fast food restaurant concept. Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court Northern District of Texas Case No.: 24-42483 Debtor's Counsel: Richard Grant, Esq. CULHANE, PLLC 13101 Preston Road, Suite 110-1510 Dallas TX 75240 Tel: 214-210-2929 E-mail: rgrant@cm.law Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Pruitt as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6CWKNGI/Amergent_Hospitality_Group_Inc__txnbke-24-42483__0001.0.pdf?mcid=tGE4TAMA ART BUILDINGS: Case Summary & Two Unsecured Creditors ----------------------------------------------------- Debtor: Art Buildings LLC 2405 Coffee Road Modesto, CA 95355 Business Description: Art Buildings LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court Northern District of California Case No.: 24-41062 Debtor's Counsel: Michael Jay Berger, Esq. LAW OFFICES OF MICHAEL JAY BERGER 9454 Wilshire Boulevard, 6th Floor Beverly Hills, CA 90212 Tel: (310) 271-6223 Email: michael.berger@bankruptcypower.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Satpreet Thiara as managing partner. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MUEOE3Y/Art_Buildings_LLC__canbke-24-41062__0001.0.pdf?mcid=tGE4TAMA ATLANTIC HILLS: Seeks to Extend Plan Exclusivity to September 30 ---------------------------------------------------------------- Atlantic Hills, LLC, and its affiliates asked the U.S. Bankruptcy Court for the Southern District of Florida to extend their exclusivity periods to file a plan of reorganization and obtain acceptance thereof to September 30 and December 2, 2024, respectively. Atlantic is a holding company, owning both Superior Power and Superior Golf. The Debtors Superior Power and Superior Golf were in the business of selling and/or renting golf carts, motorcycles and other recreational vehicles. Prior to the commencement of these cases, one or both of the Debtors Superior Power and Superior Golf operated out of locations with the following addresses: 2409 and 2411 N. Federal Hwy., Delray Beach, FL 33483, ("Delray Location"); and 260 N. Dixie Hwy., Boca Raton, FL 33432, ("Boca Raton Location"), (collectively referred to as the "Leased Premises"). The landlord for the Leased Premises is Investments Limited, ("Landlord"). Prior to the commencement of these cases, Sanchez Hughley, acted as the manager of the Debtors' businesses, and the man in charge of the day to day affairs. Due to certain concerns about the manner in which he was operating the business, on August 18, 2023, Hughley was terminated as a manager of the businesses. The Debtors claim that they needed to address the issues concerning the Leased Premises. The Debtors were not sure what businesses were being operated by Hughley out of the Leased Premises, the status of rental payments for use of the Leased Premises, and whether the Debtors expected to continue to use one or both of the Leased Premises on an on-going basis. The Debtors explain that due to the time expended in localizing their operations into one location, and assembling the golf carts and other inventory into that one location, the Debtors have not been able to address the terms of a Plan of Reorganization. Further, the Proof of Claim bar date for non-governmental units passed on November 24, 2023, and the deadline for governmental units recently passed on March 13, 2024. Further, in the Superior Power case, the Florida Department of Revenue filed a claim in the amount of $24,971.35. Both of these claims were filed as priority claims. The current management of the Debtors have been in discussions with the Florida Department of Revenue, in order to better understand the basis for these claims, as they appear to have arisen when Hughley was controlling the operations. Further, the Internal Revenue Service has filed claims in all three of the Debtors' cases. The Debtors state that a review of those claims, which combined add up to over $38,000.00, relate to the failure to timely file tax returns. Again, this appears to have occurred while Hughley was in control of the Debtors' operations. The Debtors believe that in order to properly analyze the extent of the creditor body, and to formulate a plan of reorganization, it is important for the issues surrounding the government claims to be resolved. The Debtors assert that they continue to discuss with the landlord the issues surrounding the lease of the premises where the Debtors operate. Pursuant to Agreed Order on Movant Investments Limited Motion for Relief From Stay, the Debtors have until the August 31, 2024 to secure a new lease with the landlord. As of the writing of this Motion, a new lease has not been secured. This is an important factor that will effect the Debtors' ability to construct a Plan. Attorneys for the Debtors: Brian S. Behar, Esq. BEHAR, GUTT & GLAZER, P.A. DCOTA, Suite A-350 1855 Griffin Road Ft. Lauderdale, FL 33180 Tel: (305) 931-3771 Fax: (305) 931-3774 About Atlantic Hills Atlantic Hills, LLC filed Chapter 11 petition (Bankr. S.D. Fla. Case No. 23-17432) on Sept. 15, 2023, with up to $50,000 in assets and $50,001 to $100,000 in liabilities. Judge Erik P. Kimball oversees the case. Brian S. Behar, Esq., at Behar, Gutt & Glazer, P.A., is the Debtor's legal counsel. BACM 2017-BNK3: Fitch Affirms 'B-sf' Rating on Class F Certificates ------------------------------------------------------------------- Fitch Ratings has affirmed 12 classes of Bank of America Merrill Lynch Commercial Mortgage Trust 2017 BNK3 Commercial Mortgage Pass-Through Certificates, Series 2017-BNK3. In addition, the Rating Outlooks on classes E and F have been revised to Negative from Stable. Entity/Debt Rating Prior ----------- ------ ----- BACM 2017-BNK3 A-3 06427DAR4 LT AAAsf Affirmed AAAsf A-4 06427DAS2 LT AAAsf Affirmed AAAsf A-S 06427DAV5 LT AAAsf Affirmed AAAsf A-SB 06427DAQ6 LT AAAsf Affirmed AAAsf B 06427DAW3 LT AA-sf Affirmed AA-sf C 06427DAX1 LT A-sf Affirmed A-sf D 06427DAC7 LT BBB-sf Affirmed BBB-sf E 06427DAE3 LT BBsf Affirmed BBsf F 06427DAG8 LT B-sf Affirmed B-sf X-A 06427DAT0 LT AAAsf Affirmed AAAsf X-B 06427DAU7 LT A-sf Affirmed A-sf X-D 06427DAA1 LT BBB-sf Affirmed BBB-sf KEY RATING DRIVERS Overall Stable 'B' Loss Expectations: The affirmations reflect the generally stable performance of the pool since Fitch's prior rating action. Fitch's current ratings incorporate a 'Bsf' rating case loss of 3.8%. Six loans (14.4% of the pool) are considered Fitch Loans of Concern (FLOCs), including three office loans in the top 15 with upcoming rollover concerns and declining performance. The Negative Outlooks on the classes E and F reflect performance concerns with the FLOCs, particularly, 191 Peachtree (4.6%), Calabasas Tech Center (3.8%), Rio West Business Park (2.4%) and 8700-8714 Santa Monica Boulevard (1.6%). The largest contributor to loss expectations is the Calabasas Tech Center (3.8%) loan, which is secured by a 282,434-sf suburban office property located in Calabasas, CA. The property's largest tenants include; Yamaha Guitar Group (26.8% of NRA, leased through August 2026), Kim's a Princess (8.6%, January 2027) and Golden Entropy Marketing Inc, (5.4%, December 2026). The property was 71.5% (Physical occupancy) occupied as of the March 2024 rent roll. The Grant & Weber (11% of NRA) space is currently dark as the tenant vacated the premises on or about August 2022 prior to the May 2024 lease expiry date. Near term lease rollover includes 17.8% of the NRA in 2024 and 1.4% in 2025. According to CoStar, the property lies within the Calabasas / Westlake Village Office Submarket of the Los Angeles market area. As of 2Q24, average rental rates were $35.12 psf and $41.53 psf for the submarket and market, respectively. Vacancy for the submarket and market was 16.7% and 16.2%, respectively. Fitch's 'Bsf' case loss of 21.1% (prior to a concentration adjustment) is based on a 10.25% cap rate and 15% stress to the YE 2023 NOI, and factors in an increased probability of default due to the low occupancy and loan's heightened maturity default risk. The second largest contributor to expected losses is the Rio West Business Park (2.4%) loan, which is secured by a 296,633-sf suburban office property located in Tempe, AZ. The property was 100% occupied as of the March 2024 rent roll. The property's largest tenant, American Airlines (69% of NRA), has been in occupancy at the building since the property was constructed in 2006 and has exercised renewal options for the majority of their space. There are three separate leases with American Airlines with staggered lease expirations starting in November 2024 (19%) and August 2029 (50%). Fitch requested for a leasing status update pertaining to the November 2024 lease expiry. Per the servicer, the borrower is in discussions with American Airlines, and the tenant has not given notice of intent to renew or vacate its space at the property. According to CoStar, the property lies within the Tempe Office Submarket of the Phoenix market area. As of 2Q24, average rental rates were $33.10 psf and $29.64 psf for the submarket and market, respectively. Vacancy for the submarket and market was 23.4% and 16.6%, respectively. Fitch's 'Bsf' case loss of 18.7% (prior to a concentration adjustment) is based on a 10.0% cap rate and 20% stress to the YE 2023 NOI due to the near-term rollover risk, and factors in an increased probability of default due to the loan's heightened maturity default risk. The third largest contributor to expected losses is the 8700-8714 Santa Monica Boulevard (1.6%) loan, which is secured by a 32,964-sf mixed use property located in West Hollywood, CA. The servicer- reported occupancy and NOI DSCR were reported at 76.7% and 1.38x, respectively, as of March 2024. Fitch's 'Bsf' case loss of 24.4% (prior to a concentration adjustment) is based on a 9.0% cap rate and 20% stress to the YE 2022 NOI due to upcoming rollover concerns, and factors in an increased probability of default due to the loan's heightened maturity default risk. Fitch is also monitoring the performance of the 191 Peachtree (4.6%) loan, which is secured by a 1.2 million-sf office building located in Atlanta, GA. Occupancy was 84% as of the March 2024 rent roll. The property's largest tenants include; Deloitte (19.4% of NRA, leased through November 2025), HNTB Corporation (7.0%, May 2025) and Hall, Booth, Smith (6.3%, October 2028). According to the servicer, Deloitte recently extended its lease at the property for one-year through Nov. 30, 2025. The loan has been designated as a FLOC, due to anticipated refinance concerns given upcoming lease rollover. Fitch's 'Bsf' case loss of 2.8% (prior to a concentration adjustment) is based on a 9.50% cap rate and 30% stress to the YE 2023 NOI. Increase in Credit Enhancement: As of the June 2024 remittance reporting, the pool's aggregate principal balance has been reduced by 10.7% to $872.9 million from $977.1 million at issuance. Sixteen loans (60.5%) are full term, interest-only. Nineteen loans (21.5%) have a partial, interest-only component; all of which have begun amortizing. Five loans (4.3%) have been defeased. To date, the trust has not incurred any realized principal losses. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrades to the 'AAAsf' and 'AA-sf' rated classes are not likely due to the expected continued paydowns and increasing credit enhancement (CE) relative to loss expectations but may occur should interest shortfalls affect these classes. Downgrades to these classes are possible should 191 Peachtree and a large portion of non-FLOCs fail to pay off and default at or before maturity, exposing these classes to prolonged workout losses. Downgrades to the 'A-sf' and 'BBB-sf' rated classes may be possible should expected pool losses significantly increase and/or performance of the FLOCs, particularly Calabasas Tech Center, Rio West Business Park and 8700-8714 Santa Monica Boulevard, continue to decline and/or incur outsized losses. Downgrades to the 'BBsf' and 'B-sf' rated classes may occur with FLOCs transferring to special servicing, with greater certainty of losses from the FLOCs and/or if actual realized losses on FLOCs exceed expectations. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Stable to improved asset performance, coupled with additional paydown and/or defeasance. Upgrades to the 'A-sf' and 'AA-sf' rated classes are not expected but would likely occur with significant improvement in CE and/or defeasance. Upgrades to the 'BBB-sf' classes would be considered with increased paydown and/or defeasance, combined with performance stabilization of the FLOCs. Classes would not be upgraded above 'Asf' if there is a likelihood of interest shortfalls. An upgrade to the 'BBsf' and 'B-sf' rated classes may occur in the later years of a transaction if performance of the remaining pool is stable, with sufficient CE to these classes and limited pool-level losses, but would be limited based on sensitivity to concentrations or the potential for adverse selection. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. 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. BIOXCEL THERAPEUTICS: Estimates $1.1MM Net Revenue in Fiscal Q2 --------------------------------------------------------------- BioXcel Therapeutics, Inc. announced its preliminary estimated unaudited net revenue results from sales of IGALMI (dexmedetomidine) sublingual film for the second quarter ended June 30, 2024. The Company expects unaudited revenue of approximately $1.1 million for the three months ended June 30, 2024, representing an increase of approximately 90% quarter over quarter and approximately 141% compared to the same period in 2023. Revenue growth was driven by an increase in contracting with psychiatric care clinics and behavioral health facilities using a small commercial team. "We are pleased with the positive feedback we continue to receive from physicians, caregivers, and patients about IGALMITM for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder," said Vimal Mehta, Ph.D., CEO of BioXcel Therapeutics. "Since our commercial launch and deployment of focused market-access strategy, we are continuing to build IGALMI brand equity. Our current indication covers the institutional setting, where an estimated 16 million agitation episodes occur annually.1-3 We believe the current market presence could also help drive our potential expansion into the at-home setting, if BXCL501 is successfully developed and approved for use at home, where we estimate an additional 23 million annual agitation episodes occur. 1-3 We look forward to advancing our SERENITY program with the goal of addressing this at-home market, while remaining focused on progressing our TRANQUILITY program to potentially reach an even greater number of patients suffering from agitation associated with Alzheimer's dementia." The Company will discuss financial results and business updates for the second quarter of 2024 during its upcoming earnings conference call, the timing of which will be announced at a later date. About BioXcel Therapeutics, Inc. Headquartered in New Haven, Conn. BioXcel Therapeutics, Inc. is a biopharmaceutical company utilizing artificial intelligence to develop transformative medicines in neuroscience and, through the Company's wholly owned subsidiary, OnkosXcel Therapeutics LLC, immuno-oncology. The Company employs various AI platforms to reduce therapeutic development costs and potentially accelerate development timelines. As of March 31, 2024, BioXcel Therapeutics had $82.32 million in total assets, $154.68 million in total liabilities, and a total stockholders' deficit of $72.36 million. Stamford, Conn.-based Ernst & Young LLP, the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 22, 2024, citing that the Company has suffered recurring losses from operations, has used significant cash in operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. CARLOS A. ROJAS: Amends U.S. Bank Secured Claims Pay Details ------------------------------------------------------------ Carlos A. Rojas, D.P.M., P.A., submitted a First Amended Plan of Reorganization under Subchapter V dated July 2, 2024. This Plan provides for a comprehensive reorganization of the Debtor to preserve its going concern value and future business. This Plan proposes to pay creditors using the Net Disposable Income of the Debtor over the three-year period after the Effective Date. The Plan will allow Secured Creditors to be paid the full value of their secured interests and Unsecured Creditors to recover approximately 1.78% of their claim amounts as opposed to no recovery at all if the Debtor's assets were sold in a hypothetical Chapter 7 liquidation as all of the Debtor's assets are secured. U.S. Bank has a first lien on the Debtor's 2015 Range Rover; BMW Financial Services NA, LLC has a first lien on the Debtor's interest in the 2021 BMW X5; the U.S. Small Business Administration has a first lien on the Debtor's deposit account; and First American Bank has a first lien on all of the Debtor's remaining assets. Accordingly, after applying all sale proceeds to the secured obligations, there would be no remaining funds left for any unsecured creditors of the Debtor's estate. The Debtor believes this Plan represents the best possible return to Holders of Claims. The Debtor believes this Plan will successfully reorganize the Debtor and that confirmation of the Plan is in the best interests of the Debtor, its Creditors, and equity interest holders. The Debtor's financial projections show that the Debtor will have projected disposable income of $24,417.62. The initial payment to Unsecured Creditors is estimated to be made on September 1, 2024 and the final Plan payment is expected to be paid on August 1, 2027. This Plan of Reorganization proposes to pay creditors of the Debtor from an initial infusion of cash of $15,000.00 from the Debtor's principal, Dr. Carlos A. Rojas, and cash flow generated from the ongoing operations of the Debtor's podiatry practice. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at one and one-half cents on the dollar. This Plan also provides for the payment of administrative and priority claims in full. Class 4 consists of the Secured Claim of U.S. Bank. In exchange for full and final satisfaction of its Class 4 Secured Claim, the Class 4 Secured Creditor shall retain a first lien on the Debtor's 2015 Land Rover, Range Rover subject to and to the extent that such lien existed prepetition by virtue of said Secured Creditor's Retail Installment Sales Contract dated December 20, 2019, and shall be paid in full in accordance with the terms of the Retail Installment Sales Contract at the rate of $936.84 per month until maturity (March 3, 2026). Upon the completion of such payments, all liens and encumbrances held by U.S. Bank on the Debtor's the 2015 Land Rover, Range Rover shall be deemed released, terminated, and extinguished, without further notice or order of the Court. Thereafter, U.S. Bank shall cooperate by filing all documents necessary to terminate and release its lien on the title to the vehicle. The Class 4 Secured Creditor is unimpaired and conclusively deemed to have accepted the Plan and is not entitled to vote on the Plan. Like in the prior iteration of the Plan, each Holder of a Class 6 Claim shall receive its pro rata share of 11 consecutive quarterly installments of $300.00 each, commencing December 1, 2024. The Plan will be implemented by an infusion of cash by the Debtor's principal, Dr. Carlos A. Rojas and further funded by the ongoing operations of the business. Dr. Rojas is the sole shareholder of the Debtor and the only doctor in the Debtor's podiatry practice. Dr. Rojas is jointly liable with the Debtor on the debts to First American Bank, BankUnited, American Express and the SBA (collectively, the "Joint Debt Creditors"). Dr. Rojas is essential to the operations of the Debtor by providing the only source of revenue for the business. He is also responsible for the day to day operations and financial affairs of the business. Without Dr. Rojas' commitment to the business, the Debtor cannot survive. Dr. Rojas has committed to a significant reduction in his salary. His salary has been reduced to $2,500.00 per month, which is unheard of for a doctor in his field of practice and his experience. In order to further invest in the success of the Debtor, with help from friends and family, Dr. Rojas has committed to infusing the sum of $15,000.00 into the Debtor for the purpose of funding the initial Plan payments. In return for this contribution, the Debtor is seeking a consensual plan where the Joint Debt Creditors will agree to release Dr. Rojas from all personal liability, so that he may continue to work for the Debtor and assure creditors that the Debtor will in turn have sufficient revenue to fund the Plan. Prior to the date set for hearing on confirmation of the Plan, Dr. Rojas will deliver his contribution of $15,000.00 to the Debtor to be deposited in the Debtor's operating account as a means for funding the Plan along with the Debtor's operating income. Unless ordered otherwise in the Confirmation Order, the Reorganized Debtor shall make all payments required by the Plan. In order to ensure the successful implementation of the Debtor's Plan, Dr. Rojas shall retain his position as President with the Reorganized Debtor and maintain his responsibilities for the day to day operations and financial management of the Reorganized Debtor. A full-text copy of the First Amended Plan of Reorganization dated July 2, 2024 is available at https://urlcurt.com/u?l=Wbmbpz from PacerMonitor.com at no charge. Attorney for the Debtor: Jeffrey N. Schatzman, Esq. SCHATZMAN & SCHATZMAN, P.A. 9990 SW 77th Ave Penthouse 2 Miami, FL 33156 Phone: (305) 670-6000 Email: jschatzman@schatzmanlaw.com About Carlos A. Rojas, D.P.M., P.A. Carlos A. Rojas, D.P.M., P.A., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-13207) on April 2, 2024, listing up to $50,000 in assets and $500,001 to $1 million in liabilities. Jeffrey N Schatzman, Esq. at Schatzman & Schatzman, P.A., as its counsel. CBDMD INC: Submits Compliance Plan to NYSE American --------------------------------------------------- As previously disclosed, on June 5, 2024, cbdMD, Inc. received notification from the NYSE American LLC that the Company is no longer in compliance with NYSE American's continued listing standards. The Notice provided that the Company must submit a plan of compliance by July 5, addressing how it intends to regain compliance with the continued listing standards by December 5, 2025. The Company timely submitted the Plan to the NYSE American on July 5, 2024, advising of actions the Company intends to take to regain compliance with the continued listing standards. The Company expects to receive a response from NYSE American in August 2024. About cbdMD, Inc. Headquartered in Charlotte, NC, cbdMD, Inc. -- www.cbdmd.com -- owns and operates the nationally recognized CBD (cannabidiol) brands cbdMD, Paw CBD and cbdMD Botanicals. Its mission is to enhance its customer's overall quality of life while bringing CBD education, awareness and accessibility of high quality and effective products to all. The Company sources cannabinoids, including CBD, which are extracted from non-GMO hemp grown on farms in the United States. Charlotte, North Carolina-based Cherry Bekaert LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Dec. 22, 2023, citing that the Company has historically incurred losses, including a net loss of approximately [$23 million] in the current year, resulting in an accumulated deficit of approximately $174 million as of Sept. 30, 2023. These conditions raise substantial doubt about the Company's ability to continue as a going concern. While the Company is taking strong action, believes in the viability of its strategy and path to profitability, and in its ability to raise additional funds, there can be no assurances to that effect. The Company's working capital position may not be sufficient to support the Company's daily operations for the twelve months subsequent to the issuance of these annual financial statements. The Company's ability to continue as a going concern is dependent upon its ability to improve profitability and the ability to acquire additional funding. These and other factors raise substantial doubt about the Company's ability to continue as a going concern within 12 months after the date that the annual financial statements are issued, the Company said in its Quarterly Report for the period ended March 31, 2024. CLEVELAND-CLIFFS: S&P Alters Outlook to Stable, Affirms 'BB-' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook to stable from positive and affirmed its 'BB-' issuer credit rating on Ohio-based Cleveland-Cliffs Inc. S&P affirmed its 'BB-' issue-level rating on the senior unsecured debt and 'B' issue-level rating on the subordinated debt, and their associated recovery ratings are unchanged. The stable outlook reflects S&P's expectation of leverage exceeding 3x over the next 12-24 months, primarily as a result of the increased debt balance and exacerbated by current steel price volatility. On July 15, 2024, Cleveland-Cliffs Inc. announced it had entered into a definitive agreement to acquire Stelco Holdings Inc., the parent company of Stelco Inc., a Canadian-based steel producer with blast furnace operations. The proposed transaction reflects an enterprise value of $2.5 billion. The proposed acquisition will enhance Cliffs' scale, drive a slight improvement in margins, and increase earnings variability. Once completed, the integration of Stelco will further consolidate blast furnace operations, enhancing Cliffs' scale and operational efficiencies. S&P projects Cliffs' steel shipment volumes will increase 21% to about 20 million tons per annum post-transaction close, consolidating its position as one of the leading steel manufacturers in North America. This acquisition also adds some diversity to Cliffs' end markets, which are heavily weighted toward the automotive end market. At the same time, the consolidation will pave way for further vertical integration, as Cliffs can feed the additional blast furnace with iron ore from its own mines. The proposed acquisition will further diversify Cliffs' geographic reach and customer base as it gains expanded access to new customers and markets in Canada. The union of the two entities could also result in some cost synergies given the similarity of operations and complimentary capabilities identified by Cliffs. S&P said, "While Stelco presents low-cost operations given favorable exchange rates between the U.S. dollar and Canadian dollar, iron supply agreements, and energy rates, we do not expect material improvement in Cliffs' margins given that Stelco would represent less than 15% of total output. We expect EBITDA margins could improve slightly to 9%-11% from 8.7% at year-end 2023, which is comparable with United States Steel Corp. (BB-/Watch Pos/--), a close peer with blast furnace and electric arc furnace operations." These margin levels reflect exposure to higher fixed costs, older assets, and limited ability to adjust supply in times of unfavorable market conditions, which is typical of blast furnaces. On the other hand, margins for higher-rated peers such as Steel Dynamics Inc. (BBB/Stable/--; 19.5% for fiscal 2023), Commercial Metals Co. (BB+/Stable/NR; 17%), and Nucor Corp. (A-/Stable/A-1; 21.9%) are higher as mini mills have highly variable costs, newer assets, and an ability to adjust production according to demand. Stelco will also amplify the volatility of Cliffs' earnings as it will increase Cliffs' exposure to spot sales volume. The acquisition will be primarily funded by incremental debt, which will cause leverage to increase beyond 3x. Cliffs proposes to use a mixture of debt, cash, and equity to fund the acquisition of Stelco. The company plans to issue $750 million of a new term loan B and $1.25 billion of new senior unsecured notes, in addition to drawings of about $800 million under its existing $4.75 billion asset-based lending (ABL) facility, which currently has $342 million outstanding as of March 31, 2024. S&P said, "At the same time, Cliffs will take on incremental other debt-like obligations such as leases of about $266 million and employee-related obligations of about $270 million from Stelco as of March 31, 2024, which we consider in our adjusted debt calculations. On an S&P Global Ratings-adjusted debt basis, we believe Cliffs' debt could rise at least 70% to $7.5 billion-$8 billion, resulting in S&P Global Ratings adjusted debt to EBITDA above 3x upon close of the transaction and in the following 12 months, absent any substantial debt repayment." The company could begin deleveraging based on their public statement to prioritize debt repayment with free cash flow following the announcement of the acquisition. This is in line with past deleveraging efforts, such as a reduction in debt of more than $2 billion from 2022-2023; however, the company's most recent financial policy favored significant share repurchases over debt reduction. S&P said, "While Cliffs has a recent history of deleveraging, we believe the pace could be slower given challenging market conditions that could limit cash flow generation in 2024. Hot-rolled coil prices (HRC) have declined more than 50% to about $650 between December 2023 and July 2024, along with general industrial destocking by steel service centers. We also expect Cliffs could incur restructuring costs of about $150 million-$180 million in relation to the indefinite idling of its Weirton plant. As a result, free cash flow could decline about 30%-40% in 2024 and leverage could remain above 3x." S&P Cliffs' financial policy targets a net debt leverage of 2.5x, which excludes other debt-like obligations like pensions, leases and asset retirement obligations that S&P includes in its adjusted leverage calculations." The company plans to issue equity of about $411 million to partly finance the acquisition of Stelco, in line with plans to stay within its stated net leverage target. The proposed capital structure includes prepayable debt, such as a new term loan B and drawings under the ABL, which provides Cliffs with the opportunity to voluntarily reduce its debt with excess cash flows following closure of the acquisition. The company's recent deleveraging history includes voluntary repayments of about $2.1 billion of debt in the last two fiscal-years 2022 and 2023 (ending Dec 31). However, in December 2023, Cliffs announced it would undertake aggressive share repurchases in 2024, purchasing about 30 million of its common stock valued at $608 million in the first quarter of 2024. S&P said, "In our view, these actions have depleted Cliffs' cash availability for debt reduction this year. Although the company recently approved a new stock repurchase program of $1.5 billion in April 2024, we expect it will apply roughly 20% or less of free cash flow toward share repurchases as it refocuses on debt reduction." S&P said, "The stable outlook reflects our expectation that Cliffs' leverage may remain in the 3x-4x range within the next 12 months given current steel price dynamics and the proposed use of incremental debt for the Stelco acquisition. We also expect the pace of deleveraging could be slower due to declining free cash flow generation and share repurchases that reduce cash availability for debt reduction." S&P could lower its ratings on Cliffs if it sustains leverage above 4x. This could occur from: -- Prolonged market weakness, leading to weaker-than-expected earnings; or -- An aggressive financial policy, such as significant share repurchases or further debt-financed acquisitions. S&P could raise its ratings on Cliffs over the next 12 months if: -- It deleverages quicker than S&P anticipates, leading to leverage of 2x or better; and -- S&P expects a push toward low double-digit percent margins, which would further confirm an improving business following the Stelco acquisition. CMG MEDIA: S&P Lowers ICR to 'CCC+' on Elevated Refinancing Risk ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on CMG Media Corp. to 'CCC+' from 'B-' and it removed all ratings from CreditWatch, where they were placed with negative implications on June 20, 2024. At the same time, S&P lowered its issue-level rating on the company's senior secured debt to 'CCC+' from 'B-'. S&P's '3' recovery rating on this debt is unchanged. S&P also lowered its issue-level rating on its senior unsecured debt to 'CCC-' from 'CCC'. S&P's '6' recovery rating on this debt is unchanged. S&P said, "The negative outlook reflects the potential for a lower rating if we envision a default within 12 months, which could occur if the company's debt becomes current. Alternatively, we could lower the rating if the company pursues a subpar debt repurchase or exchange, which we would likely view as tantamount to a default. "The company's elevated leverage increases its refinancing risk. We believe CMG could face difficulty refinancing upcoming maturities in 2026 and 2027 if it is unable to significantly reduce its leverage over the next two years. We expect the company's trailing-eight-quarter S&P Global Ratings-adjusted gross leverage will be 7.6x in 2024 and expect it to remain above 6x over the next two years, even if the company uses all of its excess cash ($353 million as of March 31, 2024), along with S&P estimated FOCF of about $125 million in 2024 and $30 million in 2025, to reduce its debt. While CMG has shown a past willingness to reduce debt, it has also pursued shareholder returns and could do so again given its financial sponsor ownership by Apollo. Yields across the company's various debt pieces have also continued to increase since the beginning of this year. If the company needed to refinance its significant debt load at current market yields, we believe it would be difficult for it to continue generating positive FOCF." Current debt trading levels increase the potential for a subpar debt buyback. The company's senior secured term loan is currently trading around 82 cents on the dollar, and its senior unsecured notes are about 57 cents on the dollar. S&P said, "We believe the discount associated with the value of the company's debt increases the potential for it to pursue a subpar debt buyback. If the company were to buy back or exchange its debt below par, we would likely view it as distressed and tantamount to a default given the challenged operating environment and uncertainty around future cash flows." Core advertising revenue to remain challenged in 2024, slightly offset by improvements in retransmission revenue. S&P said, "We expect CMG's core advertising revenue will remain challenged in 2024 as large national advertisers continue to hold back their spending and crowd out from political advertising. Slightly offsetting, we expect the company's retransmission revenue will increase 3%-5% this year thanks to the new carriage agreement with Dish TV in April 2024 following a near 18-month blackout. While we expect it will generate political revenue of about $150 million to $160 million in 2024, given the upcoming presidential election, we do not anticipate it will benefit as strongly as it did in 2020, when the election cycle included spending from two senate runoff races in Georgia." S&P said, "The negative outlook reflects the potential for a lower rating if we envision a default within 12 months, which could occur if the company's debt becomes current. Alternatively, we could lower the rating if the company pursues a subpar debt repurchase or exchange, which we would likely view as tantamount to a default." S&P could lower the rating if: -- There is not improvement in future operating performance (likely due political revenue exceeding our expectations) that leads to significant deleveraging and the company's debt becomes current, such that S&P envisions a default within 12 months; or -- The company pursues a subpar debt repurchase or exchange that S&P views as tantamount to a default. S&P views an upgrade as unlikely given its expectations for future performance, the company's large debt maturities, and uncertainty around the company's future expected cash flows. However, S&P could raise the rating if: -- S&P expects the company will refinance its 2026 and 2027 debt maturities at rates that position it to generate consistent positive FOCF thereafter; and -- It maintains EBITDA interest coverage comfortably above 1x. S&P said, "Governance factors are a moderately negative consideration, as it is 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 controlling owners. This also reflects private-equity sponsors' generally finite holding periods and focus on maximizing shareholder returns." COMTECH TELECOM: Registers 1.4M Shares for Resale by Investors -------------------------------------------------------------- Comtech Telecommunications Corp. filed a preliminary prospectus on Form S-1 with the U.S. Securities and Exchange Commission relating to the resale from time to time, by the selling stockholders -- Clover Private Credit Opportunities Origination II LP, Clover Private Credit Opportunities, Origination (Levered) II LP, Maple Hill, LLC, TCW Rescue Financing Fund II LP, and Trifolium O SPE LLC -- of up to 1,435,884 shares of common stock, par value $0.10 per share, which the selling stockholders may acquire upon the exercise of outstanding warrants. Comtech issued the Warrants to the Selling Stockholders in a private placement concurrent with the entry into its Credit Facility. On June 17, 2024, the Company entered into a Credit Agreement, dated as of June 17, 2024, among Comtech Telecommunications Corp., the lenders party thereto, TCW Asset Management Company LLC, as agent, and Wingspire Capital LLC, as revolving agent. The Credit Facility provides a senior secured loan facility consisting of: (i) a $162.0 million term loan and (ii) an asset-based revolving credit facility with revolving commitments in an aggregate principal amount of $60.0 million, which is subject to certain borrowing base limitations. In connection with the Credit Facility, the Company issued the Warrants to the Selling Stockholders, which entitle the Selling Stockholders to purchase from the Company 1,435,884 shares of the Common Stock, at any time and from time to time after June 17, 2024 and on or prior to the close of business on June 17, 2031, at an exercise price of $0.10 per share, subject to certain adjustments. The Warrants are exercisable until the Expiration Date, at the election of the holder, either in full or in part, for cash or by Net Share Settlement. Upon a refinancing resulting in the payment in full of all Term Loan Obligations on or before the relevant maturity date, each of the Selling Stockholders shall have the right to sell, and, upon exercise by any Selling Stockholder of its Put Right, the Company shall have the obligation to purchase for cash, up to 50% of the Warrants held by such Selling Stockholder at a price per share equal to 90% of the 30-day volume-weighted average price of the Common Stock calculated as of the date of exercise of the Put Right. Pursuant to the terms of the Warrants, we agreed to file a registration statement providing for the resale by the Selling Stockholders of the Warrant Shares within 30 calendar days from the date of the issuance of the Warrants. We agreed to use commercially reasonable efforts to cause such registration statement to become effective as soon as practicable thereafter and to keep such registration statement continuously effective until the earlier of (1) the date that the respective Selling Stockholder no longer owns any Warrants or Warrant Shares and (2) the date on which all Warrant Shares held by a holder may be sold pursuant to Rule 144 without regard to any volume or manner of sale restrictions, assuming all Warrants held by such holder are exercised on a Net Share Settlement basis. The closing of the issuance and sale of the Warrants was consummated on June 17, 2024. The Selling Stockholders of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal trading market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. Comtech will not receive any proceeds from the sale of the Warrant Shares by the Selling Stockholders. However, it will receive proceeds from the exercise of the Warrants by the Selling Stockholders to the extent they are exercised for cash. The Company said, "We estimate that the maximum proceeds that we may receive from the exercise of the Warrants, assuming all the Warrants are exercised at their exercise price of $0.10, will be $143,588. We do not know, however, whether any of the Warrants will be exercised or, if any of the Warrants are exercised, when they will be exercised. It is possible that the Warrants will expire and never be exercised. There are circumstances under which the Warrants may be exercised utilizing net share. In these circumstances, even if the Warrants are exercised, we may not receive any proceeds, or the proceeds that we do receive may be significantly less than what we might expect. We intend to use the aggregate net proceeds from the exercise of the Warrants for general corporate purposes, including working capital. The Selling Stockholders will pay any expenses incurred by the Selling Stockholders for brokerage, accounting, tax or legal services or any other expenses incurred by the Selling Stockholders in disposing of its shares of Common Stock. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares covered by this prospectus, including, without limitation, all registration fees and fees and expenses of our counsel and our accountants." A full-text copy of the Preliminary prospectus is available at: https://tinyurl.com/yc5bshr4 About Comtech Telecommunications Headquartered in Huntington, New York, Comtech Telecommunications Corp. designs, develops, and manufactures technology electronic products and systems. As of April 30, 2024, Comtech had $991 million in total assets, $414.33 million in total liabilities, $170.25 million in convertible preferred stock, and $406.42 million in total stockholders' equity. In its Quarterly Report for the three months ended April 30, 2024, Comtech said that its current cash and liquidity projections raise substantial doubt about its ability to continue as a going concern. Based on its current business plans, including projected capital expenditures, the Company believes its current level of cash and cash equivalents, excess availability under its revolver loan and liquidity expected to be generated from future cash flows will be sufficient to fund its operations over the next 12 months beyond the issuance date. However, such a determination is dependent on several factors including, but not limited to, general business conditions and the Company's ability to reduce investments in working capital (such as unbilled receivables). If the Company is unable to maintain its current level of cash and cash equivalents, excess availability under its revolver loan or generate sufficient liquidity from future cash flows, the Company's business, financial condition and results of operations could be materially and adversely affected. ELETSON HOLDINGS: Files Amendment to Disclosure Statement --------------------------------------------------------- Eletson Holdings Inc., et al., submitted a First Amended Disclosure Statement in support of Second Amended Joint Plan of Reorganization dated July 5, 2024. The Petitioning Creditors has requested that the following Statements be included (with which the Debtors disagree): The Petitioning Creditors believe that (1) the Debtors' Plan is not in the best interests of creditors and (2) all holders of Claims entitled to vote on the Debtors' Plan should reject such Plan. The Petitioning Creditors disagree with the assertion that the Debtors' Plan is the "most advantageous outcome" because the Petitioning Creditors have filed their own Plan which the Petitioning Creditors believe provide significantly better returns to creditors than the Debtors' Plan. The Petitioning Creditors disagree with the assertion that if the Debtors' Plan is not confirmed, the Debtors would be forced to either liquidate under chapter 7 or dismiss the Chapter 11 Cases. The Petitioning Creditors believe that the PS Plan presents a viable and much better path out of Chapter 11, including because it provides higher returns to creditors. In any event, the availability of the PS Plan as an alternative to the Debtors' Plan if the Debtors' Plan is not confirmed renders the Debtors' assertions in the preceding paragraph inaccurate. In addition, the Petitioning Creditors disagree with the assertion that in either a liquidation or dismissal creditors would receive smaller distributions for their claims than they would under the Debtors' Plan. The Petitioning Creditors, at their own expense, have prepared a Corporate Organization Chart that is available for creditors to review at Docket Number 664, Appendix B. The Debtors do not agree with the characterizations in the Corporate Organization Chart prepared by the Petitioning Creditors. The Petitioning Creditors assert that "management agreements" and "management fees" have not been disclosed to creditors; however, all relevant forecasts at attached to the Disclosure Statement and a substantial amount of financial information related to the Debtors and various subsidiaries was made available to the Petitioning Creditors (and their respective counsel) and the Committee throughout the cases. The Petitioning Creditors dispute all of the allegations and arguments set forth in this Subsection, including with respect to the status and legal effect of the Second RSA and OCM Financing Stipulation as of the filing of the Involuntary Petitions and assert that the disclosures in the paragraphs are misleading, inaccurate, and omit material facts for all the reasons set forth in the extensive briefing in connection with the Debtors' Motion to Dismiss that was voluntarily withdrawn by the Debtors. The Petitioning Creditors also question the Debtors' assertions as to the continued existence of the Second RSA when the terms of the Debtors' Plan in no way shape or form reflect the restructuring that the Debtors promised to deliver to their creditors under the Second RSA, which provided for, among other things, 70% of the Debtors' equity to go to their noteholder creditors (instead of 0% under the Debtors' Plan) and various other sources of value that are wholly absent from the Debtors' Plan. The Petitioning Creditors dispute that a proper Independent Committee has ever been constituted, and dispute that Mr. Konstantaras was or could be properly appointed thereto. The Petitioning Creditors also note that the retention of counsel for the purported Independent Committee has never been approved by the Bankruptcy Court. The Debtors' note that the Court noted the formation and existence of the Independent Committee as one of several bases to deny the Chapter 11 Trustee motions. The Committee has requested that the following statements be included (with which the Debtors disagree): The Noteholder Election Recovery Claims are only payable upon an affirmative election of certain Creditors to be treated in Class 5. In the event holders of more than $7 million in Class 6A and 6B Claims elect to receive Class 5 treatment, then Class 5 electing creditors could receive less than payment in full. Given the inherent uncertainty in which creditors will elect Class 5 treatment, the estimates with respect to this class are uncertain, according to a footnote in the First Amended Disclosure Statement. In addition, the Committee has requested that the Debtors include the following statements (with which the Debtors disagree): The Debtors use the bottom of the range claims figure of $179 million in the low case recovery and top of the range claims figure of $380 million in the high case recovery. The high range recovery of 17% assumes that the Debtors equitably subordinate the Petitioning Creditor Exchange Notes. The subordination of the Petitioning Creditor Exchange Note Claims is likely to be fiercely contested and is uncertain. The centerpiece of the Plan is the Plan Consideration, which is comprised in part of the Shareholder New Value Contribution. The Shareholder New Value Contribution is (i) an aggregate $30 million contribution consisting of cash and cash equivalents and (ii) the Collections Contribution which is comprised of the assignment of 75% of the collections of the Gas Ownership Defendants against Levona on account of the Final Award and the District Court Order, net of costs of collection. The Shareholder New Value Contribution is being provided (or caused to be provided) by the Eletson Members. The Shareholder New Value Contribution was the result of the Debtors' attempts to secure financing from their historical financiers to fund a potential exit from the Chapter 11 Cases. As with the Debtors' postpetition financing facility, the Debtors were unable to secure independent third-party financing for several reasons, including the very litigious nature of these Chapter 11 Cases. With no alternative funding sources available, the Debtors turned to the Eletson Members to determine what funding opportunities were available to pay the Debtors' administrative claims and otherwise provide an exit from the Chapter 11 Cases. A full-text copy of the First Amended Disclosure Statement dated July 5, 2024 is available at https://urlcurt.com/u?l=2CLna6 from PacerMonitor.com at no charge. Attorneys for the Debtors: REED SMITH LLP Derek J. Baker, Esq. Derek Osei-Bonsu, Esq. Three Logan Square, Esq. 1717 Arch Street Philadelphia, PA 19103 Tel: (215) 851-8100 Fax: (215) 851-1420 E-mail: dbaker@reedsmith.com dosei-bonsu@reedsmith.com -and- Andrew L. Buck, Esq. Louis M. Solomon, Esq. 599 Lexington Avenue New York, NY 10022 Tel: (212) 251-5400 Fax: (212) 521-5450 E-mail: abuck@reedsmith.com lsolomon@reedsmith.com -and- Ann E. Pille, Esq. 10 S. Wacker Drive, Suite 4000 Chicago, IL 60606 Tel: (312) 207-1000 Fax: (312) 207-6400 E-mail: apille@reedsmith.com About Eletson Holdings Eletson Holdings Inc. is a family-owned international shipping company, which touts itself as having a global presence with headquarters in Piraeus, Greece as well as offices in Stamford, Connecticut, and London. At one time, Eletson claimed to own and operate one of the world's largest fleets of medium and long-range product tankers and boasted a fleet consisting of 17 double hull tankers with a combined capacity of 1,366,497 dwt, 5 LPG/NH3 carriers with a combined capacity of 174,730 cbm and 9 LEG carriers with capacity of 108,000 cbm. Eletson Holdings, a Liberian company, is Eletson's ultimate parent company and is the direct parent and owner of 100% of the equity interests in the two other debtors, Eletson Finance (US) LLC, and Agathonissos Finance LLC. Eletson and its two affiliates were subject to involuntary Chapter 7 bankruptcy petitions (Bankr. S.D.N.Y. Case No. 23-10322) filed on March 7, 2023 by creditors Pach Shemen LLC, VR Global Partners, L.P. and Alpine Partners (BVI), L.P. The petitioning creditors are represented by Kyle J. Ortiz, Esq., at Togut, Segal & Segal, LLP. On Sept. 25, 2023, the Chapter 7 cases were converted to Chapter 11 cases. The Honorable John P. Mastando, III is the case judge. Derek J. Baker, Esq., represents the Debtors as bankruptcy counsel. On Oct. 20, 2023, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped Dechert, LLP as its legal counsel. EUROASIA PRODUCTS: Unsecureds to Split $2,500 over 3 Years ---------------------------------------------------------- Euroasia Product, Inc., filed with the U.S. Bankruptcy Court for the Middle District of Florida a Plan of Reorganization dated July 4, 2024. The Debtor is a Florida Profit Corporation created by Articles of Incorporation filed with the Florida Secretary of State on or around May 13, 1998. The Debtor offers consulting solutions for Original Equipment Manufacturer (OEM) products. Specializing in high-end housewares, Debtor provides expert advice and assistance in professional design and product development, including mass production strategies. The Debtor has no employees other than its President, John Bowers. This Plan provides for: 1 class of secured claims; 1 class of unsecured claims; and 1 class of equity security holders. Class 1 consists of the Allowed Secured Claim of Truist Bank. This Claim is secured by a lien on the Truist Bank Collateral. This Class is Unimpaired. In full satisfaction of the Truist Bank Secured Claim, the Debtor will surrender the Truist Bank Collateral to Truist Bank as the indubitable equivalent of its Claim. Class 2 consists of the Allowed Unsecured Claims against the Debtor. This Class is Impaired. * Consensual Plan Treatment: The liquidation value or amount that unsecured creditors would receive in a hypothetical chapter 7 case is approximately $0.00. The Debtor proposes to pay unsecured creditors a pro rata portion of $2,500.00. Payments will be made on the effective date. Pursuant to §1191, the value to be distributed to unsecured creditors is greater than the Debtor's projected disposable income to be received in the 3-year period. Holders of Class 2 claims shall be paid directly by the Debtor. * Nonconsensual Plan Treatment: The liquidation value or amount that unsecured creditors would receive in a hypothetical chapter 7 case is approximately $0.00. Accordingly, the Debtor proposes to pay unsecured creditors a pro rata portion of $2,500.00 that will be paid by the Debtor’s Principal personally. Holders of Class 2 claims shall be paid directly by the Debtor. Class 3 consists of any and all equity interests currently issued or authorized in the Debtor. This Class is Unimpaired. Holders of a Class 3 interests shall retain their full equity interest in the same amounts, percentages, manner and structure as existed on the Petition Date. The Debtor shall continue to exist as the Reorganized Debtor, doing business under the name Euroasia Products, Inc. The Plan contemplates that the Reorganized Debtor's Principal, John Bowers, will continue to look for new business opportunities for the Reorganized Debtor, and funds generated from those efforts will be used to fund the business going forward. A full-text copy of the Plan of Reorganization dated July 4, 2024 is available at https://urlcurt.com/u?l=7OBgQA from PacerMonitor.com at no charge. Counsel to the Debtor: BransonLaw, PLLC Jeffrey S. Ainsworth, Esq. Cole B. Branson, Esq. 1501 East Concord Street Orlando, Florida 32803 Telephone: (407) 894-6834 Facsimile: (407) 894-8559 E-mail: jeff@bransonlaw.com E-mail: cole@bransonlaw.com About Euroasia Products Euroasia Products, Inc. offers consulting solutions for Original Equipment Manufacturer (OEM) products. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-01964) on April 22, 2024, with $0 to $50,000 in assets and $500,001 to $1 million in liabilities. Judge Tiffany P. Geyer presides over the case. Jeffrey Ainsworth at Bransonlaw PLLC represents the Debtor as legal counsel. FINANCE OF AMERICA: Sets July 25 Effective Date for 1-for-10 Split ------------------------------------------------------------------ Finance of America Companies Inc. said it expects its intended 1-for-10 reverse stock split of its outstanding shares of Class A Common Stock, previously disclosed on June 27, 2024, to be effective as of July 25, 2024 at 5:00 p.m. Eastern Time. The Company's Class A Common Stock is expected to begin trading on a split-adjusted basis on the New York Stock Exchange ("NYSE") under the existing symbol (FOA) when the market opens on July 26, 2024. The new CUSIP number for the Company's Class A Common Stock following the reverse stock split will be 31738L 206. As of the Effective Time, every ten issued and outstanding shares of the Company's Class A Common Stock will be automatically reclassified into one issued and outstanding share of the Company's Class A Common Stock. No fractional shares will be issued as a result of the reverse stock split. Instead, Continental Stock Transfer & Trust Company, the Company's exchange agent, will aggregate and sell any such fractional shares and the cash proceeds of such sale will be issued to stockholders in lieu of fractional shares on a pro rata basis. Proportionate adjustments will be made to the terms of outstanding warrants, equity-based awards, limited liability company units of Finance of America Equity Capital LLC (the "Class A LLC Units") (which are exchangeable for shares of Class A Common Stock on a one-for-one basis), the Company's equity plans and certain other agreements, in accordance with the terms of the applicable agreements. With respect to the Company's warrants, every ten shares of Class A Common Stock that may be purchased pursuant to the exercise of warrants prior to the Effective Time represent one share of Class A Common Stock that may be purchased pursuant to such warrants following the Effective Time. The exercise price for each warrant following the Effective Time equals the product of ten multiplied by the exercise price prior to the Effective Time. Accordingly, the exercise price for the Company's public warrants will be $115. The CUSIP number for the Company's warrants will not change. Additionally, the reverse stock split will not affect the number of authorized shares, the par value of the Class A Common Stock or the number of outstanding shares of Class B Common Stock. Continental Stock Transfer & Trust Company is acting as the exchange agent for the reverse stock split. Registered stockholders holding pre-split shares of the Company's Class A Common Stock are not required to take any action to receive post-reverse stock split shares of Class A Common Stock in registered book-entry form or cash payment in lieu of fractional shares, if applicable. Stockholders owning shares through a broker, bank or other holder of record are expected to have their positions automatically adjusted to reflect the reverse stock split and cash payment in lieu of fractional shares, if applicable, subject to any particular processes of the holder of record. Stockholders that hold shares of Class A Common Stock with a broker, bank or other holder of record, should contact their holder of record with any questions in this regard. The reverse stock split is primarily intended to increase the per share trading price of Finance of America's Class A Common Stock in order to meet the NYSE's price criteria for continued listing. Additional information about the reverse stock split can be found in Finance of America's definitive information statement filed with the Securities and Exchange Commission on June 27, 2024, which is available free of charge at the SEC's website at www.sec.gov and on Finance of America's website at https://ir.financeofamerica.com. About Finance of America Plano, Texas-based, Finance of America Companies Inc. is a financial services holding company which, through its operating subsidiaries, is a modern retirement solutions platform that provides customers with access to an innovative range of retirement offerings centered on the home. In addition, FoA offers capital markets and portfolio management capabilities to optimize distribution to investors. As of December 31, 2023, the Company had $27.11 billion in total assets, $26.84 billion in total liabilities, and $272.41 million in total equity. As reported by the Troubled Company Reporter on Oct. 20, 2023, Fitch Ratings has downgraded the Long-Term Issuer Default Ratings (IDRs) of Finance of America Companies Inc. and its subsidiaries, Finance of America Equity Capital LLC and Finance of America Funding LLC, to 'CCC+' from 'B-'. Fitch has also downgraded Finance of America Funding LLC's senior unsecured debt rating to 'CCC-'/'RR6' from 'CCC+'/'RR5'. The Rating Outlook remains Negative. The rating actions have been taken as part of a periodic peer review of non-bank mortgage companies, which is comprised of six publicly rated firms. The rating downgrade reflects the operating losses and resulting erosion of tangible equity FOA has experienced over the last year, which has resulted in continuing covenant breaches, which may limit the company's ability to extend debt maturities and secure future funding. High interest rates and borrower affordability challenges have reduced origination volumes, which, along with widening credits preads, have resulted in significant negative fair value adjustments to FOA's assets. Tangible equity has decreased to negative $5 million at 2Q23, down from $288 million in 2Q22 and $480 million at YE21. The Negative Outlook reflects Fitch's expectation that FOA's profitability will remain weak, challenging its ability to rebuild tangible capital levels over the Outlook horizon. Additionally, Fitch's believes execution risk remains with regard to the integration of American Advisors Group (AAG) and the restructuring of FOA's continuing business segments, which could impact its long-term franchise and market position. FITNESS INTERNATIONAL: S&P Rates Incremental Term Loan 'B+' ----------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue-level rating and '2' recovery rating to Fitness International LLC's new $150 million incremental term loan B due 2029. The '2' recovery rating indicates its expectation of substantial (70%-90%; rounded estimate: 75%) recovery for lenders in the event of a default. The company used the proceeds from the term loan to acquire XSport Fitness and reduce its outstanding revolver balance. The acquisition added 35 locations under the XSport Fitness brand in Chicago, New York, and Virginia. The new incremental term loan B has substantially the same terms and is pari passu with the existing senior secured credit facilities. S&P's estimated recovery prospects for lenders will only modestly decline following the increase in secured debt claims from the new incremental term loan because S&P also moderately raised its estimated recovery valuation to incorporate the acquisition. S&P said, "Our 'B' issuer credit rating and stable outlook on the company are unchanged, which reflects our expectations for modest growth in revenue and EBITDA, which incorporate our forecast for S&P Global Ratings lease-adjusted leverage to remain below 6.5x and for the company to sustain S&P Global Ratings-adjusted free operating cash flow to debt above 5% through 2025. We expect modest growth in revenue and EBITDA from increases in dues above GDP growth, expanding its Club Studio offerings, consolidation of lower performing clubs, and incremental revenue and EBITDA from XSport Fitness. We expect S&P Global Ratings lease-adjusted leverage in the mid-5x area in 2024, improving modestly in 2025." ISSUE RATINGS – RECOVERY ANALYSIS Simulated default assumptions -- S&P's issue-level rating and recovery rating on Fitness International's first-lien credit facilities are 'B+' and '2', respectively. The '2' recovery rating indicates its expectation of substantial (70%-90%; rounded estimate: 75%) recovery for lenders in the event of a payment default. -- S&P's simulated default scenario contemplates a default occurring in 2027, reflecting a substantial decline in cash flow due to prolonged economic weakness and increased competitive pressures, contributing to severe customer attrition. -- If Fitness International defaults, it will still have a viable business model because of its geographical diversity and large club network. As a result, S&P believes lenders will achieve greater recovery through reorganization rather than a liquidation of the business. To value the enterprise, S&P applies a 5.5x multiple. -- S&P assumes the $300 million revolver is 85% drawn at default. Key analytical factors -- Year of default: 2027 -- EBITDA at emergence: $207 million -- EBITDA multiple: 5.5x -- Revolving credit facility: 85% drawn at default Simplified waterfall -- Net enterprise value (after 5% administrative costs): About $1.1 billion -- Obligor/nonobligor split: 100%/0% -- Estimated secured debt: About $1.4 billion -- Value available for first-lien claim: $1.1 billion --Recovery expectation: 70%-90% (rounded estimate: 75%) All debt amounts include six months of prepetition interest. FREIRICH FOODS: Seeks to Extend Plan Exclusivity to October 31 -------------------------------------------------------------- Freirich Foods, Inc. asked the U.S. Bankruptcy Court for the Middle District of North Carolina to extend its exclusivity periods to file a plan and disclosure statement and obtain confirmation thereof to October 31 and December 31, 2024, respectively. The Debtor is a North Carolina corporation that presently conducts its business operations at a production facility located at 815 W. Kerr St., Salisbury, NC (the "Production Facility"). The Debtor is engaged in the business of producing prepared meat products, which it then packages on the Production Facility. The Debtor has continued operations, obtained authority to use cash collateral, filed all necessary reports, and generally complied with all requirements imposed by the Bankruptcy Rules, the Local Rules, and Orders of this Court. The Debtor has commenced plan negotiations with First National Bank of Pennsylvania ("FNB"), the single largest creditor in this case and whose claim is secured by a properly perfected blanket lien on substantially all property of the estate. The Debtor also commenced an adversary proceeding against Americold Logistics, LLC (AP No. 24-06005, the "Americold Litigation"), in which the Debtor seeks to recover the damages suffered by the Debtor in an amount to be determined. This adversary proceeding is in the early stages, the matter has been referred to arbitration which is expected to take approximately 8-12 months, and the Debtor is unable to predict the outcome at this time. The Debtor explains that although it does not intend to delay filing a proposed plan and disclosure statement until after completion of the arbitration process, the Debtor expects that the discovery obtained in the arbitration process will assist the Debtor (and its creditors) in evaluating the possible range of outcomes and the alternatives which necessarily need to be presented in the disclosure statement. Freirich Foods, Inc. is represented by: John A. Northen, Esq. Northen Blue, LLP PO Box 2208 Chapel Hill, NC 27515 Tel: (919) 968-4441 E-mail: jan@nbfirm.com About Freirich Foods Freirich Foods, Inc. is a deli meat processor that produces dry open-oven roasted products. Freirich Foods has been supplying specialty meats to select grocers and delis since 1921. Although initially opened in New York, the business is headquartered in Salisbury, North Carolina today and has been managed by four generations of the Freirich family. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. N.C. Case No. 24-50204) on March 20, 2024. In the petition signed by Paul Bardinas, president, the Debtor disclosed $13,015,005 in assets and $14,524,627 in liabilities. Judge Benjamin A. Kahn oversees the case. John A Northen, Esq., at NORTHEN BLUE LLP, is the Debtor's legal counsel. FTX TRADING: Plan Exclusivity Period Extended to August 3 --------------------------------------------------------- Judge John T. Dorsey of the U.S. Bankruptcy Court for the District of Delaware extended Emergent Fidelity Technologies Ltd.'s, a Debtor Affiliate of FTX Trading Ltd., exclusive periods to file a chapter 11 plan and solicit acceptances thereof to August 3 and October 3, 2024, respectively. As shared by Troubled Company Reporter, Emergent Debtor is the owner and was the record holder of approximately 55 million shares of Robinhood Markets, Inc. that have now been converted to cash (the "Assets") and are being held by the DOJ pending further adjudication regarding their ownership and potential claims against them. Multiple parties have made claims to the Assets, including (i) the DOJ, for the benefit of SBF's victims; (ii) FTX, for the benefit of its creditors; (iii) BlockFi, for the benefit of its creditors; (iv) SBF himself; (v) FTX Digital Markets Ltd (in provisional liquidation), a chapter 15 debtor; and (vi) Yonatan Ben Shimon, an FTX customer who alleges that his deposits may have been misappropriated by Alameda and used to purchase the Assets. The Emergent Debtor explains that it continues to investigate, secure, and recover assets for distribution; this will lead to a necessary determination of whether reorganization or liquidation is in the best interests of creditors. Notwithstanding the substantial progress made to date, the Emergent Debtor continues to develop information necessary to prepare a disclosure statement and to consider and propose a chapter 11 plan. The Emergent Debtor claims that it requires additional time to continue to advance the core objectives laid out by the Joint Liquidators on behalf of the Emergent Debtor and ensure that the Assets are recovered for the benefit of its creditors. Emergent Fidelity Technologies Ltd., is represented by: MORGAN, LEWIS & BOCKIUS LLP Jody C. Barillare, Esq. 1201 N. Market Street, Suite 2201 Wilmington, DE 19801 Telephone: (302) 574-3000 Email: jody.barillare@morganlewis.com - and - John C. Goodchild, III, Esq. Matthew C. Ziegler, Esq. 2222 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5000 Email: john.goodchild@morganlewis.com Email: matthew.ziegler@morganlewis.com - and - Craig A. Wolfe, Esq. Joshua Dorchak, Esq. David K. Shim, Esq. 101 Park Avenue New York, NY 10178 Telephone: (212) 309-6000 Email: craig.wolfe@morganlewis.com Email: joshua.dorchak@morganlewis.com Email: david.shim@morganlewis.com About FTX FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (doing business as FTX.com), West Realm Shires Services Inc. (doing business as FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. More entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 million in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10 showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/HomeIndex The official committee of unsecured creditors tapped Paul Hastings, LLP as bankruptcy counsel; FTI Consulting, Inc. as financial advisor; and Jefferies, LLC as the investment banker. Young Conaway Stargatt & Taylor, LLP is the committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. GIRARD HOUSE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Girard House Cooperative, LCA 744 Girard Street, N.W. Washington, DC 20001 Business Description: Girard House is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court District of Columbia Case No.: 24-00260 Judge: Hon. Elizabeth L Gunn Debtor's Counsel: David E. Lynn, Esq. DAVID E. LYNN, P.C. 15245 Shady Grove Road, Suite 465 N Rockville, MD 20850 Tel: 301-255-0100 Email: davidlynn@verizon.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Hilda Ziegler, Board 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/57U7TII/Girard_House_Cooperative_LCA__dcbke-24-00260__0001.0.pdf?mcid=tGE4TAMA GUANELLA PASS: Ongoing Operations to Fund Plan Payments ------------------------------------------------------- Guanella Pass Brewing Company, LLC filed with the U.S. Bankruptcy Court for the District of Colorado an Amended Plan of Reorganization for Small Business under Subchapter V dated July 2, 2024. The Debtor was founded by Steve and Stacy Skalski and originally opened as a brewery in Georgetown, Colorado. Prior to the Petition Date, Debtor serviced the secured debt on the Properties by making monthly payments directly to secured creditors on the Properties, plus directly paying taxes, insurance, and utilities on the Properties. Through the Plan, Debtor's monthly rental payment will allow each of the Properties to service their respective secured debts directly. As of 2024, the Debtor operates a saloon in the building adjacent to its brewery location, which is anticipated to generate additional revenue. For the five-year total, Debtor projects $56,664.00 net cash flow which can be paid to creditors under the "disposable income" requirement of the Code. Payments to unsecured creditors shall commence after Debtor's accumulates $100,000.00 in cash required for its working capital in ongoing business operations. Class 4 consists of Allowed Unsecured Claims. The Class 4 creditors shall each be paid their pro rata share of the Plan Payment Fund along with the Class 2 Claims. Class 4 includes the claims of Clear Creek Economic Development ("CCED") as its lien doesn't attach to Debtor's assets due to prior liens of Class 1 creditors. CCED's claim shall be paid by Switchback8530, LLC, a non-debtor entity that is also an obligor on this debt. Although CCED is an unsecured creditor to this Debtor, and it will be paid by this Debtor as an unsecured creditor, the obligations owed to CCED in the total amount of $251,581.64 will be repaid in full, with interest, by Rarified Air, LLC and Switchback8530, LLC, affiliated entities of the Debtor, who will assume the obligations of this Debtor to CCED contemporaneously with Plan confirmation. The two non-debtor entities have already pledged lien interests in the Properties to CCED. The terms of the repayment will be as set forth in the Assumption and Reaffirmation Agreement in form acceptable to CCED, the Debtor, Rarified Air, LLC and Switchback8530, LLC. The Debtor requests that Rarified Air, LLC and Switchback8530, LLC execute such Assumption and Reaffirmation Agreement in order to maintain possession and control of the Properties, which is essential for the continuing operations of the Debtor. As part of the Debtor's Plan, the Debtor has agreed to pay Rarified Air, LLC and Switchback8530, LLC sufficient rent in order for them to pay the obligations owed to CCED. CCED shall receive a monthly rental payment in the amount of $3,280.00 from Switchback8530, LLC. The Class 4 claim shall not be discharged per stipulation of the parties. Debtor agrees to execute an Assumption and Reaffirmation Agreement to the extent necessary to preserve such claim. Pursuant to the Plan, Debtor shall accumulate $100,000 in working capital before making any payments to unsecured creditors. Due to the nature and seasonality of Debtor's business, this working capital reserve is necessary to ensure the business can maintain its ongoing operations. Distributions to unsecured creditors are projected to start in 2027. The Debtor's Plan is feasible because the Plan Payment Fund shall be funded following accumulation of $100,000.00 in cash required for Debtor's working capital as provided for in the projections, but in no event later than 30 days following the Effective Date for Class 1 and Class 3 Secured Claims and annually following the Effective Date for all other classes. Due to the seasonality of Debtor's business, its net revenue varies substantially throughout the year. The Debtor's president, Steve Skalski, prepared cash flow projections which reflect a realistic prediction of Debtor's operations during the five 5-year period following confirmation of the Plan. These projections show an accumulated net cash flow available to pay creditors in the total amount of $56,664.00 over the 5-year period. This amount shall be paid pro rata to Unsecured Creditors with Allowed Claims in Classes 2 and 4. The projections also demonstrate the ability to pay the Secured Creditors in Classes 1 and 3. The funds deposited into the account representing the Plan Payment Fund will come from Debtor's net revenue generated from its ongoing operations. The Plan Payment Fund shall be placed in an interest-bearing account following the Effective Date and in accordance with Debtor's projections for Unsecured Creditors and shall be distributed annually only after Debtor accumulates $100,000.00 in cash required for its working capital. A full-text copy of the Amended Plan dated July 2, 2024 is available at https://urlcurt.com/u?l=t9y6ob from PacerMonitor.com at no charge. Attorneys for the Debtor: Jeffrey A. Weinman, Esq. Katharine S. Sender, Esq. Allen Vellone Wolf Helfrich & Factor, P.C. 1600 Stout Street, Suite 1900 Denver, CO 80202 Telephone: (720) 245-2423 Fax: (303) 534-4499 Email: jweinman@allen-vellone.com ksender@allen-vellone.com About Guanella Pass Brewing Guanella Pass Brewing owns and operates a brewery in Georgetown, CO. Guanella Pass Brewing Company, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-16068) on Dec. 30, 2023. The petition was signed by Steven Skalski as managing member. At the time of filing, the Debtor estimated $72,340 in assets and $2,282,564 in liabilities. Judge Thomas B. Mcnamara presides over the case. Katharine Sender, Esq. at COHEN & COHEN, P.C. represents the Debtor as counsel. HADAD DESIGN: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Hadad Design and Construction, Inc. Kitchen and Bath Decor & More 1707 S. Durham Drive Houston TX 77007 Business Description: Hadad Design is a full service kitchen and bathroom remodeling company. It offers kitchen cabinets, bathroom cabinets, countertops, backsplash, tiles, flooring, etc. Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court Southern District of Texas Case No.: 24-33277 Judge: Hon. Christopher M Lopez Debtor's Counsel: Leonard Simon, Esq. PENDERGRAFT & SIMON LLP 2777 Allen Parkway Suite 800 Houston TX 77019 Tel: 713-528-8555 Email: lsimon@pendergraftsimon.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Elias Haddad as president and director. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6W2TPMQ/Hadad_Design_and_Construction__txsbke-24-33277__0001.2.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6MTXLDA/Hadad_Design_and_Construction__txsbke-24-33277__0001.0.pdf?mcid=tGE4TAMA HAOB HORIZONTAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: HAOB Horizontal Drilling, LLC f/d/b/a HAOB Investments LLC 11184 NW 73rd Street Miami, FL 33178 Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court Southern District of Florida Case No.: 24-17240 Judge: Hon. Laurel M Isicoff Debtor's Counsel: Timothy S. Kingcade, Esq. KINGCADE, GARCIA & MCMAKEN, P.A. 1370 Coral Way Miami, FL 33145 Tel: 305-285-9100 Email: scanner@miamibankruptcy.com Total Assets: $1,595,296 Total Liabilities: $2,120,263 The petition was signed by Otoniel A. Pinho 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/RJAVVCA/HAOB_Horizontal_Drilling_LLC__flsbke-24-17240__0001.0.pdf?mcid=tGE4TAMA HERITAGE 10: Claims Will be Paid from Property Refinance -------------------------------------------------------- Heritage 10 W Tasman, LLC, filed with the U.S. Bankruptcy Court for the Northern District of California a Combined Plan of Reorganization and Disclosure Statement. The Debtor acquired commercial property located at 10 West Tasman Drive, San Jose, California the ("Property") in April 2021. Subject Property, at the time of acquisition, was 100% vacant. The Debtor acquired the Property for $30,000,000 with the plan to lease it and thus increase the value to the Property. The Property is a 2-story commercial office and industrial building with 105,000 sq. ft. of rentable space, which is suitable for single tenancy and not multi-tenancy. Soulbrain CA, LLC brought an action against the Debtor and other parties for breach of fiduciary duty, fraud, conspiracy to commit fraud, breach of contract, conversion, and unjust enrichment on December 29, 2023, which is now pending before the California Superior Court, County of Santa Clara, as Case No. 23CV428385. After the within bankruptcy case was filed, Soulbrain dismissed the Debtor from the lawsuit, but Soulbrain may file a proof of claim. The Debtor has several defenses, including that the lease sued upon was fictitious and the parties never intended for it to be enforced. If Soulbrain files a proof of claim, the Debtor intends to retain Berliner Cohen LLP to prosecute a claim objection, subject to Court approval. This Plan proposes to refinance the Property. The Debtor anticipates that there will be no capital gains or other income taxes resulting from the refinance. The Debtor will refinance the Property within 120 days after the Effective Date of this Plan, paying secured creditors' allowed claims in full from the proceeds of the sale. Debtor will borrow $24,800,000 from Legalist, Inc. Authority to incur such indebtedness will be sought by separate motion. In the event that available financing falls below $24,800,000, the equity security holder of the Debtor will contribute capital sufficient to raise available funds to $24,800,000 pursuant to the agreement. Class 2 consists of General Unsecured Claims. Creditors will receive a pro rata share of a fund equal to the net proceeds of the aforesaid refinance after payment of Class 1A and 1B claims on the Effective Date of the Plan. Pro-rata means the entire amount of the fund divided by the entire amount owed to creditors with allowed claims in this class. The Debtor expects that said proceeds will be sufficient to pay all allowed Class 2 claims in full. If all Class 2 claims are to be paid in full, then they will be paid with interest at the applicable contract or statutory rate. The non-governmental claims bar date is August 5, 2024. The Debtor reserves the right to object to any claims that are filed subsequent to the filing of this Plan. Such subsequent claims that are filed and allowed will be treated. Late filed claims will receive nothing under this Plan. This class is impaired and is entitled to vote on confirmation of the Plan. The allowed unsecured claims total $20,749.84. The equity security holders of the Debtor shall retain their interests without modification. The Debtor will fund all payments under this Plan from the proceeds of the aforesaid refinance. On the Effective Date, all property of the estate and interests of the Debtor will vest in the reorganized Debtor pursuant to Section 1141(b) of the Bankruptcy Code free and clear of all claims and interests except as provided in this Plan. A full-text copy of the Combined Plan and Disclosure Statement dated July 3, 2024 is available at https://urlcurt.com/u?l=dRmuQT from PacerMonitor.com at no charge. Attorney for the Debtor: Robert G. Harris, Esq. Julie H. Rome-Banks, Esq. Reno Fernandez, Esq. Binder Malter Harris & Rome-Banks, LLP 2775 Park Avenue Santa Clara, CA 95050 Telephone: (408) 295-1700 Email: rob@bindermalter.com julie@bindermalter.com reno@bindermalter.com About Heritage 10 W Tasman, LLC Heritage 10 West Tasman, LLC filed its voluntary Chapter 11 petition (Bankr. N.D. Cal. Lead Case No. 24-50488) on Apr. 5, 2024. In the petition signed by DH Daehyun Kang, managing member, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Dennis Montali oversees the cases. Binder Malter Harris & Rome-Banks, LLP serves as the Debtor's counsel. HEYCART INC: Unsecureds Will Get 3.8% of Claims over 5 Years ------------------------------------------------------------ Heycart Inc. filed with the U.S. Bankruptcy Court for the Central District of California a Disclosure Statement describing First Amended Plan of Reorganization dated July 3, 2024. The Debtor is an ecommerce home goods business that sells its products primarily through Amazon.com. As a startup company, the Debtor initially experimented with a variety of products and eventually focused on "Home & Kitchen" items. Currently, the Debtor sells cheese boards, cutting boards, cooking utensil sets, and other products. Tony Li, the Chief Executive Officer, and Aiden Chien, the Chief Operating Officer, started the Company together in 2017. The Company currently has nine employees, including Mr. Li and Mr. Chien. The Debtor is attempting to negotiate a consensual Plan. In doing so, the Debtor is at different stages of discussions with 8fig, Amazon, Clearco, and the Committee. This First Amended Disclosure Statement and accompanying First Amended Plan already reflect tentative settlement terms with 8fig, and the Debtor will file a Plan Supplement to the extent any additional settlements are reached. The Plan is a plan of reorganization. Generally, the Plan proposes to restructure debts owed to five classes of creditors who hold Secured Claims against the Debtor's Estate and proposes to pay the Allowed Secured Claims through monthly payments over a five-year period. The Plan further proposes to pay Holders of Priority Tax Claims in full and General Unsecured Claims their pro rata share of $400,000. Holders of General Unsecured Claims are projected to receive approximately 3.8% of such Claims. The Plan will be funded by Cash on hand on the Effective Date and future operations. Class 7 consists of General Unsecured Claims. Except to the extent that the Holder of an Allowed Claim in Class 7 agrees to less favorable treatment, each Holder of an Allowed Claim in Class 7 shall receive, in full and final satisfaction, settlement, and release of and in exchange for its Allowed Class 7 Claim its Pro Rata Share of the General Unsecured Claim Distribution Fund. Allowed General Unsecured Claims are projected to receive Distributions valued at about 3.8% of their respective Allowed Claims, which projection is calculated based on estimated non subordinated General Unsecured Claims listed of approximately $10.5 million. Class 8 consists of Subordinated Claims. Holders of Subordinated Claims shall receive no Distribution on account of their Subordinated Claims pursuant to the Plan. Class 9 consists of Equity Interests. On the Effective Date, all Existing Equity Interests shall be deemed canceled, extinguished, and discharged and of no further force or effect, and each Holder of an Existing Equity Interest in the Debtor shall receive no Distribution pursuant to the Plan. On the Effective Date, New Equity Interests shall be issued in the Reorganized Debtor—45% to Aiden Chien and 55% to Tony Li. Distributions to creditors holding Allowed Secured Claims under the Plan will be paid from the Debtor's projected net disposable income. Distributions to creditors holding Allowed General Unsecured Claims under the Plan will come from the General Unsecured Creditors Distribution Fund, which will be funded from the Debtor's projected Cash on hand. A full-text copy of the Disclosure Statement dated July 3, 2024 is available at https://urlcurt.com/u?l=fHInt6 from PacerMonitor.com at no charge. General Bankruptcy Counsel for the Debtor: Zev Shechtman, Esq. Carol Chow, Esq. SAUL EWING LLP 1888 Century Park East, Suite 1500 Los Angeles, California 90067-6006 Telephone: (310) 255-6100 Facsimile: (310) 255-6200 Paige Topper, Esq. SAUL EWING LLP 1201 N. Market St., Suite 2300 Wilmington, Delaware 19801 Telephone: (302) 421-6800 Facsimile: (302) 421-6813 Sabrina Espinal, Esq. SAUL EWING LLP 1500 Market St., 38th Floor Philadelphia, Pennsylvania 19102 Telephone: (215) 972-7777 Facsimile: (215) 972-7725 About Heycart Inc. Heycart Inc. is primarily engaged in selling utensils, ceramic dishes, reusable labels and wine accessories. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-10483) on February 28, 2024. In the petition signed by Aiden Chien, chief operating officer, the Debtor disclosed $1,231,380 in assets and $23,500,047 in liabilities. Judge Theodor Albert oversees the case. Saul Ewing, LLP and Danning, Gill Israel & Krasnoff, LLP represent the Debtor as legal counsel. Armory Consulting Co. is the Debtor's financial advisor. The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. HOT CRETE: Seeks to Extend Plan Exclusivity to October 7 -------------------------------------------------------- Hot Crete LLC asked the U.S. Bankruptcy Court for the Western District of Texas to extend its exclusivity periods to file a plan of reorganization and obtain acceptance thereof to October 7 and December 6, 2024, respectively. The Debtor continues to operate its business as "Debtor-in-Possession" pursuant to sections 1107 and 1108 of the Bankruptcy Code. The Debtor has obtained approval to liquidate the main assets of the Estate, the sale of those items is expected to occur by the end of August. The main source of liabilities for the Debtor stems from installing defective concrete (gunite or shotcrete) for dozens if not hundreds of residential pool owners. Due to the defective concrete, many of these pools would be considered a complete loss. The Debtor filed its bankruptcy petition with approximately 30 lawsuits pending and dozens of claims filed against its insurance policies. The Debtor believes the relevant factors weigh in favor of extending exclusivity: * First, the Debtor has been progressing towards in this bankruptcy case in good faith and proceeding towards an equitable resolution in favor of all known constituents. The Debtor has been communicating with its creditors and has begun the plan drafting process. * Second, the Debtor is paying its debts as they come due. * Third, the Debtor believes it has reasonable prospects for confirming a viable plan * Fourth, this is the Debtor's first request and the case has only been pending for 112 days. * Fifth, the Debtor is not filing the instant Motion as a means of pressuring any creditors. * Sixth, and most importantly, the Debtor seeks this extension to allow time to negotiate with various constituents that will be instrumental in presenting a plan with a process designed to provide the most equitable recovery to the high number of homeowners, as opposed to a first in time exhaustion of the insurance policies. Accordingly, the Debtor believes the exclusivity period should be extended. Hot Crete LLC is represented by: Todd Headden, Esq. Charlie Shelton, Esq. HAYWARD PLLC 7600 Burnet Road, Suite 530 Austin, TX 78757 Phone: (737) 881-7100 Email: theadden@haywardfirm.com cshelton@haywardfirm.co About Hot Crete LLC Hot Crete LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 24-10303) on March 22, 2024, listing $1,000,001 to $10 million in both assets and liabilities. The petition was signed by Edgar Castro as president. Todd Brice Headden, Esq. at Hayward PLLC represents the Debtor as counsel. IRON SPRINGS: Unsecureds Will Get 100% of Claims in Plan -------------------------------------------------------- Iron Springs Development, LLC, filed with the U.S. Bankruptcy Court for the Northern District of California a Combined Plan of Reorganization and Disclosure Statement. In 2015, Debtor was created for the purpose of purchasing, improving, and selling Iron Springs as a single family residence. Debtor's owners(members) are Ali Abiani, Cung Ta, Phu Vuong, and Uno Group Capital Holdings, LLC. Saul Flores is Debtor's manager and chief executive officer. Saul is also the developer of Iron Springs, and the CEO of MFA Construction("MFA"), the general contractor in charge of the project("Project"). Iron Springs was purchased in October 2015 for $547,000, and financed by Robert Shafer, the seller, carrying back a note and senior deed of trust. The note matured after 5 years, and after extensions expired, went into default. A notice of trustee's sale was published, and this Chapter 11 stayed the foreclosure. Shafer is owed $360,042. The Debtor owns a 100% fee interest in Iron Springs. The Property consists of approximately 5.4 acres of hillside land, surrounded by forest, off Highway 17, in Los Gatos, California. The Property is ready for site approval. If proper funding can be located, then construction of a single family residence would take about six to eight months. If proper funding cannot be located then Debtor would seek funding sufficient to pay off Shafer. In any event, at the very least, Debtor would sell Iron Springs as an undeveloped, entitled, Property on or before March 2025. Class 2(a) consists of General Unsecured Claims. Creditors will receive a pro-rata share, likely to result in a 100.00% recovery of allowed claims, of a fund created by the Sale Proceeds. Pro-rata means the entire amount of the fund divided by the entire amount owed to creditors with allowed claims in this class. A lump sum distribution will be made within 60 days after the sale and escrow closing of Iron Springs. The allowed unsecured claims total $400. This class is impaired and is entitled to vote on confirmation of the Plan. Funding to complete the Project will be provided by investors that EHL will hopefully locate. If funding occurs, then MFA will resume work on the Project. If funding for the Project does not materialize, then Eagle Home Loans("EHL") will seek funding to pay off Shafer. At that point, Debtor will market the Property for sale. Given its unique character, the marketing could take several months. An appraisal performed in August 2018, valued the Property at $1,800,000. Saul believes that the "as is" value of the Property is about $1,600,000. If sold as a completed home, then Debtor expects to sell Iron Springs at or near its projected fair market value of at least $3 million, and pay all claims in full. The Debtor shall retain its current ownership interests, and Saul Flores, Debtor's manager, shall retain his position without compensation. A full-text copy of the Combined Plan and Disclosure Statement dated July 3, 2024 is available at https://urlcurt.com/u?l=bEmMQ4 from PacerMonitor.com at no charge. Attorney for the Debtor: Stanley A. Zlotoff, Esq. Stanley A. Zlotoff, a Professional Corporation 300 S. First St. Suite 215 San Jose, CA 95113 Tel: (408) 287-5087 Fax: (408) 287-7645 Email: zlotofflaw@gmail.com About Iron Springs Development Iron Springs Development, LLC in Los Gatos, CA, filed its voluntary petition for Chapter 11 protection (Bankr. N.D. Cal. Case No. 24-50504) on April 9, 2024, listing $1 million to $10 million in assets and $500,000 to $1 million in liabilities. Saul Flores as managing member, signed the petition. Judge M. Elaine Hammond oversees the case. STANLEY Z. ZLOTOFF serves as the Debtor's legal counsel. JDL HVAC SERVICES: Unsecureds to Get Share of Income for 3 Years ---------------------------------------------------------------- JDL HVAC Services, LLC, filed with the U.S. Bankruptcy Court for the District of Maryland a Chapter 11 Plan dated July 3, 2024. The Debtor was formed in 2012 as a heating, air conditioning, and plumbing business at its principal place of business in Laurel, Maryland, and a second location in McLean, Virginia. The Covid-19 pandemic caused the Debtor great financial difficulty, due to its customers not wishing Debtor employees to enter their homes. As a result, the Debtor began taking out loans to survive. In December 2020, the Debtor obtained a loan from the U.S. Small Business Administration in the approximate amount of $1,425,400, secured by a first lien and blanket security interest in all assets of the Debtor. The Debtor subsequently took out several Merchant Cash Advance ("MCA") loans with a number of lenders. In early 2024, it became apparent that the Debtor could not continue its operations without substantial loss. It accordingly consulted with Counsel to discuss the possibility of filing for relief under Chapter 11 of the Bankruptcy Code. The Plan establishes 18 classes of claims, plus two categories of unclassified claims (for administrative expenses and priority taxes). Class C-1 consists of all allowed general unsecured claims against the Debtor, including any unsecured portion of Class B1 through and including B-10, B-12, and B-15. In accordance with the provisions of Section 1191(d) of the Bankruptcy Code, this class shall be paid, pro rata, all of the Debtor's Disposable Income in calendar years 2024, 2025, and 2026. The allowed unsecured claims total $2,884,330.27. Within 30 days after the filing of the annual income tax return of the Debtor, the Debtor shall file a Statement with the Court setting forth the Disposable Income of the Debtor for such calendar year. Such Disposable Income, if any, shall be paid pro rata, on all allowed general unsecured claims within 30 days after the filing of such Statement. The pro rata share of the claimed amount of any claims which are then subject to objections as to which a Final Order has not been entered shall be deposited in an interest bearing bank account until a Final Order is entered. When Final Orders are entered disallowing or allowing and liquidating all Class C-1 claims, the remaining funds in the bank account shall be distributed to the holders of all Class C-1 claims pro rata. This class is impaired. Funds for implementation of the Plan will be derived from the Debtor's business income and cash on hand. The Debtor can afford to make the payments herein because its existing Projected Disposable Income shows the ability to make the payments required herein. A full-text copy of the Chapter 11 Plan dated July 3, 2024 is available at https://urlcurt.com/u?l=zIU4I9 from PacerMonitor.com at no charge. Counsel to the Debtor: Brett Weiss, Esq. Weiss Law Group, LLC 8843 Greenbelt Road, Suite 299, Greenbelt, Maryland 20770 Tel: (301) 924-4400 Fax: (240) 627-4186 Email: brett@BankruptcyLawMaryland.com About JDL HVAC Services, LLC JDL HVAC Services offers a wide range of money-saving heating, cooling, and air quality solutions serving both residential and light commercial clients. JDL HVAC Services, LLC in Laurel, MD, filed its voluntary petition for Chapter 11 protection (Bankr. D. Md. Case No. 24-12823) on April 4, 2024, listing $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Joe Liles, Jr. as managing member, signed the petition. Judge Maria Ellena Chavez-Ruark oversees the case. THE WEISS LAW GROUP serve as the Debtor's legal counsel. KLX ENERGY: Estimates Net Loss of Up to $11MM in Fiscal 2024 ------------------------------------------------------------ KLX Energy Services Holdings, Inc announced preliminary financial results for the three months ended June 30, 2024. Preliminary Second Quarter 2024 Financial and Operational Highlights: * Estimated Revenue range of $178 million to $182 million, increased sequentially approximately 3% despite a 7% decline in rig count over the same period * Enacted approximately $16 million of annualized cost reductions in the second quarter of 2024 primarily related to operational streamlining initiatives, insurance and professional fees * Estimated Net Loss range of $(7) million to $(11) million * Estimated Adjusted EBITDA and Adjusted EBITDA Margin ranges of $24 million to $27 million and 14% to 15%, respectively * Estimated Adjusted EBITDA and Adjusted EBITDA Margin improved sequentially by 100% to 125% and by 104% to 118%, respectively * Estimated Net Cash Flow Provided by Operating Activities range of $18 million to $22 million * Estimated Levered Free Cash Flow range of $5 million to $11 million * Estimated Cash balance of approximately $87 million, increased $2 million sequentially * Estimated Total Debt and Net Debt of approximately $285 million and $198 million, respectively * Estimated Liquidity of approximately $126 million, including approximately $87 million of cash and $39 million of borrowing availability as of the May 2024 Borrowing Base Certificate Chris Baker, KLX President and Chief Executive Officer, stated, "We are extremely proud of our second quarter performance. Despite a 7% rig count decline this quarter, and continued drilling and completions activity volatility, KLX revenue results are expected to increase approximately 3% sequentially and Adjusted EBITDA Margin results are materially above our previously provided guidance. We expect to generate second quarter Adjusted EBITDA and Adjusted EBITDA Margin of $24 million to $27 million and 14% and 15% respectively." "Similar to the third quarter of 2023, where KLX's geographic and product service line diversification drove margin sustainability in the face of market weakness, we once again saw a similar rotation this quarter, highlighting the strengths of the KLX platform as seasonal impacts waned and production and intervention activity returned to a normalized level. KLX's leading presence in extended reach laterals, completion technologies, and production and intervention services should continue to yield sustainable results even in a flat market." "The sequential improvement in Adjusted EBITDA and Adjusted EBITDA Margin was driven by a non-recurrence of first quarter 2024 transitory issues, cost structure optimization initiatives, improved crew utilization, seasonally-reduced payroll tax exposure, and incremental activity and a shift in revenue mix towards higher margin segments (Rockies) and product service lines (Rentals and Tech Services (including Fishing)), particularly within the Rockies and Southwest segments." "Based on current calendars and latest customer conversations, we expect third quarter 2024 revenue to be flat to slightly up relative to the second quarter, with similar margins to the prior quarter," concluded Baker. About KLX Energy KLX Energy Services Holdings, Inc. -- https://www.klxenergy.com/ -- is a provider of diversified oilfield services to leading onshore oil and natural gas exploration and production companies operating in both conventional and unconventional plays in all of the active major basins throughout the United States. The Company delivers mission critical oilfield services focused on drilling, completion, production, and intervention activities for technically demanding wells from over 60 service and support facilities located throughout the United States. As of March 31, 2024, KLX had $497.5 million in total assets and $480.6 million in total liabilities. * * * As reported by the TCR on April 5, 2024, S&P Global Ratings revised its outlook to stable from positive and affirmed all of its ratings on KLX Energy Services Holdings Inc., including the 'CCC+' issuer credit rating. S&P said, "The stable outlook reflects our expectation for negative free cash flow of about $10 million in 2024 and a recovery to about break-even in 2025 on higher natural gas prices and activity. We also anticipate the company will address upcoming maturities in a timely and favorable manner." LBB ACQUISITION 1: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: LBB Acquisition 1 LLC 7529 Red Oak Ln Charlotte, NC 28226 Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court Northern District of Texas Case No.: 24-42485 Debtor's Counsel: Richard Grant, Esq. CULHANE, PLLC 13101 Preston Road, Suite 110-1510 Dallas TX 75240 Tel: 214-210-2929 Email: rgrant@cm.law Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Pruitt as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/EXLZEDY/LBB_Acquisition_1_LLC__txnbke-24-42485__0001.0.pdf?mcid=tGE4TAMA LBB ACQUISITION: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: LBB Acquisition, LLC 7529 Red Oak Ln Charlotte NC 28226 Business Description: The Debtor owns a restaurant business. Chapter 11 Petition Date: July 11, 2024 Court: United States Bankruptcy Court Northern District of Texas Case No.: 24-42484 Debtor's Counsel: Richard Grant, Esq. CULHANE, PLLC 13101 Preston Road, Suite 110-1510 Dallas, TX 75240 Tel: 214-210-2929 Email: rgrant@cm.law Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Pruitt as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6KMMGTQ/LBB_Acquisition_LLC__txnbke-24-42484__0001.0.pdf?mcid=tGE4TAMA LBB LAKE OSWEGO: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: LBB Lake Oswego LLC 3 Monroe Pkwy, Ste T Lake Oswego OR 97035 Business Description: LBB Lake owns a restaurant business. Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court Northern District of Texas Case No.: 24-42489 Debtor's Counsel: Richard Grant, Esq. CULHANE, PLLC 13101 Preston Road, Suite 110-1510 Tel: 214-210-2929 Email: rgrant@cm.law Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Pruitt as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FE5THKI/LBB_Lake_Oswego_LLC__txnbke-24-42489__0001.0.pdf?mcid=tGE4TAMA LBB PROGRESS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: LBB Progress Ridge LLC 12345 SW Horizon Blvd., Ste 41 Beaverton OR 97007 Business Description: LBB Progress owns a restaurant business. Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court Northern District of Texas Case No.: 24-42490 Debtor's Counsel: Richard Grant, Esq. CULHANE, PLLC 13101 Preston Road, Suite 110-1510 Dallas TX 75240 Tel: 214-210-2929 Email: rgrant@cm.law Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Pruitt as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LU6SM3A/LBB_Progress_Ridge_LLC__txnbke-24-42490__0001.0.pdf?mcid=tGE4TAMA LEEWARD RENEWABLE: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Leeward Renewable Energy Operations, LLC's (LREO) Long-Term Issuer Default Rating (IDR) at 'BB-'. Fitch has also affirmed LREO's senior unsecured rating at 'BB-'/'RR4'. The Rating Outlook is Stable. The ratings reflect LREO's long-term contracted cash flows from its diversified portfolio of mostly wind projects in U.S. and Fitch projected holdco-only FFO leverage to decrease to 4.3x in 2024 and average below 3.5x from 2025-2028. 2023 performance was weaker than its prior forecast, due to lower wind resources, delays in project contributions, and higher outstanding revolver balances resulting in a spike in credit metrics. The expected contributions of additional solar, wind and battery projects from Leeward Renewable Energy Development, LLC (Leeward Development), Leeward's development entity should help support LREO's FFO leverage over the forecast period and provide additional diversification to its operating portfolio. LREO's concentration in wind generation and its limited size constrains its credit rating. KEY RATING DRIVERS Long-Term Contracted Portfolio: LREO owns and operates a long-term contracted portfolio of 22 wind projects and one solar project totaling 2.3 GW gross capacity predominantly in the Midwest, West and Texas markets as of Dec. 31, 2023. LREO cashflows are largely contracted with investment-grade offtakers. The weighted average remaining contract life is 8.1 years and is modestly below average among industry peers. Additional projects that are currently operational and in construction are expected to be contributed into LREO between 2024-2026 with an average contract life of 15.7 years and would increase the portfolio's average contracted tenor closer to peers. Project distributions are less diversified than industry peers with the top five projects contributing about 54% of distributions in 2023. Over time, Fitch expects that older projects will be repowered and new developed projects contributed to LREO, which should mitigate any purchase power agreement (PPA) cliff concerns. Market for renewable resources, including wind repowering, has been strong, and management expects to repower a substantial portion of older wind resources in the next several years. Wind Concentration a Key Risk: Wind technologies are simple to construct and operate with minimal technological complexity and ongoing capex requirements. However, LREO's asset portfolio of older wind projects is subject to higher resource variabilities, impeding stability, a credit weakness. Geographic diversity lowers some of the risk associated with weaker wind resources in any one region. Operationally, turbine availability has historically averaged mid-90%, a positive. LREO also has minimum availability service guarantees from service and maintenance providers, which minimizes availability risk. Most of the growth beyond repowering is expected to come from solar projects in the development pipeline, which should provide some diversity, as wind cash flow contribution is projected to decline to closer around 80% by 2025. Solar resource availability is typically stable and predictable. Robust Development Pipeline: Fitch expects LREO's near-term growth will come primarily from solar projects developed by Leeward Development. Fitch's projections assume 1.7GW across 12 projects primarily solar and includes two repowering wind projects are added to LREO by 2026. Six projects have already begun operations and do not face development risk, while the remaining six are under construction and expect to begin commercial operations between Q3 2024 to Q1 2025. All repowered and new projects are expected to have long-term PPAs, with investment-grade counterparties. LREO expects to continue expanding its footprint and adding new projects in the medium term. All solar projects have executed module purchase orders with First Solar and have no anticircumvention or tariff risk. Leeward Development is separated from LREO, as LREO holds assets that are in commercial operation. The separation removes most of the construction risks from LREO. Near-term Credit Metrics Higher: Fitch calculates LREO's credit metrics on a deconsolidated basis, as its operating assets are largely financed with tax equity and nonrecourse project debt. LREO's Holdco FFO leverage increased to 6.1x in 2023 due to lower project distributions caused by wind resource variability, delays in project contributions from Leeward Development and higher revolver balances. Credit metrics are expected to improve with FFO leverage to decrease to 4.3x in 2024 and average below 3.5x from 2025-2028, reflecting expected solar and wind project contributions to LREO in a form of equity without any cash outlay and additional holdco debt issuance. Financial Policy Flexibility: Management's target leverage ratio for LREO, corporate debt to cash flow available for debt service, is between 3.5x to 4.0x. Management also targets a $110 million liquidity goal at holdco level including $10 million available cash and $100 million cash borrowing sublimit under its $200 million revolving credit facility (RCF). A clear financial target is credit positive. After LREO satisfies its financial covenants and credit metrics target, it contributes all the excess cash to its parent, Leeward Renewable Energy, LLC (LRE), to reinvest in development activities at Leeward Development. Once assets are operational, they are expected, but not required, to be transferred to LREO. Parent Subsidiary Linkage: Fitch rates LREO on a standalone basis. Consistent with Fitch's approach, it views OMERS (AAA/Stable) as financial investors and does not apply PSL linkage. OMERS, one of the largest Canadian pension funds, acquired Leeward in 2018. LREO has its own credit facilities and does not depend on Leeward and affiliates for liquidity. While no explicit rating linkage exists, Fitch views LREO's relationship with OMERS as supportive of its credit quality. DERIVATION SUMMARY Fitch views LREO's portfolio of assets as less favorably positioned compared to Atlantica Sustainable Infrastructure plc (Atlantica; BB+/Rating Watch Negative), NextEra Energy Partners (NEP; BB+/Stable), and Terraform Power Operating LLC. (TERPO; BB-/Stable), due to LREO's almost 100% wind generation assets, which exhibit more resource variability. Comparatively, Atlantica's portfolio consists of 42% solar and 28% wind among others. TERP's portfolio consists of 44% solar and 56% wind projects and NEP's portfolio consists of a large proportion of wind projects. LREO's operating scale in terms of generation capacity of around 2.3GW is similar to Atlantica (which also has other non-generation projects), but much smaller than NEP and TERPO. LREO's portfolio is less diversified than its peers with only 22 projects in the U.S., compared with 165 projects at TERPO, 43 at NEP and 46 at Atlantica. In addition, its distributions are more concentrated versus peers. Fitch views LREO's and NEP's geographic exposure in the U.S. and Canada (100%) favorably, compared to TERPO's (68%) and Atlantica (33%). Both Atlantica and TERPO have exposure to the Spanish regulatory framework for renewable assets, but the current construct provides clarity of return. In terms of total MW, approximately one-third of Atlantica's power generation portfolio is in Spain compared with one-quarter for TERPO. LREO's long-term contracted fleet has a remaining contracted life of 8.1 years, lower than its peers with Atlantica's at 13 years, similar to NEP's at around 14 years and TERPO at 11 years. Fitch projects LREO's credit metrics to be stronger than Atlantica, NEP and TERPO beyond 2024. Fitch forecasts LREO's holdco only FFO leverage to be 4.3x in 2024 and average below 3.5x between 2025-2028, compared with 4.0 in 2024 for Atlantica, mid-4x for NEP, and around 4.7x for TERPO. LREO, like TERPO and NEP, has strong parent support. TERPO benefits from having Brookfield Asset Management as an 100% owner and NEP is supported by its association with NextEra, which is the largest renewable developer in the world. LREO benefits from having OMERS as a sponsor. LREO's private ownership is overall more advantageous than publicly held yieldcos. It removes the pressure for aggressive growth in unitholder distribution, but will likely impair transparency in financial reporting and operational activities, a negative. KEY ASSUMPTIONS - Assumes contribution of 1.7GW of solar assets from the Leeward Development by 2026; All projects back-levered by non-recourse project debt and tax equity and contributed with no expected cash outlay by LREO; - Oak Trail solar power project (100MW), Chapparal Springs solar power project + BESS (262MW), White Wing Ranch (179MW) and Big Plain solar power project (196MW) contributing to cash flows in 2024; - GSG wind power (80MW) is repowered by 2024; - Assumes all remaining cash post HoldCo debt service is upstreamed to Leeward; - No overhead/SG&A assumed at rated entity as they are allocated at the project level and project distributions are post those allocations; - Assumes no additional debt is issued at the HoldCo level over the forecast period and outstanding revolver averages around $25 million. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Holding company FFO leverage below 3.5x on a sustained basis; - A track record of adhering to the financial policies under OMERS's ownership; - Increase in solar generation in the overall portfolio such that it comprises about 30% of the total. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Holding company FFO leverage ratio exceeding 4.5x on a sustained basis; - Underperformance in the underlying assets that lends material variability or shortfall to expected project distributions on a sustained basis; - Change or deviation from the stated financial policies. LIQUIDITY AND DEBT STRUCTURE Adequate liquidity: Fitch views LREO's liquidity position as adequate with around $27.3 million readily available cash at consolidated level as of March 31, 2024. The company has a $200 million RCF that matures in May 2028 and $450 million letter of credit facility (EDC Facility), which carries the guarantee Export Development Canada (EDC) renewed annually. At March 31, 2024, LREO had about $157.8 million drawn from its RCF that consists of letters of credit for $77.8 million and cash borrowings of $80.0 million. There were no drawings on its EDC Facility. Total available credit from its facilities was about $492.2 million. Debt maturities are manageable as there are no material maturities in the until 2029 when its $375 million unsecured notes are due. ISSUER PROFILE LREO is a renewable energy company and owns a portfolio of 22 renewable energy facilities across nine states in U.S. with around 2,300MW of installed capacity at end 2023. LREO has a robust development project pipeline of about 32GW. 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 ----------- ------ -------- ----- Leeward Renewable Energy Operations, LLC LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- LIDO 10: Case Summary & Four Unsecured Creditors ------------------------------------------------ Debtor: Lido 10, LLC 1048 Irvine Ave., #1550 Newport Beach, CA 92660 Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court Central District of California Case No.: 24-11818 Judge: Hon. Theodor Albert Debtor's Counsel: Matthew D. Resnik, Esq. RHM LAW LLP 17609 Ventura Blvd. Ste 314 Encino, CA 91316 Tel: (818) 285-0100 Fax: (818) 855-7013 Email: matt@rhmfirm.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Ronald L. Meer, president of the sole managing member of the Debtor's sole managing member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VVWBJYA/Lido_10_LLC__cacbke-24-11818__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Four Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Feld & Associates Services Rendered $7,000 449 S. Beverly Drive Beverly Hills, CA 90212 2. Howard Robinson & Services Rendered $6,512 Associate 660 S. Figueroa St., Ste. 1780 Los Angeles, CA 90017 3. Sheppard Mullin Services Rendered $5,177 Richter & Hampton L 333 S. Hope St., 43rd Floor Los Angeles, CA 90071 4. Wiegle, Szekel and Services Rendered $1,589 Frisby CPA 500 State College Blvd., Ste. 1110 Orange, CA 92868 META MATERIALS: Completes $10MM Authentication Business Sale ------------------------------------------------------------ As previously disclosed in the Current Report on Form 8-K filed by Meta Materials Inc. (the "Company") with the Securities and Exchange Commission on July 5, 2024, Nanotech Security Corp., a wholly-owned subsidiary of 1315115 BC Inc., which is a wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement dated July 3, with Authentix, Inc., a Delaware corporation ("Authentix"), and Authentix Canada Solutions, Inc., a corporation formed under the laws of British Columbia, Canada (together with Authentix, "Buyer"), pursuant to which Buyer agreed to: (i) purchase substantially all of the assets owned by NSC and used in the operation of the Company's authentication business and (ii) assume certain liabilities of the Authentication Business. On July 16, 2024, NSC completed the transactions contemplated by the Purchase Agreement, and Buyer paid in cash an aggregate of $10 million for the Authentication Business, which included $4 million of prior deposits paid by Buyer which were applied to the Purchase Price. In addition, $3 million of the Purchase Price is being held in escrow to satisfy certain post-closing matters. Additionally, on July 16, in connection with the Transaction, all 5 remaining employees of the Authentication Business were terminated by the Company and paid severance under their employment agreements. Such employees received employment offers from Authentix. Even with the closing of the Transaction, the Company continues to face financial hardship and there remains significant concern that the Company will be able to continue operations. The Board and the Company management continue to consider viable strategic alternatives and to work with its advisors to sell assets and secure additional financing to generate liquidity, however, expectations for success are low, which could lead to a potential winddown and bankruptcy filing of the Company. On July 12, 2024, Metamaterial Inc., an immaterial subsidiary of the Company, made a voluntary assignment for the general benefit of creditors pursuant to the Bankruptcy and Insolvency Act (Canada) in the District Court of Ontario. Grant Thornton Limited was appointed as trustee in the bankruptcy for the benefit of the creditors of MMI. The operations and assets of MMI consisted primarily of a leased facility located at 60 Highfield Park, Dartmouth, Nova Scotia B3A 4R9. About Meta Materials Headquartered in Dartmouth, Nova Scotia, Canada, Meta Materials Inc. is an advanced materials and nanotechnology company. The Company is developing materials that it believes can improve the performance and efficiency of many current products as well as allow new products to be developed that cannot otherwise be developed without such materials. The Company has product concepts currently in various stages of development with multiple potential customers in diverse market verticals. Meta Materials Inc. reported a net loss of $7.5 million for the three months ended March 31, 2024, compared to a net loss of $18.7 million for the three months ended March 31, 2023. As of March 31, 2024, the Company had $46.4 million in total assets and $28 million in total liabilities. Vaughan, Canada-based KPMG LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated March 28, 2024, citing that the Company has suffered recurring losses and negative cash flows from operations and requires additional financing to fund its operations that raise substantial doubt about its ability to continue as a going concern. MOJITO CLUB: Unsecured Creditors Will Get 20% of Claims in Plan --------------------------------------------------------------- Mojito Club Sawgrass, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Florida a First Modified Plan of Reorganization dated July 3, 2024. The Debtor is a restaurant and bar business. The Debtor operates a restaurant and bar at Room 1219 located at Oasis at Sawgrass Mills, 12801 W. Sunrise Blvd, Sunrise, FL 33323. The Debtor's business suffered as a result of the COVID-19 pandemic due to reduced revenue during the initial first years of the pandemic. The Debtor is in active negations with a food partner to increase lunch time traffic. No formal arrangement has been provided to date. Creditors had through May 28, 2024 to file claims; however, the Debtor scheduled claims most of which the Debtor believes are non objectionable. The Debtor estimates that the total amount of allowed general unsecured claims is $152,064.92. By this Plan, the Debtor will be restructuring these obligations, such that the Debtor can remain viable as a going concern. The Debtor's financial projections show that the Debtor will have projected disposable income of $32,640. The final Plan payment is expected to be paid in the third quarter of 2027. Creditors will receive payment from the Debtor from the cash flow of the Debtor's operations for a period of 3 years. This Plan provides for two classes of secured claims, one class of administrative convenience claims, one class of general unsecured claims, and one class of equity security holders claims. General unsecured creditors holding allowed claims will receive distributions, which the Debtor has valued at approximately 20 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 4 consists of all allowed general unsecured claims. The Class 4 General Unsecured Creditors shall share pro rata in total distribution in the amount of $32,640. Unsecured creditors will be receiving a distribution of approximately 20% or more of their allowed claim(s), which is an amount in excess of what claimants would receive in a hypothetical Chapter 7 proceeding, in which case such claimants would receive 0.00%, as set forth in Exhibit A. Class 4 Creditors shall be paid quarterly over the first year of the Plan. Estimated allowed general unsecured claims total $165,000.00 including the unliquidated and contingent litigation claim of Nilsa Justiniano. Class 4 is impaired. Class 5 consists of the following: Adam Silverstein, Henry Lease & Rosa Leace, Peter G. Gruber & Madeleine Gruber, The Eric Pfeffer Revocable Trust and the VC Family Investments LLC (together "Equity Security Holders"). Equity Security Holders shall retain their prepetition interests. The means necessary for the implementation of this Plan include the Debtor's cash flow from operations for a period of 3 years. The Debtor's financial projections show that the Debtor will have sufficient cash over the life of the Plan to make the required Plan payments and operate its business. The estimated cash on hand as of the First Payment Date of this Plan is $129,000. A full-text copy of the First Modified Plan dated July 3, 2024 is available at https://urlcurt.com/u?l=A81Ke8 from PacerMonitor.com at no charge. Counsel for the Debtor: Patricia Redmond, Esq. STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A. Museum Tower, Suite 2200 150 West Flagler Street Miami, Florida 33130 Telephone: (305) 789-3200 Facsimile: (305) 789-3395 About Mojito Club Sawgrass Mojito Club Sawgrass, LLC is a restaurant in Fort Lauderdale, Fla., which features a high-energy atmosphere, indoor and outdoor seating and fresh squeezed mojitos in an assortment of flavors. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-12552) on March 18, 2024, with $311,330 in assets and $1,683,011 in liabilities. Henry Leace, managing member, signed the petition. Judge Scott M. Grossman oversees the case. Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., represents the Debtor as legal counsel. MOZART CAFE: Case Summary & 19 Unsecured Creditors -------------------------------------------------- Debtor: Mozart Cafe Inc 3120 Coney Island Ave Brooklyn, NY 11235 Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court Eastern District of New York Case No.: 24-43000 Judge: Hon. Elizabeth S Stong Debtor's Counsel: Alla Kachan, Esq. LAW OFFICES OF ALLA KACHAN, P.C. 2799 Coney Island Avenue Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347) 342-3156 Email: alla@kachanlaw.com Total Assets: $502,181 Total Liabilities: $1,206,500 The petition was signed by Ilgar Ashurov as president. 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/FLNNILY/Mozart_Cafe_Inc__nyebke-24-43000__0001.0.pdf?mcid=tGE4TAMA NEELY GROUP: Plan Exclusivity Period Extended to October 14 ----------------------------------------------------------- Judge A. Benjamin Goldgar of the U.S. Bankruptcy Court for the Northern District of Illinois extended The Neely Group, Inc.'s exclusive period to file a chapter 11 plan of reorganization and disclosure statement to October 14, 2024. As shared by Troubled Company Reporter, the Debtor has operated two UPS Store locations and maintains it has at least an agreement to form an agreement with UPS to operate a third store. The Court has ruled that the two existing locations were properly terminated by UPS, but that ruling is under appeal. In any event, in order to deal with the possibility it will lose the appeal, the Debtor is attempting to establish itself as a general delivery service for many carriers such as DHL, USPS, FedEx, as well as UPS, as well as continuing its mailbox services, none of which require a franchise. The Debtor claims that additional time is required in order to prepare and finalize a plan of reorganization. The Neely Group, Inc., is represented by: Keevan D. Morgan, Esq. Morgan & Bley, Ltd. 900 W. Jackson Blvd., Ste. 4E Chicago, Illinois 60607 Phone: 312.753.6956 Email: kmorgan@morganandbleylimited.com About The Neely Group Inc. The Neely Group, Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-03859) on March 18, 2024. In the petition signed by Morrell Neely, owner, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Benjamin Goldgar oversees the case. Morgan & Bley, Ltd., is counsel to the Debtor. NEW ORLEANS ARCHDIOCESE: Bankr. Advisors Get Derivative Immunity ---------------------------------------------------------------- Judge Meredith S. Grabill of the United States Bankruptcy Court for the Eastern District of Louisiana granted the request of Mark A. Mintz, Jones Walker, LLP, and Donlin Recano & Company, Inc. for summary judgment in an adversary proceeding filed by Richard C. Trahant and Amy O. Trahant in the bankruptcy case of the Roman Catholic Church of the Archdiocese of New Orleans. Prior to filing for bankruptcy protection, the Archdiocese had been defending against at least 34 pending lawsuits filed in Louisiana state court between 2018 and 2020 by individuals alleging claims of sexual abuse by priests or lay persons employed or supervised by the Archdiocese and complicity of the Archdiocese in that abuse. Richard Trahant represented plaintiffs in some of the Abuse Cases. All of the Abuse Cases were stayed pursuant to 11 U.S.C. Sec. 362(a) following the Chapter 11 filing, but several of the plaintiffs and their counsel in the Abuse Cases, including Trahant, mobilized quickly and have participated from the very start of the Debtor's bankruptcy case. For two years, Richard Trahant served as counsel to several individual members of the Committee. In January 2022, the Debtor notified the Court of its belief that individual(s) had breached the Court's Protective Order governing discovery exchanged between the Debtor and the Committee in the Debtor's bankruptcy case. The Debtor requested discovery from the Committee and an evidentiary hearing to determine the root of the breach. After months of informal discovery between the parties followed by an official independent investigation by the U.S. Trustee involving numerous depositions and robust discovery, the Court memorialized and detailed its conclusions in an Order dated June 7, 2022. In that Order, the Court found, among other things, that Trahant had knowingly and willfully violated the Protective Order by disclosing confidential, protected information obtained through discovery in the bankruptcy case to third parties, including the media. The Court's June 7, 2022 Order also instructed the U.S. Trustee to remove the individual Committee members represented by Trahant from the Committee to prevent Trahant from having further access to confidential, protected information. After considering attorney argument and sworn testimony provided by Trahant at a show-cause hearing, the Court issued a Memorandum Opinion and Order dated October 11, 2022, detailing the factual and legal bases for imposing sanctions against Trahant in the amount of $400,000 for willfully violating the Court's Protective Order. Almost one year after the issuance of the June 7, 2022 Order, the Trahants filed a Petition for Damages in Louisiana state court against the Defendants on June 2, 2023, asserting claims for abuse of process, intentional and negligent infliction of emotional distress, and loss of consortium, all in connection with the Defendants' alleged improper service of the Court's June 7, 2022 Order. Prior to discovery being exchanged between the parties, the Defendants filed the Motion for Summary Judgment in the Adversary Proceeding, asserting, among other things, that they are entitled to judgment as a matter of law on all claims asserted in the State Court Action because they are immune from suit for their conduct in serving the Court's June 7, 2022 Order. According to the Court, when trustees and debtors-in-possession act as an arm or extension of the court, they are derivatively entitled to the judge's absolute immunity for all actions taken pursuant to a court order. In turn, that absolute immunity extends to the professionals of trustees and debtors-in-possession acting at the direction of the trustee or debtor-in-possession and pursuant to court orders, the Court notes. The fact that all of the Defendants are professionals of the Debtor is not in dispute. It is also not disputed that the Court instructed the June 7, 2022 Order to be served on all parties in interest identified by the Mailing Matrix. All of the Defendants' actions forming the basis for the claims alleged in the State Law Action -- abuse of process, intentional and negligent infliction of emotional distress, and loss of consortium -- were committed by the act of complying with the Court's orders instructing the Defendants to serve the June 7, 2022 Order on all individuals and entities listed on the Mailing Matrix. Like the trustee in Boullion, the Defendants in this case acted "under the supervision and subject to the orders of the bankruptcy judge," and, therefore, as an arm of the Court in serving the June 7, 2022 Order, they are entitled to derivative absolute immunity as a matter of law, the Court holds. The Court concludes that no genuine issues of material fact exist and the Defendants are entitled to summary judgment on all claims asserted in the Trahants' State Court Action. In their Rule 56(d) Motion, the Trahants request leave to conduct discovery to more fully oppose the Defendants' Motion for Summary Judgment, asserting that "[t]here are numerous questions of fact raised by the Motion for Summary Judgment that can only be addressed through formal discovery processes." Although Rule 56(d) motions are "broadly favored," the Court finds that such relief is not warranted in this case. The State Court Action alleges that the Defendants injured the Trahants by the act of serving the Court's June 7, 2022 Order on the individuals and entities on the Mailing Matrix in the absence of the Court's authority to do so. Even if the Trahants were to receive the information concerning the composition of the Mailing Matrix, that information would not produce the facts they need to withstand the Motion for Summary Judgment based on application of derivative absolute immunity, the Court states. That information is thus insufficient to create a genuine issue of material fact where the undisputed facts indicate that the Defendants served the Court's June 7, 2022 Order on the individuals and entities listed on the Mailing Matrix at the direction of the Court. Therefore, the Court denies the Trahants' request for further discovery under Rule 56(d). Shortly after the Defendants filed the Motion for Summary Judgment, the Trahants filed the Motion to Amend Complaint solely to assert a demand for a jury trial. The Trahants acknowledge that the proposed amended complaint "does not add new claims or factual allegations." Thus, the Court treats the Defendants' Motion for Summary Judgment as directed to the amended complaint because the defects in the Trahants' original State Court Action reappear in their amended complaint. A copy of the Court's decision dated July 16, 2024, is available at https://urlcurt.com/u?l=ms9d8V About Roman Catholic Church of the Archdiocese of New Orleans The Roman Catholic Church of the Archdiocese of New Orleans -- https://www.nolacatholic.org/ -- is a non-profit religious corporation incorporated under the laws of the State of Louisiana. Created as a diocese in 1793, and established as an archdiocese in 1850, the Archdiocese of New Orleans has educated hundreds of thousands in its schools, provided religious services to its churches and provided charitable assistance to individuals in need, including those affected by hurricanes, floods, natural disasters, war, civil unrest, plagues, epidemics, and illness. Currently, the archdiocese's geographic footprint occupies over 4,200 square miles in southeast Louisiana and includes eight civil parishes: Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, St. Tammany, and Washington. The Roman Catholic Church for the Archdiocese of New Orleans sought Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1, 2020. The archdiocese was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge Meredith S. Grabill oversees the case. Jones Walker, LLP and Blank Rome, LLP, serve as the archdiocese's bankruptcy counsel and special counsel, respectively. Donlin, Recano& Company, Inc., is the claims agent. The U.S. Trustee for Region 5 appointed an official committee of unsecured creditors on May 20, 2020. The committee is represented by the law firms of Pachulski Stang Ziehl & Jones, LLP and Locke Lord, LLP. Berkeley Research Group, LLC is the committee's financial advisor. NEW ORLEANS ARCHDIOCESE: Disabled Kids' Lawsuit Exempt from Stay ---------------------------------------------------------------- Judge Edith H. Jones of the United States Court of Appeals for the Fifth Circuit reversed the bankruptcy court's order that enforced the automatic stay against minor children pursuing a state court lawsuit against the Roman Catholic Church of the Archdiocese of New Orleans. The Archdiocese filed for bankruptcy in May 2020 after more than 500 alleged instances of child sexual abuse by local clergy came to light. The Minor Children's suit, however, has no connection with the tort claims at issue in the underlying bankruptcy. Instead, the Minor Children are a group of disabled Catholic school-aged children in the New Orleans area whose parents wish for them to attend Catholic schools that are either directly or indirectly controlled by the Archdiocese. The Minor Children assert that the Catholic schools they seek to attend are asking pre-admission questions about disabilities and/or requesting medical evaluations of students in violation of Louisiana civil rights laws. As a result, the Minor Children claim they have been dissuaded from applying to the Catholic schools they wish to attend. Minor Children filed a (later amended) class action lawsuit in Louisiana state court in August 2022, alleging that Catholic schools in the New Orleans area directly or indirectly controlled by the Archdiocese are violating Louisiana civil rights laws. The lawsuit seeks an injunction to prevent the Archdiocese from asking such questions of prospective applicants. They also seek attorney's fees. The lawsuit explicitly disclaims any claims to damages for past misconduct. Later that month, the Archdiocese removed the action to federal district court under 28 U.S.C. Sec. 1452(a), premising removal on the court's "related to" bankruptcy jurisdiction under 28 U.S.C. Sec. 1334(b) as a result of the Archdiocese's bankruptcy case. The Minor Children moved to remand and requested a "comfort order" from the bankruptcy court, seeking judicial confirmation that their action against the Archdiocese was not subject to the automatic stay. On October 3, 2022, before the bankruptcy court could rule on the comfort order motion, the United States District Court for the Eastern District of Louisiana granted the Minor Children's motion to remand, as it concluded that their suit was not "related to" the Archdiocese's bankruptcy because it could not conceivably affect the bankruptcy estate. The Archdiocese did not appeal this decision because remand orders predicated on jurisdictional decisions are unappealable. Notwithstanding the district court's ruling, the bankruptcy court orally denied the motion for a comfort order and enforced the automatic stay against the Minor Children's state court lawsuit at a hearing. The bankruptcy court subsequently signed a formal order confirming its ruling. The Minor Children appealed to the district court without seeking leave to appeal under 28 U.S.C. Sec. 158. In the district court, the Archdiocese moved to dismiss, arguing that Minor Children lack standing to appeal and the bankruptcy court's underlying order was interlocutory and unappealable. In June 2023, the district court rejected the Archdiocese's procedural contentions. The district court held that the bankruptcy court's order was appealable, and the Minor Children had standing to prosecute their appeal. A month later, the district court ruled on the merits of the Minor Children's appeal. Consistent with its previous position, the district court reversed the bankruptcy court and held that the automatic stay does not apply to the Minor Children's lawsuit. The Fifth Circuit agrees with the district court that the bankruptcy court erred in enforcing the automatic stay against the Minor Children Appellees. The Archdiocese argues that the Minor Children's state court lawsuit is subject to the automatic stay because it could have been filed prepetition, thus invoking Section 362(a)(1), and because it affects property of the estate, invoking Section 362(a)(3). The Fifth Circuit disagrees with both arguments. According to the Fifth Circuit, the district court correctly determined the Minor Children's state court lawsuit implicated only post-petition conduct. Nothing in the record indicates the named plaintiffs in this class action were aware of the Archdiocese's alleged discrimination against children with disabilities, or that they were in any way aggrieved by the Archdiocese prior to May 2020, the Fifth Circuit notes. Simply put, a lawsuit filed in 2022 that only seeks prospective relief cannot enjoin conduct that occurred in 2020, before the Archdiocese filed for bankruptcy. The Archdiocese also argues the automatic stay applies to the Minor Children's claims under Section 362(a)(3) of the Bankruptcy Code, which states that "any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate." The Archdiocese argues the Minor Children's state court lawsuit seeks to exert control over the operations of the Archdiocese's estate property by designating how children can be admitted to its schools, and by seeking recovery of attorney's fees. The Fifth Circuit agrees with the district court that this provision of the automatic stay does not cover the Minor Children's post-petition suit. The Fifth Circuit points out that the bankruptcy automatic stay "was intended to prevent interference with a bankruptcy court's orderly disposition of the property of the estate, it was not intended to preclude post-petition suits to enjoin unlawful conduct." According to the Fifth Circuit, Section 362(a)(3) does not stymie the Minor Children's state court suit for prospective injunctive relief. This lawsuit does not implicate the automatic stay's core function of preventing a race to the courthouse among creditors and does not undermine the provision's role in "preserv[ing] property for use in the reorganization of the debtor and . . . prevent[ing] the dismemberment of the estate." Further, the possibility of an award of attorney's fees by the Louisiana state court does not invoke the automatic stay, the Court notes. Any such fees should be considered "administrative expenses" under Section 503 of the Bankruptcy Code, because those expenses would be the necessary and predictable consequences of post-petition tortious activity by a debtor, the Court states. A copy of the Court's decision dated July 17, 2024, is available at https://urlcurt.com/u?l=wJ9uKa About Roman Catholic Church of the Archdiocese of New Orleans The Roman Catholic Church of the Archdiocese of New Orleans -- https://www.nolacatholic.org/ -- is a non-profit religious corporation incorporated under the laws of the State of Louisiana. Created as a diocese in 1793, and established as an archdiocese in 1850, the Archdiocese of New Orleans has educated hundreds of thousands in its schools, provided religious services to its churches and provided charitable assistance to individuals in need, including those affected by hurricanes, floods, natural disasters, war, civil unrest, plagues, epidemics, and illness. Currently, the archdiocese's geographic footprint occupies over 4,200 square miles in southeast Louisiana and includes eight civil parishes: Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, St. Tammany, and Washington. The Roman Catholic Church for the Archdiocese of New Orleans sought Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1, 2020. The archdiocese was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Judge Meredith S. Grabill oversees the case. Jones Walker, LLP and Blank Rome, LLP, serve as the archdiocese's bankruptcy counsel and special counsel, respectively. Donlin, Recano& Company, Inc., is the claims agent. The U.S. Trustee for Region 5 appointed an official committee of unsecured creditors on May 20, 2020. The committee is represented by the law firms of Pachulski Stang Ziehl & Jones, LLP and Locke Lord, LLP. Berkeley Research Group, LLC is the committee's financial advisor. NOEL RUIZ NURSERY: Property Sale Proceeds to Fund Plan ------------------------------------------------------ Noel Ruiz Nursery, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Florida a Subchapter V Plan of Reorganization for Small Business dated July 4, 2024. Prepetition: From 2016 through the bankruptcy filing, the Nursery owned and operated three properties: * 26030 SW 177 Avenue ("Krome"), Homestead, FL 33031, covering 1.07 acres fronting Krome. BZI Realty Corp. ("BZI"), the first mortgage lender, has a foreclosure judgment and believes the property is worth $787,335, and the Debtor believes the fair market value is $950,000 to $1.1 million. The foreclosure sale was set for April 8th, and the Debtor filed for bankruptcy to salvage equity in this property. This property has a very late model, less than 2,100 square foot 3.2 residential units. The Debtor formerly leased the property out as a fruit and vegetable stand with smoothies, but the property is gated, locked down, and unused. * 21630 SW 177th Avenue, Homestead, FL 33031, covering 0.97 acre fronting Krome. BZI has the final judgment of foreclosure of $549,000. This property has two small single-room units, but its fair market value is $700,000 to $750,000. The Debtor formerly leased the property out as a fruit and vegetable stand with smoothies, but the property is gated, locked down, and unused. * 16585 SW 177 Avenue, Homestead, FL 33031, covering 2.73 acres fronting Krome. This property has various structures and is the Debtor's operational property selling fruits, vegetables, soft drinks, etc. Coram Deo Holdings Corp ("CDHC"). The Debtor is unsure of the value at this time. The mortgage debt on this property is current, and the Plan contemplates this mortgage and note will secure the lender on this property. The Debtor filed bankruptcy to stop the April 8th foreclosure sale of the 26030 SW 177th Avenue property and to stay the other pending foreclosure by BZI on the 21630 SW 177th Avenue property. The Debtor had signed pending contracts to sell 26030 and 21630 SW 177th Avenue ("Krome"), but both failed to close. BZI commenced the two foreclosures against 26030 and 21630 SW 177 Avenue properties. The Debtor entered a pending contract for the 21630 SW 177th Avenue property with a $730,000 sale price. The Court approved the Debtor's sale of this property, and the Debtor and the buyer are resolving a code compliance lien of Miami-Dade County and expect this sale to close during July. 26030 SW 177th Avenue is being listed for one million dollars. The Debtor anticipates that it will be able to sell this property within six months of the Effective Date. The net one million dollar sale price will allow the Debtor to satisfy the BZI mortgage with interest fully. The net proceeds from the sale of the two properties are expected to comfortably exceed all of the allowed secured and unsecured claims, except for CDHC, the mortgagee on the 16886 SW 177th Avenue property. The Debtor is currently on the CDHC mortgage and will continue to service this mortgage outside the Plan. CDHC will retain - unaltered - its lien rights against the property. The Plan proposes to pay all allowed administrative, priority, secured, and unsecured creditors one hundred percent of their allowed claim plus interest on or before the expiration of the six months following the Plan's Effective Date. This Plan provides for the following classes: priority claims, secured claims, non-priority unsecured claims, and classes of equity security holders. Class 3 consists of Holders of allowed non-priority secured claims, including the claims of Miami-Dade County, estimated totaling $30,000. This amount may change as the claims process is completed. On or before six months following the Effective Date, the Debtor shall pay each holder of an allowed secured claim the total amount of its allowed claim plus interest directly at the closing of the sale of the two properties. Until paid in full, each creditor shall retain its liens unimpaired. Class 3 claims are impaired by the treatment afforded under the Plan. Class 4 consists of the Interest of the Debtor in property of the Estate. Arelys Tarraza, Maria M Garci, and Noel Ruiz Perez will continue to own the Debtor and operate and manage the Debtor’s operations post confirmation. The contemplated sales of the two properties in the Debtor's reasonable faith estimate shall result in net sale proceeds more than adequate to fund all plan payments to creditors before the expiration of six months following the Effective Date. A full-text copy of the Plan of Reorganization dated July 4, 2024 is available at https://urlcurt.com/u?l=cbxCG4 from PacerMonitor.com at no charge. Attorney for the Debtor: Gary M Murphree, Esq. AM LAW, LLC 10743 SW 104th Street Miami, FL 33176 Phone: (305) 441-9530 Email: gmm@amlaw-miami.com About Noel Ruiz Nursery Noel Ruiz Nursery, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-13317) on April 5, 2024, with $1 million to $10 million in both assets and liabilities. Arelys Tarraza, vice-president, signed the petition. Judge Laurel M. Isicoff presides over the case. Gary M. Murphree, Esq., at AM Law, LLC represents the Debtor as bankruptcy counsel. NOVENO LLC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Noveno LLC 2038 NE Alberta St Portland OR 97211 Business Description: Noveno LLC owns a restaurant business. Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court Northern District of Texas Case No.: 24-42491 Debtor's Counsel: Richard Grant, Esq. CULHANE, PLLC 13101 Preston Road, Suite 110-1510 Dallas TX 75240 Tel: 214-210-2929 Email: rgrant@cm.law Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Pruitt as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/L6RDHAA/Noveno_LLC__txnbke-24-42491__0001.0.pdf?mcid=tGE4TAMA ORCHARD PARK: Case Summary & 10 Unsecured Creditors --------------------------------------------------- Debtor: Orchard Park Equity Associates LLC Sheffer Farms 4078 California Road Orchard Park NY 14127 Business Description: The Debtor owns the Sheffer Farms Townhomes located in Orchard Park, New York. Chapter 11 Petition Date: July 17, 2024 Court: United States Bankruptcy Court Western District of New York Case No.: 24-10772 Judge: Hon. Carl L Bucki Debtor's Counsel: Samuel L. Yellen, Esq. SAMUEL L. YELLEN, ATTORNEY AT LAW, PLLC 1 Seneca St., 29th Fl. M-2 Buffalo, NY 14203 Tel: (716) 304-2820 Email: sam@yellenlegal.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Edward E. Lewis as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 10 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/AFU6CMQ/Orchard_Park_Equity_Associates__nywbke-24-10772__0001.0.pdf?mcid=tGE4TAMA ORYX MIDSTREAM: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Oryx Midstream Services Permian Basin LLC's (Oryx or HoldCo) Long-Term Issuer Default Rating at 'BB-'. In addition, Fitch has affirmed Oryx's senior secured term loan B at 'BB'/'RR3'. The Rating Outlook is Stable. The ratings reflect the scale of the asset base, which is well positioned for growth in the Permian basin, ability to generate increasingly greater FCF, and the fixed-fee but volume exposed business model. High leverage of 5.3x on a proportionately consolidated basis and 8.0x on a HoldCo-only basis at YE 2023 is a key weakness, along with structural subordination. Proportionately consolidated EBITDA leverage higher than 4.5x past 2024 could result in a negative rating action. KEY RATING DRIVERS High Leverage: EBITDA-leverage at HoldCo was 8.0x at YE 2023, considerably higher than Fitch's expectations of 6.4x. On a proportionately consolidated basis EBITDA leverage was 5.3x, higher than Fitch's expectation of 4.4x for the same period. Leverage was higher due to $300 million in debt funded dividend in 2023, higher capex and acquisition spending partially funded with debt, as well as weaker cashflows. Based on continued growth expectations in the Permian and manageable capex needs, Fitch expects proportionately consolidated leverage to be around 4.5x by YE 2024 and move lower from there, with HoldCo leverage of 6.2x in 2025. Failure to achieve these targets could result in a negative rating action. Leverage Metrics: Due to debt at the joint venture (JV), which was previously unexpected, Fitch will also evaluate proportionately consolidated leverage metrics going forward. Additionally, distributions to HoldCo can be volatile based on capex at the JV, which has been higher than previously anticipated. To capture this volatility Fitch has increased its Holdco leverage downgrade sensitivity to 6.5x. Fitch uses the cash distributions to Oryx (less operating expenses at Oryx) as a proxy for EBITDA for its HoldCo leverage calculations. Limited Control and Structural Subordination: Oryx's only asset is its 35% ownership interest in the JV. It is a holding company that receives subordinated cash flows as distributions, which are tiered per the terms of the JV agreement. All key decisions including the budget must be approved by a unanimous vote from the five-member board, three of whom are nominated by Plains All American Pipeline, L.P. (Plains, BBB/Stable) and the other two by Oryx's owners. All distributable cash flows must be distributed to the parent entities and the first $300 million in distributions will be divided 50/50 between the two parents, which by itself is sufficient for the entire debt service at Oryx. Similar to many other JVs, this structure constrains Oryx's ability to exercise unilateral control over financial policy including a sale of the underlying assets in times of distress. Fitch views this structural construct as weak for Oryx, and it forms a key credit consideration. This concern is lessened by limitations on total debt at the JV (maximum of $150 million). In 2024, Oryx will make a total payment of about $44 million to fully pay down its share of the debt at the JV. Strong Footprint: The JV has one of the largest transportation networks in the Permian, spanning both the Delaware and Midlands basins, and offers greater connectivity to the major intra-basin hubs (Wink, Midland and Crane). With approximately 4.4 million dedicated acres, 5,500 pipeline miles and 6.8MMBbl/d of pipeline system multi segment capacity, the system provides leading connectivity to downstream markets with 10+ direct connections to the three key destination hubs of Houston, Corpus Christi and Cushing, allowing customers to optimize transportation. The Permian continues to be the favored basin for crude production growth. Plains manages all the operations leveraging its experience and footprint for continued growth and profitability, which is a key strength. For 2024, Fitch expects the JV will generate around $1.2 billion of annualized EBITDA, trending about 15% higher than 2023. JV EBITDA grew by about 16% in 2023 from 2022, which was around 10% lower than Fitch's expectations. Diversified Customer Base: The JV benefits from a diversified portfolio of more than 95 contracted, Permian-focused customers with largely fixed-fee contracts and a weighted average remaining term of approximately seven years. Weighted by the dedicated acreage, 65% of the customers are investment grade, 15% are non-investment grade, and 16% are private or not rated. The JV has a diversified revenue stream with no single customer accounting for more than 16% of total volumes. Volumetric Exposure: Oryx's rating reflects its operational exposure to volumetric risks associated with the production and demand for crude oil. The JV benefits from acreage dedication with minimal minimum volume commitments (MVCs) accounting for only about 7% of overall volumes. From 1Q22 to 4Q23, total tariff volumes have grown 14% to 5,052 MBbl/d. In 2024, Fitch expects volume growth to be steady in the 5% range as producers remain cautious in ramping up capex. Single-Basin Focus: Given the JV's single basin focus, volatility can arise from multiple sources including weather events, distress at the E&P producers or a decline in commodity prices. Fitch expects capex to be around $250 million to $300 million annually over the next three years. Higher capex at the JV level, while supportive of long-term growth, could lower distribution to Oryx over the near term. DERIVATION SUMMARY Oryx's ratings reflect the JV's ability to generate strong cash flows and its extensive asset base that is well connected to the regional hubs, positioning the JV to take advantage of the growth in the Permian basin. Structural subordination of Oryx, high leverage, and single basin focus limit the rating. From a structural perspective Oryx is somewhat comparable to GIP Stetson (BB-/Stable) which also owns a partial economic stake in a subsidiary Enlink Midstream LLC (BBB-/Stable). GIP Stetson's sole source of cash flow is its dividend payments from a non-controlling, minority interest in Enlink. On a proportionately consolidated basis, over the near term GIP Stetson is expected to have an EBITDA leverage at or under 5.0x, compared to 4.5x at Oryx. Compared to Plains, Oryx (the holding company) is highly leveraged, with HoldCo-only EBITDA leverage at 8.0x for 2023 as compared to Plains leverage which was below 4.0x. Plains is also a more diversified and considerably larger entity generating over 5x the EBITDA that would be attributable to Oryx on a proportionately consolidated basis. KEY ASSUMPTIONS - Fitch price deck for WTI oil price; - Volume growth in 2024, supported by improved drilling and well completions; - No new major acreage dedications or new producer customers; - No major acquisitions during forecast period requiring capital contributions from Stonepeak Partners LP (Stonepeak); - All debt at the JV is paid off by YE 2024; - Base interest rate applicable to the revolving credit facility reflects the Fitch Global Economic Outlook; - Deleveraging supported by term loan amortization (1% annually) per the conditions of the term loan. No additional optional debt paydown. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - HoldCo EBITDA Leverage below 4.5x on a sustained basis; - Increases in scale with a focus on the HoldCo's distributions above $350 million annually, or significant improvement in business risk from a greater proportion of MVCs or take or pay contracts. Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Expectations that proportionately consolidated EBITDA Leverage will be above 4.5x beyond 2024; - HoldCo EBITDA Leverage above 6.5x on a sustained basis; - HoldCo EBITDA Interest Coverage below 2.0x on a sustained basis; - A further leveraging event causing a spike above Fitch's downgrade threshold in 2024 or beyond; - A significant weakening of the cash flow profile, driven by a move away from the current majority of revenue being fee based. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Liquidity is limited to the $25 million cash on the balance sheet and $19 million available on the $50 million super senior revolver. Fitch expects Oryx to receive sufficient distributions to comfortably meet its debt service. Uses of cash are limited to principal payments for the term loan which amortizes at 1% every year. There is a tiered excess cash flow sweep in place when the First Lien Net Leverage Ratio is greater than 4.50x. In 2024, Oryx is required to pay around $11 million in quarterly interest and principle payments (totaling $45 million) to fully pay down its portion of the JV debt. Another potential use of cash could be additional asset development or purchase at the JV level, Oryx's share of which will be funded by retained cash at the Oryx level or with additional contributions from the sponsor Stonepeak, if needed. Both the term loan and the revolver have a 1.10x debt service coverage ratio covenant. The revolver matures in 2026 and the term loan in 2028. Of the $1,845 million, $1,475 million is currently hedged (approximately 80%). ISSUER PROFILE Oryx is a Permian Basin based midstream energy company. It was formed by the merger of the legacy Oryx entity with the majority of Plains' assets in the Permian Basin. Oryx's only asset is a 35% equity interest in the JV. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch utilizes financials statements from both the HoldCo and the JV in its analysis. HoldCo-only EBITDA Leverage is calculated as the ratio of Holdco-only debt to HoldCo-only EBITDA. HoldCo-only EBITDA is calculated as actual distributions received at Oryx less any operating expenses at Oryx. Similarly, Fitch calculates Holdco-only EBITDA Interest Coverage as the ratio of HoldCo-only EBITDA to HoldCo-only interest. For additional perspective, Fitch also evaluates Oryx on the basis of its Proportionately Consolidated EBITDA Leverage, which is the ratio of the sum of Holdco-only debt plus Oryx's pro-rata share of debt at the JV to Oryx's pro rata share of EBITDA at the JV. ESG CONSIDERATIONS ESG Considerations: Oryx has an ESG Relevance Score of '4' for Financial Transparency as some private-equity backed midstream companies have less structural and financial disclosure transparency than publicly traded issuers. The score of '4' for Group Structure reflects the complex group structure amongst Oryx and the JV, 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 Prior ----------- ------ -------- ----- Oryx Midstream Services Permian Basin LLC LT IDR BB- Affirmed BB- senior secured LT BB Affirmed RR3 BB PARK 28 PARTNERS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Park 28 Partners LLC f/d/b/a JTRE Park 28 LLC 700 Bangs Avenue, Suite 4 Asbury Park, NJ 07712 Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court District of New Jersey Case No.: 24-17234 Debtor's Counsel: Eric H. Horn, Esq. A.Y. STRAUSS LLC 290 West Mount Pleasant Avenue Suite 3260 Livingston, NJ 07039 Tel: 973-287-5006 Email: ehorn@aystrauss.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by David Goldwasser as VP restructuring. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/XYDMZIA/Park_28_Partners_LLC__njbke-24-17234__0001.0.pdf?mcid=tGE4TAMA PDK LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: PDK, LLC 503 North Maney Avenue Murfreesboro, TN 37130 Business Description: PDK is a locally-owned casual eatery serving a fresh take on Southern favorites with its signature chicken and waffles, shrimp and grits, and PDK burger dishes. Chapter 11 Petition Date: July 17, 2024 Court: United States Bankruptcy Court Middle District of Tennessee Case No.: 24-02652 Judge: Hon. Randal S Mashburn Debtor's Counsel: Henry E. ("Ned") Hildebrand, IV, Esq. DUNHAM HILDEBRAND PAYNE WALDRON, PLLC 9020 Overlook Blvd., Suite 316 Brentwood, TN 37027 Tel: 615-933-5851 Fax: 615-777-3765 Email: ned@dhnashville.com Total Assets: $93,040 Total Liabilities: $2,283,108 The petition was signed by Peter Demos as managing 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/JA6OHHI/PDK_LLC__tnmbke-24-02652__0001.0.pdf?mcid=tGE4TAMA PENN CENTER: Asset Sale Proceeds to Fund Plan Payments ------------------------------------------------------ Penn Center Harrisburg, LP, filed with the U.S. Bankruptcy Court for the Middle District of Pennsylvania a Disclosure Statement in support of Plan of Liquidation dated July 3, 2024. The Debtor was formed in 2002, for the purpose of purchasing the Real Property. The Debtor is organized as a Pennsylvania Limited Partnership. Since formation, there are 2 General Partners, which are limited liability companies. The General Partners are Daley Real Estate Holdings, LLC and Morris Real Estate Holdings, LLC. Each General Partners holds a 1% interest in the Debtor. Michael Daley and Burton Morris, are the limited partners. Each limited partner holds a 49% interest in the Debtor. The Debtor continued to rent space and seek new tenants. In the meantime, one of the major tenants, the Commonwealth of Pennsylvania, Pennsylvania Department of State's lease was not renewed and this lease was terminated by the Commonwealth of Pennsylvania in 2024. The lack of tenants harmed the cash flow of the Debtor. Because of the lack of tenants, the Debtor could not service all of the debt owed to Fulton Bank as to its loans. As a result, the Debtor filed its Chapter 11 proceeding. When the Case was filed, most of two of the three buildings were vacant. The Debtor's main Asset is the Real Property. The Debtor listed the value of the Real Property at $9,000,000.00. As was borne out by the sale activities, the value was determined to be considerably less as the Real Property sold for $1,450,000.00. The Debtor continued its efforts to sell its Assets. These sale efforts continued through the use of the real estate broker, NAI CIR. Ultimately, the Debtor entered into a new contract with Pennmark. The Debtor thereafter filed the Sale Motion and the Sale Order was entered. Closing on the sale occurred on March 22, 2024. The Class 6 General Unsecured Creditors include all creditors not otherwise classified under the Plan. These Claims include all such creditors notwithstanding the nature of the categorization of any Claim by a creditor. Unsecured creditors will receive a pro rata distribution from the $35,000.00 representing the net proceeds from the sale of the Vehicles which occurred under the Sale Order. The equity held by the Equity Holder, that is general partnership interests held by the limited liability companies and the limited partnership interests of Michael Daley and Burton Morris, which consist of the general partners, is all to be cancelled under the Plan. The Equity Holders shall retain their equity in the Debtor only until Final Distribution. When Final Distribution occurs, all equity shall be deemed canceled. The Debtor has sold its Assets consisting of the Real Property, Personal Property and Vehicles. Distribution has occurred of all funds from the sale, except for $35,000.00, from the sale proceeds of the Vehicles. Under the Sale Order, $50,000.00 was allocated to the sale of the Vehicles. Of such sum, $15,000.00 was set forth to be paid to Cunningham, Chernicoff & Warshawsky, P.C. for payment of legal fees. The sum of $35,000.00, remains for distribution. At the sale, except for the vehicle proceeds, the net proceeds of the Real Property and Personal Property were paid to Fulton Bank in the amount of $1,162,186.06. The Sale proceeds are what remained after payment of real estate taxes, real estate commission, costs of sale, municipal claims, U.S. Trustee Fees and other items necessary to be paid under the Sale Order. The remaining proceeds of $35,000.00, are to be paid pro rata to class 5 and class 6 Claim holders under the Plan. A full-text copy of the Disclosure Statement dated July 3, 2024 is available at https://urlcurt.com/u?l=L06X6B from PacerMonitor.com at no charge. Counsel to the Debtor: Robert E. Chernicoff, Esq. Cunningham, Chernicoff & Warshawsky, PC 2320 North Second Street P.O. Box 60457 Harrisburg, PA 17106 Telephone: (717) 238-6570 About Penn Center Harrisburg, L.P. Penn Center Harrisburg, LP was formed in 2002, for the purpose of purchasing the Real Property. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 23-02771) on Dec. 7, 2023, with $1 million to $10 million in assets and $10 million to $50 million in liabilities. Michael Daley, partner, signed the petition. Judge Henry W. Van Eck oversees the case. Robert E. Chernicoff, Esq., at Cunningham, Chernicoff, Warshawsky PC, is the Debtor's legal counsel. PERASO INC: Anticipates Q2 Revenue of $4.2 Million in Fiscal Q2 --------------------------------------------------------------- Peraso Inc. announced its preliminary revenue results for the second quarter ended June 30, 2024. Total net revenue for the second quarter is anticipated to be approximately $4.2 million, exceeding the Company's previous guidance of revenue to range between $3.7 million and $4 million. "Our stronger than expected preliminary revenue results for the second quarter represent strong growth of over 50% sequentially and over 70% year-over-year," stated Ron Glibbery, CEO of Peraso. "The higher revenue for the quarter was primarily driven by increased shipments of our end-of life memory IC products, combined with a new volume production order for our mmWave antenna modules in support of the initial deployment of our DUNE platform by a South African service provider. We expect additional incremental orders from this customer in the coming quarters, together with a growing number of mmWave customer engagements targeting gigabit-speed fixed wireless access applications in dense urban environments." Glibbery concluded, "The further ramping of our mmWave shipments, as well as continued fulfillment of our sizable backlog orders of EOL memory products, gives us increased confidence in the Company's outlook for continued growth in the second half of 2024." Peraso will report its complete financial results for the second quarter of 2024 in conjunction with the Company's quarterly earnings conference call, which is currently planned to be held in August. About Peraso Headquartered in San Jose, California, Peraso Inc. is a fabless semiconductor company focused on the development and sale of: i) millimeter wavelength wireless technology, or mmWave, semiconductor devices and antenna modules based on its proprietary semiconductor devices and ii) performance of non-recurring engineering, or NRE, services and licensing of intellectual property, or IP. The Company's primary focus is the development of mmWave, which is generally described as the frequency band from 24 Gigahertz, or GHz, to 300 GHz. The Company's mmWave products enable a range of applications including: multi-gigabit point-to-point, or PtP, wireless links with a range of up to 25 kilometers and operating in the 60 GHz frequency band; multi-gigabit point-to-multi-point, or PtMP, links in the 60 GHz frequency band used to provide fixed wireless access, or FWA, services; FWA in the 5G operating bands from 24 GHz to 43 GHz to provide multi-gigabit capability and low latency connections; military communications; and consumer applications, such as high performance wireless video streaming and untethered augmented reality and virtual reality. The Company also has a line of memory-denominated integrated circuits, or ICs, for high-speed cloud networking, communications, security appliance, video, monitor and test, data center and computing markets that deliver time-to-market, performance, power, area and economic benefits for system original equipment manufacturers, or OEMs. Peraso reported a net loss of $2 million for the three months ended March 31, 2024, compared to a net loss of $3.1 million for the same period in 2023. As of March 31, 2024, the Company had $11.5 million in total assets, $4.8 million in total liabilities, and total stockholders' equity of $6.7 million. Los Angeles, California-based Weinberg & Company, the Company's auditor since 2020, issued a "going concern" qualification in its report dated March 29, 2024, citing that during the year ended Dec. 31, 2023, the Company incurred a net loss and utilized cash in operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. PIONEER HEALTH: Files Amended Plan; Confirmation Hearing July 25 ---------------------------------------------------------------- Pioneer Health Systems, LLC, and its affiliates submitted a Second Amended Subchapter V Plan of Reorganization dated July 5, 2024. The Debtors' joint Plan of Reorganization commits the Debtors' future disposable income though the end of 2029 to payment of creditor claims. In total, the Debtors project paying allowed secured claims in full, paying tax claims and allowed administrative expenses in full, and paying $7,264,148 to unsecured creditors. Payments to creditors will come from Debtors' profits from future operations, recoveries on pre-petition litigation claims, and recoveries on avoidance actions. Payments to creditors may also come from proceeds of a sale of the Debtors' assets or equity. The Debtors will pay Administrative Expenses incurred by their professionals and the Trustee on the Effective Date, and post petition operating costs will be paid in the ordinary course of business. The Debtors do not expect there will be any other allowed Administrative Expenses. As the Debtors are paying pre- and postpetition priority claims of taxing authorities in the ordinary course, the Debtors do not expect to have any priority tax claims as of the Effective Date. Debtor also do not expect there will be any other allowed priority claims. The Plan provides for payment of the claim of the DIP Lender though a new Exit Facility, which will be in an amount of not less than $1.2 million to provide the Debtors with additional liquidity to support operations through 2025. After that time, Debtors' operations will be sufficiently stable to pay down the Exit Facility and make distributions to creditors. Holders of claims secured by the Debtors' equipment and tax refunds will be paid according to the terms of their prepetition agreements. Holders of claims for rejected leases secured by security deposits will retain the security deposit and the balance of any claim will be paid as a General Unsecured Claim. Holders of claim which alleged to be secured based on Mechanic's Liens will be treated as General Unsecured Creditors to the extent any such claims are allowed. Allowed Priority Wage Claims are treated in Class 2 and will be paid in full in cash on the Effective Date. Allowed Unsecured Claims are split into two classes: a convenience class of claims not exceeding $1,600 (Class 3) and all other claims are General Unsecured Claims (Class 4). Allowed Class 3 Claims will be paid in full in cash on the Effective Date. Allowed Class 4 Claims will be paid on the 45th day of each calendar quarterly a prorated share of the Debtors' projected disposable income for the prior quarter. Payments to holders of Allowed Class 4 Claims will commence by February 14, 2026, and will be completed by February 14, 2030. Like in the prior iteration of the Plan, holders of Allowed General Unsecured Claims will receive a pro rata distribution of the Disposable Income Fund. The first payment will be made not later than February 14, 2026, and will continue on the last day of each calendar quarter until holders of allowed General Unsecured Claims receive their full pro rata distribution, but in no case not later than February 14, 2030. The Debtors will commit their Projected Disposable Income to fund plan payments. The Class 1(a) claim shall be paid in full, in cash, on the Effective Date from the proceeds of the Exit Facility. Allowed Claims in Classes 1(b)–1(j) shall be paid according to their prepetition contracts. Allowed Class 1(k) claims will retain the security deposit held by the relevant Claimant and the balance of any claim will be paid as a Class 4 General Unsecured Claim. Allowed Secured Property Tax Claims in Class 1(l) shall be paid in the ordinary course. Holders of claims in Class 1(m), which allege to be secured based on Mechanic's Liens, will be treated as Class 4 General Unsecured Creditors to the extent any such claims are allowed. Allowed Class 2 and Allowed Class 3 claims will paid in full on the Effective Date. Payments on Allowed Class 4 claims commence not later than February 14, 2026, and shall continue quarterly until the General Unsecured Distribution shall have been made in full, but not later than February 14, 2030. Holders of the Debtors' equity interests shall retain their interests. The Debtors shall also obtain an Exit Facility of approximately $1.2 million to (i) retire the obligations under the DIP Loan and (2) provide additional liquidity for Debtors' operations. Following the Petition Date, the Debtors received two offers to purchase the Debtors' business. In broad terms, the first proposal, as amended on June 28, 2024, ("Proposal No. 1") offers to purchase the Debtors' equity for approximately $12.235 million in cash. If the transaction is consummated, the cash consideration will be used to retire the DIP Loan, Administrative Expenses, and Convenience Class Claims; and fund a $1 million operating reserve to fund the Debtors' working capital needs. The remaining cash, estimated at $10.5 million, would be distributed to Claimants holding General Unsecured Claims on a pro rata basis in full satisfaction of their Claims. Debtors' management assesses the present value of Proposal No. 1 at $12.235 million. The second proposal ("Proposal No. 2") offers to purchase the Debtors' business for approximately $12 million in cash (the "Cash Consideration") plus 40% of the equity in the acquiring company (the "Equity Consideration"). The Debtors expect that, if the transaction is consummated, the Cash Consideration will be distributed in much the same manner as Proposal No. 1. Because the acquiring company is a closely held business, the Debtors understand that distribution of the Equity Consideration to all creditors is not acceptable to the proposed buyer. Instead, the Debtors expect that the Equity Consideration will be held (either by the Pioneer Health directly or in a trust), with the proceeds of any distributions on account of the Equity Consideration through December 31, 2029, being distributed on a quarterly basis to Claimants holding General Unsecured Claims until, if possible, their claims are paid in full. On January 1, 2030, or after such earlier date, if any, as General Unsecured Claims are paid in full, the Equity Consideration may be distributed to Holders of Class 5(a) equity interest in full satisfaction of their interests. Debtors' management assesses the present value of Proposal No. 2 at approximately $30 million. The Bankruptcy Court has scheduled July 25, 2024, at 10:00 A.M. as the hearing on confirmation of the Plan. A full-text copy of the Second Amended Plan July 5, 2024 is available at https://urlcurt.com/u?l=K5EdBP from PacerMonitor.com at no charge. Counsel for the Debtors: Matthew J. Olson, Esq. DORSEY & WHITNEY LLP 51 West 52nd Street New York, NY 10019 Telephone: (212) 415-9200 Facsimile: (212) 953-7201 Email: schnabel.eric@dorsey.com -and- Alessandra Glorioso, Esq. DORSEY & WHITNEY (DELAWARE) LLP 300 Delaware Avenue, Suite 1010 Wilmington, Delaware 19801 Telephone: (302) 425-7171 Email: glorioso.alessandra@dorsey.com About Pioneer Health Systems Pioneer Health Systems, LLC, is the parent company for the following brands: Surgical Hospital of Oklahoma, L.L.C. (SHO), Direct Orthopedic Care (DOC), and Integrated Care Technologies (ICT). Combined, this model allows Pioneer to offer a complete vertical orthopedic healthcare system. The Debtor filed a Chapter 11 petition (Bankr. D. Del. Case No. 24-10279) on Feb. 21, 2024, with $1 million to $10 million in both assets and liabilities. Colin Chenault, chief financial officer, signed the petition. Judge J. Kate Stickles oversees the case. Alessandra Glorioso, Esq., at Dorsey & Whitney (Delaware), LLP, is the Debtor's legal counsel. QBS PARENT: Fitch Hikes LongTerm IDR to 'B-', Outlook Stable ------------------------------------------------------------ Fitch Ratings has upgraded the Long-Term Issuer Default Rating (IDR) for QBS Parent, Inc. (dba Quorum Software [Quorum]) to 'B-' from 'CCC+'. Fitch has also upgraded Quorum's first lien secured revolver and term loan to 'B'/'RR3' from 'B-'/'RR3'. The Rating Outlook is Stable. The 'B-' rating reflects Fitch's expectation that the improvement of Quorum's financial performance as evidenced by the significantly stronger EBITDA margin and FCF profile in FY 2023 than previously expected, will be sustainable in the longer term. The rating is also supported by the company's high software renewal rate year over year, mission criticality of their software products, and their diversified customer base. However, Quorum still has a high leverage and weak interest coverage limiting the rating, with both metrics remaining outside of the positive sensitivities for the 'B-' rating through 2027. The upcoming maturities of their revolver and term loans pose refinancing risks as well, but Fitch assumes that Quorum would be able to refinance these debts in the next few quarters. KEY RATING DRIVERS Cost Reduction and Margin Expansion: In FY 2023, Quorum took some meaningful cost reduction initiatives such as moving their software engineering team to lower-cost offshore locations to decrease their R&D expenses, closing out physical office locations and enabling fully remote working for employees, lowering marketing expenses, etc. Such cost reduction initiatives resulted in materially higher Fitch calculated EBITDA margin, and Fitch expects the margin to continue expanding gradually. FCF also turned positive in FY 2023. With future rate cuts, and EBITDA growth, FCF is expected to improve over the forecast period. High Retention and Recurring Revenues: Fitch expects that the renewal rate for software bookings will remain consistent in the mid-to-high 90s range as in 2023, indicating that Quorum's software solutions remain mission critical, and the high retention continues providing good revenue visibility of Quorum. In addition, software license, maintenance and support revenues were up high-single digits in 2023 and the recurring revenue mix remained approximately 70% of total revenues. Both professional services and field services revenues had a modest increase in 2023. Total revenues were up high single digits over the prior year and surpassed the high-water mark in 2019. Diversified Customer Base: Quorum serves a diverse set of customers, with no significant customer concentration. Its top 10 recurring customers accounted for approximately 20% of revenue, and no single customer represented more than 10% of total revenue. While industry structure could vary over time, Quorum's exposure to a large part of the value chain could enable the company to maintain relatively more diversity in its customer base. Its revenues remain highly concentrated in North America with nearly 100% coming from the U.S. and Canada in both 2022 and 2023. Other geographic regions only contributed less than 1% of total revenue. Refinancing Risk: In Q1 2024, Quorum repaid $20 million of their revolver, bringing the outstanding balance of the revolver down to $10 million from $30 million at the end of 2023, with $24.2 million available. In April 2024, Quorum paid another $3 million to the revolver, leading to an outstanding balance of $7 million and a better liquidity situation. Quorum had been utilizing and repaying the revolver from time to time historically, and the revolver is maturing in December 2024. The first lien and second lien term loans will mature in 2025 and 2026, respectively. The upcoming maturities of their revolver and term loans pose refinancing risks, but Fitch assumes that Quorum would be able to refinance these debts in the next few quarters. Exposure to Energy Industry Cyclicality: Fitch considers Quorum's software products generally mission critical and resilient through the energy industry cycles; however, its services segment is more susceptible to industry cyclicality. During the 2015-2016 energy industry down cycle, Quorum's software subscription revenue and support revenue continued to grow at a steady pace; however, total revenue declined as services revenue contracted. The operating leverage of the software products enabled the company to limit downside to its EBITDA margins during the down cycle. Acquisitions Halted: Historically, Quorum had been very active with acquisitions and completed the most recent one in October 2020. Past acquisitions expanded its product platform, and the largest one in recent history was Coastal Flow Measurement in 2019. Fitch does not anticipate meaningful acquisitions in the near term, and that Quorum's focus will be on the upcoming maturities of their revolver and term loans. DERIVATION SUMMARY Quorum's 'B-' rating reflects the company's high leverage, limited interest coverage and upcoming debt maturities. The company benefits from a strong renewal rate, which reflects the mission criticality of their software solutions to customers and Fitch expects it to remain consistent in the mid-to-high 90s range as in 2023. The company's EBITDA margin, leverage, interest coverage and FCF significantly improved in 2023, and Fitch expects these metrics to remain in line with other similarly rated issuers in Fitch's software universe. Quorum has relied upon the revolver for funding from time to time, and it is maturing in December 2024. Similar to other private equity owned issuers, Fitch believes that the company's focus is ultimately ROE rather than debt reduction. KEY ASSUMPTIONS - Fitch assumes that revenues grow mid-single digits in 2024 and low single digits afterwards; - EBITDA margins are in the mid-30s, which is fairly in line with Fitch adjusted EBITDA margins for 2023 and the LTM period ending March 31, 2024; - EBITDA Interest coverage is close to 1.3x in 2024 and improves over time due to lower assumptions for floating interest expenses and higher EBITDA; - Fitch assumes that FCF would improve over the forecast period, and no additional external capital is needed; - Fitch assumes that Quorum can successfully extend the $35 million revolver beyond the Dec. 21, 2024 maturity date, and both term loans are refinanced before their respective maturity dates, with the first lien term loan principal of $350 million and no change to the second lien term loan; - No dividends or acquisitions are assumed. RECOVERY ANALYSIS Key Recovery Rating Assumptions - The recovery analysis assumes that QBS would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated; - The revolver is assumed to be fully drawn; - Fitch has assumed a 10% administrative claim. No concession payment between the first and second lien term loans is assumed. GC Approach In estimating a distressed enterprise value (EV) for Quorum, Fitch assumes a GC EBITDA of $44 million, reflecting lower revenues from upstream and midstream projects in a less favorable commodity environment. To a lesser extent, it also reflects lower recurring revenues as a result of some customers not renewing their contracts at expiry. Besides, the margin in a distressed scenario is assumed to be lower due to extensive SG&A spending to boost their top line. The GC EBITDA is higher than $40 million in the last review, reflecting the positive impacts of sustainable cost reduction initiatives Quorum has taken. Fitch assumes a 6.5x EV multiple in Fitch's recovery analysis. In the 2023 Fitch TMT Bankruptcy EV and Creditor Recoveries case studies, the EV multiples of technology companies range between 2.6x and 10.8x with a median of 5.3x. Of these companies, only four were in the Software sector, Allen Systems Group, Inc. (8.4x), Avaya, Inc. (7.5x in 2023 and 8.1x in 2017), Aspect Software Parent, Inc. (5.5x) and Riverbed Technology Software (8.3x). Fitch believes Quorum's strong position in software solution for the energy sector and highly visible revenue outlook support a recovery multiple in the middle of this range. Fitch's GC EBITDA of $44 million and recovery multiple of 6.5x result in a post-reorganization enterprise value of $257 million after the deduction of expected administrative claims. 1L debt, assuming a fully drawn revolver, will be rated 'B' with 'RR3'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage sustained below 6.5x; - EBITDA interest coverage over 1.5x on a sustained basis; - (CFO-Capex)/Debt sustained above 2.5%. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Failure to refinance the revolver and term loan ahead of maturity; - EBITDA interest coverage below 1.25x on a sustained basis; - (CFO-Capex)/Debt sustained below 0%. LIQUIDITY AND DEBT STRUCTURE Improved Liquidity: As of March 31, 2024, Quorum had over $10 million cash in hand. They repaid $20 million to their RCF balance in the first quarter of FY24, and another $3 million in April 2024, leading to a balance of $10 million and $7 million on March 31 and April 30, 2024, respectively. The total availability of the RCF went up to $27.2 million after the repayment in April. Due to the cost reduction starting in 2023, the company's FCF profile significantly improved, and so did the liquidity situation. However, Quorum still has the refinancing risk as the revolver is maturing in December 2024, and the term loans are maturing in the next two years as well. ISSUER PROFILE QBS Parent, Inc. (dba Quorum Software) is a provider of mission critical business process software to energy companies in the upstream (oil and gas production) and midstream sectors (gathering and processing as well as pipelines), effectively digitalizing operations and transactions through the energy value chain. The company designs, develops, implements and supports software. It also provides gas and liquid measurement services through its data management system. 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 ----------- ------ -------- ----- QBS Parent, Inc. LT IDR B- Upgrade CCC+ senior secured LT B Upgrade RR3 B- QUEST SOFTWARE: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR ------------------------------------------------------------------ S&P Global Ratings revised its outlook on Quest Software US Holdings Inc. to negative from stable due to the firm's limited prospects for organically improving cash generation and liquidity. At the same time, S&P affirmed its 'CCC+' issuer credit rating on Quest, based on its assessment that the firm has sufficient liquidity to avoid a default in the next 12 months. S&P said, "Elevated interest expense continues to hinder Quest's ability to generate positive free cash flow, and we see limited prospects for material improvement from organic operating performance. Quest has reported increasingly negative free cash flow generation over the past two years, primarily due to growing interest expense, in spite of modestly improving operational execution. Following the firm's acquisition by Clearlake Capital Group L.P. in early 2022, the total debt balance increased to over $3.5 billion from $2.1 billion. Since then, interest expense more than tripled to about $390 million in fiscal 2024 from about $110 million in fiscal 2022. Although we forecast interest rates to decline gradually starting in late 2024 and expect Quest's core operating performance to continue to support some improvement to cash generation, we expect cash flow to remain negative for the next 12-24 months. We currently project Quest's fiscal 2025 and 2026 interest expense to be about $370-$380 million annually. Given this sizable debt burden, we see further deterioration of Quest's liquidity position as largely inevitable over the next 24 months, absent an asset sale, refinancing, or other corporate action. We have viewed Quest's capital structure as unsustainable since our last downgrade in July 2023 but see the current level of revolver use and approaching (but still well over a year from becoming current) maturities as likely to present a catalyst for default as soon as calendar year 2026. "In fiscal 2024, Quest entered into two interest rate swap contracts to hedge a portion its floating-rate debt through the first quarter of 2026 and and third quarter of 2026, respectively. Although we view this action as constructive in mitigating the risk of further interest rate increases, it offers limited alleviation of the high interest burden that is currently draining the company's cash flow substantially. "The company currently has about $220 million drawn under its $400 million revolver that expires in February 2027. As the result of insufficient cash flow generation and diminishing liquidity, we expect the company will continue to draw on the revolver to fund liquidity needs for the remainder of fiscal 2025. We believe over the next 12 months, including cash balance, the company's total available liquidity of about $230 million will be adequate to support the company to service debt and grow recurring revenue. "The negative outlook reflects our view that Quest will continue to face difficulties in generating positive free cash flow, due to an unsustainably high level of interest expense. We believe that the likelihood that Quest will be able to organically achieve cash generation levels that would make its capital structure sustainable over the next 24 months is extremely low. We expect continued cash burn over the next 12 months that will put further pressure on diminishing liquidity." S&P could lower the rating on Quest if it believed that the firm would face significant risk of default within 12 months. This could happen if: -- The company failed to reduce its debt balance with proceeds from asset sales or other transactions over the next year, or -- Liquidity deteriorated faster than expected due to substantial cash burn and underperformance in revenue growth and EBITDA margin expansion. S&P could revise its rating to stable if the company: -- Generated positive FOCF on a sustained basis and liquidity improved meaningfully, or -- Reduced leverage and interest burdens via debt repayment. S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of the company, as is the case for most rated entities owned by private-equity sponsors. We believe Quest's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects the generally finite holding periods and a focus on maximizing shareholder returns." QUINTO LLC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Quinto LLC 3810 SE Division St Portland OR 97202 Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court Northern District of Texas Case No.: 24-42492 Debtor's Counsel: Richard Grant, Esq. CULHANE, PLLC 13101 Preston Road, Suite 110-1510 Dallas TX 75240 Tel: 214-210-2929 Email: rgrant@cm.law Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Pruitt as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2HQVFGQ/Quinto_LLC__txnbke-24-42492__0001.0.pdf?mcid=tGE4TAMA RA CUSTOM: Amends Several Secured Claims Pay Details ---------------------------------------------------- RA Custom Design, Inc., submitted a Second Amended Plan of Reorganization dated July 2, 2024. This Plan deals with all property of Debtor and provides for treatment of all Claims against Debtor and its property. Class 5 shall consist of the Secured Claim of SSA NE Assets d/b/a Flatiron Realty Capital ("SSA") (such amount owed to SSA and as allowed by the Court plus interest accruing pursuant to this Class 5 shall be referred to herein as the "Class 5 Secured Claim"). Debtor scheduled SSA as holding a claim in the amount of $1,350,000.00. SSA filed Proof of Claim 5, asserting a secured claim of $1,280,018.79, comprised of (i) $1,171,170 in principle, (ii) $49,956.66 in accrued interest, (iii) $94,227.68 in accrued default interest, (iv) a credit of $55,512.60 for undrawn rehab escrow, (v) $11,853.07 in protective advances, (vi) $9,748.98 in fees, and (vii) $575.00 in postpetition attorney's fees. On or about November 7, 2022, Debtor executed a certain a promissory note, security deed and other loan documentation in favor of FRC VTX Assets LLC, as assigned to SSA NE Assets LLC (the "SSA Pre-Petition Loan Documents"), in the principal amount of $1,171,170.00. The Class 5 Secured Claim is secured by a first priority lien on that certain real property located at 2153 Cooper Lake, Smyrna, GA 30080 (the "Cooper Lake Property") pursuant to a security deed recorded in Deed Book 16101, Page 5294, Cobb County, Georgia (the "Security Deed"). The SSA Pre-Petition Loan Documents and Security Deed are referred to herein collectively as the "Class 5 Loan Documents." Debtor asserts that the fair market value of the Cooper Lake Property is $2,100,000.00. The Debtor will pay the Class 5 Secured Claim as follows: Beginning on September 30, 2024 and continuing on the last day of each month through and including November 15, 2026, Debtor shall make monthly interest only payments on the Class 5 Secured Claim at $10,000.00 per month. Debtor shall pay all outstanding principal and interest on December 31, 2026. SSA shall retain its lien on the Cooper Lake Property and pursuant to the Security Deed, said lien shall be valid and fully enforceable to the same validity and priority as existed on the Filing Date and to the extent of the Class 5 Secured Claim. Upon receipt of payment in full of the Class 5 Secured Claim, SSA shall release its lien on the Cooper Lake Property and shall mark any lien as satisfied. Any payments paid to SSA after the Filing Date but before the Effective Date shall be applied first to the principal balance of the Class 5 Secured Claim and then to interest accruing on the Class 5 Secured Claim. Class 6 shall consist of the Secured Claim of Homegrown Capital (such amount owed to Homegrown and as allowed by the Court plus interest accruing pursuant to this Class 6 shall be referred to herein as the "Class 6 Secured Claim"). Debtor scheduled Homegrown as holding a claim in the amount of $1,052,836.77. Homegrown filed Proof of Claim 12, asserting a secured claim of $1,099,112.23. Such Proof of Claim is comprised of three loans: (i) 0 Union Road (Stonewall Manor Estates), (ii) 4269 Manor Street, and (iii) 5622 Livesage Drive. Class 6A consists of the 0 Union Road (Stonewall Manor Estates) loan, Homegrown's Proof of Claim 12 asserted as secured claim comprised of (i) $175,000 in unpaid principal, (ii) $19,599.97 in accrued interest, (iii) $1,677.81 in unpaid interest, (iv) $875 in late fees, (v) $5,556.25 in pro-rated extension fee, and (vii) $100 for a payoff fee (the "Class 6A Secured Claim"). The Debtor will pay the Class 6A Secured Claim as follows: Beginning on September 30, 2024 and continuing on the last day of each month through and including December 15, 2024, Debtor shall make monthly interest only payments on the Class 6A Secured Claim at the contractual interest rate of 12%, calculated at $2,028.09 per month. Debtor shall pay all outstanding principal and interest on February 28, 2025. Homewood shall retain its lien on the Stonewall Manor property and pursuant to the Security Deed, said lien shall be valid and fully enforceable to the same validity and priority as existed on the Filing Date and to the extent of the Class 6A Secured Claim. Upon receipt of payment in full of the Class 6A Secured Claim, Homewood shall release its lien on the Stonewall Manor property and shall mark any lien as satisfied. Any payments paid to Homewood after the Filing Date but before the Effective Date shall be applied first to the principal balance of the Class 6A Secured Claim and then to interest accruing on the Class 6A Secured Claim. Class 6B consists of the 4269 Manor Street loan, Homegrown's Proof of Claim 12 asserted as secured claim comprised of (i) $775,000 in unpaid principal, (ii) $72,225.70 in accrued interest, (iii) $4,110.14 in unpaid interest, (iv) $3,196.89 in late fees, (v) $13,562.50 in pro-rated extension fee, (vi) a credit of $500,000 for remaining LIP and (vii) $100 for a payoff fee. On or about February 4, 2022, Debtor executed a certain a promissory note, deed to secure debt and other loan documentation (the "Homegrown 4269 Manor Pre-Petition Loan Documents") in favor of Homegrown in the principal amount of $775,000.00. The Debtor will pay the Class 6B Secured Claim in full, including all outstanding principal and interest, on or before February 28, 2025. Interest shall accrue on the principal balance of the Class 6B Secured Claim at the contractual interest rate of 11%, calculated at $3,375.12 per month. Homegrown shall retain its lien on the 4269 Manor Property and pursuant to the Security Deed, said lien shall be valid and fully enforceable to the same validity and priority as existed on the Filing Date and to the extent of the Class 6B Secured Claim. Upon request by Debtor, Homegrown shall provide a payoff letter within 5 business days of request by Debtor confirming the amount due under the terms of this Class 6B of the Plan and allowing for the release of the liens on the Manor Street Property upon receipt of payment in full by Homegrown of the Class 6B Secured Claim on the terms set forth herein. Upon receipt of payment in full of the Class 6B Secured Claim, Homegrown shall release its lien on the Manor Street Property and shall mark any lien as satisfied. Like in the prior iteration of the Plan, the Debtor will pay the Holders of Class 10 General Unsecured Claims in full over five years. Debtor shall pay such Unsecured Total Distribution in semi annually payments of $115,345.86 commencing on the 15th day of the sixth month following the Effective Date and continuing semi-annually thereafter for a total of 10 payments. The Total Unsecured Distributions shall be $1,153,458.66. Upon confirmation, Debtor will be charged with administration of the Case. Debtor will be authorized and empowered to take such actions as are required to effectuate the Plan. Debtor will file all post-confirmation reports required by the United States Trustee's office. The source of funds for the payments pursuant to the Plan is Debtor's sale of the houses listed in this Plan as well as the continued operations of Debtor and future projects. A full-text copy of the Second Amended Plan dated July 2, 2024 is available at https://urlcurt.com/u?l=ALWEW0 from PacerMonitor.com at no charge. Attorney for the Debtor: Cameron M. McCord, Esq. JONES & WALDEN LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Tel: (404) 564-9300 Email: cmccord@joneswalden.com About RA Custom Design RA Custom Design, Inc. is a custom residential home builder located at 2451 Cumberland Parkway, #3946, Atlanta, Ga. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-58494) on Sept. 1, 2023, with as much as $50,000 in assets and $1 million to $10 million in liabilities. Raymond Curry, authorized representative, signed the petition. Judge Sage M. Sigler oversees the case. Cameron M. McCord, Esq., at Jones & Walden, LLC, is the Debtor's legal counsel. RODAN & FIELDS: S&P Lowers ICR to 'D' on Missed Interest Payments ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on San Francisco-based skincare company Rodan & Fields LLC (R+F) to 'D' from 'CCC-', its issue-level rating on its super priority second-out term loan to 'D' from 'CCC+', and its issue-level rating on its super priority third-out term loan to 'D' from 'CC'. R+F did not make the amortization and interest payments due on its super priority second- and third-out term loans at the end of June. The company did make the payments due on its super priority first-out revolver. The downgrade reflects that R+F has defaulted on all of its debt obligations under the forbearance agreement. S&P said, "It also reflects that the company failed to make the amortization and interest payments due on its super priority second- and third-out term loans as of the end of June, which we also view as a default. R+F has proposed several changes to its capital structure, including new money coming in ahead of its existing super priority second- and third-out term loans. The company is seeking to receive lender approval for the proposed capital structure changes. The transaction is scheduled to close by the first half of September 2024. We believe these transactions are akin to an out-of-court restructuring." SBG BURGER: Seeks to Extend Plan Exclusivity to August 14 --------------------------------------------------------- Starboard with Cheese, LLC; 9 S&M Foods, LLC; and 10 S&M Foods, LLC, Debtor Affiliates of SBG Burger Opco, LLC, asked the U.S. Bankruptcy Court for the Middle District of Florida to extend their exclusivity periods to file a plan of reorganization and obtain acceptance thereof to August 14 and October 16, 2024, respectively. The Extending Debtors continue to operate their businesses and manage their property as debtors in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. After inception of this case, this Court has approved two omnibus sale processes; and, this Court has approved three omnibus rejection processes. After the rejection and sale processes, SBG Cheese has three remaining stores. SBG Cheese has already received the consent of the landlords for Stores 704 and 707 to extend the assumption deadline through and including September 1, 2024. And, SBG Cheese has already assumed the lease for Store 705. As a result of these sales, rejections and negotiations, Extending Debtors require an extension of the deadline and exclusive period within which they may file plan(s) and solicit acceptances or rejections of the same, without prejudice to seeking further extensions. Extending Debtors assert that they continue to work diligently to evaluate their business operations and believe that cause exists to extend the exclusive period within which they may file a plan(s) and solicit acceptances pursuant to Section 1121 of the Bankruptcy Code. Permitting this extension will not prejudice creditors in this case, while allowing Extending Debtors to continue their bankruptcy efforts. Counsel to the Debtors: Thomas M. Messana, Esq. Scott A. Underwood, Esq. Megan W. Murray, Esq. UNDERWOOD MURRAY, PA 100 N. Tampa St., Suite 2325 Tampa, FL 33602 Telephone: (813) 540-8401 Facsimile: (813) 553-5345 Email: tmessana@underwoodmurray.com sunderwood@underwoodmurray.com mmurray@underwoodmurray.com About SBG Burger Opco SBG Burger Opco, LLC and affiliates operate 73 Wendy's, 6 McAlister's Deli, 15 Subway, 5 Fuzzy's Taco Shop and 22 CiCi's Pizza restaurants across Alabama, Florida, Illinois, Missouri, Louisiana, Wisconsin and Texas. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 23-04797) on November 14, 2023. The Debtors are Starboard Group of Space Coast, LLC; Starboard Group of Southeast Florida, LLC; Starboard Group of Tampa, LLC; Starboard Group of Tampa II, LLC; Starboard Group of Alabama, LLC; 7 S & M Foods, LLC; 9 S & M Foods, LLC; 10 S & M Foods, LLC; Starboard with Cheese, LLC; and SBG Burger Opco, LLC. In the petition signed by Andrew Levy, manager, lead Debtor SBG Burger Opco, LLC disclosed up to $50,000 in both assets and liabilities. SBG Alabama listed $1 billion to $10 billion in estimated assets and $1 billion to $10 billion in estimated liabilities. SBG Spacecoast listed $10 million to $50 million in estimated assets and $1 million to $10 million in estimated liabilities. SBG Cheese listed $1 million to $10 million in estimated assets and $1 million to $10 million in estimated liabilities. SBG Tampa listed $1 million to $10 million in estimated assets and $1 million to $10 million in estimated liabilities. SBG SE Florida listed $1 million to $10 million in estimated assets and $1 million to $10 million in estimated liabilities. Judge Tiffany P. Geyer oversees the cases. Scott A. Underwood, Esq., at Underwood Murray, PA, is the Debtors' legal counsel. On January 23, 2024, the U.S. Trustee for Region 21 appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped Bast Amron, LLP as its legal counsel. SERINDEEP INTERNATIONAL: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: Serindeep International Inc. 9749 SW 111 Terrace Miami, FL 33176 Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court Southern District of Florida Case No.: 24-17241 Judge: Hon. Robert A Mark Debtor's Counsel: James B. Miller, Esq. JAMES B. MILLER, P.A. 19 West Flagler St. #416 Miami, FL 33130 Tel: 305-374-0200 Email: bkcmiami@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Sivakumar Sinnarajah as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RXBFEVI/SERINDEEP_INTERNATIONAL_INC__flsbke-24-17241__0001.0.pdf?mcid=tGE4TAMA SEXTO LLC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Sexto LLC 3704 SW Bond Ave Portland OR 97239 Business Description: Sexto LLC owns a restaurant business. Chapter 11 Petition Date: July 18, 2024 Court: United States Bankruptcy Court Northern District of Texas Case No.: 24-42493 Debtor's Counsel: Richard Grant, Esq. CULHANE, PLLC 13101 Preston Road, Suite 110-1510 Dallas, TX 75240 Tel: 214-210-2929 Email: rgrant@cm.law Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Mike Pruitt as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/2ID3UXI/Sexto_LLC__txnbke-24-42493__0001.0.pdf?mcid=tGE4TAMA SHIFT TECHNOLOGIES: Unsecureds Owed Under $2K to Recover 7.25% -------------------------------------------------------------- Shift Technologies, Inc. and its Debtor Affiliates filed with the U.S. Bankruptcy Court for the Northern District of California a Combined Disclosure Statement and Joint Chapter 11 Plan dated July 3, 2024. Prior to the Petition Date, Shift was a consumer-centric omnichannel retailer for buying and selling used cars, with headquarters in San Francisco and operations in Oakland and Pomona, California. As Shift continued to expend its available cash on technology development, capital markets in early-to-mid 2023 tightened and focused on profitability over growth, making it increasingly difficult to find capital to fund growth and operations absent immediate cash returns. It became apparent that Shift would have significant difficulty continuing to invest in its ecommerce platform. Ultimately, Shift was unable to secure any source of additional capital to fund continuing operations. On October 6, 2023, Shift announced that it would begin an orderly wind down and liquidation through these Chapter 11 Cases. That day, Shift closed its website and car dealerships in Oakland and Pomona and terminated approximately 80% of its workforce. The remaining employees of Shift were those necessary to facilitate an orderly wind down of its business and liquidation of its assets. Shift filed these Chapter 11 Cases to begin an orderly wind down, using cash on hand and cash generated by the liquidation of inventory through wholesale channels to provide the necessary liquidity to support the wind down and the chapter 11 process. In these Chapter 11 Cases, the Combined Plan and Disclosure Statement contemplates a liquidation of each of the Debtors and is therefore referred to as a plan of liquidation. The Debtors' remaining assets largely consist of Cash and Causes of Action. The Causes of Action include, but are not limited to, Avoidance Actions and other claims, rights, and causes of action held by the Estates. The Combined Plan and Disclosure Statement provides for the creation of a Liquidating Trust and appointment of a Liquidating Trustee, who will administer and liquidate all remaining property of the Debtors and their Estates. The Combined Plan and Disclosure Statement also provides for Distributions to be made to certain Holders of Administrative Claims, Professional Fee Claims, Priority Tax Claims, Other Secured Claims, Priority Claims, and General Unsecured Claims, and for the funding of the Liquidating Trust. The Combined Plan and Disclosure Statement also provides for deemed consolidation as of the Effective Date of all of the Debtors into the Liquidating Trust. Finally, the Combined Plan and Disclosure Statement contemplates the cancellation of all Equity Interests in the Debtors, the dissolution and wind up of the affairs of the Debtors, and the administration of any remaining assets of the Estates by the Liquidating Trustee. During the latter half of October 2023, the Debtors were able to sell approximately 90% of the vehicle inventory they held as of the Petition Date through regular auction sales in California, yielding approximately $8 million. The Debtors have sold substantially all of the remaining vehicle inventory through auction sales. The Debtors have also sold, through online auctions, equipment and personal property from their former vehicle storage and sales facilities in Oakland, California; Pomona, California; and Beaverton, Oregon; as well as at their headquarters in San Francisco, California. The total net proceeds of such sales was $560,453. Finally, the Debtors sold various intangible assets: domain names, trademarks, copyrights, and other intellectual property. An order authorizing the sale of the substantial majority of those assets issued on March 7, 2024 and sales closed thereon with net proceeds (after payment of the Debtors' agent's fees) of approximately $2.0 million. The motion and other supporting documents and notices thereon provide additional details about the transactions. Class 3A consists of all General Unsecured Claims against the Debtors' parent company, Shift Technologies, that are not Class 3C Claims. Each Holder of Allowed General Unsecured Claim in Class 3A shall receive, in full satisfaction, settlement, and release of and in exchange for such Allowed General Unsecured Claim, on, or as soon as reasonably practicable after the later of (i) the Effective Date and (ii) the date on which a General Unsecured Claim becomes Allowed and payable pursuant to and as specified by an order of the Bankruptcy Court, a Pro Rata Class A beneficial interest in the Liquidating Trust and Distributions therefrom, after all other payments required as of the Effective Date have been made and the Liquidating Trust Operating Reserve has been funded, as follows: * Avoidance Actions: 55% of net proceeds; * Causes of Action (other than Avoidance Actions): 85% of net proceeds; and * Net Effective Date Cash and other proceeds: 15%. Class 3B consists of all General Unsecured Claims against any Debtor other than the Debtors' parent company, Shift Technologies, that are not Class 3C Claims. Each Holder of Allowed General Unsecured Claim in Class 3B shall receive, in full satisfaction, settlement, and release of and in exchange for such Allowed General Unsecured Claim, on, or as soon as reasonably practicable after the later of (i) the Effective Date and (ii) the date on which a General Unsecured Claim becomes Allowed and payable pursuant to and as specified by an order of the Bankruptcy Court, a Pro Rata Class B beneficial interest in the Liquidating Trust and Distributions therefrom, after all other payments required as of the Effective Date have been made and the Liquidating Trust Operating Reserve has been funded, as follows: * Avoidance Actions: 45% of net proceeds; * Causes of Action (other than Avoidance Actions): 15% of net proceeds; and * Net Effective Date Cash and other proceeds: 85%. Class 3C consists of all General Unsecured Claims against the Debtors' parent company, Shift Technologies, in an amount equal to or less than $30,000, or that elects to voluntarily reduce its Claim (if over $30,000) to $30,000. Each Holder of Allowed General Unsecured Claim in Class 3C shall receive, in full satisfaction, settlement, and release of and in exchange for such Allowed General Unsecured Claim, on, or as soon as reasonably practicable after the later of (i) the Effective Date and (ii) the date on which a General Unsecured Claim becomes Allowed and payable pursuant to and as specified by an order of the Bankruptcy Court, a payment in Cash equal to 0.6% of the Allowed General Unsecured Claim in Class 3C. Class 3D consists of all General Unsecured Claims against any Debtor other than the Debtors' parent company, Shift Technologies, in an amount equal to or less than $2,000, or that elects to voluntarily reduce its Claim (if over $2,000) to $2,000. Each Holder of Allowed General Unsecured Claim in Class 3D shall receive, in full satisfaction, settlement, and release of and in exchange for such Allowed General Unsecured Claim, on, or as soon as reasonably practicable after the later of (i) the Effective Date and (ii) the date on which a General Unsecured Claim becomes Allowed and payable pursuant to and as specified by an order of the Bankruptcy Court, a payment in Cash equal to 7.25% of the Allowed General Unsecured Claim in Class 3D. Class 5 consists of all Equity Interests. As of the Effective Date, all Equity Interests shall be deemed void, cancelled, and of no further force and effect. On and after the Effective Date, Holders of Equity Interests shall not be entitled to, and shall not receive or retain any property or interest in property under the Plan on account of such Equity Interests. Class 5 is deemed to have rejected the Plan and, therefore, Holders of Equity Interests are not entitled to vote on the Plan. The Combined Plan and Disclosure Statement will be implemented by various acts and transactions as set forth in the Combined Plan and Disclosure Statement, including, among other things, the establishment of the Liquidating Trust, the appointment of the Liquidating Trustee, and the making of Distributions by the Liquidating Trustee. A full-text copy of the Combined Disclosure Statement and Plan dated July 3, 2024 is available at https://urlcurt.com/u?l=2DaYhY from PacerMonitor.com at no charge. Attorneys for the Debtors: Tobias S. Keller, Esq. Keith Mcdaniels, Esq. Danisha Brar, Esq. KELLER BENVENUTTI KIM LLP 650 California Street, Suite 1900 San Francisco, CA 94108 Telephone: (415) 496-6723 Facsimile: (650) 636-9251 Email: tkeller@kbkllp.com kmcdaniels@kbkllp.com dbrar@kbkllp.com About Shift Technologies Shift Technologies, Inc. is a consumer-centric omnichannel used car retailer. It operates the website www.shift.com and two locations in Oakland and Pomona, California. Shift Technologies and its affiliates filed Chapter 11 petitions (Bankr. N.D. Calif. Lead Case No. 23-30687) on Oct. 9, 2023. In the petitions signed by its chief financial officer, Jason Curtis, Shift Technologies disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Hannah L. Blumenstiel oversees the cases. The Debtors tapped Thomas B. Rupp, Esq., at Keller Benvenutti Kim, LLP as legal counsel; AlixPartners, LLC as financial advisor; and Omni Agent Solutions, Inc. as claims and noticing agent. The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Michael Sweet, Esq., at Fox Rothschild, LLP. SM ENERGY: S&P Assigns 'BB-' Rating on New Senior Unsecured Notes ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue-level rating and '3' recovery rating to U.S.-based crude oil and natural gas exploration and production company SM Energy Co.'s proposed issuance of senior unsecured notes due 2029 and 2032. The '3' recovery rating indicates S&P's expectation of substantial (50%-70%; capped at 65%) recovery of principal by creditors in the event of a payment default. The notes will rank equally in right of payment with the company's current and future unsecured debt. SM Energy will use the proceeds from the offering of the notes together with cash on hand and borrowings under its senior secured revolving credit facility to fund its pending acquisition of XCL Resources LLC (not rated) and redeem its existing 5.625% $349 million senior unsecured notes due 2025, as well as pay related fees and expenses. In June, SM Energy announced it had agreed to acquire 80% of the Uinta Basin assets of XCL Resources LLC, a private operator backed by EnCap Investments L.P. and Rice Investment Group for $2.04 billion. If the XCL transaction is not completed on or prior to July 1, 2025, SM Energy will be required to redeem the 2029 notes at par plus accrued interest. S&P expects the transaction will close in the fourth quarter of 2024, subject to customary closing conditions and approvals. S&P's 'BB-' issuer credit rating and stable outlook on SM Energy are unchanged. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's simulated default scenario for SM Energy assumes a sustained period of low commodity prices, consistent with the conditions of past defaults in this sector. -- S&P based its valuation on SM Energy on a company-provided PV-10 report as of Dec. 31, 2023, pro forma for an estimated PV-10 of the XCL reserves evaluated at its recovery price deck assumptions of $50 per barrel for West Texas Intermediate oil and $2.50 per million Btu for Henry Hub natural gas. -- S&P's recovery analysis for SM Energy also incorporates its $1.25 billion of commitments on its senior secured reserve-based loan facility, which we assume will be fully drawn at default, less outstanding letters of credit. -- S&P caps its recovery ratings on the unsecured debt of issuers it rates in the 'BB' category at '3' to reflect the likelihood that additional priority or pari passu debt will be issued on the path to default. Simulated default assumptions -- Simulated year of default: 2028 -- Insolvency jurisdiction (Rank A): The company has majority of its revenue/assets located in U.S. Simplified waterfall -- Net enterprise value (after 5% administrative costs): $4.5 billion -- Senior secured claims: $1.3 billion --Recovery expectations: Not applicable -- Total value available to unsecured claims: $3.2 billion -- Senior unsecured claims: $2.6 billion --Recovery expectations: 50%-70% (rounded estimate: 65%, capped) Note: All debt amounts include six months of prepetition interest. SPIRIT AIRLINES: Lowers Fiscal Q2 Revenue to $1.28 Billion ---------------------------------------------------------- Spirit Airlines, Inc. provided an update to investors announcing certain preliminary estimates and guidance for the second quarter 2024. According to the Company, total revenue for the second quarter 2024 is estimated to be approximately $1.28 billion, lower than previously expected primarily due to lower-than-expected non-ticket revenue. In early May, the Company anticipated there would be significant pressure on leisure ticket yields throughout the second quarter and continuing into the third quarter due to large industry capacity increases. Estimated ticket revenue per segment for the second quarter is in-line with the Company's previous expectations. However, non-ticket revenue for the quarter underperformed the Company's initial estimate. The Company attributes this underperformance to incremental pressure on ancillary pricing due to changes in the competitive marketplace. The Company estimates non-ticket revenue per passenger segment will be about $64 for the second quarter 2024, several dollars lower than anticipated. Spirit has begun to execute on its transformation plan to better align with the current market dynamics. As the Company progresses on its transformation strategy, it anticipates that over time it will be able to drive improvement in total revenue per passenger segment. In March 2024, the Company entered into an agreement with International Aero Engines, LLC, an affiliate of Pratt & Whitney, pursuant to which IAE will provide the Company with a monthly credit from October 1, 2023 through the end of 2024, subject to certain conditions, as compensation for each of the Company's aircraft unavailable for operational service due to geared turbo fan engine issues. Credits issued by Pratt & Whitney based on aircraft on ground days in the fourth quarter 2023 were approximately $26 million. The Company estimates AOG credits to be issued by Pratt & Whitney based on AOG days in the second quarter 2024 of $37 million, bringing the year-to-date estimate through June 30, 2024, to about $68 million. For the second quarter 2024, the Company estimates $7 million will be recorded within the Company's condensed consolidated statement of operations, of which an estimated $3.5 million will be recorded as a credit within maintenance, materials and repairs, $2.0 million recorded as aircraft rent and $1.5 million recorded as a credit to depreciation and amortization. The Company estimates $52 million will be recorded as a reduction in the cost of assets on the Company's condensed consolidated balance sheet in the second quarter. Year-to-date through June 30, 2024, the Company estimates AOG credits have benefited liquidity by $94 million which includes credits that have been issued related to AOG days in the fourth quarter 2023 and year-to-date through June 30, 2024. For the full year 2024, the Company estimates AOG credits to be issued by Pratt & Whitney will enhance liquidity by approximately $150 to $200 million. Spirit estimates its second quarter 2024 adjusted operating margin will be negative 13.5 percent to negative 12.5 percent. If the Company had recognized all the AOG credits to be received for AOG aircraft in the second quarter 2024, the Company estimates its operating margin would have been negative 11.2 percent to negative 10.2 percent. The Company plans to provide updated estimates for full year 2024 capacity and year-end liquidity when it provides its third quarter 2024 estimates for capacity, revenue and operating income in conjunction with reporting its second quarter earnings results which it plans to do in early August 2024. About Spirit Airlines Spirit Airlines Inc. is a major United States ultra-low cost airline headquartered in Miramar, Florida, in the Miami metropolitan area. As of March 31, 2024, the Company had $9.5 billion in total assets, $8.5 billion in total liabilities, and $1 billion in total stockholders' equity. * * * In June 2024, S&P Global Ratings lowered its issuer credit rating on Spirit Airlines Inc. to 'CCC' from 'CCC+'. S&P also lowered its ratings on Spirit's enhanced equipment trust certificates (EETCs) by one notch, in line with the lower issuer credit rating. The negative outlook reflects the uncertainty around the company's ability to address its upcoming 2025 maturities, the sustainability of its capital structure over the longer term, and S&P's view that a distressed exchange is likely. In January 2024, Moody's Investors Service downgraded its ratings of Spirit Airlines, including the corporate family rating to Caa2 from Caa1 and probability of default rating to Caa2-PD from Caa1-PD. Moody's also downgraded the backed senior secured rating assigned to Spirit IP Cayman Ltd.'s 8% senior notes, which are secured by the company's loyalty program and brand IP, to Caa2 from B2. The speculative grade liquidity rating remains unchanged at SGL-3 and the rating outlook remains negative. The downgrade of the corporate family rating to Caa2 reflects Moody's belief that the potential of a default has increased since Judge William Young ruled in January that the agreed acquisition by JetBlue Airways Corp. would be anti-competitive and a violation of the Clayton Act. The downgrades of the CFR as well as of the senior notes secured by Spirit's loyalty program IP and brand IP reflect the increased potential of a default and less than a full recovery, whether in a formal reorganization or if the senior secured notes are refinanced or retired for less than face value. The Caa2 instrument rating incorporates a negative one notch override of the LGD model to reflect the potential for a more than nominal loss on the instrument in a restructuring or exchange scenario. Following the ruling on January 16, the market price of the Notes fell to around 50 from the low to mid-70s since mid-November. The notes price has increased to the low 60s following the announcement that Spirit and JetBlue would appeal the District Court's ruling. Moody's continues to expect Spirit's operations to generate an operating loss in 2024 and again in 2025 on a reported basis. Moody's forecasts about breakeven operating cash flow in 2024, an improvement from its forecast for negative $150 million in 2023. Moody's projects cash to fall from the $1.1 billion on hand on Sep. 30, 2023, towards $700 million by the end of 2024. The Company's $300 million revolver expires on Sept. 30, 2025. Alternate sources of liquidity are very limited. In September 2023, Egan-Jones Ratings Company maintained its 'CCC+' foreign currency and local currency senior unsecured ratings on debt issued by Spirit Airlines, Inc. SPIRIT AIRLINES: Welcomes Richard Wallman to Board of Directors --------------------------------------------------------------- Spirit Airlines, Inc. announced that its Board of Directors has appointed Richard F. Wallman as its newest member, effective July 16, 2024. "We are very pleased that Richard Wallman has agreed to join our board," said H. McIntyre "Mac" Gardner, Spirit's Chairman of the Board. "Richard is a wise and respected business leader, with a deep background in financial management, corporate development, and diverse experience on public and private company boards. Richard will be a tremendous resource to the Spirit management team." "I am delighted to join Spirit's board and to be a part of advancing the company's goal to increase value to travelers and shareholders alike," said Mr. Wallman. "I look forward to working with Spirit's leadership team and the other board members." Mr. Wallman served as the Chief Financial Officer and Senior Vice President of Honeywell International Inc., a diversified industrial technology and manufacturing company, and its predecessor AlliedSignal, from March 1995 to July 2003. Prior to that, Mr. Wallman served in senior financial positions with IBM and Chrysler Corporation. He is currently a director of CECO Environmental Corp., Charles River Laboratories International, Inc., and Roper Technologies, Inc. Mr. Wallman received his Bachelor of Science from Vanderbilt University and his MBA from the University of Chicago Booth Graduate School of Business. About Spirit Airlines Spirit Airlines Inc. is a major United States ultra-low cost airline headquartered in Miramar, Florida, in the Miami metropolitan area. As of March 31, 2024, the Company had $9.5 billion in total assets, $8.5 billion in total liabilities, and $1 billion in total stockholders' equity. * * * In June 2024, S&P Global Ratings lowered its issuer credit rating on Spirit Airlines Inc. to 'CCC' from 'CCC+'. S&P also lowered its ratings on Spirit's enhanced equipment trust certificates (EETCs) by one notch, in line with the lower issuer credit rating. The negative outlook reflects the uncertainty around the company's ability to address its upcoming 2025 maturities, the sustainability of its capital structure over the longer term, and S&P's view that a distressed exchange is likely. In January 2024, Moody's Investors Service downgraded its ratings of Spirit Airlines, including the corporate family rating to Caa2 from Caa1 and probability of default rating to Caa2-PD from Caa1-PD. Moody's also downgraded the backed senior secured rating assigned to Spirit IP Cayman Ltd.'s 8% senior notes, which are secured by the company's loyalty program and brand IP, to Caa2 from B2. The speculative grade liquidity rating remains unchanged at SGL-3 and the rating outlook remains negative. The downgrade of the corporate family rating to Caa2 reflects Moody's belief that the potential of a default has increased since Judge William Young ruled in January that the agreed acquisition by JetBlue Airways Corp. would be anti-competitive and a violation of the Clayton Act. The downgrades of the CFR as well as of the senior notes secured by Spirit's loyalty program IP and brand IP reflect the increased potential of a default and less than a full recovery, whether in a formal reorganization or if the senior secured notes are refinanced or retired for less than face value. The Caa2 instrument rating incorporates a negative one notch override of the LGD model to reflect the potential for a more than nominal loss on the instrument in a restructuring or exchange scenario. Following the ruling on January 16, the market price of the Notes fell to around 50 from the low to mid-70s since mid-November. The notes price has increased to the low 60s following the announcement that Spirit and JetBlue would appeal the District Court's ruling. Moody's continues to expect Spirit's operations to generate an operating loss in 2024 and again in 2025 on a reported basis. Moody's forecasts about breakeven operating cash flow in 2024, an improvement from its forecast for negative $150 million in 2023. Moody's projects cash to fall from the $1.1 billion on hand on Sep. 30, 2023, towards $700 million by the end of 2024. The Company's $300 million revolver expires on Sept. 30, 2025. Alternate sources of liquidity are very limited. In September 2023, Egan-Jones Ratings Company maintained its 'CCC+' foreign currency and local currency senior unsecured ratings on debt issued by Spirit Airlines, Inc. STAR PARENT: S&P Affirms 'B' ICR, Outlook Positive -------------------------------------------------- S&P Global Ratings affirmed its 'B' issuer credit rating on Moorisville, N.C.-based clinical research organization (CRO) Star Parent Inc. (doing business as Syneos Health Inc.), with a positive outlook. At the same time, S&P affirmed its 'B' issue-level rating on Syneos' first-lien term loan and senior secured notes. The recovery rating remains '3' (50%-70%; rounded estimate: 50%). The positive outlook reflects S&P's expectation that net awards will continue to improve from lower levels over the past 24 months. It also incorporates its expectation that operational improvements will generate higher margins and higher cash flow in the next 12 months. The company's turn-around story is taking longer than anticipated, but bookings are improving. Syneos has been addressing its recent operational challenges by adding industry veterans to its advisory and management team, hiring a new head of business development, increasing client facing employee retention, and integrating and upgrading IT systems. As a result, the company's bookings have improved to 0.9x for the 12 months ended March 31, 2024, compared with 0.8x the previous year, and since its lowest single quarter of 0.3x after the third quarter of 2022. The book-to-bill rates of below 1.0x and some reports of cautiousness and delayed decision-making across the CRO and commercialization space contribute to S&P's projection of a decline of between 3% and 4% in revenue in 2024. Although declining from $9.8 billion from the previous year, the company backlog is still substantial at $9.3 billion, with the average contract length for its clinical solutions business of five to seven years. S&P said, "We are projecting revenue growth to recover in 2025 because of favorable long-term industry dynamics and the company's progress in improving bookings and focus on business development. Our projections assume booking levels continue to improve and will be 1x sometime this year and continue to improve in 2025." S&P said, "Although we expect a rebound in EBITDA margins, they still lag peers. In the medium term, we expect its S&P Global Ratings-adjusted EBITDA margins will remain below its high-rated peers, which include  IQVIA Holdings Inc.  (about 23%) and Icon PLC (about 21%). We anticipate EBITDA margins to remain low at about 9% in 2024 because of significant integration-related and restructuring costs and revenue declines. However, we expect EBITDA will improve in 2025 because of the company's cost-saving plan, including consolidating facilities and reducing back-office headcount, to between 13% and 14%. "We expect leverage improvement later this year and throughout 2025. Leverage was high at 7.3x on March 31, 2024, and while we believe it will likely rise in the second quarter because of high restructuring charges that we are not adding back, we expect leverage to begin to fall in the second half and continue to decline in 2025. We expect S&P Global Ratings-adjusted leverage of 7.5x-8.5x at the end of 2024 and 5.0x-5.5x by the end of 2025. However, if margins do not improve, book-to-bill metrics remain soft, or we expect leverage improvement will be pushed out further, we could consider revising our outlook. "We anticipate FOCF will be constrained.  The company's recovering operations, restructuring expenses related to its cost-saving plan, and high interest burden will constrain its FOCF through the remainder of 2024. The cost-saving plan, which includes over $160 million of work force savings and over $70 million of operational cost savings, has already cost about $25 million in restructuring charges in the first quarter of 2024, and the company will experience further costs throughout the year. This, coupled with our expectation for operational weakness in 2024 and high interest rates, leads to our expectation of FOCF between $20 million and $50 million in 2024 and FOCF to debt between 1% and 2% in 2024. However, we anticipate FCOF increasing to between 4% and 6% in 2025 due to improving operations, lower restructuring expenses, and the realization of benefits from these cost-saving initiatives. "The positive rating outlook on Star Parent reflects our expectation that net awards will continue to improve from historically weaker awards over the past 12 months. It also incorporates our expectation that operational improvements will generate higher margins and improve cash flow generation in the next 12 months." S&P could raise its rating on Star Parent over the next 12 months if its book-to-bill rate continued to improve, revenue continued to grow, and productivity initiatives produced improving margins and FOCF such that: -- Its S&P Global Ratings-adjusted debt to EBITDA declined below 6x, and we believed the company would adhere to financial policies that would maintain leverage below this level; and -- FOCF to debt improved to above 3%. S&P could revise its outlook to stable over the next six to 12 months if Star Parent experienced a sudden reversal in business momentum (book-to-bill rate stagnated or worsened) or the company were unable to show progress in cost savings such that: -- The company's leverage remained above 6x, and -- FOCF remained below 3%. S&P said "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." STRATHCONA RESOURCES: Fitch Affirms B+ LongTerm IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Strathcona Resources Ltd.'s Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch has also affirmed the company's first lien secured revolving credit facility at 'BB+'/'RR1' and upgraded the senior unsecured bond to 'B+'/'RR4' from 'B'/'RR5'. Following these actions, Fitch withdrew the IDR and instrument ratings for commercial reasons. KEY RATING DRIVERS Key rating drivers do not apply as the ratings have been withdrawn. RATING SENSITIVITIES Rating sensitivities do not apply as the ratings have been withdrawn. ISSUER PROFILE Strathcona is a private E&P company with operations in western Canada that are focused on thermal oil, enhanced heavy oil recovery and condensate-rich natural gas. Strathcona has three core operating areas: Cold Lake Thermal Division, Montney Division and Lloydminster Heavy Oil Division. ESG CONSIDERATIONS Strathcona Resources Ltd. has an ESG Relevance Score of '4' for Governance Structure due to the Waterous Energy Fund ownership concentration, which has a negative impact on the credit profile, and is relevant to the ratings 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 Prior ----------- ------ -------- ----- Strathcona Resources Ltd. LT IDR B+ Affirmed B+ LT IDR WD Withdrawn B+ senior secured LT BB+ Affirmed RR1 BB+ senior secured LT WD Withdrawn BB+ senior unsecured LT B+ Upgrade RR4 B senior unsecured LT WD Withdrawn B+ TERRAFORM LABS: Unsecureds to Get Share of GUC Pool in Plan ----------------------------------------------------------- Terraform Labs Pte. Ltd. ("TFL") and Terraform Labs Limited ("TLL") filed with the U.S. Bankruptcy Court for the District of Delaware a Disclosure Statement for Joint Chapter 11 Plan dated July 3, 2024. TFL was incorporated as a limited exempt private company in the Republic of Singapore on April 23, 2018, when its co-founder, Mr. Kwon, along with others, began developing an early version of the Terra blockchain (the "Terra Classic Blockchain"). TLL is a British Virgin Islands ("BVI") company limited by shares and a wholly-owned subsidiary of TFL. It was incorporated on June 25, 2018. TLL entered into token sale agreements (collectively, the "Token Sale Agreements") and other agreements with third parties. TFL and TLL entered into "subscription agreements" with each other (collectively, the "Subscription Agreements") that permitted TFL to accept payments for certain tokens from third parties that otherwise would have been payable to TLL pursuant to the Token Sale Agreements and other agreements. Consequently, for token sales, third parties paid TFL, not TLL, for Luna Classic under the Token Sale Agreements, and in accordance with the Subscription Agreements, TFL was permitted to collect and use this money. In exchange, TLL was granted a "perpetual security." Following the May '21 De-peg, TLL contributed billions of Luna Classic tokens to LFG. TFL sought chapter 11 relief to preserve value and maximize creditor recoveries in light of a judgment in the action the U.S. Securities and Exchange Commission (the "SEC") commenced against TFL and its founder, former director, and former Chief Executive Officer, Kwon Do Hyeong ("Mr. Kwon") in the District Court of the Southern District of New York, titled SEC v. Terraform Labs Pte. Ltd., et al., Case No. 1:23-cv-013460-JSR (S.D.N.Y.) (the "SEC Enforcement Action"). As discussed in detail, following the District Court's summary judgment ruling in favor of the SEC on certain counts and a jury trial verdict against Mr. Kwon and TFL on other counts, TFL entered into settlement discussions with the SEC, which culminated in a consent agreement signed by TFL (the "Consent") and the Final Judgment Against Terraform Labs Pte. Ltd. and Do Hyeong Kwon (No. 1:23-cv-1346 (JSR); Docket No. 271) (the "Final Judgment"), approved by District Court Judge Jed S. Rakoff on June 12, 2024. The Consent and Final Judgment (together, the "SEC Settlement") contemplate, among other things, a chapter 11 plan of liquidation, a wind down of the Debtors' business operations, and sales of TFL's assets. Moreover, under the SEC Settlement, Mr. Kwon is transferring assets worth hundreds of millions of dollars into the Debtors' estates for distribution to certain creditors and the SEC is agreeing to forgo any monetary recoveries on its multi-billion-dollar claim until most creditors are paid in full, enabling other creditors to receive all available proceeds of the Debtors' estates (after wind-down costs). The Debtors believe that the wind down and asset sales pursuant to the terms of the SEC Settlement and the Plan accomplish the Debtors' goal of maximizing recovery for the Debtors' creditors in light of the jury verdict. The SEC Settlement requires TFL to commence a wind down of its operations and liquidate its assets, including taking the following actions: * prior to the Effective Date, liquidating its assets, including: -- marketing and selling equity interest in Proximity Panorama LDA and the Venture Investments; -- Converting certain digital assets within its possession and control into U.S. dollars; * by the Effective Date, burning all tokens in its possession native to the Terra Blockchain, including, but not limited to Luna Classic, Luna, UST, MIR and ANC, or destroying all private keys in TFL’s possession to wallets or blockchain addresses holding such tokens; and * by the Effective Date, allowing third parties to withdraw, unwind, and/or unstake their positions from TFL's applications and protocols. Class 4 consists of General Unsecured Claims. Except to the extent that a holder of an Allowed General Unsecured Claim agrees to less favorable treatment of such Claim, each holder of an Allowed General Unsecured Claim will receive its Pro Rata share of the GUC Pool up to the full amount of such Allowed General Unsecured Claim. This Class is impaired. On the Effective Date, the Debtors will establish the following pools of funds for wind-down costs and distributions to claimants: * Wind Down Reserve: Funded with Cash sufficient to fund the wind down process until the Wind Down Completion Date, 8 taking into account funds that are not yet in the Debtors' estates, but are likely to be available after the Effective Date, as provided in the Wind Down Budget. The Wind Down Budget will be included in the Plan Supplement. * Senior Claim Pool: Funded on the Effective Date with Cash estimated to be necessary to pay holders of secured and/or priority claims (i.e., Administrative Expense, Priority Tax, Priority NonTax, and Other Secured Claims) ("Senior Claims") a 100% recovery, plus any amounts estimated to be necessary to pay holders of Disputed Senior Claims. * Fee Escrow Account: Funded with Cash for the payment of professional fees and costs ("Fee Claims"), based on estimates provided in advance of the Effective Date. * GUC Pool (for the payment of Allowed General Unsecured Claims): Funded (i) on the Effective Date, with Effective Date Available Cash (i.e., available cash that is not otherwise reserved for another fund/pool) and (ii) after the Effective Date, with (a) Post-Effective Date Cash, (b) Surplus Reserved Cash, and (c) Surplus Senior Claim Pool Cash, in each case in accordance with the Waterfall. * Crypto Loss Claims Pool: (for the payment of Crypto Loss Claims): Funded initially with (i) the funds in the SEC Settlement Fund and (ii) thereafter, with any remaining Cash in the GUC Pool upon the time at which all Allowed General Unsecured Claims are indefeasibly paid in full in Cash and there are no Disputed General Unsecured Claims (the "General Unsecured Claim Payment Completion"). * SEC Settlement Fund: Funded with amounts transferred to the Debtors by Mr. Kwon and LFG under the SEC Settlement, which shall be converted to Cash after the Effective Date and reserved for distribution solely to holders of Crypto Loss Claims pursuant to the SEC Settlement. Cash received after the Effective Date, such as proceeds from the sale of Estate assets, proceeds from Estate Causes of Action, and Cash in restricted bank accounts (to the extent recovered) ("Post Effective Date Cash"), as well as surplus Cash in the Wind Down Reserve, as may be released from the Wind Down Reserve by the Liquidating Plan Administrator from time to time (the "Surplus Reserved Cash"), and surplus Cash in the Senior Claim Pool, as may be released by the Liquidating Plan Administrator from time to time (the "Surplus Senior Claim Pool Cash") shall be distributed pursuant to a "Waterfall": (i) first, to fund any deficits in the Wind Down Reserve, as determined in the sole discretion of the Liquidating Plan Administrator, (ii) second, to fund any deficits in the Senior Claim Pool, as determined in the sole discretion of the Liquidating Plan Administrator, and (iii) third, to fund the GUC Pool, until the General Unsecured Claim Payment Completion. A full-text copy of the Disclosure Statement dated July 3, 2024 is available at https://urlcurt.com/u?l=vC0g3F from PacerMonitor.com at no charge. Attorneys for the Debtors: Zachary I. Shapiro, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square, 920 North King Street Wilmington, Delaware 19801 Tel: (302) 651-7700 Email: shapiro@rlf.com Ronit Berkovich, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Email: ronit.berkovich@weil.com About Terraform Labs Terraform Labs Limited's parent is Terraform Labs Pte. Ltd., a software development company. Its Parent's primary business purpose is to develop and support (i) software used to create and run the current Terra blockchain network, which was started in May 2022, and (ii) an entire suite of tools, protocols, and applications that operate on the Terra Blockchain, making transactions on the network easier, faster, and more user friendly. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-11481) on July 1, 2024, with $100 million to $500 million in assets and $0 to $50,000 in liabilities. Chris Amani, Head of Company Operations of Terraform Labs Pte. Ltd., Director of Terraform Labs Limited, signed the petition. The Debtor tapped RICHARDS, LAYTON & FINGER, P.A. as local counsel; WEIL, GOTSHAL & MANGES LLP as attorney; DENTONS US LLP as special litigation counsel; WONGPARTNERSHIP LLP as special foreign counsel; and ALVAREZ & MARSAL NORTH AMERICA, LLC as financial advisor. TERRAFORM POWER: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed TerraForm Power Operating, LLC's (TERPO) Long-Term Issuer Default Rating (IDR) at 'BB-'. The Rating Outlook is Stable. Fitch has also affirmed the senior secured Term Loan B and senior unsecured ratings at 'BB+'/'RR2' and 'BB-'/'RR4', respectively. TERPO ratings and Outlook are supported by relatively stable, long-term contracted and regulated cash flows from a diversified portfolio of renewable projects. TERPO, privately owned by Brookfield Renewable Partners and affiliates, is expected to focus on organic and low-growth strategies. Fitch calculates TERPO's credit metrics on a deconsolidated basis due to non-recourse financing of its operating assets, and projects holding company-only FFO leverage to average 5.5x through the 2024-2027 forecast period. KEY RATING DRIVERS Contracted and Regulated Portfolio: TERPO owns and operates 4.1GW in a diversified portfolio of wind and solar assets primarily in the U.S. and Spain. Approximately 95% of cash flows are rate-regulated or derived from long-term contracts, with over 90% off-takers being investment grade or exhibiting investment-grade characteristics. TERPO's power purchase contracts have a 11-year average remaining life. U.S. contributes approximately two-thirds of TERPO's generation capacity, with the majority of the remainder from Spain and the rest from Portugal, Chile, and United Kingdom. Project Distribution: TERPO operates a fleet with generational capacity comprised of 56% wind and 44% solar assets. Traditionally, wind assets are subject to higher levels of resource variability risk as compared to solar assets. However, Fitch believes geographic diversification allows the company to partially mitigate some of the resource variability that follows wind generation assets. Spain Regulatory Framework: In March 2022, the Spanish government issued a royal decree to eliminate the impact of energy price volatility on rate payers. The price band mechanism was eliminated for 2023-2025, which resulted in a larger proportion of revenues being collected from the market price than the regulated revenue mechanisms. As a result of the update, the regulatory price was increased from €49/MWh to €122/MWh for 2022 and further revised to €109.31/MWh for 2023. Fitch forecasts slight negative impact on cash flow available for debt service in the near term due to the regulatory adjustment. However, the fundamental principles of the framework remain unchanged, and has no impact on the value of the Spanish assets. Strong Financial Strategy: TERPO's financing strategy entails funding repowering, redevelopment and other growth initiatives through non-recourse project level debt as well as company's own retained distributions. Project-level debt is structured with investment grade metrics and is expected to be fully amortized over the life of the project. There is no debt between project level and holding company. Fitch views clear stated financial targets as credit positive with respect to management's focus on deleveraging and repaying over $100 million of corporate debt during the forecast period, as well as aiming to maintain holding company-only leverage within the 5.0x range. Robust Outlook for Wind and Solar Generation: In Fitch's view, the accelerating decarbonization trend in power generation and customer demand for cleaner generation should continue to drive wind and solar generation. The enhanced U.S. federal tax incentives provided by the Inflation Reduction Act are expected to support and drive significant growth in renewable technologies. At the same time, the renewable industry has increasingly become very competitive and equipment costs have increased due to inflation and supply chain issues. Despite recent increases in costs, contracted renewables remain competitive, given the increase in natural gas and power prices. Organic Business Growth: Fitch expects TERPO to focus on an organic and low-growth model through reinvestment across its solar and wind generation assets. TERPO is on track to complete the inverter replacement at its 266MW Mount Signal solar farm and is advancing 100% replacement of wind turbines of a 200MW wind farm in the U.S, which is part of the larger 700MW asset redevelopment initiative by 2028. Within the distributed solar generation business, TERPO has optimized 290 sites in 2023 and has identified a 100 more for 2024 to enhance cash flows through a combination of inverter replacement or refurbishment, module replacement and maintenance of tracker and wiring as necessary. Private Ownership: Private ownership by Brookfield Renewable Partners and Brookfield affiliates is beneficial as compared to publicly held yieldco. With private ownership, the pressure for aggressive growth target in distribution, administrative costs associated with a publicly listed company and the need to pay management fees are all removed. However, private ownership is usually less transparent. Credit Metrics: Fitch calculates TERPO's credit metrics on a deconsolidated basis, as its operating assets are largely financed with nonrecourse debt. TERPO's 2023 holdco-only FFO leverage ratio was approximately 5.1x. Fitch projects TERPO's holdco-only FFO leverage will average 5.5x during 2024-2027, which is slightly elevated as compared to previous forecast of low 5x due to the near-term impact of Spanish regulatory update. Nevertheless, the company has sufficient headroom within its 6.0x downgrade threshold over the forecast period. Parent-Subsidiary Linkage: Fitch rates TERPO on a standalone basis. Consistent with Fitch's approach with Brookfield affiliates, Fitch views Brookfield as financial investors and does not apply parent and subsidiary linkage. DERIVATION SUMMARY TERPO's ratings are assigned based on a deconsolidated approach. TERPO's subsidiaries are project subsidiaries that are largely funded by nonrecourse debt. Fitch applies similar approach to Pattern Energy Operations, LP (PEO; BB-/Stable) and Leeward Renewable Operations Energy (LREO; BB-/Stable), both of which own and operate portfolios of non-recourse projects. TERPO is larger than both PEO and LREO in terms of generation capacity. TERPO's renewable portfolio benefits from a large proportion of solar generation assets (44%) that exhibit less resource variability. In comparison, PEO and LREO operate nearly 100% wind generation assets. TERPO's long-term contracted fleet has a remaining contract life of 11 years, lower than PEO's 12 years, but higher than LREO's eight years. Fitch views PEO and LREO's 100% geographic exposure in North America favorable as compared to TERPO's 67%. TERPO's favorable asset mix and larger generation capacity is offset by its relatively weaker credit metrics compared to PEO and LREO. Fitch forecasts TERPO's holdco only FFO leverage to be in the mid-5.0x through 2024-2027, while PEO's is expected to be in low 4x and LREO's to average around 3.3x from 2024-2026. Similar to PEO and LREO, TERPO has been taken private and is no longer subject to public growth targets and has a moderate and relatively stable growth strategy. Additionally, strong private sponsors provide a more predictable funding source and remove capital market uncertainties. Furthermore, TERPO benefits from its affiliation with Brookfield Corporation (A-/Stable). KEY ASSUMPTIONS - Execution of 700MW of repowering and redevelopment opportunities through 2028; - Project-level debt amortization of around $350 million over the next four years; - oldco Interest Rate assumed at 5.7%. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead To Positive Rating Action/Upgrade - Holding company-only FFO leverage below 5.0x on a sustainable basis; - A record of a conservative and consistent approach in executing the business plan from a credit perspective. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Holding company-only FFO leverage above 6.0x on a sustainable basis; - Underperformance in project assets that lends material variability or shortfall to expected project distributions on a sustained basis and without a clear path to recovery. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch considers liquidity for TERPO adequate with about $340 million of available corporate liquidity as of March 31, 2024. TERPO's liquidity comprises of $280 million available under revolving credit facility and $60 million of unrestricted corporate and project-level distributable cash. TERPO also has access to $180 million of other project-level restricted and unrestricted cash. As of March 31, 2024, approximately 67% of TERPO's consolidated debt was non-recourse project debt. TERPO's corporate level debt primarily represents senior notes due in 2028 and 2030, Term Loan B, and draws on revolving credit facility. The company has no material corporate debt maturities until 2028. ISSUER PROFILE TerraForm Power Operating, LLC (TERPO) owns and operates 4.1GW of diversified wind and solar assets predominantly in the U.S., Europe and Canada. 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 ----------- ------ -------- ----- TerraForm Power Operating, LLC LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- senior secured LT BB+ Affirmed RR2 BB+ THERMOGENESIS HOLDINGS: Boyalife to Seize Equity Following Default ------------------------------------------------------------------ ThermoGenesis Holdings, Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that Boyalife Group (USA), Inc. delivered to the Company a notice stating that it "has elected to exercise its contractual rights to take all equity of the collateral asset, ThermoGenesis Corp, without any further consent or action from the Company." As previously disclosed, on July 9, 2024, the Company received a notice of default from Boyalife under the First Amended and Restated Revolving Credit Agreement, dated April 16, 2018, between the Company and Lender, as amended, and under the Second Amended and Restated Convertible Promissory Note, dated March 4, 2022, as amended, issued by the Company to the Lender under the Credit Agreement. The Default Notice stated and declared that a default occurred under the Credit Agreement and Note as of July 1, 2024, for failure to make a required interest payment and declared the entire balance of the Note to be immediately due and payable. The Note is secured by the Company's shares in its ThermoGenesis Corp. subsidiary. The Default Notice also stated that if the entire outstanding balance of the Note was not paid in full to the Lender by July 11, 2024, the Lender would elect to "take all equity of the collateral assets, TG Corp. without any further consent action from the Company." The Company was not able to pay the Note in full. About ThermoGenesis ThermoGenesis Holdings, Inc. develops and commercializes a range of automated technologies for cell-banking, cell-processing, and cell-based therapeutics. Since the 1990's, ThermoGenesis Holdings has been a pioneer in, and a leading provider of, automated systems that isolate, purify and cryogenically store units of hematopoietic stem and progenitor cells for the cord blood banking industry. The Company was founded in 1986 and is incorporated in the State of Delaware and headquartered in Rancho Cordova, CA. As of March 31, 2024, the Company had $10.09 million in total assets, $11.17 million in total liabilities, and a total deficit of $1.09 million. New York, N.Y.-based Marcum LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 15, 2024, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional capital to grow its business, fund operating expenses and make interest payments. These conditions raise substantial doubt about the Company's ability to continue as a going concern. UMERAH FAMILY: Unsecureds to Get Share of Creditors' Trust ---------------------------------------------------------- Umerah Family Practice, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Georgia a Plan of Reorganization for Small Business dated July 3, 2024. The Debtor is a limited liability corporation. Since 2019, Debtor has been in the business of operating a medical practice. This Plan of Reorganization proposes to pay creditors of the Debtor from revenues and recoveries from the bankruptcy causes of action. The final Plan payment is expected to be paid on December 31, 2027. Class 3 consists of non-priority unsecured creditors. Creditors in this class will receive a pro rata share of the creditors' trust after full payment of any administrative and priority claims. This Class is impaired. Class 4 consists of Equity security holders of the Debtor. Class 4 shall have interests retained. This Class is impaired. Means of Implementation of the Plan being adversary proceedings brought under Section 541 of the Bankruptcy Code through Section 562 of the Bankruptcy Code, non bankruptcy causes of action, and objections to or complaints for equitable subordination of claims under Section 510 of the Bankruptcy Code. On the effective date, all assets of the estate derived from bankruptcy recovery action, or other causes of action, shall be vested in the unsecured creditors' trust ("UCT"). The UCT Responsible Person shall administer the liquidating trust assets pursuant to this plan from and after the effective date. The UCT Responsible Person shall have the ordinary and customary role and duties of a post-confirmation plan administrator, with authority to sell, collect, or otherwise liquidate any remaining assets; pursue, prosecute and settle litigation claims forming a part of the remaining assets; and lodge and prosecute objections to any claims against the Debtor's Chapter 11 estate. The UCT Responsible Person shall also be responsible for liquidating the liquidating trust assets, analyzing and reconciling claims (including filing and pursuing objections to the extent required or permitted by this Plan), pursuing the avoidance actions and causes of action, making distributions of the net asset recoveries (and any other proceeds of the liquidation trust assets, if any) to the beneficiaries of the trust in accordance with this plan and confirmation order and all other activities typically related to trust administration subject to the terms of this plan and confirmation order. A full-text copy of the Chapter 11 Plan dated July 3, 2024 is available at https://urlcurt.com/u?l=jK1LFz from PacerMonitor.com at no charge. Attorney for the Debtor: Wesley J. Boyer, Esq. Boyer Terry LLC 348 Cotton Avenue, Suite 200 Macon, GA 31201 Telephone: (478) 742-6481 Email: Wes@BoyerTerry.com About Umerah Family Practice Umerah Family Practice, LLC, has been in the business of operating a medical practice. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. M.D. Ga. Case No. 24-50520) on April 4, 2024, disclosing under $1 million in both assets and liabilities. The Debtor is represented by BOYER TERRY LLC. VERTEX ENERGY: Updates Fiscal Q2 Financial and Operational Outlook ------------------------------------------------------------------ Vertex Energy, Inc. provided an update to its financial and operational outlook for the second quarter of 2024. Highlights include: * Expected reductions in direct operating expense of 7% and capital expenditures of 29%, compared to previous guidance midpoints; * Anticipated conventional throughput of 68,000 barrels per day (bpd), within guidance range of 68,000 to 72,000 bpd; and * Renewable throughput and utilization in line with prior guidance, which took into account the Company's pause and pivot strategy. Benjamin P. Cowart, President and CEO of Vertex, stated, "We were in line with our guidance in the second quarter of 2024, coupled with continued lower operating expense and lower capital spending. We remain focused on margin improvement, reducing our costs and operating efficiently. We continue to execute on the strategic pause of our renewable diesel business and the pivot to producing conventional fuels from our hydrocracker unit." A full-text copy of the Company's Report attached on Form 8-K filed with the Securities and Exchange Commission is available at: https://tinyurl.com/3v78htee About Vertex Energy Vertex Energy is a leading energy transition company that specializes in producing both renewable and conventional fuels. The Company's innovative solutions are designed to enhance the performance of our customers and partners while also prioritizing sustainability, safety, and operational excellence. With a commitment to providing superior products and services, Vertex Energy is dedicated to shaping the future of the energy industry. As of March 31, 2024, the Company had $835.1 million in total assets, $652.1 million in total liabilities, and $183 million in total equity. * * * As reported by the Troubled Company Reporter on Feb. 8, 2024, Fitch Ratings has downgraded Vertex Energy Inc.'s (Vertex) and Vertex Refining Alabama LLC's Long-Term Issuer Default Ratings (IDR) to 'CCC+' from 'B-'. Fitch has also downgraded the rating of Vertex Refining Alabama's senior secured term loan to 'B-'/'RR3' from 'B'/'RR3'. The downgrade reflects Vertex's weaker liquidity buffer amid lower U.S. Gulf Coast refining crack spreads and weak Fitch-expected contribution from renewable diesel segment in 2024. The company's FCF generation is highly sensitive to refining crack spreads that declined in 4Q23 from abnormally high 2022-2023 levels. Its unrestricted cash balance fell from $141 million at YE 2022 to around $70-80 million at YE 2023. Fitch projects negative EBITDA and FCF for Vertex in 2024 based on the assumptions of continued crack spread normalization and weak renewable diesel profitability. On June 2024, &P Global Ratings lowered its issuer credit rating (ICR) on Vertex Energy Inc. (Vertex) to 'CCC' from 'B-' and its issue-level rating on the company's term loan B (TLB) to 'CCC' from 'B'. At the same time, S&P Global Ratings removed the ratings from CreditWatch, where they were placed with negative implications on March 15, 2024. In addition, S&P revised its assessment of the company's liquidity position to weak from less than adequate. S&P also revised its recovery rating on the TLB to '3' from '2', indicating its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery. The negative outlook reflects the elevated risk of a default scenario given the lack of sufficient liquidity sources to fully repay the TLB or a concrete refinancing plan. W 72 STREET: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: W 72 Street Partners LLC FDBA JTRE W72nd Street LLC 700 Bangs Avenue, Suite 4 Asbury Park, NJ 07712 Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court District of New Jersey Case No.: 24-17236 Debtor's Counsel: Eric H. Horn, Esq. A.Y. STRAUSS LLC 290 West Mount Pleasant Avenue Suite 3260 Livingston, NJ 07039 Tel: 973-287-5006 Email: ehorn@aystrauss.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by David Goldwasser, VP-restructuring. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UOLZM6I/W_72_Street_Partners_LLC__njbke-24-17236__0001.0.pdf?mcid=tGE4TAMA WASTE PRO: Fitch Assigns 'B+' LongTerm IDR, Outlook Stable ---------------------------------------------------------- Fitch Ratings has assigned a 'B+' first-time Long-Term Issuer Default Rating (IDR) to Waste Pro USA Inc. Fitch has also assigned a 'BB+'/'RR1' rating to the company's ABL and a 'BB-'/'RR3' rating to its senior unsecured bonds. The Rating Outlook is Stable. Waste Pro's 'B+' IDR reflects the inherent stability of municipal solid waste (MSW) collection across economic cycles, its multi-year service contracts with a long-term, diversified customer base and established position in the growing U.S. Southeast. The rating is also supported by Waste Pro's selective contract bidding and renewals that enhance route density and cost recovery. Fitch's rating case forecasts neutral-to-positive annual FCF generation, which the company could enhance, if needed, by paring back growth spending. Fitch also projects, excluding potential large acquisitions, EBITDA leverage and interest coverage around the low to mid-4.0x range in 2024. M&A activity could lead to variability and deterioration in credit metrics to levels that are generally consistent with 'B+' rating tolerances. Waste Pro's concentrated ownership profile introduces governance risks, such as potential large distributions, but this is mitigated by management's track record of prioritizing business investment. KEY RATING DRIVERS MSW and Contracts Create Stability: Approximately 73% of revenue is tied to residential and commercial waste collection services, which are fairly stable through economic cycles, due to consistent waste generation from households and businesses. Waste Pro's contracts with municipalities can stretch 5-10 years and, together with and its ability to retain customers, this provides added earnings visibility. A portion of its revenue is from construction and demolition activity which tends to be relatively more susceptible to business cycles. Long-term growth fundamentals in Waste Pro's core operating regions are supported by secular growth trends and population shifts that also support active construction-driven business. Growth Investment-Linked Leverage Profile: Fitch forecasts EBITDA leverage of 4.2x in FY24, down from 4.8x in FY23, primarily driven by pricing increases, shedding less profitable contracts, and volume growth resulting in increased EBITDA and margin in the year. Fitch expects Waste Pro to continue to prioritize growth, which leads to its expectation of EBITDA leverage moving into the 4.5x-5.0x range during significant growth periods, a level that is consistent with 'B' category environmental services companies. Fitch recognizes the attractive return profiles of bolt-on M&A and growth capex, as well as the company's meaningful growth-linked capital flexibility. Management has indicated that it would prioritize deleveraging toward 4x following any future leveraging event. FCF, Financial Flexibility Improving: In the near term, Fitch expects FCF, after growth capex, to turn neutral-to-positive on stronger EBITDA margins and measured capital spending. Growth spend is typically comprised of truck and container purchases (roughly half of total capex). Fitch believes Waste Pro retains flexibility to manage FCF by paring back growth investment and repositioning trucks in a downturn or customer loss scenario. Fitch expects the company to maintain EBITDA interest coverage around the low-to-mid 4.0x range over the medium term, excluding large acquisitions, a level that is relatively strong for the 'B+' rating. Even during heightened inflationary pressures in 2021 and 2022, EBITDA interest coverage remained above 3.0x due to a largely fixed-rate debt mix and access to advantaged tax-exempt bonds. Operating, Pricing Improving Profitability: Fitch expects continued organic EBITDA margin improvement in 2024 to 20% from nearly 19% in 2023. Strategic initiatives to enhance profitability have led to shedding low-return contracts, and pricing implementations are catching up to the heightened inflationary environment. Waste Pro's open market contracts (40% of 2023 revenue) provide an opportunity for more frequent and higher adjustments than restricted price contracts, which typically peg to broad inflationary measures. Fitch also believes Waste Pro benefits to some degree from its larger peers prioritizing pricing rationality over aggressive volume growth. Business Profile Considerations: Waste Pro's ratings are not currently constrained by its business profile, which exhibits 'BB' category characteristics, though its regional focus, smaller scale of cash flow relative to investment opportunities and collection-heavy operations are key credit considerations, relative to large publicly traded MSW firms. The focused geographic exposure introduces region specific competitive, regulatory, political or weather-related risks though these currently appear manageable. Large MSW firms benefit from a higher degree of vertical integration with disposal into company-controlled landfills, supporting a stronger ability to manage respective cost structures. However, Waste Pro's focus on disposal-neutral markets provides optionality in disposal and reduces longer-term liability exposure. DERIVATION SUMMARY Fitch compares Waste Pro to environmental service peers such as Reworld Holding Corporation (B+/Stable), Stericycle (BB/RWP) and the large municipal waste management companies. Reworld owns and operates a network of waste to energy facilities and sells electricity and recycled materials that are created or captured in the waste incineration process. Reworld's asset profile has less replacement risk than Waste Pro's due to its geographically advantaged and regulatorily constrained incineration assets. This is partially offset by Covanta's moderate exposure to energy and commodity prices that Fitch views as more volatile than Waste Pro's focus on contracted waste collection service. Waste Pro's expected EBITDA coverage ratio, excluding a material growth-linked leveraging event, of 3.5x-4x is stronger than Covanta's anticipated EBITDA coverage ratio around 3x. Stericycle is a public peer and a leading provider of medical waste and document shredding services. Relative to Waste Pro, Stericycle has maintained a track record of financial policy that manages a relatively stable leverage around 3x and a strong coverage above 6x. KEY ASSUMPTIONS - Organic revenues grow in the low teens in 2024 driven mainly from strong pricing improvement and volume growth. - Revenue growth tempers to mid-single-digits towards 2026 on moderating pricing and volume growth. - Organic EBITDA margin expands 125 bps in 2024, benefitting from the shedding of low-return contracts and strong pricing that outpaces cost inflation. Margin expansion moderates to 25 bps annually from 2025 to 2026. - CAPEX around 12% revenue in 2024, equally split between maintenance and growth initiatives. Beyond 2024, the intensity of growth CAPEX slightly reduces, in line with tempered organic revenue growth. - Debt-funded M&A, which could include bolt-on or large-scale transactions are pursued, sustaining leverage in the 4.5x-5.0x range. - No material shareholder distributions. RECOVERY ANALYSIS The Recovery Rating assumes that Waste Pro would be reorganized as a going concern (GC) in a bankruptcy scenario rather than liquidated. A 10% administrative claim on the enterprise value is assumed. Fitch estimates Waste Pro's GC EBITDA at $150 million. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. Fitch assumes a hypothetical bankruptcy scenario could come from a combination of contract losses and weaker margins stemming from intense competition, structurally weaker pricing environment while the company contends with higher cost inflation. Fitch assumes Waste Pro will receive a GC recovery multiple of 6x. This multiple is applied to the GC EBITDA to calculate a post-reorganization enterprise value (EV). The multiple assumption is primarily driven by the recurring demand inherent to the waste management industry and the longer-term and diversified nature of contracts. It also reflects the company's vulnerability due to its regional focus. The multiple is lower than the 6.3x assigned to Covanta which benefits from its geographically advantaged and regulatorily constrained incinerator assets. The multiple also considers Waste Pro and the larger waste companies' historical acquisition multiples. Fitch's recovery scenario assumes that the ABL is 80% drawn. The ABL receives priority above the unsecured debt in the distribution of value in the recovery waterfall. The Recovery Rating results in a 'BB+'/'RR1' rating for the ABL and 'BB-'/'RR3' for the unsecured debt. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Demonstrated commitment to credit conscious capital allocation strategy that maintains a through-the-cycle EBITDA leverage below 4.5x; - Consistently positive FCF, after growth capex. Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Deviation in capital allocation and financial policy leading to EBITDA leverage sustained above 5.0x; - EBITDA interest coverage sustained below 2.5x; - Reduced financial flexibility indicated by sustained negative FCF and ABL availability below 75%. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of March 2024, Waste Pro had $188 million of liquidity, consisting of $164 million availability on the ABL and $24 million cash. Liquidity is also supported by Fitch's expectation that FCF will turn neutral-to-positive in 2024 and that the company could scale back growth CAPEX to preserve and generate liquidity in a stress scenario. Waste Pro has a largely fixed-rate debt mix and benefits from advantaged tax-exempt bonds. The company does not have a major maturity until June 2026 when $480 million of its unsecured bonds mature. The company also has $21 to $23 million of debt amortization in 2024 and 2025, respectively. ISSUER PROFILE Headquartered in Florida, Waste Pro provides non-hazardous solid waste management services, focusing on collection for residential, commercial, and industrial customers. The company operates across nine states in the southeastern U.S. 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. DATE OF RELEVANT COMMITTEE 18 June 2024 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Entity/Debt Rating Recovery ----------- ------ -------- Waste Pro USA, Inc. LT IDR B+ New Rating senior unsecured LT BB- New Rating RR3 senior secured LT BB+ New Rating RR1 WESTERN OIL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Western Oil Exploration Company 2605 S Decatur Blvd, Ste 123 #588 Las Vegas, NV 89102 Business Description: The Debtor is an oil and gas extraction company. Chapter 11 Petition Date: July 19, 2024 Court: United States Bankruptcy Court District of Nevada Case No.: 24-13661 Judge: Hon. Mike K Nakagawa Debtor's Counsel: Jason Imes, Esq. FOX, IMES & CROSBY 601 S. 10th St. Suite 202 Las Vegas, NV 89101 Tel: (702) 382-1007 Fax: (702) 382-1921 Email: jimes@ficlegal.com Total Assets: $501,777 Total Liabilities: $2,987,638 The petition was signed by James E. Franklin, chief executive officer. 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/6CBR56I/WESTERN_OIL_EXPLORATION_COMPANY__nvbke-24-13661__0001.0.pdf?mcid=tGE4TAMA [^] BOND PRICING: For the Week from July 15 to 19, 2024 ------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 2U Inc TWOU 2.250 54.601 5/1/2025 99 Cents Only Stores LLC NDN 7.500 5.000 1/15/2026 99 Cents Only Stores LLC NDN 7.500 4.895 1/15/2026 99 Cents Only Stores LLC NDN 7.500 4.895 1/15/2026 Acorda Therapeutics Inc ACOR 6.000 56.314 12/1/2024 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 40.878 2/15/2028 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 41.367 2/15/2028 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 40.800 2/15/2028 Amyris Inc AMRS 1.500 0.498 11/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 At Home Group Inc HOME 7.125 28.088 7/15/2029 At Home Group Inc HOME 7.125 28.088 7/15/2029 Audacy Capital Corp CBSR 6.750 3.875 3/31/2029 Audacy Capital Corp CBSR 6.500 4.500 5/1/2027 Audacy Capital Corp CBSR 6.750 3.448 3/31/2029 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Bank of America Corp BAC 7.000 94.992 9/20/2032 Beasley Mezzanine Holdings BBGI 8.625 59.285 2/1/2026 Beasley Mezzanine Holdings BBGI 8.625 59.285 2/1/2026 Biora Therapeutics Inc BIOR 7.250 57.412 12/1/2025 Comerica Bank CMA 2.500 99.970 7/23/2024 CorEnergy Infrastructure Trust Inc CORR 5.875 70.500 8/15/2025 Curo Group Holdings Corp CURO 7.500 4.364 8/1/2028 Curo Group Holdings Corp CURO 7.500 23.000 8/1/2028 Curo Group Holdings Corp CURO 7.500 4.364 8/1/2028 Cutera Inc CUTR 2.250 19.750 6/1/2028 Cutera Inc CUTR 4.000 18.625 6/1/2029 Cutera Inc CUTR 2.250 33.035 3/15/2026 Danimer Scientific Inc DNMR 3.250 15.568 12/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 1.850 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 1.900 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 2.202 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 1.822 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 2.500 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 2.202 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 1.721 8/15/2026 Energy Conversion Devices ENER 3.000 0.762 6/15/2013 Enviva Partners LP / Enviva Partners Finance Corp EVA 6.500 43.750 1/15/2026 Enviva Partners LP / Enviva Partners Finance Corp EVA 6.500 43.750 1/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 35.000 7/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 22.810 7/15/2026 F&M Financial Corp/TN FMFNCP 5.950 94.000 9/17/2029 F&M Financial Corp/TN FMFNCP 5.950 94.000 9/15/2029 Federal Farm Credit Banks Funding Corp FFCB 0.450 99.873 7/23/2024 Federal Farm Credit Banks Funding Corp FFCB 0.310 96.776 7/22/2024 Federal Farm Credit Banks Funding Corp FFCB 2.810 99.891 7/23/2024 Federal Farm Credit Banks Funding Corp FFCB 0.440 97.014 7/22/2024 Federal Home Loan Banks FHLB 4.875 99.404 7/25/2024 Federal Home Loan Banks FHLB 0.500 99.260 7/29/2024 Federal Home Loan Banks FHLB 3.700 99.374 7/26/2024 Federal Home Loan Banks FHLB 0.300 96.944 7/22/2024 Federal Home Loan Banks FHLB 0.500 99.302 7/26/2024 Federal Home Loan Banks FHLB 1.050 99.328 7/25/2024 Federal Home Loan Banks FHLB 2.750 99.364 7/25/2024 Federal Home Loan Banks FHLB 0.450 99.301 7/26/2024 Federal Home Loan Banks FHLB 0.500 99.348 7/22/2024 Federal Home Loan Banks FHLB 0.520 96.068 8/23/2024 Federal Home Loan Banks FHLB 0.510 99.261 7/29/2024 Federal Home Loan Banks FHLB 0.550 99.304 7/26/2024 Federal Home Loan Banks FHLB 5.750 99.576 7/26/2028 Federal Home Loan Banks FHLB 3.750 99.384 7/25/2024 Federal Home Loan Banks FHLB 3.625 99.381 7/25/2024 Federal Home Loan Banks FHLB 0.500 99.260 7/29/2024 Federal Home Loan Banks FHLB 0.710 99.267 7/29/2024 Federal Home Loan Banks FHLB 2.500 99.378 7/22/2024 Federal Home Loan Banks FHLB 1.060 99.312 7/25/2024 Federal Home Loan Banks FHLB 1.060 99.315 7/26/2024 Federal Home Loan Banks FHLB 1.050 99.315 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 3.650 99.373 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 3.650 99.378 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 5.000 99.414 7/25/2024 Federal Home Loan Mortgage Corp FHLMC 5.020 99.411 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 4.000 99.388 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 3.625 99.381 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 3.700 99.383 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 3.625 99.381 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 3.650 99.382 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 4.850 99.408 7/26/2024 Federal Home Loan Mortgage Corp FHLMC 0.400 63.172 10/21/2024 First Republic Bank/CA FRCB 4.375 2.938 8/1/2046 First Republic Bank/CA FRCB 4.625 4.750 2/13/2047 GNC Holdings Inc GNC 1.500 0.833 8/15/2020 German American Bancorp Inc GABC 4.500 92.652 6/30/2029 German American Bancorp Inc GABC 4.500 92.652 6/30/2029 German American Bancorp Inc GABC 4.500 92.652 6/30/2029 Goldman Sachs Group Inc/The GS 7.000 94.130 9/20/2032 Goodman Networks Inc GOODNT 8.000 5.000 5/11/2022 Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022 H-Food Holdings LLC / Hearthside Finance Co Inc HEFOSO 8.500 7.210 6/1/2026 H-Food Holdings LLC / Hearthside Finance Co Inc HEFOSO 8.500 7.416 6/1/2026 Hallmark Financial Services HALL 6.250 18.500 8/15/2029 Homer City Generation LP HOMCTY 8.734 38.750 10/1/2026 Hughes Satellite Systems SATS 6.625 45.035 8/1/2026 Hughes Satellite Systems SATS 6.625 45.767 8/1/2026 Hughes Satellite Systems SATS 6.625 45.767 8/1/2026 INNOVATE Corp VATE 7.500 35.250 8/1/2026 Inseego Corp INSG 3.250 73.790 5/1/2025 Invacare Corp IVC 4.250 1.002 3/15/2026 Invitae Corp NVTA 2.000 87.500 9/1/2024 JPMorgan Chase Bank NA JPM 2.000 88.589 9/10/2031 Karyopharm Therapeutics Inc KPTI 3.000 64.741 10/15/2025 Ligado Networks LLC NEWLSQ 15.500 16.080 11/1/2023 Ligado Networks LLC NEWLSQ 15.500 15.750 11/1/2023 Ligado Networks LLC NEWLSQ 17.500 2.000 5/1/2024 Lightning eMotors Inc ZEVY 7.500 1.000 5/15/2024 Lumen Technologies Inc LUMN 6.875 41.949 1/15/2028 Lumen Technologies Inc LUMN 4.500 29.742 1/15/2029 Lumen Technologies Inc LUMN 4.500 29.529 1/15/2029 MBIA Insurance Corp MBI 16.823 6.239 1/15/2033 MBIA Insurance Corp MBI 16.823 6.239 1/15/2033 Macy's Retail Holdings LLC M 6.700 84.374 7/15/2034 Macy's Retail Holdings LLC M 6.900 89.841 1/15/2032 Mashantucket Western Pequot Tribe MASHTU 7.350 50.000 7/1/2026 Millennium Escrow Corp CFIELD 6.625 52.414 8/1/2026 Millennium Escrow Corp CFIELD 6.625 52.230 8/1/2026 Morgan Stanley MS 1.800 76.926 8/27/2036 NanoString Technologies Inc NSTG 2.625 73.768 3/1/2025 Office Properties Income Trust OPI 4.500 78.943 2/1/2025 Polar US Borrower LLC / Schenectady International Group Inc SIGRP 6.750 27.500 5/15/2026 Polar US Borrower LLC / Schenectady International Group Inc SIGRP 6.750 27.325 5/15/2026 Qwest Capital Funding Inc QWECOM 6.875 36.299 7/15/2028 RR Donnelley & Sons Co RRD 8.250 100.000 7/1/2027 Rackspace Technology Global RAX 5.375 29.524 12/1/2028 Rackspace Technology Global RAX 3.500 29.613 2/15/2028 Rackspace Technology Global RAX 5.375 28.228 12/1/2028 Rackspace Technology Global RAX 3.500 29.613 2/15/2028 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Rite Aid Corp RAD 8.000 44.000 11/15/2026 Rite Aid Corp RAD 7.700 1.205 2/15/2027 Rite Aid Corp RAD 7.500 41.500 7/1/2025 Rite Aid Corp RAD 6.875 3.255 12/15/2028 Rite Aid Corp RAD 8.000 42.190 11/15/2026 Rite Aid Corp RAD 7.500 42.692 7/1/2025 Rite Aid Corp RAD 6.875 3.255 12/15/2028 RumbleON Inc RMBL 6.750 67.475 1/1/2025 SVB Financial Group SIVB 3.500 62.000 1/29/2025 Sandy Spring Bancorp Inc SASR 4.250 86.000 11/15/2029 Shift Technologies Inc SFT 4.750 0.428 5/15/2026 Shutterfly LLC SFLY 8.500 47.500 10/1/2026 Shutterfly LLC SFLY 8.500 47.500 10/1/2026 Spanish Broadcasting System SBSAA 9.750 59.679 3/1/2026 Spanish Broadcasting System SBSAA 9.750 58.762 3/1/2026 Spirit Airlines Inc SAVE 1.000 42.500 5/15/2026 Spirit Airlines Inc SAVE 4.750 73.000 5/15/2025 Team Health Holdings Inc TMH 6.375 99.065 2/1/2025 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Tricida Inc TCDA 3.500 9.190 5/15/2027 Veritex Holdings Inc VBTX 4.750 89.429 11/15/2029 Veritone Inc VERI 1.750 36.750 11/15/2026 Virgin Galactic Holdings Inc SPCE 2.500 30.930 2/1/2027 Vista Outdoor Inc VSTO 4.500 99.418 3/15/2029 Vista Outdoor Inc VSTO 4.500 100.551 3/15/2029 Voyager Aviation Holdings VAHLLC 8.500 15.462 5/9/2026 Voyager Aviation Holdings VAHLLC 8.500 15.462 5/9/2026 Voyager Aviation Holdings VAHLLC 8.500 15.462 5/9/2026 WeWork Cos US LLC WEWORK 12.000 1.025 8/15/2027 Wesco Aircraft Holdings Inc WAIR 9.000 40.800 11/15/2026 Wesco Aircraft Holdings Inc WAIR 13.125 2.460 11/15/2027 Wesco Aircraft Holdings Inc WAIR 9.000 40.800 11/15/2026 Wesco Aircraft Holdings Inc WAIR 13.125 2.460 11/15/2027 Wheel Pros Inc WHLPRO 6.500 16.862 5/15/2029 Wheel Pros Inc WHLPRO 6.500 16.862 5/15/2029 fuboTV Inc FUBO 3.250 59.719 2/15/2026 iHeartCommunications Inc IHRT 8.375 38.043 5/1/2027 ********* 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. 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