/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/240819.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, August 19, 2024, Vol. 28, No. 231 Headlines 303 HIGHLINE: Case Summary & Five Unsecured Creditors 316-318 GUILFORD: Hires Harvest Realty LLC as Real Estate Broker A&V HOLDINGS: S&P Withdraws 'B' Issuer Credit Rating ACOSTA HOLDINGS: Moody's Assigns 'B2' CFR, Outlook Stable AFB RESTAURANTS: Case Summary & Five Unsecured Creditors ALIGHT INC: Moody's Affirms 'Ba3' CFR & Alters Outlook to Stable ALTITUDE GROUP: Seeks Chapter 11 Bankruptcy Protection ARCADIA BIOSCIENCES: Posts $1.06 Million Net Income in 2nd Quarter ARCHROCK PARTNERS: Fitch Assigns 'BB' Rating on Sr. Unsecured Notes ASHFORD HOSPITALITY: Reports $50.8MM Net Income in Fiscal Q2 ATS CORP: Moody's Affirms Ba3 CFR & Rates New Unsecured Notes B1 AUBREY PROPERTIES: Files for Chapter 11 Bankruptcy B & J PROPERTY: U.S. Trustee Unable to Appoint Committee BISHOP OF SACRAMENTO: Hires Blank Rome LLP as Insurance Counsel BISHOP OF SANTA ROSA: Hires Blank Rome LLP as Insurance Counsel BUCA TEXAS: Buca de Beppo Seeks Chapter 11 Bankruptcy BYJU'S ALPHA: Avoids Bankruptcy After Debt Settlement Okayed CENTERPOINT ENERGY: Fitch Gives BB+ Rating on 2055 Jr. Sub. Notes CHARA SOFTWARE: Case Summary & 11 Unsecured Creditors COACH USA: To Auction 8 Bus Terminals Amid Restructurings COHEN ANYTIME: Maria Yip Named Subchapter V Trustee COMBAT ARMORY: Case Summary & 20 Largest Unsecured Creditors COMMSCOPE HOLDING: Reports $44.4 Million Net Income in Fiscal Q2 COMSERO INC: Amends Unsecured Claims Pay Details CONNECT FIT: Unsecured Creditors to Split $48K in Plan CONNECT HOLDING: S&P Downgrades ICR to 'SD' on Debt Restructuring CONNECTWISE HOLDINGS: Fitch Affirms B+ LongTerm IDR, Outlook Stable CREW ENERGY: S&P Withdraws 'B' ICR Following Announced Acquisition D AND J'S HASH: Amends Unsecured Claims Details DARE BIOSCIENCE: Posts $12.91 Million Net Income in Second Quarter DELEK LOGISTICS: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable DIOCESE OF SAN FRANCISCO: Hires Blank Rome as Insurance Counsel DMK PHARMACEUTICALS: US WorldMeds Asks Court to Toss $414M Suit E&J PROPERTIES: Voluntary Chapter 11 Case Summary ENGLOBAL CORP: Reports Net Loss of $1.2 Million in Fiscal Q2 ENTXAR ELLOPROP: MidFirst Wins Summary Judgment in Adversary Case ETIENNE ESTATES: Files for Chapter 11 Bankruptcy EXPRESS INC: Plan Exclusivity Period Extended to Nov. 18 FIVEMILETOWN HOLDINGS: Case Summary & Six Unsecured Creditors FLORIST ATLANTA: Unsecured Creditors to Split $15K in Plan FOCUS FINANCIAL: Defers $3.65-Billion Term-Loan Deal FULL CIRCLE: Nicole Nigrelli of Ciardi Named Subchapter V Trustee FYM LLC: Joseph DiOrio of Pannone Named Subchapter V Trustee GLOBAL SUPPLIES: Commences Subchapter V Bankruptcy Process GOLDEN STATE BUYER: Moody's Ups CFR to B2 & Sr. Secured Debt to B1 GOOD GAMING: Incurs $320K Net Loss in Second Quarter HARRIS FAMILY: Paula Beran Named Subchapter V Trustee HEAVENLY SCENT: George Oliver Named Subchapter V Trustee HERITAGE COLLEGIATE: Case Summary & 20 Top Unsecured Creditors ICAP ENTERPRISES: Plan Exclusivity Period Extended to Aug. 29 JACKSON-STRONG ALLIANCE: Files for Chapter 11 Bankruptcy JETBLUE AIRWAYS: Fitch Assigns BB Rating on Proposed Secured Loans KALO CLINICAL: Bankruptcy Court Confirms Plan of Reorganization KAYA HOLDINGS: Incurs $357K Net Income in Second Quarter KINETIK HOLDINGS: Fitch Alters Outlook on 'BB+' IDR to Stable KLX ENERGY: Posts $8 Million Net Loss in Fiscal Q2 LIKEMIND BRANDS: Starts Subchapter V Bankruptcy Proceeding LL FLOORING: Receives NYSE Notice of Delisting LOCUS DIGITAL: Unsecureds to Get Share of Income for 60 Months LOUISIANA DELTA OIL: Starts Subchapter V Bankruptcy Proceeding LOVESWORTH HOLDINGS: Gina Klump Named Subchapter V Trustee MASHANTUCKET (WESTERN): S&P Upgrades ICR to 'CCC', Outlook Neg. MIRION TECHNOLOGIES: Moody's Affirms 'B1' CFR, Outlook Stable MLN US HOLDCO: Moody's Cuts CFR to Ca & Senior Secured Debt to B3 MORNING JUMP: Plan Exclusivity Period Extended to September 16 MOSS CREEK: Fitch Rates Proposed $750MM Sr. Unsecured Note 'B+' MOTORS ACCEPTANCE: Case Summary & Five Unsecured Creditors MULLEN AUTOMOTIVE: Narrows Third Quarter Net Loss to $91.63 Million NATIONAL HISTORIC SOUL: U.S. Trustee Unable to Appoint Committee NEVADA COPPER: Gets Court Approval for Sept. 10 Auction NEW FORTRESS: Fitch Lowers IDR to 'B+', On Rating Watch Negative NMG HOLDING: Moody's Rates New Sr. Secured Exchange Notes 'Caa1' NOBLE'S SONG: Hires Century 21 as Real Estate Broker NOVALENT LTD: Case Summary & 20 Largest Unsecured Creditors NY METROPOLITAN COLLEGE: Fitch Affirms 'CC' LongTerm IDR OCUGEN INC: Reports $15.3 Million Net Loss in Fiscal Q2 ODYSSEY MARINE: Reports Net Loss of $3.7 Million in Fiscal Q2 OPTINOSE INC: Reports $7.6 Million Net Loss in Fiscal Q2 OPTIO RX: Hires Alvarez & Marsal North as Financial Advisor OPTIO RX: Unsecured Trade Claims Will Get 100% of Claims in Plan PICCARD PETS: Case Summary & 20 Largest Unsecured Creditors PITNEY BOWES: Moody's Affirms 'B1' CFR & Alters Outlook to Stable PREMIER GLASS: Must Defend Against Christopher Glass' Claim PROVIDER TRANSPORT: Seeks to Hire Brittney Dunn as Accountant RADYO PANOU: Case Summary & Six Unsecured Creditors RAPSYS INC.: Hires Franchise Firm LLP as Special Counsel RED LOBSTER: Sept. 5, 2024 Hearing on Joint Plan & Disclosures ROBERTSHAW US: Invesco Ltd. Challenges Restructuring Plan S&G HOSPITALITY: Hires Doucet Co. LPA as Litigation Counsel SBG BURGER: Seeks to Extend Plan Exclusivity to September 16 SHIFT4 PAYMENTS: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable SHINING WAY: Seeks Chapter 11 Bankruptcy in Texas SINTX TECHNOLOGIES: Incurs $2.2 Million Net Loss in Second Quarter SIRVA WORLDWIDE: Moody's Lowers CFR & First Lien Loans to 'Caa3' SL GREEN: Fitch Alters Outlook on 'BB+' IDR to Stable SOLDIER OPERATING: Hires Chaffe & Associates as Investment Banker SOLIGENIX INC: Reports $1.64 Million Net Loss in Second Quarter STEWARD HEALTH: Sells Northern Florida Assets to Orlando Health SUNNY ENERGY: Files Subchapter V Bankruptcy Case SUNPOWER CORP: Seeks Chapter 11 With Solaria Deal SVB FINANCIAL: Bankruptcy Plan Okayed; FDIC Fight Remains SYDOW FIRM: Case Summary & Eight Unsecured Creditors SYLVAMO CORP: Fitch Assigns 'BB+' LongTerm IDR, Outlook Stable T L C MEDICAL: Files for Subchapter V Bankruptcy TEAM HEALTH: S&P Upgrades ICR to 'B-', Outlook Stable TEHUM CARE: Secures $15.5M in DIP Financing TERRY LAIN MD: Case Summary & Three Unsecured Creditors THOUGHTWORKS INC: S&P Downgrades ICR to 'B+', Outlook Negative TOOLIPIS CREATIVE: Mark Sharf Named Subchapter V Trustee TOSCA SERVICES: In Discussions With Lenders for New Loan TROJAN EV: Golf Carts Unsecureds Will Get 3% of Claims in Plan UNITED PREMIER: Voluntary Chapter 11 Case Summary USA SALES: 9th Cir. Takes Back Ruling on UST Fees Dispute VALIANT FITNESS: Commences Subchapter V Bankruptcy Process VANSHI LLC: Plan Exclusivity Period Extended to November 7 VFX FOAM: Unsecureds to Split $20K in Subchapter V Plan VIEWSTAR LLC: Voluntary Chapter 11 Case Summary VORNADO REALTY: Fitch Affirms 'BB+' IDR, Outlook Stable WATERVILLE REDEVELOPMENT: Loses Bid to Extend Time to File Plan WATTSTOCK LLC: Alta Power Can Amend Complaint v. GE, Court Says WILLIAMS LAND: Apex Funding et al. Lose Bid to Appeal Court Ruling WIN-SC LLC: Case Summary & Two Unsecured Creditors WOM SA: Plan Exclusivity Period Extended to Dec. 31 YELLOW CORP: Court Declines to Rule on Pension Fight [*] Attorneys Push Congress to Ban Texas Two-Step Bankruptcy [*] Bankruptcy Attorney Joseph Butler Joins Lipresti Law [*] Fears Law Honored Best Lawyers in America [^] BOND PRICING: For the Week from August 12 to 16, 2024 ********* 303 HIGHLINE: Case Summary & Five Unsecured Creditors ----------------------------------------------------- Debtor: 303 Highline Corp. d/b/a Hudson Market 303 Tenth Avenue New York NY 10001 Business Description: The Debtor owns a grocery store in New York. Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Southern District of New York Case No.: 24-11409 Debtor's Counsel: Douglas Pick, Esq. PICK & ZABICKI LLP 369 Lexington Avenue 12th Floor New York City NY 10017 Tel: (212) 695-6000 Email: dpick@picklaw.net Total Assets: $207,164 Total Liabilities: $2,161,207 The petition was signed by Hyeon ("Jeff") Jin Kim as president. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ETM7GTI/303_Highline_Corp__nysbke-24-11409__0001.0.pdf?mcid=tGE4TAMA 316-318 GUILFORD: Hires Harvest Realty LLC as Real Estate Broker ---------------------------------------------------------------- 316-318 Guilford Avenue, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ Harvest Realty, LLC as real estate broker. The firm will market and sell the Debtor's real property located at 316-318 Guilford Avenue, Baltimore, MD 21202. The firm will be paid a commission of 1.765 percent of the sales price. Michael R. McNeill, a partner at Harvest Realty, LLC, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael R. McNeill Harvest Realty, LLC 201 Milford Mill RD STE 101 Pikesville, MD 21208 Tel: (443) 904-9942 About 316-318 Guilford Avenue, LLC 316-318 Guilford Avenue LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). 316-318 Guilford Avenue sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 23-18476) on Nov. 21, 2023. In the petition filed by Larry Young, as member, the Debtor estimated assets and liabilities between $1 million and $10 million. The Debtor is represented by Stephen L. Prevas, Esq. at Prevas and Prevas. A&V HOLDINGS: S&P Withdraws 'B' Issuer Credit Rating ---------------------------------------------------- S&P Global Ratings withdrew all its ratings on A&V Holdings Holdco LLC, including the 'B' issuer credit rating, at the issuer's request. At the time of the withdrawal, our outlook on the company was stable. A&V Holdings Holdco recently replaced its debt through a private-placement transaction. ACOSTA HOLDINGS: Moody's Assigns 'B2' CFR, Outlook Stable --------------------------------------------------------- Moody's Ratings assigned a B2 corporate family rating and a B2-PD probability of default rating to Acosta Holdings Corp. ("Acosta"), a provider of outsourced sales and merchandising services to retailers, manufacturers, suppliers, foodservice providers and producers of consumer packaged goods. Concurrently, Moody's assigned a B1 to the company's proposed $500 million backed senior secured term loan B due 2031 at Acosta, Inc. The outlook is stable for both issuers. Proceeds from the new term loan will be used to repay a portion of the company's existing term loan A (unrated), and repay a bridge loan facility used to acquire Crossmark Holdings, Inc. ("Crossmark"), a sales and marketing agency ("SMA") in the US. Concurrent with the transaction, the company is upsizing its revolving credit facility (unrated) to $100 million from $75 million and extending the maturity of the revolver and $237 million term loan A to 2029. Additionally, the company is extending the maturity of its $218 million senior unsecured notes (unrated) to six months after the new term loan B. Additionally, the company will retain perpetual preferred equity shares held by a group of former creditors that also hold the majority of common equity. "Acosta will materially increase its size, scale, and service offerings from the Crossmark acquisition and firmly establishes itself as the second leading player in the sales and marketing agency industry and one of the few competitors capable of serving large national accounts," said Moody's Ratings Vice President Andrew MacDonald. " Moody's expect that leverage will reduce towards 3.5x over the next 18 months which supports the B2 rating and stable outlook, but the leverage reduction is largely contingent on realizing significant cost savings and integration risk will remain elevated in the near term." The assigned ratings incorporate environmental, social, and governance ("ESG") considerations, which are a key consideration in this rating action and resulted in a credit impact score of CIS-4. The company is privately owned by a group that includes former creditors, which have been invested in the company for a number of years now, and Moody's expect ownership will opportunistically pursue financial strategies that include acquisitions and shareholder-friendly policies. These governance matters are key considerations to this ratings action. RATINGS RATIONALE The B2 CFR reflects Acosta's elevated financial leverage, with debt to EBITDA of about 4.1x as of the twelve months ended March 31, 2024 (pro forma for the proposed financing and acquisition, and excluding one-time costs and cost savings initiatives), aggressive financial policies evident by the debt funded acquisition of Crossmark, and the highly competitive nature of the SMA industry. The company has a somewhat limited operating history within a portion of its current portfolio of services as a result of the seven acquisitions (including Crossmark) done since 2021, which have materially contributed to the more than doubling of the company's revenue over the same period. There are integration risks pending the completion of the Crossmark acquisition, which will increase the company's revenue by nearly $600 million or 29%. However, Moody's expect that debt to EBITDA will reduce to 3.5x by 2025 from realization of cost savings and low single-digit revenue growth, which positions the company well compared to other B2-rated services industry companies. The company's credit profile benefits from its size, which positions it as the clear #2 industry player. Moody's expect over $2.6 billion of revenue in 2024, pro forma for the Crossmark acquisition. The company's clients include large national accounts among well-known retail, consumer electronic, and consumer package goods companies with relationships going back many years. The company has had success in integrating previous acquisitions, which lends support that the Crossmark integration and related cost savings will be completed with minimal disruption. Moody's expect free cash flow to debt in the high single-digit percentages in 2025, which is in line with the B2 rating. Unless otherwise noted, all financial metrics cited reflect Moody's standard adjustments. Moody's anticipate that Acosta will maintain an adequate liquidity profile over the next 12 to 18 months. Pro forma for the August 2024 refinancing, the company will have $94 million of cash on hand and $67.2 million capacity (net of $32.8 million letters of credit) under its $100 million revolving credit facility expiring 2029. Moody's expect that the company will generate around $50 million of free cash flow over the next 12 months or 5% of free cash flow to debt, but that cash flow could be limited in the second half of 2024 by one-time integration costs. The term loan A will have an initial net leverage ratio test set at 3.75x and a fixed charge coverage ratio test set at 1.25x. The term loan B will not contain any financial maintenance covenants. Moody's expect the company will remain in compliance. Marketing terms for the term loan B (final terms may differ materially) include the following: Incremental pari passu debt capacity up to the greater of a dollar amount equivalent to 50% of the closing date EBITDA and 50% of consolidated EBITDA, plus unlimited amounts subject to a 2.0x First Lien Leverage Ratio. There is no inside maturity sublimit. The credit agreement is expected to include a "blocker" provision that restricts the transfer of material intellectual property to unrestricted subsidiaries. The credit agreement is expected to provide some limitations on up-tiering transactions, requiring 100% lender consent for amendments that subordinate or have the effect of subordinating the debt and the liens, except with respect to an amendment to permit the incurrence of any AR securitization, receivables factoring or other similar facilities. The B1 rating on Acosta's senior secured first lien credit facility reflects both the probability of default rating of B2-PD and the application of Moody's Loss Given Default for Speculative-Grade Companies methodology. The B1 rating, one notch above the B2 corporate family rating, benefits from the loss absorption provided by the junior ranking senior unsecured notes and other non-debt obligations. The senior secured term loan benefits from secured guarantees from its direct parent and all existing and subsequently acquired domestic subsidiaries. The stable outlook is based on Moody's expectation that Acosta will generate annual revenue growth around 2% to 3% and financial performance will gradually improve during the next 12 to 18 months, which will drive EBITDA growth and reduce debt to EBITDA by early 2025. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Moody's expect Acosta will grow revenue and earnings, sustain debt to EBITDA below 4.5x considering its acquisition based growth strategy and near-term integration risk associated with Crossmark, increase EBITA-to-interest expense above 2.5x, and demonstrate free cash flow to debt in the mid-to-high single digit percentages. A ratings downgrade could result if revenue and earnings decline, if Moody's expect debt to EBITDA will be sustained above 6x, EBITA-to-interest expense approaches 1.75x, free cash flow to debt below 2%, or liquidity deteriorates. The adoption of a more aggressive financial policy through excessive debt funded acquisitions or dividends could also lead to a ratings downgrade. Acosta is a leading sales and marketing agency providing outsourced marketing and merchandising services to consumer packaged goods companies, consumer electronics manufacturers, and retailers. The company's service offerings include headquarter sales, foodservice sales, digital commerce services, retail merchandising, assisted sales and training, and commerce marketing services. Moody's expect the company will generate $2.6 billion of revenue in 2024. Acosta is privately owned by parties who are former creditors of Acosta, Inc. including affiliates of Elliot Investment Management, Davidson Kempner Capital Management, Oaktree Capital Management, and Nexus Capital Management. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. AFB RESTAURANTS: Case Summary & Five Unsecured Creditors -------------------------------------------------------- Debtor: AFB Restaurants, Inc. d/b/a Manakash Oven & Grill 2905 N. Main Street Walnut Creek, CA 94597 Business Description: AFB Restaurants is a provider of catering for Mediterranean food in Walnut Creek. Chapter 11 Petition Date: August 16, 2024 Court: United States Bankruptcy Court Northern District of California Case No.: 24-41235 Debtor's Counsel: John G. Downing, Esq. DOWNING LAW OFFICES, P.C. 2021 The Alameda, Suite 200 San Jose, CA 95126 Tel: (530) 582-9182 Fax: (530) 579-5062 Email: john@downinglaw.com Total Assets: $32,470 Total Liabilities: $1,103,058 The petition was signed by Ferass Nabil Abughan as CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/GJHZP2A/AFB_RESTAURANTS_INC__canbke-24-41235__0001.0.pdf?mcid=tGE4TAMA ALIGHT INC: Moody's Affirms 'Ba3' CFR & Alters Outlook to Stable ---------------------------------------------------------------- Moody's Ratings affirmed Alight, Inc.'s ("Alight") Ba3 corporate family rating, Ba3-PD probability of default rating and Ba3 backed senior secured first-lien credit facilities (issued by Tempo Acquisition, LLC, including a $300 million revolving credit facility expiring 2026 and an approximately $2.5 billion term loan due 2028) ratings. The speculative grade liquidity rating remains SGL-1. The outlook was changed to stable from negative. Alight provides outsourced healthcare and retirement benefits administration services and human resources technology solutions. On July 15th, Alight completed the sale of certain business lines, including its Professional Services segment and HCM & Payroll Outsourcing businesses within the Employer Solutions segment, for $1.2 billion. A portion of the proceeds from the sale were used to pay down debt, including approximately $440 million of the term loan and the full amount of the $300 million senior secured notes. The rating affirmations and revision of the outlook to stable from negative reflect the company's reduced debt burden and improved business profile following the business line sale. Moody's expect that Alight will have higher profit margins, improved cash flow and a greater portion of recurring revenue that will result in debt to EBITDA declining to below 5.0x in the next 12 to 18 months. RATINGS RATIONALE Alight's Ba3 CFR is supported by its leading market position in the outsourced employee benefits administration industry, Moody's expectation for revenue growth and a reduction of financial leverage in 2024 and 2025. Debt to EBITDA leverage as of March 31, 2024 was 5.2x, pro forma for the sale of the business lines. Moody's expect the company to achieve and maintain annual organic revenue growth rates in the mid-single-digit area over the next 18 months, which will be underpinned by new client wins and pricing. Moody's also anticipate profit margins will improve, driven by an increasing proportion of revenue from business process as a service ("BPaaS") contracts, which typically have higher margins than non-BPaaS contracts. Additionally, the amount of stock-based compensation, that Moody's consider as an ongoing expense and do not give credit for in the calculation of EBITDA, is likely to decline, supporting improved profit margins. Further supporting the ratings is the company's long-term contract-driven revenue model, and a revenue base supported by a large and diverse customer base. Alight's employee-benefits services constitute critical, embedded functions within customers' operations. Alight's speculative grade liquidity rating is SGL-1, reflecting Moody's assessment of the company's liquidity as very good, supported by a cash balance of $183 million as of June 30, 2024 and Moody's expectation of annual free cash flow over $100 million in 2024 and 2025, corresponding to free cash flow to debt of around 5%. Liquidity is also supported by the $300 million revolving credit facility that is currently undrawn. Moody's do not expect Alight to draw on the revolver over the next 12 to 18 months given its solid cash flow generation and cash balance. The senior secured first-lien revolving credit facility expiring 2026 and the senior secured first-lien term loan due in 2028 are rated Ba3, which is the same as the Ba3 CFR, since the facilities' represented the preponderance of debt claims in Moody's hierarchy of claims at default. The stable outlook reflects Moody's expectation for debt-to-EBITDA leverage to decline to below 5.0x over the next 12 to 18 months and for free cash flow to debt to improve as profit margins improve. The outlook also assumes an approximately 6% revenue gains over the longer term and no debt funded acquisitions or distributions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if revenue growth is sustained in the mid-single-digit percentages, debt-to-EBITDA moderates below 4.0x on a sustained basis, and if Alight establishes a track record of conservative financial policies. The ratings could be downgraded if Moody's expect revenue growth to be flat, margins will not improve as expected as a result of the improved business profile, free cash flow will remain below 10% of debt, or debt-to-EBITDA above 5.0x. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Lincolnshire, IL-headquartered Alight, Inc. is a provider of outsourced healthcare and retirement benefits administration services and human resources technology solutions. Private investors have a large (approximately 30%) minority position in Alight (NYSE: ALIT). Moody's expect the company to generate 2024 revenue of approximately $2.3 billion, pro forma for the business line sale. ALTITUDE GROUP: Seeks Chapter 11 Bankruptcy Protection ------------------------------------------------------ The Altitude Group LLC filed Chapter 11 protection in the Southern District of Florida. According to court filing, the Debtor reports between $1 million and $10 million in debt owed to 1,000 and 5,000 creditors. The petition states funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for August 30, 2024 at 10:00 a.m. in Room Telephonically. About The Altitude Group LLC The Altitude Group LLC, doing business as Core Home Security, sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla.Case No. 24-17893) on August 1, 2024. In the petition filed by Ryan Neill, as manager, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. The Honorable Bankruptcy Judge Erik P. Kimball oversees the case. The Debtor is represented by: Tate M Russack, Esq. 1095 Broke Sound ParkwaySuite 203 Boca Raton, FL 33487 ARCADIA BIOSCIENCES: Posts $1.06 Million Net Income in 2nd Quarter ------------------------------------------------------------------ Arcadia Biosciences, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income of $1.06 million on $1.31 million of total revenues for the three months ended June 30, 2024, compared to net income of $818,000 on $1.30 million of total revenues for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss of $1.36 million on $2.29 million of total revenues, compared to a net loss of $8.57 million on $2.38 million of total revenues for the six months ended June 30, 2023. As of June 30, 2024, the Company had $17.37 million in total assets, $5.80 million in total liabilities, and $11.57 million in total stockholders' equity. Arcadia stated, "We believe that our existing cash and cash equivalents, short-term investments and current note receivable will not be sufficient to meet our anticipated cash requirements for at least the next 12-18 months from the issuance date of these financial statements, and thus raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. "We may seek to raise additional funds through debt or equity financings, if necessary. We may also consider entering into additional partner arrangements. Any sale of additional equity would result in dilution to our stockholders. Our incurrence of debt would result in debt service obligations, and the instruments governing our debt could provide for additional operating and financing covenants that would restrict our operations. If we require additional funds and are not able to secure adequate additional funding, we may be forced to reduce our spending, extend payment terms with our suppliers, liquidate assets, or suspend or curtail planned product launches. Any of these actions could materially harm our business, results of operations and financial condition." Management Comments "The second quarter of 2024 was a significant turning point for Arcadia as we transform the business and chart our path to becoming cash flow positive," said T.J. Schaefer, president and CEO. "We monetized our wheat IP through two transactions: selling our resistant starch wheat trait to a wholly owned subsidiary of Corteva Agriscience for $4 million; and selling our GoodWheatTM brand to Above Food for net payments of $4 million over the next three years. In addition, we've secured significant distribution gains for Zola coconut water and launched two new flavors and are positioned to grow faster than the category and gain market share." "Over the last two years, we've exited several underperforming brands, right sized the organization and streamlined our cost structure in order to extend our runway. While we continue to explore strategic alternatives, our focus for the remainder of the year remains on reducing our operating costs and accelerating growth in Zola," Schaefer said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1469443/000095017024096439/rkda-20240630.htm About Arcadia Headquartered in Dallas, TX, Arcadia Biosciences, Inc. is a producer and marketer of innovative, plant-based food and beverage products. The Company has used non-genetically modified ("non-GMO") advanced breeding techniques to develop these proprietary innovations which it is now commercializing through the sales of seed and grain, food ingredients and products, trait licensing and royalty agreements. The acquisition of the assets of Live Zola, LLC added coconut water to its portfolio of products. Tempe, Arizona-based Deloitte & Touche LLP, the Company's auditor since 2007, issued a "going concern" qualification in its report dated March 28, 2024, citing that the Company has an accumulated deficit, recurring net losses and net cash used in operations, and resources that will not be sufficient to meet its anticipated cash requirements, which raises substantial doubt about its ability to continue as a going concern. ARCHROCK PARTNERS: Fitch Assigns 'BB' Rating on Sr. Unsecured Notes ------------------------------------------------------------------- Fitch Ratings has assigned a 'BB'/'RR4' rating to Archrock Partners, L.P. (APLP) and Archrock Partners Finance Corp.'s co-issued offering of senior unsecured notes. Proceeds from the offering will be used to fund the cash consideration of its recently announced acquisition and for the repayment of existing indebtedness. Fitch has reviewed preliminary documentation and assumes no material variations in the final terms. Fitch currently rates the Long-Term Issuer Default Ratings (IDRs) of Archrock, Inc. and Archrock Partners, L.P. (collectively, Archrock) 'BB' with Stable Rating Outlooks. The ratings reflect Archrock's relatively stable cash flows, supported by take-or-pay contracts, as well as its diverse customer base and large geographic footprint. The company's relatively short weighted-average remaining contract term compares unfavorably to other, higher-rated midstream issuers. This potential credit risk is partially offset by the strategic arrangements and long-term relationships held with customers. Fitch considers Archrock's leverage appropriate for the rating category. Key Rating Drivers TOPS Acquisition: On July 22, 2024, Archrock announced an agreement to purchase Total Operations and Production Services, LLC (TOPS; not rated) for $983 million, which will be financed with a mix of debt and equity. Through the acquisition Archrock acquired a fleet of primarily electric motor-drive compressors that operate on a fixed-fee, contracted basis in the Permian basin. Fitch does not expect the transaction to have a material effect on Archrock's average remaining contract life or counterparty credit quality, but it will increase the company's geographic concentration. Leverage will rise as a result of the transaction but should remain well below Fitch's negative leverage sensitivity of 4.5x. Mostly Take-or-Pay, with a Caveat: The vast majority of Archrock's EBITDA is generated from take-or-pay contracts, providing reasonable visibility into future cash flows. Fitch considers this contractual framework supportive of Archrock's credit profile, as it removes direct commodity price exposure and volumetric risk for the balance of the contract term. However, the company's average remaining contract term, while typical for this corner of the midstream space, is considerably shorter than the broader midstream sector. As such, Archrock's contract portfolio contains a high percentage of month-to-month contracts and leaves the company exposed to near-term compression market dynamics. Preferred vendor agreements, customer-paid moving fees, and high current fleet utilization partially offset the risks inherent with shorter contract durations. Archrock has strategic arrangements with several key customers requiring them to provide Archrock preferential consideration for their compression needs. However, these arrangements do not contain explicit protection against the earnings volatility associated with declining utilization or rates. Tailwinds Supporting Utilization: Archrock's credit profile benefits from strong underlying fundamentals in the compression subsector. Long-lead times necessary to produce compression equipment has prevented the supply of compression horsepower from keeping pace with a strong rebound in production. The resulting market tightness has bolstered Archrock's utilization rates, which have risen from a low of 82% during the pandemic to a record high of 96% at YE 2023. Despite the market imbalances, industry participants have prioritized capital discipline and a prudent build-out of capacity. Fitch expects these supply constraints, the growing natural gas demand from liquefied natural gas export facilities, and increases in unconventional and associated gas production to support utilization rates above 90% throughout the forecast horizon. Appropriate Leverage, Capital Allocation Priorities: Fitch considers Archrock's EBITDA leverage appropriate for the current rating. It has steadily reduced leverage since 2021 to 3.6x as of YE 2023. With the TOPS acquisition, Fitch expects leverage to approximate 3.5x through 2026. Fitch views positively the company's adherence to a disciplined capital allocation policy and desire to maintain financial flexibility throughout the cycle. Fitch expects minimal further debt reduction, with excess FCF allocated towards increasing shareholder returns and capital expenditures. Geographic and Customer Diversification: Archrock's compression fleet is active in substantially all producing regions in the United States, with approximately two-thirds of horsepower located across the Permian Basin and Eagle Ford Shale. The company's top 20 customers generated approximately 63% of the company's total revenue in 2023, with no individual customer accounting for more than 10%. Excluding the TOPS acquisition, the weighted average credit quality of Archrock's top 20 customers is approximately 'BBB'. Derivation Summary Archrock's closest peers are fellow pure-play compression services companies Kodiak Gas Services, LLC (KGS: BB/Stable) and USA Compression Partners, LP (USAC; BB/Stable). All three companies generate cash flows from fixed-fee, take-or-pay contracts and have similar size, counterparty exposure and, to a lesser extent, geographic diversity. Archrock's average remaining contract term is roughly comparable to KGS, but is shorter than USAC. Relative to both peers, Archrock has a greater share of month-to-month contracts. Archrock's leverage and financial policy compare favorably to KGS and USAC. Fitch expects Archrock's capital expenditures and shareholder returns to remain largely within the company's FCF, resulting in leverage that remains within Fitch's sensitivity band. KGS has a similar capital allocation policy; however, the company's ability to bring leverage in line with its target of 3.5x by YE 2025 depends on the execution of its growth strategy and ability to integrate the recent acquisition of CSI Compressco. Archrock's leverage was 3.6x in 2023 and Fitch expects leverage to approximate 3.5x through 2026. This compares to Fitch's expectation for leverage at KGS to decline slightly from about 4.4x in 2024. Fitch expects USAC will manage leverage below 5.0x and draw on its revolver to support capex and distributions. The higher proportion of month-to-month contracts increases Archrock's business risk relative to KGS and USAC, which is balanced by Archrock's lower leverage leading to all three issuers being rated at the same IDR level. Key Assumptions - Oil and natural gas production consistent with Fitch Price Deck; - Pricing environment remains constructive for large horsepower compression, as supply/demand remain tight; - Utilization rates for Archrock's compression fleet moderate slightly from current levels; - Capital expenditures consistent with 2023; - FCF directed towards increased dividends and common unit repurchases; - Interest rates consistent with Fitch Global Economic Outlook. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to a Positive Rating Action/Upgrade - EBITDA leverage sustained below 3.0x; - A meaningful increase in the average contract life in conjunction with a significant increase in the percent of assets operating under term contracts longer than one month. Factors that Could, Individually or Collectively, Lead to a Negative Rating Action/Downgrade - EBITDA leverage expected to be above 4.5x on a sustained basis; - An acquisition or capital expenditure project that significantly increases business risk; - A shift in financial policy towards material debt funded shareholder returns. Liquidity and Debt Structure Adequate Liquidity: As of June 30, 2024, Archrock had $919 thousand in cash on hand and $435 million of available borrowing capacity on its $750 million asset-backed loan (ABL) facility due May 2028. Fitch does not expect the borrowing base to restrict the company's borrowing capacity at any point during the forecast period. Archrock's nearest maturity is April 2027. However, the ABL facility has a springing maturity if any portion of the APLP 6.875% 2027 note remains outstanding in December 2026, or if any of the APLP 6.25% 2028 note remains outstanding in December 2027. Financial covenants require Archrock maintain a minimum interest coverage of 2.50x, maximum senior secured leverage of 3.00x and maximum total leverage of 5.25x. Total leverage may increase to 5.50x temporarily if an acquisition occurs. Archrock was in compliance with these covenants as of June 30, 2024 and Fitch expects the company to remain in compliance over the forecast period. Issuer Profile Archrock, Inc. is a publicly traded company (NYSE: AROC) that provides compression services to upstream and midstream companies in the U.S. Archrock specializes in contracting, operating and maintaining large horsepower compression equipment critical to producing, transporting and processing natural gas. 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 ----------- ------ -------- Archrock Partners Finance Corp. senior unsecured LT BB New Rating RR4 Archrock Partners, L.P. senior unsecured LT BB New Rating RR4 ASHFORD HOSPITALITY: Reports $50.8MM Net Income in Fiscal Q2 ------------------------------------------------------------ Ashford Hospitality Trust, Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net income of $50.8 million on $316.5 million of total revenue for the three months ended June 30, 2024, compared to a net loss of $24.96 million on $375.7 of total revenue for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net income of $123.2 million on $620.4 million of total revenue, compared to a net loss of $86.5 million on $704.6 of total revenue for the same period in 2023. As of June 30, 2024, the Company had $3.3 billion in total assets, $3.4 billion in total liabilities, $22.97 million in redeemable noncontrolling interests in operating partnership, $119.82 million in Series J redeemable preferred stock, and $8.84 million in Series K redeemable preferred stock and $207.98 million in total stockholders' deficit. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/yc5mp6nw About Ashford Hospitality Headquartered in Dallas, Texas, Ashford Hospitality Trust, Inc. operates as a self-advised real estate investment trust focusing on the lodging industry. Ashford Hospitality Trust reported a net loss of $180.73 million for the year ended Dec. 31, 2023, compared to a net loss of $141.06 million for the year ended Dec. 31, 2022. As of Dec. 31, 2023, the Company had $3.46 billion in total assets, $3.69 billion in total liabilities, $22.01 million in redeemable noncontrolling interests in operating partnership, $79.98 million in Series J Redeemable Preferred Stock, $0.01 par value (3,475,318 shares issued and outstanding at December 31, 2023), $4.78 million in Series K Redeemable Preferred Stock, $0.01 par value (194,193 shares issued and outstanding at December 31, 2023), and $331.04 million in total deficit. * * * Egan-Jones Ratings Company, on May 5, 2023, maintained its 'CCC+' foreign currency and local currency senior unsecured ratings on debt issued by Ashford Hospitality Trust, Inc. On March 1, 2024, the Company received notice that the hotel properties securing the KEYS Pool A and KEYS Pool B loans had been transferred to a court-appointed receiver. On March 6, 2024, the Company sold the Residence Inn Salt Lake City in Salt Lake City, Utah, for $19.2 million in cash. As reported by the TCR on April 22, the Company closed on the sale of the 390-room Hilton Boston Back Bay in Boston, Massachusetts, for $171 million. On April 29, it closed on the sale of the 85-room Hampton Inn in Lawrenceville, Georgia, for $8.1 million. On May 27, Ashford closed a $267 million refinancing of the mortgage loan for the 673-room Renaissance Hotel in Nashville, Tennessee, which had a final maturity date of March 2026. On June 14, the Company closed on the sale of the 90-room Courtyard located in Manchester, Connecticut, for $8 million. ATS CORP: Moody's Affirms Ba3 CFR & Rates New Unsecured Notes B1 ---------------------------------------------------------------- Moody's Ratings affirms ATS Corporation's (ATS) Ba3 corporate family rating and Ba3-PD probability of default rating and has assigned a B1 rating to the company's proposed C$300 million senior unsecured notes due 2032 (with potential upsize). The existing US$350 million senior unsecured notes have been upgraded to B1 from B2. The outlook remains positive. Proceeds from the company's proposed notes issuance will be used to pay down drawings on the company's revolving credit facility. The upgrade of the senior unsecured notes reflects the increasing proportion of unsecured debt relative to the secured revolving facility and term loan, which improves the recovery of the instruments. RATINGS RATIONALE ATS Corporation's rating benefits from: (1) a track record of post acquisition deleveraging with debt to EBITDA remaining around 3.0x in fiscal 2025 and trending toward 2.5x in fiscal 2026 as working capital unwinds; (2) good geographical and end market diversification for its automated industrial solutions; (3) significant and growing revenue concentration in tightly regulated, high precision markets characterized by favorable long-term demand trends, such as life sciences; and (4) a good acquisition track record. The company is constrained by: (1) small scale among large players in a competitive environment; (2) the volatile nature of order bookings and cyclical manufacturing industry; and (3) an active acquisition strategy involving releveraging and execution risks. ATS is expected to maintain good liquidity (SGL-2) over the next 12 months. Sources total about C$955 million, consisting of cash on hand of close to C$170 million as of March 31, 2024, expected free cash flow of around C$255 million over the next four quarters to March 2025 and about C$530 million available (post new unsecured note offering) under the C$750 million revolver expiring November 2026. Moody's expect some excess free cash flow to be allocated towards a combination of acquisitions and share buybacks. ATS' revolver is subject to leverage and coverage covenants with which the company will remain in compliance. The company has some flexibility to boost liquidity from asset sales. ATS has two classes of debt; (1) a secured credit facility with a C$750 revolver and C$300 million non-amortizing secured loan maturing in 2026 (both unrated) and; (2) a US$350 million senior unsecured notes due 2028 (rated B1) and a new C$300 million senior unsecured notes due 2032 (rated B1). The unsecured notes, which are guaranteed by certain material subsidiaries, are rated one notch below the corporate family rating to reflect their junior position relative to the secured revolver and term loan ranking ahead of them. The positive outlook reflects Moody's expectations that ATS will execute well on its announced transition away from transportation into the life sciences sector without lasting revenue and margin impacts, improve its overall working capital position, achieve solid free cash flow generation, and maintain good liquidity over the next 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if ATS maintains positive free cash flow, stable organic revenue growth, and debt to EBITDA sustained below 3.0x. The ratings could be downgraded if ATS debt to EBITDA sustainably rises above 4.0x or liquidity deteriorates. The principal methodology used in these ratings was Manufacturing published in September 2021. ATS Corporation, headquartered in Cambridge, Ontario, Canada, designs, engineers, builds and services automated manufacturing systems and production lines for multinational companies. AUBREY PROPERTIES: Files for Chapter 11 Bankruptcy -------------------------------------------------- Aubrey Properties LLC filed Chapter 11 protection in the Northern District of Georgia. According to court documents, the Debtor reports between $1 million and $10 million in debt owed to 1 and 49 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for September 4, 2024 at 1:00 p.m. in Room Telephonically on telephone conference line: 888-902-9750. participant access code: 9635734. About Aubrey Properties LLC Aubrey Properties LLC is engaged in activities related to real estate. Aubrey Properties LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-58027) on August 4, 2024. In the petition filed by Angela Oakley, as sole member, the Debtor reports estimated assets and liabilities between $1 million each. The Debtor is represented by: Benjamin Keck, Esq. KECK LEGAL, LLC 2801 Buford Highway NE 115 Atlanta GA 30329 Tel: 470-826-6020 E-mail: bkeck@kecklegal.com B & J PROPERTY: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- The U.S. Trustee for Region 21, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of B & J Property Management of Ocala, LLC, according to court dockets. About B & J Property Management B & J Property Management of Ocala LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor is the sole owner of real property located at 1834 SW 1st Avenue, Suite 201, Ocala, Fla., valued at $821,896. B & J sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-01976) on July 11, 2024, with total assets of $821,896 and total liabilities of $1,505,000. Gordon Johnson, manager, signed the petition. Judge Jacob A. Brown oversees the case. The Debtor is represented by Richard A. Perry, Esq., at Richard A. Perry P.A. BISHOP OF SACRAMENTO: Hires Blank Rome LLP as Insurance Counsel --------------------------------------------------------------- Roman Catholic Bishop Of Sacramento seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to employ Blank Rome, LLP as special insurance counsel. The firm will provide these services: a. analyze the liability insurance coverage which may be available to the Debtor for claims pending against it, including review of policies and facts of each claim, and research regarding policy provisions; b. negotiate with the carriers to obtain appropriate defense and indemnity contributions for those claims; and c. assist the Debtor, its primary bankruptcy counsel, and its litigation counsel in the course of the Bankruptcy Case on matters falling within Blank Rome's expertise or special knowledge. The firm will be paid at these rates: Barron L. Weinstein, Counsel $675 per hour Kevin L. Cifarelli Senior Attorney $450 per hour James R. Murray, Partner $1,066 per hour James S. Carter, Partner $836 per hour Jeffrey Schulman, Partner $836 per hour Robyn L. Michaelson, Partner $808 per hour Anna K. Milunas Associate $796 per hour Alexander H. Berman Associate $668 per hour Paralegals $164 to $359 The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Barron L. Weinstein, a partner at Blank Rome, LLP, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Barron L. Weinstein, Esq. Blank Rome, LLP 1825 Eye Street NW Washington, DC 20006 Tel: (202) 420-3171 About Roman Catholic Bishop of Sacramento The Roman Catholic Bishop of Sacramento, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Cal. Case No. 24-21326) on April 1, 2024. The Debtor hires Paul J. Pascuzzi, Esq., as counsel. Keller Benvenutti Kim LLP as local counsel. BISHOP OF SANTA ROSA: Hires Blank Rome LLP as Insurance Counsel --------------------------------------------------------------- The Roman Catholic Bishop of Santa Rosa seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Blank Rome, LLP as special insurance counsel. The firm will provide these services: a. analyze the liability insurance coverage which may be available to the Debtor in Possession for claims pending against it, including review of policies and facts of each claim, and research regarding policy provisions; b. negotiate with the carriers to obtain appropriate defense and indemnity contributions for those claims; and c. assist the Debtor in Possession, its primary bankruptcy counsel, and its litigation counsel in the course of the Bankruptcy Case on matters falling within Blank Rome's expertise or special knowledge The firm will be paid at these rates: Barron L. Weinstein, Of Counsel $675 per hour Kevin L. Cifarelli Senior Attorney $450 per hour James R. Murray Partner $1,066 per hour James S. Carter Partner $836 per hour Jeffrey Schulman Partner $836 per hour Robyn L. Michaelson Partner $808 per hour Anna K. Milunas Associate $796 per hour Alexander H. Berman Associate $668 per hour Paralegals $164 to $359 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Barron L. Weinstein, Esq., a partner at Blank Rome, LLP, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Barron L. Weinstein, Esq. Blank Rome, LLP 1825 Eye Street NW Washington, DC 20006 Tel: (202) 420-3171 About The Roman Catholic Bishop of Santa Rosa The Roman Catholic Bishop of Santa Rosa is a diocese, or ecclesiastical territory, of the Roman Catholic Church in the Northern California region of the United States, named in honor of St. Rose of Lima. Abuse victims filed hundreds lawsuits after the state of California paused for three years its statute of limitation on claims for child sexual abuse. The pause ended on Dec. 31, 2022. Facing more than 200 new legal claims over childhood sexual abuse, the Roman Catholic Bishop of Santa Rosa, also known as the Diocese of Santa Rosa, filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 23-10113) on March 13, 2023. The Debtor estimated $10 million to $50 million in both assets and liabilities. The Hon. Charles Novack is the case judge. The Debtor tapped Felderstein Fitzgerald Willoughby Pascuzzi & Rios, LLP as bankruptcy counsel; GlassRatner Advisory & Capital Group, LLC as financial advisor; and Donlin, Recano & Company, Inc. as claims agent. Shapiro Galvin Shapiro & Moran, Weinstein & Numbers, LLP, and Foley & Lardner, LLP serve as special counsels. The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. Stinson, LLP and Berkeley Research Group, LLC serve as the committee's legal counsel and financial advisor, respectively. BUCA TEXAS: Buca de Beppo Seeks Chapter 11 Bankruptcy ----------------------------------------------------- Steven Church of Bloomberg News reports that Buca di Beppo, the renowned family-style Italian dining brand, announced on August 5, 2024 that it has voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas. The goal of the restructuring effort is to ensure a seamless transition and to position the brand for future success. This decision is aimed at optimizing operations and enhancing the dining experience for its valued customers. Buca di Beppo is restructuring 44 core locations and is in process of opening one new location. The company is committed to ensuring that the restaurants operate as usual, and all gift cards, reservations, and promotional services currently remain active and redeemable. "This is a strategic step towards a strong future for Buca di Beppo. While the restaurant industry has faced significant challenges, this move is the best next step for our brand. By restructuring with the continued support of our lenders, we are paving the way toward a reinvigorated future," said Rich Saultz, President. "Buca di Beppo has been a beloved gathering place for celebrations and memorable meals for many years, and we are enthusiastic about entering this next phase of our brand's story." William Snyder, Chief Restructuring Officer of Buca C, LLC, stated: "We believe this path will best allow us to continue to serve Buca's patrons and communities for many years to come. We are open for business in 44 locations, and we expect day-to-day operations to continue uninterrupted. We anticipate moving through this process as quickly and efficiently as possible to emerge as a stronger organization built for the future." Buca di Beppo appreciates the continued support of its customers, employees, and vendors as it looks forward to emerging from the bankruptcy process more resilient and well-positioned for the future. Gray Reed & McGraw LLP is serving as legal advisor. CR3 Partners LLC is serving as financial advisor and providing corporate leadership as Chief Restructuring Officer. Stout Capital, LLC is serving as investment banker. About Buca di Beppo Founded in Minneapolis in 1993, Buca di Beppo restaurants embody the Italian traditions of food, friendship, fun, celebration, and hospitality. Dishes enjoyed for generations in villages throughout Italy inspire the menu, which features both Northern and Southern Italian favorites and delicious cocktails inspired by the region. While the food has pleased millions of palates from coast-to-coast, Buca di Beppo is equally famous for its quirky decor and upbeat atmosphere. For more information, visit bucadibeppo.com and follow along on Facebook, Instagram, TikTok or Twitter @bucadibeppo. Buca di Beppo sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-80058) on August 5, 2024. In the petition filed by William Snyder, as chief restructuring officer, the Debtor reports estimated assets up to $50,000 and estimated liabilities between $10 million and $50 million. The Debtor is represented by: Amber Michelle Carson, Esq. Gray Reed & McGraw LLP 4700 Millenia Boulevard, Suite 400 Orlando, FL 32839 BYJU'S ALPHA: Avoids Bankruptcy After Debt Settlement Okayed ------------------------------------------------------------ Sankalp Phartiyal and Saikat Das of Bloomberg Law report that Byju's secured time to repay $19 million owed to India's cricket governing board, a move that allows the online tutoring startup to avoid insolvency for now. A companies' appeals court in the southern Indian city of Chennai on Friday quashed an insolvency order issued by a lower court and ruled that Byju's can settle the case with the Board of Control for Cricket in India. The firm owed the cricket overseer 1.59 billion rupees ($19 million) and its co-founder Riju Ravindran has so far paid 500 million rupees of the total. About BYJU's Alpha BYJU's Alpha, Inc. designs and develops education software solutions. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-10140) on Feb. 1, 2024. In the petition signed by Timothy R. Pohl, chief executive officer, the Debtor disclosed up to $1 billion in assets and up to $10 billion in liabilities. Judge John T. Dorsey oversees the case. Young Conaway Stargatt & Taylor, LLP and Quinn Emanuel Urquhart & Sullivan, LLP serve as the Debtor's legal counsel. GLAS Trust Company LLC, as DIP Agent and Prepetition Agent, is represented in the Debtor's case by Kirkland & Ellis LLP, Pachulski Stang Ziehl & Jones, and Reed Smith. CENTERPOINT ENERGY: Fitch Gives BB+ Rating on 2055 Jr. Sub. Notes ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' instrument rating to CenterPoint Energy, Inc.'s (CNP) fixed-to-fixed rate reset junior subordinated notes (JSN) due 2055. The notes are CNP's unsecured obligations and will rank junior and subordinate in right of payment to the prior payment in full of CNP's existing and future senior indebtedness. Proceeds from the debt offering will be for general corporate purposes, including repayment of $500 million in aggregate principal amount of CNP's 2.50% senior notes due 2024. The JSNs qualify under Fitch criteria for 50% equity credit. The ratings and CNP's Negative Rating Outlook reflect the expected impact from 2024 Texas storm costs and high leverage relative to the company's creditworthiness in 2024 and 2025. The ratings and Negative Outlook also consider political/regulatory headwinds in the wake of CNP's storm response to Hurricane Beryl and its potential implications for CenterPoint Energy Houston Electric's (CEHE) regulatory compact in the state. CNP's ratings could be downgraded if adverse political and/or regulatory outcomes, including an inability to comply with Governor Abbott's requirements to improve storm resilience, cause expected post-2024 leverage to exceed Fitch's FFO leverage downgrade sensitivity of 5.0x for CNP on a sustained basis. Key Rating Drivers Cost Recovery & Risk Loom Large: CNP's utility focused strategy is comprised of investment in a diverse portfolio of natural gas local distribution utilities in several midwestern states and Texas, as well as its Houston-based electric transmission and distribution (T&D) and integrated Indiana electric utility operations. The company's relatively low risk business model is a key credit positive, offset by a noticeable rise in catastrophic storm activity at CNP subsidiary CEHE in recent years. Texas has authorized tariff bonds and other regulatory mechanisms to facilitate timely storm cost recovery, a significant credit positive. Prospective recovery of storm costs and the impact of CNP's 2024 storm response on the regulatory compact in Texas will be key determinants in resolving the Negative Outlook. Credit Supportive Action Expected: Fitch believes CNP management is committed to its current creditworthiness and expects storm costs will be funded with a balanced mix of debt and equity designed to defend its current ratings. Management announced plans to increase common equity issuance and issue hybrid securities, including the instant JSNs. CNP's ratings could be downgraded if adverse outcomes, including the inability to comply with the governor's requirements to improve storm resilience, cause expected post-2024 leverage to exceed Fitch's downgrade sensitivity of 5.0x for CNP on a sustained basis. Storm Resilience Plan Acceleration: CEHE has filed a request with the administrative law judge to withdraw its base rate increase application with the Public Utility Commission of Texas (PUCT) in order to focus on improving system resilience and storm response following Hurricane Beryl. CNP has been in discussions with Governor Abbott regarding its efforts to timely enhance resilience and response to storms that is acceptable to the governor. The Texas Senate has also conducted hearings regarding CNP's response to Hurricane Beryl. The company is working to accelerate work that includes vegetation management, pole replacement and better anticipation and staging of resources to minimize the impact of storms on the grid. TX Electric Rate Case: In March 2024, CEHE filed an electric base rate case with PUCT seeking a $60 million increase in March 2024 based on a 10.4% ROE, an equity ratio of 44.9% and a 2023 test year. CEHE's authorized equity ratio is significantly lower than peer electric utilities operating in other states, which is a credit negative. In its filing, CEHE requests an increase to 44.9% from its current 42.5% authorized equity ratio. CEHE's current authorized ROE is a below industry average 9.4%. In Indiana, CNP filed its case-in-chief supporting a $118.8 million rate increase to be phased in during 2024-2026 based on a 10.4% ROE and a 2025 test year. Credit Metrics Pressured: CEHE was significantly impacted by storm activity in May and July 2024. Fitch expects CEHE will fully recover 2024 storm costs through securitization and cost recovery riders. CNP estimates the cost of the two storms to be in the $1.6 billion-$1.8 billion range. Large storm-related CEHE cash shortfalls are expected to push CNP's consolidated 2024 FFO leverage significantly above Fitch's downgrade sensitivity of 6.0x. Fitch expects FFO leverage to be around 6.0x in 2025, before improving to below 6.0x in 2026. Assuming securitization and Transmission Cost of Service (TCOS) filings in 4Q24, Fitch expects storm cost recovery to commence in 2026. Failure to timely recover storm costs would likely result in elevated leverage for longer, challenging creditworthiness. Ratings Impact: Credit supportive outcomes in regulatory proceedings to recover CEHE storm costs are embedded in Fitch's projections and could result in an affirmation of CNP's current ratings. Conversely, further weakening of post-2024 credit metrics due to unexpected delay in storm cost recovery or adverse political and/or regulatory outcomes could result in credit rating downgrades. Constructive Regulatory Mechanisms: CNP conducts its natural gas utility operations primarily through CenterPoint Energy Resources Corp. (CERC), which benefits from geographic and regulatory diversification across six states (IN, MN, OH, MS, LA and TX). CNP also provides integrated electric and gas utility service in southwestern Indiana through SIGECO. Credit supportive cost recovery mechanisms include the Gas Reliability Infrastructure Program (GRIP) in Texas and Compliance and System Improvement Adjustment (CSIA) in Indiana. Most of CNP's gas utilities have regulatory capital equity ratios of 50% or greater, other than Indiana, and authorized ROEs ranging from 9.3% to 9.8%. Electric T&D operations in Texas are not exposed to commodity risks and do not have provider-of-last-resort obligations. CNP's Transmission Cost of Service (TCOS) and Distribution Cost Recovery Factor (DCRF) mechanisms facilitate timely cost recovery outside of base rate case filings in Texas. CEHE can submit DCRF filings twice per year, instead of once a year, as was the case prior to passage of Texas Senate Bill 1015. TCOS are also filed semi-annually. Similarly, approved regulatory riders in Indiana facilitate cost recovery in a timely manner, mitigating regulatory lag. Large Capex Program: CNP planned capex is $21.3 billion during 2021-2025 and $44.5 billion through 2030. Roughly 64% of CNP's five-year investment plan targets electric operations, 35% gas distribution and the remaining 1% corporate and other. CNP recently filed its system resiliency plan (SRP) with the PUCT as required by legislation enacted in 2023 targeting $2.2 billion to $2.7 billion for electric system hardening and modernization (which could have added $500 million to its 10-year capital plan). The company withdrew its SRP filing, which Fitch expects will be updated in light of questions regarding its storm response to Hurricane Beryl and the May derecho. LDC Asset Sale: In February 2024, CNP announced the planned sale of its Louisiana and Mississippi gas distribution businesses to Bernhard Capital Partners for $1.2 billion pre-tax. The transaction is expected to close by the end of 1Q25 and proceeds used to efficiently fund capex, which Fitch views as credit supportive. The net purchase price represents roughly 1.6x rate base and ~32x earnings. Full Regulatory Docket: In 4Q23, CNP operating utilities filed gas rate increase requests in Minnesota and Texas. On Nov. 1, 2023, CERC filed a base rate case with the Minnesota Public Utilities Commission seeking an $84.6 million rate increase in 2024 and a $51.8 million rate increase in 2025. The Minnesota rate increase request is based on a 10.3% ROE and forward looking 2024 and 2025 test years. The Minnesota Public Utilities Commission authorized an interim rate increase of approximately $69 million effective Jan. 1, 2024. The Texas Railroad Commission recently approved a settlement in CNP's gas base rate case, which is discussed further below. CNP plans to file a gas base rate case in Ohio later this year. A final decision in CERC's Minnesota rate case is expected in 2025. TX Gas Settlement Approved: Fitch believes recent commission approval of CNP's Texas gas distribution base rate case settlement is a constructive development. CNP filed the settlement with the Railroad Commission of Texas on April 23, 2024. The commission approved the settlement June 25, 2024 without modification. New rates will be effective in December 2024. Indiana Settlement Reached: In May 2024, CNP filed a non-unanimous settlement agreement with the Indiana Utility Regulatory Commission (IURC). If approved by the IURC, the settlement agreement would increase electric rates $80 million in two phases effective around March 2025 and March 2026. The rate increase is based on a 9.8% authorized ROE. Fitch believes the proposed settlement, if approved by the IURC, would be a constructive development from a credit perspective. Hearings are expected to be held in September 2024 and a commission decision is expected early next year. Parent-Subsidiary Rating Linkage: Fitch has determined there is parent subsidiary rating linkage between CNP and its rated utility subsidiaries, CEHE and CERC. Fitch determines CNP's standalone credit profile (SCP) based on consolidated metrics. In Fitch's analysis, CEHE and CERC have stronger SCPs than their corporate parent and Fitch has utilized the strong subsidiary path under Fitch's "Parent-Subsidiary Rating Linkage Criteria." Emphasis is placed on the subsidiaries' status as regulated utilities. Legal ring fencing is considered porous, given the general protections afforded by rate regulation. Access and control are porous. CNP manages the treasury function for its subsidiary utilities and is the sole source of equity; however, CEHE and CERC issue their own short- and long-term debt. CEHE and CERC do not guarantee the debt obligations at CNP. Due to these considerations, Fitch limits the separation between CNP and its subsidiaries' IDRs to two notches. CNP is well-positioned compared to peers NiSource Inc. (NiSource; BBB/Stable) and Sempra (BBB+/Stable). CNP and NiSource's utility assets are more diversified in comparison with Sempra. CNP is smaller than Sempra and larger than NiSource as measured by EBITDA. CNP's, NiSource's and Sempra's 2023 EBITDA totaled $3 billion, $2.2 billion and $5,8 billion, respectively. Both CNP and NI are multi-state utilities with gas and electric utility operations across parts of six states. Sempra operates gas distribution and electric utilities in California, owns electric transmission and distribution utilities in Texas and owns significant nonutility, energy sector investments. More than 95% of CNP's EBITDA is derived from regulated utilities. Regulated utilities provide virtually all of NiSource's consolidated EBITDA and around 80% of Sempra's EBITDA is from regulated operations. CNP's utilities are more geographically diverse and, in Fitch's opinion, less exposed to aggressive clean energy policies compared with Sempra. Fitch believes wildfire risk is more pronounced for Sempra than CNP. Both Sempra's and CNP's Texas-based utilities are exposed to hurricane and other extreme weather events. CNP's Texas service territory enjoys more robust customer growth compared to NiSources Indiana-based electric operations. CNP and NiSource's gas distribution assets are similarly diversified across mid-western states with generally supportive rate regulation and manageable environmental policy goals. CNP's FFO leverage is estimated by Fitch at 6.0x and 5.8x in 2025 and 2026, respectively, weaker than NI's and Sempra's 2024-2026 average of 5.6x and 4.5x Key Assumptions - Annual customer growth of approximately 1% for CERC and 2% for CEHE; - Total capex $21.3 billion from 2021-2025; - Full recovery of 2024 storm costs in rates via securitization and other rate recovery mechanisms; - Continued supportive rate regulation. RATING SENSITIVITIES Factors That Could, Individually Or Collectively, Lead To A Stable Rating Outlook - Timely recovery of Texas storm costs, credit supportive rate regulation in Texas and balanced issuance of debt and equity. Factors That Could, Individually Or Collectively, Lead To Positive Rating Action/Upgrade - FFO leverage below 5x on a sustained basis and continued supportive rate regulation. Factors That Could, Individually Or Collectively, Lead To Negative Rating Action/Downgrade - FFO leverage above 6x on a sustained basis; - Significant, unexpected deterioration in CNP's regulatory environment. Liquidity and Debt Structure Adequate Liquidity: On a consolidated basis, CNP and its subsidiaries have access to up to $4 billion of credit facilities, including a $2.4 billion facility at the parent. CNP subsidiaries CenterPoint Energy Resources Corp. (CERC), CenterPoint Energy Houston Electric (CEHE) and SIGECO, through separate credit facilities, have the ability to borrow up to approximately $1.1 billion, $300 million and $250 million, respectively. The credit facilities terminate Dec. 6, 2027. As of March 31, 2024, CNP had cash and cash equivalents (excluding restricted cash) of $161 million on a consolidated basis and $35 million of parent-level cash. Available borrowing capacity under CNP and its subsidiaries' credit facilities as of April 22, 2024 was approximately $2.6 billion, primarily reflecting approximately $1 billion of CP issued by CNP and $430 million at CERC. CERC and CEHE participate in CNP's money pool, borrowing and investing on a short-term basis. In June 2024, CEHE entered into a delayed draw term loan agreement. Under the agreement, CERC can borrow up to $300 million and is able to request an incremental $200 million of borrowings pending satisfaction of certain customary, precedent conditions. CNP estimates exposure related to the May storms of $425 million to $475 million and recent impacts from Hurricane Beryl are likely to add significantly to that total. Fitch believes CEHE liquidity, provided by available credit and term loan facilities and support from CNP, is solid. There are no debt maturities scheduled in 2024 or 2025. CEHE's next maturity is $300 million in 2026. Issuer Profile CNP is a large, multi-state utility holding company strategically focused on its core utility operations, having exited investment in midstream and other unregulated businesses in recent years. 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. 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 ----------- ------ CenterPoint Energy, Inc. junior subordinated LT BB+ New Rating CHARA SOFTWARE: Case Summary & 11 Unsecured Creditors ----------------------------------------------------- Debtor: Chara Software LLC 4589 Woodwind Drive Destin, FL 32541 Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Northern District of Florida Case No.: 24-30647 Debtor's Counsel: Michael A. Wynn, Esq. WYNN & ASSOCIATES PLLC 430 W. 5th Street Suite 400 Panama City, FL 32401 Tel: (850) 303-7800 Fax: (850) 526-5210 Email: michael@wynnpllc.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Brian Martino as president/owner. A full-text copy of the petition containing, among other items, a list of the Debtor's 11 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/JCGH5UY/Chara_Software_LLC__flnbke-24-30647__0001.0.pdf?mcid=tGE4TAMA COACH USA: To Auction 8 Bus Terminals Amid Restructurings --------------------------------------------------------- A&G Real Estate Partners, in its capacity as real estate advisor to passenger transportation and mobility services provider Coach USA, on Aug. 13, 2024, announced the upcoming auction of eight bus terminals across the United States, as part of the company's expedited financial restructuring. The bid deadline is August 28, subject to court approval of bid procedures. Paramus, N.J.-base Coach USA this past June announced that it had commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware, with a goal of preserving jobs, ensuring continued service and maximizing the value of its businesses. The company continues to operate as normal and remains focused on safely serving customers across North America. "These eight bus terminals offer ample space for parking, storage and repair/maintenance, and they also boast strategic locations near airports, highways and major U.S. markets," said Emilio Amendola, Co-President of A&G Real Estate Partners and head of the firm's real estate sales division. "Bus and trucking companies already are expressing strong interest in these sites." The terminals are located in: -- California (Bakersfield) -- Maryland (Landover) -- New Jersey (Paulsboro, Elizabeth) -- Ohio (Columbiana) -- Pennsylvania (Fairview) -- Texas (Austin and Houston). "These assets offer attractive rents, and the Elizabeth location is adjacent to the Port of Newark, with very significant remaining term adding to the appeal," said Chief Restructuring Officer Spencer M. Ware, Partner, CR3 Partners, LLC. "It's a tremendous opportunity for the U.S. transportation sector." Houlihan Lokey is the company's investment banker, with Alston & Bird as well as Young Conaway Stargatt & Taylor, LLP, serving as debtor's counsel. For further information on the assets, visit www.arep.com/real-estate-for-sale or contact Emilio Amendola, (631) 465-9507, emilio@agrep.com, or Doug Greenspan, A&G Senior Managing Director, (310) 770-7832, doug@agrep.com Media Contacts: At Jaffe Communications, Elisa Krantz, (908) 789-0700, 381785@email4pr.com About Coach USA Coach USA, Inc., a company in Paramus, N.J., is a provider of ground passenger transportation and mobility solutions in North America, offering many types of specialized ground transportation solutions to government agencies, airports, colleges and universities, and major corporations. With 25 business segments throughout the United States and Canada employing approximately 2,700 employees and operating approximately 2,070 buses, the Coach USA network of companies carries millions of passengers throughout the United States and Canada each year. In addition to the household name "Coach USA," the company operates under several other brands, including Megabus, Coach Canada, Coach USA Airport Express, Dillon's Bus Company, and Go Van Galder. Coach USA and its affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 24-11258) on June 11, 2024. At the time of the filing, Coach USA reported $100 million to $500 million in both assets and liabilities. Judge Mary F. Walrath oversees the cases. The Debtors tapped Alston & Bird, LLP and Young Conaway Stargatt & Taylor, LLP as legal counsels; Houlihan Lokey Capital, Inc. as investment banker; and CR3 Partners, LLC as restructuring advisor. Kroll Restructuring Administration, LLC is the Debtors' claims and noticing agent and administrative advisor. COHEN ANYTIME: Maria Yip Named Subchapter V Trustee --------------------------------------------------- The U.S. Trustee for Region 21 appointed Maria Yip, a certified public accountant and managing partner at Yip Associates, as Subchapter V trustee for Cohen Anytime, Inc. Ms. Yip will be paid an hourly fee of $450 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Yip declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Maria M. Yip 2 S. Biscayne Blvd., Suite 2690 Miami, FL 33131 Tel: (305) 569-0550 Email: myip@yipcpa.com About Cohen Anytime Cohen Anytime, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-18110) on August 9, 2024, with as much as $50,000 in both assets and liabilities. Judge Corali Lopez-Castro presides over the case. Diego Mendez, Esq., represents the Debtor as legal counsel. COMBAT ARMORY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Combat Armory, LLC Dearborn Outdoors 3125 Old Farm Lane Commerce Township, MI 48390-1655 Business Description: The Debtor specializes in providing a wide range of firearm parts and accessories, including Glock barrels, Glock slides, Glock internal parts, and AR-15/AR-10/AR9. It clients include the law enforcement, military and civilian personnel. Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Eastern District of Michigan Case No.: 24-47861 Judge: Hon. Thomas J Tucker Debtor's Counsel: John J. Stockdale, Jr., Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Ave., Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 Email: jstockdale@schaferandweiner.com Total Assets: $673,339 Total Liabilities: $3,919,175 The petition was signed by Waleed J. Jammal as member. 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/RTSO5CI/Combat_Armory_LLC__miebke-24-47861__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/RJANLDI/Combat_Armory_LLC__miebke-24-47861__0001.0.pdf?mcid=tGE4TAMA COMMSCOPE HOLDING: Reports $44.4 Million Net Income in Fiscal Q2 ---------------------------------------------------------------- CommScope Holding Company, Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net income of $44.4 million on $1.4 billion of net sales for the three months ended June 30, 2024, compared to a net loss of $100.4 million on $1.6 billion of net sales for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss of $314.8 million on $2.6 billion of net sales, compared to a net loss of $97 million on $3.3 billion of net sales for the same period in 2023. "As expected, our second quarter results improved from the first quarter. Our performance in our Core businesses was mixed with strength in Connectivity and Cable Solutions (CCS) and continued weakness in Access Network Solutions (ANS) and NICS. Our focus on profitability through CommScope NEXT during the downturn is now paying dividends as our Core EBITDA margin in the second quarter was 19.1% up from 10.2% in the first quarter and 15.9% in the second quarter of 2023. We are pleased with our CCS performance as datacenter and GenAI was a strong driver of growth. We are well positioned to take advantage of what we believe to be a multi-year growth cycle in this business. CCS adjusted EBITDA of $173 million improved versus prior year and the first quarter of 2024 by 107% and 80%, respectively. Despite an improved second quarter, visibility remains limited as customers continue to deal with higher-than-normal inventory levels and upgrade cycles are delayed. As previously reported, CommScope entered into a definitive agreement to sell its OWN segment as well as the DAS business unit of the NICS segment to Amphenol Corporation (NYSE: APH). Upon closing, CommScope will receive approximately $2.1 billion in cash," said Chuck Treadway, President and Chief Executive Officer. "Despite improved performance sequentially, Core CommScope net sales declined 17% from the prior year to $1.05 billion and delivered adjusted EBITDA of $201 million. Although visibility remains limited, our full year Core adjusted EBITDA guideposts are $700 to $800 million. We continue to evaluate capital structure alternatives and expect to meet with our existing lenders in the third quarter to address the upcoming debt maturities. We finished the quarter with significant liquidity of $880 million," said Kyle Lorentzen, Chief Financial Officer. As of June 30, 2024, the Company had $8.8 billion in total assets, $10.9 billion in total liabilities, $1.19 billion in Series A convertible preferred stock and $3.3 billion in total stockholders' deficit. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/hpn792tr About CommScope Holding Headquartered in Hickory, North Carolina, CommScope Holding Company, Inc. -- https://www.commscope.com/ -- is a global provider of infrastructure solutions for communication, data center, and entertainment networks. The Company's solutions for wired and wireless networks enable service providers, including cable, telephone, and digital broadcast satellite operators, as well as media programmers, to deliver media, voice, Internet Protocol (IP) data services, and Wi-Fi to their subscribers. This allows enterprises to experience constant wireless and wired connectivity across complex and varied networking environments. CommScope reported a net loss of $1.45 billion in 2023, a net loss of $1.28 billion in 2022, a net loss of $462.6 million in 2021, and a net loss of $573.4 million in 2020. * * * As reported by the TCR on Nov. 22, 2023, S&P Global Ratings lowered its issuer credit rating on CommScope to 'CCC' from 'B-' and removed the ratings from CreditWatch with negative implications, where they were placed on Oct. 31, 2023. S&P revised the outlook to negative. The negative outlook reflects S&P's view that CommScope's expected weak financial performance, with leverage above the 10x area and low FOCF generation in 2023 and 2024, will increase the risk of a distressed exchange or buyback within the next 12 months to address upcoming maturities. As reported by the TCR on March 15, 2024, Moody's Ratings downgraded CommScope's ratings, including the corporate family rating to Caa2 from B3. The ratings downgrade primarily reflects the increasing risk of a capital restructuring, including a distressed exchange of some or all of the company's debt, with maturities approaching, including the company's senior notes in June 2025 and secured debt in March and April of 2026. COMSERO INC: Amends Unsecured Claims Pay Details ------------------------------------------------ Comsero, Inc. d/b/a m.c. Squares submitted an Amended Plan of Reorganization dated July 29, 2024. The Debtor is a Delaware corporation headquartered in Thornton, Colorado and engaged in business manufacturing and selling reusable office products, including reusable sticky notes, white boards, and calendars. On January 31, 2024, the Debtor filed an Application to Employ New Mill Capital Holdings, LLC to act as the auctioneer for the Debtor and sell the assets in its Thornton, Colorado location and further sought authority to conduct an auction of the assets. On March 18, 2024, the Court entered an Agreed Order Partially Approving the Application to Employ and Compensate New Mill Capital Holdings, LLC, and an Order Approving the Stipulation Among Comsero, Inc, Amazon Capital Services, Inc., and Old Vine – Pinnacle Associates, LLC, authorizing the Debtor to sell its assets, with all liens to attach to the proceeds of the sale. New Mill conducted the sale in early April, 2024, and realized proceeds in the amount of $184,095.00 before application of the commission. On May 7, 2024, the Debtor filed a Motion to Authorize Distribution of Proceeds. On June 4, 2024, the Court entered an Order Granting Motion to Authorize Distribution of Auction Proceeds. New Mill has made a number of the payments required by the Order, but still has a few payments to distribute to secured creditors. Upon payment, it will result in a satisfaction of the liens to the extent of the value of the asset securing the lien, and will result, in some instances, in a bifurcation of claims for the secured creditors pursuant to Section 506 of the Bankruptcy Code. Classes 10 is comprised of the Allowed General Unsecured Claims holding unsecured claims against the Debtor. Class 10 shall be treated and paid as follows: * Class 10 shall receive pro-rata distributions equal to 100% of the Debtor's Net Revenue calculated on a quarterly basis for a 4-year period beginning on the 1 year anniversary of the Effective Date of the Plan ("Class 10 Plan Term"); * Commencing on the first day of the second calendar quarter following the commencement of the Class 10 Plan Term and continuing on the first day of each quarter thereafter, the Debtors shall distribute an amount equal to (100%) of the prior quarter's Net Revenue. By way of example, if the Plan is confirmed in July 2024, the Class 10 Plan Term shall commence in July 2025, and the first distribution shall be made on October 1, 2025 based on the combined Net Revenue generated from July 2025 through September 2025; * Based on the Debtors' projections, the Debtors estimate that Class 10 Claims will receive approximately 11.7% on account of their claims. Upon request by any party in interest, the Debtor shall provide a quarterly financial statement, including amounts disbursed to creditors in accordance with the Plan; * The Debtor shall be entitled to retire the entire obligations to Class 10 Creditors at any time during the first two years of the Class 10 Plan Term by making a single pro rata distribution of $110,000, less amounts previously disbursed to unsecured creditors; and * In addition to the amounts set forth above, Class 10 shall receive 50% of the amounts recovered for claims arising under Chapter 5 after payment of attorney fees, cost of litigation, and cost of recovery. Class 11 is comprised of the holders of common shares existing as of the Petition Date. Class 11 is impaired by the Plan. On the Effective Date of the Plan, Class 11 interest holders shall retain all interests held on the Petition Date subject to the dilution of such shares as contemplated by this Plan. It is anticipated that after dilution, Class 11 interest holders will hold a total of approximately 5% of the common stocks in the Debtor. On the Effective Date of the Plan, Anthony Franco shall be appointed pursuant to Section 1142(b) of the Bankruptcy Code for the purpose of carrying out the terms of the Plan, and taking all actions deemed necessary or convenient to consummating the terms of the Plan. Mr. Franco shall continue to receive an annual salary in the amount of $150,000, subject to adjustment as the Debtor determines is reasonable and appropriate. In addition to the compensation set forth above, Mr. Franco shall receive 43% of the New Common Stock issued in accordance with this Plan as incentive to maintain operations and in exchange for any post-petition claim for wages or salary accrued but unpaid through the Effective Date of the Plan. Mr. Franco has not received a salary on a post-petition basis to preserve cash flow for the company, and will therefore be waiving a claim that would otherwise be entitled to administrative priority status, and would exceed $75,000 through the date of confirmation of the Plan. As evidenced by the projections, the Debtor anticipates that its income will be positive each year of the Plan, and will generate sufficient revenue to meet its obligations under the Plan. A full-text copy of the Amended Plan dated July 29, 2024 is available at https://urlcurt.com/u?l=BTDAVV from PacerMonitor.com at no charge. Attorneys for the Debtor: Keri L. Riley, Esq. KUTNER BRINEN DICKEY RILEY, P.C. 1660 Lincoln Street, Suite 1720 Denver, CO 80264 Tel: (303) 832-2910 Email: klr@kutnerlaw.com About Comsero, Inc. Comsero, Inc., a Denver-based start-up, creates magnetic, dry erase products as an alternative to disposable sticky notes. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 23-15959) on December 22, 2023, with $906,316 in assets and $3,336,200 in liabilities. Anthony Franco, chief executive officer, signed the petition. Judge Michael E. Romero oversees the case. Keri L. Riley, Esq., at Kutner Brinen Dickey Riley, PC represents the Debtor as legal counsel. CONNECT FIT: Unsecured Creditors to Split $48K in Plan ------------------------------------------------------ Connect Fit LLC filed with the U.S. Bankruptcy Court for the District of Massachusetts a Chapter 11 Plan of Reorganization dated July 29, 2024. The Debtor is a retailer of personal fitness equipment, high-end gym flooring, and related accessories. The Debtor works with builders, designers, and personal trainers to help design and outfit residential and commercial gyms. The Debtor was formed in 2020 by Jennifer Morrision and Norman J. Morrison, IV. Both Jennifer and Norman have spent the past 25 years working in the personal fitness industry. The Debtor opened its first store in August of 2020 at 84 Needham St. Newton, MA. The Debtor benefited from the increased demand for home fitness equipment that occurred during the Covid pandemic and the Newton store was profitable from the outset. The Debtor's Plan is a three-year bootstrap plan. The Debtor will continue operating its Newton store and will repay creditors from future income. The Debtor will also continue to fulfill pre petition orders. The Plan represents a balance between fulfilling the pre-petition orders and providing a distribution to unsecured creditors. The distribution to unsecured creditors beginning in year two of the plan. The reason for this is two-fold. First, the Debtor's business relies on repeat and referral business. The Debtor believes its business will improve as it is able to reduce its backlog of unfulfilled orders. Second, if the pre-petition orders are not fulfilled, arguably these customers would each be entitled to a priority claim of $3,350.00 for consumer deposits pursuant to Section 507(a)(7) of the Bankruptcy Code. Given the number of unfilled orders, the Debtor would be unable to pay all the claims and the Debtor would be forced into a liquidation. As demonstrated in the attached liquidation analysis, under this scenario, unsecured creditors would receive nothing. Thus, general unsecured creditors are better off waiting to receive distributions until the second year of the Plan. The Plan provides for quarterly payments to general unsecured creditors in years two and three of the Plan, beginning in or around January 2026. The Plan also pays administrative claims on the Effective Date, priority tax claims in equal monthly installments within four years of the Petition Date, and the Newton landlord's prepetition arrearage over the remaining term of the lease. The Plan is funded through the Debtor's future net income based on conservative assumptions. Class Four consists of the Allowed General Unsecured Claims against the Debtor. In full and complete satisfaction, settlement, release and discharge of all Class Four claims, each holder of an Allowed Class Four claim shall receive a pro rata distribution of 4 quarterly payments of $3,000.00 commencing on the one-year anniversary of the Effective Date and 4 quarterly payments of $9,000 commencing on the two-year anniversary of the Effective Date, for a total distribution to unsecured creditors of $48,000.00. This Class is impaired. The Plan will be funded from the Debtor's net income. Upon the Effective Date, the Debtor is authorized to take all action permitted by law, including, without limitation, to use its cash and other Assets for all purposes provided for in the Plan and in its operations, to borrow funds, to transfer funds between itself and any other entity for any legitimate purpose, including but not limited to cash management, to refinance its obligations under the Plan or to sell its existing Assets. A full-text copy of the Plan of Reorganization dated July 29, 2024 is available at https://urlcurt.com/u?l=Ef0JW3 from PacerMonitor.com at no charge. Counsel to the Debtor: Kate E. Nicholson, Esq. Nicholson Devine LLC 21 Bishop Allen Drive Cambridge, MA 02139 Phone: (857) 600-0508 Email: kate@nicholsondevine.com About Connect Fit LLC Connect Fit LLC is a retailer of personal fitness equipment, high end gym flooring, and related accessories. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 24-40441) on April 30, 2024. In the petition signed by Jennifer A. Morrison, manager, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Elizabeth D. Katz oversees the case. Kate E. Nicholson, Esq., at Nicholson PC, represents the Debtor as legal counsel. CONNECT HOLDING: S&P Downgrades ICR to 'SD' on Debt Restructuring ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating (ICR) on U.S.-based telecommunications service provider Connect Holding II LLC (dba Brightspeed) to 'SD' (selective default) from 'CCC'. S&P also lowered the issue-level ratings on the affected issues to 'D'. The 'CC' issue-level rating on operating subsidiary Embarq Corp.'s senior unsecured debt is unchanged since it was not part of the transaction. S&P said, "The downgrade follows the completed debt restructuring, which we view as distressed because lenders will receive less than the original promise. Brightspeed completed a debt restructuring with full participation of lenders that involved the exchange of the company's $985 million term loan A, $1.970 billion term loan B, and $1.865 billion senior secured notes for about $2.236 billion first-lien second-out term loan and $1.475 billion first-lien fourth-out term loan. The transaction also included about $3.650 billion of new money in the form of secured debt to support its fiber builds. "We view the debt exchanges as distressed and tantamount to a default because lenders received less than they were originally promised. Additionally, it is our view that Brightspeed would likely have exhausted its liquidity and defaulted on its debt obligations in 2024, absent this transaction." More specifically: -- The senior secured term loan A, term loan B and 8% secured notes are being exchanged at a substantial discount to par; -- While there is an increase in the interest rate on the new debt, S&P doesn't not view it as sufficient compensation to extend the company's debt maturity profile. Additionally, the cash interest on the previous secured debt was replaced with payment in kind (PIK) interest for at least the next 18 months on the new debt; and -- 46% of previous senior secured debt is now subordinated in payment position in the first-lien, second-out position, and 31% of previous senior secured debt is now subordinated in the first-lien, fourth-out position. S&P said, "We plan to reevaluate the ICR within the next couple of weeks to reflect the company's new capital structure and liquidity position. Our review will focus on the long-term viability of Brightspeed's capital structure and our forward-looking view of its creditworthiness. We will also review the recovery prospects on the new debt as part of our analysis. We expect the issuer-credit rating will remain in the 'CCC' category." CONNECTWISE HOLDINGS: Fitch Affirms B+ LongTerm IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of ConnectWise Holdings, LLC and ConnectWise, LLC (dba ConnectWise) at 'B+'. The Rating Outlook is Stable. Fitch has also affirmed ConnectWise's secured revolving credit facility (RCF) and first lien secured term loan at 'BB+'/'RR1'. ConnectWise, LLC is the issuer of debt. The ratings are supported by ConnectWise's industry-leading software solutions for Managed Service Providers (MSPs) and Technology Success Providers (TSPs). The company's growth strategy and private equity ownership could limit deleveraging despite the FCF generation projected for the company. Fitch expects the company to prioritize tuck-in acquisitions as part of its growth strategy over accelerated deleveraging, and expects Fitch-adjusted leverage to remain over 4.0x in the near term. Key Rating Drivers Industry Tailwind Supports Growth: ConnectWise's end-markets are small- and medium-sized businesses (SMBs) that lack IT resources and look to MSPs and TSPs to provide technology solutions. The managed services market is estimated to grow in the high single digits to low-teens supported by increasing dependence of businesses on technology for all aspects of operations. In addition, the migration to cloud services and hybrid IT services further increases complexity in management of IT resources that creates further incremental demand. Fitch believes these factors serve as underlying demand growth drivers for managed services resulting in greater demand for ConnectWise's products. High Levels of Recurring Revenues and Revenue Retention: Recurring revenue represents over 95% of total revenue, while net retention rate has sustained over 100%. These attributes provide significant visibility into future revenue streams and profitability. Diversified Customer Base with SMB Exposure: ConnectWise serves over 35,000 customers globally. No single customer represented over 1% of Annual Recurring Revenue (ARR). While ConnectWise's customers are concentrated in MSPs and TSPs, the end-markets represent a diverse cross-section of industries. In Fitch's view, the diverse set of customers and industry verticals in the end-markets should minimize idiosyncratic risks that may arise from customers or industry concentration. Through the MSPs and TSPs, ConnectWise is indirectly exposed to the SMB market segment as SMBs lack sophisticated IT resources to manage the increasingly complex IT environment and leverage services provided by MSPs and TSPs. Cross-Selling Opportunities: ConnectWise's software ARR growth has outpaced customer growth, demonstrating growth in revenue per customer. This is attributed to its broad product portfolio and its ability to increase product penetration into existing customer base. In addition to supporting revenue growth, Fitch believes ConnectWise also benefits through greater customer retention as the products become more integrated with the customers' operations. M&A Central to Growth Strategy: The company is active in M&As as a strategy to expand its product offerings and geographical footprint. Since 2015, ConnectWise has acquired Screen Connect, HTG, ITBoost, BrightGauge, Continuum, Service Leadership, Perch Security, Stratozen, SmileBack and Wise-Sync. These acquisitions expanded ConnectWise's offerings in the three products areas of Business Management, Security Management and Unified Management and also geographical footprint. Despite the acquisitive nature of the company, its net leverage has historically reverted back to 4x-5.5x within 12 months after temporary increases. Narrow Niche Market Focus: ConnectWise's software solutions cater primarily to the MSP and TSP market. The company provides broad solutions that facilitate their customers' operations in support of the SMB end-market. In Fitch's view, the narrow market focus is effectively mitigated given the broader end-market. However, the narrow focus in serving the MSP and TSP market does expose ConnectWise to systemic risks associated with the specific market. Moderate Financial Leverage: Fitch estimates Fitch-adjusted leverage to be around 4.0x in 2024 with capacity to delever over the rating horizon supported by strong FCF generation. However, given the private equity ownership that is likely to prioritize ROE, Fitch believes accelerated debt repayment is unlikely. Fitch expects excess capital to be used for acquisitions to accelerate growth or for dividends to equity owners with financial leverage remaining at moderate levels. Derivation Summary ConnectWise is a leader in the fragmented niche market of mission-critical software solutions that supports the MSPs and TSPs. The products facilitate their customers ongoing operations in areas of Business Management, Security Management, and Unified Management in serving the SMB end-markets. ConnectWise's recurring revenue represents over 95% of total revenue and net retention rates have sustained over 100% in recent years. It serves over 35,000 customers with no single customer representing more than 1% of revenue. The MSP and TSP markets are projected to grow in the low-teens supported by the increasing complexity in IT infrastructure and applications. ConnectWise's revenue visibility, profitability, financial structure and liquidity compare well against vertical industry software peers in the 'B' category. Consistent with other private equity owned software peers, the ownership structure could optimize ROE limiting the prospect for accelerated deleveraging. Key Assumptions - Revenue growth high single digit in 2024 and the low teens after; - EBITDA margins in the mid-30s in 2024 reflects top line pressures. Margins rise to a stable level of the high-30s after that; - Capex intensity 5.0 % of revenue; - Debt repayment limited to mandatory amortization; - Aggregate acquisitions of $600 million through rating horizon partially funded with debt; Recovery Analysis KEY RECOVERY RATING ASSUMPTIONS - The recovery analysis assumes that ConnectWise would be reorganized as a going-concern in bankruptcy rather than liquidated; - Fitch has assumed a 10% administrative claim. Going-Concern Approach - In estimating a distressed enterprise valuation (EV) for ConnectWise, Fitch assumes a combination of customer churn and margin compression on lower revenue scale in a distressed scenario to result in approximately 10% revenue decline with stressed margin of low-30s leading to a going concern EBITDA that is approximately 20% lower relative to 2023 adjusted EBTIDA; - Fitch assumes an adjusted distressed EV of $1.16 billion using approximately $185 million in going-concern EBITDA; - Fitch assumes that ConnectWise will receive a going-concern recovery multiple of 7.0x. The estimate considers several factors, including the highly recurring nature of the revenue, the high customer retention, the secular growth drivers for the sector, the company's strong FCF generation and the competitive dynamics. The EV multiple is supported by: - The historical bankruptcy case study exits multiples for technology peer companies ranged from 2.6x to 10.8x; - Of these companies, only three were in the Software sector: Allen Systems Group, Inc., Avaya, Inc. and Aspect Software Parent, Inc., which received recovery multiples of 8.4x, 8.1x and 5.5x, respectively; - The highly recurring nature of ConnectWise's revenue and mission critical nature of the product support the high-end of the range. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - EBITDA leverage sustaining below 4.0x; - (CFO - capex)/debt ratio sustaining near 10%; - Organic revenue growth sustaining above the high single digits; - Diversification of product focus. Factors that could, individually or collectively, lead to negative rating action/downgrade: - EBITDA leverage sustaining above 5.5x; - (CFO - capex)/debt ratio sustaining below 7.5%; - Organic revenue growth sustaining near 0% Liquidity and Debt Structure Adequate Liquidity: The company's liquidity is projected to be adequate, supported by its FCF generation and an undrawn $70 million RCF, and ~$240 million readily available cash and cash equivalents as of March 31, 2024. Fitch forecasts ConnectWise's FCF margins to remain in high teens through 2027 supported by EBITDA margin in the high-30's. Debt Structure: ConnectWise has $1.026 billion of secured first lien debt due 2028. Given the recurring nature of the business and adequate liquidity, Fitch believes ConnectWise will be able to make its required debt payments. Issuer Profile ConnectWise is a provider of software solutions for IT Managed Service Providers (MSPs) and Technology Success Providers (TSPs) encompassing the full scope of business activities including Business Management, Security Management, and Unified Management. ConnectWise serves over 35,000 customers globally. 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. 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 ----------- ------ -------- ----- ConnectWise, LLC LT IDR B+ Affirmed B+ senior secured LT BB+ Affirmed RR1 BB+ ConnectWise Holdings, LLC LT IDR B+ Affirmed B+ CREW ENERGY: S&P Withdraws 'B' ICR Following Announced Acquisition ------------------------------------------------------------------ S&P Global Ratings withdrew its 'B' issuer credit rating on Crew Energy Inc. following the company's announcement that it will be acquired by Tourmaline Oil Corp. (not rated). S&P expects the acquisition will close later this year. At the time of the withdrawal, its outlook on Crew was stable. The company had no rated debt outstanding. D AND J'S HASH: Amends Unsecured Claims Details ----------------------------------------------- D and J's Hash House, Inc. d/b/a D&J's Hash House submitted a First Amended Chapter 11 Plan of Reorganization for Small Business under Subchapter V dated July 29, 2024. The total for filed and scheduled General Unsecured Claims against the Debtor (including undersecured claims) is $428,566.75. Class 4 consists of the general unsecured claims. In full and complete satisfaction, settlement, release and discharge of the Class 4 Claims, each holder of the Allowed Class 4 Claim shall receive cash in an amount equal to such Claim's pro rata share of $15,000. The $15,000 shall be funded in quarterly installments for the 3 years after the Effective Date. Class 4 is impaired under the Plan, and shall be entitled to vote to accept or reject this Plan. Class 5 consists of holders of Interests in the Debtor. On the Effective Date, each holder shall retain their Interests in the Debtor in the same proportions that existed on the Petition Date. This Plan will be funded from cash on hand, working capital, and cash from ongoing business operations. The Debtor will continue to operate in the ordinary course of business. Pursuant to Section 1190(2) of the Code, the Plan provides for the submission of all or such portion of the future earnings of the Debtor as is necessary for the execution of the Plan. A full-text copy of the Amended Plan dated July 29, 2024 is available at https://urlcurt.com/u?l=TZPiOD from PacerMonitor.com at no charge. Counsel for the Debtor: Gary M. Weiner, Esq. Robert E. Girvan III, Esq. Weiner Law Firm, PC 1441 Main Street, Suite 610 Springfield, MA 01103 Tel: (413) 732-6840 Fax: (413) 785-5666 Email: gweiner@weinerlegal.com rgirvan@weinerlegal.com About D and J's Hash House, Inc. D and J's Hash House, Inc. operates D&J's Hash House restaurant in Southwick, Mass., which is open for breakfast and lunch. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Mass. Case No. 24-30072) on February 23, 2024, with up to $50,000 in assets and up to $500,000 in liabilities. Susan Duffy, president, signed the petition. Judge Elizabeth D. Katz oversees the case. Robert E. Girvan III, Esq., at Weiner Law Firm, P.C., is the Debtor's bankruptcy counsel. DARE BIOSCIENCE: Posts $12.91 Million Net Income in Second Quarter ------------------------------------------------------------------ Dare Bioscience, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income of $12.91 million on $22,438 of total revenue for the three months ended June 30, 2024, compared to a net loss of $8.76 million on $0 of total revenue for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported net income of $6.16 million on $31,740 of total revenue, compared to a net loss of $16.80 million on $0 of total revenue for the six months ended June 30, 2023. As of June 30, 2024, the Company had $23.61 million in total assets,$20.93 million in total liabilities, and $2.67 million in total stockholders' equity. Dare Bioscience stated, "The Company has a history of losses from operations, net losses, and negative cash flows from operations and, although it reported net income and positive cash flow from operations for the six months ended June 30, 2024, the Company expects significant losses from operations, net losses and negative cash flows from operations for at least the next several years as it develops and seeks to bring to market its existing product candidates and to potentially acquire, license and develop additional product candidates. These circumstances raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1401914/000140191424000038/dare-20240630.htm About Dare Bioscience Dare Bioscience is a biopharmaceutical company committed to advancing innovative products for women's health. The Company's mission is to identify, develop and bring to market a diverse portfolio of differentiated therapies that prioritize women's health and well-being, expand treatment options, and improve outcomes, primarily in the areas of contraception, vaginal health, reproductive health, menopause, sexual health and fertility. Irvine, California-based Haskell & White LLP, the Company's auditor since 2023, issued a "going concern" qualification in its report dated March 28, 2024, citing that the Company has recurring losses from operations, negative cash flow from operations and is dependent on additional financing to fund operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. DELEK LOGISTICS: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed Delek Logistics Partners, L.P. (DKL) Long-Term Issuer Default Rating (IDR) at 'BB-'. The senior unsecured notes co-issued by Delek Logistics Partners, L.P. and Delek Logistics Finance Corp. have also been affirmed at 'BB-'/'RR4'. The Rating Outlook is Stable. The affirmation of DKL's IDR considers its rating linkage with Delek US Holdings (Delek Holdings; BB-/Stable) and the resulting rating uplift from Delek Holding's stronger standalone credit profile (SCP) under Fitch's Parent and Subsidiary Linkage Criteria. DKL's SCP is consistent with a 'B+' rating due to its sustained high leverage ratio. DKL's rating is supported by its location-advantaged assets, growing size and scale, and ongoing initiatives in diversifying its customer base and service offerings. This is balanced by the partnership's high distribution, elevated capital needs and business risk associated with the acquired assets. Key Rating Drivers Leverage Elevated by Aggressive Growth: Fitch considers leverage to be a crucial aspect of DKL's credit profile due to the partnership's counterparty and geographic concentration, as well as the significant distributions inherent in the MLP model. Fitch projects that leverage will rise to approximately 4.8x by 2024 and remain above 4.0x in the following years, primarily driven by growth initiatives and the major contract renewal with Delek Holdings announced on the 2Q24 earnings call. Fitch does not anticipate a significant reduction in leverage in the near term through internally generated FCF. The partnership's post-dividend FCF has been negative for the past two years, and Fitch expects this trend to continue due to high capital requirements and a steady increase in shareholder distributions. Fitch also assumes there will be some execution risk in integrating the newly acquired assets. Parent Support Enhances Rating: DKL's ratings reflect one-notch uplift due to the rating linkage with its parent, Delek Holdings. Delek Holdings' SCP is stronger given the adequate liquidity and moderate leverage. The linkage between the companies follows a strong parent/weak subsidiary approach. Legal incentive is weak given the lack of guarantees. Strategic incentives are also weak as Delek Holdings is actively pursuing the divestiture of DKL. Operational incentives are assessed as medium, given integrated assets and shared management of the two companies. This results in DKL's ratings receiving a one-notch uplift. Growth Supported by Strategic Location: DKL benefits from its strategic location in the Permian Basin, where oil production has remained resilient through various commodity price cycles. The acquisitions of the Delaware Gathering System and H2O Midstream assets have expanded DKL's asset base in the Permian, providing the company with increased scale, a diversified customer base and an expanded service offering. The construction of an additional natural gas processing plant positions DKL for continued growth even in a softening commodity price environment. However, Fitch notes that midstream service providers with a single-basin focus are exposed to significant risks if there are any substantial disruptions or slowdowns in the region's refining markets or hydrocarbon production. Counterparty Exposure: Despite the acquisition of the Delaware Gathering System in 2022, Delek Holdings remains the largest counterparty for DKL, accounting for approximately 58% of DKL's net revenue and approximately 50% of EBITDA as of Q2 2024. Fitch anticipates that this cash flow concentration will persist in the near term until the recently announced growth initiatives and contract amendments take effect and diversify DKL's customer base. While DKL's customer concentration risk is likely to decrease due to higher third-party EBITDA, the partnership maintains significant exposure to non-investment grade (non-IG) and/or unrated counterparties. Volumetric Risk and Direct Commodity Price Exposure: The partnership's revenue is supported by long-term fixed-fee contracts with minimum volume commitments (MVCs) from Delek Holdings and some other customers. Increasing third-party EBITDA contribution may potentially expose the partnership to higher volumetric risk. According to Fitch's observation, gathering and processing contracts in the Permian Basin typically lack volume assurance terms. DKL has modest exposure to volatility in commodity and refined product prices when it takes ownership of these products. Direct commodity price exposure historically accounted for about 5% of EBITDA, primarily within the West Texas wholesale marketing segment, and is largely hedged. Fitch anticipates that commodity price exposure will slightly increase with the sale of skim oil from the wastewater disposal business. Delek Logistics Partners, LP has an ESG Relevance Score of '4' for Group Structure due to material related party transactions with its sponsor Delek Holdings, which has a negative impact on the credit profile, and is relevant to the rating[s] 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. Derivation Summary DKL's ratings are supported by the ratings of its parent Delek Holdings. In the absence of an explicit rating linkage between DKL and Delek Holdings, Fitch views DKL's standalone credit profile as consistent with 'B+' rated midstream issuers. Considering DKL's increasing scale in gathering and processing (approximately 50% of EBITDA) and its location in the Permian Basin, Medallion Midland Acquisition, LP (Medallion; B+/Stable) can be seen as a close peer to DKL. Medallion is a high-growth midstream services company with assets primarily in the Midland Basin. The company provides crude oil gathering and intrastate transportation services (approximately 85%) in Texas and is expanding its marketing businesses (approximately 15%). Unlike DKL, Medallion is predominantly involved in the gathering and processing business with a fully built out network in the region. With slightly over $200 million in annual EBITDA, Medallion is smaller in size and only a small percentage of its revenue is supported by MVCs. Medallion has a lower counterparty concentration risk and relies solely on organic growth to steadily increase its scale. Its leverage is slightly above 4.0x, and Fitch expects it to fluctuate between 4.0x and 4.5x during the forecast period. Both companies have similar standalone credit profile due to Medallion's modestly higher business risk being balanced by its lower leverage ratio. Harvest Midstream I, L.P. (HMI; BB-/Stable) is another comparable company. HMI is similar in size to DKL, with revenue concentrated in a high-yield counterparty and a growth strategy focused on acquisitions. The company provides midstream services for both oil and natural gas and operates across five distinct basins, which Fitch views as credit supportive. HMI aims for a leverage target of 3.0x to 3.5x. While its current leverage is slightly above 3.5x due to recent acquisitions, Fitch expects this ratio to decline to 3.5x by 2025. The combination of HMI's modestly lower business risk and lower leverage results in a one-notch difference compared to DKL's standalone rating. Key Assumptions - Fitch price deck for WTI oil price of $75/bbl in 2024, $65/bbl in 2025, $60/bbl in 2026 and 2027, and $57/bbl thereafter; --Fitch price deck for Henry Hub prices of $2.5/mcf in 2024, $3.0/mcf in 2025 and 2026, and $2.75/mcf thereafter; - Fitch Global Economic Outlook interest rate assumptions; - One refinery turnaround each year; - Capex and distributions for 2024 largely in line with management guidance; - No significant acquisition, asset sales or drop down from Delek Holdings assumed beyond what was announced in August 2024; - No additional contract amendment with Delek Holdings. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: An upgrade is unlikely in the near term. However, Fitch may consider positive rating action if: - Demonstrated ability to maintain the EBITDA leverage at or below 4.0x and distribution coverage above 1.0x on a sustained basis, together with a favorable rating action at Delek US Holdings. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Expected leverage above 5.0x and/or Distribution Coverage below 1.0x on a sustained basis; - A material change in contractual arrangements or operating practices, or a significant deterioration in customer quality with Delek Holdings, which negatively affect DKL's cash flow and earnings profile, as long as Delek Holdings remains a significant counterparty; - Unfavorable rating action at Delek Holdings or change of Delek Holdings' ownership interest in DKL; - Impairments to liquidity. Liquidity and Debt Structure Sufficient Liquidity: As of June 30, 2024, DKL had approximately $825 million in available liquidity. Cash on balance sheet was $5.1 million. The partnership had about $820 million available under its $1.15 billion senior secured revolving credit facility, maturing in October 2027. The credit facility is secured by first priority liens on substantially all of the partnership's and its subsidiaries assets. The credit facility includes restrictions on total leverage, senior leverage and interest coverage which must remain below 5.25x (5.50x for certain acquisitions), 3.75x (4.0x for certain acquisitions) and above 2.0x, respectively. As of June 30, 2024, DKL was in compliance with its covenants and Fitch expects it to remain in compliance with its covenants through the forecast period. DKL announced a series of developments on the 2Q24 earnings call which includes the major contract extension with Delek Holdings, the acquisitions of H2O Midstream and indirect interest in Wink-to-Webster pipeline, as well as the construction of a new natural gas plant. These initiatives involve a total cash consideration of about $400 million in 2H24 and are the primary driver of external funding needs. Debt Maturity Profile: DKL has a maturity wall starting 2027. The revolver ($330 million as of June 30, 2024) matures on Oct. 13, 2027. The unsecured notes are due in June 2028 ($400 million) and March 2029 ($1.05 billion), respectively. 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. ESG Considerations Delek Logistics Partners, LP has an ESG Relevance Score of '4' for Group Structure due to {DESCRIPTION OF ISSUE/RATIONALE}, which has a negative impact on the credit profile, and is relevant to the rating[s] 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 ----------- ------ -------- ----- Delek Logistics Finance Corp. senior unsecured LT BB- Affirmed RR4 BB- Delek Logistics Partners, LP LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- DIOCESE OF SAN FRANCISCO: Hires Blank Rome as Insurance Counsel --------------------------------------------------------------- Roman Catholic Archbishop of San Francisco seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Blank Rome, LLP as insurance counsel. The firm's services include: a. analyze the liability insurance coverage which may be available to the Debtor for claims pending against it, including review of policies and facts of each claim, and research regarding policy provisions; b. negotiate with the carriers to obtain appropriate defense and indemnity contributions for those claims; and c. assist the Debtor, its primary bankruptcy counsel, and its litigation counsel in the course of the Bankruptcy Case on matters falling within Blank Rome's expertise or special knowledge. The firm will be paid at these rates: Barron L. Weinstein Of Counsel $675 per hour Kevin L. Cifarelli Senior Attorney $450 per hour James R. Murray Partner $1,066 per hour James S. Carter Partner $836 per hour Jeffrey Schulman Partner $836 per hour Robyn L. Michaelson Partner $808 per hour Anna K. Milunas Associate $796 per hour Alexander H. Berman Associate $668 per hour Paralegals $164 to $359 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Barron L. Weinstein, a partner at Blank Rome, LLP, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Barron L. Weinstein, Esq. Blank Rome, LLP 1825 Eye Street NW Washington, DC 20006 Tel: (202) 420-3171 About Roman Catholic Archbishop of San Francisco The Roman Catholic Archbishop of San Francisco filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 23-30564) on Aug. 21, 2023, with $100 million to $500 million in both assets and liabilities. Judge Dennis Montali oversees the case. The Debtor tapped Felderstein Fitzgerald Willoughby Pascuzzi & Rios, LLP and Sheppard, Mullin, Richter & Hampton LLP as counsel. Weintraub Tobin Chediak Coleman & Grodin as special litigation counsel. Weinstein & Numbers, LLP as special insurance counsel. GlassRatner Advisory & Capital Group LLC d/b/a B. Riley Advisory Services as financial advisor. Omni Agent Solutions, Inc., is the administrative agent. DMK PHARMACEUTICALS: US WorldMeds Asks Court to Toss $414M Suit --------------------------------------------------------------- Yun Park of Law360 Bankruptcy Authority reports that US WorldMeds, a pharmaceutical business, has urged Delaware's bankruptcy court to dismiss a lawsuit that says it misrepresented its medicines and caused DMK Pharmaceuticals to file for bankruptcy. The firm argues that there are not enough evidence in the lawsuit to substantiate the allegations and that the suit seeks excessive damages. About DMK Pharmaceuticals Corp. DMK Pharmaceuticals Corporation and its affiliates are composed of a family of pharmaceutical companies that own various therapies treating different indications. Over time, the Debtors' portfolio of treatments has focused on treatment of the opioid epidemic, both in an emergency setting and in the prophylactic treatment of Opioid Use Disorder. DMK Pharmaceuticals and its affiliates filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10153) on Feb. 2, 2024. In the petition signed by its chief financial officer, Seth Cohen, DMK Pharmaceuticals disclosed $10 million to $50 million in both assets and liabilities. The Debtors tapped Gellert Scali Busenkell & Brown, LLC and Nelson, Mullins, Riley & Scarborough, LLP as legal counsels; and Rock Creek Advisors, LLC as financial advisor. BMC Group, Inc. is the claims and noticing agent. E&J PROPERTIES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: E&J Properties, LLC 2825 30th St Ensley Apt 15 Birmingham, AL 35208-3748 Business Description: The Debtor is engaged in activities relalted to real estate. Chapter 11 Petition Date: August 16, 2024 Court: United States Bankruptcy Court Northern District of Alabama Case No.: 24-02477 Judge: Hon. Tamara O Mitchell Debtor's Counsel: Anthony Brian Bush, Esq. THE BUSH LAW FIRM, LLC 3198 Parliament Cir Ste 302 Montgomery AL 36116 Tel: (334) 263-7733 E-mail: abush@bushlegalfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Brian E. Sanders as managing member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/QCKUA6A/EJ_Properties_LLC__alnbke-24-02477__0001.0.pdf?mcid=tGE4TAMA ENGLOBAL CORP: Reports Net Loss of $1.2 Million in Fiscal Q2 ------------------------------------------------------------ ENGlobal Corporation filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $1.2 million on $6.1 million of operating revenues for the three months ended June 29, 2024, compared to a net loss of $4.3 million on $9.7 million of operating revenues for the three months ended July 1, 2023. For the six months ended June 29, 2024, the Company reported a net loss of $2.6 million on $12.7 million of operating revenues, compared to a net loss of $10.7 million on $22.9 million of operating revenues for the six months ended July 1, 2023. As of June 29, 2024, the Company had $14.8 million in total assets, $18.8 million in total liabilities, and $3.9 million in total stockholders' deficit. "While we still have a lot of work to do, we continue to make progress in our quest for profitability," said William A. Coskey, P.E., Chairman and Chief Executive Officer of ENGlobal. "The conclusion of legacy, money losing projects; our continued acute focus on corporate efficiency; and new, higher margin business opportunities should provide us a path to reach run rate profitability by year-end. We continue to explore options to improve our cash position as well as strategic growth opportunities as both are critically important to ENGlobal's future." A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/379xtdrf About ENGlobal ENGlobal Corporation (NASDAQ: ENG) -- www.englobal.com -- is a provider of innovative, delivered project solutions primarily to the energy industry. ENGlobal operates through two reportable segments: Commercial and Government Services. The Commercial segment provides engineering, design, fabrication, construction management, and integration of automated control systems. The Government Services segment provides engineering, design, installation, operations, and maintenance of various government, public sector, and international facilities, specializing in turnkey automation and instrumentation systems for the U.S. Defense industry. Houston, Texas-based Moss Adams LLP, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 29, 2024, citing that the Company has suffered recurring losses from operations and has utilized significant cash in operations, raising substantial doubt about its ability to continue as a going concern. ENTXAR ELLOPROP: MidFirst Wins Summary Judgment in Adversary Case ----------------------------------------------------------------- Judge Craig A. Gargotta of the United States Bankruptcy Court for the Western District of Texas granted MidFirst Bank's motion for summary judgment in the adversary proceeding filed by Entxar Elloprop LLC with respect to the foreclosure sale of a property. The present case concerns a dispute over real property located at 4906 Winter Cherry, San Antonio, Texas 78245. In connection with the purchase of their home in January 2015, William Earl Dees and Aleasha Dees executed a Promissory Note, which was secured by a deed of trust, for $303,515.00 made payable to Cornerstone Lending, Inc. Mortgage Electronic Registration Services, Inc. was originally named as both the nominee and beneficiary of Cornerstone Lending, Inc. In early January of 2022, Defendant Dees failed to pay their homeowners' association dues. This triggered a homeowners' association foreclosure sale of the Property. On January 4, 2022, Entxar Elloprop, LLC purchased the Property at the foreclosure sale for $16,000. Defendant Dees failed to redeem the property and vacated the premises shortly thereafter. By February 2023, after numerous transfers and assignments of the note, the note was ultimately assigned to MidFirst Bank. Defendant Dees failed to pay multiple monthly mortgage payments and defaulted under the note. Defendant Bank then sent a letter to Defendant Dees informing the couple that the loan was "in default" and notified them of their right to cure by May 22, 2023. The letter also stated that Defendant Bank intended to accelerate the loan balance and initiate a foreclosure sale if the balance was not paid. On May 25, 2023, Defendant Dees had not cured the default, and Defendant Bank exercised its right to accelerate the note under the deed of trust. Defendant Bank entered its Notice of Foreclosure Sale on June 8, 2023. In July 2023, Entxar Elloprop discovered Defendant Bank's Notice of Foreclosure Sale and brought suit against Defendant Bank in the 131st Judicial District of Bexar County, Texas. Entxar Elloprop asserted causes of action for breach of contract and violations of the Texas Property Code. Defendant Bank subsequently removed the state court action to the United States District Court for the Western District of Texas. In December 2023, Entxar Elloprop filed for Chapter 11 bankruptcy. Defendant Bank removed the case to this Court in January 2024. Defendant Bank contends Entxar Elloprop's breach of contract claim fails as a matter of law because Plaintiff does not have standing. Defendant Bank argues Entxar Elloprop lacks privity with Defendant Bank as Plaintiff is neither a party nor a third-party beneficiary to the note or deed of trust. In Defendant Bank's view, Plaintiff had the opportunity to pay the debt through receiving a "payoff quote" but instead allowed the quote to expire. Regarding Plaintiff's declaratory judgment request, Defendant Bank argues that Plaintiff's claim for declaratory judgment is impermissibly duplicative of its breach of contract claim. Plaintiff argues that it is: (1) a successor with a right to assume the loan, (2) willing and able to perform the terms of the loan, and (3) a third-party beneficiary with standing to enforce the loan agreement. In Plaintiff's view, the deed of trust requires that Defendant Bank give Plaintiff "the right to reinstate" and pay off Defendant Dees's default. Because Plaintiff has not yet made any payment on the default, Plaintiff blames Defendant Bank's "failure to allow Plaintiff to assume the mortgage and to make payments" as the reason for this lack of payment. Plaintiff alleges Defendant Bank "interfere[d]" with Plaintiff discharging its duties under the agreement, and thus Plaintiff's performance on the contract should be excused. Defendant Bank reiterates that Plaintiff is not a third-part beneficiary or successor under the loan agreement and thus, has not sufficiently pleaded privity to avoid summary judgment. Defendant Bank posits that upon purchasing the Property at the homeowners' association sale, Plaintiff merely acquired title to the Property. With this title, Defendant Bank states that Plaintiff only possesses the right to pay off the lien in full -- not a right to reinstate Defendant Dees's loan agreement. Defendant Bank contends Plaintiff's declaratory judgment claim is duplicative of the failed breach of contract issue. According to the Court, Plaintiff must demonstrate: (1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds; (4) a communication that each party consented to the terms of the contract; and (5) execution and delivery of the contract with the intent that it be mutual and binding on all parties; and (6) consideration. Considering the four corners of the loan agreement, the Court concludes that (1) Plaintiff is not a party to the policy or a third-party donee beneficiary of the loan agreement, and accordingly, (2) Plaintiff does not have standing to bring its breach of contract claim. The agreement's plain language lacks a clear and unequivocal expression of the contracting parties' intent to directly benefit Plaintiff. In its pleadings, Plaintiff repeatedly points to Paragraph 9(b) of the deed of trust. The issue is that this language only provides that in the event of a sale without credit approval, such as a homeowners' association foreclosure, Defendant Bank possesses the right to accelerate the loan and to sell the property. The language lacks the clear intent to directly benefit Plaintiff, and the successor and assigns provision only incidentally benefits Plaintiff, the Court states. Because the first element of a breach of contract is not satisfied, the Court will not address the remaining elements of the alleged breach of contract claim herein and grants summary judgment to Defendant Bank as to the breach of contract claim. Upon review, the Court agrees with Defendant Bank that summary judgment is warranted. In this case, the requested relief ties to the predicate that the Court deny summary judgment on the breach of contract claim. Plaintiff has failed to allege an additional justiciable controversy beyond the dispute, which is only a breach of contract claim, cited in its Third Amended Complaint, the Court finds. Because the breach of contract claim is not a continuing controversy, and thus is neither real nor immediate, the Court also grants summary judgment to Defendant Bank on the declaratory judgment issue. A copy of the Court's decision dated August 2, 2024, is available at https://urlcurt.com/u?l=CHMxvy About Entxar Elloprop LLC Entxar Elloprop LLC filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-51806) on Dec. 29, 2023, listing $100,001 to $500,000 in assets and $50,001 to $100,000 in liabilities. David T. Cain, Esq. at the Law Office of David T. Cain represents the Debtor as counsel. ETIENNE ESTATES: Files for Chapter 11 Bankruptcy ------------------------------------------------ Etienne Estates at Washington LLC filed Chapter 11 protection in the Eastern District of New York. According to court documents, the Debtor reports $2,655,845 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for September 9, 2024 at 12:45 p.m. in Room Telephonically on telephone conference line: 1 (877) 929-2553. participant access code: 1576337#. About Etienne Estates at Washington LLC Etienne Estates at Washington LLC holds title to real property located at 301 Washington Avenue, Brooklyn, New York valued at $6.3 million. Etienne Estates at Washington LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code IBankr. E.D.N.Y. Case No. 24-43203) on July 31, 2024. In the petition filed by Johanna ML Francis, as manager, the Debtor reports total assets of $6,800,084 and total liabilities of $2,655,845. Honorable Bankruptcy Judge Nancy Hershey Lord handles the case. The Debtor is represented by: Kevin Nash, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 125 Park Ave New York, NY 10017-5690 aE-mail: knash@gwfglaw.com EXPRESS INC: Plan Exclusivity Period Extended to Nov. 18 -------------------------------------------------------- Judge Karen B. Owens of the U.S. Bankruptcy Court for the District of Delaware extended Express, Inc., and affiliates' exclusive periods to file a plan of reorganization and obtain acceptance thereof to November 18, 2024 and January 20, 2025, respectively. As shared by Troubled Company Reporter, the chapter 11 cases involve 12 debtor-affiliate entities, which had, at the outset of these cases, approximately 9,300 employees, 2,800 of whom were full-time. The Debtors have successfully consummated a sale transaction for substantially all of their assets with the Purchasers, which will allow the Express and Bonobos brand to continue to operate a complex business with over 450 locations. As of the Petition Date, the Debtors had approximately $190 million in funded-debt obligations. The Debtors continue to provide transition services to the Purchasers, and are proceeding with the final store closing sales at stores that will not be transferred to the Purchasers, to effectuate a smooth transfer for all stakeholders and to maximize the value of these estates before proceeding to an orderly winddown. The Debtors claim that they have made significant progress in negotiating with their stakeholders and administering these chapter 11 cases during their short time in chapter 11. The Debtors have moved as expeditiously as possible through these chapter 11 cases and are now working to transition their assets and vendor relationships to the Purchasers and run going-out-of business sales at the closing stores to maximize the value of their estates for the benefit of all stakeholders. The Debtors explain that they have consummated a value maximizing sale transaction, which has provided for, among other things, a paydown of the Debtors' postpetition financing, substantial additional cash consideration, and has mitigated the size of the claims pool through the (i) assumption and assignment of executory contracts and leases and (ii) by continuing to provide employment for thousands of employees. As a result of the significant consideration provided as a result of the Sale Transaction as well as the ongoing proceeds from store closing sales, the Debtors will have meaningful assets to make distributions to creditors through their forthcoming chapter 11 plan. Co-Counsel for the Debtors: Joshua A. Sussberg, P.C. Emily E. Geier, P.C. Nicholas M. Adzima, Esq. KIRKLAND & ELLIS LLP AND KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 E-mail: joshua.sussberg@kirkland.com emily.geier@kirkland.com nicholas.adzima@kirkland.com - and - Charles B. Sterrett, Esq. 333 West Wolf Point Plaza Chicago, Illinois 60654 Tel: (312) 862-2000 Fax: (312) 862-2200 E-mail: charles.sterrett@kirkland.com Co-Counsel for the Debtors: Domenic E. Pacitti, Esq. Michael W. Yurkewicz, Esq. Alyssa M. Radovanovich, Esq. KLEHR HARRISON HARVEY BRANZBURG LLP 919 North Market Street, Suite 1000 Wilmington, Delaware 19801 Tel: (302) 426-1189 Fax: (302) 426-9193 E-mail: dpacitti@klehr.com myurkewicz@klehr.com aradvanovich@klehr.com - and - Morton R. Branzburg, Esq. 1835 Market Street, Suite 1400 Philadelphia, Pennsylvania 19103 Tel: (215) 569-3007 Fax: (215) 568-6603 E-mail: mbranzburg@klehr.com About Express Inc. Express, Inc., operates specialty retail apparel stores. The Company offers apparel and accessories such as jeans, sweaters, dresses, suits, and coats. Express serves customers in the United States. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10831) on April 22, 2024. In the petition signed by Stewart Glendinning, chief executive officer, the Debtor disclosed $1,298,055,000 in assets and $1,199,781,226 in liabilities. The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as bankruptcy counsel; Klehr Harrison Harvey Branzburg, LLP as local bankruptcy counsel; Moelis & Company, LLC as investment banker; M3 Advisory Partners, LP as restructuring advisor; and Stretto, Inc. as claims agent. Stephen L. Iacovo, Esq., at Ropes & Gray, LLP serves as counsel to ReStore Capital, LLC, agent to the FILO Lenders. ReStore is also the agent under a second lien senior secured DIP single-draw term facility. AlixPartners, LLP serves as advisor to the DIP agents. Randall L. Klein, Eseq., Eva D. Gadzheva, Esq., and Dimitri G. Karcazes, Esq., at Goldberg Kohn Ltd., serve as counsel to Wells Fargo Bank, National Association, as first lien ABL agent. Wells Fargo is also the agent under a first lien senior secured DIP revolving credit facility. FIVEMILETOWN HOLDINGS: Case Summary & Six Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Fivemiletown Holdings Limited 26, Nikis Avenue 5th Floor, Office 501 1086, Nicosia, Cyprus Business Description: The Debtors manufacture military aircraft, armored vehicles, maritime systems and equipment. Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court District of Delaware Four affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Fivemiletown Holdings Limited (Lead Case) 24-11848 Paramount Group Ltd 24-11849 Paramount Intellectual Property Holdings, Inc. 24-11850 Paramount Logistics Corporation Limited 24-11851 Judge: Hon. Laurie Selber Silverstein Debtors' Delaware Bankruptcy Counsel: Matthew B. Lunn, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square, 1000 North King Street Wilmington DE 19801 Tel: (302) 571-6600 Email: mlunn@ycst.commlunn@ycst.com Debtors' General Bankruptcy Counsel: PAUL HASTINGS LLP Debtors' Restructuring Advisor: ALVAREZ & MARSAL Estimated Assets (on a consolidated basis): $500 million to $1 billion Estimated Liabilities (on a consolidated basis): $100 million to $500 million The petitions were signed by George Sophocleous as authorized person. Full-text copies of two of the Debtors' petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/AHPWB2Q/Fivemiletown_Holdings_Limited__debke-24-11848__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/LN5J2IQ/Paramount_Logistics_Corporation__debke-24-11851__0001.0.pdf?mcid=tGE4TAMA List of Debtors' Six Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Paramount Industries Innovation Professional $2,232,000 Systems Greece S.A. Amfitheas Avenue, Palaion Faliron Attica, 17564 Georges Kyriakos, CEO PHONE: 302 10 364 3104 MOBILE: 306 94 640 0788 EMAIL: GEORGE.KYRIAKOS@PARAMOUNTGROUP.COM 2. ADV AP BEZUIDENHOUT Trade $59,367 3rd Floor, La Croisette, Chemin Vinght Pieds Grand Baie Mauritius 30525 ANDRE BEZUIDENHOUT PHONE: 23052505573 EMAIL: ANDRE@BCOLLECTION.MU 3. Michael Levy Professional $23,000 10 Oriel Ofekh Street Herzlia 46470 Israel Mike Levy PHONE: 27 83 603 2203 EMAIL: MIKE.LEVY@PARAMOUNTGROUP.COM 4. Paramount Logistics Trade $10,000 Corporation Ltd. (Mozambique) Biarro Central AV Julius Nyerere No. 854 1 Andar Direito, Mozambique Peter Revelas PHONE: 27 (11) 2667600 EMAIL: PETER.REVELAS@PARAMOUNTGROUP.COM 5. Shane Cohen Professional $4,896 119 Poleg St Rosh Haayin 4862720, Israel PHONE: 27 21 100 3774 EMAIL: SHANECOHEN1963@GMAIL.COM 6. Abu Dhabi Autonomous Systems Litigation $_ Investments Co LLC Presitge Tower 17, Level 20, Street 79, Mohamed Bin Zayed City, Abu Dhabi, UAE C/O Allen & Overy LLP 11th Floor, BURJ Daman Building AL Mustaqbal Street, Dubai International Financial Centre PO BOX 506678 Dubai, United Arab Emirates ALI ALYAFEI PHONE: 97124416400 EMAIL: ALI.ALYAFEI@ADASI.AE FLORIST ATLANTA: Unsecured Creditors to Split $15K in Plan ---------------------------------------------------------- Florist Atlanta, Inc., submitted an Amended Plan of Reorganization dated July 29, 2024. This Plan deals with all property of Debtor and provides for treatment of all Claims against Debtor and its property. Class 6 shall consist of General Unsecured Claims. If the Plan is confirmed under Section 1191(a) of the Bankruptcy Code, the Debtor shall pay the General Unsecured Creditors their pro rata share of $14,933.59 to be paid in quarterly installments commencing on the first day of the full quarter immediately following the Effective Date and continuing on the 1st day of each quarter through and including the 12th quarter following the Effective Date. General Unsecured Creditors will receive 12 disbursements of $1,244.47. If the Plan is confirmed under Section 1191(b) of the Bankruptcy Code, Class 6 shall be treated the same as if the Plan was confirmed under Section 1191(a) of the Bankruptcy Code. The Claims of the Class 6 Creditors are Impaired by the Plan, and the holders of Class 6 Claims are entitled to vote to accept or reject the Plan. The allowed unsecured claims total $324,399.91. Class 7 consists of Kenneth McLaughlin as the equity interest holder of the Debtor and Mr. McLaughlin shall retain his interest in the Reorganized Debtor. Upon confirmation, Debtor will be charged with administration of the Plan. 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 or by the Subchapter V Trustee. The source of funds for the payments pursuant to the Plan is the Debtor's continued business operations. A full-text copy of the Amended Plan dated July 29, 2024 is available at https://urlcurt.com/u?l=wL8HFW from PacerMonitor.com at no charge. Attorneys for the Debtor: William A. Rountree, Esq. Caitlyn Powers, Esq. Rountree, Leitman, Klein & Geer, LLC Century Plaza I 2987 Clairmont Road, Suite 350 Atlanta, GA 30329 Tel: (404) 584-1238 Email: wgeer@rlkglaw.com About Florist Atlanta Florist Atlanta, Inc., is a florist shop owned and operated by Kenneth McLaughlin. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-51980) on Feb. 26, 2024, with up to $50,000 in assets and up to $500,000 in liabilities. Kenneth McLaughlin, chief executive officer, signed the petition. Judge Paul W. Bonapfel oversees the case. William Rountree, Esq., at Rountree, Leitman, Klein & Geer, LLC, represents the Debtor as legal counsel. FOCUS FINANCIAL: Defers $3.65-Billion Term-Loan Deal ---------------------------------------------------- Gowri Gurumurthy, Jill R. Shah, and Carmen Arroyo of Bloomberg News report that the US leveraged loan offer worth $3.65 billion for Focus Financial Partners has been delayed. This is the third time this week that a deal of this kind has been postponed due to global market turbulence that has reduced debt market issuance in recent days. The transaction was removed from syndication early on Tuesday, August 6, 2024, according to individuals with knowledge of the situation who want to remain anonymous because the specifics are confidential. The $3.33 billion term loan and the $325 million delayed draw term loan were the two components of the July 31 launch, which was led by Royal Bank of Canada. About Focus Financial Partners Focus Financial Partners is a leading aggregator of registered investment advisors with over 70 partner firms operating primarily in the US. For the last twelve months ended March 31, the company earned over $1.4 billion in revenue and its partner firms manage over $250 billion in client assets. FULL CIRCLE: Nicole Nigrelli of Ciardi Named Subchapter V Trustee ----------------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed Nicole Nigrelli, Esq., at Ciardi, Ciardi & Astin as Subchapter V trustee for Full Circle Lawn Care LLC. Ms. Nigrelli will be paid an hourly fee of $450 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Nigrelli declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Nicole M. Nigrelli, Esq. Ciardi, Ciardi & Astin 1905 Spruce Street Philadelphia, PA 19103 Phone: (215) 557-3550 ext. 115 Email: nnigrelli@ciardilaw.com About Full Circle Lawn Care Full Circle Lawn Care LLC d/b/a Guaranteed Plants and Florist specializes in the creative design, professional installation and maintenance of landscape plantings, walkways, patios, retaining walls. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 24-17892) on August 8, 2024, with $257,100 in assets and $2,365,186 in liabilities. Timothy Hikade, managing member, signed the petition. Allen I. Gorski, Esq. at GORSKI & KNOWLTON PC represents the Debtor as legal counsel. FYM LLC: Joseph DiOrio of Pannone Named Subchapter V Trustee ------------------------------------------------------------ The U.S. Trustee for Region 1 appointed Joseph DiOrio, Esq., at Pannone Lopes Devereaux & O'Gara LLC as Subchapter V trustee for FYM, LLC. Mr. DiOrio will be paid an hourly fee of $475 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. DiOrio declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Joseph M. DiOrio, Esq. Pannone Lopes Devereaux & O'Gara LLC 1301 Atwood Avenue, Suite 215 N Johnston, RI 02919 Phone: 401-824-5100 Email: jdiorio@pldolaw.com About FYM LLC FYM, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 24-10543) on August 8, 2024, with $1 million to $10 million in assets and liabilities. James T. Mullowney, Jr., sole member, signed the petition. Russell D. Raskin, Esq., at Raskin & Berman represents the Debtor as legal counsel. GLOBAL SUPPLIES: Commences Subchapter V Bankruptcy Process ---------------------------------------------------------- Global Supplies NY Inc. filed Chapter 11 protection in the Eastern District of New York. According to court documents, the Debtor reports $3,633,514 in debt owed to 1 and 49 creditors. The petition states that funds will not be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for September 6, 2024 at 11:00 a.m. in Room Telephonically on telephone conference line: 1(866) 819-1498. participant access code: 4769770#. About Global Supplies NY Inc. Global Supplies NY Inc. is a distribution service provider in New York. Global Supplies NY Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-43232) on August 1, 2024. In the petition filed by Samuel Y. Seidenfeld, as president, the Debtor reports total assets of $1,115,425 and total liabilities of $3,633,514. The Honorable Bankruptcy Judge Elizabeth S. Stong oversees the case. The Debtor is represented by: Rachel S. Blumenfeld, Esq. LAW OFFICE OF RACHEL S. BLUMENFIELD PLLC 26 Court Street Suite 2220 Brooklyn, NY 11242 Tel: 718-858-9600 Email: rachel@blumenfeldbankruptcy.com GOLDEN STATE BUYER: Moody's Ups CFR to B2 & Sr. Secured Debt to B1 ------------------------------------------------------------------ Moody's Ratings upgraded Golden State Buyer, Inc.'s (borrowing entity of Golden State Medical Supply, Inc., collectively, "Golden State") Corporate Family Rating to B2 from B3 and the probability of default rating to B2-PD from B3-PD. At the same time, Moody's upgraded the senior secured bank credit facility rating to B1 from B2, and the second lien senior secured term loan rating to Caa1 from Caa2. The outlook remains stable. The ratings upgrade reflects Golden State's improving credit profile supported by Moody's expectation that Golden State will maintain debt/EBITDA below 6.0x along with good free cash flow. Growth in profitability over the last 12 months, along with voluntary debt repayment has meaningfully reduced Moody's adjusted debt/EBITDA to 4.8x as of March 31, 2024. Golden State has been benefitting from meaningful growth in its non-exclusive business selling to the US government via Multiple Award Schedules, specifically, the Federal Supply Schedule which has bolstered operating margins. Moody's expect Golden State will continue to grow revenue and earnings over the next 12 to 18 months by adding new products to its offering to the government and winning the majority of re-compete bids for already contracted products that expire in 2024. RATINGS RATIONALE Golden State's B2 Corporate Family Rating reflects the company's high customer concentration with the US Department of Veteran's Affairs and the Department of Defense, which account for all of its revenues. The rating is constrained by Golden State's moderately high Moody's adjusted gross debt-to-EBITDA of 4.8 times for the twelve months ended March 31, 2024. Contract re-bidding is a key credit risk. Golden State must compete for new and existing government contracts, as well as expand the share of generic drugs that manufacturers sell to the government through resellers. Roughly one-fifth of National Contracts are up for re-bid annually; however, Moody's expect Golden State will re-bid and win the majority of these contracts. A large percent of revenue is derived from long-term, exclusive contracts with relatively high win rates, resulting in lower earnings volatility as compared to generic manufacturers in non-government markets. The rating is also supported by Golden State's good liquidity profile. Moody's expect that Golden State will maintain good liquidity over the next 12 months. The company's liquidity is supported by a cash balance which stood at $23 million as of March 31, 2024. Additionally, Moody's expect the company to generate positive free cash flow in the range of $30-40 million over the next 12 months. These cash sources provide sufficient coverage for the required 1% amortization (roughly $4 million) of the first-lien senior secured term loan, and modest capital expenditures, typically at less than $1 million per quarter. Golden State's liquidity is bolstered by its $40 million revolving credit facility, which was undrawn as of March 31, 2024. The revolving facility will expire in March 2026. Golden State's first lien senior secured credit facilities are comprised of a $40 million revolver expiring in March 2026 and approximately $393 million outstanding on a term loan due 2026 are rated B1, one notch higher than the Corporate Family Rating. These facilities benefit from a first lien pledged on substantially all assets and contain upstream and downstream guarantees. The $88 million of outstanding second lien term loan due 2027 is rated Caa1, two notches below the Corporate Family Rating, reflecting its junior position in the capital structure. The second lien facility has a second lien pledge on all assets and the same guarantee structure as the first lien credit facility. Golden State's CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. Among social risks is responsible production, reflecting risks associated with compliance with regulatory requirements for safety in distribution of pharmaceutical products. The company benefits from demographic trends, such as rising use of specialty medicines that underpins good organic growth prospects over the long term. Governance risks reflect Golden State's high financial leverage, as well as private equity ownership, which creates risk of aggressive financial policies. The stable outlook reflects Moody's view that earnings will experience growth, and that debt/EBITDA will remain below 6.0x over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Golden State can grow its earnings and scale and demonstrate new national contract adds along with reduced supplier concentration. The ratings could also be upgraded if Golden State sustains debt/EBITDA below 4.5x and maintains good liquidity highlighted by consistent positive free cash flow. The ratings could be downgraded if Golden State's growth or profitability weakens, such as through the failure to successfully manage its re-bid of expiring national contracts. Ratings could be downgraded if the company undertakes significant debt-funded acquisitions or shareholder distributions such that debt/EBITDA is sustained above 6.0x. The ratings could also be downgraded if company's liquidity deteriorates, such as through a weakening of operating cash flows or an increase in investment needs leading to sustained negative free cash flow. The principal methodology used in these ratings was Distribution and Supply Chain Services published in February 2023. Golden State Buyer, Inc., headquartered in Camarillo, CA, and doing business via its operating subsidiary, Golden State Medical Supply, Inc. is a repackages and distributes generic pharmaceuticals, primarily supplying US government agencies, such as the Department of Veteran Affairs and the Department of Defense. The company is owned by private equity sponsor Court Square Capital Partners. Revenue for the twelve months ended March 31, 2024 was approximately $456 million. GOOD GAMING: Incurs $320K Net Loss in Second Quarter ---------------------------------------------------- Good Gaming, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $319,883 on $214 of revenues for the three months ended June 30, 2024, compared to a net loss of $336,045 on $155 of revenues for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss of $675,048 on $331 of revenues, compared to a net loss of $707,194 on $3,416 of revenues for the six months ended June 30, 2023. As of June 30, 2024, the Company had $179,968 in total assets, $814,485 in total liabilities, and a total stockholders' deficit of $634,517. The Company has generated minimal revenues to date, has never paid any dividends, and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of June 30,2024, the Company had a working capital deficit of $744,422 and an accumulated deficit of $11,286,887. Good Gaming stated, "The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements." A full-text copy of the Form 10-Q is available for free at the SEC's website at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001454742/000149315224032705/form10-q.htm About Good Gaming Incorporated in 2008 and headquartered in Kennett Square, PA, Good Gaming, Inc. -- http://www.good-gaming.com/-- aims to become a leading tournament gaming provider and an online destination for over 250 million esports players worldwide looking to compete at the high school or college level. Operating as a developmental stage business with limited revenues and a history of operating losses, Good Gaming established the Good Gaming platform in early 2014 to address the need for a structured organization for amateur gamers. Houston, Texas-based Victor Mokuolu, CPA PLLC, the Company's auditor since 2022, issued a "going concern" qualification in its report dated March 29, 2024, citing that the Company has suffered recurring operating losses, had a working capital deficit of $122,427, and accumulated deficit of $10,611,838 as of Dec. 31, 2023. These factors raise substantial doubt about the Company's ability to continue as a going concern. HARRIS FAMILY: Paula Beran Named Subchapter V Trustee ----------------------------------------------------- The Acting U.S. Trustee for Region 4 appointed Paula Beran, Esq., at Tavenner & Beran, PLC as Subchapter V trustee for Harris Family Holdings, LLC. Ms. Beran will be paid an hourly fee of $480 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Beran declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Paula S. Beran, Esq. Tavenner & Beran, PLC 20 North 8th Street Richmond, Virginia 23219 Phone: (804) 783-8300 Email: Beran@TB-LawFirm.com About Harris Family Holdings Harris Family Holdings, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Va. Case No. 24-70568) on August 8, 2024, with up to $1 million in assets and up to $50,000 in liabilities. Michael Dean Hart, Esq., at Michael D. Hart, PC represents the Debtor as legal counsel. HEAVENLY SCENT: George Oliver Named Subchapter V Trustee -------------------------------------------------------- The U.S. Bankruptcy Administrator for the Eastern District of North Carolina appointed George Mason Oliver as Subchapter V trustee for Heavenly Scent Commercial Cleaning, Inc. About Heavenly Scent Commercial Cleaning Heavenly Scent Commercial Cleaning, Inc. doing business as Sasquatch Manor, Inc. offers janitorial cleaning services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-02669) on August 9, 2024, with $759,141 in assets and $1,614,261 in liabilities. Howard Niven, president, signed the petition. Judge Pamela W. McAfee presides over the case. David J. Haidt, Esq., at Ayers & Haidt, PA represents the Debtor as legal counsel. HERITAGE COLLEGIATE: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Heritage Collegiate Apparel, Inc. f/k/a M-Den, Inc. d/b/a The M Den 315 S. Main St. Ann Arbor, MI 48104 Business Description: The Debtor serves as the official retailer of the University of Michigan Athletic Department. For more than 20 years, the Debtor has provided a selection of clothing, merchandise and gifts to the University of Michigan. Chapter 11 Petition Date: August 16, 2024 Court: United States Bankruptcy Court Eastern District of Michigan Case No.: 24-47922 Judge: Hon. Thomas J Tucker Debtor's Counsel: Kim K. Hillary, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Ave., Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 Email: khillary@schaferandweiner.com Debtor's General Corporate Counsel: W. Daniel Troyka, Esq. CONLIN MCKENNEY & PHILBRICK, P.C. Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Scott Hirth as president. 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/UOF5TOQ/Heritage_Collegiate_Apparel_Inc__miebke-24-47922__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/UHRXXNI/Heritage_Collegiate_Apparel_Inc__miebke-24-47922__0001.0.pdf?mcid=tGE4TAMA ICAP ENTERPRISES: Plan Exclusivity Period Extended to Aug. 29 ------------------------------------------------------------- Judge Whitman L. Holt of the U.S. Bankruptcy Court for the Eastern District of Washington extended iCap Enterprises, Inc., and affiliates' exclusive periods to file a plan of reorganization and obtain acceptance thereof to August 29 and October 28, 2024, respectively. As shared by Troubled Company Reporter, on July 2, 2024, the Debtors filed the DIP Motion seeking approval of the Supplemental DIP Financing in the amount of $2,014,414.00. With the Supplemental DIP Financing in place, the Debtors can continue to advance these Chapter 11 Cases towards confirmation of the Plan. The Debtors claim that they are continuing to work collaboratively with the Committee on finalizing the terms of the Plan. The Plan seeks to, among other things, establish a liquidating trust that will liquidate the Debtors' remaining assets (including, causes of action against third-parties related to the Debtors' prepetition Ponzi scheme) and make distributions to creditors in accordance with the terms of the Plan. The Debtors explain that the companies and the Committee have made significant progress on the Plan and anticipate filing the Plan within the next week. However, out of an abundance of caution, the Debtors are seeking to extend the Exclusivity Periods to provide the Debtors and the Committee with the necessary time to finish drafting, seek approvals of, and file the Plan without the disruption of competing plans. Co-Counsel to the Debtors: Julian I. Gurule, Esq. O'MELVENY & MYERS LLP 400 South Hope Street, 18th Floor Los Angeles, California 90071 Telephone: (213) 430-6067 E-mail: jgurule@omm.com Proposed Co-Counsel to the Debtors: Oren B. Haker, Esq. BLACK HELTERLINE LLP 805 SW Broadway Suite 1900 Portland, OR 97205 Telephone: 503 224-5560 Email: oren.haker@bhlaw.com About iCap Enterprises iCap Enterprises, Inc. and affiliates were founded in 2007 by Chris Christensen to invest in real estate opportunities in the Pacific Northwest. iCap Enterprises et al. grew quickly, raising more than $211 million in capital and deploying those funds toward real estate investments. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Wash. Lead Case No. 23-01243) on September 29, 2023. In the petition signed by Lance Miller, chief restructuring officer, iCap Enterprises disclosed up to $100 million in assets and up to $500 million in liabilities. Judge Whitman L. Holt oversees the case. The Debtors tapped Buchalter, A Professional Corporation as counsel, Paladin Management Group, LLC as restructuring financial advisor, BMC Group Inc. as claims noticing agent and administrative advisor. JACKSON-STRONG ALLIANCE: Files for Chapter 11 Bankruptcy -------------------------------------------------------- Jackson-Strong Alliance LLC filed Chapter 11 protection in the Central District of California. According to court filing, the Debtor reports between $10 million and $50 million in debt owed to 1 and 49 creditors. The petition states funds will not be available to unsecured creditors. About Jackson-Strong Alliance Jackson-Strong Alliance LLC was a creative partnership between Michael Joseph Jackson and Brett-Livingstone Strong. Their aim was to establish a dynamic arts enterprise, promoting the power of imagination, not just for creativity sake, but for the sake of important world causes. Michael and Brett focused their creative expression in support of the arts, international charities and protecting the environment. Jackson-Strong Alliance LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code {Bankr. C.D. Cal. Case No. 24-16203) on August 2, 2024. In the petition filed by Stason Kingsley Strong, chief executive officer, Kingsley & Associates, its capacity as the single member of Jackson-Strong Alliance LLC, the Debtor reports estimated assets between $500 million and $1 billion and estimated liabilities between $10 million and $50 million. The Debtor is represented by: Nicholas A. Koffroth, Esq. Keith C. Owens, Esq. FOX ROTHSCHILD LLP 10250 Constellation Blvd. Suite 900 Los Angeles, CA 90067 Tel: (424) 285-7070 Fax: (310) 556-9828 Email: nkoffroth@foxrothschild.com kowens@foxrothschild.com JETBLUE AIRWAYS: Fitch Assigns BB Rating on Proposed Secured Loans ------------------------------------------------------------------ Fitch Ratings has assigned 'BB'/'RR1' ratings to JetBlue's proposed loyalty-program backed senior secured debt facilities. The proposed notes and term loan will be secured by JetBlue's TrueBlue loyalty program assets. Co-issuers of the new obligations will be JetBlue Airways Corp. and JetBlue Loyalty, LP, a newly formed Cayman Islands SPV. Proceeds will be used for general corporate purposes. Fitch has also affirmed JetBlue's Long-Term Issuer Default Rating (IDR) at 'B'. The Rating Outlook is Stable. Fitch has also downgraded JetBlue's existing senior secured debt ratings to 'BB-'/'RR2' from 'BB/RR1'. The loyalty program debt ratings reflect the financial and strategic essentiality of the loyalty program assets for JetBlue, which support high recovery expectations in a bankruptcy scenario. The affirmation of JetBlue's 'B' IDR incorporates the issuer's healthy liquidity balance pro-forma for the transaction and manageable near-term maturities. However, Fitch expects JetBlue's margins to remain pressured and metrics to remain outside of negative sensitivities at least through 2025. Failure to demonstrate near-term improving trends in profitability and cash flow that progressively preserve and generate liquidity, and lead to coverage metrics above 1.5x, may result in negative rating actions. Key Rating Drivers Loyalty Program Debt Rating: JetBlue plans to issue up to $2.75 billion in loyalty program financing. Issuance above this amount would likely lead to a downgrade to 'BB-'/'RR2'. JetBlue's planned debt issuance will be secured by a priority interest in its TrueBlue loyalty program. JetBlue will act as a co-borrower along with JetBlue Loyalty LP, a newly formed SPV. Fitch's ratings are driven by a bespoke recovery analysis discussed below. Substantial Pro-Forma Liquidity: Pro-forma for the planned debt issuance, JetBlue's total liquidity will be nearly $4.9 billion inclusive of availability under its revolver. Liquidity will total 53% of LTM revenue as of June 30, 2024. Fitch also expects compensation from Pratt & Whitney to support liquidity over the next several years. Fitch believes that JetBlue's bolstered liquidity balance and manageable maturities over the next several years provides the company with significant leeway with which to fund and execute its turnaround efforts. Liquidity is likely to trend towards historical levels over the next one to two years as JetBlue effectively utilizes its loyalty financing to pre-fund negative FCF through 2025. Actionable Strategic Initiatives: The company has outlined several initiatives to improve profitability. Fitch believes that actions such as reducing costs, exiting underperforming routes, improving operational execution, focusing on core leisure markets, enhancing ancillary revenues and leaning more heavily on premium products are sensible and should drive margin improvement over time. The company should also benefit from retiring its Embraer 190s and integrating more efficient Airbus A220s and A321s. Nonetheless, there are risks associated with the implementation and execution of these plans, and Fitch will consider negative rating actions should margin improvement trends fail to materialize. Current Profit Performance Drags on Credit Metrics: JetBlue's profit margins remain under pressure, resulting in weak credit metrics that are likely to persist through 2024 and 2025. Fitch expects JetBlue's EBITDAR margin to decline modestly in 2024 before improving to the high single digits in 2025. Consequently, EBITDAR leverage is likely to be well over 10x at YE 2024 before declining to near or below 10x in 2025. This is a downward revision from Fitch's prior forecast incorporating potential for softer trends in the budget, end of leisure travel, or longer implementation times of ongoing strategic shifts. Underperformance has been driven by various issues, including softness in Latin American and Caribbean markets, off-peak demand periods, rising costs, and air traffic control (ATC) shortages, among others. In the near term, the company faces pressures from aircraft groundings due to lack of engine availability and Pratt & Whitney engine issues. Reduced but Available Unencumbered Assets: JetBlue's capacity to borrow against its assets is reduced following the loyalty program financing, but options still remain should the company need fresh capital. JetBlue previously cited a figure of $11 billion in available financeable assets, of which the loyalty program accounts for more than half based on appraised values. Fitch believes that a meaningful portion of the remaining balance consists of highly financeable assets such as aircraft, engines, and slots, gates and routes. Other assets such as JetBlue's brand are intangible and their finance-ability is less certain. Solid pro-forma liquidity, manageable upcoming debt maturities, and the remaining assets provides the company with a good deal of leeway with which to execute its turnaround plans, and differentiates JetBlue from lower rated airlines such as Spirit Airlines. Lower Capex Enhances Liquidity, Operational Focus: Fitch views JetBlue's latest aircraft delivery deferral as a positive. The decrease in planned capex will ease cash outflows and lower financing requirements while JetBlue executes its turnaround plans. Fitch continues to expect negative FCF for the next three to four years despite lower capital spending as JetBlue works to improve operating margins. The deferral carries some negatives as slower aircraft deliveries will further constrain JetBlue's ability to add capacity. Extending the useful life of existing A320s rather than operating more efficient A320 NEOs will also reduce unit cost improvement expectations, but provide management an opportunity to implement its operational initiatives. Engine-Linked Top-Line Constraints: JetBlue expects its total capacity and departures to be down in 2024 versus 2023, with aircraft groundings due to lack of engine availability and Pratt & Whitney engine issues representing the main constraining factors. Fitch expects unit revenues to remain be roughly flat or slightly increase for the year, aided by benefits from JetBlue's efforts to increase ancillary revenues. This should allow total revenue to be only slightly down in the low single digits compared to 2023. Constrained growth is likely to persist, as the company expects P&W engine availability to worsen in 2025. JetBlue's growth profile represents a challenge as unit costs continue to rise. Unit Costs Present a Headwind: JetBlue expects non-fuel unit costs to rise in the mid-to-high single digits for the year, which will strain profitability. Beyond 2024, the company should realize some cost benefits from self-help measures, but unit costs may continue to be pressured by constrained capacity growth. JetBlue is implementing cost cuts aimed at run-rate savings of $175 million-$200 million by YE 2024, consisting of improvements in automation, maintenance planning and staffing efficiencies. Derivation Summary JetBlue's 'B' rating is above those of domestic peers Spirit Airlines, Inc. (CCC) and Hawaiian Holdings, Inc. (B-/Rating Watch Positive). JetBlue maintains a stronger balance sheet than both Spirit and Hawaiian, and faces less near-term refinancing risk. JetBlue also benefits from a stronger market presence than Spirit in key markets such as New York and Boston, along with a more customer-friendly reputation. JetBlue's leverage metrics are notably weaker than network peers such as American Airlines, Inc. (B+/Stable) or United Airlines, Inc. (BB-/Stable), due to strained near-term profitability. JetBlue's operating margins remain well below pre-pandemic levels, and Fitch expects them to remain pressured in 2024, while the network carriers have largely rebounded. JetBlue is also more geographically concentrated than large network peers, and generates less robust loyalty program revenues. Fitch expects JetBlue's metrics to improve over time, returning to levels more comparable with its network peers. Key Assumptions - JetBlue's capacity down roughly 3% in 2024 followed by low to mid-single-digit growth thereafter; - Modest unit revenue improvement in 2024 driven in part by slower capacity growth and prioritization of more profitable routes; - Jet Fuel around $2.85 for 2024 and around $2.80 for the rest of the forecast; - Non-fuel unit costs up around 6% in 2024 and decline modestly in 2025; - Capex averaging $1.6 billion annually through the forecast; - JetBlue to use debt financing for most of its capital spending; - Three-month SOFR of 4.9% in 2024 declining to 4.5% in 2025. Recovery Analysis The recovery analysis assumes that JetBlue would be reorganized as a going concern in bankruptcy rather than liquidated. A 10% administrative claim on the enterprise value is assumed. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. The GC EBITDA estimate of $950 million reflects a hypothetical scenario in which margins remain impaired, potentially by a weak operating environment, structurally higher costs, or a combination thereof. An enterprise valuation multiple of 5x is applied to the GC EBITDA to calculate post-reorganization enterprise value. This multiple is reflective of prior airline bankruptcies. Fitch's analysis assumes that loyalty program debt receives priority recovery from the value of the loyalty assets. Fitch takes a conservative view on the loyalty asset value since it largely rests on JetBlue continuing as a going concern. Liquidation of the airline would materially impact the collateral values and weaken recovery. The Recovery Rating analysis results in a 'BB'/'RR1' recovery for the proposed loyalty notes. The analysis also results in a downgrade to JetBlue's existing sr. secured debt ratings to 'BB-/RR2'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBIT margins improving to the mid-to-high single digits; - Adjusted debt/EBITDAR below 4.5x; - EBITDAR fixed-charge coverage remaining above 2x. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Sustained EBITDAR leverage above 5.5x; - EBITDAR fixed-charge coverage falling below 1.5x on a sustained basis; - Evidence of decreasing financial flexibility potentially illustrated by continued leveraging of assets to maintain liquidity. Liquidity and Debt Structure Substantial Pro-Forma Liquidity: Pro-forma for the planned debt issuance, JetBlue's total liquidity will be nearly $4.9 billion inclusive of availability under its revolver. Liquidity will total 53% of LTM revenue as of June 30, 2024. JetBlue's $600 million revolver is secured by spare parts, aircraft, spare engines, and simulators. The revolver matures in October 2029 contingent upon the repayment or refinancing of JetBlue's 2026 convertible notes. Issuer Profile JetBlue is a low-cost air carrier that serves over 100 destinations throughout the United States, Caribbean, Mexico, Europe, and Latin America. 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 ----------- ------ -------- ----- JetBlue Loyalty, LP senior secured LT BB New Rating RR1 JetBlue Airways Corporation LT IDR B Affirmed B senior secured LT BB New Rating RR1 senior secured LT BB- Downgrade RR2 BB KALO CLINICAL: Bankruptcy Court Confirms Plan of Reorganization --------------------------------------------------------------- Judge Kevin R. Anderson of the United States Bankruptcy Court for the District of Utah, Central Division, confirmed Kalo Clinical Research, LLC's plan of reorganization. On August 6, 2024, the Court held a hearing on the confirmation of the Plan, at which counsel for the Debtor, counsel for the United States Trustee, and the SBRA Trustee appeared. The Court has jurisdiction over the Bankruptcy Case pursuant to 28 U.S.C. Secs. 157 and 1334. The Plan and relevant ballots were transmitted and served in substantial compliance with the Bankruptcy Rules upon Creditors entitled to vote on the Plan, and such transmittal and service were adequate and sufficient. The solicitation of votes for acceptance or rejection of the Plan complied with Sec. 1126, Bankruptcy Rules 3017.2 and 3018, all other applicable provisions of the Bankruptcy Code, and all other rules, laws, and regulations. Based on the record before the Court in the Bankruptcy Case, the Debtor's solicitation of votes on the Plan was proper and done in good faith. The Plan establishes six Classes of Claims and one Class of Equity Interests. Based on the Johnson Declaration and the Ballot Register, no creditors in Class 3 or 6 submitted ballots or objected to the Plan. Accordingly, Classes 3 and 6 are deemed to have accepted the Plan under In re Ruti-Sweetwater, Inc., 836 F.2d 1263, 1267-68 (10th Cir. 1988) (presuming acceptance of class of creditors that did not return a ballot and did not timely object to confirmation). Classes 1, 2, 4, and 5 are impaired and were entitled to vote on the Plan. The holders of Claims in Classes 1, 2, 4, and 5 who returned Ballots unanimously voted to accept the Plan. Class 7 is unimpaired and, as such, automatically is presumed to accept the Plan. The Plan, as supplemented and modified by the Confirmation Order, complies with the applicable provisions of the Bankruptcy Code, thereby satisfying Secs. 1129(a)(1) and 1191(a). The Plan provides for the same treatment for each Claim or Interest in each respective Class, unless the holder(s) of a particular Claim(s) have agreed to less favorable treatment with respect to such Claim, thereby satisfying Sec. 1123(a)(4). The Plan provides adequate and proper means for its implementation, thereby satisfying Sec. 1123(a)(5). Among other things, Articles 5 and 6 of the Plan provide for (a) the vesting of the property of the Debtor and its chapter 11 bankruptcy Estate in the Reorganized Debtor, (b) the Reorganized Debtor's use and retention of property, (c) the continuation of normal business operations by the Reorganized Debtor, and (d) distributions to creditors equal to the Reorganized Debtor's projected Disposable Income. The Plan is proposed in good faith and not by any means forbidden by law and, therefore, complies with the requirements of Sec. 1129(a)(3). The Plan states that the Reorganized Debtor shall succeed the Debtor and shall make the Plan Payments provided for in the Plan. The Reorganized Debtor's service is consistent with the interests of the holders of Claims and with public policy. Therefore, the requirements of Sec. 1129(a)(5) are satisfied. The Plan provides that each holder of a Claim will receive or retain under the Plan on account of their Claim property of a value, as of the effective date of the Plan, that is not less than the amount such holder would receive or retain if the Case were converted to chapter 7, and the Estate were liquidated by a chapter 7 trustee. As such, Sec. 1129(a)(7) is satisfied. The Plan is feasible and complies with Sec. 1129(a)(11) because confirmation is not likely to be followed by a liquidation or the need for further financial reorganization of the Debtor. The Court is satisfied that the Plan offers a reasonable prospect of success and is workable. The monthly operating reports submitted by the Debtor in the Case to date show that the Debtor's projected Disposable Income is a reasonable projection of the Debtor's disposable income for the Plan Period, as that term is used in Sec. 1191(d). As such, the requirements of section 1129(a)(11) are satisfied. A copy of the Court's decision dated August 6, 2024, is available at https://urlcurt.com/u?l=SbbkoQ About Kalo Clinical Research, LLC Kalo Clinical Research, LLC is a clinical research site local to the greater Salt Lake area in Utah, providing people with the opportunity to contribute to the development/advancement of medicine that future generations will rely on. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Utah Case No. 24-21124) on March 18, 2024. In the petition signed by Isabella M. Johnson, member, chief executive officer, the Debtor disclosed $634,599 om assets and $1,059,526 in liabilities. Judge Peggy Hunt oversees the case. George B. Hofmann, Esq., at COHNE KINGHORN, P.C., represents the Debtor as legal counsel. KAYA HOLDINGS: Incurs $357K Net Income in Second Quarter -------------------------------------------------------- Kaya Holdings, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income of $357,210 on $0 of net sales for the three months ended June 30, 2024, compared to a net loss of $714,156 on $55,116 of net sales for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss of $748,470 on $28,009 of net sales, compared to a net loss of $679,223 on $103,361 of net sales for the six months ended June 30, 2023. As of June 30, 2024, the Company had $300,680 in total assets, $16.78 million in total liabilities, and a total stockholders' deficit of $16.48 million. Kaya Holding stated, "The Company incurred net loss of $600,289 for the six months ended June 30, 2024 and net loss of $682,600 for the six months ended June 30, 2023. The net loss is due to the changes in derivative liabilities. At June 30, 2024 the Company has a working capital deficiency of $7,701,014 and is totally dependent on its ability to raise capital. The Company has a plan of operations and acknowledges that its plan of operations may not result in generating positive working capital in the near future. Even though management believes that it will be able to successfully execute its business plan, which includes third-party financing and capital issuance, and meet the Company's future liquidity needs, there can be no assurances in that regard. These matters raise substantial doubt about the Company's ability to continue as a going concern." A full-text copy of the Form 10-Q is available for free at the SEC's website at: https://www.sec.gov/Archives/edgar/data/1530746/000190359624000511/kays_10q.htm About Kaya Holdings Kaya Holdings, Inc. -- http://www.kayaholdings.com-- is a holding company focusing on wellness and mental health through operations in psychedelic treatment clinics, medical and recreational cannabis, and CBD products. The Woodlands, TX-based M&K CPAS, PLLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 16, 2024, citing that the Company has an accumulated deficit and a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. KINETIK HOLDINGS: Fitch Alters Outlook on 'BB+' IDR to Stable ------------------------------------------------------------- Fitch Ratings has affirmed Kinetik Holdings LP's Long-Term Issuer Default Rating (IDR) at 'BB+' and the senior unsecured ratings at 'BB+'/'RR4'. The Rating Outlook has been revised to Stable from Positive. Fitch does not expect EBITDA leverage to remain below the 4.0x positive sensitivity in the medium term, leading to the Outlook revision. Kinetik is strongly positioned at the 'BB+' rating, as the company has achieved leverage below 4.0x for LTM 2Q24 (3.9x is the value Fitch calculates, using a measurement of leverage which is different from management's value). Fitch views Kinetik as diligently working to achieve its leverage policy, which translates to 3.8x or under in Fitch's calculation. Fitch forecasts that sustained achievement of this policy will take longer than initially expected when the original Positive Outlook was assigned. The company's ratings reflect its sizable EBITDA generation, majority fee-based revenue stream and contract revenue-assurance features that support steady cash flow. This is balanced by considerable volumetric risk arising from the company's gathering and processing (G&P) operations, which have increased following the recent strategic acquisition of Durango Permian LLC and the Eddy County expansion projects. Key Rating Drivers Strategic Transactions Lead to Turbulent Leverage Forecast: Fitch forecasts leverage to range between 4.0x to 4.3x through 2026, driven by increased capex in 2024 and 2025 due to the new Eddy and Lea county projects and the integration of the acquired Durango assets. LTM 2Q24, Kinetik's leverage declined to about 3.9x, benefitting from debt paydown with the proceeds from the sale of the Gulf Coast Express pipeline (GCX). Kinetik's EBITDA remained robust over 1H24 following an overall strong volumetric performance in its G&P focused segment. This was despite volume curtailments from producer customer APA Corporation (BBB-/Stable), and two full quarters of higher distributions from Permian Highway Pipeline (PHP) following the completed expansion. Midstream Logistics Growth Shifts Business Risk: Fitch forecasts Kinetik's business mix moving from approximately 65% of EBITDA generated from G&P type operations in 2023 to closer to 75% pro forma the strategic transactions. These G&P operations expose Kinetik to increased volumetric risk. The Durango Permian acquisition commercial agreements are backed by a mix of fixed-fee and percentage-of-proceeds (POP) contracts. Under POP contracts, Kinetik takes title to the hydrocarbons exposing the company to commodity price risks if prices for the commodities move unfavorably. Around 40% of Durango's gross profits are exposed to commodity price risk. Kinetik has a track record of opportunistically hedging various hydrocarbons and Fitch expects the company will successfully hedge gross profits exposed to commodity price risk at or below 15%-20%. Expanding Permian Basin Footprint: Kinetik is expanding its asset footprint further into the northern Delaware basin with the Durango acquisition and announced growth projects, increasing its size and scale. The transactions increase Kinetik's processing capacity by about 20% and more than double its pipeline mileage. Kinetik has a balanced profile given its exposure to both supply and demand territories. The Delaware basin has been the faster growing basin of the Permian basin's two sub-basins over the recent years on a percentage basis. The Permian is the leading U.S. oil basin, where over half of all oil-directed rigs working in the U.S. are located. Kinetik supplements its G&P business with long-haul pipelines via joint ventures (JVs). Kinetik retains ownership of two large JV pipelines that each terminate in robust demand centers at different points along the Texas coast. Fitch expects both of Kinetik's business segments will continue to develop operations by capitalizing on the company's geography and size. Durango Acquisition Expands Customer Base: The addition of commercial agreements from the Durango Permian acquisition increases counterparty diversification to around 90 customers from about 30 customers. Private companies not rated by Fitch including Spur Energy Partners (NR) and Mewbourne Oil Company (NR). Mewbourne is one of the most active producers in the Permian. Fitch expects majority of gross profit will generated by investment grade rated counterparties. Balanced Acquisition Funding: Fitch acknowledges the commitment to maintaining a strong credit profile as demonstrated by the mix of funding between debt and equity for the Durango Permian acquisition. Kinetik is committed to achieving a management-defined leverage ratio of 3.5x or less, and maintaining the current level of dividends until this target is achieved. Converting the company's leverage definition to Fitch's leverage calculation translates to a policy of approximately 3.8x or less. GCX Sale Lowers Cash Flow Assurance: Kinetik will no longer receive annual distributions of around $50 million per year following the sale of GCX, which closed during 2Q24. GCX provided high revenue assurance due to its take-or-pay agreements. The company maintains its ownership stakes in both PHP and Shin Oak pipeline, which provide high cash flow assurance backed by take-or-pay agreements, providing stability to Kinetik's business mix. As Kinetik is a shipper on both of the aformented pipelines, they are considered core to the company's operations. Derivation Summary The best comparable for Kinetik is DT Midstream, Inc. (DTM; BB+/Rating Watch Positive). Both companies have volumetric risk. Each company has a large presence in regions with long-term fast-paced growth, giving some assurance that the volumetric risk at each company is bounded. As of YE 2023, both companies had around 90% fee-based business (i.e. taking title to hydrocarbons and selling them at market prices is a small part of each company). Following the Durango acquisition, Kinetik's percentage of fee-based business is declining. Durango commercial agreements are exposed to volumetric and price risk with a mix of fixed-fee and POP contracts. Under POP contracts Kinetik will take title to specified commodities and is therefore exposed to commodity price movements. Kinetik has better counterparty risk than DTM when isolating long-term take-or-pay payments. However, DTM's most salient take-or-pay exposure is to a 'BB+' rated company on Positive Watch, so a contract rejection in bankruptcy is relatively unlikely. Fitch estimates DTM has a higher percentage of run-rate operating cash flows coming from revenue-assurance-type contracts (i.e. take-or-pay and minimum volume commitments). Fitch forecasts Kinetik's leverage to falls to 4.0x by YE 2024 which compares to Fitch's forecast for DTM's leverage to remain around 3.5x in 2024 and trend lower in subsequent years. Fitch expects Kinetik's Fitch-defined leverage to be in the 4.0x-4.3x range, through 2026. The two companies differ in terms of their focus hydrocarbons and operating regions. Kinetik is mainly a gas gatherer, as it focuses on the wellhead side of the business. However, Delaware Basin production has thus far been explored in the last decade based on crude oil economics, not natural gas. DTM's two regions are explored for the purpose for finding natural gas. Each hydrocarbon has a different volumetric risk profile. Over the last 10 years, volumes for oil in the U.S. experienced their strongest downward moves on OPEC+ actions, with the most recent one exacerbated by the coronavirus pandemic. U.S. natural gas volumes over the same period showed vulnerability to warm U.S. winters (especially consecutive warm winters, which is the case for the past several winters). As U.S. liquefied natural gas export volumes continue to grow, winter weather in Europe and Asia may be a factor in the future. Fitch expects the volume risk for each hydrocarbon to generally have different cycles. Key Assumptions - Fitch macro assumptions, e.g. the Fitch price deck for oil and natural gas, and the Global Economic Outlook regarding Kinetik's unhedged portion of interest rates; - EBITDA expected to ramp over the forecast, with volumes expected to grow in the high single-digits yoy in 2024 from expansion projects completed in 2023 and the Durango acquisition; - GCX sale and earn-out related to expansion FID occur in-line with management's guidance in 2024; - Capex in line with management's updated 2024 guidance. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage expected to be sustained below 4.0x; - Meaningful improvement of the of existing business risk by increasing the percentage of gross margin generated from take-or-pay contracts and minimum volume commitments from current percentages. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage expected to be sustained above 5.0x; - Meaningful increase in business risk; - A cluster of large shippers on the joint venture pipelines experiencing business shocks or radically changing financial policy results in the cluster's credit quality falling to 'B'. Liquidity and Debt Structure Adequate Liquidity: As of June 30, 2024, Kinetik LP had available liquidity of about $764.2 million, primarily consisting of $750.4 million of availability on the $1.25 billion senior unsecured revolving credit facility, which had $487 million of outstanding borrowings and $12.6 million of LOCs, and approximately $12.5 million of cash and cash equivalents. Additionally, the $150 million accounts receivables securitization facility (A/R facility) had $1.2 million of available for investment. Maturities are manageable, with the nearest maturity being the $150 A/R facility due in April 2025 followed by the $1 billion remaining balance of the term loan A due to mature in December 2026. Kinetik's credit agreements contain a financial covenant that requires it to maintain a net leverage ratio below 5.00 to 1.00 at the end of any fiscal quarter. Following certain acquisition periods, this ratio is raised to 5.50 to 1.00. Kinetik LP was in compliance for all covenants as of the quarter ended June 30, 2024. Issuer Profile Kinetik is a gathering and processing focused midstream company handling natural gas, NGLs, and crude oil with assets primarily focused in the Delaware Basin in the Permian. Summary of Financial Adjustments Under Fitch's typical calculation of EBITDA, distributions from investees accounted for under the equity method of accounting are included in EBITDA. Equity earnings or EBITDA from these entities are excluded. 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. 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 ----------- ------ -------- ----- Kinetik Holdings LP LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ KLX ENERGY: Posts $8 Million Net Loss in Fiscal Q2 -------------------------------------------------- KLX Energy Services Holdings, Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $8 million on $180.2 million of revenues for the three months ended June 30, 2024, compared to a net income of $11.4 million on $234 million of revenues for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported net loss of $30.2 million on $354.9 million of revenues as compared to net income of $20.8 million on $473.6 million of revenues in the prior year period. As of June 30, 2024, the Company had $491.2 million in total assets, $481.4 million in total liabilities, and $9.8 million in total stockholders' equity. Commenting on the result, Chris Baker, KLX President and Chief Executive Officer, said, "As I stated in our preliminary results release three weeks ago, we are extremely proud of our second quarter performance. Despite the 7% decline in total rig count during the quarter and continued drilling and completions market volatility, our revenue increased 3.1% sequentially to $180.2 million, which was the middle of our revised revenue guidance range." "Second quarter Adjusted EBITDA improved sequentially by 125% to $27.0 million, and Adjusted EBITDA margin grew 118% to 15.0%, both at the top end of our revised guidance ranges." "Our dramatic growth in sequential Adjusted EBITDA and Adjusted EBITDA margin saw results return to more normalized levels and 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." "Once again, our geographic and product service line diversification has driven margin sustainability in the face of market weakness highlighting the resiliency and strength of the KLX platform. Our leading presence in extended reach laterals, completion technologies, and production and intervention services should continue to yield sustainable results even in a flat market." "Based on current calendars and latest customer conversations, we are reaffirming our third quarter 2024 guidance for revenue to be flat to slightly up relative to the second quarter, with similar Adjusted EBITDA margins to the second quarter," concluded Baker. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/48k5mwtm 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 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." LIKEMIND BRANDS: Starts Subchapter V Bankruptcy Proceeding ---------------------------------------------------------- LikeMind Brands Inc. filed Chapter 11 protection in the Western District of Michigan. According to court filing, the Debtor reports $2,051,905 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. About LikeMind Brands Inc. LikeMind Brands Inc. is a privately held e-commerce retailer. LikeMind Brands Inc. sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Mich. Case No. 24-02042) on August 2, 2024. In the petition filed by Justin Trump, as president, the Debtor reports total assets of $515,939 and total liabilities of $2,051,905. Honorable Bankruptcy Judge James W. Boyd handles the case. The Debtor is represented by: Perry Pastula, Esq. DUNN, SCHOUTEN & SNOAP, P.C. 2745 Dehoop Ave SW Wyoming MI 49509 Tel: 616-538-6380 Email: ppastula@dunnsslaw.com LL FLOORING: Receives NYSE Notice of Delisting ---------------------------------------------- LL Flooring Holdings, Inc. on Aug. 13, 2024 announced that the Company was informed on August 12 by the New York Stock Exchange that based on the Company's and certain of its direct and indirect subsidiaries' voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the "Chapter 11 proceedings"), the staff of NYSE Regulation determined that the Company is no longer suitable for listing pursuant to the NYSE Listed Company Manual Section 802.01D, and accordingly, determined to commence proceedings to delist the common stock of the Company from the NYSE and suspend trading in the Company's common stock immediately. The NYSE will apply to the Securities and Exchange Commission to delist the Company's common stock upon completion of all applicable procedures. The Company does not intend to appeal the NYSE's determination and therefore expects that its common stock will be delisted from the NYSE. The Company's common stock is expected to continue trading on the OTC market under the symbol "LLFLQ." About LL Flooring Holdings LL Flooring Holdings, Inc. is a specialty retailer of flooring. The Company carries a wide range of hard-surface floors and carpets in a range of styles and designs, and primarily sells to consumers or flooring-focused professionals. LL Flooring and four of its affiliates sought relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del., Case No. 24-11680) on August 11, 2024. In the petitions signed by Holly Etlin as chief restructuring officer, the Debtors disclosed total assets of $501,117,025 and total debts of $416,298,035 as of July 31, 2024. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as counsel. Houlihan Lokey Capital Inc. serves as the Debtors' investment banker, AlixPartners LLP acts as the Debtors' financial advisor, and Stretto, Inc. acts as the Debtors' claims and noticing agent. LOCUS DIGITAL: Unsecureds to Get Share of Income for 60 Months -------------------------------------------------------------- Locus Digital, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Texas a Plan of Reorganization dated July 29, 2024. The Debtor operates a digital marketing and software development agency. It designs websites and offers its clients services to enhance its marketing capabilities and search engine optimization. The instant bankruptcy filing was the result of setbacks suffered over the previous year arising from the loss of its largest client. The Debtor became overwhelmed by a number of merchant cash advance loans that interfered with its cash flow and its ability to meet its near-term obligations. Shortly before bankruptcy the Debtor surrendered its leased premises and is now operating its business remotely. The Debtor has filed the instant case to provide a single forum for the resolution of the issues against it and to provide a vehicle for an appropriate repayment plan for the benefit of all creditors. In this Plan, the Debtor proposes to reorganize and pay existing debts as provided herein from its future disposable income. The Debtor believes that the terms of this Plan will maximize distributions to the creditors of the Debtor and will allow the Debtor to emerge from bankruptcy with the ability to meet future ongoing obligations. The Class 4 Claims include all General Unsecured Claims and all other Claims not specifically provided for elsewhere herein. The Class 4 claims of unsecured creditors are impaired. General Unsecured shall share pro rata in the Unsecured Creditors' Pool funded by the Debtor's future projected disposable income. Debtor shall make 60 monthly payments commencing on the Effective Date of the amount set forth on the Exhibit B Plan Projections each month into the Unsecured Creditors' Pool. The Debtor shall deposit the first of the 60-payments into the pool on the Effective Date. Debtor shall maintain the Unsecured Creditor's Pool in a separate account for which it shall be the custodian and responsible for making the distributions provided in the Plan. Commencing 90 days after the Effective Date, the Debtor shall begin distribution of 3 months of accumulated payments to the members of Class 4 on a pro rate basis and continue distributions every 3 months until the full amount of the Unsecured Creditors Pool is distributed. If any Claims remain Contested and not Allowed on the date of the initial distribution, the Debtor shall hold an appropriate amount in reserve pending Allowance of all Contested Claims, and distribute such reserved amounts once all Contested Claims have been Allowed. Class 5 consists of Interest Holders. Holders of Interests in the Debtor shall retain such Interests following the Effective Date. As of the Effective Date, all Assets of the Debtor shall be vested in the Debtor. The Assets shall be vested in the Debtor free and clear of all Liens, Claims, rights, Interests, and charges, except as expressly provided in this Plan. The obligations under the Plan shall be funded by the operation of the Debtor's business. A full-text copy of the Plan of Reorganization dated July 29, 2024 is available at https://urlcurt.com/u?l=LJHsj6 from PacerMonitor.com at no charge. Attorneys for the Debtor: John Paul Stanford, Esq. Quilling, Selander, Lownds, Winslett & Moser, P.C. 2001 Bryan Street, Suite 1800 Dallas, TA 75201 Tel: (214) 880-1805 Fax: (214) 871-2111 Email: jstanford@qslwm.com About Locus Digital Locus Digital, LLC, operates a digital marketing and software development agency. The Debtor filed a Chapter 11 bankruptcy petition (Bankr.E.D. Tex. Case No. 24-40998) on April 30, 2024, disclosing under $1 million in both assets and liabilities. The Debtor is represented by QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C. LOUISIANA DELTA OIL: Starts Subchapter V Bankruptcy Proceeding -------------------------------------------------------------- Louisiana Delta Oil Company LLC filed Chapter 11 protection in the Eastern District of Louisiana. According to court filing, the Debtor reports between $1 million and $10 million in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for September 3, 2024 at 1:00 p.m. in Room Telephonically on telephone conference line: 866-790-6904. participant access code: 3156784. About Louisiana Delta Oil Company Louisiana Delta Oil Company LLC is in the crude petroleum extraction business. Louisiana Delta Oil Company LLC sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. La. Case No. 24-11493) on August 1, 2024. In the petition filed by Ethan A. Miller, as president/manager, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge Meredith S. Grabill oversees the case. The Debtor is represented by: Frederick Bunol, Esq. THE DERBES LAW FIRM, LLC 3027 Ridgelake Drive Metairie LA 70002 Tel: 504-207-0908 Email: fbunol@derbeslaw.com LOVESWORTH HOLDINGS: Gina Klump Named Subchapter V Trustee ---------------------------------------------------------- The U.S. Trustee for Region 17 appointed Gina Klump, Esq., at the Law Office of Gina R. Klump, as Subchapter V trustee for Lovesworth Holdings, Inc. Ms. Klump will be paid an hourly fee of $500 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Klump declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Gina Klump, Esq. Law Office of Gina R. Klump 11 5th Street, Suite 102 Petaluma, CA 94952 Phone: (707) 778-0111 Email: gklump@klumplaw.net About Lovesworth Holdings Inc. Lovesworth Holdings Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Calif. Case No. 24-40909) on June 18, 2024. In the petition signed by Samuel Ezeibe, as president, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge William J. Lafferty oversees the case. The Debtor is represented by: Arasto Farsad, Esq. FARSAD LAW OFFICE, P.C. 1625 The Alameda, Suite 525 San Jose, CA 95126 Tel: 408-641-9966 E-mail: Farsadlaw1@gmail.com MASHANTUCKET (WESTERN): S&P Upgrades ICR to 'CCC', Outlook Neg. --------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S. casino operator Mashantucket (Western) Pequot Tribe to 'CCC' from 'SD' (selective default) and its issue-level rating on the existing term loan B to 'CCC' from 'D' (default). The negative outlook reflects that Mashantucket might consider a restructuring of some of its junior debt in the next 12 months given its sizable 2026 debt maturity and S&P's view that the tribe's capital structure is unsustainable. The upgrade reflects Mashantucket's inability to service its capital structure with cash flow, sizable 2026 junior debt maturity, and very high leverage, increasing the likelihood of another restructuring or default in the next 12 months. Mashantucket remains current on the interest and amortization payments under its term loan B following its recent maturity extension, but has not made cash interest payments to junior debtholders following receipt of a specified default notice from senior lenders in September 2014 that effectively blocks cash interest payments to junior debtholders. Mashantucket's senior lenders sent the blocking notice because the tribe failed to comply with certain financial covenants under its senior credit facility as of the June 30, 2014, test date. Therefore, senior lenders exercised their right to block cash interest payments to Mashantucket's junior debtholders to preserve liquidity for themselves. Under the terms of its debt agreements, Mashantucket is allowed to accrue or make payments in kind on the junior debt until senior lenders waive the blocking notice. S&P views this as a breach of an imputed, rather than contractual, promise. Although junior lenders expected timely cash interest payments, the contractual provisions of the debt agreements, including the indentures and the intercreditor agreement, allow for the accrual of interest following the receipt of a specified default notice that blocks cash payments to junior debtholders. Mashantucket faces a sizable debt maturity in two years when its $675.1 million SRO notes outstanding mature in July 2026. These SRO notes have also accrued $486 million of interest as of June 30, 2024. While S&P expects the tribe will generate sufficient cash flow to pay term loan B interest and amortization, the 'CCC' issuer credit rating on the tribe reflects its view that Mashantucket will need some form of restructuring before the 2026 maturity that will likely impair creditors given the tribe's very high leverage, a cash flow base that is insufficient to service all the debt in its capital structure, and likely inability to access the capital markets. In the near term, S&P believes the tribe will generate sufficient EBITDA to cover its cash fixed charges, including amortization and cash interest on its term loan B, maintenance capital expenditure, and priority distributions. S&P said, "In fiscal 2024 (ending Sept. 30), we forecast revenue growth of 1%-2%, as growth in nongaming revenue from the opening of new amenities offsets gaming revenue declines because of competitive pressures from nearby casinos and internet gaming. We expect Mashantucket's 2024 EBITDA margins will decline about 120-150 basis points due to pressure on labor and marketing costs. "Under our base case, we forecast leverage will remain very high, above 25x in fiscal years 2024 and 2025. In addition, we expect EBITDA coverage of total interest expense (including interest accruing on junior debt obligations) will remain below 1x through fiscal 2025. Mashantucket's debt consists of a term loan B ($112 million outstanding at July 25, 2024) and about $2 billion of junior obligations, including accrued interest (as of June 30, 2024). We estimate cash fixed-charge coverage will be in the low-to-mid 1x area through fiscal 2025. Mashantucket's mandatory amortization under the term loan B is $15 million per year. Under the tribe's credit agreement, Mashantucket's term loan B contains an excess cash flow sweep provision that requires it to offer to prepay a certain portion of the term loan based on its excess cash flow generation. However, we expect Mashantucket will have limited excess cash flow available after funding capital expenditure (capex) and priority distributions to reduce the principal balances under its term loan B because of its plans to allocate additional capex to renovate its casino floor and hotel rooms, which we expect will take three years to complete." Mashantucket has significant geographic concentration and relies on a single property for cash flow. The tribe's reliance on Foxwoods Resort Casino for cash flow exposes Mashantucket to EBITDA volatility given the high competition in the Northeast, the potential for additional future competition from New York City casinos, and potential constraints from adverse weather and regional economic downturns. Foxwoods faces heavy competition from the Mohegan Sun casino in Uncasville, Conn. (approximately 10 miles away) as well as regional casinos in adjoining states (Rhode Island, Massachusetts, and New York). Foxwoods also maintains a weaker position in the Connecticut market. The negative outlook reflects S&P's view that Mashantucket might consider a restructuring in the next 12 months given its sizable 2026 debt maturity and its view that its capital structure is unsustainable. S&P could lower its rating on Mashantucket one or more notches if liquidity deteriorates and it believes a distressed exchange, restructuring, or default is imminent. S&P believes an upgrade is unlikely over the next 12 months given the tribe's looming junior debt maturities and our base-case forecast for cash flow, leverage, and liquidity. To consider a higher rating, we would need to be certain that Mashantucket could: -- Address upcoming maturities; -- Substantially improve liquidity; -- Generate sufficient operating cash flow to fully cover fixed charges; and -- Demonstrate it can reduce leverage to more sustainable levels. MIRION TECHNOLOGIES: Moody's Affirms 'B1' CFR, Outlook Stable ------------------------------------------------------------- Moody's Ratings affirmed the ratings of Mirion Technologies (US), Inc. (Mirion), including the B1 corporate family rating, B1-PD probability of default rating and B1 rating on the senior secured bank credit facilities, consisting of Mirion's first lien term loan and revolving credit facility. The outlook remains stable. The SGL-2 speculative-grade liquidity rating remains unchanged. RATINGS RATIONALE The ratings affirmation reflects Moody's view that Mirion remains well positioned in niche markets with positive longer term fundamentals that Moody's expect will continue to drive organic growth. The company is also a leading player within the specialized, highly regulated nuclear power industry, which has high barriers to entry. The company benefits from a sizable recurring revenue base that provides good revenue visibility and geographic diversification with over 50% derived outside the US. Mirion has modest scale with a niche market focus on radiation detection and measurement. It also maintains a sizeable reliance on the low volume, headline-risk exposed nuclear power industry (about 40% of revenue), where project timing fluctuates. Mirion has focused on growth opportunities increasingly in non-nuclear power markets (e.g., medical, military) mainly via acquisitions, adding top line resilience and diversification. Moody's believe renewed interest in nuclear plant investments to increase energy security amid geopolitical tensions, particularly in Europe, increases prospects for additional growth. Acquisitions will remain core to Mirion's growth strategy though Moody's do not expect any significant transactions in the near term. Moody's expect pricing and efficiency initiatives to temper cost inflation and near term moderating growth in the Medical segment, and support margin expansion. This will be aided by a healthy backlog, underpinned by the longer cycle nature of demand in the nuclear and medical markets. The stable outlook reflects Moody's expectation of moderate top line growth and improving profitability to strengthen credit metrics over the next year, with debt-to-EBITDA falling toward 3.7x over the next year. This will be supported by order growth in key end markets and recurring replacement/maintenance revenue from the installed base, helping to offset continuing macro headwinds. Moody's also expect Mirion to maintain good liquidity over the next 12-18 months. The SGL-2 speculative grade liquidity rating reflects Moody's expectation for good liquidity. This is based on Moody's expectation for Mirion to maintain a healthy cash balance, positive free cash flow and ample access to the undrawn $90 million revolving credit facility expiring in 2026. The revolver had $72 million available (net of letters of credit) at June 30, 2024. Moody's expect these sources to provide sufficient liquidity to manage through periodic revenue swings driven by customer spending/budget cycles, project-based end markets and seasonal nuclear reactor maintenance programs. Moody's expect free cash flow to exceed $60 million over the next 12 -18 months. The company's procurement initiatives to simplify its supply chain and continued focus on improving working capital efficiency should improve free cash flow. The revolving facility is subject to a springing covenant for maximum first-lien net leverage of 7.0x if revolver borrowing exceeds 40%, tested quarterly. Moody's do not expect the covenant to be tested. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded with increasing scale, particularly in the non-nuclear power plant end markets. A meaningful uptick in revenue from nuclear plant project revenue, including decontamination and decommissioning projects, could also support an upgrade. Quantitatively, EBITDA margin sustained above 20%, debt-to-EBITDA expected to remain below 3.5x and consistently healthy free cash flow such that free cash flow to debt remains above 6% could lead to a ratings upgrade. The ratings could be downgraded if margins deteriorate or liquidity weakens such that free cash flow to debt is sustained below 5%. Debt-to-EBITDA expected to remain above 5x could also lead to a downgrade. Additionally, the loss of a major customer or increasingly aggressive financial policies, including debt funded acquisitions that weaken the credit metrics could also prompt a downgrade of the ratings. The principal methodology used in these ratings was Manufacturing published in September 2021. Mirion Technologies (US), Inc., a subsidiary of Mirion Technologies, Inc., provides radiation detection, measurement, analysis and monitoring products and related services to the nuclear, defense and homeland security, and medical end markets. Key products include dosimeters, contamination and clearance monitors, detection and identification instruments and radiation monitoring systems. Revenue was approximately $821 million for the twelve months ended June 30, 2024. MLN US HOLDCO: Moody's Cuts CFR to Ca & Senior Secured Debt to B3 ----------------------------------------------------------------- Moody's Ratings downgraded MLN US Holdco LLC's ("MLN US Holdco") corporate family rating to Ca from Caa3, probability of default rating to Ca-PD from Caa2-PD, backed senior secured bank credit facilities (super-priority revolving credit facility and term loan) ratings to B3 from B2, backed senior secured second out term loan rating to Ca from Caa3, backed senior secured third out term loan rating to C from Ca, initial backed senior secured first lien term loan rating to C from Ca, and initial backed senior secured second lien term loan rating to C from Ca. The rating outlook remains stable. At the same time, Moody's assigned a Ca CFR, Ca-PD PDR and a stable outlook to MLN US Holdco's parent, Mitel Networks (International) Limited ("Mitel") and Moody's will withdraw the CFR and PDR at MLN US Holdco. MLN US Holdco, the borrower of the rated debt, is the main operating company but does not file financial statements so Moody's analyze the company using its parent's financial statements. The parent is also a guarantor of the rated debt and hence the assignment of the CFR and PDR at that entity. "The downgrade reflects the company's operational pressures and the high likelihood of a debt restructuring given its high financial leverage and weak debt trading prices," said Peter Adu, Moody's Ratings Vice President and Senior Credit Officer. RATINGS RATIONALE Mitel's Ca CFR is constrained by: (1) high financial leverage (Debt/EBITDA of 45.4x at LTM Q1/2024) and Moody's expectation that the ratio will remain above 10x through 2025, which may signal an untenable capital structure; (2) weak debt trading prices that significantly limit debt capital sources and raise the likelihood of a debt restructuring; (3) ongoing revenue decline in its core Unified Communications (UC) business, which elevates business risk; (4) vulnerability to competition from large and well established peers. The rating benefits from a good market position with a large installed UC base of over 75 million users. MLN US Holdco has five classes of secured debt: (1) B3 rated super-priority debt consisting of $65 million super-priority revolving credit facility due November 2025 and $155.8 million super-priority term loan due October 2027; (2) Ca rated $576.3 million second out term loan due October 2027; (3) C rated $157 million third out term loan due October 2027; (4) C rated $235.3 million initial first lien term loan due November 2025; and (5) C rated $108.4 million initial second lien term loan due November 2026. The B3 rating on the super-priority debt is four notches above the CFR to reflect their priority ranking in the debt structure. The Ca rating on the second out term loan is the same as the CFR, whereas the C ratings on the third out term loan, initial first lien term loan and initial second lien term loan are one notch below the CFR to reflect their junior ranking relative to all the other debt in the capital structure. Mitel has weak liquidity through December 31, 2025 with sources approximating $115 million while the company has uses of about $335 million. Sources of liquidity include cash of $80 million at March 31, 2024, $30 million of migration payments received from RingCentral in June 2024 to terminate the partnership, and about $5 million of availability under its $65 million super-priority revolving credit facility that expires in November 2025. Uses reflect $295 million of debt maturities ($60 million of revolver drawings and $235 million of initial first lien term loan due November 2025) and Moody's free cash flow consumption estimate of about $40 million. Moody's expect Mitel to be in compliance with its net priority secured leverage covenant over the next four quarters (about 10% cushion). Mitel has limited ability to generate liquidity from asset sales as its assets are encumbered and not readily divisible. The stable outlook assumes that recoveries for lenders will be in line with Moody's current estimates as reflected in the ratings. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Mitel puts in place a sustainable capital structure. The ratings could be downgraded if Mitel defaults on its debt or if Moody's determine that recoveries for lenders will be lower than Moody's current estimates. The principal methodology used in these ratings was Diversified Technology published in February 2022. Mitel, headquartered in Ottawa, Ontario, Canada, provides phone systems, collaboration applications (voice, video calling, audio and web conferencing, instant messaging etc.) and contact center solutions through on-site and cloud offerings. Mitel is majority-owned by Searchlight Capital Partners. MORNING JUMP: Plan Exclusivity Period Extended to September 16 -------------------------------------------------------------- Judge David M. Warren of the U.S. Bankruptcy Court for the Eastern District of North Carolina extended The Morning Jump, LLC's exclusive periods to file a plan of reorganization and disclosure statement and obtain confirmation of the plan to September 16 and November 15, 2024, respectively. As shared by Troubled Company Reporter, the Debtor filed its Plan of Reorganization Disclosure Statement on July 17, 2024. On July 19, 2024, this Court entered an Order Conditionally Approving Disclosure Statement and setting the confirmation hearing for Debtor's Plan of Reorganization September 5, 2024. The Debtor asserts that it is in the best interest of the bankruptcy estate to extend Debtor's exclusive periods to file a plan, disclosure statement, and obtain confirmation of its plan. The Morning Jump, LLC, is represented by: William P. Janvier, Esq. Stevens Martin Vaughn & Tadych, PLLC 2225 W. Millbrook Road, Raleigh, NC 27612 Tel.: (919) 582-2300 Email: wjanvier@smvt.com About The Morning Jump The Morning Jump, LLC, is a North Carolina limited liability company formed in 2013 which operates a coffee company in Spring Lake, North Carolina. The Debtor sought Chapter 11 protection (Bankr. E.D.N.C. Case No. 24-01113) on April 4, 2024. The Debtor estimated listed assets of $100,000 to $500,000 and liabilities of $1 million to $10 million as of the bankruptcy filing. The Hon. David M. Warren is the case judge. Stevens Martin Vaughn & Tadych, PLLC, led by William P. Janvier, is the Debtor's counsel. MOSS CREEK: Fitch Rates Proposed $750MM Sr. Unsecured Note 'B+' --------------------------------------------------------------- Fitch Ratings has assigned a 'B+'/'RR3' rating to Moss Creek Resources Holdings, Inc.'s proposed $750 million senior unsecured note. This new senior unsecured note rating is one notch above the current 'B'/'RR4' rating on the 2026 and 2027 unsecured notes (the $597.4MM January 2026 notes and the $401.2MM May 2027 notes) which, along with cash on hand, will be repaid at closing. In addition, Fitch has affirmed the Long-Term Issuer Default Ratings (IDRs) at 'B' for Moss Creek Resources Holdings, Inc. and Moss Creek Resources, LLC. Fitch has also affirmed Moss Creek Resources, LLC's senior secured reserve-based lending facility (RBL) at 'BB'/'RR1'. The Rating Outlook is Stable. The ratings reflect Moss Creek's Permian Basin asset base with high liquids exposure, forecast positive FCF and reduced refinancing risk following this note issuance along with improved liquidity, which should result in midcycle gross leverage remaining below 1.5x. These factors are partially offset by the company's relatively small production size, adequate 12-month hedge coverage and low proved developed producing (PDP) reserves. Fitch will subsequently withdraw the rating on both of the 2026 and 2027 unsecured notes (the $597.4MM January 2026 notes and the $401.2MM May 2027 notes) following repayment. Key Rating Drivers Lower Absolute Debt Quantum: Fitch believes the proposed refinancing of the 2026 and 2027 senior unsecured notes with a new seven-year senior unsecured note is positive as it reduces absolute debt by around 25% to $750 million and reduces near-term refinancing risk. Following the refinancing, Moss Creek will have approximately $287 million cash on the balance sheet and the RBL will remain undrawn at closing. Smaller Producer: At YE 2023, Moss Creek has 284.6 million boe of proved reserves (58% PDP, 66% oil) and 1H24 production of approximately 61.6 thousand barrels of oil equivalent per day (mboepd), including roughly 70% liquids. On both a reserve and production basis, Moss Creek's size is consistent with the 'B' rating category. Moss Creek's production level is more important to its overall IDR, as smaller producers typically have less resilience during weaker points in the commodity cycle to maintain development plans and access to capital. Permian Asset Base: Fitch believes Moss Creek's northern assets in Borden County have some development and execution risk as the acreage is less derisked and well results could vary across the region. Moss Creek's asset base consists of approximately 135,200 net acres consisting of 104,700 largely contiguous net acres in Howard and Borden Counties of the Midland basin, with opportunity for 11,000+ foot laterals given the blocky nature of the acreage. The remaining acreage are in Dawson, Gaines and Crosby Counties. As of June 30, 2024, Moss Creek operates approximately 93% of their net acreage and approximately 86% of their acreage was held by production. Minimal legacy development on some of the acreage provides Moss Creek the ability to utilize industry learnings to optimize development patterning and completion across the delineated formations. The Midland basin is well-developed, particularly the Lower Spraberry and Wolfcamp A, which bodes well for expected well results. Positive FCF and Strong Liquidity: Fitch believes Moss Creek will generate positive FCF before dividends throughout the base case which will improve liquidity further. The company is forecast to generate positive FCF before dividends of $260 million in 2024 at Fitch's $75 WTI price, which declines toward $18 million at its long-term midcycle price of $57 WTI. Moss Creek is likely to maintain annual production around 60 mboepd. Pro forma this refinancing, Fitch expects close to full availability under the RBL (less $10.7 million LOCs) along with cash of approximately $287 million at close, providing Moss Creek with $1.2 billion of liquidity. Management has the ability to scale back its rig count to preserve liquidity in a weakened oil price environment given the short-term nature of the company's rig contracts. Expect Increased Dividend payments: Fitch has assumed dividends to the parent, Xinchao Energy, will increase from 2025 under the proposed April 2024 Revision to the Shanghai Stock Exchange (SSE) Listing Rules. The parent is incorporated under Chinese law, listed on the SSE and subject to the laws, rules and regulations of China. The proposed revision, if adopted, would require SSE-listed companies to pay cash dividends when a subsidiary of the listed company meets certain minimum profitability metrics beginning in 2025. This Chinese ownership adds additional steps — for example, Moss Creek had to obtain approval from the National Development and Reform Commission of the People's Republic of China (NDRC) before it can incur certain debt. Adequate Near-Term Hedge Book: Fitch believes Moss Creek has adequate hedge coverage, which partially protects the company in a weakened commodity price environment in the near term. The company has hedged approximately 40% of its expected 2024 oil production at an average price of approximately $74 per bbl and approximately 30% of its expected 2025 oil production at an average of approximately $70/bbl. Moss Creek's credit agreement requires it to hedge 50% of its PDP oil for 12 months if net leverage is below 1.5x, with a step up in hedging required if net leverage is above 1.5x and again if above 2.0x. Sub-1.5x Leverage Profile: Fitch forecasts Moss Creek's leverage to be approximately 0.9x in 2024 at its $75 per barrel (bbl) West Texas Intermediate (WTI) price assumption and remain under 1.5x leverage under Fitch's WTI price assumptions. This is aligned with management's target to maintain a conservative leverage profile with ample RBL availability. Derivation Summary Moss Creek is a relatively small, growth-oriented operator with average daily production of approximately 62.3 mboepd in 2Q24. The company is larger than Howard County peer HighPeak Energy, Inc. (B/Stable; 49.7 mboepd in 1Q24), but smaller than non-operator Northern Oil & Gas, Inc. (B+/Positive; 119.4 mboepd), Baytex Energy Corp. (BB-/Stable; 150.6 mboepd) and Permian peers Matador Resources Company (BB-/Positive; 149.8 mboepd) and Permian Resources (BB+/Stable; 319.5 mboepd). Moss Creek's 1Q24 Fitch-calculated unhedged cash netback of $36.5/boe is higher than that of NOG, Permian Resources, Matador and Baytex, but below HighPeak's unhedged cash netback of $43.0/boe. Moss Creek's unhedged cash netbacks level is partially offset by higher than average operating costs of $16.4/boe, which is among the highest of the peer group. The company's leverage remains consistent with the Permian peer average in 1Q24, with Fitch forecast EBITDA leverage of less than 1.5x at Fitch's long-term price assumptions. Key Assumptions - WTI prices of $75.00/bbl in 2024, $65.00/bbl in 2025, $60.00/bbl in 2026 and 2027, and $57.00/bbl thereafter; - Henry Hub prices of $2.50/mcf in 2024, $3.00/mcf in 2025 and 2026, and $2.75/mcf thereafter; - Average production of 62 mboepd in 2024 with production reverting down to 59 mboepd by 2028; - Capex of $530 million in 2024 reducing to $475 million in the outer years of the forecast; - Assume no M&A over the forecast; - Assume the 2026 and 2027 notes are refinanced under the proposed terms outlined; - Assume dividends to the parent increases from 2025. Recovery Analysis The recovery analysis assumes that Moss Creek would be reorganized as a going concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim and 100% draw on the RBL facility ($900 million). Going-Concern (GC) Approach Fitch assumed a bankruptcy scenario exit EBITDA of $150 million. Moss Creek's going concern EBITDA assumption reflects Fitch's projections under a stressed case price deck. The going concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level on which it bases the enterprise valuation, which reflects the decline from current pricing levels to stressed levels, and a partial recovery in 2026-2027 after coming out of a troughed pricing environment. Fitch believes that a lower-for-longer price environment, combined with continued aggressive growth and consequent RBL-funded capital outspending and liquidity erosion, could pose a plausible bankruptcy scenario for Moss Creek. An enterprise valuation multiple of 3.25x EBITDA is applied to going concern EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: - The historical bankruptcy case study exit multiples for peer companies of 2.8x-7.0x, with an average of 5.2x and a median of 5.4x; - Although Permian Basin assets are considered valuable, there is a perceived increased risk because some of the acreage is less developed. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation process conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch considers valuations such as SEC PV-10 and M&A transactions for each basin, including multiples for production per flowing barrel, proved reserves valuation, value per acre and value per drilling location. Fitch assumed the lower production per flowing barrel-based valuation estimate to be the most conservative. The RBL facility is assumed to be fully drawn upon default, given the company's hedge position as well as Fitch's expectation that production growth would likely offset the risk of a price-linked borrowing base reduction. The RBL facility is senior to the unsecured notes in the waterfall. The allocation of value in the liability waterfall results in recovery corresponding to 'RR1' for the senior secured RBL facility of $900 million and 'RR3' for the senior unsecured notes of approximately $750 million, which is consistent with Fitch's Corporates Recovery Ratings and Instrument Ratings Criteria. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Organic and/or M&A growth leading to production sustained over 70Mboped while maintaining unit costs; - Continued derisking and operational momentum in the Permian that results in a maintenance of economic drilling inventory and proved reserves; - Midcycle EBITDA leverage sustained below 2.5x. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - A shift to negative FCF contributing to diminished liquidity or significant utilization of revolver; - Loss of operational momentum resulting in annual production sustained below 40 mboepd or materially increasing production costs; - Midcycle EBITDA leverage sustained above 3.0x. Liquidity and Debt Structure Sufficient Liquidity: Moss Creek maintains a conservative financial policy and consistently keeps unrestricted cash on the balance sheet. At 2Q24, liquidity consisted of $561.8 million of cash on its balance sheet (pro forma refinancing cash balance reduces to ~$287 million) and full availability of borrowing capacity under the $900 million RBL facility less $10.7 million of outstanding letters of credit. With these characteristics and consistently positive FCF, Fitch expects Moss Creek will maintain adequate liquidity throughout the rating case. Pro forma Simple Debt Structure and Long-Dated Maturity: Pro forma the proposed $750 million senior unsecured note issuance which along with cash on hand will be used to repay the $597.4 million, 7.5% unsecured note that matures in January 2026 and the $401.2 million, 10.5% unsecured note that matures in May 2027. Moss Creek has no near-term maturities; the RBL maturity is March 22, 2028. The floating rate RBL facility has a borrowing base subject to semiannual redeterminations. At the most recent redetermination in April 2024, the company borrowing base was reduced to $1.4 billion from $1.5 billion and elected amount was reduced to $900 million from $935 million. At 2Q24, only $10.7 million of letters of credit was outstanding. Issuer Profile Moss Creek is an independent energy exploration and production company operating in the Midland Basin of the Permian in West Texas. 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. ESG Considerations Moss Creek has an ESG Relevance Score of '4' for energy management that reflects the company's cost competitiveness and financial and operational flexibility due to scale, business mix and diversification. This factor 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 ----------- ------ -------- ----- Moss Creek Resources LLC LT IDR B Affirmed B senior secured LT BB Affirmed RR1 BB Moss Creek Resources Holdings, Inc. LT IDR B Affirmed B senior unsecured LT B+ New Rating RR3 MOTORS ACCEPTANCE: Case Summary & Five Unsecured Creditors ---------------------------------------------------------- Debtor: Motors Acceptance Corporation 1700 10th Avenue Columbus, GA 31901 Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Middle District of Georgia Case No.: 24-40483 Debtor's Counsel: Wesley J. Boyer, Esq. BOYER TERRY LLC 348 Cotton Avenue, Suite 200 Macon, GA 31201 Tel: (478) 742-6481 Fax: (770) 200-9230 Email: Wes@BoyerTerry.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Shannon Arnette as vice president. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CMFIESI/Motors_Acceptance_Corporation__gambke-24-40483__0001.0.pdf?mcid=tGE4TAMA MULLEN AUTOMOTIVE: Narrows Third Quarter Net Loss to $91.63 Million ------------------------------------------------------------------- Mullen Automotive Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $91.63 million on $65,235 of revenue for the three months ended June 30, 2024, compared to a net loss of $311.43 million on $308,000 of revenue for the three months ended June 30, 2023. For the nine months ended June 30, 2024, the Company reported a net loss of $326.98 million on $98,570 of revenue, compared to a net loss of $806.80 million on $308,000 of revenue for the nine months ended June 30, 2023. As of June 30, 2024, the Company had $192.33 million in total assets, $139.33 million in total liabilities, and $53 million in total stockholders' equity. Mullen stated, "The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern over the next twelve months from the date of filing this report. The Company's principal source of liquidity consists of existing cash and restricted cash of approximately $4.0 million as of June 30, 2024. During the nine months ended June 30, 2024, the Company used approximately $145.2 million of cash for operating activities. The net working capital deficit on June 30, 2024 amounted to approximately $59.0 million, or $10.4 million after excluding derivative and warrant liabilities, Series E Preferred Stock liability, ELOC commitment fees, and liabilities to issue stock that may be settled by issuing common stock, rather than cash. For the nine months ended June 30, 2024, the Company incurred a net loss of $327.0 million and, and as of June 30, 2024, our accumulated deficit was $2,143.3 million. There is substantial doubt about the Company's ability to continue as a going concern because the cash on hand is insufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of the filing of this Form 10-Q. "If the Company does not secure adequate funding to fulfill its current liabilities, it anticipates seeking bankruptcy protection in various jurisdictions within 30 days of publishing these financial statements. The Company is actively pursuing additional funds. However, there is no guarantee that the Company will be able to restructure its debts and/or secure the necessary financing on favorable terms." Management Comments Commenting on the results for the three and nine months that ended June 30, 2024, and recent Company developments, CEO and chairman David Michery stated: "We narrowed our loss in the quarter and year-to-date. We are positioning our fiscal Q4 for strong year-over-year growth. I am thankful to our team and our efforts in scaling our commercial EV business in the U.S. and internationally." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1499961/000143774924026065/muln20240630c_10q.htm About Mullen Mullen Automotive Inc., f/k/a Net Element Inc., is a Southern California-based automotive company building the next generation of commercial electric vehicles ("EVs") with two United States-based vehicle plants located in Tunica, Mississippi, (120,000 square feet) and Mishawaka, Indiana (650,000 square feet). In August 2023, Mullen began commercial vehicle production in Tunica. In September 2023, Mullen received IRS approval for federal EV tax credits on its commercial vehicles with a Qualified Manufacturer designation that offers eligible customers up to $7,500 per vehicle. As of January 2024, both the Mullen ONE, a Class 1 EV cargo van, and Mullen THREE, a Class 3 EV cab chassis truck, are California Air Resource Board (CARB) and EPA certified and available for sale in the U.S. Recently CARB issued HVIP approval on the Mullen THREE, Class 3 EV truck, providing up to $45,000 cash voucher at time of vehicle purchase. The Company has also recently expanded its commercial dealer network with the addition of Pritchard EV and National Auto Fleet Group, providing sales and service coverage in key Midwest and West Coast markets. The Company also recently announced Foreign Trade Zone ("FTZ") status approval for its Tunica, Mississippi, commercial vehicle manufacturing center. FTZ approval provides a number of benefits, including deferment of duties owed and elimination of duties on exported vehicles. Larkspur, California-based RBSM LLP, the Company's auditor since 2023, issued a "going concern" qualification in its report dated Jan. 16, 2024, citing that the Company has an accumulated deficit, recurring losses, and expects continuing future losses. These conditions raise substantial doubt about the Company's ability to continue as a going concern. NATIONAL HISTORIC SOUL: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------------- The U.S. Trustee for Region 13 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of National Historic Soul Jazz Blues Walker Foundation, Inc. About National Historic Soul Jazz Blues Walker Foundation National Historic Soul Jazz Blues Walker Foundation, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 24-40934) on July 10, 2024, with up to $500,000 in assets and up to $50,000 in liabilities. Judge Brian T Fenimore presides over the case. Colin N. Gotham, Esq., at Evans & Mullinix, P.A. represents the Debtor as legal counsel. NEVADA COPPER: Gets Court Approval for Sept. 10 Auction ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada approved bidding procedures for the sale of substantially all assets of Nevada Copper Inc. and its debtor-affiliates. The Debtors will conduct an auction of their assets on Sept. 10, 2024, at 12:00 p.m. (Prevailing Eastern Time) at the New York offices of Allen Overy Shearman Sterling US LLP, 599 Lexington Avenue, New York, New York 10022, or such other location announced to the bidders and consultation parties. The Debtors will seek approval of the sale transactions at a hearing scheduled to commence on or before Sept. 25, 2024, at 10:00 a.m. (Prevailing Pacific Time before the Hon. Judge Barnes, at the United States Bankruptcy Court, 300 Booth Street, 5th Floor, Courtroom 2, Reno, Nevada 89509, and telephonically. Objections to the sale, if any, must be filed no later than 12:00 p.m. (prevailing Pacific Time) on Sept. 19, 2024. As reported by the Troubled Company Reporter on Aug. 14, 2024, Nevada Copper Corp. announced on Aug. 12, that it and its subsidiaries have entered into an asset purchase agreement with Southwest Critical Materials LLC, an affiliate of Kinterra Capital Corp., pursuant to which the Buyer has agreed to purchase substantially all of the assets of the Company. The purchase price under the Stalking Horse APA is US$128 million plus the Buyer's obligation to pay certain cure costs with an adjustment for the assumption of certain liabilities. On June 10, 2024, the Company filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court of the District of Nevada. A sales process in accordance with Section 363 of the U.S. Bankruptcy Code was initiated by the Company with Moelis & Company LLC who was retained to assist with the process. The U.S. Bankruptcy Court and the Superior Court of Justice (Commercial List) of Ontario have approved bidding procedures for use in connection with the Company's sale process. In accordance with the Bidding Procedures, and subject to approval of the Courts, the Buyer will serve as the stalking horse bidder, establishing a minimum purchase price for substantially all of the Company's assets. In order to maximize the proceeds from the sale of the Company's assets, the Company's sales process remains ongoing in accordance with the terms of the Bidding Procedures, and other interested bidders are continuing their participation in the sales process. Multiple non-binding indications of interest were submitted to the Company and due diligence by various bidders is actively underway. The deadline to submit binding offers to purchase substantially all of the Company's assets is September 6, 2024. Following such binding offer deadline, an auction may be conducted in respect of the Company's assets. If the Company receives a higher or otherwise better bid than the Stalking Horse Bid upon the conclusion of the sales process, subject to approval by the Courts, such alternative transaction will proceed, and the Stalking Horse APA will be terminated. If the Stalking Horse APA is terminated due to the Company accepting another bid as a result of the auction, or under certain other limited circumstances (as set forth in greater detail in the Stalking Horse APA), the Company would be required to pay the Buyer a customary termination fee pursuant to the terms of the Stalking Horse APA. In certain other circumstances under which the Stalking Horse APA could be terminated, the Company would be required to reimburse the Buyer's transaction expenses up to a cap. The consummation of the Stalking Horse Bid is subject to closing conditions that are customary for transactions of this nature under Section 363 of the U.S. Bankruptcy Code, including compliance with the Bidding Procedures and approval of the Courts. There is no assurance, regardless of whether a better or otherwise higher bid is received by the Company, that the Stalking Horse Bid or any other transaction will be completed. Delisting Review As previously announced, the Company was under delisting review by the Toronto Stock Exchange as a result of the Chapter 11 proceedings and its shares currently remain halted from trading on the TSX. The TSX has now completed its review and ordered that the Company's shares be delisted effective August 21, 2024. About Nevada Copper Nevada Copper, Inc. and affiliates have been in the business of mining copper and other minerals and operating a processing plant that refines copper ore into copper concentrate, with the bulk of the debtors' operations focused on their Pumpkin Hollow project, which is located outside of Yerington, Nevada. The project, which contains substantial mineral reserves and resources, including copper, gold, silver, and iron magnetite, consists of an underground mine and processing facility, together with an open-pit project that is in the pre-feasibility stage of development. The debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. Lead Case No. 24-50566) on June 10, 2024. In the petition signed by Gregory J. Martin, executive vice president and chief financial officer, Nevada Copper disclosed $500,000,001 to $1 billion in assets and $100 million to $500 million in liabilities. Judge Hilary L. Barnes oversees the cases. The debtors tapped Allen Overy Shearman Sterling US, LLP, as general bankruptcy counsel; McDonald Carano, LLP, as Nevada bankruptcy counsel; AlixPartners, LLP, as financial and restructuring advisor; Torys, LLP, as special Canadian and corporate counsel; Moelis & Company, LLC, as financial advisor and investment banker; and Epiq Corporate Restructuring, LLC, as notice and claims agent and administrative advisor. The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Nevada Copper, Inc. and Nevada Copper Corp. NEW FORTRESS: Fitch Lowers IDR to 'B+', On Rating Watch Negative ---------------------------------------------------------------- Fitch Ratings has downgraded New Fortress Energy Inc.'s (NFE) Long-Term Issuer Default Rating (IDR) to 'B+' from 'BB-' and has placed it on Rating Watch Negative. The senior secured debt has been downgraded to 'B+'/'RR4' from 'BB-'/'RR4'. 'RR4' denotes average recovery in the event of default. The downgrade and Negative Watch reflect NFE's significant refinancing risk and highly constrained liquidity position given its capital-intensive growth strategy. Weaknesses include higher than previously expected EBITDA-leverage estimated to be greater than 6.0x in 2024-2025 under Fitch's rating case, and commodity linked pricing in the company's natural gas supply contracts. Concentration of cash flows in Latin America and ongoing execution risk including the development of complex LNG production assets further increase business risk. The competitive positioning of NFE's terminals offer long-term opportunities for natural gas supply and power plant development. Cash flow stability is expected to increase as the company executes more contracts, underpinned by some take-or-pay agreements and minimum volume commitments. Key Rating Drivers Refinancing and Liquidity Risk: NFE faces significant maturities over 2025-2026 and currently liquidity is highly constrained with the revolver fully drawn. NFE's term loan B ($774 million outstanding) and revolving credit facility ($1.0 billion) have springing maturities that could be triggered by July 16, 2025 if the company's 6.75% senior secured notes ($875 million) are not refinanced by that date and the 6.5% senior secured notes ($1.5 billion) are not refinanced by July 31, 2026, each 60 days before their maturity dates. NFE has obtained a backstop agreement for refinancing its 2025 maturity, which partially addresses this risk. Failure to refinance these upcoming maturities on reasonable terms and in a timely manner, and generate adequate liquidity for NFE's working capital requirements and ongoing growth projects, could result in further downgrades. High Leverage: Fitch calculated 2024 leverage is expected to be over 6.0x, due to the delay in production from FLNG1 and slower demand growth in Puerto Rico. Fitch's 2024 EBITDA estimate includes a one-time cash payment of $500 million-$600 million from FEMA as termination payment for contract cancellations in Puerto Rico. This payment alone constitutes about 40% of the total EBITDA in 2024. Lower settlement amounts or a delay in receiving proceeds would pressure both leverage and liquidity. Fitch expects leverage to remain around 6.0x in 2025, improving to around 5.5x in 2026-2027 as projects ramp-up across its portfolio. Fitch will look for solid operations of the first FLNG unit, successful deployment of the following FLNG units, and continued expansion of operations in Puerto Rico and Brazil for sustained EBITDA growth. At YE 2023, leverage was 6.0x, significantly higher than Fitch's previous expectations of 3.1x as market prices for LNG declined significantly and expected growth from the terminals was delayed. NFE sold all of its 20% ownership in the LNG vessels to a joint venture, Energos Infrastructure in mid-February 2024. However, it continues to guarantee the vessel lease charters. Fitch considers the $2.0 billion sale leaseback transaction a long-term obligation and includes $1.4 billion as debt. Commodity Price Linkage: NFE is paid for the gas it supplies based on the prevailing regional diesel prices. Fitch calculates year-to-date diesel prices in 2024 are 20% lower than average price in 2023. Fitch projects NFE will require spot market LNG purchases for about 10% of its gas supply requirements in 2024. Higher LNG prices, which could result from global macro conditions, would compress realized margins if diesel priced don't rise in lock-step, or if they fall. Fitch expects gas supplied under such contracts will account for about 70% of revenues over the next three years. Additionally, NFE's agreement to supply up to 80 tbtu/year of natural gas in Puerto Rico does not have take-or-pay provisions, exposing earnings to demand volatility. As a comparison, other LNG producers secure long-term, take-or-pay contracts to support large liquefaction units. Complex Capital Projects: NFE's capex program includes construction of two LNG units, each a 1.4 million tonnes per year natural gas liquefaction unit. FLNG1 is mounted on three refurbished offshore oil rigs; FLNG2 will be onshore. The first unit installed in Altamira, Mexico was delayed and first cargo is now expected in 3Q24. As the project obtains feedgas from the U.S., it requires U.S. Energy Department approvals to export to non-FTA countries. It has obtained a U.S. Customs and Border Protection ruling allowing it to transport LNG in the U.S. and Puerto Rico. The remaining construction program includes development of FLNG2 LNG import terminal, for which around $1.0 billion of funding has been spent or secured. Fitch believes NFE could incur higher costs in order to receive full permitting or due to additional construction delays. Fitch views liquefied natural gas (LNG) production as one of the more complex midstream businesses. It exposes NFE to higher operational, execution and regulatory risk than its legacy gas supply to power businesses. Production of its own LNG provides supply security which is a positive. In addition, NFE could pursue development of power plant projects in Brazil and Nicaragua requiring capex ranging between $1.5 billion to $2 billion, over each of the next two years, some of which would be discretionary. Capex exceeded $3.0 billion in 2023, far higher than its expectations, funded through FCF, debt, and asset sales. Improving Contract Mix: NFE derives most of its margin from terminals, largely supplying natural gas. Sales are increasingly contracted with multiple contracts with a tenor of over ten years and take-or-pay features. There is considerable concentration risk in the portfolio. Over the next four years, Fitch projects around 50% of the EBITDA will be derived from Puerto Rico and Brazil, where political and economic volatility is balanced by the push for cleaner burning fuels. The pivot away from open market sales of LNG should lower cashflow volatility, with contributions from this segment expected to decline to less than 10% of EBITDA starting 2024. Counterparty and Country Ceiling Exposure: NFE's IDR is not capped by a country ceiling, as its cash flows from the Puerto Rico (N/R; no transfer and convertibility cap) and Mexico (BBB-/Stable) cover its hard currency interest expense. Fitch estimates that through 2027, around 46% of NFE's cash flow will originate from Puerto Rico, 7% from Mexico with the remaining derived in Jamaica (BB-/Positive), Nicaragua (B/Stable) and Brazil (BB/Stable). However, the counterparty credit profile is weak with about 75% of the revenues derived from customers that are not rated or rated below the BB-category. Diversity of the customer base partially offsets this risk. Derivation Summary NFE is closest in operations and geographical focus to LNG producer Cheniere Energy, Inc. (CEI, BBB-/Stable). NFE has operations in Puerto Rico, Jamaica, Mexico, Nicaragua and Brazil. NFE's cash flow is supported by sale of LNG and power to with utilities, power generators and industrial customers in its operating regions. NFE's contractual profile is much weaker compared with CEI, with lower portion of take-or-pay provisions, though it has multiple contracts with remaining term of over 10 years. CEI's contracts average around 15 years with a much higher portion of fixed take-or-pay revenues. NFE has significant concentration risk with around 50% of the revenues expected to be derived from Puerto Rico and Brazil. It also has a weaker counterparty profile and is expected to be about one-fourth of CEI in terms of consolidated EBITDA, all factors which drive the difference in ratings. CEI generates its cashflows from two large LNG export facilities and accompanying infrastructure such as natural gas pipelines. CEI's consolidated operations are supported by long-term, take-or-pay style contracts for import, export and pipeline capacity, and it has two highly rated operating subsidiaries Sabine Pass Liquification, LLC (BBB+/Stable), and Cheniere Corpus Christie Holdings, LLC (BBB+/Stable). Fitch notes CEI's underlying contracts are of much more substantial duration than most of its midstream peers, in addition to its primarily fee-based revenue. The contract profile is with investment grade counterparties, in contrast to NFE, which has almost 75% of its contracts with entities that are not rated or rated below the BB-category. Additionally, Cheniere's contracts are supported by a pass-through of fixed and variable costs of LNG to contractually obligated offtakers, unlike NFE, which is exposed to changes in commodity price and offtake volumes. The majority of NFE's subsidiaries do not have project level debt, while CEI's intermediate subsidiary and two operating projects have substantial leverage, and in a combined and severe downside case of payment default by a large customer and weak merchant price forecast realizations, cash could be trapped. Leverage for NFE under the Fitch rating case is expected to be weak in 2024-2025 averaging around 6.0x, compared to around 4.0x for CEI. Fitch believes CEI has a demonstrated track record in management and completion of complex construction projects and less construction risk related to debottlenecking and the next planned expansion compared with NFE's pipeline of FLNG, power plants and terminal projects which have substantial development and execution risk. Key Assumptions - Natural gas at Henry Hub (HH) as per Fitch's price deck: $2.50/mcf in 2024, $3.0/Mcf in 2025, $3.0/mcf in 2026, and $2.75/mcf thereafter; - LNG market spreads informed by Fitch's price deck; - Growth capital spending is largely funded with retained cash and debt; - Proceeds of $500 million - $600 million from the FEMA claim received in 2H 2024; - Dividends in line with the company's guidance; - Interest expense reflects a base rate as per the Fitch Global Economic Outlook; - Execution of committed growth projects and any additional growth projects annually during the outer years of the forecast; - Construction for FLNG2 completed on-time and per Fitch's current assumptions. Recovery Analysis For the Recovery Rating, Fitch estimates the company's going-concern value was greater than the liquidation value, despite the high equity value retained by NFE in its assets. The going-concern multiple used was a 5.0x EBITDA multiple, which reflects the default occurring during construction and deployment of the FLNG assets, and the reorganization would be impacted by the complexity of the construction project and the location of the terminals. There have been a limited number of bankruptcies within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. In its recent bankruptcy case study report, "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries," published in September 2021, the median enterprise valuation exit multiple for the 51 energy cases with sufficient data to estimate was 5.3x, with a wide range of multiples observed. Fitch's going concern EBITDA estimate is $725 million. It is a measure of Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of the company. As per criteria, the going concern EBITDA reflects some residual portion of the distress that caused the default. Fitch calculated administrative claims to be 10%, which is the standard assumption. The outcome is a 'B+'/'RR4' rating for the senior secured debt. Additionally, Fitch believes, on a normalized run-rate basis almost all of the revenues will come from outside U.S., in countries where Fitch does not assign an uplift to the debt based on the recovery profile. Per Fitch's "Corporates Recovery Ratings and Instrument Ratings Criteria," secured debt can be notched up to 'RR1'/'+3' from the IDR; however, the instrument ratings have been capped at 'RR4' due to Fitch's "Country Specific Treatment of Recovery Rating Criteria". RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Resolving the Rating Watch - The Rating Watch Negative could be resolved if the 2025 maturity was refinanced on reasonable terms in a timely manner, and the company secured liquidity to adequately cover its working capital needs and non-discretionary capital expense. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Though not expected in the near term, Fitch could take a positive rating action if: - Fitch calculated EBITDA leverage below 5.0x on a sustained basis; - Sustained record of production at or around nameplate capacity at FLNG1; - Stronger contractual structures, including reduced commodity price linkages, long-term, fixed-price contracts and improving counterparty profile. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - 2025 and 2026 debt maturities not addressed in a timely manner; - Expectation of EBITDA interest coverage below 2.0x; - Fitch calculated EBITDA leverage above 6.0x on a sustained basis; - Excessive cost and/or schedule overruns on current construction projects; - Weaker fundamentals in the target markets lowering realized margins, putting additional pressure on the company's cash flow generation; - Weaker business mix, including the company entering into more volatile sectors. Liquidity and Debt Structure Liquidity Constrained: As of June 30, 2024, NFE had about $133 million of unrestricted cash, and about $165 million of restricted cash on its balance sheet restricted to funding of a thermal plant project. As of June 30, 2024, the $1.0 billion revolver was fully drawn. The revolver matures in April 2026. The revolver and the term loan ($772 million drawn), both come due 60 days prior to the 2025 notes, if the said notes are not refinanced prior to their maturity date. As of March 31, 2024, the company is compliant under the covenants required by the letter of credit facility and the revolver, which require it to maintain a debt to capitalization ratio of less than 0.7:1.0 and, for quarters in which the revolver is more than 50% drawn, the debt to annualized EBITDA ratio of less than 4.0:1.0. Near Term Maturities: Senior secured notes amounting to $875.0 billion mature in 2025, and $1.50 billion of senior secured notes mature in 2026. Principal Payments on the $355.6 million BNDES term loan of which about $275 million is drawn, are required after April 2026, and due quarterly thereafter until maturity in 2045. Issuer Profile New Fortress Energy LLC is a gas-to-power energy infrastructure company. The company spans the entire production and delivery chain from natural gas procurement and LNG production to logistics, shipping, terminals and conversion or development of natural gas-fired generation. Summary of Financial Adjustments Consolidated leverage for NFE includes asset level debt and the Energos Formation Transaction obligations. Under Fitch's Corporate Criteria, the Energos lease obligations are considered long-term obligations and the reported lease liability is treated as debt. The preferred stock at GMLP is given a 50% equity credit due to its perpetuality and cumulative nature of the dividends and interest. NFE's recently issued Series A Convertible Preferred Stock is treated as 100% debt as its dividend rate increases by 2% until the company pays of all previously accrued but unpaid dividends. 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. ESG Considerations NFE has an ESG relevance score of '4' for Exposure to Environmental Impacts due to potential operational challenges related to extreme weather events in its operating regions. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. NFE has an ESG relevance score of '4' for Governance Structure due to its concentrated ownership. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. NFE has an ESG relevance score of '4' for Financial Transparency due to the level of detail and transparency in its financial disclosure that is weaker than other industry peers. This 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 ----------- ------ -------- ----- New Fortress Energy Inc. LT IDR B+ Downgrade BB- senior secured LT B+ Downgrade RR4 BB- NMG HOLDING: Moody's Rates New Sr. Secured Exchange Notes 'Caa1' ---------------------------------------------------------------- Moody's Ratings assigned a Caa1 rating to NMG Holding Company, Inc.'s (dba "Neiman Marcus") proposed new senior secured exchange notes due 2028. The new senior secured notes will be issued in exchange for the existing senior secured notes due 2026. The exchange will address Neiman Marcus' 2026 debt maturities providing additional time to work though the closing process related to its acquisition by Hudsons Bay Company ("HBC"), the owner of Saks Fifth Avenue. All of the senior secured notes will be redeemed at the closing of the transaction. All other ratings remain unchanged. RATINGS RATIONALE Neiman Marcus' B3 corporate family rating reflects Moody's expectation of elevated pressure on its credit profile as aspirational customers scale back purchases due to a more difficult consumer spending environment. Increased promotional cadence has also negatively impacted the company's profitability and operating performance. Neiman Marcus has good liquidity with no near term maturities and an undrawn $900 million ABL revolver (unrated) and Moody's expect it to be moderately free cash flow positive in fiscal 2024. The company will need to continue to invest in retaining top customers and attracting a younger demographic which may prove challenging as competition increases, particularly as the brands offered through Neiman Marcus increase their direct to consumer efforts. Although its core higher income demographic customer has been loyal and typically has the means to spend, participation remains dependent on the customer's desire to purchase. If the acquisition transaction with HBC is not consummated for any reason, the risk will remain that the company could pursue aggressive financial strategies as its former lenders continue to seek to divest their current ownership of the company. The stable outlook reflects Moody's expectation that Neiman Marcus' operating performance will not deteriorate further and that credit metrics will improve due to better execution and inventory management. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Rating could be downgraded if Neiman Marcus' EBITDA does not demonstrate consistent improvement. Rating could also be downgraded if the company does not refinance its debt well in advance of maturities. Quantitatively, rating could be downgraded if debt/EBITDA remains above 6.0x, EBITA/interest remains below 1.2x or if its liquidity profile deteriorates. Any additional debt incurrence or shareholder friendly activities would be viewed negatively. Rating could be upgraded if operating performance including sales, margins and profitability consistently improve, liquidity remains good, and financial strategies support debt/EBITDA sustained below 4.0x and EBITA/interest is sustained above 1.75x. Headquartered in Dallas, Texas, NMG Holding Company, Inc. operates 36 Neiman Marcus stores, 2 Bergdorf Goodman stores as well as an online and catalog presence. Total revenue was $4.3 billion for the LTM period ended April 27, 2024. The company's equity owners include PIMCO, Davidson Kempner, and Sixth Street. The principal methodology used in this rating was Retail and Apparel published in November 2023. NOBLE'S SONG: Hires Century 21 as Real Estate Broker ---------------------------------------------------- NOBLE'S SONG, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ Century 21 New Millennium as real estate broker. The firm will market and sell the Debtor's real property situated at 14532 Solomons Island Rd. S, Solomons, Maryland 20688. The firm will be paid at 5 percent commission of the sale, exchange, or transfer, plus $495. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Carol Choporis, a partner at Century 21 New Millennium, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Carol Choporis Century 21 New Millennium 23063 Three Notch Road California, MD 20619 Tel: (301) 862-2169 About Noble's Song, LLC Noble's Song LLC is primarily engaged in acting as lessors of buildings used as residences or dwellings, primarily engaged in renting and leasing real estate properties. Noble's Song LLC sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 24-10692) on Jan. 26, 2024. In the petition filed by Deborah A. Steffen, as managing member, the Debtor reported assets between $1 million and $10 million and estimated liabilities between $500,000 and $1 million. The Debtor is represented by John D. Burns, Esq. at The Burns Law Firm, LLC. NOVALENT LTD: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Three affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Novalent, Ltd. 24-02756 f/k/a Indusco, Ltd PO Box 10610 Southport, NC 27461 Novalent MiddleCo, Inc. 24-02758 f/k/a GreenShield NewCo, Inc. P.O. Box 10610 Southport NC 27461 Novalent Biotech, Inc. 24-02761 f/k/a Greenshield Holdco, Inc PO Box 10610 Southport NC 27461 Business Description: Novalent is a biotechnology engineering firm which has pioneered the development of long- lasting technology to protect against bacteria and viruses. Chapter 11 Petition Date: August 16, 2024 Court: United States Bankruptcy Court Eastern District of North Carolina Judge: Hon. Joseph N Callaway Debtors' Counsel: Kevin L. Sink, Esq. WALDREP WALL BABCOCK & BAILEY PLLC 3600 Glenwood Avenue Suite 210 Raleigh, NC 27612 Tel: 919-589-7985 Email: ksink@waldrepwall.com Novalent, Ltd.'s Total Assets: $2,102,902 Novalent, Ltd.'s Total Liabilities: $12,480,356 Novalent MiddleCo's Total Assets: $0 Novalent MiddleCo's Total Liabilities: $1,773,618 Novalent Biotech's Total Assets: $0 Novalent Biotech's Total Liabilities: $350,000 The petitions were signed by Cameron Harris as president. Full-text copies of the Debtors' petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/GPE3DYQ/Novalent_Ltd__ncebke-24-02756__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/G6AYOXA/Novalent_MiddleCo_Inc__ncebke-24-02758__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/C22ZWTA/Novalent_Biotech_Inc__ncebke-24-02761__0001.0.pdf?mcid=tGE4TAMA A. List of Novalent, Ltd.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. Bank of New Zealand Patents Owned $1,773,617 Deloitte Centre By Debtor Level 6 80 Queen Auckland New Zealand 11420 2. BDO $4,676 PO Box 642743 Pittsburgh, PA 15264-2743 3. Brenntag Mid-South, Inc. $4,874 PO Box 7410714 Chicago, IL 60674-0714 4. Chemtrec $6,125 2900 Fairview Park Dr. Falls Church, VA 22042 5. Delaware Secretary $8,924 of State Division of Corporations PO Box 898 Dover, DE 19903 6. Element $8,265 1285 Corporate Center Drive. Suite 110 Eagan, MN 55121 7. Harcros Chemical Inc. $10,693 PO Box 74583 Chicago, IL 60696 8. Kevin L. Parrish Severance $350,000 5108 Bearberry Point Claim Greensboro, NC 27455 9. Mega Chem, Inc. $7,440 647 Southwest Street High Point, NC 27260 10. Mississippi State University $4,486 Office of Controller & Treasurer PO Box 5227 Mississippi State, MS 39762 11. Novalent Biotech, Inc. Intercompany $9,278,083 PO Box 10610 Payable Southport, NC 27461 12. Novalent MiddleCo, Inc. Intercompany $893,821 PO Box 10610 Payable Southport, NC 27461 13. Pinnacle Bank, $23,745 Cardmember Services PO Box 332509 Murfreesboro, TN 37133 14. Pretium Packaging LLC $3,897 3240 N O'Henry Blvd Greensboro, NC 27405 15. Pretium Packaging LLC $3,897 3240 N O'Henry Blvd Greensboro, NC 27405 16. Product Safety Labs, Inc. $16,865 2394 US Highway 130 Dayton, NJ 08810 17. Schuetz Container $4,122 Systems, Inc. 138 Walser Road Lexington, NC 27293 18. Scientific & Regulatory $34,653 Consultants 201 W. Van Buren Street Columbia City, IN 46725 19. SRI Technologies, Inc. $5,702 2114 Chatham Drive Dalton, GA 30720 20. Univar Solutions $6,109 3075 Highland Pkwy Suite 200 Downers Grove, IL 60515 B. Novalent MiddleCo's Sole Unsecured Creditor: Entity Nature of Claim Claim Amount 1. Bank of New Zealand $1,773,618 Deloitte Centre, Level 6 80 Queen Street Auckland, NZ 11420 Email: guy_jolly@bnz.co.nz C. Novalent Biotech's Sole Unsecured Creditor: Entity Nature of Claim Claim Amount 1. Kevin L. Parrish Severance $350,000 5108 Bearberry Point Claim Greensboro, NC 27455 NY METROPOLITAN COLLEGE: Fitch Affirms 'CC' LongTerm IDR -------------------------------------------------------- Fitch Ratings has affirmed the Metropolitan College of New York's (MCNY) Issuer Default Rating (IDR) and the rating on the $67.4 million series 2014 revenue bonds issued by Build NYC Resource Corporation on behalf of MCNY at 'CC'. Entity/Debt Rating Prior ----------- ------ ----- Metropolitan College of New York (NY) LT IDR CC Affirmed CC Metropolitan College of New York (NY) /General Revenues/1 LT LT CC Affirmed CC MCNY's IDR and bond rating affirmation at 'CC' is based on Fitch's 'CC' rating definition that default of some kind appears probable. Since August 2023, MCNY has been in active negotiations with counsel to the bond trustee on terms of a forbearance agreement that may cover certain covenant defaults for MCNY's fiscal year ended Dec. 31, 2023, and certain anticipated future defaults, potentially including the Nov. 1, 2024 principal payment. MCNY is current on all principal and interest payments on the bonds to date, including the Nov. 1, 2023 and May 1, 2024 principal and interest payments. The next scheduled bond payment is on Nov. 1, 2024. Fitch views a forbearance agreement to be a distressed debt exchange (DDE) if the agreement acknowledges that non-payments of principal or interest are anticipated, and such non-payments, in Fitch's opinion, are in lieu of default. If and upon notice that a final forbearance agreement is executed, Fitch would downgrade the bond rating to 'C' if Fitch deems the final forbearance agreement to represent a DDE. An actual payment default on the bonds, with or without a forbearance agreement, would warrant a bond downgrade to 'D' (default) or 'RD' (restricted default). SECURITY The bonds are secured by a lien on unrestricted revenues, a mortgage on condominium units at 40 Rector Street, New York, NY, and a cash-funded debt service reserve fund. KEY RATING DRIVERS Revenue Defensibility - 'bb' Operating Risk - 'bb' Financial Profile - 'bb' Asymmetric Additional Risk Considerations Asymmetric additional risk considerations include MCNY's enrollment volatility with small total student body, significant budgetary imbalance, and active negotiation of a forbearance agreement that, if and when finalized, Fitch may consider to be a DDE. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Bondholder acceptance of a forbearance agreement that Fitch considers to be a DDE would result in a downgrade to 'C', a rating that reflects default appears imminent or inevitable; - Impairment of significant assets, licenses, or other requirements that would realistically impede MCNY's ability to execute on financial stabilization plans; - Payment default on the bonds, with or without a forbearance agreement, would warrant a bond downgrade to 'D' or 'RD'. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Demonstrated ability and intent to make timely payments on all debt service obligations the series 2014 bonds; - Meaningful progress towards execution of a realistic financial and operational restructuring plan that does not involve deferral of principal or interest payments of the series 2014 bonds in lieu of a default. Such plans may include, but are not limited to, the sale of condominium units owned at 40 Rector Street or refinancing MCNY-Bronx's mortgage. PROFILE Founded in 1964, MCNY is a private, not-for-profit institution offering certificate programs and associate and bachelor's degrees, as well as master's degrees in education, business, public affairs and administration. The college, utilizing recommendations of external consultants, is currently refining and expanding their program offerings. Students are largely adult, non-traditional students, and all are commuters. Given this student population, courses are structured to be accessible to working adults (day, evening, weekend) and include distance-learning components. The college operates three full semesters each academic year, using a cohort model; however, the majority of students enter in the fall semester. Total headcount enrollment, which had always been small, fell dramatically during the pandemic, from roughly 1,000 students to the low-mid 600s during the pandemic. Spring 2024 headcount is roughly 600 students. MCNY operates in two locations. Its primary operations are in lower Manhattan at 40 Rector St., which is south of the World Trade Center and near major transportation hubs. MCNY owns floors 6, 7, and 8 and some ground floor entry space as condominium units of this building. The purchase of these condominium units were financed by the series 2014 bonds. These condominium units are currently being marketed for sale. MCNY also operates in the Bronx in a condominium unit owned by MCNY's subsidiary, MCNY-Bronx. This condominium was financed by a mortgage loan and federal New Markets Tax Credit financing, and payments are guaranteed by MCNY. MCNY's is accredited by the Middle States Commission on Higher Education (MSCHE). MSCHE last affirmed MCNY's accreditation in 2019 and the next self-study evaluation is scheduled for 2027-2028. MSCHE has requested several supplemental information reports from the college since 2023, with another report due by Sept. 1, 2024. Sources of Information In addition to the sources of information identified in Fitch's applicable criteria specified below, this action was informed by information from Lumesis. OCUGEN INC: Reports $15.3 Million Net Loss in Fiscal Q2 ------------------------------------------------------- Ocugen, Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $15.3 million on $1.1 million of total revenue for the three months ended June 30, 2024, compared to a net loss of $23.1 million on $485,000 of total revenue for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss of $27.2 million on $2.2 million of total revenue, compared to a net loss of $40.4 million on $928,000 of total revenue for the same period in 2023. As of June 30, 2024, the Company had an accumulated deficit of $313.4 million and cash, cash equivalents, and restricted cash totaling $16 million. As of June 30, 2024, the Company had $40.5 million in total assets, $23.6 million in total liabilities, and $16.9 million in total stockholders' equity. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/ankhp5yh About Ocugen Inc. Malvern, Pa.-based Ocugen, Inc. is a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies, biologics, and vaccines that improve health and offer hope for patients across the globe. The Company's technology pipeline includes: Modifier Gene Therapy Platform, Novel Biologic Therapy for Retinal Diseases, Regenerative Medicine Cell Therapy Platform, and Inhaled Mucosal Vaccine Platform. Philadelphia, Pennsylvania-based Ernst & Young LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 16, 2024, citing that the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. ODYSSEY MARINE: Reports Net Loss of $3.7 Million in Fiscal Q2 ------------------------------------------------------------- Odyssey Marine Exploration, Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $3.7 million on $215,565 of total revenue for the three months ended June 30, 2024, compared to a net loss of $7.2 million on $172,575 of total revenue for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss of $2.8 million on $418,629 of total revenue, compared to a net income of $12.8 million on $461,314 of total revenue for the same period in 2023. "We have experienced several years of net losses and may continue to do so. Our ability to generate net income or positive cash flows for the following twelve months is dependent upon financings, our success in developing and monetizing our interests in mineral exploration entities, generating income from contracted services, collecting on amounts owed to us," the Company stated. "Our 2024 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects. We continually plan to generate new cash inflows through the monetization of our receivables and equity stakes in seabed mineral companies, financings, syndications or other partnership opportunities. If cash inflow becomes insufficient to meet our desired projected business plan requirements, we would be required to follow a contingency business plan based on curtailed expenses and fewer cash requirements. On December 1, 2023, we entered into the December 2023 Note Purchase Agreement with institutional investors pursuant to which we issued and sold to the investors the December 2023 Notes in the principal amount of up to $6 million and the December 2023 Warrants to purchase shares of our common stock." "In addition, on May 3, 2024, we received a payment of approximately $9.4 million arising from a residual economic interest in a salvaged shipwreck. The balance of the proceeds from the December 2023 Notes and a portion of the proceeds received in May 2024, together with other anticipated cash inflows, are expected to provide sufficient operating funds through at least the fourth quarter of 2024." "Our consolidated non-restricted cash balance at June 30, 2024 was $7.6 million. We have a working capital deficit at June 30, 2024 of $29.7 million. The total consolidated book value of our assets was approximately $26.3 million at June 30, 2024, which includes cash of $7.6 million. The fair market value of these assets may differ from their net carrying book value. The factors continue to raise substantial doubt about our ability to continue as a going concern." As of June 30, 2024, the Company had $26.3 million in total assets, $120.2 million in total liabilities, and $93.9 million in total stockholders' deficit. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/yvzsb3fr About Odyssey Marine Odyssey Marine Exploration, Inc. and its subsidiaries are engaged in deep-ocean exploration. Their innovative techniques are currently applied to mineral exploration and other marine survey and contracted services. The corporate headquarters are in Tampa, Florida. Tampa, Fla.-based Grant Thornton LLP, the Company's auditor since 2023, issued a "going concern" qualification in its report dated May 17, 2024, citing that the Company incurred net operating losses during the year ended 2023, and as of December 31, 2023, the Company's current liabilities exceeded its current assets by $26.6 million, and its total liabilities exceeded its total assets by $85.9 million. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. OPTINOSE INC: Reports $7.6 Million Net Loss in Fiscal Q2 -------------------------------------------------------- OptiNose, Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $7.6 million for the three months ended June 30, 2024, compared to a net income of $2.6 million for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss of $21.6 million, compared to a net loss of $16.2 million for the same period in 2023. The Company reported $20.5 million in net revenue from sales of XHANCE during the three-month period ended June 30, 2024, an increase of 5% compared to $19.5 million during the three-month period ended June 30, 2023. For the six-month period ended June 30, 2024, the Company reported $35.4 million in net revenue from sales of XHANCE, an increase of 13% compared to the six-month period ended June 30, 2023. The Company had cash and cash equivalents of $91.4 million as of June 30, 2024. "This is the first quarter in which we are executing on the launch of our new first-and-only label indication for chronic sinusitis, also called chronic rhinosinusitis without nasal polyps, which gives us access to a greatly expanded total addressable market," stated CEO Ramy Mahmoud, MD, MPH. "We believe the addition of XHANCE to Express Scripts preferred formularies late in the second quarter is an example of gradually improving insurance barriers with our new first-and-only approval. Improving insurance barriers, in conjunction with consistent efforts to disseminate highly differentiated clinical results to both old and new prescribers, are important enablers of our future revenue growth trajectory." As of June 30, 2024, the Company had $131.9 million in total assets, $174.7 million in total liabilities, and $42.9 million in total stockholders' deficit A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/s4rtsxy2 About OptiNose, Inc. Yardley, Pa.-based OptiNose, Inc. is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. Philadelphia. Pa.-based Ernst & Young LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated March 7, 2024, citing that the Company has incurred recurring losses from operations, has a working capital deficiency and expects to not be in compliance with certain debt covenants, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. OPTIO RX: Hires Alvarez & Marsal North as Financial Advisor ----------------------------------------------------------- The official committee of unsecured creditors of Optio RX, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America, LLC as financial advisor. The firm will provide these services: a. assist in the assessment and monitoring of cash flow budgets, liquidity and operating results; b. assist in the review of Court disclosures, including the Schedules of Assets and Liabilities, the Statements of Financial Affairs, Monthly Operating Reports, and Periodic Reports; c. assist in the review of the Debtors' cost/benefit evaluations with respect to the assumption or rejection of executory contracts and/or unexpired leases; d. assist in the analysis of any assets and liabilities and any proposed transactions for which Court approval is sought; e. assist in the review of the Debtors' proposed key employee retention plan and key employee incentive plan, if required; f. attend meetings with the Debtors, the Debtors' lenders and creditors, potential investors, the Committee and any other official committees organized in these chapter 11 cases, the U.S. Trustee, other parties in interest, and professionals hired by the same, as requested; g. assist in the review of any tax issues; h. assist in the investigation and pursuit of causes of actions; i. assist in tracing and pursuing assets, as requested; j. assist in the review of the claims reconciliation and estimation process; k. assist in the review of the Debtors' business plan; l. assist in the review of the sales or dispositions of the Debtors' assets, including allocation of sale proceeds; m. assist in the valuation of the Debtors' intellectual property, if required; n. assist in the review and/or preparation of information and analysis necessary for the confirmation of a plan in these chapter 11 cases; and o. render such other general business consulting or such other assistance as the Committee or its counsel may deem necessary, consistent with the role of a financial advisor and not duplicative of services provided by other professionals in these chapter 11 cases. The firm will be paid at these rates: Managing Directors $1,075 to $1,525 per hour Directors $825 to $1,075 per hour Associates $625 to $825 per hour Analysts $425 to $625 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Richard Newman, a managing director at Alvarez & Marsal North America, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Richard Newman Alvarez & Marsal North America, LLC 540 West Madison Street, Suite 1800 Chicago, IL 60661 Tel: (312) 601-4220 Fax: (312) 332-4599 Email: richard.newman@alvarezandmarsal.com About Optio Rx, LLC Optio Rx, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 24-11188) on June 7, 2024, listing $10,000,001 to $50 million in assets and $100,000,001 to $500 million in liabilities. William E. Chipman, Jr. at Chipman Brown Cicero & Cole, LLP represents the Debtor as counsel. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of OptioRx, LLC and its affiliates. The committee hires Saul Ewing LLP as counsel. OPTIO RX: Unsecured Trade Claims Will Get 100% of Claims in Plan ---------------------------------------------------------------- Optio Rx, LLC, and its Debtor Affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a Disclosure Statement relating to Amended Joint Chapter 11 Plan of Reorganization dated July 29, 2024. Optio Rx is a Delaware limited liability company that has 26 direct and/or indirect subsidiaries. Non-Debtor CBC Pharma HoldCo, LLC is the direct or indirect parent company of Optio Rx and each of the other Debtors. The Debtors operate in four primary specialty pharmacy business segments, including: (i) clinically focused retail dermatology pharmacies; (ii) compounding pharmacies; (iii) hospice pharmacies; and (iv) fertility treatments. Overall, the Company employs approximately 260 employees in 18 locations located in 7 states and services more than 100,000 patients. The Debtors also provide prescription fulfilling services to long term care facilities, among other things. On May 9, 2024, the Debtors, the First Out Holders, the Last Out Holder (and together with the First Out Holders, the "Consenting Lenders"), and the Prepetition Admin Agent, entered into that certain Restructuring Support Agreement, pursuant to which the Debtors and the Consenting Lenders approved certain restructuring transactions with respect to the Debtors' capital structure on the terms and conditions set forth in therein and as specified in the term sheet (including all exhibits, annexes, and schedules thereto, the "Plan Term Sheet" and, such transactions as described in the Restructuring Support Agreement and the Plan Term Sheet, the "Restructuring Transactions"). The Plan contemplates a partial debt for equity swap, as follows (the "Debt for Equity Swap"): * on the Effective Date of the Plan, the First Out Holders and the Last Out Holder will convert (i) a portion of their Prepetition Secured Obligations into exit facility claims (the "Prepetition Lien Conversion") on such terms as to effect the Exit Capital Structure attached as an exhibit to the RSA (the "Exit Facility Claims") and (ii) the remaining portion of their Prepetition Secured Obligations into preferred and common equity shares or units of Online Pharmacy Holdings LLC (the "Prepetition Lien Conversion Equity"), the new holding company formed on May 22, 2024 to issue preferred and common equity shares or units in connection with the Prepetition Lien Conversion, which Prepetition Lien Conversion Equity shall constitute consideration for the First Out Holders and Last Out Holder committing to such Prepetition Lien Conversion, all to effect the Exit Capital Structured attached as an exhibit to the RSA; and * on the Effective Date, the DIP Lenders will convert 100% of their DIP Superpriority Claims into Exit Facility Claims, all to effect the Exit Capital Structure attached as an exhibit to the RSA. On the Effective Date, after consummation of the transactions contemplated in the Debt for Equity Swap, the Prepetition Secured Obligations and related claims shall constitute first-priority, perfected, enforceable and unavoidable Exit Facility Claims in full force and effect, which Exit Facility Claims and liens shall be first-priority, enforceable, unavoidable and automatically perfected by virtue of the Confirmation Order entered by the Bankruptcy Court; provided, however, each of the holders of the Prepetition Secured Claims will gift (the "GUC Trade Gift") to the holders of allowed general unsecured trade claims (the "GUC Trade Claims") and transfer into an escrow account their proportionate share to satisfy (x) 80-95% of all allowed GUC Trade Claims on the Effective Date and (y) the remaining 5%-20% of such allowed GUC Trade Claims on the one year anniversary of the Effective Date. Creditors that hold allowed Vendor Secured Claims will, at the election of the Reorganized Debtors: (a) be paid in cash in full on the Effective Date of the Plan in satisfaction of their respective allowed secured claims; (b) receive the return of their collateral; or (c) receive such other treatment as the Reorganized Debtors and such vendor agree. The Plan also provides for the payment in full of administrative, priority and other secured claims. The Notes, Seller Notes and all equity in Optio Rx, held by CBC Pharma, shall be cancelled, released, and extinguished under the Plan. Class 5 consists of General Unsecured Trade Claims. The holders of Allowed General Unsecured Trade Claims are impaired by the Plan and shall, by virtue of the GUC Trade Gift, (x) on the Effective Date, receive [80%-95%] of their respective Allowed General Unsecured Trade Claim and (y) on the one-year anniversary of the Effective Date, receive the remaining [5%-20%] of their respective Allowed General Unsecured Trade Claim. The allowed unsecured claims total $2,033,751. This Class will receive a distribution of 100% of their allowed claims. Class 6 consists of the Other General Unsecured Claims. On the Effective Date, all Other General Unsecured Claims shall be cancelled, released, and extinguished without any distribution. The allowed unsecured claims total $379,970. This Class will receive a distribution of 0% of their allowed claims. The Debtors and the Reorganized Debtors, as applicable, shall fund distributions under the Plan with Cash on hand, the GUC Trade Gift, and the GUC Opt-In Gift. A full-text copy of the Disclosure Statement dated July 29, 2024 is available at https://urlcurt.com/u?l=BMSS28 from PacerMonitor.com at no charge. Counsel to the Debtors: CHIPMAN, BROWN, CICERO & COLE, LLP William E. Chipman, Jr., Esq. David W. Carickhoff, Esq. Mark. D. Olivere, Esq. Alan M. Root, Esq. Hercules Plaza 1313 North Market Street, Suite 5400 Wilmington, Delaware 19801 Email: Chipman@chipmanbrown.com Carickhoff@chipmanbrown.com Olivere@chipmanbrown.com Root@chipmanbrown.com About Optio Rx Optio Rx, LLC is a Delaware limited liability company that has 26 direct and/or indirect subsidiaries. The Debtors operate in four primary specialty pharmacy business segments, including: clinically focused retail dermatology pharmacies; compounding pharmacies; hospice pharmacies; and fertility treatments. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-11188) on June 7, 2024, with $10,000,001 to $50 million in assets and $100,000,001 to $500 million in liabilities. Judge Thomas M. Horan presides over the case. William E. Chipman, Jr., Esq. at Chipman Brown Cicero & Cole, LLP represents the Debtor as legal counsel. PICCARD PETS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Piccard Pets Supplies, Corp 5521 Blanding Blvd Jacksonville, FL 32244 Business Description: Piccard Pets offers pet supplies and medications for dogs, cats, bird, aquarium, livestock and farm. Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Middle District of Florida Case No.: 24-02434 Judge: Hon. Jacob A Brown Debtor's Counsel: Thomas Adam, Esq. ADAM LAW GROUP, PA 2258 Riverside Ave Jacksonville, FL 32204 Email: tadam@adamlawgroup.com Total Assets: $927,465 Total Liabilities: $5,323,839 The petition was signed by Marlon Martinez as CEO. 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/I25PJSY/Piccard_Pets_Supplies_Corp__flmbke-24-02434__0001.0.pdf?mcid=tGE4TAMA PITNEY BOWES: Moody's Affirms 'B1' CFR & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Ratings affirmed Pitney Bowes Inc.'s B1 Corporate Family Rating and B1-PD Probability of Default Rating following the company's recently announced exit from Global Ecommerce (GEC) businesses. The disposition of the GEC segment, which has suffered significant operating losses for each of the last several years, positions the company to increase EBITDA and free cash flow, following the funding of one-time exit costs, with no expected change in debt balances. The outlook was revised to stable from negative. Moody's also affirmed Pitney Bowes' Ba2 Senior Secured Bank Credit Facility ratings, B2 Senior Unsecured ratings for guaranteed notes, and B3 Senior Unsecured ratings for unguaranteed notes. The Speculative Grade Liquidity (SGL) rating of SGL-2 was unchanged. RATINGS RATIONALE Although the exit from GEC decreases overall revenues by 41% to $1.9 billion and reduces business diversification, Moody's affirmed Pitney Bowes' B1 CFR given the disposition will result in an increase in run-rate EBITDA and free cash flow. Going forward, reported EBITDA losses from the GEC segment, estimated at just over ($70 million) in 2024, will be removed along with future operating investments in GEC and capital spending. Moody's expect adjusted leverage will improve from just under 5x estimated for June 2024 to roughly 4x by December 2024 (pro forma for the GEC disposition, or 6x excluding equipment financing adjustments) and normalized free cash flow will increase to $150 million or more in 2025, roughly $100 million more annually. Costs related to the exit, estimated at $150 million, will likely be funded with operating cash flow and a portion of balance sheet cash. Pitney Bowes has been preparing for the potential sale of GEC for over one year which partially mitigates risks related to the disposition of GEC. The remaining two business segments, SendTech and Presort, were established prior to the formation of GEC in 2012 and have been operating as separate businesses. Pitney Bowes has realized an estimated $70 million of cost reductions through June 2024 with another $50 million to $90 million planned over the next year. Realization of cost reductions in excess of this initial $70 million would further add to profit margins and free cash flow. Although much smaller in scale following the GEC exit, Pitney Bowes' B1 CFR benefits from the leading market positions of its remaining businesses and long-standing customer relationships under multi-year contracts in the highly regulated mail metering market. Despite the secular decline in mail volumes globally, Pitney Bowes has been able to grow segment EBITDA for SendTech and Presort in 2023 while minimizing segment revenue declines by expanding offerings to include higher growth shipping parcels (16% of 2Q 2024 sales for SendTech) and gaining share within the domestic Presort market. SendTech represents two-thirds of consolidated revenues going forward with 30% reported EBIT margins. Presort represents the remaining one-third of consolidated revenues with reported EBIT margins in the mid to high teens percentage range. Results for the six months ending June 2024 reflect stable to improving operating performance for each of SendTech and Presort segments. For the six months ending June 2024, revenue for these two segments were roughly flat at $964 million compared to the prior year period, while reported segment EBIT grew 12% to $270 million. Governance risks are a key consideration given high financial leverage, activist board representation, and the company's decision to exit GEC businesses through the sale of a majority interest of GEC businesses followed by a bankruptcy filing on August 8, 2024, which will negatively impact GEC leasing creditors and benefit Pitney Bowes' shareholders. Social risks remain moderately negative reflecting the secular decline in mail volumes which impacts the majority of the company's profits. Pitney Bowes is publicly traded with its two largest shareholders, Vanguard and Blackrock, owning 9.5% - 10.5% of common shares as of March 2024. Activist investor, Hestia Capital, holds a 9% position in the company and succeeded in electing a majority of the board of directors through a proxy fight in 2023. Earlier this year, the board of directors was reduced to five seats from ten, with four of the company's five board seats held by independent directors, all nominated by Hestia Capital. The fifth director is currently interim CEO and was also nominated by Hestia Capital. The Speculative Grade Liquidity (SGL) rating of SGL-2 reflects good liquidity. Despite the vast majority of operating cash flow and a portion of excess cash being applied to fund an estimated $230 million of up front costs, including up to $150 million for the GEC disposition plus $79 million to fund incremental cost-takeouts, liquidity will remain good with an undrawn $400 million revolver expiring in 2026 (reduced from $500 million). Subsequent to funding of one-time exit costs, free cash flow growth will be supported by the elimination of significant operating losses from GEC businesses as well as realized benefits from recent cost initiatives across all of Pitney Bowes' operations. There are no near-term debt maturities until March 2026 when the remainder of the tranche A term loan comes due. Earlier this month, the credit agreement of Pitney Bowes received lender approval to release the guarantees provided by GEC subsidiaries, which enabled the sale of a majority interest in GEC to an affiliate of Hilco Global, a financial services consulting firm, and exclude the subsequent filing of Chapter 11 by GEC subsidiaries as an event of default. Additional revisions tightened certain baskets related to indebtedness, investments and restricted payments. There are no rated debt instruments at the GEC subsidiaries which filed for Chapter 11 protection. The Ba2 instrument rating on the senior secured bank credit facilities is two notches above the CFR reflecting the debt's size and position ahead of the unsecured notes and Moody's expectation for an average recovery in a distressed scenario. The B2 rating on the guaranteed senior unsecured notes is one notch below the CFR reflecting their size and position behind the secured debt, but ahead of the unguaranteed unsecured notes which are rated B3. The stable outlook for Pitney Bowes reflects the increase in EBITDA and free cash flow, following the funding of one-time costs, as a result of the exit from Global Ecommerce businesses. Debt to EBITDA will approach 4x (Moody's adjusted, pro forma for GEC exit, or 6x excluding equipment financing adjustments) by the end of 2024 with adjusted free cash flow to debt improving to the mid single digit percentage range in 2025. For the remaining segments, SendTech is expected to generate flat to growing segment EBITDA over the next year, despite a low single digit percentage decline in revenues, and Presort is expected to produce low single digit percentage growth in revenue and segment EBITDA. Improvements in credit metrics will be driven by expansion in adjusted EBITDA margins to a run-rate of roughly 20% by the end of 2025 from just under 10% prior to the exit from GEC. Moody's also expect that the liquidation of GEC will move forward as planned and Pitney Bowes will adhere to disciplined financial policies and maintain solid credit protection measures for its equipment financing operations. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Pitney Bowes demonstrates consistent growth in revenue and free cash flow with EBITDA margins (Moody's adjusted) in the mid 20% range. Adjusted debt/EBITDA would need to be maintained in the mid 3x range with adjusted free cash flow to debt in the high single digit percentages. Liquidity would need to remain good with growing cash balances and ample revolver availability. Moody's would also need to be comfortable with the execution and financial policies related to captive and third party equipment financing. Ratings could be downgraded if Pitney Bowes' consolidated revenue trends fall below Moody's expectation for flat to low single-digit percentage declines over the next year reflecting weakness in mature mailing operations or competitive pressures. Ratings could also be downgraded if Moody's expect adjusted leverage will exceed 4.5x after December 2024, adjusted EBITDA margins fail to improve to projected levels, or if Moody's expect adjusted free cash flow to debt will remain in the low single digit percentage range after 2024. Downward ratings pressure could also arise if Pitney Bowes incurs higher than expected costs or liabilities associated with the exit from GEC or if the liquidation does not move forward as planned. Funding distributions, other than quarterly dividends, prior to adjusted debt to EBITDA improving to the low 4x range could also result in a downgrade. Based in Stamford, CT, Pitney Bowes Inc. is a shipping and mailing company that provides technology, logistics, and financial services to small and medium sized businesses, large enterprises, retailers and government clients. Moody's expect the company will generate roughly $1.9 billion of revenues over the next year, pro forma for the exit from Global Ecommerce businesses. The principal methodology used in these ratings was Diversified Technology published in February 2022. PREMIER GLASS: Must Defend Against Christopher Glass' Claim ----------------------------------------------------------- Judge Deborah L. Thorne of the United States Bankruptcy Court for the Northern District of Illinois denied Premier Glass Services, LLC's motion to dismiss the adversary proceeding filed by Christopher Glass & Aluminum, Inc. seeking a determination that its claim against the Debtor for tortious interference with business expectation is nondischargeable under 11 U.S.C. Secs. 523(a)(2), (a)(6), and 11 U.S.C. Sec. 1192(2). Premier Glass is a Delaware limited liability company. Its principal, Romeo De La Cruz, previously worked for Christopher Glass. The complaint alleges that during Romeo's employment he entered into a Confidentiality, Non-Competition, and Non-Solicitation Agreement with Christopher Glass and that the Agreement required that Romeo not compete with Plaintiff within a 100-mile radius for two years if he terminated employment with Plaintiff. After Romeo left Plaintiff's employment, he formed Premier Glass and is alleged to have breached the Agreement in numerous ways. Christopher Glass alleges Romeo's violations of the Agreement were malicious and are not dischargeable under section 523(a)(6) of the Code. Plaintiff and Defendant litigated certain of the allegations contained in the Complaint before an Arbitration Tribunal prior to the filing of the Defendant's voluntary bankruptcy petition. The Arbitration Tribunal made findings which are now before the Circuit Court of Cook County for confirmation. The Defendant objects to confirmation of the arbitration award and that judgment has yet to be entered. Plaintiff alleges that in the event the state court judgment affirms the Arbitration Award and its claim that Defendant's conduct was malicious under section 523(a)(6), as tortious interference with business, then under section 1192(2) Plaintiff's claim will be nondischargeable. Plaintiff believes that confirmation of a consensual plan is not likely here and has filed the adversary case to determine whether the debts of the kind listed in section 523(a) apply to a Subchapter V entity debtor. Defendant filed a motion to dismiss the complaint for failure to state a claim on which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure, made applicable to this proceeding by Rule 7012 of the Federal Rules of Bankruptcy Procedure. Defendant argues that debts of the kind listed in section 523(a) are dischargeable in a case filed by an entity debtor under subchapter V of chapter 11 of the Code. The primary issue is whether Plaintiff's chosen claim of relief -- exception to discharge under section 523 -- even applies to entity debtors such as the Defendant under section 1192(2). To the extent that such claims are not dischargeable in a confirmation order entered under section 1192(2), the complaint states a cause of action and should not be dismissed for failure to state a claim, the Court holds. The primary issue raised in the motion to dismiss requires the Court to analyze the language of sections 1192 and 523. To resolve a question of statutory construction, the inquiry must begin with the language of the statute itself. The Defendant elected to proceed under Subchapter V when it filed its voluntary petition. Confirmation of its plan will be governed by section 1191. Plaintiff anticipates that confirmation will not be consensual and therefore will be governed by section 1191(b). Once a plan is determined to be confirmable as a nonconsensual plan under section 1191(b), section 1192 must be consulted, which explains what is dischargeable under a nonconsensual plan. Debts "of the kind" listed in section 523(a) include 21 types of debt. The introductory language to that list includes the following paragraph and has led some courts to find ambiguity in section 1192(2). The Court does not find that there is any ambiguity but that the language of the statute is clear and straightforward. The preamble to section 523(a) states: "A discharge under section 727, 1141, 1192, 1228(a), 1228(b) or 1328(b) of this title does not discharge an individual debtor from any debt." Section 1192(2) does not refer to the preamble but only to the kinds of debts listed in the section. According to Judge Thorne, "Because Congress did not add a provision to 1192(2) instructing that the list of nondischargeable debts was limited to only certain types of debtors -- entities or individuals -- we are bound by the specific words. The words of Subchapter V are clear and therefore there is no need to revert to policy issues or speculation as to what Congress must have meant." The specific language of 1192(2) refers only to types of debts, not types of debtors, the Court notes. What section 1192(2) says is that discharge is not available for "any debt . . . of the kind specified in section 523(a)." Judge Thorne says, "The language of section 1192(2) is clear, and the complaint states a cause of action for a claim under section 523(a)(6) The motion to dismiss under FRCP 12(b)(6) is denied." "If the Defendant Debtor is unable to confirm a consensual plan, any claim found to be nondischargeable under section 523(a)(6) will be nondischargeable in its plan. The complaint alleges sufficient allegations to support a nondischargeable claim under section 523(a)(6)." A copy of the Court's decision dated July 31, 2024, is available at https://urlcurt.com/u?l=Wej87u About Premier Glass Services Premier Glass Services, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-05367) on February 16, 2024, with $500,001 to $1 million in assets and $1,000,001 to $10 million in liabilities. Judge Deborah L. Thorne presides over the case. Karen M. Grivner and Kevin H. Morse at Clark Hill PLC represents the Debtor as legal counsel. PROVIDER TRANSPORT: Seeks to Hire Brittney Dunn as Accountant ------------------------------------------------------------- Provider Transport, L.L.C seeks approval from the U.S. Bankruptcy Court for the Western District of Louisiana to employ Brittney Dunn, CPA, LLC as accountant. The firm will assist in the preparation and filing of the tax returns, as well as assist in the analysis of various financial documents and the handling of other accounting duties in this case. The firm will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Brittney Dunn, a partner at Brittney Dunn, CPA, LLC, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Brittney Dunn Brittney Dunn, CPA, LLC 839 Kings Hwy, Suite 125 Shreveport, LA 71104 Tel: (318) 754-4384 About Provider Transport Provider Transport, LLC, a provider of trucking operations services, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. La. Case No. 24-80354) on June 15, 2024. At the time of the filing, the Debtor reported $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Stephen D. Wheelis oversees the case. The Law Office of Thomas R. Willson represents the Debtor as bankruptcy counsel. RADYO PANOU: Case Summary & Six Unsecured Creditors --------------------------------------------------- Debtor: Radyo Panou Inc. 1685 Nostrand Avenue Brooklyn, NY 11226 Business Description: The Debtor owns a mixed use property with two apartments residential and commerical space valued at $1 million. Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Eastern District of New York Case No.: 24-43403 Judge: Hon. Jil Mazer-Marino Debtor's Counsel: Narissa A. Joseph, Esq. LAW OFFICE OF NARISSA A. JOSEPH 305 Broadway Suite 1001 New York, NY 10007 Tel: 212-233-3060 Fax: 646-607-3335 Email: njosephlaw@aol.com Total Assets: $1,000,000 Total Liabilities: $1,006,062 The petition was signed by Geffrard Jude Joseph as president. A full-text copy of the petition containing, among other items, a list of the Debtor's six unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/42J4ZMA/Radyo_Panou_Inc__nyebke-24-43403__0001.0.pdf?mcid=tGE4TAMA RAPSYS INC.: Hires Franchise Firm LLP as Special Counsel -------------------------------------------------------- Rapsys, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ The Franchise Firm, LLP as special counsel. The Debtor needs the firm's legal assistance in connection with a case (Case No. 3:22-cv-4585) filed in the United States District Court District of New Jersey entitled GPI LLC v. Rapsys Incorporated d/b/a Geese Police of Naperville; and Vidmantas Rapsys, and resulting arbitration with the Debtor's franchisor, GPS LLC, resulting in an arbitration award in excess of $500,000. The firm will be paid at these rates: Attorneys $395 to $750 per hour Paralegals $225 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Evan M. Goldman, a partner at Crane, Simon, Clar & Goodman, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Evan M. Goldman, Founding Partner The Franchise Firm, LLP 225 Wilmington West Chester Pike, Suite 200 Chadds Ford, PA 19317 Tel: (215) 964-1553 Email: evan@thefranchisefirm.com About Rapsys, Inc. Rapsys, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code Bankr. N.D. Ill. Case No. 24-03481) on March 11, 2024, with up to $50,000 in assets and up to $1 million in liabilities. Judge David D. Cleary oversees the case. The Debtor tapped Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman as legal counsel and Eric R. Lundstorm, CPA, at Focus Capital Advisors, Inc. as accountant. RED LOBSTER: Sept. 5, 2024 Hearing on Joint Plan & Disclosures -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida will consider final approval of the adequacy of the disclosure statement explaining the joint Chapter 11 plan of Red Lobster Management LLC and its debtor-affiliates, and confirming the Debtors' joint Chapter 11 plan on Sept. 5, 2024, at 10:00 a.m. (Prevailing Eastern Time), before the Hon. Grace E. Robson, in the United States Bankruptcy Court, George C. Young Federal Courthouse, 400 W. Washington Street, Courtroom 6D, 6th Floor, Orlando, Florida 32801. Objections to the approval of the Debtors' disclosure statement and confirmation of their joint Chapter 11 plan, if any, must be filed no later than Aug. 28, 2024, at 4:00 p.m. (Prevailing Eastern Time). The deadline to accept or reject the Debtors' joint Chapter 11 plan is Aug. 28, 2024, at 4:00 p.m. (Prevailing Eastern Time). As reported by the Troubled Company Reporter on Aug. 9, 2024, Red Lobster Management, LLC, and its Debtor Affiliates filed with the U.S. Bankruptcy Court for the Middle District of Florida a Disclosure Statement for the Joint Chapter 11 Plan dated July 19, 2024. The Debtors operate the largest North American seafood restaurant chain, known as Red Lobster. The Debtors serve over 64 million customers per year and account for more than half of all casual dining seafood chain locations. Pursuant to certain bargained-for rights under the Prepetition Term Loan Credit Agreement, the Prepetition Term Loan Agent exercised equity proxy rights in December 2023 and replaced the existing managers and directors of the Debtors with Lawrence Hirsh, an independent director with more than thirty years of restructuring experience. In the first quarter of 2024, the Debtors attempted to restructure their funded debt outside of a bankruptcy proceeding by negotiating with the Prepetition Term Loan Lenders. Those negotiations were ultimately unsuccessful and the Debtors began preparing for these Chapter 11 Cases. Consistent with the Debtors' sale process that was previously approved by the Bankruptcy Court, the Plan contemplates the sale of substantially all of the Debtors' assets, either through pursuit of an asset sale transaction or, under the Plan, through a combination asset sale and sale of Reorganized Debtor equity, each at the election of the Purchaser. Depending on the outcome of the sale process, the Debtors, in consultation with the Purchaser and with the consent of the DIP Secured Parties, will determine which option to pursue. In the event of a 363 Asset Sale, all or substantially all of the Debtors' assets will be sold to Purchaser pursuant to section 363 of the Bankruptcy Code and the Purchase Agreement. In the event of a Reorganized Equity Sale, all or substantially of the assets of RL Management and Red Lobster International Holdings LLC, a Delaware limited liability company ("RL International") and the equity interests in the other Reorganized Debtors shall be sold to Purchaser pursuant to section 1129 of the Bankruptcy Code, the Purchase Agreement, and the Plan. The DIP Secured Parties have reserved the right to credit bid their debt in connection with any such sale. Upon the closing of the Sale Transaction, the Sale Proceeds shall first be used to satisfy Allowed DIP Claims, Other Priority Claims, and the Prepetition Term Loan Claims. The Plan also contemplates the creation of the GUC Trust, which shall be established to receive the GUC Fund and the Equityholder Litigation Claims, and to distribute proceeds thereof in accordance with the Plan. In the event of either a 363 Asset Sale or Reorganized Equity Sale, projected recoveries to general unsecured creditors of the Debtors is currently unknown and tied to litigation recoveries. Class 4 consists of General Unsecured Claims. On the Plan Effective Date, each holder of an Allowed Class 4 General Unsecured Claim (except for deficiency Claims held by a holder of a Prepetition Term Loan Claim) shall receive, in accordance with the GUC Trust Documents, its Pro Rata Share of the beneficial interests in the GUC Trust and the right to receive its respective Pro Rata Share of any available GUC Litigation Proceeds or other GUC Trust Assets, if any. Holders of Allowed General Unsecured Claims against more than one Debtor shall be treated as having a single Allowed General Unsecured Claim solely for purposes of any Distribution. The treatment set forth herein with respect to the holders of Allowed Class 4 Claims shall be in full and final satisfaction of the Allowed Class 4 Claims. Notwithstanding anything to the contrary contained in the Plan, no Distributions shall be made to Prepetition Term Loan Lenders on account of Allowed Class 4 Claims. Except as set forth in Article VIII of the Plan, nothing contained in the Plan, the Confirmation Order, or Definitive Documents shall compromise, modify, or affect the rights of the Prepetition Term Loan Agent and the Prepetition Term Loan Lenders to pursue additional recoveries from any Person or entity that is not a Debtor in these Chapter 11 Cases. The allowed unsecured claims total $295.1 million. This Class is impaired. The estimated recovery for General Unsecured Claims is "unknown", according to the Disclosure Statement. On the Plan Effective Date, all Interests (excluding any Sold Equity Interests) in the Debtors shall be cancelled, released and extinguished without distribution, and will be of no further force or effect. On the Plan Effective Date, the GUC Trust shall be established to receive (i) after adequate reserve for the payment (as reasonably determined by the Debtors in consultation with the Committee) of all Allowed Priority Tax Claims, Allowed Other Priority Claims, and Allowed Administrative Expense Claims that are not Assumed Liabilities (except for DIP Claims and Allowed Professional Fee Claims), the GUC Fund and (ii) the Equityholder Litigation Claims, the proceeds of which shall be distributed in accordance with the Plan. On the Plan Effective Date, the Debtors shall contribute the GUC Fund and Equityholder Litigation Claims to the GUC Trust. In no event shall any GUC Trust Assets of any kind be returned by, or otherwise transferred from, the GUC Trust to any Debtor. The Plan Administrator shall fund distributions under the Plan, to the extent not made on the Plan Effective Date, with the Plan Funding Amount, Sale Proceeds (if any), and proceeds of retained Causes of Action not settled, released, assigned, discharged, enjoined, or exculpated on or prior to the Plan Effective Date. The Plan Administrator shall fund payment of all Allowed Administrative Expense Claims, Priority Tax Claims and Other Priority Claims. Professional Fee Claims shall be funded from the Professional Fee Escrow Account. The GUC Trustee shall make all distributions of proceeds of the Equityholder Litigation Claims and other GUC Trust Assets in accordance with the Plan and the GUC Trust Agreement. Except for Assumed Liabilities arising under the Purchase Agreement, the Purchaser shall have no responsibility to make or liability for Distributions required under the Plan. A full-text copy of the Disclosure Statement dated July 19, 2024 is available at https://urlcurt.com/u?l=cbJr91 from Epiq Corporate Restructuring, LLC, claims agent. About Red Lobster Seafood Co. Red Lobster Management, LLC, owns and operates 705 Red Lobster seafood restaurants throughout North America. Red Lobster generates about $2.4 billion of annual revenue. Red Lobster is owned by private equity firm Golden Gate Capital. On the Web: http://www.redlobster.com/ Red Lobster Management and its affiliates sought Chapter 11 protection (Bankr. M.D. Fla. Lead Case NO. 24-02486) on May 19, 2024. As part of these filings, Red Lobster has entered into a stalking horse purchase agreement pursuant to which Red Lobster will sell its business to an entity formed and controlled by its existing term lenders. King & Spalding LLP is lead counsel to the Debtors; Berger Singerman LLP serves as local counsel; and Blake, Cassel & Graydon, LLC represents the Canadian applicants. Alvarez & Marsal North America, LLC is serving as financial advisor and providing corporate leadership as Chief Executive and Chief Restructuring Officers. Jonathan Tibus, a Managing Director at Alvarez & Marsal, serves as the debtors' CEO. Hilco Corporate Finance is serving as M&A advisor to Red Lobster. Keen-Summit is serving as real estate advisor. ROBERTSHAW US: Invesco Ltd. Challenges Restructuring Plan --------------------------------------------------------- Jonathan Randles of Bloomberg News reports that Invesco Ltd. continues to challenge a proposed restructuring of Robertshaw after losing a bid to pause the sale of the bankrupt appliance parts maker to rival lenders Bain Capital, Eaton Vance Management, Canyon Capital Advisors. Invesco lawyer Shai Schmidt said during a Friday hearing in Texas bankruptcy court that Robertshaw's plan includes a settlement that would unfairly free those lenders from legal claims arising from a December debt deal Invesco has challenged That deal wrested control of Robertshaw's restructuring from Invesco. About Robertshaw US Holding Corp. Robertshaw US Holding Corp., along with its affiliates, is a global leader in designing and manufacturing innovative control systems and components for the appliance and HVAC industries. Robertshaw US Holding and its affiliates filed Chapter 11 petitions (Bankr. S.D. Texas Lead Case No. 24-90052) on February 15, 2024, with $500 million to $1 billion in assets and liabilities. John Hewitt, chief executive officer, signed the petitions. The Debtors tapped Hunton Andrews Kurth LLP & Latham & Watkins, LLP as bankruptcy counsel; Guggenheim Securities, LLC as investment banker and financial advisor; and KPMG, LLP as accountant, tax advisor and auditor. Kroll Restructuring Administration, LLC is the claims, noticing, solicitation and balloting agent. S&G HOSPITALITY: Hires Doucet Co. LPA as Litigation Counsel ----------------------------------------------------------- S&G Hospitality, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to employ Doucet Co. LPA as special litigation counsel. The firm's services include: a. investigating and potentially litigating claims related to the Debtors' financing with the 2015 Loan that they obtained from Jeffries Loancore LLC, including any potential claims related to the purported securitization of that loan in the COMM 2015-POC1 Mortgage Trust, the servicing of that loan, the purported assignment of that loan to RSS COM 2015-PC1 BL, LLC; and b. pursuing claims by Debtors Buckeye Lodging LLC, Lancaster Hospitality LLC, and Sunburst Hotels LLC for the failure by Westfield Insurance to pay separate water damage claims submitted by each of them. The firm will be paid at these rates: a. A monthly flat fee of $5,000; b. A contingent fee of 10 percent of any monetary recovery on the Financing Claims or in the reduction of those claims (excluding any reductions to RSS's claims pursuant to section 502(b)(2) or section 506 of the Bankruptcy Code) Troy Doucet, Esq., a partner at Doucet Co. LPA, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Troy Doucet, Esq. Doucet Co. LPA 485 Metro Place South Suite 300 Dublin, OH 43017 Tel: (614) 221-9800 Email: troy@doucet.law About S&G Hospitality, Inc. S&G Hospitality, Inc. is part of the traveler accommodation industry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ohio Case No. 23-52859) on August 18, 2023. In the petition signed by Abijit Vasani, president, the Debtor disclosed up to $10 million in assets and up to $1 million in liabilities. Judge Mina Nami Khorrami oversees the case. The Debtor tapped David Beck, Esq., at Carpenter Lipps LLP as legal counsel and Contemporary Business Solutions, Inc. as accountant. SBG BURGER: Seeks to Extend Plan Exclusivity to September 16 ------------------------------------------------------------ Starboard with Cheese, LLC, and to the extent necessary joined by SBG Burger Opco and affiliates, 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 September 16 and November 15, 2024, respectively. SBG Cheese explains that it is in the process of finalizing a sale of the Cheese Assets which will be presented to the Court for ultimate approval. Though the terms of the sale have been agreed to in principal, SBG Cheese is awaiting receipt of the form of acceptable sale documentation from Wendys. SBG Cheese claims that it will then need time to review the form of sale documents and seek the Court's approval for the contemplated sale. SBG Cheese intends to request expedited relief in light of the limited number of stakeholders in that case. SBG Cheese asserts that it should not bear the risk of a party attempting to take advantage of the intervening time it will take to present a sale to the Court to while SBG Cheese awaits receipt of sale documents from Wendys. SBG Cheese further asserts that the requested extension will not prejudice creditors of the SBG Cheese estate and will permit SBG Cheese to focus its remaining resources on finalizing the sale of the Cheese Assets, while also preserving SBG Cheese's ability to file a plan of reorganization should the contemplated sale not materialize. 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. SHIFT4 PAYMENTS: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has assigned Shift4 Payments, Inc. (Shift4) and Shift4 Payments, LLC (Shift4 LLC) first-time Long-Term Issuer Default Ratings (IDRs) of 'BB'. The Outlook is Stable for all IDRs. Fitch has assigned ratings of 'BB'/'RR4' to Shift4 LLC's existing and proposed senior unsecured issuances, which are co-issued by Shift4 Payments Finance Sub, Inc., and 'BBB-'/'RR1' to Shift4 LLC's senior secured revolving credit facility. The IDRs reflect the group's historical performance and Fitch's expectations of continued expansion in the U.S. and internationally through Shift4's various verticals, which should lead to growing positive FCF generation and EBITDA leverage of around 3.5x or below. Offsetting attributes include smaller EBITDA scale and more limited diversification when compared with higher-rated peers, and high competition. Key Rating Drivers Sound Growth Prospects: Fitch expects Shift4 to grow rapidly as it continues to add merchants into its integrated payment platform domestically and internationally as well as through new business verticals and acquisitions, leading to quick scaling of its business. Gross revenue and end-to-end payments volume have increased fivefold over the last five years while EBITDA has gone from roughly neutral to north of $650 million for 2024 in Fitch's projection. Exposure to Discretionary Spending: The company is a provider of integrated hardware-software payment processing solutions for midsized to large businesses in the restaurant, hospitality and entertainment industries where it generates most of its revenue. The sensitivity of these industries to discretionary spending could result in cash flow volatility under recessionary periods should the company's growth slow. Although the company is expanding internationally, it derives more than 90% of its revenue from the U.S. Competitive Industry: Shift4's end markets are highly competitive. There is meaningful tech disruption and pricing competition from "legacy" fintechs, large technology providers, as well as younger, software-centric fintech companies. Key competitors include JPMorgan (via its Chase Paymentech business), Fiserv, Adyen, Block and Toast, among many others. The company is well-positioned as an integrated payment platform, but competition will continue to emerge. EBITDA Leverage Around 3.5x: Fitch expects the company will deploy free cash flow toward prioritizing organic and inorganic growth as well as shareholder returns rather than seek material deleveraging. Fitch forecasts EBITDA leverage in the mid-3.0x area in 2024 and beyond, compared with 3.9x in 2023 and 6.0x in 2024, highlighting the company's sound deleveraging capacity through expected EBITDA growth and FCF. Positive FCF: The company should grow FCF as it continues to scale. Fitch projects FCF to grow to more than $300 million per year over the next three years. The company generated about $200 million of FCF in 2022 and roughly $250 million in 2023. Cash flow leverage, measured as cash flow from operations less capex as a percent of debt, is forecast at around 10% which is solid for a BB rating in the space. This ratio was higher at 14% in 2023, mainly reflecting a large proportion of convertible debt in the company's capital structure that pays little interest. Parent-Subsidiary Linkage: A parent-subsidiary relationship exists between Shift4, the publicly listed entity that files the group's financial statements, and its primary operating subsidiary, Shift4 LLC. Fitch follows the stronger subsidiary path of the "Parent and Subsidiary Linkage Rating Criteria." Based on its criteria, Fitch has concluded that ring-fencing and access and control are both 'Open' given minimal limitations for intercompany flows as well as the common ownership by the company's founder. As such, Fitch rates Shift4 and Shift4 LLC at the consolidated level with no notching between the two entities. Derivation Summary Shift4 competes against certain Fitch-rated issuers including Block (BB+/Positive) and to a lesser extent NCR Voyix Corporation (BB-/RWP) as well as Global Payments (BBB/Stable). Global Payments and Block are multiple times larger and more diversified than Shift4, with Global Payments having much higher cash flow profitability. While Shift4 and Block have high growth profiles, Fitch expects Shift4 to continue to grow at a faster pace. Block's rating Outlook is Positive as Fitch projects that the company could operate with leverage below 3.0x, is developing material scale and presence in its end markets, and has a net cash position. Relative to NCR Voyix, Shift4 is growing revenue and earnings more rapidly and will have more meaningful scale in the next few years. Compared with Boost Newco Borrower, LLC (dba Worldpay; BB/Stable) Shift4 is meaningfully smaller but has a stronger growth profile, and Fitch expects it to operate with lower leverage. Key Assumptions - Revenue grows in the low to mid-30% range in 2024, and in the 15%-20% range in 2025 and 2026; - EBITDA margins increase to 20%+ in the next few years (or roughly 50%+ on revenue less network fees) as the company scales; - Capex of 5% of revenue; - Excess cash is used to fund share buybacks and M&A; - Floating rate debt assumes SOFR declines to 4% range over the ratings horizon. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Greater scale leading to more stable cash flow; - (CFO-capex)/debt expected to be sustained at 8% or above; - EBITDA leverage sustained below 3.5x. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - EBITDA leverage sustained above 4.0x; - Significant fundamental shifts in the business that negatively affect revenue, EBITDA and/or FCF; - (CFO-capex)/debt expected to be sustained below 4%. Liquidity and Debt Structure Adequate Liquidity: The company's liquidity is supported by FCF expectations in the $250 million to $300 million range or higher, and EBITDA leverage in the 3.5x area. The company had cash and cash equivalents of $205 million as of 2Q24, of which $116 million was held outside the U.S. Pro forma for the offering transaction, the company's next material maturity will be its $450 million of senior unsecured bonds which mature in November 2026. The company is looking to replace its $100 million revolver facility, which is undrawn, with a $450 million revolver that will also be fully available to be drawn. Debt Structure: The company's consolidated debt as of 2Q24 consisted of $450 million of senior unsecured bonds issued by Shift4 LLC and $1.3 billion of convertible notes issued at Shift4, of which $690 million mature in December 2025 and $633 million mature in August 2027. Issuer Profile Shift4 provides integrated payment processing solutions in the U.S. and internationally to businesses primarily in the restaurant, hospitality and entertainment industries. Date of Relevant Committee 08 August 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. ESG Considerations Shift4 has an ESG Relevance Score of '4' for Governance Structure due to its significant control and ownership by CEO Jared Isaacman. Mr. Isaacman has been a key force behind the company's success historically and will likely remain so in the years ahead, which presents key-person risk as well as risks of misaligned incentives between shareholder and debtholder interests. This factor was a consideration, in conjunction with other factors, used in Fitch's rating analysis that could have a negative impact over time on the IDR. 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 ----------- ------ -------- Shift4 Payments, LLC LT IDR BB New Rating senior unsecured LT BB New Rating RR4 senior secured LT BBB- New Rating RR1 Shift4 Payments Finance Sub, Inc. senior unsecured LT BB New Rating RR4 Shift4 Payments, Inc. LT IDR BB New Rating SHINING WAY: Seeks Chapter 11 Bankruptcy in Texas ------------------------------------------------- Shining Way Esthetics LLC filed Chapter 11 protection in the Southern District of Texas. According to court filing, the Debtor reports between $1 million and $10 million in debt owed to 1 and 49 creditors. The petition states that funds will be available to unsecured creditors. About Shining Way Esthetics Shining Way Esthetics LLC is a medical spa in Texas. Shining Way Esthetics LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-33555) on August 2, 2024. In the petition filed by Craig Clayton De Souza, as managing member, the Debtor reports estimated assets between $500,000 and $1 million and estimated liabilities between $1 million and $10 million. The Honorable Bankruptcy Judge Eduardo V. Rodriguez oversees the case. The Debtor is represented by: Larry A. Vick, Esq. LARRY A. VICK 13501 Katy Freeway, Suite 3474 Houston TX 77079 Tel: (832) 413-3331 Fax: (832) 202-2821 Email: lv@larryvick.com SINTX TECHNOLOGIES: Incurs $2.2 Million Net Loss in Second Quarter ------------------------------------------------------------------ SINTX Technologies, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $2.20 million on $859,000 of total revenue for the three months ended June 30, 2024, compared to a net loss of $2.46 million on $508,000 of total revenue for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss of $3.09 million on $1.55 million of total revenue, compared to a net loss of $2.75 million on $1.05 million of total revenue for the same period in 2023. As of June 30, 2024, the Company had $15.30 million in total assets, $6.45 million in total liabilities, and $8.85 million in total stockholders' equity. SINTX said, "If the Company seeks to obtain additional equity and/or debt financing, such funding is not assured and may not be available to the Company on favorable or acceptable terms and may involve significant restrictive covenants. Any additional equity financing is also not assured and, if available to the Company, will most likely be dilutive to its current stockholders. If the Company is not able to obtain additional debt or equity financing on a timely basis, the impact on the Company will be material and adverse. "These uncertainties raise substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1269026/000149315224031644/form10-q.htm About SINTX Technologies Headquartered in Salt Lake City, Utah, SINTX Technologies, Inc. -- https://ir.sintx.com/ -- is an advanced ceramics company that develops and commercializes materials, components, and technologies for biomedical, technical, and antipathogenic applications. The Company has grown from focusing primarily on the research, development and commercialization of medical devices manufactured with silicon nitride to becoming an advanced ceramics company engaged in diverse fields, including biomedical, technical and antipathogenic applications. This diversification enables the Company to focus on its core competencies which are the manufacturing, research, and development of products comprised from advanced ceramic materials for external partners. Lehi, Utah-based Tanner LLC, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 27, 2024, citing that the Company has recurring losses from operations and negative operating cash flows and needs to obtain additional financing to finance its operations. These issues raise substantial doubt about the Company's ability to continue as a going concern. SIRVA WORLDWIDE: Moody's Lowers CFR & First Lien Loans to 'Caa3' ---------------------------------------------------------------- Moody's Ratings downgraded SIRVA Worldwide, Inc.'s ("SIRVA") corporate family rating to Caa3 from Caa1 and its probability of default rating to Caa3-PD from Caa1-PD. Concurrently, Moody's downgraded the ratings on SIRVA's backed senior secured first lien credit facilities ($55.5 million revolver due May 2025, $378 million (outstanding) term loan due August 2025) to Caa3 from B3 and downgraded the rating on the company's senior secured second lien term loan due 2026 to C from Caa3. The outlook is negative. The company provides outsourced relocation and moving services to the corporate, consumer, and government sectors. The ratings downgrade reflects Moody's concern that SIRVA's financial performance will remain challenged over the next 12-18 months as corporate relocation and moving volumes remain soft while the company's high interest expense costs weaken its liquidity profile. Moody's concerns related to the company's credit quality are further exacerbated by SIRVA's elevated debt leverage (debt/EBITDA of over 10x as of March 31, 2024, more than 13x including securitization and mortgage warehouse debt based on Moody's calculations and adjustments) and growing uncertainty with respect to the company's ability to refinance its debt which substantially is set to mature in 2025. Increasingly aggressive financial policies, as reflected in the recent issuance in March 2024 of super priority debt ranking ahead of the existing first-lien facilities, was also a key ESG governance consideration of the ratings downgrade. SIRVA's willingness to subordinate existing lenders and continue to sustain very high debt levels while liquidity weakens and refinancing risk grows are indicative of increasingly aggressive financial strategies, reflected in the credit impact score ("CIS") change to CIS-5 from CIS-4. RATINGS RATIONALE SIRVA's ratings are primarily constrained by the company's very highly levered capital structure which seems unsustainable with a growing likelihood of impairment through an anticipated distressed debt exchange. The ratings are also negatively impacted by corporate governance risks related to the parent company SIRVA BGRS Worldwide, Inc.'s ("SIRVA BGRS") concentrated equity ownership by affiliates of Madison Dearborn Partners, LLC ("MDP") with a minority stake held by the Relo Group ("Relo"). Additional credit risks stem from SIRVA's modest profitability (relative to gross revenues) and anticipated free cash flow deficits over the next 12-15 months. The risks presented by the potential deterioration in the company's liquidity profile could become more significant over this period if SIRVA is unable to refinance its upcoming debt maturities and reduce its high interest burden. SIRVA is also exposed to business cyclicality and volatility in housing market pricing due to the nature of the contracts the company has with clients where SIRVA takes on home selling and purchasing risk for relocating employees. These risks are somewhat offset by the company's global market presence and integrated service offerings which provide a competitive advantage to support a broad, diverse customer base and maintain high client retention rates above 95%. Moody's consider SIRVA's liquidity profile to be weak given expectations of continued cash burn over the next 12-15 months. The company's unrestricted cash balance stood at $96.9 million as of March 31, 2024 and Moody's project further contraction as the company will incur a free cash flow deficit during 2024. Moody's concerns with respect to the company's ability to refinance a substantial portion of its debt maturing in 2025 contributes significantly to the risks related to SIRVA's liquidity profile. SIRVA's $55.5 million secured revolver expiring in May 2025 and $32.5 million unsecured revolver maturing November 2026 are presently fully drawn. As of March 31, 2024, the company was in compliance with its net leverage springing financial covenant, which stood approximately 23% below the maximum level of 5.9x, but Moody's anticipate that the company's projected cash burn will narrow this cushion significantly in 2024. In addition, SIRVA, through SIRVA Relocation Credit, LLC ("SRC"), a subsidiary of SIRVA BGRS, has a $500 million accounts receivable securitization facility expiring in July 2025 that has approximately $303 million in availability (as of March 31, 2024) that is used for pass-through expenses related to the relocation segment. SRC transfers its ownership in all of its receivables on a non-recourse basis to a third party financial institution in exchange for a cash advance and a securitization receivable. Additionally, subsidiary SIRVA Mortgage ("SM") obtains short-term mortgage warehouse facilities to fund mortgages for clients until the underlying properties are sold. SIRVA also sells non-mortgage receivables into the securitization facility. Continued access to these facilities are key to SIRVA's ability to provide certain services to its customers. The Caa3 rating on SIRVA's senior secured first lien bank credit facility which is consistent with the CFR, reflects a priority lien on collateral (substantially all domestic assets excluding the securitization facility) relative to the senior secured second lien term loan due 2026, which is rated C, and Moody's recovery expectation in the event of default. The company issued a new priority term loan ($64 million currently outstanding, unrated) in March 2024 that ranks ahead of the first lien facilities. The C rating on the senior secured second lien term loan reflects Moody's expectation that there is a high likelihood of minimal recovery for this instrument in the event of a default and debt restructuring. The parent company's SRC and SM subsidiaries are special purpose vehicles to be the borrowers of the securitization facility and the warehouse lines. These facilities are non-recourse to SIRVA. The negative outlook reflects Moody's expectation that SIRVA will be challenged to generate organic growth in revenue and EBITDA over the coming 12-18 months as corporate relocation and moving volumes remain soft. Accordingly, debt-to-EBITDA is expected to remain elevated in 2024 while refinancing risk continues to intensify and free cash flow remains negative. The outlook could be changed to stable from negative if SIRVA improves its operating performance such that Moody's expect the company will generate positive free cash flow on a sustained basis and addresses refinancing risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A rating upgrade is unlikely in the near term given the negative outlook. Over the longer term, the ratings could be upgraded if SIRVA is able to generate healthy revenue and EBITDA growth, meaningfully reduce debt/EBITDA, sustain positive free cash flow, strengthen its liquidity profile, and meaningfully extend its debt maturities. The ratings could be downgraded if SIRVA experiences a weakening competitive position or a deterioration in financial performance resulting in further weakening of the company's liquidity profile, heightened refinancing risk, and Moody's expectation of a higher probability of a default over the near term. The ratings could also be downgraded if Moody's recovery expectations in the event of default diminish. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. SIRVA's parent company, SIRVA BGRS, headquartered in Oakbrook Terrace, Illinois, provides outsourced relocation and moving services to the corporate, consumer, and government sectors. Moody's expect the company to generate revenues of $1.65 billion in 2024. SL GREEN: Fitch Alters Outlook on 'BB+' IDR to Stable ----------------------------------------------------- Fitch Ratings has affirmed SL Green Realty Corp.'s (SLG) Issuer Default Rating and the rating of its subsidiary, SL Green Operating Partnership, L.P., at 'BB+'. The Rating Outlook is revised to Stable from Negative. SLG's ratings reflect Fitch's expectation that leverage will stabilize within the context of a persistently low unencumbered asset coverage of unsecured debt (UA/UD), which slightly improved in the last year, but remains meaningfully below 2.0x. This is partially mitigated by SLG's credit strengths, including its relatively strong, albeit geographically concentrated, high quality New York office portfolio. It features above-average occupancy rates, long-term leases to solid credit tenants, and ongoing strong contingent liquidity from institutional lenders and investors. The Outlook revision to Stable is based on SLG's successful executions of asset dispositions and debt refinancings despite the headwinds of a challenged office operating environment. This demonstrates its improved liquidity capability. New York office leasing fundamentals, trends in UA/UD and overall leverage will be key factors in assessing the ratings going forward. Key Rating Drivers Persistently Low Unencumbered Coverage: Fitch estimates net UA/UD, calculated as unencumbered property net operating income (NOI) divided by a blended stressed capitalization rate of 7.75% for office and 12.25% for SUMMIT was 1.5x as of June 30, 2024, an increase from net UA/UD of 1.2x as of March 31, 2023. However, this is still below UA/UD net cash of 1.8x at YE 2019. UA/UD coverage of below 2.0x historically hindered SLG's credit profile compared with similarly rated companies. As such, Fitch believes SLG has lower financial flexibility through its unencumbered portfolio, with near-term UA/UD likely to remain below 2.0x, although it is anticipated to improve with the pay down of incremental unsecured debt. Transition to Asset Management: SLG's transition toward more of an asset management model will make it increasingly difficult to grow UA/UD as the company is less likely to acquire new wholly owned unencumbered assets prospectively. However, SLG's dispositions could bring net UA/closer to 2.0x by YE 2025 as the company looks to further payoff unsecured debt with the proceeds. Fitch excludes non-property unencumbered assets such as SLG's debt and preferred equity portfolio from the UA/UD calculations but incorporates the portfolio qualitatively. Leverage Remains at Pre-Pandemic Levels: Fitch expects consolidated net debt/recurring operating EBITDA (REIT leverage) to subside in the low-to-mid-6x level through the forecast period. This is driven by debt repayment via a substantial disposition program and incremental income from delivery of ongoing development projects, such as 760 Madison and One Madison. Leverage has been volatile in recent years. It was 6.7x in 2023 and 10.1x in 2022. However, this was largely driven higher by the timing of the 245 Park acquisition in 3Q22 and subsequent 2Q23 49.9% stake sale to Mori Trust, which made the asset unconsolidated again. Fitch believes this transaction and other dispositions will facilitate leverage sustaining at more historic, pre-pandemic levels. Above-Average Portfolio Quality: SLG wholly owns and has interests in high-quality, primarily NYC office properties with above average occupancy rates, rents and long-term leases to solid credit tenants. The company also owns and operates a street retail portfolio in key Manhattan shopping corridors, such as the Plaza District, SoHo and Times Square, and two residential NYC assets. The tenant credit profile is strong, with minimal concentration. SLG's top-10 tenants generally have healthy credit profiles and comprise about 23.6% of annualized revenues. SLG's portfolio has stronger contingent liquidity relative to most asset classes in other markets when considering Midtown Manhattan assets still remain in high demand by secured lenders and institutional investors. Executing on Dispositions and Refinancings: SLG appears on track to achieve the $1.45 billion disposition guidance it laid out at its December 2023 Investor Day as it looks to further reduce debt. The company has also discussed a plan to refinance $5 billion of debt that matures in the next few years in 2024. YTD through July 2024, the company had refinanced $2.6 billion on consistent terms, which included $49 million of debt reduction. Office Leasing Pressure: Fitch believes in-office work will remain a core tenet of corporate America. However, an increase in employers adapting to more flexible hybrid working environments likely will result in tenants leasing less space than in prior periods. This could lead to a slower recovery in leasing and rent growth than typically seen after a downturn. The recovery in NYC office space has been somewhat subdued to this point. However, the trend of the relative strength of higher quality space in the leasing market that already existed prior to the pandemic characterized by modern amenities, sustainability features and transit-centric locations continues. This should benefit SLG and REITs in general. Asset Concentration and Development Risks: SLG holds asset concentration risk following a sell down of assets in recent years, resulting in decreased granularity, and increased JV and development risk. The company successfully executed the development and lease-up of its One Vanderbilt asset, although it now represents 17.2% of annual rent at SLG's share. The company has a 71% ownership share but is reported on an unconsolidated basis, and the company expects to reduce its stake by 10%-15%. SLG seeks to replicate One Vanderbilt's development success at One Madison, which is one of the company's largest assets. It was taken offline in 2020 to be redeveloped, representing incremental lease-up risk. SLG maintains a 25.5% ownership stake in One Madison, after selling two other interests in the project in a JV partnership. The asset is reported on an unconsolidated basis and projected to begin generating meaningful income in 2026. It was 64.3% pre-leased as of June 30, 2024. Derivation Summary SLG owns high-quality, primarily NYC office portfolios, with relatively high occupancy rates and long-term leases to solid-credit tenants. The company's New York-focused portfolio has better contingent liquidity from institutional lenders and investors than its peer, Corporate Office Properties Trust (BBB-/Stable). Historically, the persistent strength and economic diversity of Manhattan and its high rents help to mitigate the geographic concentration risk. In the past, SLG has approached ground-up development more opportunistically, rather than as a key component of its operating strategy, although higher perceived risk-adjusted returns from development has somewhat altered this approach in recent years. Vornado Realty Trust (BB+/Stable) is the most similar peer to SLG due to its predominant NYC office focus, although Vornado historically has more of a consolidated development pipeline, and SLG has had a secondary suburban component in the past (and retains one asset), while also maintaining a debt and preferred equity investment portfolio. Fitch rates the Issuer Default Ratings of the parent REIT and subsidiary operating partnership on a consolidated basis, using the weak parent/strong subsidiary approach and open access and control factors, based on the entities operating as a single enterprise with strong legal and operational ties. Fitch applies 50% equity credit to the company's perpetual preferred securities given the cumulative nature of coupon deferral with settlement through a manner other than equity (cash). Certain metrics calculate leverage including preferred stock. No Country Ceiling or operating environment aspects affect the rating. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer Include - Approximate low-single digit same-store net operating income (SSNOI) decline in 2024, followed by low single digit SSNOI growth through the forecast period, which is derived by an assumption of weighted average occupancy loss of 150bps in 2024, followed by occupancy gains of approximately 100bps per annum in 2025-2026 and low-single-digit releasing spreads increases per annum. - Paydown of $100 million of consolidated unsecured debt in each of 2024 and 2025 from operating cash flows and dispositions. - Net dispositions of approximately $1.25 billion in 2024 and $200 million in 2025. - Maintenance of current dividend. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch's expectation of REIT leverage sustaining below 7.0x; - Fitch's expectation of UA/UD sustaining at or above 2.0x; - Proven and consistent capital management commensurate with a higher rating. Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Fitch's expectation of REIT leverage sustaining above 8.0x; - Fitch's expectation of UA/UD sustaining below 1.5x; - Fitch will evaluate the aforementioned sensitivities and consider a downgrade if Fitch expects material and lasting changes to the cash flow profile and financeability of the assets; - Fitch's expectation of a sustained liquidity coverage ratio below 1.0x. Liquidity and Debt Structure Adequate Liquidity Coverage: Fitch estimates SLG's sources of liquidity (cash, availability under its revolving credit facility, retained cash flow after dividends/distributions) cover uses (pro rata debt maturities, recurring capex, nondiscretionary development expenditures) by 1.9x for July 1, 2024 to Dec. 31, 2025, not including JV debt, as the company works through near-term maturities. The calculation does not assume SLG raises any external capital to repay debt maturities. Under a scenario where the company refinances 80% of maturing secured debt (not including JV debt), SLG's liquidity coverage also improves to 3.0x and 1.1x including JV debt. Overall, the company's weighted-average debt tenor is approximately 3.0 years not including extension options as of June 30, 2024. The company continues to address upcoming maturities through incremental asset dispositions, operating cash flow and refinancing of mortgages. Fitch believes the issuer's demonstrated access to a variety of capital sources over time mitigates refinancing risk. The company has demonstrated progress on the refinancing front with $2.6 billion of debt refinanced thus far in 2024. SLG's historically conservative common dividend policy supported its liquidity by allowing it to retain additional operating cash flow. The company's adjusted funds from operations pay-out ratio trended moderately below the industry average and was 52.4% for the TTM ended June 30, 2024. Issuer Profile SL Green is a NYC-based office REIT that holds interests in 55 buildings totaling 31.8 million square feet. This included ownership interests in 28.1 million square feet of Manhattan buildings and 2.8 million square feet securing debt and preferred equity investments. Summary of Financial Adjustments - Fitch adds back noncash stock-based compensation to recurring operating EBITDA; - Fitch calculates certain metrics before preferred stock, including REIT leverage; - Fitch adds cash distributions from unconsolidated joint ventures and subtracts distributions to non-controlling interests to calculate operating EBITDA. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- SL Green Operating Partnership, L.P. LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ junior subordinated LT BB Affirmed RR5 BB SL Green Realty Corp. LT IDR BB+ Affirmed BB+ preferred LT BB- Affirmed RR6 BB- SOLDIER OPERATING: Hires Chaffe & Associates as Investment Banker ----------------------------------------------------------------- The official committee of unsecured creditors of Soldier Operating, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Louisiana to employ Chaffe & Associates, Inc. as investment banker. The firm will provide these services: a. review VPLP's business, operations, properties, financial condition, prospects, and strategic alternatives; b. analyze and propose potential buyers, funding sources, or other strategic partners ("Counterparties") for VPLP's approval in connection with relevant strategic alternatives; c. assist VPLP in preparing marketing documents, such as a confidential information memorandum, and assist in compiling a virtual data room ("VDR" and other items for due diligence by potential counterparties; d. coordinate Counterparty information request, management discussions, VDR access, management meetings, and site visits; e. assist VPLP management in preparing a presentation to be delivered by management to prospective Counterparties invited to meet with VPLP, and assist in evaluating each proposal made by potential Counterparties and recommend a course of action; f. advise as to the strategy and tactics of negotiation with potential Counterparties; g. to the extent appropriate t its role as investment bankers, and if requested by VPLP, participate in negotiations in conjunction with VPLP and its attorneys, and assist with the closing of any sale transaction. The firm will be paid at these rates: a. Advisory Fee i. First two (2) months. VPLP will pay Chafee an Advisory Fee in the amount of $2,000 per month during the first two (2) months of the term of the engagement, which payments shall be deemed non-refundable and fully earned by Chaffe. ii. Subsequent months. Beginning in the third month of the engagement, the monthly advisory fee amount will be reduced to $15,000, and will not be due or owed to Chaffe by VPLP, unless and until VPLP secured SIP Financing. b. Transaction Fee i. DIP Placement Fee. Upon VPLP's consummation of a DIP financing transaction, VPLP will pay Chaffe a DIP Placement Fee in the amount of $150,000. ii. Closing Fee. Upon VPLP's consummation of a full or partial sale of VPLP's assets or other strategic transaction, VPLP will pay Chaffe a Closing Fee equal to 5% of the aggregated value received by VPLP or its equity holders with respect to the transaction. Notwithstanding to the contrary in the Engagement Agreement, the Debtor shall pay Chaffe a minimum Transaction Fee of $300,000. c. Credits Against Transaction Fee. Chafee will credit 100 percent of the Advisory Fee actually paid against the Transaction Fee; however, this credit is limited in application by the requirement of a minimum Fee of $300,000. Managing Director $450 per hour Vice Presidents $350 per hour Associates $350 per hour Analysts $250 per hour Michael H. Schmidt, a managing director at Chaffe & Associates, Inc., disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael H. Schmidt Chaffe & Associates, Inc. 201 St. Charles Avenue, Suite 1410 New Orleans, LA 70170 Tel: (504) 524-1801 Fax: (504) 524-7194 Email: mkatsanis@chaffe-associates.com About Soldier Operating, LLC Soldier Operating, LLC and Viceroy Petroleum, LP filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Lead Case No. 24-50387) on May 13, 2024. In the petitions signed by Matthew Ferguson, president, Soldier Operating disclosed $5,615,631 in assets and $6,089,722 in liabilities. Judge John W. Kolwe presides over the cases. Bradley L. Drell, Esq., at Gold, Weems, Bruser, Sues & Rundell, APLC represents the Debtors as counsel. The U.S. Trustee appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped H. Kent Aguillard, Esq., and Caleb K. Aguillard, Esq., and Stewart Robbins Brown & Altazan, LLC as co-counsel. SOLIGENIX INC: Reports $1.64 Million Net Loss in Second Quarter --------------------------------------------------------------- Soligenix, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss applicable to common stockholders of $1.64 million on $2,342 of total revenues for the three months ended June 30, 2024, compared to a net loss applicable to common stockholders of $1.61 million on $206,929 of total revenues for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company reported a net loss applicable to common stockholders of $3.56 million on $119,371 of total revenues, compared to a net loss applicable to common stockholders of $2.66 million on $464,107 of total revenues for the same period in 2023. As of June 30, 2024, the Company had $9.87 million in total assets, $6.40 million in total liabilities, and $3.46 million in total shareholders' equity. As of June 30, 2024, the Company had an accumulated deficit of $229,264,005. During the six months ended June 30, 2024, the Company used $3,260,309 of cash in operating activities. "The Company expects to continue to generate losses in the foreseeable future. The Company's liquidity needs will be determined largely by the budgeted operational expenditures incurred in regards to the progression of its product candidates. Management believes that the Company has sufficient resources available to support its development activities and business operations and timely satisfy its obligations as they become due through the second quarter of 2025. The Company does not have sufficient cash and cash equivalents as of the date of filing this Quarterly Report on Form 10-Q to support its operations for at least the 12 months following the date the financial statements are issued. These conditions raise substantial doubt about the Company's ability to continue as a going concern through 12 months after the date the financial statements are issued." said Soligenix in the SEC filing. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/812796/000155837024011740/sngx-20240630x10q.htm About Soligenix Headquartered in Princeton, N.J., Soligenix, Inc. -- http://www.soligenix.com-- is a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. The Company maintains two active business segments: Specialized BioTherapeutics and Public Health Solutions. Tampa, Florida-based Cherry Bekaert LLP, the Company's auditor since 2023, issued a "going concern" qualification in its report dated March 15, 2024, citing that the Company has recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. STEWARD HEALTH: Sells Northern Florida Assets to Orlando Health --------------------------------------------------------------- Steward Health Care, the country's largest physician-led, minority-owned, integrated health care system, announced on August 14, 2024, that it has entered into a binding asset purchase agreement to sell its Northern Florida operations, comprised of Rockledge Regional Medical Center, Melbourne Regional Medical Center, Sebastian River Medical Center, and Steward Medical Group Practices in Northern Florida, to Orlando Health, a private, not-for-profit healthcare organization serving the Southeastern United States and Puerto Rico. Orlando Health's qualified bid has been designated as the stalking horse and, subject to the terms of the agreement, Orlando Health's bid will be subject to higher or better qualified bids received by August 26th, 2024, at which time a bankruptcy court-approved auction may occur. "The emergence of Orlando Health, a premier health system with extensive operations in and around Florida, as the leading qualified bid committed to purchasing these assets reinforces the attractiveness of these best-in-class assets," said Mark Rich, President of Steward Health Care. "We look forward to reviewing any additional bids that are received between now and August 26th, and are encouraged by Orlando Health's vote of confidence in our Northern Florida operations." Orlando Health is a 3,487-bed system that includes 17 hospitals, 10 free-standing emergency rooms and 9 Hospital Care at Home programs, with additional facilities under development. In addition, the system also includes skilled nursing facilities, an in-patient behavioral health facility under the management of Acadia Healthcare, and more than 375 outpatient facilities that include physician clinics, imaging and laboratory services, wound care centers, home healthcare services in partnership with LHC Group, and urgent care centers in partnership with CareSpot Urgent Care. More than 4,950 physicians, representing more than 100 medical specialties and subspecialties have privileges across the Orlando Health system, which employs more than 29,000 team members and more than 1,500 physicians. The transaction is subject to customary closing conditions, including Bankruptcy Court and regulatory approval, and is expected to close in the Q4 2024 should Orlando Health emerge as the winning buyer at the auction. About Steward Health Care Steward Health Care System LLC owns and operates the largest private physician-owned for-profit healthcare network in the U.S. Headquartered in Dallas, Texas, Steward's operations include 31 hospitals in eight states, approximately 400 facility locations, 4,500 primary and specialty care physicians, 3,600 staffed beds, and nearly 30,000 employees. Steward Health Care provides care to more than two million patients annually. Steward and 166 affiliated debtors filed Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No. 24-90213) on May 6, 2024, in the U.S. Bankruptcy Court for the Southern District of Texas, and the Honorable Christopher M. Lopez oversees the proceeding. Weil, Gotshal & Manges LLP is serving as the Company's legal counsel. AlixPartners, LLP is providing financial advisory services to the Company, and John Castellano of AlixPartners is serving as the Company's Chief Restructuring Officer. Lazard Freres & Co. LLC, Leerink Partners LLC, and Cain Brothers, a division of KeyBanc Capital Markets Inc. are providing investment banking services to the Company. McDermott Will & Emery is special corporate and regulatory counsel for the company. Kroll is the claims agent. SUNNY ENERGY: Files Subchapter V Bankruptcy Case ------------------------------------------------ Sunny Energy LLC filed Chapter 11 protection in the District of Arizona. According to court documents, the Debtor reports $2,115,170 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for August 27, 2024 at 12:00 p.m. in Room Telephonically. About Sunny Energy LLC Sunny Energy LLC is a solar energy equipment supplier in Tempe, Arizona. Sunny Energy LLC sought relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 24-06111) on July 26, 2024. In the petition filed by Joseph J. Cunningham, as manager, the Debtor reports total assets as of April 30, 2024 amounting to $1,838,684 and total liabilities as of April 30, 2024 amounting to $2,115,170. The Honorable Bankruptcy Judge Brenda K. Martin oversees the case. The Debtor is represented by: Bradley D. Pack, Esq. ENGELMAN BERGER PC 2800 N. Central Avenue, Suite 1200 Phoenix, AZ 85004 Tel: 602-271-9090 Email: bdp@eblawyers.com SUNPOWER CORP: Seeks Chapter 11 With Solaria Deal ------------------------------------------------- SunPower Corp. (NASDAQ:SPWR), a leading residential solar technology and energy services provider, tannounced it has entered into an asset purchase agreement (the "APA") with Complete Solaria, Inc. (NASDAQ:CSLR) ("Complete Solaria") to serve as the Stalking Horse Buyer for the assets associated with SunPower's Blue Raven Solar business, New Homes business, and non-installing Dealer network (the "Assets"). Concurrently, the Company and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code ("Chapter 11") in the United States Bankruptcy Court for the District of Delaware (the "Court"), which will provide other interested parties the opportunity to submit competing bids for the Company's assets. Under the terms of the APA, subject to Court approval, Complete Solaria will acquire the Assets and assume certain related liabilities for $45 million in cash. The Company has asked the Court for approval to complete the transaction mid to late September. Additionally, SunPower intends to continue a sale process for its remaining assets and effectuate any resulting sale transactions pursuant to Section 363 of the U.S. Bankruptcy Code. "For nearly 40 years, SunPower has made solar energy more accessible to Americans, driven by our mission to change the way our world is powered. We are confident Complete Solaria's CEO, T.J. Rodgers, will carry forward our vision to shape the future of residential solar as a pioneer in this space," said Tom Werner, Executive Chairman at SunPower. "In light of the challenges SunPower has faced, the proposed transaction offers a significant opportunity for key parts of our business to continue our legacy under new ownership. We are working to secure long-term solutions for the remaining areas of our business, while maintaining our focus on supporting our valued employees, customers, dealers, builders, and partners." "Solar energy utility generation costs are now 2.4 cents per kilowatt hour (kWh) versus 3.6 cents per kWh for coal, the cheapest fossil fuel source," said T.J. Rodgers, CEO, Complete Solaria. "Thus the move to zero‑emission solar energy is accelerating, along with distributed solar power generation, as homeowners can now generate their own power for 8-10 cents per kWh, below the price of utility power in most states. We look to welcome Blue Raven Solar, the SunPower New Homes Division, and a portion of SunPower's Dealer network into the Complete Solaria portfolio. This acquisition will strengthen our position in the market and put more muscle behind our commitment to driving the future of clean, reliable energy." SunPower has requested Court approval to access the necessary prepetition cash collateral to fund business operations and administrative expenses during the Chapter 11 cases. To support its operations during the court-supervised process, the Company is filing a variety of customary motions seeking, among other things, authorization to meet its obligations to its employees. The Company expects to receive Court approval for these requests. Following an expeditious sale process, the Company plans to liquidate any remaining assets and undergo an orderly and efficient winddown of its operations. Additional information regarding the Company's Chapter 11 process is available at http://dm.epiq11.com/SunPower.Stakeholders with questions may call the Company's Claims Agent Epiq Restructuring Administration at (888) 410-9433 or +1 (971) 298-7638 if calling from outside the U.S. or email SunPowerinfo@epiqglobal.com. About SunPower SunPower (NASDAQ:SPWR) is a leading solar, storage and energy services provider in North America. SunPower offers solar + storage solutions designed and warranted by one company that gives customers control over electricity consumption and resiliency during power outages while providing cost savings to homeowners. On the Web: http://www.sunpower.com/ SunPower Corp. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-11649) on August 6, 2024. In the petition filed by Matthew Henry, as chief transformation officer, the Debtor reports estimated assets and liabilities between $1 billion and $10 billion each. Kirkland & Ellis LLP and Richards, Layton & Finger, P.A. are serving as legal counsel to SunPower. Alvarez & Marsal North America, LLC is serving as transition officer and financial advisor to the Company, with Moelis & Company serving as the investment banker and C Street Advisory Group serving as its strategic communications advisor. DLA Piper LLP (US) and Arnold & Porter Kaye Scholer LLP are serving as legal counsel to Complete Solaria, with Ayna.AI LLC serving as its advisor. SVB FINANCIAL: Bankruptcy Plan Okayed; FDIC Fight Remains --------------------------------------------------------- Jonathan Randles of Bloomberg News reports that SVB Financial Group's restructuring plan is okayed by the judge, but the company suffered a setback in its struggle with federal regulators to recoup the almost $2 billion it lost when its Silicon Valley Bank subsidiary failed last 2023. Judge Martin Glenn approved SVB's plan to distribute assets to creditors and preferred equity holders on Friday, August 2, 2024, thereby settling the company's bankruptcy. According to court records, the group comprises Citadel Advisors LLC, Hudson Bay Capital, King Street Capital Management LP, and other Wall Street heavyweights. About SVB Financial Group SVB Financial Group (Pink Sheets: SIVBQ) is a financial services company focusing on the innovation economy, offering financial products and services to clients across the United States and in key international markets. Prior to March 10, 2023, SVB Financial Group owned and operated Silicon Valley Bank, a state chartered bank. During the week of March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a severe "run-on-the-bank." On the morning of March 10, the California Department of Financial Protection and Innovation seized SVB and placed it under the receivership of the Federal Deposit Insurance Corporation. SVB was the nation's 16th largest bank and the biggest to fail since the 2008 financial meltdown. On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had assets of $19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31, 2022. The Hon. Martin Glenn is the bankruptcy judge. The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Centerview Partners, LLC as investment banker; and Alvarez & Marsal North America, LLC as restructuring advisor. William Kosturos, a partner at Alvarez & Marsal, serves as the Debtor's chief restructuring officer. Kroll Restructuring Administration, LLC, is the claims and noticing agent and administrative advisor. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee tapped Akin Gump Strauss Hauer & Feld, LLP as bankruptcy counsel; Cole Schotz P.C. as conflict counsel; Lazard Freres & Co. LLC as investment banker; and Berkeley Research Group, LLC as financial advisor. SYDOW FIRM: Case Summary & Eight Unsecured Creditors ---------------------------------------------------- Debtor: The Sydow Firm aka The Sydow Firm LLP aka Sydow & McDonald aka Sydow & McDonald LLP 1226 County Road 45 Angleton TX 77515 Case No.: 24-80236 Business Description: The Debtor is law firm in Texas. Chapter 11 Petition Date: August 14, 2024 Court: United States Bankruptcy Court Southern District of Texas Debtor's Counsel: Bennett G. Fisher, Esq. LEWIS BRISBOIS BISGAARD & SMITH 24 Greenway Plaza Suite 1400 Houston TX 77046 Tel: (346) 241-4095 Email: bennett.fisher@lewisbrisbois.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Michael Sydow as controlling partner. A copy of the Debtor's list of eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PB6QVLY/The_Sydow_Firm__txsbke-24-80236__0001.10.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/J22SX6A/The_Sydow_Firm__txsbke-24-80236__0001.0.pdf?mcid=tGE4TAMA SYLVAMO CORP: Fitch Assigns 'BB+' LongTerm IDR, Outlook Stable -------------------------------------------------------------- Fitch Ratings has assigned Sylvamo Corporation a first-time Long-Term Issuer Default Rating (IDRs) of 'BB+'. The Rating Outlook is Stable. Fitch has also assigned 'BBB-'/'RR1' ratings to Sylvamo's first-lien revolver and term loans, and 'BB+'/'RR4' rating to its unsecured notes. The 'BB+' rating reflects Sylvamo's significant scale and low-cost operations, strong FCF generation, and its conservative leverage and capital allocation policies against the backdrop of a long-term secular decline facing the paper market. Fitch also notes the credit support provided by the company's substantial forestry holdings in Brazil. Key Rating Drivers Large Scale Low-Cost Producer: Sylvamo's mills, spread across North America, Europe and Latin America are among the lowest-cost producers of uncoated freesheet in the world, with the bulk of the company's approximately three million short tons of annual capacity in the bottom 1st and 2nd quartile of the global cost curve. This favorable cost position partially buffers margins from uncertain pricing and negative volume trends in the paper industry. Since the spin-off from International Paper (IP) in 2021, Sylvamo has both increased capital expenditures and has targeted investments and upgrades across its asset base, with the effect of maintaining or improving the cost competitiveness of the operations. The company maintains a pipeline of high-return projects, which Fitch believes will continue to place Sylvamo at the lower end of the cost curve. Six of Sylvamo's seven mills are vertically integrated from the round wood processing, into pulp, and finally through paper production stage, a configuration which is highly cost effective, and allows the company to generate the majority (~80%) of its energy requirements. Sylvamo's mills are also located in attractive fiber regions where Sylvamo has access to low cost wood. Secular Industry Decline: Demand for all types of graphic paper have been in secular decline for several decades due to substitution by electronic and digital media. However, uncoated freesheet (UFS) of the type Sylvamo produces has seen a less precipitous decline than other paper types such as newsprint paper. Fitch estimates that Sylvamo's UFS volumes will decline in the 4% range per annum through the forecast period, with long-term demand supported by ongoing consumption in the education, communication and entertainment sectors. The paper market does benefit from an orderly market structure, with major producers regularly reducing capacity to maintain a market supply/demand balance, thus supporting price despite the negative volume trends. Average selling price for UFS has seen a roughly 40% increase since 2020, and Fitch expects flat to modestly increasing price over the forecast period partially mitigating the negative volume effect. Fitch notes that a number of Sylvamo's peers are converting mills to more economically sustainable containerboard and pulp products to diversify away from paper, which helps maintain equilibrium in the paper market. Conservative Financial Policies: Sylvamo has meaningfully reduced gross debt since spinoff, from $1.5 billion at October 2021, to $940 million as of March 31st 2024, resulting in Fitch calculated EBITDA leverage of about 1.7x. Fitch believes that maintaining leverage in this range anchors the company's capital allocation strategy. Annual dividends are a principal avenue for shareholder return, and are currently around $74 million, which can be easily accommodated from cash flow from operations in the $500 million area. Sylvamo does have an active share repurchase program, which Fitch assumes will be conducted within the bounds of a conservative leverage profile. Additionally, Fitch observes modest capex spending oriented toward maintenance and efficiency improvements and does not envision large scale M&A or large conversion projects, which could potentially stress the agency's leverage sensitivity bounds. Steady Cash Flow Generation: Since separation from IP, Sylvamo has generated EBITDA margins in the mid-teens, with positive annual FCF margins above 5% implying a healthy deleveraging capacity. Cash flows have seen some variability due to inventory destocking in the 2022-2023 period, and from scheduled maintenance downtime at various facilities. However, the economics of Sylvamo's business and overall cash flows should remain within a relatively tight range through Fitch's forecast period. Little Impact from Termination of Offtake Agreements: Sylvamo has the option, in early 2025 and early 2026, to terminate offtake agreements with IP related to production from the Georgetown and Riverdale facilities in North America, which are still owned and operated by IP. Per agreement terms, Sylvamo pays IP cash costs for product while maintaining the requisite order book to keep the facilities operating at budgeted capacity. Volumes attributable to Georgetown and Riverdale represent around 17% of Sylvamo's total. Should either party terminate the agreement, Fitch believes that Sylvamo will be able to effectively switch capacity to other facilities, within the context of the currently forecast capex budget. Therefore, a termination of the agreement would have a negligible impact on credit quality. Sylvamo is not responsible for any prospective shut down costs for the plants. Substantial Forestry Assets: Sylvamo's forestry holdings in Brazil are a key credit consideration supporting its 'BB+' credit profile. The company owns about 250,000 acres of land in the state of Sao Paulo valued at approximately $1.0 billion. The favorable conditions for growing trees in the region makes this property efficient by global standards, and gives the company a sustainable advantage in terms of cost of fiber and transportation costs between forest and mills. The assets also represent to Sylvamo a significant source of alternate liquidity should the company need to monetize these holdings, potentially via a sale leaseback or similar arrangement that would still afford Sylvamo access to fiber to supply its three mills in the region. Derivation Summary A notable strength for Sylvamo within the paper and packaging sector is its consistency in maintaining low leverage compared with many high-rated issuers in the industry. Sylvamo has consistently maintained EBITDA leverage of around 1.5x, significantly lower than its peers including Stora Enso Oyj (BBB-/Stable) and Suzano S.A. (BBB-/Stable). This conservative leverage profile provides Sylvamo with ample financial flexibility and provides an appropriate buffer to the cyclically declining paper industry. Sylvamo's closest peer, Domtar Corporation (BB-/Stable), generates slightly higher revenue. However, Sylvamo demonstrates superior EBITDA and FCF margins. Both companies are similar in terms of EBITDA generation and share a geographic focus that includes North America and Europe, as well as the production of wood pulp and uncoated freesheet paper. The key differentiator in their ratings is Sylvamo's EBITDA leverage, e.g. YE 2023 leverage for Sylvamo was 1.7x compared to Domtar's 4.9x. Sylvamo's selective approach to accretive acquisitions has contributed to the maintenance of its leverage profile. Sylvamo's revenue is smaller compared to its paper and packaging peers Suzano S.A. and Stora Enso Oyj, and its EBITDA is below these companies and Klabin S.A. (BB+/Stable). Suzano is the world's leading producer of market pulp, and leading producer of printing and writing paper in Brazil. Sylvamo has significantly smaller scale than Suzano but its credit profile benefits from a more conservative financial policy. Key Assumptions - Modest annual declines in global UFS volumes (-4% area) with stable pricing through the forecast period; - Capex in the $220 million range as per management, including costs of diverting production away from Georgetown and Riverdale; - Dividends and share buy backs in line with historical trends; - Georgetown and Riverdale offtake agreements terminate in January 2025 and 2026, respectively; - Sylvamo's disputed Brazil tax of $120 million paid in 2025 and funded via new debt. RATING SENSITIVITIES Factors That Could, Individually Or Collectively, Lead To Positive Rating Action/Upgrade - Maintenance of conservative financial and capital allocation policies along with sufficient liquidity buffers; - Stabilization of secular demand decline in industry; - EBITDA Leverage consistently below 1.5x. Factors That Could, Individually Or Collectively, Lead To Negative Rating Action/Downgrade - EBITDA Leverage consistently above 2.5x; - Any unfavorable change in current leverage or capital allocation policy; - More rapid than expected deterioration in the paper segment resulting in depressed margins and materially lowered FCF generation; - Deterioration in liquidity buffers including unencumbered forest landholdings. Liquidity and Debt Structure As of June 30, 2024, Sylvamo had an available borrowing capacity of $429 million on its Revolving Credit Facility due 2029, plus total cash and investments of $205 million (of which $60 million in escrow for Brazilian Tax payment), resulting in total liquidity of $634 million, or $574 million excluding the Brazil tax escrow. Issuer Profile Sylvamo is one of the world's largest manufacturers of uncoated freesheet paper. It has strong assets, including seven cost-efficient mills and extensive Eucalyptus forest lands in Brazil, which help lower production costs. Date of Relevant Committee 16-Jul-2024 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 ----------- ------ -------- Sylvamo Corporation LT IDR BB+ New Rating senior unsecured LT BB+ New Rating RR4 senior secured LT BBB- New Rating RR1 T L C MEDICAL: Files for Subchapter V Bankruptcy ------------------------------------------------ T L C Medical Group Inc. filed Chapter 11 protection in the Southern District of Florida. According to court filing, the Debtor reports between $1 million and $10 million in debt owed to 1 and 49 creditors. The petition states funds will not be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for August 30, 2024 at 9:00 a.m. in Room Telephonically. About T L C Medical Group Inc. T L C Medical Group Inc. -- https://www.tlchearts.com/ -- provides superior diagnosis and treatment of heart and circulatory disorders. T L C Medical Group Inc. sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-17881) on August 1, 2024. In the petition signed by Anthony B. Lewis, as president, the Debtor reports estimated assets up to $50,000 and estimated liabilities between $1 million and $10 million. The Honorable Bankruptcy Judge Erik P. Kimball handles the case. The Debtor is represented by: Roderick Andrew Lee Ford, Esq. 537 N.W. Lake Whitney Place Unit 103-106 Port Saint Lucie, FL 34986 TEAM HEALTH: S&P Upgrades ICR to 'B-', Outlook Stable ----------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based physician staffing provider Team Health Holdings Inc. to 'B-' from 'CCC'. The outlook is stable. At the same time, S&P raised the issue-level rating on the first-lien term loan due 2027 to 'B-' from 'CCC'. The recovery rating on the term loan remains '4' (rounded estimate: 30%). S&P said, "The stable outlook reflects our view that revenue growth will continue over the next couple of years stemming from new-contract wins and a continued recovery in patient volumes. We expect that working capital requirements will normalize, and the company will generate S&P Global Ratings-adjusted EBITDA margins of about 8%. Under this scenario, we expect adjusted debt to EBITDA to stabilize at about 7x-8x, with adjusted FOCF to debt of 3%-4%." The company's note refinancing extends its maturities beyond two years, providing an opportunity to pursue a more comprehensive refinancing. The transaction eliminates the refinancing risks associated with its springing maturity in November 2024. The springing maturity has now been effectively extended to the end of 2026, or roughly 91 days ahead of its term loan coming due in March 2027. The equity infusion as part of the refinancing also reduces 2024 leverage by nearly a full turn, although the interest savings are minimal due to the higher cash interest rate on the new debt. We expect the company will use the additional runway to pursue a comprehensive refinancing into a more traditional capital structure. S&P said, "As base rates are expected to decline and credit spreads have tightened, we believe it is now more likely that the company will successfully execute a comprehensive refinancing without any significant increase in cash interest expense. Additionally, we believe Blackstone's willingness to contribute additional equity to facilitate the recent transaction indicates a commitment to its investment. If the company faces additional refinancing hurdles, we believe Blackstone would contribute additional equity or debt to facilitate the transaction. "Team Health's revenue growth and profitability has exceeded our expectations through the first half of 2024, and we expect solid growth will continue into 2025 and beyond.The company's revenue increased 14.3% in the first half of 2024 due to incremental revenue from new contracts signed in 2023 and stronger-than-expected same-contract revenue. The increase in same-contract revenue is mainly due to higher-than-expected patient volume and higher collection rates. While we expect some moderation in volume growth during the second half of the year, we think same-contract revenue growth for 2024 will be materially higher than our previous expectations. Additionally, Team Health's EBITDA margin has improved over the first half of 2024 mainly due to lower start-up losses associated with new contracts. We now expect S&P Global Ratings-adjusted EBITDA margin to increase roughly 100 basis points (bps) to 6.2% for 2024, which would translate to roughly 8% under the company's calculation. While we believe the company will reach the low end of its 8%-10% adjusted EBITDA margin goal this year, we don't expect it will reach the higher end of its profitability goal until it addresses its premium labor challenges. "We believe with the immediate capital structure situation resolved, Team Health can now concentrate on its growth initiatives that are focused on signing new contracts. However, too much success in new-contract signings can become an additional near-term profitability headwind due to the start-up costs. Still, we believe the potential growth and long-term operating leverage gains from new-contract signings will more than offset any near-term impact on profitability and leverage. "We expect Team Health will generate modestly positive FOCF in 2024, increasing to 2% of debt in 2025 and over 3% of debt in 2026.Incremental revenue growth and improved profitability, combined with our expectation for improved accounts-receivable collections related to No Surpises Act (NSA) arbitration in the second half of 2024, leads us to believe that FOCF will turn positive in 2024. We expect revenue and EBITDA growth to continue in 2025, which when combined with declining base interest rates, should result in FOCF to debt increasing to about 2% in 2025. However, any delays in receivables collections could cause cash flow to remain negative in 2024, but it would just defer the benefit to 2025 and make FOCF to debt even higher in 2025. Longer term we expect increased fixed-cost leverage and continued declines in base rates will cause FOCF to debt to increase and be sustained in the 3%-4% range. "Although PIK interest is benefitting cash flow in the near term, it will slow deleveraging.A portion of the interest on both the company's first-lien notes due 2028 and its second-lien notes due 2029 is currently being paid-in-kind. However, if the company was required to pay the full interest expense in cash, its FOCF would be roughly breakeven in 2025 and less than 2% in 2026. We believe the the company's capital structure would be sustainable even if it had to pay all interest expense in cash given expected EBITDA growth and our view it can sustain FOCF to debt of over 1.5%. We also believe it can successfully refinance its entire capital structure without materially increasing cash interest expense. "Reimbursement rate pressure is likely to constrain growth and profitability. In our view, payors will continue to seek ways to reduce emergency room utilization. Reimbursement risk remains significant from all payors as the industry continues to try and curtail very expensive emergency room care. We believe all payors, including both government and private payors, will continue to aggressively manage ER utilization and limit rate increases, constraining long-term revenue growth and profit margin expansion for Team Health. "Team Health is the largest player in the highly fragmented and competitive physician staffing industry. Team Health is the largest participant in the narrow health care physician staffing industry, with significant market positions in the emergency medicine (about 57% of net revenue in 2023), hospitalist (about 21% of net revenues), and anesthesiology (about 13% of net revenues) staffing segments. The industry is highly fragmented and competitive, with low barriers to entry, with many alternatives to emergency departments for lower-acuity care, including telehealth, urgent care sites, and multi-care facilities. Longer term, we expect low-single-digit percent organic revenue growth as new contract wins and a modest increase in rates are largely offset by emergency department volumes under existing contracts that should be flat to down 1% per year. "The stable outlook reflects our view that revenue growth will continue over the next couple years driven by new-contract wins and a continued recovery in patient volumes. It also reflects our view that working capital requirements will normalize and the company will generate adjusted EBITDA margins of about 8%. Under this scenario, we expect adjusted debt to EBITDA to stabilize at about 7x-8x, with adjusted FOCF to debt of 3%-4%." S&P could lower our rating on the company within the next 12 months if it consider its capital structure unsustainable over the long term. This could occur if: -- Revenue growth is lower than expected due to declining volumes or contract losses; -- Costs are higher than expected due to rising labor costs and inability to reduce premium labor expense; -- Base interest rates remain elevated, or the company executes a refinancing at a much higher cash interest rate; and -- The company cannot consistently generate adjusted FOCF to debt of over 1.5%. Alternatively, S&P could lower its rating if the company is unable to refinance its term loan prior to the end of 2025, decreasing the likelihood of a successful refinancing well in advance of its springing maturity at the end of 2026. While unlikely over the next 12 months, S&P could raise its rating on the company if: -- The company successfully refinances its term loan due 2027, and re-sets its debt maturity profile while also decreasing its cash interest expense; and -- S&P expects adjusted debt to EBITDA to decline and remain below 7x with adjusted FOCF to debt increasing and remaining above 5%. TEHUM CARE: Secures $15.5M in DIP Financing ------------------------------------------- Tehum Care Services, Inc. a correctional healthcare company formerly known as Corizon Health, announced that the Bankruptcy Court in Southern District of Texas has entered a Fifth Interim DIP Order approving additional post-petition $15.5M in financing in Tehum's ongoing bankruptcy proceedings. This Order provides for the funding of professional fees and expenses in accordance with a budget approved by the Debtor, The DIP Lender and the creditor committees. After reaching a joint settlement with the creditor committees, the Order is a vital next step in moving the case forward to final resolution ensuring funding for professionals to see the case through its anticipated completion. Russell Perry, Chief Restructuring Officer of Tehum, stated, "We are excited to see the entry of this Order which provides funding for the professionals and moves us closer to a final resolution which will pave the way for substantial recoveries to creditors." About Tehum Care Services Tehum Care Services Inc., doing business as Corizon Health Services Inc., is a privately held prison healthcare contractor in the United States. It is based in Brentwood, Tenn. Tehum Care Services filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90086) on Feb. 13, 2023. In the petition filed by Russell A. Perry, as chief restructuring officer, the Debtor reported assets between $1 million and $10 million and liabilities between $10 million and $50 million. Judge Christopher M. Lopez oversees the case. The Debtor tapped Gray Reed & McGraw, LLP as bankruptcy counsel; Bradley Arant Boult Cummings, LLP as special litigation counsel; and Ankura Consulting Group, LLC as financial advisor. Russell A. Perry, senior managing director at Ankura, serves as the Debtor's chief restructuring officer. Kurtzman Carson Consultants, LLC, is the claims, noticing, and solicitation agent. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. Stinson, LLP and Dundon Advisers, LLC, serve as the committee's legal counsel and financial advisor, respectively. TERRY LAIN MD: Case Summary & Three Unsecured Creditors ------------------------------------------------------- Debtor: Terry Lain, MD LLC 5610 Read Blvd New Orleans, LA 70127 Business Description: The Debtor is a provider of psychiatric care services. Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Eastern District of Louisiana Case No.: 24-11609 Judge: Hon. Meredith S Grabill Debtor's Counsel: Darryl T. Landwehr, Esq. LANDWEHR LAW FIRM, LLC 650 Poydras Street Suite 2519 New Orleans LA 70130 Email: dtlandwehr@att.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Terry Lain, M.D., as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LVZ6BKY/Terry_Lain_MD_LLC__laebke-24-11609__0001.0.pdf?mcid=tGE4TAMA THOUGHTWORKS INC: S&P Downgrades ICR to 'B+', Outlook Negative -------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating by one notch to 'B+' on ThoughtWorks Inc. Additionally, S&P lowered its first-lien credit facility rating by one notch to 'B+'. The negative outlook reflects the risk that S&P could lower its ratings with continued underperformance such that cash flow and profitability remain low. Cautionary client budgetary environment continues to pressure revenues. ThoughtWorks continues to face a subdued demand environment amid uncertain economic conditions. The discretionary characteristics of its service offerings have made the company more susceptible to its clients' budget pressures, prompting longer sales cycles, smaller contract sizes, and pricing pressures due to clients' cautious approach. The company's relatively higher onshore employee presence, particularly in the U.S., adds to these challenges, as clients increasingly prefer an offshore mix to reduce costs, prompting price adjustments. These factors continued to negatively affect ThoughtWorks' revenues and bookings through its second quarter of fiscal 2024 (three months ending on June 30, 2024). Over these three and six-month periods of 2024, its revenues have declined by 12.4% and 15.8% compared to the same period a year earlier. While the revenue declines thus far are consistent with our initial expectations, ThoughtWorks also reported that its bookings for the 12-months-ending June 30, 2024, totaled $1.2 billion, which is about a 20% decrease from $1.5 billion in the same period last year and roughly flat from the first quarter of 2024. Bookings activity stabilized sequentially and we think it reflects the benefits of a refined go-to-market strategy and an early recovery in levels of IT spending. However, we believe this suggests 2024 revenues will likely decline by a wider margin than the 11% we were previously projecting for the year. S&P said, "We believe the company's expanded cost restructuring plan will help lift EBITDA margins from currently record low levels. Thoughtworks generated S&P Global Ratings-adjusted EBITDA margin of 4% for the 12-months-ending June 2024, which includes restructuring costs and other one-time costs. This is a record low since we began ratings coverage of the company. The margin degradation stems from reduced operating leverage, a less profitable revenue mix, and $28.3 million in pre-tax charges incurred in implementing its restructuring program, which was initially launched on Aug. 8, 2023, expanded in May 2024, and further on Aug. 2, 2024, to reduce operational costs and better aligning with customer needs in a challenging macroeconomic environment. "The company expects these actions to improve utilization, increase G&A efficiency, boost offshore presence, and complete the restructuring program by October 2024. However, we anticipate adjusted margins will decline to around 0% by year end as the restructuring intensifies in the second half. This is lower than our previous expectations for adjusted EBITDA margin to be around 9% in 2024. That said, in 2025, we expect one-time charges to decrease, leading to lower costs and improved efficiencies which, alongside some normalization in the pricing environment and macroeconomic recovery, we anticipate adjusted EBITDA margins should return to the high-single-digit range. This would be similar to 2023 but still lower than the high teens reported in 2022. "We expect the company to maintain sufficient liquidity for the remainder of the year. Despite expectations for weaker profitability in 2024 as the company implements its cost restructuring plan, we project it will return to generating cash flow in the fourth quarter of 2024 once the restructuring program concludes and sustains positive cash generation in 2025. Based on these expectations and considering that the company faces no debt maturities until March 2026, we believe the company, with $48 million of cash on hand as of June 30, 2024, and full availability under its revolving credit facility, which matures in March 2026, has sufficient liquidity to withstand these cash flow deficits over the next two quarters. "We do not believe plans by affiliates of the financial sponsor Apax Partners, the current majority owner of Thoughtworks, to acquire complete control and take the company private will lead to more aggressive financial policies in the near term. Apax, the private equity firm which currently owns approximately 60% of ThoughtWorks' equity, has announced it will purchase the remainder of shares it does not already own in order to convert the company to private ownership. We expect the transition to be completed by the fourth quarter. Apax is equity financing the buyout of the company, and we believe it will tightly manage leverage over the next year given the earnings pressures the company is witnessing. We do not expect the sponsor to leverage up the balance sheet while the company experiences earnings weakness, and note Apax has been supportive of debt reduction when the company was doing well during the pandemic. However if Apax shifts its financial policy to be more conducive of leveraged dividends or M&A once the company returns to growth, ratings could be pressured. "We base the negative outlook on our expectation for EBITDA to turn negative for the full year based on the upsized cost restructuring program, revenue declines, and slow conversion of cost savings, with the full benefit not to be seen until 2025." TOOLIPIS CREATIVE: Mark Sharf Named Subchapter V Trustee -------------------------------------------------------- The U.S. Trustee for Region 16 appointed Mark Sharf, Esq., a practicing attorney in Los Angeles, as Subchapter V trustee for Toolipis Creative, Inc. Mr. Sharf will charge $660 per hour for his services as Subchapter V trustee and $150 per hour for his trustee administrator's services. In addition, the Subchapter V trustee will seek reimbursement for work-related expenses incurred. Mr. Sharf declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Mark Sharf, Esq. 6080 Center Drive, 6th Floor Los Angeles, CA 90045 Telephone: (323) 612-0202 Email: mark@sharflaw.com About Toolipis Creative Toolipis Creative, Inc., doing business as Upper Partners, assists its clients in applying for the ERC in accordance with the accurate IRS guideline. It specializes in helping various sizes of businesses receive their maximum tax refunds through the Employee Retention Credit program (ERC) and the Self-Employed Tax Credit Program (SETC). The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-11996) on August 8, 2024, with $529,572 in assets and $1,977,145 in liabilities. Joung Hun Lee, chief executive officer, signed the petition. Judge Theodor Albert presides over the case. Anerio Ventura Altman, Esq., at Lake Forest Bankruptcy represents the Debtor as legal counsel. TOSCA SERVICES: In Discussions With Lenders for New Loan -------------------------------------------------------- Reshmi Basu of Bloomberg News reports that People familiar with the situation said that Tosca Services, a provider of apex-backed crates, is in talks with several creditors about a fresh loan that would help the business financially. The idea would also provide Tosca the option of paying a portion of its interest in kind over a set period of time, according to some persons who asked not to be identified because they were discussing a private subject. Borrowers might use payment-in-kind debt to pay interest on further debt. Discussions are ongoing and that the terms of the agreement may alter. About Tosca Services Tosca Services, LLC, manufactures and supplies container solutions. The Company offers plastic containers to transport fruit and vegetable, egg, poultry, meat, and cheese products. Tosca Services serves growers, suppliers, food manufacturers, and retailers in North America. TROJAN EV: Golf Carts Unsecureds Will Get 3% of Claims in Plan -------------------------------------------------------------- Trojan EV, LLC and Golf Carts of Cypress, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas a Disclosure Statement in support of Joint Plan of Reorganization dated July 29, 2024. The Debtors are both single-member limited liability companies with common ownership. The sole Member and Manager of Trojan EV and GCC is Federico Nell. Trojan EV is a Wyoming limited liability company formed in 2020, while GCC is a Texas limited liability company formed in 2019. Trojan EV is a wholesale golf cart and personal mobility vehicle company that previously modified and customized golf carts and personal mobility vehicles for sale under its Trojan EV brand. GCC is a retail golf cart and personal mobility vehicle company that sells and services golf carts and personal mobility vehicles from its location in Cypress, Texas. As a result of the IP Litigation, the Debtors faced entry of a judgment against them in the millions of dollars. In addition, as a result of the IP Findings, Trojan EV may no longer sell modified and customized golf carts under its Trojan EV brand. Debtors believe that the alleged liability to Trojan Battery substantially exceeds the capacity of the Debtors to pay, the Debtors filed the Bankruptcy Case to reorganize their debts and operations to ensure sustained viability of the business. Class A2 consists of General Unsecured Claims of Trojan Battery Against Trojan EV. Class A2 consists of the Allowed Unsecured Claims of Trojan Battery against Trojan EV. On account of the Class A2 Claim and in full satisfaction and discharge of the Class A2 Claim, Trojan Battery shall receive (a) the sum of $72,000, which shall be paid $6,000 per month for a period of 12 months, and (b) its Pro Rata share of the Trojan GUC Trust Interests. This Class is impaired. Class A3 consists of General Unsecured Claims Against Trojan EV. Class A3 consists of Allowed Unsecured Claims Against Trojan EV not placed in any other Class. Except to the extent that a holder of an Allowed Class A3 Claim and the Debtors or Reorganized Debtors agree to less favorable treatment, each holder of an Allowed Class A3 Claim shall receive, in full and final satisfaction of such claim, its Pro Rata share of the Trojan GUC Trust Interests. The allowed unsecured claims total $2,411,494.17. This Class is impaired. Class B4 consists of General Unsecured Claims Against GCC. Class B4 shall consist of Allowed Unsecured Claims Against GCC not placed in any other Class. Except to the extent that a holder of an Allowed Class B4 Claim and the Debtors or Reorganized Debtors agree to less favorable treatment, each holder of an Allowed Class B4 Claim shall receive in full and final satisfaction of such claim, its Pro Rata share of the Net Equity Sale Proceeds. The allowed unsecured claims total $830,181.45. This Class will receive a distribution of 3% of their allowed claims. This Class is impaired. On the Effective Date, EV Titan, LLC, shall purchase from Trojan EV the Inventory for the sum of $72,000.00 (the "Inventory Proceeds"). The Inventory Proceeds shall be paid by EV Titan $6,000 per month for twelve months, with the first payment being made on the first day of the first month after the Effective Date. For the avoidance of doubt, the Inventory will be sold to EV Titan, LLC subject to the liens and claims of Stellar Bank. The Plan contemplates the cancellation of the Equity Interests in GCC and the sale of new equity interests (the "Reorganized GCC Equity Interests") in Reorganized GCC for the GCC Purchase Price. At the Confirmation Hearing and pursuant to the Plan, the Debtors will seek Bankruptcy Court approval to sell the Reorganized GCC Equity Interests free and clear of any Liens, Claims, encumbrances, or other interests to the Proposed Purchaser for the GCC Purchase Price. The Net Equity Sale Proceeds shall be used in the following order of priority: first, to satisfy Administrative Claims (including Professional Claims); second, to fund distributions to Holders of Allowed Class B4 Claims; third, to fund distribution to Holders of Allowed Class B5 Claims once the Allowed Class B4 Claims are paid in full; and finally, if any Net Equity Sale Proceeds remain after payment of Allowed Administrative Claims, Allowed Class B4 Claims, and Allowed Class B5 Claims, then the remainder shall be distributed to the holders of Class B6 Equity Interests. A full-text copy of the Disclosure Statement dated July 29, 2024 is available at https://urlcurt.com/u?l=f1VO2p from PacerMonitor.com at no charge. Counsel for the Debtors: Jason P. Kathman, Esq. Megan F. Clontz, Esq. SPENCER FANE LLP 5700 Granite Parkway, Suite 650 Plano, TX 75024 Tel: (972) 324-0300 Fax: (972) 324-0301 Email: jkathman@spencerfane.com mclontz@spencerfane.com About Trojan EV, LLC Trojan EV, LLC is a wholesale golf cart and personal mobility vehicle company. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-31910) on April 29, 2024. In the petition signed by Federico D. Nell, sole member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Eduardo V. Rodriguez oversees the case. Jason P. Kathman, Esq., at Spencer Fane, represents the Debtor as legal counsel. UNITED PREMIER: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: United Premier Development, LLC Attn: Eva Neumann 4418 Bowman Blvd Los Angeles, CA 90032 Business Description: The Debtor is the fee simple owner of real property located at 9517 Commerce Way, Adelanto, CA having a current value of $4 million. Chapter 11 Petition Date: August 16, 2024 Court: United States Bankruptcy Court Central District of California Case No.: 24-16601 Judge: Hon. Sheri Bluebond Debtor's Counsel: Michael R. Totaro, Esq. TOTARO & SHANAHAN, LLP PO Box 789 Pacific Palisades CA 90272 Tel: (310) 804-2157 Email: Mtotaro@aol.com Total Assets: $4,572,000 Total Liabilities: $3,092,098 The petition was signed by Eva Neumann as manager. The Debtor filed an empty list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/5SO7JWI/United_Premier_Development_LLC__cacbke-24-16601__0001.0.pdf?mcid=tGE4TAMA USA SALES: 9th Cir. Takes Back Ruling on UST Fees Dispute --------------------------------------------------------- In light of the recent Supreme Court decision in Office of the United States Trustee v. John Q. Hammons Fall 2006, LLC, 144 S. Ct. 1588 (2024), the United States Court of Appeals for the Ninth Circuit reversed the United States District Court for the Central District California's determination that USA Sales, Inc. was entitled to a refund of statutory fees, and remanded the case to the district court. This case concerns a provision of the Bankruptcy Judgeship Act of 2017, which significantly increased the statutory fees for certain debtors in all but six judicial districts. USA Sales, Inc., a Chapter 11 debtor, sued for a refund of the increased fees, arguing that the 2017 Act (1) did not apply because USA Sales had filed for bankruptcy before the Act took effect; and (2) violated the uniformity requirement of the Bankruptcy Clause, U.S. Const. art I, Sec. 8, cl. 4. The district court agreed with both arguments and ordered a refund. The Office of the United States Trustee timely appealed from the district court's summary judgment. The Ninth Circuit originally affirmed. On remand from the Supreme Court, the Ninth Circuit held that John Q. Hammons did not alter its original holding that the 2017 Act applied to USA Sales' bankruptcy proceeding even though the case was already pending when the Act took effect. In Siegel v. Fitzgerald, 596 U.S. 464 (2022), the Supreme Court held that the 2017 Act violated the uniformity requirement of the Bankruptcy Clause but left open the question of the appropriate remedy. The Ninth Circuit pointed out in John Q. Hammons Fall 2006, LLC, the Supreme Court answered that question, holding that the appropriate remedy was prospective parity, not a refund for debtors who paid unconstitutional fees or retrospectively raising fees. A copy of the Court's decision dated August 6, 2024, is available at https://urlcurt.com/u?l=ykSOfF About USA Sales USA Sales, Inc., d/b/a Statewide Distributors, Inc., filed for Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 16-14576) on May 20, 2016, estimating assets and liabilities between $1 million and $10 million. The petition was signed by Claudia Ali, surviving spouse of Kabiruddin Karim Ali and 100% beneficiary. Judge Mark S. Wallace presides over the case. The Debtor is a tobacco and cigarette distributor based in Ontario, California. Daren M Schlecter, Esq., at the Law Office of Daren M. Schletcter, APC, serves as the Debtor's bankruptcy counsel. The Law Offices of A. Lavar Taylor LLP serves as special counsel. The Debtor engaged M. Zubair Rawda as accountant and BSW & Associates as investment banker. VALIANT FITNESS: Commences Subchapter V Bankruptcy Process ---------------------------------------------------------- Valiant Fitness LLC filed Chapter 11 protection in the Northern District of Texas. According to court filing, the Debtor reports between $500,000 and $1 million in debt owed to 1 and 49 creditors. The petition states that funds will be available to unsecured creditors. About Valiant Fitness LLC Valiant Fitness LLC -- https://www.rumbleboxinggym.com -- doing business as Rumble Boxing, Valiant Fitness LLC sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-42700) on August 1, 2024. In the petition filed by Michael Valentin, as owner, the Debtor reports estimated assets up to $50,000 and estimated liabilities between $500,000 and $1 million. The Honorable Bankruptcy Judge Edward L. Morris oversees the case. The Debtor is represented by: Robert Lane, Esq. The Lane Law Firm PLLC 4813 Hughes Cir Flower Mound, TX 75022-2942 VANSHI LLC: Plan Exclusivity Period Extended to November 7 ---------------------------------------------------------- Judge Jerry C. Oldshue Jr. of the U.S. Bankruptcy Court for the Northern District of Florida extended Vanshi, L.L.C., d/b/a Quality Inn's exclusive periods to file a plan of reorganization and obtain acceptance thereof to November 7, 2024 and January 8, 2025, respectively. As shared by Troubled Company Reporter, the Debtor's estate includes real property, which the Debtor is currently in the process of attempting to sell. The Debtor will be seeking to sell the real property at an auction to occur sometime in early September 2024. The sale of the Debtor's real property is necessary to determine how best to draft a Chapter 11 plan in this case. The Debtor requests this extension to allow the real property to be sold. The Debtor seeks the extension of exclusivity in good faith, and not for the purpose of pressuring or otherwise attempting to prejudice the rights of any creditors. The Debtor claims that the sale of real property are necessary to drafting a viable Chapter 11 Plan. Vanshi, L.L.C. is represented by: Robert C. Bruner, Esq. Byron Wright III, Esq. Bruner Wright, PA 2810 Remington Green Circle Tallahassee, FL 32308 Telephone: (850) 385-0342 Facsimile: (850) 270-2441 Email: rbruner@brunerwright.com twright@brunerwright.com About Vanshi LLC Vanshi is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Vanshi, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-30803) on Nov. 13, 2023. In the petition signed by Priteshkumar M. Patel, owner, the Debtor disclosed $1 million to $10 million in both assets and liabilities. Judge Jerry C. Oldshue Jr. oversees the case. Robert C. Bruner, Esq. at Bruner Wright, PA, is the Debtor's counsel. VFX FOAM: Unsecureds to Split $20K in Subchapter V Plan ------------------------------------------------------- VFX Foam, LLC filed with the U.S. Bankruptcy Court for the Western District of Washington a Plan of Reorganization under Subchapter V dated July 29, 2024. The Debtor serves its customers as a manufacturer of products for the theming industry. The business was started in 2016 by Richard O'Connor, III and has been operating as a single member LLC. The Debtor manufactures products ranging from mini-golf courses for family entertainment centers/cruise ships, large 3D signage/photo-op props for large brands (i.e. NFL, etc.), non profit wheelchair theming for kids (Magic Wheelchair), photo stands, and custom sculptures for artists. The products are sculpted with lightweight materials and made with both robots and by hand. Class 3 consists of General Unsecured Class. Each holder of an allowed general unsecured claim will be paid a pro-rata share of $20,000.00. This Class is impaired. Richard O'Connor holds a 100%-member interest in the Debtor which will be retained. For services as managing member of the Debtor, Richard O'Connor will receive compensation, in the form of monthly owner draws, which will not exceed the amount set forth in Exhibit B until such time as the payments provided for in this plan are paid in full. It is anticipated the Debtor's fixed expenses will remain relatively constant moving forward with variable expenses increasing proportionately with revenue. The Plan will be funded with revenue from the Debtor's operation. A full-text copy of the Subchapter V Plan dated July 29, 2024 is available at https://urlcurt.com/u?l=uLfFie from PacerMonitor.com at no charge. Attorney for the Debtor: Jennifer L. Neeleman, Esq. Neeleman Law Group, P.C. 1403 8th Street Marysville, WA 98270 Tel: (425) 212-4800 Fax: (425) 212-4802 About VFX Foam, LLC VFX Foam, LLC serves its customers as a manufacturer of products for the theming industry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 24-11086) on April 30, 2024. In the petition signed by Richard O'Connor, owner, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Christopher M Alston oversees the case. Jennifer L. Neeleman, Esq., at NEELEMAN LAW GROUP, P.C., represents the Debtor's legal counsel. VIEWSTAR LLC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Viewstar LLC 228 E. Route 59, Unit 60 Nanuet NY 10954 Business Description: The Debtor is the owner of real property located at 10 Mountainview Road, Upper Saddle River, New Jersey 07458. Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Southern District of New York Case No.: 24-22716 Judge: Hon. Judge Sean H. Lane Debtor's Counsel: Paul Rubin, Esq. Hanh V. Huynh, Esq. RUBIN LLC 11 Broadway, Suite 715 New York NY 10004 Tel: 212-390-8054 Fax: 212-390-8064 Email: prubin@rubinlawllc.com hhuynh@rubinlawllc.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Lee E. Buchwald as restructuring officer. 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/MCCWS7I/Viewstar_LLC__nysbke-24-22716__0001.0.pdf?mcid=tGE4TAMA VORNADO REALTY: Fitch Affirms 'BB+' IDR, Outlook Stable ------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) for Vornado Realty Trust (VNO) and Vornado Realty, LP. The Rating Outlook remains Stable. Fitch has also affirmed the preferred stock rating of Vornado Realty Trust at 'BB-' and assigned an 'RR6' Recovery Rating to it. Fitch believes that Vornado Realty Trust's leverage remains at relatively high levels on a historical basis. This is offset to some extent after consideration of the company's strong competitive position in high-quality Manhattan assets in New York City, significant ongoing access to institutional mortgage debt and private equity capital. VNO's portfolio continues to face challenges of weakened demand for office space and decreasing occupancy, at least in the near term. Work-from-home trends have negatively affected New York property market fundamentals. To some degree, VNO's higher relative quality portfolio and above market occupancy level and long-term leases with solid credit tenants have helped to balance this effect. The Stable Outlook reflects Fitch's expectation that VNO will operate with leverage within its sensitivities for the forecast horizon, given the possibility of lessening demand for office space going forward. Key Rating Drivers Continuing High Leverage: VNO has operated with REIT leverage (net debt/recurring operating EBITDA), in the mid-7x level for the last two years (7.6x in 2023, 7.5x in 2022). Fitch expects that (re)development costs in the next two years on the Penn District projects, combined with projected near-term occupancy headwinds, will cause VNO's leverage to increase to around the mid-8x level in 2024 before coming down to the mid-7x level in 2025 as new leases that have already been signed/will be signed take effect by 2025. Fitch anticipates further stabilization from the portfolio enhanced by delivery of incremental NOI and completed (re)development spend in 2026 to bring about a continued deleveraging effect, with leverage expected to be around the low-7x level by 2026. Solid Contingent Liquidity: New York City's superior commercial real estate (CRE) market characteristics have helped to mitigate VNO's market concentration risk historically. New York City is the largest and arguably most diverse office market in the U.S., if not the world. New York City CRE has historically demonstrated contingent liquidity characteristics due to institutional lender and investor demand that maintained an interest in high-quality product. VNO's New York-centric portfolio has some diversification by CRE property type as retail is approximately 20% of New York City NOI (18% overall). In addition, the company's interests in THE MART in Chicago and 555 California Street in San Francisco provide some geographic diversification and represented approximately 16% of office NOI at 1Q24. Fitch estimates VNO's gross unencumbered assets to unsecured debt (UA/UD) at approximately 1.8x based on a direct capitalization approach of its annualized 1Q24 unencumbered NOI, using a 7.75% stressed, through-the-cycle capitalization rate. Fitch usually views 2.0x UA/UD coverage as the standard threshold for investment-grade REITs. On an unsecured debt net of cash basis, UA/UD is 2.7x for 1Q24. VNO's UA/UD coverage is supported by high asset quality, less use of unsecured debt and strategy of placing higher loan-to-value ratios on encumbered properties. Above-Average Portfolio Quality: VNO wholly owns and has interests in high-quality, primarily New York City office properties with above peer-average occupancy rates and rents with long-term leases to solid credit tenants. The company also owns and operates a large street retail portfolio in key, supply-constrained Manhattan shopping corridors, such as upper Fifth Avenue and Times Square. VNO generates 88% of its NOI from its New York portfolio and 12% from select class A office properties in Chicago and San Francisco at 1Q24. VNO has a long (10.0 years for New York City office leases signed in 2023) weighted average lease duration which minimizes rollover risk. The company's tenant credit profile is strong with moderate concentration. VNO's top 10 tenants generally have healthy credit profiles and comprise approximately 31% of annualized revenue. Sizable Near-Term Debt Maturities: VNO has reasonably well-laddered maturities with some nearer-term debt coming due. After the refinancing of 435 7th Avenue was completed in 2Q24, approximately 17% of debt matures through YE2025 including a $450 million unsecured bond in January 2025. One remaining $74 million mortgage matures in 2024, with a more substantial component of three mortgages of $880 million maturing in 2025. Fitch notes that VNO's liquidity is sufficient to address these maturities, and the REIT will likely refinance mortgages while potentially putting anticipated dispositions and operating cash flow toward the unsecured January 2025 maturity. Office Leasing Pressure Could Remain: Fitch believes in-office work will remain a core tenet of corporate America. However, with employers adapting to more flexible working environments and hybrid arrangements it is likely to result in tenants leasing less space than in prior periods, potentially leading to a slower recovery in leasing and rent growth than typically seen after a downturn. Nonetheless, a distinguishing feature that existed before the pandemic that has become more evident in the last few years is the relative strength of higher quality space with modern amenities, sustainability features, and locations near major transportation hubs as well as higher quality sponsorship, all of which should benefit VNO and REITs relative to other landlords. Complex Structure Reduces Visibility: VNO's business complexity remains above average despite its efforts to streamline operations and increased financial reporting. VNO's active (re)development platform and considerable use of joint ventures (JVs) challenge cash flow forecasting and liquidity requirements. VNO has disposed of considerable non-core assets in recent years. This has included the sale of ownership stakes in shares of other publicly traded REITs, Lexington Realty Trust, Urban Edge Properties, Pennsylvania REIT and the spinoff of JGB Smith. Modest Development Risk: VNO has an active development pipeline. However, it has completed a majority of capex on its current projects thereby lowering execution risk. The company's unfunded commitments totaled 0.6% of gross assets at June 30, 2024. The company has taken steps to manage its development risk, including using JV equity and lease-up of assets prior to construction completion. The company maintains adequate liquidity, underpinned by $873 million of cash and $1.59 billion available under its committed $2.17 billion unsecured revolving credit facilities as of June 30, 2024. However, some of the cash is earmarked for redevelopment projects. Derivation Summary VNO owns and controls a concentrated portfolio comprised primarily of high-quality office and street retail assets in Manhattan with strong access to institutional mortgage debt and private equity capital. The company is a large and established REIT that is well known to equity investors but less active in the public unsecured bond market due to its greater acceptance and strategic use of secured mortgage debt. VNO's solid ratio of unencumbered assets to net unsecured debt and leverage levels provide additional credit protection. The company's New York-focused portfolio has better contingent liquidity from institutional lenders and investors than REIT peer Corporate Office Properties Trust, albeit with higher leverage. The geographic concentration risk that VNO possesses through its large regional presence in New York is partially mitigated by the historical strength and economic diversity of Manhattan, relatively higher rents than most other markets, and greater institutional preference for its portfolio. SL Green Realty Corp. is the most similar peer to VNO as it also has a predominant New York City office focus. However, SLG historically has had more of a secondary suburban concentration while also maintaining a debt and preferred equity investment portfolio. Fitch assigns the Issuer Default Ratings of the parent REIT and subsidiary operating partnership on a consolidated basis, using the weak parent/strong subsidiary approach and open access and control factors, based on the entities operating as a single enterprise with strong legal and operational ties. Fitch applies 50% equity credit to the company's perpetual preferred securities given the cumulative nature of coupon deferral with settlement through a manner other than equity (cash). Certain metrics calculate leverage including preferred stock. Key Assumptions - Mid-to-high single-digit SSNOI overall property decline in 2024, which is driven by an assumed 225bps occupancy decline and higher operating expenses relating to known moveouts where replacement tenants won't contribute to income until 2025. This is followed by mid-single digit SSNOI growth in 2025, based on low single-digit rent spreads and recovering occupancy of approximately 150bps in 2025. Low-mid-single digit SSNOI growth is assumed in 2026 based on a further 100bps occupancy improvement; - VNO funds remaining Penn District redevelopment project costs; - Fitch assumes PENN 2 delivery of NOI at the beginning of 2026; - No incremental debt and equity raises other than refinancing secured mortgages. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Fitch's expectation of REIT leverage (net debt to recurring operating EBITDA) sustaining below 7.0x; - Fitch's expectation of more consistent leverage and financial flexibility; - Fitch's expectation of UA/UD sustaining at or above 2.0x. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Fitch's expectation of REIT leverage (net debt to recurring operating EBITDA) sustaining above 8.0x; - Fitch's expectation of UA/UD sustaining below 1.5x; - Fitch will evaluate the aforementioned sensitivities and consider revising them should Fitch expect material and lasting changes to the cash flow profile and financeability of the assets; - Fitch's expectation of a sustained liquidity coverage ratio below 1.0x. Liquidity and Debt Structure Adequate Liquidity Coverage: VNO's sources of liquidity (cash, availability under its revolving credit facility, retained cash flow after dividends/distributions) cover its uses (pro rata debt maturities, recurring capex, non-discretionary development expenditures) by 1.5x for the period July 1, 2024 through Dec. 31, 2025. Fitch's liquidity analysis incorporates upcoming maturities within the mentioned periods above, including 606 Broadway for 2024 and 4 Union Square South, Penn 11, 888 Seventh Avenue and $450 million of unsecured notes maturing in 2025. This reflects VNO's good access to a variety of capital sources over time, which meaningfully mitigates refinancing risk in Fitch's view. VNO's liquidity coverage improves to 2.5x under a scenario where the company refinances 80% of maturing pro rata secured debt. In addition, this liquidity incorporates the assumption of VNO's funding of redevelopment costs and maintenance capital expenditures by the end of 2025. As of June 30, 2024, VNO had adequate availability under two separate revolvers totaling $2.17 billion. A higher utilization than usual of $1.075 billion was drawn down at March 31, 2020, although this was done as a cautionary measure to raise cash during the onset of the pandemic and was restored to a $575 million draw in 3Q20, where it has remained for the last 17 quarters. Historically, VNO has more frequently accessed the mortgage market than the unsecured bond market as a source of funds. However, in 2021, VNO executed two tranches of unsecured public green bond issuances. As of June 30, 2024, 69% of the company's consolidated debt was secured. Issuer Profile Vornado Realty Trust (VNO) is a New York-based equity REIT that owns, acquires, develops and manages a portfolio of primarily Manhattan office and, to a lesser extent, street retail properties. The company also owns select Class A office assets in San Francisco and Chicago. 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 ----------- ------ -------- ----- Vornado Realty Trust LT IDR BB+ Affirmed BB+ Preferred LT BB- Affirmed RR6 BB- Vornado Realty, LP LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ WATERVILLE REDEVELOPMENT: Loses Bid to Extend Time to File Plan --------------------------------------------------------------- Judge Michael A. Fagone of the United States Bankruptcy Court for the District of Maine denied Waterville Redevelopment Company IV, LLC's motion to extend time to file a plan of reorganization. The Court will hold a Status Conference Hearing on Aug. 22 at 1:00 p.m. at Bankruptcy Courtroom, Room 30600, in Bangor. Opposing the motion are the United States trustee and a secured creditor, SW Legacy LLC, which has a pending motion to dismiss this case. The Debtor began this case under chapter 11 on February 27, 2024, electing to proceed under subchapter V. To enjoy the advantages of subchapter V, the Debtor was obligated to move expeditiously toward a plan, including by disclosing its efforts in a status report and at a status conference, both mandated under subchapter V to occur within the first couple months of the case. The Debtor filed its status report on April 11, 2024, about six weeks before the plan was due. After stating that one purpose in seeking bankruptcy protection had been to "halt the foreclosure process" begun by SW Legacy, the Debtor reported only that it was discussing a possible forbearance agreement with SW Legacy, with an eye toward then "negotiat[ing] means to repay the indebtedness[.]" The next day, SW Legacy filed its motion to dismiss the case. On April 23, 2024, the Court held the mandatory status conference. The Debtor's then-counsel disclosed that, just the day prior, an "experienced DIP lender" had provided a confidential but close-to-final term sheet for a potential loan to the Debtor, which would be used, in part, to pay off SW Legacy's claim. On May 23, 2024, the Debtor asked for a 45-day extension of its May 28 statutory deadline to file a plan. At an expedited hearing on that first extension request, the Debtor's then-counsel reported that the Debtor's "DIP financing is still moving along." Counsel also reported, however, that conflict-checking internal mistakes at his law firm were prompting counsel's need to withdraw and, in turn, the Debtor's need to seek new counsel and an extension of the plan filing deadline. Counsel and the United States trustee agreed that counsel's law firm, not the Debtor, was responsible for the circumstances. Based on counsel's representations about internal mistakes, the need for an extension (i.e., to retain and acquaint new counsel before filing a plan) was arguably attributable to circumstances (i.e., law firm missteps prompting counsel's need to withdraw) for which the Debtor should not justly be held accountable. With no opposition, the Court extended the plan filing deadline as requested -- to July 12, 2024. One day after receiving that extension, the Debtor retained successor counsel, whose employment was promptly approved without opposition. Six weeks passed. Then, on the July 12 deadline, the Debtor requested a second extension of time to file a plan. To explain why no plan could be filed yet, the Debtor reiterates that its plan would be "premised on obtaining takeout financing to satisfy its prepetition debt, including the existing debt to [SW] Legacy." Without offering specific facts or evidence, the Debtor then adds: "Based on discussions with potential[] DIP lenders, the Debtor has determined that it will be unable to obtain that takeout financing while the [SW] Legacy Motion to Dismiss is pending." According to the Debtor, the pending motion to dismiss qualifies as a "circumstance[] for which the debtor should not justly be held accountable." Continuing, the Debtor argues that this circumstance "is delaying the formulation and finalization of a plan" -- thus, warranting an extension. Specifically, the Debtor requests an extension to an indeterminate date -- 10 days after a disposition of the motion to dismiss. Bankruptcy Code Section 1189(b) permits the Court to "extend the period [for filing a subchapter V plan] if the need for the extension is attributable to circumstances for which the debtor should not justly be held accountable." Judge Fagone says, "At the July 18 hearing, counsel to the Debtor plainly implied that no 'confirmable' plan could be filed yet but did not shore up that insinuation with any specifics. He mentioned foregoing the option of filing a 'placeholder plan' but did not explain what he meant by the term -- that is, what the plan might be lacking. If one concern was that the plan's feasibility could not be shown due to lenders' wait-and-see approach, given the motion to dismiss, the confirmation process could have been paused accordingly, if needed. If the Debtor's projected confidence in its ability to obtain financing upon surviving a motion to dismiss corresponds to reality, then any wait-and-see approach should not have prevented the Debtor from timely filing a plan." "As noted, subchapter V obligates debtors to pursue their plans expeditiously. If they cannot meet that obligation, they must show that the failure is due to circumstances beyond their control and that those circumstances warrant providing more time. Otherwise, they cannot be permitted to continue to benefit from the advantages of subchapter V. Judge Fagone also notes the Debtor's counsel's representations were ambiguous, at times, as to who was responsible for unpaid fees that reportedly stalled the due diligence process. If the prospective DIP lender unexpectedly refused to pay, there is no evidence of that either. According to Judge Fagone, "Regardless of whether a motion to dismiss has been impacting progress, barring some financial assistance, the Debtor has lacked funds to move the process forward alone, as indicated by its monthly operating reports. If the Debtor's circumstances include being perpetually unable (or perhaps, for example, its equity holders are unwilling) to provide funds needed to proceed with financing -- as the Debtor's desired reorganization strategy -- such a circumstance would not seem to be innately beyond the Debtor's control such that a plan filing deadline should be extended. Rather, given the Debtor's reported financial situation immediately before and since filing its petition, that would seem like an expected complication with the Debtor's selected strategy." A copy of the Court's decision dated August 5, 2024, is available at https://urlcurt.com/u?l=Uddxww * * * The Debtor has opposed SW Legacy's motion to dismiss, and the parties have agreed to an extended briefing schedule and other treatment that varies from that provided under Section 1112(b)(3), with the motion to be considered and, if necessary, heard no earlier than September 2024. In connection with that matter, the Debtor and SW Legacy have filed a stipulation of facts. They indicate that forbearance discussions began in January or February 2024, prompting SW Legacy to pause its foreclosure sale efforts until around February 26, 2024, when "discussions regarding a long-term forbearance . . . reached an impasse." The Debtor filed its bankruptcy petition the next day -- the date to which foreclosure sales had been continued. About Waterville Redevelopment Company IV Waterville Redevelopment Company IV, LLC is engaged in activities related to real estate. The company is based in Gardiner, Maine. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Maine Case No. 24-10027) on Feb. 27, 2023, with $1 million to $10 million in both assets and liabilities. Kevin Mattson, manager, signed the petition. Judge Michael A. Fagone presides over the case, taking over from Judge Peter G. Cary. David C. Johnson, Esq., at Marcus Clegg, was initially retained to represent the Debtor as legal counsel. After Marcus Clegg stepped down, Waterville sought approval to hire Fred W. Bopp, III, Esq., at Bopp & Guecia as its replacement general bankruptcy counsel. WATTSTOCK LLC: Alta Power Can Amend Complaint v. GE, Court Says --------------------------------------------------------------- Judge Brantley Starr of the United States District Court for the Northern District of Texas granted Alta Power LLC's motion for leave to file an amended complaint and General Electric International Inc.'s motion for leave to file a sur-reply. Wattstock LLC sued Alta in state court, and Alta brought claims against GE. Wattstock then removed the case to federal court after filing for Chapter 11 bankruptcy. The bankruptcy court filed a report and recommendation proposing that the District Court defer all pretrial matters to the bankruptcy court and withdraw the reference when the case was ready for trial. The District Court agreed, adopted the recommendation, and referred the case to the bankruptcy court. In the bankruptcy court, Wattstock and Alta filed an agreed motion to dismiss their claims against one another, and the bankruptcy court granted the motion and dismissed Wattstock from the case. The District Court withdrew the reference from the bankruptcy court. Now, Alta seeks to amend its complaint against GE to clarify its claims and factual allegations as well as assert new theories of liability. But GE contends that the amendment is sought in bad faith and would cause undue delay and prejudice to GE. "[T]here is no evidence of bad faith here," Judge Starr says. Bad faith amendments include those designed to gain tactical advantages or otherwise abuse procedures. According to Judge Starr, "Although GE contends that Alta acted to gain a tactical advantage because Alta knew its claims were meritless from this litigation's onset, GE offers no support for this contention. At most, GE says that Alta ultimately withdrew some of its initial claims. But that alone fails to show bad faith. GE also asserts that Alta sought to gain a tactical advantage by forcing GE to burn through discovery before amending the claim. But Alta brought this motion prior to the Court's deadline to file motions for leave to amend pleadings and well before the close of discovery. Thus, GE's argument rings hollow, especially given that discovery may be extended for cause if necessary." "Finally, GE argues in its sur-reply that Alta showed bad faith by re-writing its proposed complaint. But GE fails to show how this meets the bad faith standards set by case law. While Alta's actions may demonstrate a lack of courtesy to GE, this does not make it bad faith. The Court thus finds no reason to deny this motion on the basis of bad faith." GE failed to show how Alta's timely motion caused undue delay, even if Alta did "[know] the facts all along." As a result, the Court determines that granting Alta's motion for leave to amend will not result in undue delay. Finally, GE argues that granting the motion for leave will prejudice GE by locking GE out of discovery on the new claims. But the Court concludes that the amendment will not cause undue prejudice to GE, especially given that discovery period has not concluded yet and Alta's new claims arise from the same facts as its prior claims. GE contends that the Court should grant it leave to file a sur-reply because Alta raised new legal theories in its reply brief. GE specifically points to multiple new arguments that Alta raised in its reply brief and urges the Court to allow it to reply to them. The Court agrees that GE should be permitted to reply to new arguments raised by Alta in its reply. Alta presented new theories in its reply, attempting to give the Court a fuller picture to decide the motion for leave to amend on. GE should be given the opportunity to respond and an equal opportunity to give the Court the fullest picture possible when ruling on Alta's motion. A copy of the Court's decision dated July 31, 2024, is available at https://urlcurt.com/u?l=W9aBaN About WattStock LLC Dallas, Texas-based WattStock, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 21 31488) on Aug. 17, 2021, listing as much as $10 million in both assets and liabilities. Patrick Jenevein, manager of WattStock, signed the petition. Judge Stacey G. Jernigan oversees the case. Davor Rukavina, Esq., at Munsch Hardt Kopf and Harr, PC is the Debtor's legal counsel. WILLIAMS LAND: Apex Funding et al. Lose Bid to Appeal Court Ruling ------------------------------------------------------------------ Judge Terrence W. Boyle of the United States District Court for the Eastern District of North Carolina denied the motion filed by Apex Funding Source, LLC and Yehunda Klein, a/k/a Jay Klein, for leave to take an appeal from the decision of the United States Bankruptcy Court for the Eastern District of North Carolina denying their motion to dismiss the adversary proceedings brought by Williams Land Clearing, Grading, and Timber Logger, LLC. This case began with a merchant cash advance agreement between Apex Funding and Williams Land Clearing on March 8, 2022. The agreement provided a lump sum to Williams Land Clearing in exchange for weekly payments based on a percentage of its receivables. The payments were to continue until Apex Funding was paid with interest. Williams Land Clearing made payments for a time but stopped. In May 2022, Apex Funding sued Williams Landing Clearing in the Supreme Court of the State of New York, Queens County for the remainder plus additional costs and fees. Klein was Apex Funding's attorney in that action. Apex Funding and Williams Land Clearing settled their dispute. Under the Stipulation of Settlement, Williams Land Clearing was to pay Apex Funding. The Stipulation of Settlement also provided that, in the event of a default, Apex Funding could enter a default judgment without notice to Williams Land Clearing. Not long after, it failed to make payments under the Stipulation of Settlement. As a result, a judgment was entered in New York on Apex Funding's motion. Not long after the default judgment, Williams Land Clearing filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. Williams Land Clearing then filed a complaint in an adversary proceeding seeking primarily to avoid and recover transfers to Apex Funding and Klein. Defendants then moved to dismiss Williams Land Clearing's claims under Federal Rules of Civil Procedure 12(b)(l) and 12(b)(6). On February 23, 2024, the bankruptcy court denied Defendant's motion to dismiss. Defendants filed a notice of appeal the same day. Defendants move for leave to appeal an interlocutory order that denies their motion to dismiss, contending that the bankruptcy court's order present grounds for an interlocutory appeal under Sec. 1292(b), specifically the bankruptcy court's ruling on the applicability of the Rooker-Feldman doctrine and the New York choice-of-law provision in the merchant cash advance agreement. Judge Boyle says, "In all the ways that matter, this case is identical to Ace Funding Source, LLC v. Williams Land Clearing, Grading and Timber Logger, LLC, No. 5:23-cv-00551-BO. In Ace Funding, as here, the Defendants filed a motion for leave to appeal an interlocutory order of the bankruptcy court denying defendant's motion to dismiss because of the Rooker-Feldman doctrine and a choice-of-law provisions. This Court denied defendant's motion on the grounds that neither issue as addressed in the bankruptcy court's order presented a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from that order would materially advance the termination of the litigation." "So too here. Thus, for the reasons set forth in its July 1, 2024 Order, 5:23-cv-00551-BO, the Court concludes that Apex Funding and Klein has failed satisfy the high standard set forth in Sec. 1292(b). Accordingly, the Court denies Defendants' Motion for Leave to Appeal." A copy of the Court's decision dated August 5, 2024, is available at https://urlcurt.com/u?l=rTyhEX About Williams Land Clearing, Grading and Timber Logger Williams Land Clearing, Grading, and Timber Logger, LLC is a land development company that logs timber in addition to offering lot and site clearing, land leveling, drainage solutions, and related services. Prior to forming Williams Land in 2016, the company's sole member, Lamont Williams, had been in the logging business since 2001, and added clearing and grading to his business in about 2006. Williams Land sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02094) on Sept. 16, 2022, with $10 million to $50 million in assets and $1 million to $10 million in liabilities. Lamonte Williams, manager, signed the petition. Judge Pamela W. McAfee oversees the case. The Debtor tapped William P. Janvier, Esq., at Stevens Martin Vaughn and Tadych, PLLC is the Debtor's legal counsel, and Caleb Thomas, Esq., as chief restructuring officer. WIN-SC LLC: Case Summary & Two Unsecured Creditors -------------------------------------------------- Debtor: Win-SC, LLC 1870-1910 North Atherton Street State College, PA 16803 Business Description: The Debtor owns real property located at 1890 - 1900 North Atherton Street, State College, Centre County, Pennsylvania comprised of two parcels having a current value of $5.27 million. Chapter 11 Petition Date: August 15, 2024 Court: United States Bankruptcy Court Middle District of Pennsylvania Case No.: 24-02012 Judge: Hon. Henry W Van Eck Debtor's Counsel: Lawrence V. Young, Esq. CGA LAW FIRM 135 North George Street York, PA 17401 Tel: 717-848-4900 Fax: 717-843-9039 Email: lyoung@cgalaw.com Total Assets: $5,286,776 Total Liabilities: $8,222,411 The petition was signed by Robert E. Schmidt, Jr., Managing Member of Schmidt Investments of South Florida, LLC. 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/D2M3MLA/Win-SC_LLC__pambke-24-02012__0001.0.pdf?mcid=tGE4TAMA WOM SA: Plan Exclusivity Period Extended to Dec. 31 --------------------------------------------------- Judge Karen B. Owens of the U.S. Bankruptcy Court for the District of Delaware extended WOM SA and its affiliates' exclusive periods to file a plan of reorganization and obtain acceptance thereof to December 31, 2024 and March 1, 2025, respectively. As shared by Troubled Company Reporter, the Debtors are located in three different countries, Chile, Luxembourg, and Norway, which present cross-border legal issues unique to each jurisdiction. The Debtors' creditors are located throughout the world, and particular elements of the Chilean bankruptcy system, including the ability of creditors to trigger involuntary insolvency proceedings, require particular consideration and nuanced treatment as the Chapter 11 Cases continue to unfold. The Debtors explain that the Company's business also involves a variety of stakeholders including suppliers, customers, financial creditors, and governmental regulators. The Debtors also reported $810.8 million of debt obligations in the June 2024 monthly operating report. These facts further demonstrate the complexity and size of these cases, and the Debtors must work through the myriad issues that a business of this scale faces when rebuilding its operations through the chapter 11 process. The Debtors claim that they are currently marketing their business and soliciting bids for the Debtors' assets or a chapter 11 plan sponsorship transaction pursuant to the Bidding Procedures Order. The Marketing Process has required material attention from the Debtors' management and professionals, the advisors have developed a confidential information memorandum with the assistance of management and populated a virtual data room, and continue to negotiate non-disclosure agreements. Co-Counsel to the Debtors: John K. Cunningham, Esq. Richard S. Kebrdle, Esq. WHITE & CASE LLP Southeast Financial Center 200 South Biscayne Boulevard, Suite 4900 Miami, Florida 33131 Tel: (305) 371-2700 E-mail: jcunningham@whitecase.com rkebrdle@whitecase.com - and - Philip M. Abelson, Esq. Andrew Zatz, Esq. Samuel P. Hershey, Esq. Andrea Amulic, Esq. Lilian Marques, Esq. Claire Tuffey, Esq. 1221 Avenue of the Americas New York, NY 10020 Phone: (212) 819-8200 E-mail: philip.abelson@whitecase.com azatz@whitecase.com sam.hershey@whitecase.com andrea.amulic@whitecase.com lilian.marques@whitecase.com claire.tuffey@whitecase.com Co-Counsel to the Debtors: John H. Knight, Esq. Amanda R. Steele, Esq. Brendan J. Schlauch, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801 Tel: (302) 651-7700 E-mail: knight@rlf.com steele@rlf.com schlauch@rlf.com About WOM SA WOM is a Chilean telecommunications provider, focused on offering mobile voice, data, and broadband services, along with a rapidly expanding "Fiber to the Home" broadband offering, to consumers and businesses in Chile. Since the acquisition of Nextel Chile in 2015 through Novator Partners LLP's investment vehicle NC Telecom AS, WOM has expanded from having virtually no market share to establishing itself as the second-largest mobile network operator in Chile. WOM sought relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10628) on April 1, 2024. In the petition filed by Timothy O'Connoer, as independent director, the Debtor estimated assets and liabilities between $1 billion and $10 billion each. The Honorable Bankruptcy Judge Karen B. Owens oversees the case. The Debtors tapped White & Case, LLP as general bankruptcy counsel; Richards, Layton & Finger, P.A. as local bankruptcy counsel; Riveron Consulting, LLC, as financial advisor; and Rothschild & Co US Inc. as investment banker. Kroll Restructuring Administration, LLC, is the claims agent. YELLOW CORP: Court Declines to Rule on Pension Fight ---------------------------------------------------- Alex Wittenberg of Law360 Bankruptcy Authority reports that a Delaware bankruptcy judge declined to rule Tuesday, August 6, 2024, on competing motions for summary judgment filed by trucking firm Yellow Corp. and Central States Pension Fund in a $7.8 billion dispute over Yellow's withdrawal from multistate employee pension programs, saying he needed more time to consider the issue. About Yellow Corporation Yellow Corporation -- http://www.myyellow.com/-- operates logistics and less-than-truckload (LTL) networks in North America, providing customers with regional, national, and international shipping services throughout. Yellow's principal office is in Nashville, Tenn., and is the holding company for a portfolio of LTL brands including Holland, New Penn, Reddaway, and YRC Freight, as well as the logistics company Yellow Logistics. Yellow Corporation and 23 affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow Corporation had $2,152,200,000 in total assets against $2,588,800,000 in total liabilities. The petitions were signed by Matthew A. Doheny as chief restructuring officer. The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel; Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel; Kasowitz, Benson and Torres, LLP as special litigation counsel; Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC, as investment banker; and Alvarez and Marsal as financial advisor. Epiq Bankruptcy Solutions is the claims and noticing agent. Milbank LLP serves as counsel to certain investment funds and accounts managed by affiliates of Apollo Capital Management, L.P. while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP serve as counsels to Beal Bank USA and the U.S. Department of the Treasury, respectively. On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped Akin Gump Strauss Hauer & Feld, LLP and Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller Buckfire as investment banker; and Huron Consulting Services, LLC, as financial advisor. [*] Attorneys Push Congress to Ban Texas Two-Step Bankruptcy ------------------------------------------------------------ The attorneys representing tens of thousands of women in their talc-related ovarian cancer lawsuits against Johnson & Johnson (NYSE:JNJ) are calling for passage of a measure in Congress that would end the ability of solvent companies to use the so-called Texas Two-Step bankruptcy process in order to avoid lawsuit liabilities. The process involves taking a company's liabilities -- in this case, the thousands of talc-ovarian cancer lawsuits -- placing them into a new company and then filing a petition aimed at resolving the cases in bankruptcy court rather than the tort system. Johnson & Johnson has twice tried and failed to use the Two-Step to resolve the ovarian cancer claims tied to its iconic Baby Powder. Michelle Parfitt and Leigh O'Dell are co-lead counsel in multidistrict litigation in the cases before a federal court in New Jersey. Both support passage of the Ending Corporate Bankruptcy Abuse Act (ECBA), introduced in July 2024. "This legislation is critical to protect the American system of justice, fairness, and the original intent of the bankruptcy laws," declared Ms. Parfitt, Senior Partner at the Ashcraft & Gerel law firm. This bipartisan legislation, sponsored by Sens. Sheldon Whitehouse (D-R.I.) and Josh Hawley (R-Mo.), along with Reps. Emilia Sykes (D-Ohio) and Lance Gooden (R-Texas) would ensure that courts treat such bankruptcy filings as bad faith and prohibits stays of litigation against non-bankrupt affiliates involved in these maneuvers. Ms. O'Dell highlighted the severe impact on women forced into personal bankruptcy due to exorbitant medical bills from ovarian cancer caused by Johnson & Johnson's talc powder, which contains asbestos, one of the most poisonous substances on the planet. "With average medical costs exceeding $220,000, these women face actual financial ruin while J&J, which earned over $83 billion in 2023, is trying for the third time to claim bankruptcy. This egregious tactic primarily targets African American, Hispanic, and overweight women, whom J&J aggressively targeted in advertising," said Ms. O'Dell, who practices in the Mass Tort Section at the Beasley Allen Law Firm. After gaining initial momentum, the use of the Texas Two-Step is drawing increasing criticism from legal scholars and members of Congress: "In this case, the company tried to use a legal scheme known as the 'Texas Two-Step.' It's an accurate name because it would have allowed J&J to dance around its obligations to consumers it harmed. And this is not a few people we're talking about: this case concerns nearly 40,000 Americans who used J&J products and have been diagnosed with ovarian cancer or mesothelioma." Sen. Richard Durbin (D-Ill.) "Just like the Sacklers, who are using a legal loophole to escape accountability for their role in the opioid epidemic, Johnson & Johnson is blatantly abusing our bankruptcy system in a way that protects the wealthy and giant corporations and stiffs the ordinary Americans who they have harmed." Rep. Carolyn B. Maloney (D-N.Y.) "For too long, corporations have used dirty backroom deals to shield themselves from liability for corporate misconduct. This bipartisan bill will put an end to it." Sen. Josh Hawley (R-Mo.) Original sponsors and early supporters of the Texas legislation have made it clear that they did not intend for the Texas Two-Step to be used so corruptly and fraudulently. "As co-chairs of the MDL, we are very grateful to these courageous elected representatives who are standing up against the millions of dollars that J&J and other corrupt companies are using to influence officials and contaminate the rule of law and America's system of fairness," say Ms. Parfitt and Ms. O'Dell. There are more than 57,000 pending cases in the Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, in the United States District Court for the District of New Jersey, MDL No. 2738 (3:16-md-02738). About LLT Management LLT Management, LLC (formerly known as LTL Management LLC) , is a subsidiary of Johnson & Johnson that was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management first filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, served as the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. Re-Filing of Chapter 11 Petition On January 30, 2023, a panel of the Third Circuit issued an opinion directing this Court to dismiss the 2021 Chapter 11 Case on the basis that it was not filed in good faith. Although the Third Circuit panel recognized that the Debtor "inherited massive liabilities" and faced "thousands" of future claims, it concluded that the Debtor was not in financial distress before the filing. On March 22, 2023, the Third Circuit entered an order denying the Debtor's petition for rehearing. The Third Circuit entered an order denying LTL's stay motion on March 31, 2023, and, on the dame day, issued its mandate directing the Bankruptcy Court to dismiss the 2021 Chapter 11 Case. The Bankruptcy Court entered an order dismissing the 2021 Case on April 4, 2023. Johnson & Johnson on April 4, 2023, announced that its subsidiary LTL Management LLC (LTL) has re-filed for voluntary Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain approval of a reorganization plan that will equitably and efficiently resolve all claims arising from cosmetic talc litigation against the Company and its affiliates in North America. In the new filing, J&J said it has agreed to contribute up to a present value of $8.9 billion, payable over 25 years, to resolve all the current and future talc claims, which is an increase of $6.9 billion over the $2 billion previously committed in connection with LTL's initial bankruptcy filing in October 2021. LTL also has secured commitments from over 60,000 current claimants to support a global resolution on these terms. In August 2023, U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey, ruled that the second bankruptcy case should be dismissed. 3rd Try In May 2024, J&J announced its subsidiary LLT Management LLC is soliciting support for a consensual prepackaged bankruptcy plan to resolve its talc-related liabilities. Under the terms of the plan, a trust would be funded with over $5.4 billion in the first three years and more than $8 billion over the course of 25 years, which J&J calculates to have a net present value of $6.475 billion. Claimants must cast their vote to accept or reject the Plan by 4:00 p.m. (Central Time) on July 26, 2024. A solicitation package may be requested at www.OfficialTalcClaims.com or by calling 1-888-431-4056. If the Plan is accepted by at least 75% of voters, a bankruptcy may be filed under the case name In re: Red River Talc LLC in a bankruptcy court in Texas or in the bankruptcy court of another jurisdiction. Epiq Corporate Restructuring, LLC is serving as balloting and solicitation agent for LLT. On May 22, 2024, five individuals, both individually and on behalf of a proposed class, filed a class action complaint against, among others, LLT, J&J, Holdco, and certain of their officers and directors in the United States District Court for the District of New Jersey and is proceeding under case number 3:24-cv-06320. The tort claimants are represented by: (a) Golomb Legal; (b) Levin, Papantonio, Rafferty, Proctor, Buchanan, O’Brien, Barr, Mougey, P.A.; (c) Bailey Glasser LLP; (d) Beasley, Allen, Crow, Methvin, Portis & Miles P.C.; (e) Aschraft & Gerel, LLP; and (f) Burns Charest LLP. The proposed class includes all persons who, as of August 11, 2023, either had a pending lawsuit alleging an ovarian cancer or mesothelioma personal injury claim caused by asbestos or other constituents in J&J talcum powder products or had executed a retainer agreement with a lawyer or law firm to pursue such a claim. The complaint alleges 10 causes of action that generally seek to avoid: the 2021 Corporate Restructuring; the termination of the 2021 Funding Agreement; and the separation of J&J’s consumer health division into Kenvue on the basis that these transactions were actual fraudulent transfers. LLT, J&J, Holdco, and the other defendants dispute the allegations in the Class Action Complaint and believe it lacks merit. In May 2024, J&J and LLT filed in In re Johnson & Johnson Talcum Powder Products Mktg., Sales Practices and Products Litig., MDL No. 2738, Civil Action No. 16-2638 (FLW) (D.N.J. April 27, 2020), a notice of their intent to issue a subpoena to Ellington Management Group, who J&J and LLT believe may have financed Beasley Allen's, or their co-counsel's, talc litigation. J&J and LLT have also filed a notice to issue a subpoena to the Smith Law Firm PLLC. These subpoenas seek documents relating to any litigation financing arrangements. Lawyers at Jones Day serve as counsel to LLT in the 2024 prepackaged bankruptcy. Lawyers at White & Case LLP and Barnes & Thornburg LLP advise Johnson & Johnson. The Members of the Talc Trust Advisory Committee are Andrews & Thornton; Pulaski Kherkher, PLLC; Watts Law Firm LLP; Onderlaw, LLC; and Nachawati Law Group. [*] Bankruptcy Attorney Joseph Butler Joins Lipresti Law -------------------------------------------------------- Lipresti Law, a law firm dedicated to business/corporate matters, announced that Joseph Butler of Westwood, MA, an attorney experienced in commercial/consumer bankruptcy and commercial litigation, has joined the firm. Butler has extensive experience representing individual, corporate, and partnership debtors and creditors in bankruptcy across all chapters, including Chapters 7, 11, and 13, within Bankruptcy Courts. Since 1987, Mr. Butler has served as a Chapter 7 trustee for the United States Bankruptcy Court for the District of Massachusetts. He has acted as a Chapter 11 trustee in both Massachusetts and Rhode Island and been appointed as a state court receiver for nursing homes and a guardian ad litem in probate cases in Massachusetts. "Joe brings a great deal of experience in bankruptcy and commercial litigation that adds to the wide range of services we already provide to businesses at all stages," said Lipresti Law managing partner Nicholas Lipresti. "His extensive experience is a great asset as the firm continues to grow and ensures that the firm will be able to service Rhode Island businesses and residents." In addition to Butler's bankruptcy expertise, he has decades of experience in general litigation and can effectively represent clients in cases of contract breaches and/or property disputes. "I am excited to be joining a firm that is focused on supporting businesses and their owners," Butler said. "Working through this prism, we can provide a high level of legal support along with in-depth guidance." For more information, contact the firm at 617-351-4745 and/or nlipresti@liprestilaw.com. Lipresti Law is a business law firm providing legal expertise and counsel across industries and activities. LLPC works with rapidly moving companies and entrepreneurs who leverage the firm for its attorneys' experience and judgment to solve business challenges -- legal and beyond. [*] Fears Law Honored Best Lawyers in America --------------------------------------------- Fears Law announced that founder Bryan Fears and partner Julianne Parker have been recognized in the 2025 edition of The Best Lawyers in America for their representation in cases involving bankruptcy and creditor debtor rights, and insolvency and reorganization law. Best Lawyers is the oldest and most respected peer review guide in the nation, setting the standard for legal recognition nationwide. Best Lawyers compiles the lists by conducting peer-review surveys in which tens of thousands of leading lawyers confidentially evaluate their professional peers, recognizing only the top 5.3% of elite lawyers in the nation across 150 practice areas. Along with recognition for Mr. Fears and Ms. Parker, three Fears Law attorneys were selected for Best Lawyers: Ones to Watch, which recognizes attorneys that exhibit outstanding professional excellence earlier in their careers. Partner Jeremy Ayer and attorney Christopher Pride were recognized for excellence in plaintiffs' personal injury litigation, and partner Chris Brown was honored for his practice in commercial litigation, intellectual property law, trusts and estates and business organizations, including LLCs and partnerships. "Here at Fears Law, we believe legal challenges deserve personalized solutions," said Mr. Fears. "We are dedicated to making the law work for our clients and ensuring their voices are heard. We are honored that our legal peers recognize our hard work, and we are grateful for the recognition." Fears Law provides exceptional client service rooted in the core values of transparency, integrity, tenacity, responsibility, and trust. Fears attorneys offer tailored legal solutions for individuals and businesses in personal injury, business law, intellectual property, and trusts & estates. For more information, visit fears.com. [^] BOND PRICING: For the Week from August 12 to 16, 2024 --------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 2U Inc TWOU 2.250 42.000 5/1/2025 99 Cents Only Stores LLC NDN 7.500 5.000 1/15/2026 99 Cents Only Stores LLC NDN 7.500 5.004 1/15/2026 99 Cents Only Stores LLC NDN 7.500 5.004 1/15/2026 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 40.899 2/15/2028 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 41.068 2/15/2028 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 40.792 2/15/2028 Amyris Inc AMRS 1.500 1.515 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 4.875 30.625 7/15/2028 At Home Group Inc HOME 7.125 28.339 7/15/2029 At Home Group Inc HOME 7.125 28.339 7/15/2029 At Home Group Inc HOME 4.875 31.047 7/15/2028 Athene Global Funding ATH 5.927 99.710 8/19/2024 Audacy Capital Corp CBSR 6.500 4.500 5/1/2027 Audacy Capital Corp CBSR 6.750 4.125 3/31/2029 Audacy Capital Corp CBSR 6.750 4.004 3/31/2029 Azul Investments LLP AZUBBZ 5.875 92.787 10/26/2024 Azul Investments LLP AZUBBZ 5.875 92.180 10/26/2024 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Bank of America Corp BAC 7.000 95.182 9/20/2032 Beasley Mezzanine Holdings LLC BBGI 8.625 57.628 2/1/2026 Beasley Mezzanine Holdings LLC BBGI 8.625 58.281 2/1/2026 Biora Therapeutics Inc BIOR 7.250 57.568 12/1/2025 Castle US Holding Corp CISN 9.500 47.457 2/15/2028 Castle US Holding Corp CISN 9.500 47.457 2/15/2028 CorEnergy Infrastructure Trust Inc CORR 5.875 69.731 8/15/2025 Cornerstone Chemical Co CRNRCH 10.250 50.750 9/1/2027 Curo Group Holdings Corp CURO 7.500 5.283 8/1/2028 Curo Group Holdings Corp CURO 7.500 21.529 8/1/2028 Curo Group Holdings Corp CURO 7.500 5.283 8/1/2028 Cutera Inc CUTR 2.250 15.750 6/1/2028 Cutera Inc CUTR 4.000 18.625 6/1/2029 Cutera Inc CUTR 2.250 33.170 3/15/2026 Danimer Scientific Inc DNMR 3.250 13.788 12/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 2.075 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 2.025 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 2.075 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 2.455 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 1.894 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 2.455 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 1.954 8/15/2026 Energy Conversion Devices ENER 3.000 0.762 6/15/2013 Entergy Louisiana LLC ETR 0.950 99.154 10/1/2024 Enviva Partners LP / Enviva Partners Finance Corp EVA 6.500 43.500 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 29.446 7/15/2026 Federal Farm Credit Banks Funding Corp FFCB 0.470 99.933 8/19/2024 Federal Farm Credit Banks Funding Corp FFCB 0.460 99.419 8/19/2024 Federal Farm Credit Banks Funding Corp FFCB 0.460 99.933 8/19/2024 Federal Home Loan Banks FHLB 0.500 99.396 8/16/2024 Federal Home Loan Banks FHLB 0.750 99.555 9/16/2024 Federal Home Loan Banks FHLB 1.200 99.887 8/16/2024 Federal Home Loan Banks FHLB 0.250 99.882 8/16/2024 Federal Home Loan Banks FHLB 0.450 99.396 8/16/2024 Federal Home Loan Banks FHLB 0.475 99.368 8/19/2024 Federal Home Loan Banks FHLB 0.750 99.350 8/22/2024 Federal Home Loan Banks FHLB 1.250 99.887 8/16/2024 Federal Home Loan Banks FHLB 1.305 99.763 8/16/2024 Federal National Mortgage Association FNMA 5.250 99.392 11/22/2024 First Republic Bank/CA FRCB 4.375 2.000 8/1/2046 First Republic Bank/CA FRCB 4.625 2.500 2/13/2047 Ford Motor Credit Co LLC F 7.000 98.845 8/20/2026 GNC Holdings Inc GNC 1.500 0.774 8/15/2020 Goldman Sachs Group Inc/The GS 7.000 94.157 9/20/2032 Goldman Sachs Group Inc/The GS 4.000 100.000 8/20/2024 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 7.770 6/1/2026 H-Food Holdings LLC / Hearthside Finance Co Inc HEFOSO 8.500 7.770 6/1/2026 Hallmark Financial Services Inc HALL 6.250 17.513 8/15/2029 Homer City Generation LP HOMCTY 8.734 38.750 10/1/2026 Hughes Satellite Systems SATS 6.625 48.064 8/1/2026 Hughes Satellite Systems SATS 6.625 48.329 8/1/2026 Hughes Satellite Systems SATS 6.625 48.329 8/1/2026 Inseego Corp INSG 3.250 73.790 5/1/2025 Invacare Corp IVC 4.250 1.002 3/15/2026 Karyopharm Therapeutics KPTI 3.000 63.864 10/15/2025 Ligado Networks LLC NEWLSQ 15.500 15.000 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 Luminar Technologies Inc LAZR 1.250 45.500 12/15/2026 MBIA Insurance Corp MBI 16.823 5.000 1/15/2033 MBIA Insurance Corp MBI 16.823 4.972 1/15/2033 Macy's Retail Holdings LLC M 6.700 86.554 7/15/2034 Macy's Retail Holdings LLC M 6.900 93.890 1/15/2032 Mashantucket Western Pequot Tribe MASHTU 7.350 51.734 7/1/2026 Millennium Escrow Corp CFIELD 6.625 50.951 8/1/2026 Millennium Escrow Corp CFIELD 6.625 51.117 8/1/2026 Morgan Stanley MS 1.800 79.341 8/27/2036 NanoString Technologies NSTG 2.625 75.232 3/1/2025 Office Properties Income Trust OPI 4.500 79.812 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 27.692 5/15/2026 Rackspace Technology Global Inc RAX 5.375 30.562 12/1/2028 Rackspace Technology Global Inc RAX 3.500 29.263 2/15/2028 Rackspace Technology Global Inc RAX 3.500 29.263 2/15/2028 Rackspace Technology Global Inc RAX 5.375 28.439 12/1/2028 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 3.500 2/15/2027 Rite Aid Corp RAD 7.500 41.500 7/1/2025 Rite Aid Corp RAD 8.000 17.000 11/15/2026 Rite Aid Corp RAD 6.875 3.488 12/15/2028 Rite Aid Corp RAD 7.500 17.188 7/1/2025 Rite Aid Corp RAD 6.875 3.488 12/15/2028 RumbleON Inc RMBL 6.750 72.007 1/1/2025 SITE Centers Corp SITC 4.700 100.294 6/1/2027 SITE Centers Corp SITC 3.625 99.225 2/1/2025 SVB Financial Group SIVB 3.500 59.500 1/29/2025 Sandy Spring Bancorp Inc SASR 4.250 86.000 11/15/2029 Shift Technologies Inc SFT 4.750 0.382 5/15/2026 Shutterfly LLC SFLY 8.500 47.500 10/1/2026 Shutterfly LLC SFLY 8.500 47.500 10/1/2026 Southern First Bancshares SFST 4.750 96.516 9/30/2029 Southern First Bancshares SFST 4.750 96.516 9/30/2029 Southern First Bancshares SFST 4.750 96.516 9/30/2029 Spanish Broadcasting System Inc SBSAA 9.750 60.250 3/1/2026 Spanish Broadcasting System Inc SBSAA 9.750 59.500 3/1/2026 Spirit Airlines Inc SAVE 1.000 28.900 5/15/2026 Spirit Airlines Inc SAVE 4.750 66.913 5/15/2025 Summit Midstream Holdings LLC / Summit Midstream Finance Corp SUMMPL 5.750 99.558 4/15/2025 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Tricida Inc TCDA 3.500 9.000 5/15/2027 Veritex Holdings Inc VBTX 4.750 89.472 11/15/2029 Veritone Inc VERI 1.750 33.000 11/15/2026 Virgin Galactic Holdings SPCE 2.500 30.747 2/1/2027 Voyager Aviation Holdings VAHLLC 8.500 15.487 5/9/2026 Voyager Aviation Holdings VAHLLC 8.500 15.487 5/9/2026 Voyager Aviation Holdings VAHLLC 8.500 15.487 5/9/2026 WW International Inc WW 4.500 25.519 4/15/2029 WW International Inc WW 4.500 26.261 4/15/2029 WeWork Cos US LLC WEWORK 12.000 1.060 8/15/2027 Wesco Aircraft Holdings WAIR 9.000 41.088 11/15/2026 Wesco Aircraft Holdings WAIR 13.125 1.797 11/15/2027 Wesco Aircraft Holdings WAIR 9.000 41.088 11/15/2026 Wesco Aircraft Holdings WAIR 13.125 1.797 11/15/2027 Wheel Pros Inc WHLPRO 6.500 5.000 5/15/2029 Wheel Pros Inc WHLPRO 6.500 5.080 5/15/2029 fuboTV Inc FUBO 3.250 65.000 2/15/2026 iHeartCommunications Inc IHRT 8.375 45.231 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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