/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/241202.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, December 2, 2024, Vol. 28, No. 336 Headlines 76 M INC: Seeks to Hire Marcus & Millichap as Real Estate Broker 9415 107 STREET: Files Chapter 11, Dec. 23 Creditors' Meeting A GRANDE PROMOTION: Has Deal on Cash Collateral Access ACADEMIR CHARTER: Moody's Alters Outlook on Ba2 Rating to Positive AFINITI LTD: Gains Ch. 15 Recognition for Bermuda Restructuring AG PARENT: Moody's Affirms ‘B3’ CFR, Outlook Stable ALGORHYTHM HOLDINGS: Posts $1.20 Million Net Income in 3rd Quarter ALGORHYTHM HOLDINGS: Regains Compliance With Nasdaq Listing Rule ALL IN ONE MANAGEMENT: Seeks Court Nod to Use Cash Collateral ALMOND COW: Hires GGG Partners LLC as Financial Advisor AMCI NCR LLC: Hits Chapter 11 Bankruptcy Protection in Delaware AMERICAN CONTRACTORS: Hires Meridian Law as Bankruptcy Counsel AMERICAN TIRE: S&P Discontinues 'D' ICR Following October Default ANDERSON UNIVERSITY: Fitch Alters Outlook on 'B-' IDR to Negative APPLOVIN CORP: Moody's Raises CFR to Ba1, Outlook Positive AR ACQUISITIONS: Files Chapter 11, Dec. 20 Creditors' Meeting ASSETS HOLDING: Updates Flagstar & IMT Commercial Claims Pay AXENTIA CARD: Seeks Court Nod to Use Cash Collateral BARCA HOLDINGS: Case Summary & 20 Largest Unsecured Creditors BERRY CORP: Swings to $69.9 Million Net Income in Fiscal Q3 BERRY GLOBAL: Fitch Puts 'BB+' LongTerm IDR on Watch Positive BERRY GLOBAL: Moody's Puts 'Ba1' CFR Under Review for Upgrade BIG RIVER: Hires Pattillo Brown & Hill LLP as Accountant BIOHARVEST SCIENCES: Incurs $2.69 Million Net Loss in Third Quarter BIOLASE INC: Committee Hires Esbrook PC as Legal Counsel BLACKRIDGE OPERATING: Unsecureds Will Get 64% of Claims in Plan BLINK HOLDINGS: Unsecured Creditors to Get 0% in Sale Plan BLUE RACER: Moody's Affirms 'B1' CFR, Outlook Remains Stable BOONE HOSPITAL: Moody's Alters Outlook on B1 Bond Rating to Stable BREAD FINANCIAL: Moody's Affirms 'Ba3' Issuer & Unsecured Ratings BYJU'S ALPHA: Trustee Requests Sanctions for Breaching Ch. 11 Stay CAST & CREW: Moody’s Lowers Ratings on First Lien Loans to B3 CASTLE US: Moody's Lowers CFR to Caa2, Outlook Negative CENTENNIAL HOUSING: PCO Taps Sak Management as Operations Advisor CENTER FOR ALLERGIC: Updates Fairview Center Secured Claim Pay CG JERSEY: Seeks Chapter 11 Bankruptcy, Dec. 19 Creditors' Meeting CHARTER COMMUNICATIONS: Moody's Rates New Sr. Secured Debt 'Ba1' CITIUS PHARMACEUTICALS: Effects 1-for-25 Reverse Stock Split CL CRESSLER: Seeks to Hire PRS Pharmacy Services as Broker CL CRESSLER: Taps PRS Pharmacy as Staffing Services Provider CLS ELECTRIC: Gets Court Nod to Use Cash Collateral CMG MEDIA: Moody's Affirms 'Caa1' CFR & Alters Outlook to Stable COASTAL GROWERS: Seeks Chapter 11 Reorganization CORREIA CONTRACTING: Sec. 341(a) Meeting of Creditors on Dec. 19 CUSTOMIZED CLEANING: Hires Johnson & Company as Accountants CYT MAINTENANCE: Hires Hartman Valeriano Magovern as Counsel DARK RHIINO: Gets Interim OK to Use Cash Collateral DELTA HOLDCO: Fitch Affirms & Withdraws 'B-' IDR, Outlook Stable DELUXE CORP: Fitch Assigns 'B' LongTerm IDR, Outlook Stable DELUXE CORP: Moody's Rates New $400MM Secured Notes ‘Ba3’ DESTINATIONS TO RECOVERY: Seeks Court OK to Use Cash Collateral DIOCESE OF ROCKVILLE: Updates Restructuring Plan Disclosures DNR REAL ESTATE: Hires Vivona Pandurangi as Bankruptcy Counsel EAST ORANGE SD: Moody's Puts 'Ba1' Issuer on Review for Withdrawal ENJOY SA: Creditors Agree to Postpone Repayment Until Dec. 6 ENOVA INTERNATIONAL: Moody's Affirms 'B1' CFR, Outlook Stable EPIC COMPANIES: Plan Exclusivity Period Extended to May 5, 2025 EVOFEM BIOSCIENCES: Incurs $2.37 Million Net Loss in Third Quarter FAITH VICTORY: Unsecureds Will Get 100% over 2 Years FARADAY FUTURE: Will Change its Stock Ticker Symbol to "FFAI" FINANCE OF AMERICA: Swings to $203.7-Mil. Net Income in Fiscal Q3 FIREPAK INC: Gets Interim OK to Use Cash Collateral Until Dec. 31 FRANCHISE GROUP: Wants Litigation Protection for CEO GAUCHO GROUP: Seeks Court OK to Use Cash Collateral GAUCHO GROUP: Seeks to Hire Mancuso Law P.A. as Counsel GB SCIENCES: Incurs $191K Net Loss in Second Quarter GB SCIENCES: Incurs $285K Net Loss in First Quarter GOL LINHAS: To Finalize Agreement Resolving Tax Obligations GRUPO HIMA: Amends Plan to Include Luma Administrative Claim GSE GLOBAL: Seeks to Hire Ford & Crane as Bankruptcy Counsel HADAD DESIGN: Unsecureds Will Get 62.3% of Claims in Plan HOOPER'S RE: Case Summary & One Unsecured Creditor HOSPITAL FOR SPECIAL: PCO Hires Fellers Snider as Attorney HYPERSCALE DATA: To Issue Dividend of 1M Shares of Series F Stock IHEARTCOMMUNICATIONS INC: Moody's Reviews Caa1 CFR for Downgrade INDOCHINE RESTAURANT: Hires Red Bike Advisors as Accountant INNOPHOS HOLDINGS: Moody's Rates Amended $440MM Term Loan 'B1' JOURNEY HEALTH: Hires Cooney Law Offices as Bankruptcy Counsel KAM REALTY: Seeks to Hire Rodney D. Shepherd as Legal Counsel KARPATIA TRUCKS: Updates Restructuring Plan Disclosures KENNISON STRATEGIC: Seeks to Hire Thompson Law Group as Counsel KINGDOM EMPOWERMENT: Voluntary Chapter 11 Case Summary KODIAK BP: Moody's Affirms ‘B1’ CFR, Outlook Stable LA LOBA: Hires Maureen J. Shanahan as General Insolvency Counsel LA ZAMORANA COCKTAIL: Hires Gandia-Fabian Law Office as Counsel LA ZAMORANA COCKTAIL: Hires Jimenez Vazquez as Counsel LASERSHIP INC: Moody's Appends 'LD' Designation to PDR LJB LLC: Seeks to Hire Gary W. Cruickshank as Legal Counsel LL FLOORING: Unsecureds' Recovery "TBD" in Liquidating Plan MCR HEALTH: Hires Forvis Mazars as Health Care Consulting Advisor MEDLIN EXPEDITED: Sec. 341(a) Meeting of Creditors on Dec. 18 METHANEX CORP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable METHANEX US: Moody's Rates New $500MM Senior Unsecured Notes 'Ba2' MISS AMERICA: Chapter 11 Dismissal Hearing Postponed Pending Event MS FREIGHT: Files Chapter 11 Bankruptcy NATIONAL ASSOCIATION: Trustee Hires SL Biggs as Accountant NOVA CHEMICALS: Fitch Assigns BB- Rating on $400MM Sr. Unsec. Notes NOVA CHEMICALS: Moody's Rates Unsecured Notes Ba3, Outlook Stable NXT ENERGY: Reports C$1.48 Million Net Loss in Fiscal Q3 OG LIVING: Case Summary & 20 Largest Unsecured Creditors ORIGINAL MOWBRAY'S: Hires Grobstein Teeple as Financial Advisors OU MEDICINE: Moody's Ups Bond to Ba2 & Alters Outlook to Stable P&L DEVELOPMENT: Fitch Hikes LongTerm IDR to 'CCC+' PAR PACIFIC: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable PAR PETROLEUM: $100MM Loan Add-on No Impact on Moody's 'Ba3' CFR PERIMETER FOODS: Hires Barry Strickland & Company as Accountant PIONEERS MEMORIAL: Fitch Alters Outlook on 'B' IDR to Positive PODS LLC: Moody's Cuts CFR to B3, Outlook Negative PRAIRIE SEEDS ACADEMY: Moody's Rates 2024 School Bonds 'Ba2' PURDUE PHARMA: Obtains Limited Extension for Ch. 11 Deal Talks QSR STEEL: Unsecured Creditors to Get Share of Income for 3 Years RG AVIATION: Files Chapter 11, Dec. 20 Creditors' Meeting ROTI RESTAURANTS: Hires TAGex Brands as Auctioneer SAMYS OC: Seeks Court Nod to Use Cash Collateral SC HEALTHCARE: Seeks to Extend Plan Exclusivity to March 17, 2025 SIX RIVERS: Ongoing Operations to Fund Plan Payments SKILLZ INC: Posts $21.1 Million Net Loss in Fiscal Q3 SMART COMMUNICATIONS: Case Summary & 18 Unsecured Creditors SOLIGENIX INC: Reports Net Loss of $1.7 Million in Fiscal Q3 SPENCER SPIRIT: Moody's Affirms 'B1' CFR, Outlook Remains Stable SPIRIT AIRLINES: Fitch Lowers LongTerm IDR to 'D' SPIRIT AIRLINES: Moody's Cuts CFR to Ca & Alters Outlook to Stable SRM-DOUBLE L LLC: Hires Parsons Behle & Latimer as Counsel SRM-DOUBLE L LLC: Seeks to Hire Ampleo Turnaround as Accountant STAR PUMP: Case Summary & 11 Unsecured Creditors STOLI GROUP: Seeks Chapter 11 Bankruptcy w/ Subsidiary TENET HEALTHCARE: Moody's Raises CFR & Senior Secured Notes to Ba3 THUNDER ROAD: Hires Feinman Law Offices as Legal Counsel TILI LOGISTICS: Seeks to Use Cash Collateral Until Feb. 14 TOLEDO GAS: Sec. 341(a) Meeting of Creditors on Dec. 18 TRINITY EXCAVATORS: Seeks Cash Collateral Access TRUIST INSURANCE: Fitch Affirms 'B' LongTerm IDR, Outlook Stable TWO RIVERS: Hires Langley & Banack, Inc. as Legal Counsel UNITED BELIEVERS: Gets Green Light to Use Cash Collateral UPSTREAM LIFE: A.M. Best Cuts Fin. Strength Rating to C++(Marginal) US FOODS: Moody's Affirms 'Ba2' CFR & Alters Outlook to Positive UWHARRIE CHARTER: Moody's Affirms Ba2 on 2022A/B Revenue Bonds VG IMPERIAL: Amends Plan to Include Dept. of Labor Priority Claim VILROSE VENTURES: Hires Tittle Law Group PLLC as Counsel WELLPATH HOLDINGS: Moody's Withdraws Caa3 CFR on Bankruptcy Filing WESTMINSTER-CANTERBURY: Fitch Affirms 'BB+' IDR, Outlook Stable WIN PRODUCTIONS: Seeks to Hire Sgro Hanrahan Durr as Attorney YUNHONG GREEN: Reports $1.19 Million Net Loss in Fiscal Q3 [*] Moody's Takes Action on 5 Bonds From 5 US RMBS Deals [^] BOND PRICING: For the Week from November 25 to 29, 2024 ********* 76 M INC: Seeks to Hire Marcus & Millichap as Real Estate Broker ---------------------------------------------------------------- 76 M, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Columbia to employ Marcus & Millichap as real estate broker. The Debtor proposes to sell three buildings; namely, 6145 Kansas Avenue, NE, Washington DC 20011 (4 units); 6147 Kansas Avenue, NE, Washington DC 20011 (4 units); and 6149 Kansas Avenue, NE, Washington DC 20011 (4 units). The broker will receive a commission equal to 5 percent of gross sales. As disclosed in the court filings, Marcus & Millichap is a "disinterested person" as that term is defined 11 U.S.C. Sec. 101(14). The firm can be reached through: John M. Zupancic Marcus & Millichap 7200 Wisconsin Ave, Suite 1101 Bethesda, MD 20814 Office: (202) 536-3700 Direct: (202) 536-3788 About 76 M Inc. 76 M Inc. is primarily engaged in renting and leasing real estate properties. 76 M Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. C. Case No. 24-00003) on Jan. 3, 2023, listing up to $50,000 in assets and $1 million to $10 million in liabilities. The petition was signed by Peter Odagbodo as president. Judge Elizabeth L. Gunn presides over the case. John D. Burns, Esq. at The Burns Law Firm, LLC represents the Debtor as counsel. 9415 107 STREET: Files Chapter 11, Dec. 23 Creditors' Meeting ------------------------------------------------------------- On November 15, 2024, 9415 107 Street LLC filed Chapter 11 protection in the Eastern District of New York. According to court filing, the Debtor reports between $500,000 and $1 million in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. A meeting of creditors under Sec. 341(a) to be held on December 23, 2024 at 2:00 PM. About 9415 107 Street LLC 9415 107 Street LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). 9415 107 Street LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-44770) on November 15, 2024. In the petition filed by Kristh Narine Ramjewan, as authorized representative of the Debtor, the Debtor reports estimated assets between $1 million and $10 million and estimated liabilities between $500,000 and $1 million. The case is before Honorable Bankruptcy Judge Elizabeth S. Stong. Vivian Williams, Esq. of VMW LAW PC represents the case. A GRANDE PROMOTION: Has Deal on Cash Collateral Access ------------------------------------------------------ A Grande Promotion Company, LLC asked the U.S. Bankruptcy Court for the District of Arizona to approve its stipulation with the U.S. Small Business Administration that would allow the company to use its secured creditor's cash collateral until Feb. 28 next year. Under the stipulation, A Grande agreed to use the cash collateral only for ordinary and necessary expenses set forth in its projected budget, with a 10% variance. The company will make no additional or unauthorized use of the cash collateral retroactive from the petition date until Feb. 28, or the entry of an order confirming its Chapter 11 plan of reorganization, whichever occurs earlier. As adequate protection, the SBA will receive a replacement lien on all post-petition revenues of the company to the same extent and with the same priority and validity as its pre-bankruptcy lien. A Grande also agreed to remit monthly payments to the SBA, with said payments due on the 25th of each month pending confirmation of the reorganization plan. Prior to the petition date, A Grande executed a U.S. Small Business Administration Note, pursuant to which it obtained a loan in the amount of $150,000. The Note was modified in the amount of $1.546 million on March 17, 2022. About A Grande Promotion Company A Grande Promotion Company, LLC, a company in Phoenix, Ariz., filed Chapter 11 petition (Bankr. D. Ariz. Case No. 24-09458) on Nov. 5, 2024, listing $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Eugene Medrano, a member and manager of A Grande, signed the petition. Judge Scott H Gan oversees the case. Allan D. NewDelman, P.C. serves as the Debtor's legal counsel. ACADEMIR CHARTER: Moody's Alters Outlook on Ba2 Rating to Positive ------------------------------------------------------------------ Moody's Ratings has revised the outlook to positive from stable and affirmed the Ba2 rating on AcadeMir Charter Schools, Inc.'s D/B/A as AcadeMir Charter School West, FL ("the school") Series 2021A, Series 2021B, Series 2021A-2 and Series 2021B-2 bonds. The school has approximately $21 million in outstanding debt as of fiscal 2024. The outlook revision to positive reflects the school's improving cash position which should continue to grow over the next 12 months and push days cash on hand to over 200 days and improve leverage to 26% of debt. RATINGS RATIONALE The Ba2 rating reflects significantly improved liquidity, solid coverage levels and reduced leverage resulting from a settlement with Miami-Dade County School District. The school received $1.5 million in July 2024 and will receive an additional $1.5 million in July 2025. The school is on track to meet its fiscal 2025 budget and continues to exhibit strong academics. Challenges exist in the school's ability to ramp up its middle school enrollment to full capacity, and the potential for additional pressure through affiliated debt associated with growth across the AcadeMir Network of schools. RATING OUTLOOK The positive outlook reflects the likelihood of stable operating performance and improved liquidity and leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -- Sustained improvement with cash and investments over $5 million -- Maintenance of debt service coverage of over 1.7x -- Trend of cash to debt of over 26% -- Achievement of enrollment targets FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -- Decline in liquidity that reduces the days cash on hand below 60 days -- Weakening enrollment trend or other evidence of weakened demand -- Reduced state and local support for capital or operating funding -- Additional debt without commensurate growth in resources LEGAL SECURITY The bonds are secured by revenues from the obligated school and any other public charter schools owned by the Borrower using facilities that are financed or refinanced with the proceeds of these bonds and a first priority lien on bond financed facilities. PROFILE AcadeMir Charter Schools, Inc. D/B/A AcadeMir Charter School West (K-8) operates under charter authorization with Miami-Dade School District expiring in 2029. The total campus enrollment for fall 2024 was 730 students. AcadeMir Charter Schools, Inc. was incorporated in 2008 and currently operates 10 schools all of which use D/B/A (does business as) nomenclature. AcadeMir Charters Schools, Inc. has plans to open three additional charter schools over the next several years planning to add capacity for 4,300 additional students to the current enrollment of the networks of 3,921 students. Enrollment capacity is planned to increase to 7,000 students by 2028. METHODOLOGY The principal methodology used in these ratings was US Charter Schools published in April 2024. AFINITI LTD: Gains Ch. 15 Recognition for Bermuda Restructuring --------------------------------------------------------------- Ben Zigterman of Law360 Bankruptcy Authority reports that a Delaware bankruptcy judge confirmed she would recognize the Bermuda insolvency proceedings of software company Afiniti Ltd. as it attempts to restructure more than $500 million in debt. About Afiniti Ltd. Afiniti Ltd. provides management consultancy services. Afiniti Ltd. sought relief under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 1:24-bk-12539) on Nov. 3, 2024, to seek U.S. recognition of the liquidation proceedings in Bermuda. The Debtor's U.S. counsel: Kara Hammond Coyle Young Conaway Stargatt & Taylor LLP 302-571-6600 kcoyle@ycst.com AG PARENT: Moody's Affirms ‘B3’ CFR, Outlook Stable ------------------------------------------------------- Moody's Ratings affirmed AG Parent Holdings, LLC's (ArisGlobal) B3 Corporate Family Rating, B3-PD Probability of Default Rating, and Caa2 Senior Secured Second Lien Term Loan rating. Concurrently, Moody's downgraded the Senior Secured First Lien Bank Credit Facilities (Term Loan and Revolving Credit Facility) to B3 from B2. The outlook is stable. The downgrade of the company's First Lien Senior Secured Bank Credit Facilities (Term Loan and Revolver) to B3 from B2, and now in line with the Company's B3 CFR, reflects Moody's expectation that first lien debt will continue to comprise a substantial majority of ArisGlobal's debt capital structure over the medium term. The stable outlook reflects Moody's expectations that the company's EBITDA will grow mainly as a result of large cost reductions and modest revenue growth, leading to modestly positive free cash flow in FY 2025 and maintenance of adequate liquidity in the next 12-15 months. RATINGS RATIONALE The B3 CFR reflects the company's small scale and niche primary focus on pharmacovigilance software for life sciences companies, as well as its elevated leverage, with debt-to-EBITDA expected to end 2024 at about 6.1x, or 7.7x when expensing capitalized software development costs. The company's negative free cash flow generation over the last 12 to 18 months have eroded its liquidity and credit profile, though Moody's expect free cash flow to turn modestly positive in 2025. The company is small compared to other, much larger players in the pharmacovigilance software space, such as Oracle Corporation and Veeva Systems Inc. These risks are tempered by the company's strong product offering, especially for Safety and Regulatory pharmaceutical workflows, and the sticky nature of its products with relatively high retention rates. Cost actions taken in late 2023 and early 2024, after a period of heightened R&D investment in 2021-2022, will result in greater profitability and cash flows in 2025. Liquidity is adequate and includes about $13 million of cash and $10 million of revolver availability at November 2024 and should support the company's debt servicing needs, especially given expectations for modestly positive free cash flow in 2025. The credit facility is covenant-lite, with the revolver subject to only a springing maximum 7.85x first lien net leverage ratio when the facility is drawn more than 35% of its committed amount. Moody's expect the company to maintain sufficient headroom under the covenant over the next year. The company's $30 million revolver, which expires on April 2026, has $10 million in availability with $20 million in outstanding borrowings. Additionally, there is little to no alternate liquidity expected given the nature of the company's business and mostly intangible assets. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded with a significant expansion in scale an scope of service offerings, and/or with free cash flow to debt sustained above 8%. The ratings could be downgraded with a sharp drop in revenue, a loss of a major customer or other materially unfavorable development. In addition, the credit profile could be pressured by approaching large revolving loans and term loan maturities. Free cash flow to debt sustained below 3% and/or weak liquidity could also lead to a downgrade. STRUCTURAL CONSIDERATIONS The B3 rating on the first lien bank credit facilities (including the $30 million revolver and $240 million term loan, with about $229 million outstanding) reflect the substantial preponderance of first lien debt relative to overall debt, with only $26 million of second lien debt ranking below those instruments in the debt stack. The Caa2 rating on the $26 million second lien term loan reflects its subordination to the much more substantial first lien debt. Headquartered in Waltham, MA, ArisGlobal develops software that helps pharmaceutical companies and government regulators monitor and analyze safety and compliance information after the launch of a drug. About two thirds of the company's revenues are generated in U.S. dollars, with most of the remainder in euros. Around 80% of ArisGlobal's workforce is based in India. Private equity firm Nordic Capital owns approximately 95% (on an undiluted basis) of the company as the result of a mid-2019 leveraged buyout. Revenue for the LTM period ended September 30, 2024, was approximately $168 million. The principal methodology used in these ratings was Software published in June 2022. ALGORHYTHM HOLDINGS: Posts $1.20 Million Net Income in 3rd Quarter ------------------------------------------------------------------ Algorhythm Holdings, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net income available to common stockholders of $1.20 million on $10.62 million of net sales for the three months ended Sept. 30, 2024, compared to net income available to common stockholders of $97,000 on $15.93 million of net sales for the three months ended Sept. 30, 2023. For the nine months ended Sept. 30, 2024, the Company reported a net loss available to common stockholders of $7.29 million on $15.49 million of net sales, compared to a net loss available to common stockholders of $5.35 million on $21.94 million of net sales for the same period during the prior year. As of Sept. 30, 2024, the Company had $19.61 million in total assets, $16.87 million in total liabilities, and $2.74 million in total shareholders' equity. As of Sept. 30, 2024, the Company had cash on hand of approximately $621,000 and deficit working capital of approximately $2,082,000 which is not sufficient to fund the Company's planned operations through one year after the date the consolidated financial statements are issued. The Company has a recent history of recurring operating losses and decreases in working capital. The Company said these factors create substantial doubt about the Company's ability to continue as a going concern for at least one year after the date that the Company's audited consolidated financial statements are issued. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/923601/000149315224046807/form10-q.htm About Algorhythm Holdings Algorhythm Holdings, Inc. (fka The Singing Machine Company, Inc.) is a holding company for an AI enabled software logistics business operated through its SemiCab Holding subsidiary and a home karaoke consumer products company that designs and distributes karaoke products globally to retailers and ecommerce partners through our Singing Machine subsidiary. ALGORHYTHM HOLDINGS: Regains Compliance With Nasdaq Listing Rule ---------------------------------------------------------------- Algorhythm Holdings, Inc. reported in a Form 8-K filed with the Securities and Exchange Commission that on Nov. 22, 2024, the Company received a letter from The Nasdaq Stock Market informing the Company that, based on the Company's Current Report on Form 8-K filed Nov. 13, 2024, the Nasdaq Staff has determined that the Company complies with Nasdaq Listing Rule 5550(b)(1). The Company understands that if it fails to evidence continued compliance as of its next periodic report filed with the SEC, the Company may be subject to delisting, in which event Nasdaq Staff would provide written notification to the Company, which may then appeal the determination to a listing panel. On Aug. 26, 2024, Algorhythm received a letter from Nasdaq notifying the Company that it was not in compliance with the minimum stockholders' equity requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1), because it reported stockholders' equity of less than $2.5 million in its Quarterly ‎Report on Form 10-Q for the period ended June 30, 2024, and it did not meet the alternative tests for market ‎value of listed securities or net income from continuing operations. In accordance with the letter, within 45 days of receipt of the letter, the Company submitted a plan to regain ‎compliance with the minimum stockholders' equity standard. On Nov. 13, 2024, the Company filed a Current Report on Form 8-K, in which the Company described the steps it had taken to regain compliance with the Nasdaq Listing Rule 5550(b)(1) and indicated that it believed it had regained compliance. About Algorhythm Holdings Algorhythm Holdings, Inc. (fka The Singing Machine Company, Inc.) is a holding company for an AI enabled software logistics business operated through its SemiCab Holding subsidiary and a home karaoke consumer products company that designs and distributes karaoke products globally to retailers and ecommerce partners through our Singing Machine subsidiary. "Based on cash flow projections from operating and financing activities and the existing balance of cash, management is of the opinion that the Company has insufficient funds to sustain operations for at least one year after the date of this report, and it may not be able to meet its payment obligations from operations and related commitments, if the Company is not able to obtain outside financing to allow the Company to continue as a going concern. Based on these factors, the Company has substantial doubt that it will continue as a going concern for the twelve months following the issuance date of the financial statements included elsewhere in this report," Singing Machine said in its Quarterly Report for the period ended June 30, 2024. ALL IN ONE MANAGEMENT: Seeks Court Nod to Use Cash Collateral -------------------------------------------------------------- All In One Management and Services, Inc. asked the U.S. Bankruptcy Court for the Central District of Illinois for authority to use its secured creditors' cash collateral. The secured creditors include Alliance Laundry Systems, LLC, Local Initiatives Support Corporation, Illinois National Bank, the U.S. Small Business Administration, Eastern Funding, LLC, Channel Partners Capital, LLC and Small Business Financial Solutions, LLC. All In One believes these secured creditors hold security interests in its deposit accounts and receivables, equipment, inventory and other business assets. As of the petition date, All In One owed $3,135 to Alliance Laundry Systems; $578,218 to Local Initiatives Support; $396,547 to Illinois National Bank; $500,000 to the SBA; $591,530 to Eastern Funding; $67,689 to Channel Partners Capital; and $91,093 to Small Business Financial Solutions. An interim lien on its post-petition receivables and post-petition deposit accounts in favor of each creditor in order of priority would be appropriate adequate protection for cash collateral use, according to the company. A court hearing is scheduled for Dec. 19. About All In One Management and Services All In One Management and Services, Inc. sought relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Ill. Case No. 24-70883) on Oct. 31, 2024, with up to $10 million in both assets and liabilities. Pamela L. Frazier, president of All In One, signed the petition. Judge Mary P. Gorman oversees the case. Jeana K. Reinbold, Esq., at Sgro, Hanrahan, Durr, Rabin & Reinbold, LLP serves as the Debtor's legal counsel. ALMOND COW: Hires GGG Partners LLC as Financial Advisor ------------------------------------------------------- Almond Cow, Inc seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ GGG Partners, LLC as financial advisor. The firm will provide these services: a. assist the Debtor in fulfilling its statutory reporting requirements during the Chapter 11 proceeding, including Monthly Operating Reports (MORs). b. assist the Debtor with the preparation of reports for, and communications with, the Bankruptcy Court, secured lenders, other creditors, and any other constituents. c. assess the near-term and intermediate cash flow and financing requirements of the Debtor in order to create a cash-based budget to support any motions for the ongoing use of cash collateral; d. provide support and assistance with regards to the proper receipt, disbursement and accounting for funds and other property of the Debtor's estate; e. assist the Debtor with a thorough review of its financial affairs; and f. provide any other duty or task which falls within the normal responsibilities of a Financial Advisor. The firm will be paid at these rates: Katie Goodman, Managing Partner $425 per hour Other Partners, $350 to 400 per hour The firm received from the Debtor a retainer in the amount of $10,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Katie Goodman, a Managing Partner at GGG Partners, 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: Katie Goodman GGG Partners, LLC 2870 Peachtree Road #502, Atlanta, GA 30305 Tel: (404) 293-0137 Email: kgoodman@gggpartners.com About Almond Cow Almond Cow Inc. -- https://almondcow.co -- is a plant-based milk maker. Almond Cow filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-61376) on October 25, 2024, with $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Brett Goodson, president of Almond Cow, signed the petition. Judge Lisa Ritchey Craig oversees the case. The Debtor is represented by Ashley Reynolds Ray, Esq., at Scroggins, Williamson & Ray, P.C. AMCI NCR LLC: Hits Chapter 11 Bankruptcy Protection in Delaware --------------------------------------------------------------- On November 14, 2024, AMCI NCR LLC filed Chapter 11 protection in the District of Delaware. According to court filing, the Debtor reports between $100 million and $500 million 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 Sec. 341(a) to be held on December 19, 2024 at 10:00 AM at J. Caleb Boggs Federal Building, 844 King St., Room 3209, Wilmington, Delaware. About AMCI NCR LLC AMCI NCR LLC is a limited liability company. AMCI NCR LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-12616) on November 14, 2024. In the petition filed by Nimesh Patel, as manager, the Debtor reports estimated assets and liabilities between $100 million and $500 million each. Honorable Bankruptcy Judge Karen B. Owens handles the case. The Debtor is represented by: Derek C. Abbott, Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 North Market Street Wilmington DE 19801 Tel: (302) 658-9200 E-mail: DAbbott@morrisnichols.com AMERICAN CONTRACTORS: Hires Meridian Law as Bankruptcy Counsel -------------------------------------------------------------- American Contractors of Baltimore, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire Meridian Law, LLC to handle its Chapter 11 case. The firm will be billed at its regular hourly rate of $375, plus reimbursement for expenses incurred. Aryeh Stein, Esq., a member of Meridian Law, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Aryeh E. Stein, Esq. Meridian Law, LLC 1212 Reisterstown Road Baltimore, MD 21208 Telephone: (443) 326-6011 Facsimile: (410) 653-9061 Email: astein@meridianlawfirm.com About American Contractors of Baltimore American Contractors of Baltimore, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 24-19293) on Nov. 3, 2024, listing $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge David E Rice presides over the case. Aryeh E. Stein, Esq. at Meridian Law, LLC represents the Debtor as counsel. AMERICAN TIRE: S&P Discontinues 'D' ICR Following October Default ----------------------------------------------------------------- S&P Global Ratings discontinued all of its ratings on American Tire Distributors Inc. (D/--). This follows S&P's downgrade of the company to 'D' after its Chapter 11 bankruptcy filing in October 2024. ANDERSON UNIVERSITY: Fitch Alters Outlook on 'B-' IDR to Negative ----------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook on the Issuer Default Rating (IDR) and bond rating for Anderson University, IN (AU, Anderson) to Negative from Stable. Fitch has affirmed the 'B-' IDR and bond rating on approximately $29.4 million outstanding par (FYE 2024) City of Anderson, IN Economic Development Revenue Refunding Bonds, series 2017 issued on behalf of AU. Entity/Debt Rating Prior ----------- ------ ----- Anderson University (IN) LT IDR B- Affirmed B- Anderson University (IN) /General Revenues/1 LT LT B- Affirmed B- The change in Anderson's Outlook to Negative follows continued use of nonrecurring items, such as asset sales and extraordinary endowment draws, to cover budget gaps for fiscal years 2023, 2024 and an expected shortfall in 2025. Liquidity available within one year at FYE 2024 fell to about $8 million (about 20% of annual operations), and recovery of Anderson's liquidity and leverage ratios to levels consistent with the current ratings will require swift and full execution of management's right-sizing and asset monetization plans. The Negative Outlook is also supported by Anderson's miss of its 1.1x debt service coverage ratio (DSCR) bond covenant for fiscal 2024, requiring a consultant report. This puts Anderson at risk of an event of default (EOD) (without a bondholder waiver) if fiscal 2025's DSCR falls below 1.0x. While an EOD requiring acceleration is unlikely in Fitch's view, in such a case, downgrades to 'CCC' or lower rating categories are expected. (Anderson had previously missed its 1.1x DSCR threshold as recently as FY 2021, and restored it to above the covenant threshold in FYs 2022 and 2023.) Fitch's affirmation of Anderson's 'B-' ratings reflect the university's small, regional student body with repeated increases in first-time freshmen enrollment in fall 2024 and fall 2023, generally stable net student revenue, solid fundraising capacity, and strong community partnerships in the context of very high leverage. Fitch's forward-looking scenario, which forms the basis of Anderson's current ratings, consider these attributes and management's plans to monetize assets and eliminate operating gaps by FY 2027. Anderson's financial profile sustains leverage ratios consistent with its current ratings in this forward-looking scenario. However, the forecast outcomes are highly sensitive to even small variances, highlighting the critical importance to the ratings of diligent execution of management's plans. SECURITY The bonds are a general obligation of the obligated group of which Anderson University, Inc., independently of its consolidated subsidiaries, is the sole member. The bonds are secured by the university's pledged revenue consisting of effectively all unrestricted funds and revenue, a mortgage on AU's core campus property and a debt service reserve fund that is cash-funded to maximum annual debt service. Separately, a $7.5 million bank line of credit is secured by $1 million cash collateral, which replaces the mortgage on AU's Wellness Center previously securing this instrument. KEY RATING DRIVERS Revenue Defensibility - bb Small Student Base Within Competitive Midwest Christian Market; Solid Fundraising and Non-Recurring Revenue Options Facing challenging demographics and competitive pressures, AU exhibited a very weak freshman matriculation rate of 8% in fall 2024, yet managed 349 new freshman matriculants, the highest number over the past five years. This is particularly notable given AU's very high percentage of Pell Grant-eligible students during a year when colleges nationwide faced enrollment headwinds from exceptionally delayed financial aid award information from the federal government. AU's retention rates and discount rates are very weak. Nevertheless, net student revenue and overall FTE enrollment at 1,154 students, 92% of whom are undergraduates, remained essentially stable yoy. AU is designated as one of four federal cyberdefense centers of excellence in Indiana, which opens up potential revenue-producing programs from public and private affiliations. AU's revenue also benefits from Indiana's 21st Century Scholars program, which provides private tuition scholarships up to the cost of in-state public university tuition for certain students. A new 2+2 program was initiated last year with Ivy Tech Community College of Indianapolis, IN. AU's role in and relationship with the City of Anderson, IN, where AU is one of its top five employers, and its affiliation with its founding organization Church of God Ministries Anderson (COG), also based in the City of Anderson, are defining characteristics of the university's competitive position, governance and revenue mix. Several recent, significant grants and pending grant proposals are anchored on private and public support of AU's economic development initiatives and Christian education mission. In addition, COG members historically comprised roughly one-fifth of AU students, have a controlling position on AU's board, and have provided donations to AU. The university is currently in the middle of a $25 million fundraising campaign, with about half that amount already committed. Anderson benefits from the cushion afforded by its $35 million endowment and several marketable non-core real estate parcels. The university's endowment generates consistent operating support through regular policy distributions and recent supplemental draws approved by the board. Regular and supplemental distributions may provide $6-$8 million in operating support during fiscal year 2025. In addition, Anderson is in the process of selling several parcels of non-core real estate, which is expected to generate additional cash proceeds during fiscal year 2025. Operating Risk - bb FY24 Reliance on Non-Recurring Measures Constrains Ongoing Cash Flows; Limited Capex Spending Against Growing Needs Fiscal year 2024 was characterized with steady net tuition and auxiliary revenue, but also with the exhaustion of about $6 million of fiscal year 2023 pandemic relief funds. That loss was only partially balanced with increased fundraising and other revenue. At the same time, expenses increased about 4% from fiscal 2023 levels, consistent with inflationary pressure but in contrast with Fitch's expectations of expense reductions. Anderson is taking active steps to reduce expenses, leverage popular educational programs and increase retention rates to achieve operating balance in fiscal 2027. However, Fitch expects adjusted cash flow margins from recurring revenue to be rather anemic, in the range of 5% or less, which is consistent with Fitch's 'bb' Operating Risk assessment. The university's operating flexibility in the form of additional draws from endowment funds and sales of noncore real estate has bolstered bottom-line results during fiscal 2024 and will continue during fiscal 2025. However, as such items are not included in the definition of revenue available for debt service for the DSCR calculations under bond documents, Anderson has missed the 1.1x threshold in fiscal 2024, registering -0.46x. This requires the hiring of a consultant. For fiscal year 2025, a less than 1.0x threshold will result in an EOD and acceleration of the bonds unless bondholders waive this provision. Fitch believes both missing the 1.0 threshold under the current bond definitions and some form of waiver to be reasonably likely to occur. AU's very high average age of plant at over 25 years is partially offset by near-term flexibility to reinvest at levels expected to be well short of depreciation expense in the coming years. A recent student feedback study indicated that deferred maintenance could become a constraint to AU's competitive and financial position over time. However, reduced capital needs from a now-smaller student population, sale of older non-core assets and continued donor support for key initiatives will somewhat reduce AU's internally funded capex requirements. Anderson executed a sale-leaseback transaction of the Wellness Center that sits on university property during fiscal 2024. In Fitch's view, this transaction has no material credit impact and is not factored into the analysis of Anderson's ratings. Financial Profile - bb Limited Available Funds to Cushion Debt, but Adequate through Fitch-modeled Scenario AU's leverage, represented by available funds (AF: cash and investments less permanently restricted assets)-to-adjusted debt (debt plus debt equivalent pension obligations and right of use lease obligations), stood at a very low 29% at FYE 24. This level is low even for Fitch's lowest Financial Profile assessment of 'bb' in the context of AU's 'bb' Revenue Defensibility and 'bb' Operating Risk assessments. AF stood at $16 million at FYE 24 against adjusted debt of $41 million ($29.4 million series 2017 bonds, other bonds and notes payable, and debt equivalent lease obligations). Adjusting AF to include about $4 million in debt service reserve funds and subtracting $1 million in cash collateral pledged to bank, the ratio would still be very weak, but higher at 37%. Fitch's 'bb' Financial Profile assessment is also based upon a forward-looking, Fitch-modeled scenario analysis that considers the effects of plausible financial market performance and AU's anticipated revenue, expenses, capital expenditures and non-recurring items. AU sustains a leverage profile consistent with its current ratings through the five years of the Fitch-modeled scenario. However, the overall credit scenario remains subject to the aforementioned DSCR covenant performance and remedies for fiscal 2025, as noted above, as Fitch does not view Anderson as having the liquid resources to pay outstanding series 2017 bonds upon a potential acceleration. AU's $35 million endowment as of FYE 2024 provides some offsetting cushion to its modest AF. The endowment is mostly donor-restricted (and therefore excluded from Fitch's AF metric). However, these funds could potentially provide some short-term cash flow or liquidity benefit, though not without compromising endowment growth in the future. Asymmetric Additional Risk Considerations Fitch's Operating Risk and Liquidity assessments for AU remain 'Weaker' due to Fitch's aforementioned concerns over sufficiency of annual debt service coverage and possible further decline in liquid resources in FY 2025 without additional adjustments taken by AU. Fitch-calculated AF-to-operating expenses, a measure of liquidity, was a low 27% at FYE 2024. Highlighting constraints on AU's operating liquidity, AU regularly draws down on its $7.5 million bank line of credit, particularly at its May 31 FYE, to bridge funding gaps prior to the receipt of fall tuition receipts and to maintain compliance with its 75 days cash on hand (DCOH) liquidity covenant. DCOH stood at 91 at FYE 2024, exceeding the bond requirement. Liquidity available within one year stood at just $8 million at FYE 2024, compared to $22 million at FYE 2023. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Lack of execution of asset monetization, approved supplemental endowment draws and expense reductions in fiscal 2025, leading to a failure to narrow the deficit as expected in fiscal 2026 and toward full balance in fiscal 2027; - Failure to achieve 1.0x debt service coverage in fiscal 2025 would trigger an event of default and lead to a downgrade to 'CCC' or below based on the accompanying threat of acceleration. Acceleration is somewhat unusual in the sector but is an available remedy under the documents (requires consent of 25% of holders), and Fitch does not believe AU has sufficient unrestricted resources to avoid a payment default in the event of acceleration; - Debt service coverage between 1.0x and 1.1x in fiscal 2025 if prospects for fiscal 2026 coverage remain pressured; - Notable enrollment or net student revenue declines in fall 2025 and fiscal 2026, respectively, or decrease in donor support; - Weakening of cash flow margins toward about 0% or below; - Stress on operating liquidity or the liquidity covenant, or AU's inability to maintain the operating line of credit; - Any additional debt or deterioration in available funds such that available funds-to-adjusted debt falls below the approximately 30% current level. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Execution of asset monetization, approved supplemental endowment draws and expense reductions in fiscal 2025, leading to minimal deficit in fiscal 2026 and fully balanced recurring operations by fiscal 2027; - Meaningful bondholder engagement in assisting the university through its consultant engagement and execution process, and any waivers that may be requested, in response to the fiscal 2024 DSCR deficiency and any potential fiscal 2025 deficiency; - Supplemental fundraising, completion of meaningful level of noncore asset sales, or other extraordinary external support or contracts; - Restoration of Fitch-calculated cash flows to the 5%-10% range; - Improved leverage position, with AF-to-adjusted debt around 50%; - Growth in operating liquidity, and elimination of bank lines to manage liquidity covenant performance. PROFILE Founded in 1917, AU is a coeducational, private Christian university located on a 166-acre campus in Anderson, IN, about 35 miles northeast of Indianapolis. It was founded by and is affiliated with COG and is the only college affiliated with COG in the Midwest. Per the university's bylaws, almost all Trustees are ratified by COG, and at least 11 trustees must be ordained ministers of COG. The university offers various undergraduate programs, which make up 92% of FTE enrollment, as well as graduate programs in business, theology and music education. AU also offers workforce readiness certificates, associate's degrees and bachelor's degrees to nontraditional adult students. On a consolidated basis, the university has two affiliates, Anderson University Properties, LLC, which owns a student housing complex slated for sale in FY 2025, and the Center for Security Studies and Cyber Defense, LLC. The university is the only obligated group member, and comprises 94% of the assets and 100% of the revenue of the consolidated entity. The Flagship Enterprise Center (FEC), a regional business incubator and small business lender created through a partnership between AU and the city of Anderson, was a non-obligated group-controlled affiliate until Jan. 1, 2023 when AU no longer controlled a majority of FEC's board. As FEC was a non-obligated group member, this change did not impact the financial ratios or ratings of Anderson University. In 2019, the Higher Learning Commission affirmed AU's continued accreditation, with the next reaffirmation review occurring in 2028-2029. AU also maintains program-specific accreditations from the relevant accreditation bodies. The Department of Education (DOE) composite score for Anderson University for fiscal year 2024 is calculated at the highest possible 3.0 score, improving from 1.7 the year prior. Both levels are considered financially responsible by DOE. 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. APPLOVIN CORP: Moody's Raises CFR to Ba1, Outlook Positive ---------------------------------------------------------- Moody's Ratings upgraded AppLovin Corporation's corporate family rating to Ba1 from Ba2 and probability of default rating to Ba1-PD from Ba2-PD. In connection with this rating action, Moody's also assigned Ba1 ratings to the proposed $3.55 billion senior unsecured notes and took no action on the senior secured first-lien bank credit facilities that are currently rated Ba2. The Speculative Grade Liquidity rating remains unchanged at SGL-1. The outlook is positive. Net proceeds from the notes offering will be used to repay the $1.45 billion outstanding term loan due 2028 and $2.08 billion outstanding term loan due 2030. The proposed unrated $1 billion senior unsecured revolving credit facility (RCF) due 2029 will be executed via a new unsecured credit agreement, which will replace the existing secured credit agreement governing the $610 million RCF due 2028 and term loans. Moody's will withdraw the Ba2 ratings on the company's senior secured first-lien bank credit facilities upon their full repayment and extinguishment. The assigned ratings are subject to review of final documentation and no material change in the size, terms and conditions of the transaction as advised to us. RATINGS RATIONALE The ratings upgrade reflects AppLovin's recent outperformance momentum, improved credit profile and Moody's expectation for continued deleveraging and expanding free cash flow (FCF) over the next 12-18 months, which will lead to financial leverage declining below 1.7x and FCF to total debt increasing to the 55%-65% range. Following strong operating performance in the third fiscal quarter, the company's debt protection measures demonstrated solid improvement on a sequential basis. At LTM Q3 2024, leverage, as measured by total debt to EBITDA, was 1.9x and FCF to total debt was 46% compared to 2.2x and 37%, respectively, at LTM Q2 2024 (all metrics are Moody's adjusted). The upgrade also reflects increased financial flexibility given AppLovin's planned recapitalization of its balance sheet to a fully unsecured capital structure. As a result of the recapitalization, Moody's expect reduced interest expense from the issuance of lower cost fixed rate unsecured notes to repay the secured term loans in full, which will enhance future cash flows. Additionally, over the past month, due to a doubling of its common stock price, AppLovin's market equity has materially increased in value providing a sizable equity cushion beneath its debt obligations. This indicates a healthier issuer profile with greater capacity to withstand economic downturns and a bigger asset cushion from which to draw, if needed. Moody's caution that equity prices are volatile and do not guarantee creditworthiness especially if market conditions result in a downturn in stock prices. Nonetheless, as result of these positive developments, the upgrade reflects reduced governance risk. Notwithstanding Moody's expectation for continued strength in the Software Platform's AppDiscovery programmatic advertising technology, AppLovin's CFR considers governance issues associated with board structure and policies, given that ownership and voting control is concentrated with two individuals, as well as "key person risk" associated with the CEO. Though the company has a majority of independent directors and demonstrates accountability to financial policies, AppLovin is deemed a controlled company under NASDAQ corporate governance requirements with Adam Foroughi (Chairperson, CEO and co-founder) and Herald Chen (former CFO and board member) holding the majority of outstanding Class B super voting common shares (20 votes per share), which provides greater than 60% voting control. AppLovin relies on NASDAQ controlled company exemptions to avoid certain corporate governance requirements. Consequently, AppLovin's shareholders are not afforded the same protections as shareholders of other NASDAQ-listed companies with respect to corporate governance. This is somewhat mitigated by the company's recent public commitment to a net debt to EBITDA leverage target of below 2x (as-reported). As AppLovin demonstrates a longer track record with a consistent and sustainable business model and commitment to conservative financial policies, Moody's expect this particular governance risk to minimize over time. The positive outlook reflects Moody's expectation for continued double-digit percentage top-line revenue growth over the next 12-18 months with Moody's adjusted EBITDA margins in the 45%-55% range. The steady improvement in profit margins reflects robust mobile app advertiser spending growth and greater EBITDA contribution from the Software Platform leading to leverage declining to the 1.3x–1.7x range (Moody's adjusted), barring no debt-financed acquisitions. AppLovin's Ba1 CFR reflects the company's scale as one of the largest mobile marketing platforms with an improving business mix and diversification across gaming and other industry verticals. The company's higher margin Software Platform contributes a meaningful share of total revenue (65% at LTM September 30, 2024) and EBITDA (89%) with roughly 70% EBITDA margins (segment adjusted). Moody's continue to forecast favorable growth trends for the in-game advertising market, which is likely to grow at least 9% annually over the next four years. Moody's expect AppLovin to grow faster than the market as advertisers diversify their digital presence away from the Big Media-Tech walled garden publishers to performance-based marketers with robust mobile marketing, measurement and user-analysis technologies. Additionally, AppLovin has successfully optimized the Apps portfolio by deliberately reducing its studio footprint for a more focused investment strategy. Margins are expected to continue to expand over the medium-term as a result of the portfolio optimization and investments in talent and technology. Liquidity is expected to remain very good with solid cash balances and strong FCF generation due to AppLovin's high margins and relatively modest capital expenditures owing to the asset-lite model. The Ba1 CFR is constrained by AppLovin's controlled company status and limited track record at its current scale and business model following the Software segment's outsized growth in recent quarters. The company's exposure to highly cyclical advertising spend also weighs on the CFR given that the Software Platform contributes the lion's share of revenue and profitability, and relies on mobile app advertisers who use the platform to grow and monetize their apps. The credit profile reflects mobile gaming's intense competition due to the proliferation of new online gaming formats with enhanced features, content and incentives that players find appealing from a large number of rivals, as well as increased privacy restrictions on third-party platforms. Collectively, these factors may impact AppLovin's ability to effectively scale the App's business and monetize its games. While the Software Platform has been the company's core since its founding, only last year has this segment grown to become the largest revenue contributor primarily due the launch of its next GenAI engine, Axon 2.0, in mid-2023, which is driving the strong outperformance. The rapid growth in the Software business has facilitated a strategic shift and re-prioritization of investments as this segment continues to scale at a faster pace than the Apps business, which will likely be de-emphasized going forward as the company continues to evolve and develop a sustainable long-term business strategy. Given Moody's expectation for continued EBITDA growth and robust FCF, AppLovin has the propensity to de-lever further. However, incremental debt could be allocated to share repurchases and/or M&A over the near-to-medium term. Despite this, Moody's forecast that leverage will continue to decline, barring an outsized debt-financed acquisition. Over the next 12-18 months, Moody's expect AppLovin's liquidity will remain very good supported by solid cash balances and strong FCF. At September 30, 2024, cash-on-hand totaled about $568 million. Moody's expect the new $1 billion RCF to remain undrawn. The revolver will have a maintenance covenant of 3.5x total debt to EBITDA, increasing to 4x in the quarter when an acquisition occurs and for three quarters thereafter (four quarters total). Moody's project AppLovin will generate at least $1.8 billion of FCF in FY 2024 rising to just over $2 billion next year, with a sizable amount allocated to share repurchases. YTD September 30, 2024, common stock repurchases totaled $981 million with $271 million remaining under the existing share repurchase program. In October, the board approved a $2 billion increase in the share repurchases. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if AppLovin is able to establish a longer track record demonstrating a consistent and sustainable business model and exhibit a commitment to conservative financial policies consistent with its publicly-defined financial policy and leverage target to counterbalance its controlled company status. The company would also need to continue executing on its current business strategy as evidenced by continued revenue and EBITDA growth, primarily in the Software segment. In addition, for upward ratings pressure to occur, Moody's adjusted total debt to EBITDA would need to approach the 1.5x area. Further, the company would also need to maintain very good liquidity with growing cash balances, good conversion of EBITDA to FCF, FCF to total debt consistently above 40% and annual share repurchases sized within excess cash flow generation capacity (all metrics are Moody's adjusted). Ratings could be downgraded if Moody's expect AppLovin's adjusted total debt to EBITDA will be sustained above 2.5x (Moody's adjusted) due to underperformance or cash distributions, share buybacks, acquisitions or partnerships funded with debt. Ratings could also be downgraded if organic revenue growth slows below the low-single digit percentage range reflecting underperformance related to execution or competitive pressures. Downward pressure on ratings could also occur if liquidity deteriorates as evidenced by reduced cash balances or revolver availability; adjusted FCF to total debt declines to the low-single digit percentage range; or Moody's expect more aggressive financial policies that would result in higher financial leverage, cash distributions, share buybacks and/or weakened adjusted FCF. With headquarters in Palo Alto, CA, AppLovin Corporation provides a software platform for mobile app developers to improve app marketing and monetization. Founded in 2011, the company also owns and operates a portfolio of free-to-play mobile games that it develops through its own or partner studios. AppLovin is a publicly traded controlled company with two company executives holding 62% voting control. At LTM September 30, 2024, revenue totaled about $4.3 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. AR ACQUISITIONS: Files Chapter 11, Dec. 20 Creditors' Meeting ------------------------------------------------------------- On November 22, 2024, AR Acquisitions LLC filed Chapter 11 protection in the Western District of Washington. According to court documents, 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 Sec. 341(a) to be held on December 20, 2024 at 10:00 AM. About AR Acquisitions LLC AR Acquisitions LLC is a limited liability company. AR Acquisitions LLC sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 24-12986) on November 22, 2024. In the petition filed by Alex Robertson, as managing member, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. The case is overseen by Honorable Bankruptcy Judge Christopher M. Alston. The Debtor is represented by: Dennis McGlothin, Esq. WESTERN WASHINGTON LAW GROUP, PLLC 01485 Northeast Sixt Street, #1820 Bellevue, WA 98004 Tel: 425-728-7296 E-mail: docs@westwalaw.com ASSETS HOLDING: Updates Flagstar & IMT Commercial Claims Pay ------------------------------------------------------------ Assets Holding Partnership, Ltd., submitted a Sixth Amended Plan of Reorganization for Small Business dated October 16, 2024. The Debtor has received an offer from Limo Palace, LLC ("Purchaser") to buy three Buses for $425,000. The Debtor has an offer to purchase the Buses slightly in excess of the value estimated by the Debtor. The sale of the Buses shall be a part of this Plan. The proceeds from the sale will be sufficient to pay off the liens and encumbrances of lenders, the ad valorem taxes, and the administrative expenses in full. The remaining proceeds will be distributed to the general unsecured creditors. C&H is currently managing vehicles for the Purchaser. C&H may operate the Buses after the sale but the Debtor will have no involvement and will not receive any benefit for operations by C&H. This Plan of Reorganization proposes to pay Debtor's creditors from the sale of the Buses. Class 7 consists of the claim of Flagstar Financing & Leasing, LLC. Flagstar Financing will be paid the amount of $199,567.58 by the Debtor upon the sale of the Buses The payment of the $199,567.58 shall be deemed full payment of the claim. Such amount is based on the claim of Flagstar Financial. Until paid, Flagstar Financing shall retain its perfected first priority secured interests in and liens on (i) that certain 2014 Van Hool CX-45 Motor Coach assigned VIN No. YE2XC21BXE3048361, (ii) that certain 2019 Freightliner M2 Tiffany Shuttle Bus assigned VIN No. 3ALACWFC3KDKL6544 and (iii) all related attachments, accessories, additions, accessions, parts and supplies, replacements and proceeds (collectively, the "Collateral") as security for the payment of its Class 7 Claim pursuant to the terms and conditions set forth in this Plan. Upon payment to Class 7, Flagstar Financial will be required to execute documents to release its liens on the Collateral when the funds are paid. Class 8 consists of the claim of IMT Commercial, LLC. IMT will be paid the amount of $144,460 by the Debtor upon the sale of the Buses. The payment of the $144,460 (the amount in the schedules of the Debtor) shall be deemed full payment of the claim. Until paid, IMT shall retain its perfected first priority secured interests in and liens on (i) that certain 2017 Van Hool Motor Coach and (ii) all related attachments, accessories, additions, accessions, parts and supplies, replacements and proceeds (collectively, the "Collateral") as security for the payment of its Class 8 Claim pursuant to the terms and conditions set forth in this Plan. Upon payment to Class 8, IMT will be required to execute documents to release its liens on the Collateral when the funds are paid. Class 9 consists of Unsecured Creditors. After the sale of the Buses and after any claim objections are resolved and the ad valorem taxes, administrative expenses have been paid or reserved, the Subchapter V Trustee will pay to Class 9 the sale proceeds that are remaining. This Class is impaired. The Debtor intends to complete the sale of the Buses and make the payments to IMT Commercial and Flagstar Financial from the proceeds of the sale of the Buses. The Subchapter V Trustee will make all other distributions provided in this Plan. The proceeds from the sale will be sufficient to pay off the liens and encumbrances of IMT Commercial and Flagstar Financial, the ad valorem taxes, and the administrative expenses in full. The remaining proceeds will be paid to the general unsecured creditors. Distributions (other than the payments to IMT Commercial and Flagstar Financial) will be made by the Subchapter V Trustee pursuant to the terms of this Plan. A full-text copy of the Sixth Amended Subchapter V Plan dated October 16, 2024 is available at https://urlcurt.com/u?l=cVwoPB from PacerMonitor.com at no charge. Attorney for the Debtor: Reese W. Baker, Esq. Baker & Associates 950 Echo Lane Ste. 300 Houston, TX 77024 Telephone: (713) 869-9200 Facsimile: (713) 869-9100 About Assets Holding Partnership Assets Holding Partnership, Ltd., is a Texas partnership that owns transportation vehicles and leases the vehicles. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-31741) on April 18, 2024, with $100,001 to $500,000 in assets and liabilities. Judge Eduardo V. Rodriguez presides over the case. Reese W. Baker, Esq., at Baker & Associates, is the Debtor's legal counsel. AXENTIA CARD: Seeks Court Nod to Use Cash Collateral ---------------------------------------------------- Axentia Card Solutions, LLC asked the U.S. Bankruptcy Court for the District of Kansas for authority to use cash collateral for the monthly payment of up to $2,500 in expenses. The company does not believe that any creditor holds duly perfected liens on its accounts receivables, inventory, and accounts. Cash generated from these assets constitutes cash collateral. Axentia's business has been struggling, however, the company believes that the business can grow and is working hard to grow the business. The next hearing is Dec. 19. About Axentia Card Solutions An involuntary Chapter 7 petition (Bankr. D. Kan. Case No. 24-20686) was filed against Axentia Card Solutions, LLC by creditor, James G. Miller, on June 5, 2024. On August 29, 2024, the court denied in part and granted in part the Debtor's motion to dismiss involuntary bankruptcy or, in the alternative to convert to Chapter 11. The Debtor's request for dismissal of the involuntary bankruptcy was denied without prejudice while its request to convert the case to Chapter 11 of the Bankruptcy Code was granted. Judge Robert D. Berger presides over the case. Evans & Mullinix, P.A. represents the Debtor as legal counsel. BARCA HOLDINGS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Barca Holdings Corporation 2617 Keady Mill Loop Kannapolis, NC 28081 Business Description: Barca Holdings is the fee simple owner of four properties located in Charlotte, NC and York, PA having a total comparable value of $1.26 million. Chapter 11 Petition Date: November 29, 2024 Court: United States Bankruptcy Court Western District of North Carolina Case No.: 24-31048 Judge: Hon. Ashley Austin Edwards Debtor's Counsel: Richard S. Wright, Esq. MOON WRIGHT & HOUSTON, PLLC 212 N. McDowell Street Suite 200 Charlotte, NC 28204 Tel: 704-944-6560 Fax: 704-944-0380 Email: rwright@mwhattorneys.com Total Assets: $1,260,700 Total Liabilities: $2,046,626 The petition was signed by Brian L. White as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/R7OXAKA/Barca_Holdings_Corporation__ncwbke-24-31048__0001.0.pdf?mcid=tGE4TAMA BERRY CORP: Swings to $69.9 Million Net Income in Fiscal Q3 ----------------------------------------------------------- Berry Corporation filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net income of $69.9 million on $259.8 million of total revenues for the three months ended September 30, 2024, compared to a net loss of $45.1 million on $118.8 million of total revenues for the three months ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported a net income of $21 million on $588.7 million of total revenues, compared to a net loss of $25.2 million on $603.1 million of total revenues for the same period in 2023. As of September 30, 2024, the Company had $1.5 billion in total assets, $784.9 million in total liabilities, and $732.2 million in total stockholders' equity. "Berry delivered another good operational quarter with production ramping up as we exited September, and we are on track to reach the mid-point of our full year production guidance. We generated $71 million of cash flow from operations for the quarter and a 55% sequential increase in Free Cash Flow(1), while decreasing capital expenditures as planned. We have now completed our 2024 drilling plan and have permits in-hand to support activities well into the new year, including drilling new wells and sidetracks and working over existing wells. Based on current permitting processes and our healthy California inventory, we are confident we can maintain consistent production levels for 2025, as we have for the last six years. We are also excited about promising upside opportunities in Utah and California that should yield increasing benefits in 2025 and beyond," said Fernando Araujo, Berry's Chief Executive Officer. "Based on activity across the Uinta basin, much of which is adjacent to our existing acreage, we believe our Utah assets have the potential to be a substantial long-term value driver for our shareholders. We entered a second farm-in agreement covering approximately 5,800 gross acres, which will help accelerate the appraisal of our acreage. Additionally, we are evaluating potential JV partners to accelerate our phase 1 plans to drill up to two multi-well horizontal drilling pads starting in 2025. "We also have promising upside opportunities in California. Success from new sidetracks drilled in the Thermal Diatomite reservoir are yielding over 100% rates of return, further driving our capital efficiency efforts. By executing on these opportunities to leverage our world class California assets, we are stronger, more resilient, and better positioned to accelerate development in Utah while still honoring our commitment to generate sustainable Free Cash Flow," Araujo continued. "Finally, we are excited to partner with Valor, Breakwall and Vitol on a new term loan facility This financing will enable us to redeem all of our notes due in 2026 and refinance our existing credit facility, while also providing uswith the ability to deploy capital into high rate of return projects, including the significant opportunity we see in our Uinta position. Importantly, the unique structure provides Berry with great flexibility to repay the loan in advance, pursue strategic opportunities, and return capital to shareholders," Araujo concluded. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/mpc2ufty About Berry Corporation Berry Corporation is a company primarily engaged in hydrocarbon exploration in California, the Uintah Basin, and the Piceance Basin. As of December 31, 2021, the company had 97 million barrels of oil equivalent of estimated proved reserves, of which 87% was petroleum and 13% was natural gas. * * * In September 2024, S&P Global Ratings lowered its issuer credit rating to 'CCC+' from 'B-' on Dallas-based oil and gas exploration and production (E&P) company Berry Corp. S&P also lowered the issue-level rating on Berry's unsecured notes due February 2026 to 'B-' from 'B'. The recovery rating remains '2', reflecting its expectation for substantial (70%-90%; rounded estimate: 85%) recovery in the event of a payment default. The negative outlook reflects S&P's view that Berry is dependent on favorable conditions to refinance its unsecured notes due February 2026 in a timely manner. However, its leverage remains modest, and S&P forecasts average funds from operations (FFO) to debt of about 40% and debt to EBITDA of about 2.25x. Refinancing risk is heightened for Berry's RBL facility due August 2025 and senior unsecured notes due February 2026. BERRY GLOBAL: Fitch Puts 'BB+' LongTerm IDR on Watch Positive ------------------------------------------------------------- Fitch Ratings has placed the ratings for Berry Global Group, Inc. (Berry) and Berry Global, Inc. on Rating Watch Positive (RWP), including both companies' Long-Term Issuer Default Ratings (IDRs) of 'BB+'. The placement on RWP follows Amcor plc's (Amcor) announcement that it will acquire Berry in an all-stock transaction. Under the terms of the agreement, Berry shareholders will receive 7.25 Amcor shares for each Berry share at closing. Amcor plans to assume Berry's outstanding debt and refinance certain maturities at closing. Fitch expects the transaction to significantly enhance the combined company's scale, geographic footprint, and customer and product portfolio, thereby strengthening the robustness of cash flows. The new company's leverage target of approximately 3.0x aligns with an enhanced credit profile. Fitch anticipates resolving the Rating Watch upon the closure of the transaction, which is expected in mid-2025 but could extend beyond six months. Key Rating Drivers Increased Size, Scale, and Diversification: The combined entity's pro forma revenues are projected to reach approximately $24 billion, with EBITDA nearing $4 billion prior to synergies, effectively doubling Berry's existing revenue and EBITDA. The portfolio will expand to include a broader array of blue-chip customers, enhancing the company's sales footprint. The transaction will bolster global geographic diversification, increasing exposure to emerging markets and more diverse end markets. Conservative Leverage Target: Fitch views the combined entity as having a more conservative leverage profile due to its significantly increased size, scale, and diversification. The combined company anticipates net leverage around 3.3x at closing, with a plan to reduce it below 3.0x by the end of the first full year. Berry's standalone net leverage was expected to be around 3.5x at FYE 2024 following the divestiture of the Health, Hygiene, and Specialties division, operating within a target range of 2.5x-3.5x net leverage. Robust Cash Flows: The combined company's EBITDA of nearly $4 billion should generate more consistent cash flows than standalone Berry due to increased geographic, market, and customer diversification. Pre-merger EBITDA margins at Berry and Amcor are comparable, in the mid-teens. Up to $650 million in synergies are possible by the end of the third year, with roughly half from procurement and operational efficiencies. This increases the potential for higher cash flows. The combined company is likely to prioritize shareholder returns, which will compete with debt reduction. Enhanced Financial Flexibility: Berry's existing secured debt obligations will be rolled into the new company and ultimately replaced with unsecured obligations. This will result in a capital structure with greater financial flexibility. Amcor has secured a $3 billion bridge commitment letter to support the intended refinancing of a portion of Berry's outstanding debt, with Amcor planning to assume the remainder of Berry's debt at closing. Derivation Summary Berry is among the largest packaging companies in the world following its acquisition of RPC Group. It has higher EBITDA than Ball Corporation (Ball; not rated), Crown Holdings, Inc. (Crown; not rated) and Silgan Holdings, Inc. (Silgan; BB+/Stable). Ball and Crown are market leaders in more consolidated metal and glass packaging subsectors and generate the majority of revenues in stable consumer non-discretionary food and beverage markets. Berry joins Crown, Ball and Sealed Air (not rated) in terms of large geographic diversification, with about 50% of sales generated outside of the U.S. Silgan is less geographically diverse, with about 25% of sales outside of the U.S., although geographic diversification does not have a big effect on its credit profile. Berry is far larger than Silgan and has higher EBITDA margins, however, Silgan compares favorably on leverage metrics. Berry's leverage compares similarly with glass packaging manufacturer OI Glass, Inc. (OI; not rated), although the former is larger, typically has higher margins and generates higher FCF, given the more capital-intensive nature of glass manufacturing. This is partially offset by OI's dominant market share in a more consolidated industry characterized by higher barriers to entry. Berry has higher EBITDA leverage compared with comparably rated peers, although it shares a strong deleveraging capacity with Silgan. Key Assumptions The following assumptions apply to Berry on a standalone basis: - Health, Hygiene, and Specialties spin-off completed by FY 2024 and $1 billion of proceeds used to pay down debt; - Debt repayment prioritized in the capital allocation waterfall; - Run rate organic revenue growth of about 2%; - EBITDA margins normalize in forecast years as inflationary costs are passed through; - Capex just over 5% of sales in support of organic expansion strategy; - Bond maturities refinanced at market rates through the forecast. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch expects to resolve the RWP upon completion of the contemplated transaction under proposed terms and treatment of Berry debt; If the transaction does not close: - Demonstrated commitment to a more conservative financial policy resulting in EBITDA leverage sustainably below 3.5x; - Improved financial flexibility evidenced by a less encumbered capital structure. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Material deviation from its financial policy leading to EBITDA leverage sustainably above 4.0x; - Failure to demonstrate substantial progress towards deleveraging by FYE 2024; - A meaningful and sustained compression in EBITDA margins. Liquidity and Debt Structure As of June 29 2024, Berry had cash and cash equivalents of $509 million and full availability under its $1 billion asset-backed revolving loans that mature on June 22, 2028. The company consistently generates solid positive FCF with roughly 7% FCF margins on average over the past four years, which will reliably build on cash levels. Issuer Profile Berry is a leading provider of plastic packaging products, value-added engineered materials, and non-woven specialty materials. The company primarily serves stable, consumer-oriented end markets such as health care, personal care, and food and beverage. 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 ----------- ------ -------- ----- Berry Global, Inc. LT IDR BB+ Rating Watch On BB+ senior secured LT BBB- Rating Watch On RR1 BBB- senior secured LT BBB- Rating Watch On RR2 BBB- Senior Secured 2nd Lien LT BB+ Rating Watch On RR4 BB+ Berry Global Group, Inc. LT IDR BB+ Rating Watch On BB+ BERRY GLOBAL: Moody's Puts 'Ba1' CFR Under Review for Upgrade ------------------------------------------------------------- Moody's Ratings placed all ratings of Berry Global Group Inc. under review for upgrade, including Ba1 corporate family rating and Ba1-PD probability of default rating. The speculative grade liquidity rating remains unchanged at SGL-1. Concurrently, Moody's have placed all instrument ratings of Berry Global, Inc. under review for upgrade, including Ba1 on senior secured first lien notes, Ba2 on senior secured second lien notes, and Ba1 on senior secured term loan. Previously, the outlook was stable. The review follows the November 19, 2024 announcement [1] that Amcor plc (Amcor, Baa2 under review for downgrade) will acquire 100% of Berry Global, Inc. for $8.9 billion of equity in Amcor and the assumption of $7.8 billion of Berry's outstanding debt. The transaction is expected to close by the middle of calendar 2025. Moody's review will focus on (1) the combined entity's future capital structure including ability to establish a fully unsecured capital structure and refinance Berry's term loan and second lien notes; (2) customary regulatory approval necessary for closing of the transaction; (3) proceeds of targeted divestures applied to debt reduction; (4) initiatives to realize the targeted synergies; and (5) Amcor's future financial policy. The review will also focus on the collateral and guarantee arrangement on Berry Global, Inc.'s first priority senior secured notes. Amcor intends to refinance about $3 billion of Berry debt that does not contain fall away covenants, and roll the remaining debt with fall away covenants into its unsecured capital structure. Moody's expect that the first priority senior secured notes will then only be secured by an equity pledge from Berry Global, Inc. but no longer by any asset pledges. A List of Affected Credit Ratings is available at https://urlcurt.com/u?l=mWEOzc RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Berry's existing Ba1 CFR benefits from its considerable scale, serving the food, beverage and healthcare end markets, which are staple goods to retail consumers, and its ability to generate solid free cash flow. Berry is also the second-largest rated plastic packaging manufacturer by revenue and has around three-quarters of its business under long-term contracts with cost pass-through provisions, which raises customer switching costs and protects against increases in volatile raw material costs. Weaknesses in Berry's credit profile include some exposure to more cyclical end markets and lags in contractual cost pass-through mechanisms, which leave the company exposed to volatility in profit and cash flow. Berry also operates in the fragmented and competitive packaging industry, which has many private, unrated competitors and strong price competition. Berry's SGL-1 speculative-grade liquidity rating reflects the company's positive free cash flow generation, its cash balance and availability under the revolving credit facility. Moody's expect Berry will continue to generate positive free cash flow in fiscal 2025, although it will decline reflecting the spin-off of its Health, Hygiene and Specialties Global Nonwovens and Films business. The company also has $1 billion asset-based revolver (unrated) that expires in June 2028 and supplements its liquidity. A rating upgrade would require a commitment to an investment-grade financial profile and capital structure. An upgrade would also be dependent upon a sustainable improvement in credit metrics and a stable competitive environment. Specifically, the ratings could be upgraded if debt/EBITDA is below 3.5x, EBITDA margin is above 20% and free cash flow/debt is above 12%. The ratings could be downgraded if there is deterioration in credit metrics, the competitive environment or liquidity. Additionally, the ratings could be downgraded if the company makes a large, debt-financed acquisition. Specifically, the ratings could be downgraded if debt/EBITDA is above 4.25x, EBITDA margin is below 17%, or free cash flow/debt is below 8%. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers published in December 2021. Based in Evansville, Indiana, Berry Global Group Inc. (NYSE: BERY) is a manufacturer of both rigid and flexible plastic packaging products. The company recorded about $12.1 billion of sales for the 12 months that ended in June 2024. BIG RIVER: Hires Pattillo Brown & Hill LLP as Accountant -------------------------------------------------------- Big River Contractors, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Pattillo, Brown & Hill, LLP as accountant. The firm will provide various financial and other professional services including, but not limited to payroll services and bookkeeping. The firm will be paid at the rate of $250 per hour. Pattillo, Brown & Hill will also be reimbursed for reasonable out-of-pocket expenses incurred. As disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Lindsey Skinner Pattillo, Brown & Hill, LLP 2209 Birdcreek Terrace Temple, TX 76502 Tel: (254) 791-3460 About Big River Contractors, LLC Big River Contractors LLC offers oil field maintenance and repair services. Big River Contractors LLC sought relief under Subchapter V of Chapter 11 of the U.S. (Bankr. W.D. Tex. Case No. 24-52028) on October 10, 2024. In the petition filed by Jeffery Green, as president, the Debtor reports total assets of $940,619 and total debts of $1,838,548. Bankruptcy Judge Craig A. Gargotta handles the case. The Debtor is represented by: Robert C. Lane, Esq. THE LANE LAW FIRM 6200 Savoy Dr Ste 1150 Houston TX 77036-3369 Tel: (713) 595-8200 E-mail: notifications@lanelaw.com BIOHARVEST SCIENCES: Incurs $2.69 Million Net Loss in Third Quarter ------------------------------------------------------------------- BioHarvest Sciences Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss and comprehensive loss of $2.69 million on $6.54 million of revenues for the three months ended Sept. 30, 2024, compared to a net loss and comprehensive loss of $1.73 million on $3.24 million of revenues for the three months ended Sept. 30, 2023. For the nine months ended Sept. 30, 2024, the Company reported a net loss and comprehensive loss of $9.96 million on $17.91 million of revenues, compared to a net loss and comprehensive loss of $5.33 million on $8.15 million of revenues for the nine months ended Sept. 30, 2023. As of Sept. 30, 2024, the Company had $25.82 million in total assets, $9.93 million in total current liabilities, $11.76 million in total non-current liabilities, and $4.14 million in total shareholders' equity. Going Concern The Company has incurred losses from operations since its inception. As at Sept. 30, 2024, the Company has an accumulated deficit of $93,462,000. The Company generated negative cash flows from operating activities of $4,295,000 and a loss in the amount of $9,957,000 for the nine months ended Sept. 30, 2024. As at the date of the issuance of these financial statements, the Company has not yet commenced generating sufficient sales to fund its operations, and therefore depends on fundraising from new and existing investors to finance its activities. The Company said these factors raise substantial doubt about its ability to continue as a going concern. Management Commentary Ilan Sobel, chief executive officer of BioHarvest, said: "The third quarter of 2024 delivered continued progress in our Products and CDMO business segments - highlighted by continued outperformance on the topline as we doubled down on growth, with third quarter revenue of $6.5 million driven by continued momentum in our VINIA subscription business and a strong response to our incremental coffee product line, resulting in over a 100% increase in Products revenue. We continued to make steady progress with our Contract Development and Manufacturing Organization (CDMO) Services Business Unit as well, with a highly focused pipeline of impactful prospective customers, some of which we expect to announce in the near-term. "In our Products division, revenue was driven by our core nutraceutical capsule business and additional 'VINIA Inside' products. VINIA Superfood Coffee, which is part of the Hot Beverage line-up, received a strong response from our customers, contributing to revenue growth and aging down our customer base. We continued to focus on our innovation pipeline of 'VINIA Inside' products in the quarter as well and are incredibly excited to have announced the launch of our functional VINIA SuperFood teas just earlier today. "Ongoing margin optimization initiatives - such as the recent digitization of manufacturing - continue to increase efficiencies across the organization, with gross margins increasing 1,200 basis points to 57% in the third quarter of 2024, as compared to 45% in the same year-ago quarter. While geopolitical events impacted margins due to increased air freight costs and the delayed implementation of certain cost-saving measures, we believe we are well positioned to see notable margin improvements throughout the first half of 2025. We remain laser focused on further enhancing manufacturing margins as we scale, leaning in on growth, and on driving further marketing efficiencies in our end-to-end e-commerce value chain. "During the third quarter we continued to advance our CDMO division with two established customers and a strong pipeline of potentially near-term prospects. We are scaling rapidly to meet current and anticipated demand, making investments in R&D infrastructure and talent to underscore our commitment to executing for our current and future customers. Each deal we announce reflects our thoughtful and measured approach to only allocating our research bandwidth to impactful CDMO customers with the highest probability to deploy world-changing molecules. This is particularly important as the bulk of our monetization potential comes on the backend in the form of royalties on future commercial sales of any molecule we may develop, which could provide a recurring revenue base over the long term. "Looking ahead, we expect continued strong growth and margin improvement in our Products division on rising VINIA sales and a growing portfolio of incremental products such as coffees and teas. In our CDMO division, we are making steady progress on our contracted research projects while concurrently building out our future B2B sales pipeline. With our listing to the Nasdaq Global Market now complete, we believe we are well positioned to unleash the power of a 'VINIA Inside' strategy that we believe will help drive sustainable, long-term value creation for our shareholder partners," concluded Sobel. A full-text copy of the Form 6-K is available for free at: https://www.sec.gov/Archives/edgar/data/1723464/000139390524000399/bhsc_ex991.htm About BioHarvest Sciences Headquartered in Vancouver, British Columbia, Canada, BioHarvest Sciences Inc. -- www.bioharvest.com -- is a leader in Botanical Synthesis, leveraging its patented technology platform to grow the active ingredients in plants, without the need to grow the underlying plant. BioHarvest is leveraging its botanical synthesis technology to develop the next generation of science-based and clinically proven therapeutic solutions within two major business verticals; as a contract development and production organization (CDMO) on behalf of customers seeking complex molecules, and as a creator of proprietary nutraceutical health and wellness products, which includes dietary supplements. BIOLASE INC: Committee Hires Esbrook PC as Legal Counsel -------------------------------------------------------- The official committee of unsecured creditors of Biolase Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Esbrook P.C. as counsel. The firm will provide these services: a. provide legal advice regarding local rules, practices, and procedures and provide substantive and strategic advice on how to accomplish the Committee's goals in connection with the prosecution of these case, bearing in mind that the Court relies on Delaware counsel such as Esbrook, P.C. to be involved in all aspects of the bankruptcy cases; b. review, comment upon and/or prepare draft of documents to be filed with the Court as Delaware counsel to the Committee; c. appear in Court and at any meeting with the U.S. Trustee and any meeting of creditors at any give time on behalf of the Committee as its Delaware counsel; d. perform various services in connection with the administration of these cases including, without limitation, (i) preparing certificates of no objections, certifications of counsel, notices of fee applications and hearings, and hearing binders of documents and pleadings, (ii) monitoring the docket for filings and coordinating with BLG on pending matters that need responses, (iii) preparing and maintaining critical dates memoranda to monitor pending applications, motions, hearing dates and other matters and the deadlines associates with the same, and (iv) handling inquiries and calss from creditors and counsel to interested parties regarding pending matters and the general status of these cases and coordinating with BLG on any necessary responses; and e. perform all other services assigned by the Committee, in consultation with BLG, to Esbrook P.C. as Delaware counsel to the Committee. The firm will be paid at these rates: Scott Leonhardt, Partner $650 per hour Robert Nader, Associate $350 per hour Tiny Murphy, Paralegal $250 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Scott J. Leonhardt, Esq., a partner at Esbrook P.C., 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: Scott J. Leonhardt, Esq. Esbrook P.C. 1000 N. West Street, Suite 1200 Wilmington, DE 19801 Tel: (302) 308-8174 Email: scott.leonhardt@esbrook.com About Biolase Inc. Biolase, Inc., a company in Foothill Ranch, Calif., and its affiliates manufacture and market dental laser systems. The Debtors' proprietary systems allow dentists, periodontists, endodontists, pediatric dentists, oral surgeons, and other dental specialists to perform a broad range of minimally invasive dental procedures, including cosmetic, restorative, and complex surgical applications. Biolase and its affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 24-12245) on Oct. 1, 2024. John Beaver, president and chief executive officer, signed the petitions. The Debtors reported total assets of $30,641,000 and total liabilities of $32,767,000 as of June 30, 2024. Judge Karen B. Owens oversees the cases. The Debtors tapped Potter Anderson & Corroon, LLP and Pillsbury Winthrop Shaw Pittman, LLP as legal counsel; SSG Capital Advisors as investment banker; and B. Riley Financial, Inc. as financial advisor. Epiq Corporate Restructuring, LLC is the Debtors' administrative advisor and claims and noticing agent. BLACKRIDGE OPERATING: Unsecureds Will Get 64% of Claims in Plan --------------------------------------------------------------- Blackridge Operating LLC submitted an Amended Subchapter V Plan of Reorganization. The Debtor has prepared a comprehensive reorganization to preserve its going concern value and future business. Specifically, Debtor, has set forth a plan of reorganization that will: (i) meet the operating expenses of Debtor's business; (ii) pay the Holders of Allowed Priority Tax Claims; Allowed Administrative Expense Claims; and Allowed Secured Claims in full; (iii) pay Allowed General Unsecured Claims more than they would receive in a Chapter 7 liquidation; and (iv) sustain the livelihood of no less than 40 families in the greater Dallas-Fort Worth, Texas community. As of the Petition Date, the books and records of Debtor, together with Proofs of Claim filed in this Bankruptcy Case, reflect an estimated $800,000, consisting primarily of unsecured trade debt and deficiency balances on financing agreements entered into by Debtor over time. The Debtor intends to continue to operate as a going concern. Debtor will fund the Plan through the continuation of its operations through its downsized Company Fleet and its recovery on Avoidance Claims, including those Avoidance Claims that it has resolved through this Plan. Debtor seeks to restructure its debts, receive favorable concessions from certain Secured Claims, and address its General Unsecured Claims through this Plan in order to improve its cash flow and streamline its ability to make payments under this Plan. The operation of Debtor's business can (i) support its payments to the Holders of Allowed Priority Tax Claims and Allowed Administrative Expense Claims; (ii) meet the operating expenses of the business; (iii) pay Allowed Secured Claims over time; and (iv) pay Allowed General Unsecured Claims pursuant the terms of this Plan. Debtor submits that it will generate enough cash over the life of the Plan to make the required Plan payments and operate Debtor's business. Class 9 consists of General Unsecured Claims. Holders of Allowed General Unsecured Claims will receive a Pro-Rata share of fifty consecutive monthly payments of $7,200.00 for total payments of $360,000.00. Such payments shall commence on month eleven (Oct. 2025) of the Plan. Holders of Allowed General Unsecured Claims will receive a Pro-Rata share of 5% of the net cash balance, if any, held by Reorganized Debtor on the Effective Date. Such payment will be paid on the last Business Day of the month in which the Effective Date occurs. There is no guaranty there will be a net cash balance that will result in such payment. The Debtor projects that Holders of Allowed General Unsecured Claims will yield a recovery of 64% on their Allowed Claims pursuant the projected Disposable Income and Liquidation Analysis. Payments shall be distributed by Reorganized Debtor directly to the Holders of Allowed General Unsecured Claims. Class 9 is Impaired under the Plan. Following the Effective Date, Reorganized Debtor will continue and operate the business with its downsized Company Fleet and with the operational and financial improvements implemented. Through Reorganized Debtor's continued operations, Reorganized Debtor will meet its obligations to creditors under this Plan. A full-text copy of the Amended Subchapter V Plan dated November 1, 2024 is available at https://urlcurt.com/u?l=2NVRVX from PacerMonitor.com at no charge. Attorney for the Debtor: C. Daniel Herrin, Esq. Herrin Law, PLLC 12001 N. Central Expy., Suite 920 Dallas, TX 75243 Telephone: (469) 607-8551 Facsimile: (214) 722-0271 Email: ecf@herrinlaw.com About Blackridge Operating LLC Blackridge Operating LLC is a freight transportation company based in Rockwall, Texas. The Debtor filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 24-41419) on June 17, 2024, listing $500,001 to $1 million in both assets and liabilities. Judge Brenda T Rhoades presides over the case. Daniel Herrin, Esq., at Herrin Law, PLLC, is the Debtor's counsel. BLINK HOLDINGS: Unsecured Creditors to Get 0% in Sale Plan ---------------------------------------------------------- Blink Holdings, Inc. and its affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a Combined Disclosure Statement and Joint Chapter 11 Plan dated October 16, 2024. The Company is a leading owner and operator of fitness clubs in the United States, specifically in the Northeast region, California, Illinois, and Texas, and maintains its headquarters in New York, New York. BFF is a wholly owned subsidiary of Blink Holdings. BFF granted franchise rights to counterparties to develop and operate health and fitness centers that provide cardiovascular and strength training equipment and related products and services. Franchised clubs operate under mandatory and suggested specifications, standards, operating procedures and rules, as specified by the Company. As of the Petition Date, BFF had seven franchised club locations, and had sold but not opened several locations in connection with twelve development rights agreements. In July 2024, the Company began actively marketing the Company's assets to would-be purchasers and diligently circulating marketing materials, a confidential information memorandum, and non disclosure agreements to potential buyers. As of the Petition Date, the Debtors had received non-binding indications of interest from several bidders, and the Debtors' advisors continued to engage, and are continuing to engage, with potential interested bidders. In addition, to support the Company's prepetition marketing efforts, the Prepetition Lenders agreed to provide bridge financing in the form of the Prepetition Protective Advances, to ensure that the Company could continue to satisfy ongoing obligations, thus maintaining operational status quo and preserving the value of the Company's assets, while the Company simultaneously engaged in marketing outreach and prepared the documents and pleadings necessary to commence the Chapter 11 Cases. To further support the Company's restructuring efforts and in consultation with the Restructuring Professionals and the Company's stakeholders, the Company created a special restructuring committee for each of its boards of directors (the "Restructuring Committee"), effective as of June 23, 2024, and delegated to the Restructuring Committee the right, responsibility, and power to manage all matters and make all final decisions regarding a potential restructuring. In connection therewith, the Company retained and appointed Emanuel Pearlman as an independent director to serve as the sole member of the Restructuring Committee. On August 19, 2024, the Debtors filed the Bidding Procedures and Sale Motion, seeking authority to proceed with the sale process, the purpose of which was to generate maximum value for their Assets. To facilitate the Sale process, the Debtors, in consultation with Moelis, and their other professional advisors, proposed the Bidding Procedures to preserve flexibility in the Sale process, generate the greatest level of interest in the Debtors' Assets, and result in the highest or otherwise best value for those Assets. On September 10, 2024, the Bankruptcy Court entered the Bidding Procedures Order, approving the Bidding Procedures and establishing, among other things, October 21, 2024, as the bid deadline and scheduling the Auction and the Sale Hearing. In addition, in accordance with the Bidding Procedures Order, the Debtors filed that certain Notice of Stalking Horse Supplement, pursuant to which the Debtors announced that they had entered into a stalking horse asset purchase agreement with Pinnacle US Holdings LLC, a Delaware limited liability, which would serve as a Stalking Horse Bidder for the sale of a majority of the Debtors' assets, including 67 club facilities and related tangible property, the Debtors' intellectual property, the Debtors' claims and causes of action, if any, against Equinox Group and its affiliates, and other miscellaneous assets, for a cash purchase price of $105 million, subject to adjustment, and the assumption of certain liabilities. Entry into such agreement establishes a floor price for the Debtors' assets, and such bid is subject to higher and better offers. The Debtors will continue to market their assets to promote a competitive auction process. Following the close of a Sale Transaction, the Debtors anticipate focusing on efficiently winding down their businesses, preserving Cash held in the Estates, and monetizing or transferring their remaining Assets to the Post-Effective Date Debtors, and pursuing confirmation of this Plan. This Combined Plan and Disclosure Statement provides for the Assets, to the extent not already liquidated or sold through the Sale, to vest in the Estates of the Post-Effective Date Debtors and to be liquidated over time and for the proceeds thereof to be distributed to holders of Allowed Claims in accordance with the terms of the Plan and the treatment of Allowed Claims described more fully herein. The Plan Administrator will effect such liquidation and distribution in consultation with the Oversight Committee and in accordance with the Plan Administration Agreement. The Debtors will be dissolved as soon as practicable after the Effective Date. Class 4 consists of General Unsecured Claims. Holders of General Unsecured Claims (including the Prepetition Loan Deficiency Claim, if any) are not expected to receive or retain any property or interest in property under the Plan on account of their General Unsecured Claims. Notwithstanding the foregoing, in the event that there are sufficient available Distributable Proceeds to make a Distribution, each Holder of an Allowed General Unsecured Claim shall be entitled to receive its Pro Rata share of the Distributable Proceeds. The allowed unsecured claims total $134.7 million, plus the Prepetition Loan Deficiency Claim, if any. This Class will receive a distribution of 0% of their allowed claims. On the Effective Date, all Interests shall be cancelled, released and extinguished as of the Effective Date, and Holders thereof shall receive no Distribution on account of such Interests. This Plan will be implemented by, among other things, the appointment of the Plan Administrator as the sole officer or manager of each of the Post-Effective Date Debtors as of the Effective Date and the representative of the Estates, the selection of the members of the Oversight Committee, and the making of Distributions to Holders of Allowed Claims from the Wind Down Assets, Sale Proceeds, and Distributable Proceeds, as applicable. All consideration necessary to make all monetary payments in accordance with this Plan shall be obtained from Sale Proceeds, Cash on hand as of the Effective Date, and the Wind Down Assets. A full-text copy of the Combined Disclosure Statement and Joint Plan dated October 16, 2024 is available at https://urlcurt.com/u?l=yFPzvu from EPIQ Corporate Restructuring LLC, claims agent. Counsel to the Debtors: Michael R. Nestor, Esq. Sean T. Greecher, Esq. Allison S. Mielke, Esq. Timothy R. Powell, Esq. Rebecca L. Lamb, Esq. Benjamin C. Carver, Esq. Young Conaway Stargatt & Taylor, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Email: mnestor@ycst.com sgreecher@ycst.com amielke@ycst.com tpowell@ycst.com rlamb@ycst.com bcarver@ycst.com About Blink Holdings Blink Holdings, Inc., is a provider of fitness services in the high value, low price fitness category. Blink Holdings and more than 100 of its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-11686) on Aug. 12, 2024. At the time of the filing, Blink Holdings disclosed $100 million to $500 million in both assets and debt. Judge J. Kate Stickles presides over the cases. Young Conaway Stargatt & Taylor, LLP serves as the Debtors' counsel. Moelis & Company is the Debtors' investment banker and EPIQ Corporate Restructuring LLC is the Debtors' notice and claims agent. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. BLUE RACER: Moody's Affirms 'B1' CFR, Outlook Remains Stable ------------------------------------------------------------ Moody's Ratings affirmed Blue Racer Midstream, LLC's B1 Corporate Family Rating, B1-PD Probability of Default Rating, and B2 senior unsecured notes ratings. The rating outlook remains stable. RATINGS RATIONALE Blue Racer's B1 CFR reflects its stable leverage profile over the past year, exposure to volumetric risks, and exposure to non-investment grade and privately owned upstream counterparties. The company's geographic concentration in the Utica and Marcellus plays in the northeast US, private ownership, and potential capital needs to support future expansions are also reflected in the rating. The B1 CFR is supported by Blue Racer's long-term fee-based cash flow backed by minimum volume, demand charge, flow commitment and acreage dedication contracts; integrated midstream operations in the liquids-rich areas of Appalachia; established track record of significant organic expansion and generating a base level of operating cash flow; and ongoing support from its private owners that have a history of reinvesting distributions back into the company to support growth and reduce financial leverage, when needed. Throughput volumes are on an improving trajectory in 2024, albeit at a slower pace than seen during 2023. The stable outlook reflects Moody's expectation for Blue Racer to maintain adequate liquidity and leverage around 4.0x. Moody's expect Blue Racer to maintain adequate liquidity through 2025. The company will continue to retain cash under its revised distribution policy so long as the debt/EBITDA ratio is above 4.0x, which will then be used to reduce debt. Moody's expect the company to size its distributions to its owners to allow for the debt/EBITDA ratio to remain around 4.0x. The company had $57 million of cash on hand and no borrowings outstanding under its $600 million secured revolving credit facility due in 2029 as of June 30, 2024. Blue Racer's $300 million senior notes will mature in 2026 and Moody's expect the company to have sufficient liquidity to retire them, if necessary. The revolving credit facility has several financial covenants, including a maximum total leverage ratio of 5.25x, maximum first-lien leverage ratio of 3.25x, and a minimum interest coverage ratio of 2.5x. Moody's expect adequate compliance headroom to be maintained under the covenants through 2024. Blue Racer's senior unsecured notes are rated B2, one notch below the CFR, reflecting the priority ranking and size of the company's $600 million committed secured revolving credit facility. Blue Racer's revolving credit facility has a priority claim over the notes and is secured by substantially all the assets of Blue Racer and its current and future material subsidiaries. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade of Blue Racer's ratings could be considered if it increases scale and diversification and sustains the debt/EBITDA ratio below 4.0x. Declining counterparty risks in stable to improving industry conditions could also support an upgrade. A downgrade of Blue Racer's ratings could be considered if debt/EBITDA is sustained above 5.5x, or if it experiences a material or sustained drop in throughput volumes and EBITDA. A deterioration in its overall counterparty risk profile could also support a downgrade. Blue Racer Midstream, LLC is a Utica and Marcellus shale focused private midstream company that provides natural gas gathering and processing as well as natural gas liquids (NGL) fractionation, transportation and marketing services to producers in Ohio, Pennsylvania and West Virginia. The company was formed in 2012 and owns and operates 718 miles of natural gas, NGL and condensate pipelines, had 1.2 billion cubic feet per day (Bcf/d) of nameplate natural gas processing capacity and 134,000 barrels per day of fractionation capacity as of June 2024. Blue Racer is a 50/50 joint-venture partnership between The Williams Companies, Inc. (WMB, Baa2 stable) owned Blue Racer Midstream Intermediate Holdings, LLC and First Reserve (unrated) backed FR BR Natrium Holdings, L.L.C. (unrated). The principal methodology used in these ratings was Midstream Energy published in February 2022. BOONE HOSPITAL: Moody's Alters Outlook on B1 Bond Rating to Stable ------------------------------------------------------------------ Moody's Ratings has affirmed Boone Hospital Center's (BHC, MO) B1 revenue bond rating. The outlook has been revised to stable from negative. The system had approximately $151 million of debt outstanding at fiscal year-end 2023; including direct debt, finance leases and a note payable. The revision of the outlook to stable from negative reflects strengthening operating performance, which will stem liquidity deterioration following several years of cash flow unrestricted cash and investment losses. RATINGS RATIONALE The B1 rating reflects BHC's weak, though improving, financial performance and thin liquidity (about 55 - 60 days cash and well under 100% cash to debt), balanced against its essential role in the market as a regional referral tertiary provider. Financial performance is on an improving trend and Moody's expect break-even cash flow in fiscal 2024 with further improvement in 2025. These trends will allow the organization to stabilize liquidity at about 55 - 60 days cash. Moody's expect management will focus on physician recruitment and specialty service investments, along with labor productivity and supply chain improvement initiatives as it endeavors to further strengthen operating performance. Moody's also do not anticipate a covenant breach in the next year due to a special debt service reserve fund and provisions for transfers from an affiliated entity that allow Boone to remain in compliance with covenants, despite weak cash flow. RATING OUTLOOK The stable outlook reflects strengthening operating performance following several years of credit stress. Moody's expect BHC to generate breakeven operating cash flow in 2024 and improve to approximately 4% operating cash flow margin in 2025. Days cash will remain in the 55-60 day range over the next several years while performance continues to improve and investments in physicians allow for volume growth. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING -- Materially improved and durable operating cash flow margins -- Significantly improved cash levels and days cash on hand measure FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING -- Inability to achieve breakeven operating cash flow in 2024 and improve thereafter -- Deterioration of days cash on hand to below 55 days -- Additional debt LEGAL SECURITY The bonds are an obligation of the board of trustees of Boone County Hospital (the board of trustees) which owns the hospital and is charged with the operation of County hospital facilities in Boone County. The hospital is leased to CH Allied Health Services (CHAS) which manages day to day operations. Moody's analysis is based on a combination of the financial statements of the hospital and the board. The hospital has little cash of its own, but pursuant to County Hospital Law, the board of trustees maintains a separate account designated as the Hospital Maintenance Fund which holds the majority of the cash reflected in Moody's analysis. The fund can be used to support hospital operations and debt service; in recent years the board has used the fund to support hospital operations and maintain covenant compliance by maintaining sufficient cash in the debt service reserve fund. The County and the board of trustees will covenant to administer and allocate all moneys held in the Hospital Maintenance Fund in the following order so long as the Bonds remain outstanding and unpaid: (a) to pay the reasonable and current costs of operating and maintaining hospital facilities (provided, however that during the term of the Lease, the Lessee is responsible for maintaining the hospital); (b) to pay debt service on bonds; (c) to maintain a debt service reserve account or accounts; (d) to be used for any lawful purpose under the County Hospital Law, all as more particularly set forth in the Indenture. PROFILE Boone Hospital Center is 392-licensed bed regional medical center whose real estate is owned by the County. The buildings are owned by the board of trustees and all other major movable equipment assets are owned by CH Allied Services. Day to day operations of the hospital (but not all of the Hospital Facilities) are managed via a lease agreement to CH Allied Services, Inc., a private nonprofit corporation (the "Lessee"). METHODOLOGY The principal methodology used in this rating was Not-for-profit Healthcare published in October 2024. BREAD FINANCIAL: Moody's Affirms 'Ba3' Issuer & Unsecured Ratings ----------------------------------------------------------------- Moody's Ratings has affirmed all of the ratings and assessments of Bread Financial Holdings, Inc. (Bread Financial), and its bank subsidiaries Comenity Bank (Comenity) and Comenity Capital Bank (Comenity Capital). The affirmations include the ba2 baseline credit assessments (BCAs) and adjusted BCAs for Comenity and Comenity Capital, along with the Ba3 long-term issuer ratings, Baa3/Prime-3 long- and short-term deposit ratings, Ba2/Not-Prime long- and short-term counterparty risk ratings and Ba1(cr)/Not-Prime(cr) long- and short-term counterparty risk assessments. Bread Financial's Ba3 long-term issuer and senior unsecured ratings were also affirmed. The outlooks for Bread Financial's Ba3 long-term issuer and senior unsecured ratings and Comenity's and Comenity Capital's Baa3 long-term deposit ratings and Ba3 long-term issuer ratings were changed to positive from stable. RATINGS RATIONALE The positive outlook reflects Bread Financial's meaningful progress toward enhancing its enterprise risk management framework and expanding its capital, funding and liquidity planning beyond its bank subsidiaries to the holding company level to be more consistent with peers. Further progress on the implementation and execution upon these initiatives, together with higher capital levels and credit performance stabilization over the outlook horizon, could result in an upgrade of the BCAs and ratings. The US bank median ratings reflect Bread Financial's very profitable, but highly concentrated business in US credit cards, which makes it more vulnerable to economic cycles. The ratings also reflect Moody's view that the company faces elevated execution risk as management works towards strengthening its capital, funding, and liquidity planning and operational and financial risk management following its shift to a more conservative financial strategy, and risk management framework that is more comparable to the bank holding company structure of its peers than its industrial loan company (ILC) structure. Bread Financial's business concentration in consumer credit cards remains a significant constraint on the BCAs of its bank subsidiaries. In addition to the asset concentration in credit cards, Bread Financial's business model relies on retail partnerships, where contract expirations create potential earnings uncertainty, although the company has a solid track record of retail partner retention. The company also faces higher asset risk than most rated US banks owing to its high exposure to unsecured consumer credit, making it highly vulnerable to economic cycles. Exacerbating this risk is the composition of its loan portfolio that consists of greater than 40% nonprime borrowers, considerably higher than most of its rated bank peers. The company's focus on the nonprime consumer and the payment hierarchy of its private label credit cards relative to general purpose, top of wallet cards, results in meaningfully higher charge-offs than rated credit card banks. Bread Financial has reduced its level of market funding in recent periods as part of its funding plans, reducing parent company debt. Even so, it still has higher levels of market funding than rated bank peers which is viewed as a credit weakness. Although the company has made meaningful progress in growing its direct-to-consumer (DTC) deposits and reducing its reliance on longer duration and more expensive brokered CDs, its deposit yields are meaningfully above peers, which could lead to less deposit stability through cycles. Helping to counterbalance higher asset risk and market funding are Bread Financial's strong profitability and capitalization. Although the company's profitability is more volatile than peers because of its higher exposure to nonprime borrowers and the impact of current expected credit losses (CECL) accounting on loan loss provisions, Moody's expect the company to produce return on tangible assets in the range of 2% - 2.5% through the cycle. Bread Financial's profitability could potentially be negatively impacted by the Consumer Financial Protection Bureau's (CFPB) rule change that would cut credit card late fees by 75%, which is currently being appealed in the courts. While the reduction of late fees is significant for Bread Financial, management has begun implementing plans to offset the loss of this revenue primarily through an increase in annual percentage rates (APRs) on its accounts. Bread Financial has meaningfully improved its consolidated capitalization. Moody's tangible common equity (Moody's Ratings TCE) as a percentage of risk weighted assets (RWA) was 13.0% as of June 30, 2024, up meaningfully from 10.6% a year ago. Management has projected Common Equity Tier 1 (CET1) to rise to around 14% over the medium term before settling out between 12% and 13% longer term. Tangible common equity when combined with its loan loss reserve was 25.4% of loans as of September 30, 2024, providing significant loss absorption capacity. Moody's expect Bread Financial's capitalization to remain solid despite seasonal volatility. Comenity and Comenity Capital's long-term issuer ratings are Ba3; one notch below the banks' BCAs and at the same level as Bread Financial's issuer rating. The volume of parent company (holdco) debt in Bread Financial's funding structure is above the threshold under Moody's Advanced Loss Given Failure framework that would support a one notch upgrade of the bank's issuer rating to Ba2 from Ba3; based on the magnitude of such holdco debt that's subordinate to the banks' debt. However, because regulators have more limited enforcement powers in a potential bank resolution with respect to the parent companies of ILCs than they do with bank holding companies, Moody's do not presume bank-level debt would be senior to holdco debt and thus the banks' issuer ratings were affirmed at Ba3. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The BCAs of Bread Financial's bank subsidiaries (Comenity and Comenity Capital) could be upgraded upon the full implementation and evidence of the effectiveness of its enterprise risk management framework including capital, funding and liquidity planning policies. An upgrade would also be contingent upon the company maintaining Moody's TCE as a percentage of RWA above 12.5%, demonstrating further improvement in asset quality, and sustaining a return on tangible assets of at least 2%. Bread Financial's ratings would likely be upgraded if its bank subsidiaries' BCAs are upgraded barring any meaningful changes to its funding structure. The outlooks for Bread Financial's senior unsecured and long-term issuer ratings together with Comenity's and Comenity Capital's long-term issuer and deposit ratings could be revised to stable if management is unsuccessful or incurs meaningful delays in further updating its enterprise risk management framework, or if Moody's TCE ratio measurement falls and is sustained below 12.5%. Given the positive outlook, a downgrade is less likely in the near-term. Longer-term, the BCAs of Bread Financial's bank subsidiaries (Comenity and Comenity Capital) could be downgraded if there is a sustained decline in consolidated capitalization (Moody's Ratings TCE % RWA below 10%) or a material decline in asset quality and profitability over a sustained period. Bread Financial's ratings would likely be downgraded if its bank subsidiaries' BCAs are downgraded barring any meaningful changes to its funding structure. The principal methodology used in these ratings was Banks published in November 2024. BYJU'S ALPHA: Trustee Requests Sanctions for Breaching Ch. 11 Stay ------------------------------------------------------------------ Emlyn Cameron of Law360 Bankruptcy Authority reports that the Chapter 11 trustee for three U.S. subsidiaries of Indian ed-tech giant Byju's has called for sanctions to be imposed by a Delaware bankruptcy judge on several parties accused of breaching the automatic stay by interfering with the subsidiaries' assets, interfering with the Byju's units' property. About BYJU's Alpha BYJU's Alpha, Inc., designs and develops education software solutions. The Debtor sought protection under Chapter 11 of the 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. CAST & CREW: Moody’s Lowers Ratings on First Lien Loans to B3 --------------------------------------------------------------- Moody's Ratings downgraded Cast & Crew LLC's senior secured first-lien ratings, including a $150 million backed senior secured 1st lien revolving credit facility ("RLOC"), and a $1,425 million backed senior secured first-lien term loan, to B3 from B2. Concurrently, Moody's assigned a Caa1 corporate family rating and a Caa1-PD probability of default rating to Camera Holdings LP ("Cast & Crew", "the company"). Moody's also withdrew the B3 corporate family rating and B3-PD probability of default rating at Cast & Crew LLC. The outlook for Cast & Crew LLC and Camera Holdings LP is stable. The company is a California-based provider of technology-enabled payroll processing and related services to the entertainment industry. The ratings downgrade is driven by the company's continued weak operating performance and very high leverage as of the quarter ended September 30, 2024, and Moody's observation that the lingering effects from the 2023 WGA and SAG-AFTRA strikes and concern over IATSE contract negotiations in 2024 continue to weigh on Cast & Crew's financial performance. Additionally, the anticipated rebound of activity levels prior to the work disruption appears to be both delayed and potentially less robust as the company manages both industry wide and idiosyncratic factors. RATINGS RATIONALE Cast & Crew's Caa1 CFR is principally constrained by the company's high debt leverage with debt-to-Ebitda of 10.8x as of the period ended September 30, 2024, that Moody's do not expect to decline meaningfully over the next 12-18 months. The company's credit profile is also negatively impacted by risks related to its concentrated exposure to the media and entertainment sectors, which have been crystalized by both the 2023 work stoppages in the industry and the slower than expected pace of recovery for projects with both streaming content providers and conventional feature film and television studios. Additional credit risks stem from the company's ability to effectively manage workers' compensation insurance claims, cybersecurity related risks given the company's access to sensitive customer data, Cast & Crew's concentrated equity ownership, and in Moody's view the potential for aggressive financial policies which have recently led to material asset write-downs. The credit profile benefits from the company's relatively large scale and entrenched position within its niche market, long-term customer relationships, and specialized industry expertise as a provider of payroll processing, production accounting, and related services for media and entertainment companies. The company has maintained very strong operating profitability margins (adjusted Ebitda margin of approximately 41%), which could drive improvement in credit metrics if the top-line growth returns to historically normalized levels. Moody's consider Cast & Crew's liquidity profile as weak, and could come under further pressure due to higher debt service costs and if the activity rebound in the entertainment sector is slower than now revised estimates. The company had an unrestricted cash balance of $87 million as of September 30, 2024 but Moody's expect cash balances to decline over the next 12 months as a result of free cash flow deficits. Support from the $150 million RLOC facility is very limited given the current draw of $85 million as September 30, 2024 and the possible reduction in the facility's available capacity by $27 million in August 2025.The company's first-lien term loan is not subject to financial maintenance covenants. However, Cast & Crew has a springing covenant for its revolving credit facility based on a maximum first-lien net leverage ratio of 8.3x, which it passed as of September 30, 2024. In December 2023, the company received a waiver for this requirement until September 30, 2024, as it was previously out of compliance with the covenant. Moody's expect the waiver will be extended moving forward if needed, but the uncertainty constrains liquidity. The B3 rating for Cast & Crew's $150 million senior secured first-lien revolver, and $1,425 million senior secured first-lien term loan reflects the borrower's Caa1-PD PDR and Moody's loss given default methodology. The senior secured first-lien ratings are secured and guaranteed by all business assets and are one notch above the CFR due to the instruments' priority in the collateral and senior ranking in the capital structure relative to Cast & Crew's unrated $275 million second-lien debt. The stable ratings outlook reflects Moody's expectation that Cast & Crew's revenue and adjusted EBITDA will be lower but eventually stabilize relative to FY22 levels over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade could occur if the company improves revenue growth, leading to increased scale, EBITDA expansion, positive free cash flow generation, material leverage reduction with debt-to-EBITDA below 7.5x, and liquidity improvement, thus restoring its financial performance to pre-strike levels. The ratings could be downgraded if revenue or EBITDA contract materially from current levels, the company continues to generate weak or negative free cash flow, liquidity deteriorates, or Moody's believe there is a higher refinancing risk as maturities approach. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Cast & Crew, based in Burbank, CA and owned by affiliates of equity sponsor EQT, is a provider of technology-enabled payroll processing, production accounting software, workers' compensation coverage and related value-added services to clients across the entertainment industry. The company's core competency is their ability to manage a complex labor structure that is often more difficult and costly for temporary production companies to navigate independently. CASTLE US: Moody's Lowers CFR to Caa2, Outlook Negative ------------------------------------------------------- Moody's Ratings downgraded Castle US Holding Corporation's (dba "Cision", Castle) corporate family rating to Caa2 from Caa1 and its probability of default rating to Caa2-PD from Caa1-PD. Concurrently, Moody's downgraded Castle's senior secured bank credit facilities (including the approximately $2 billion term loan due January 2027, the $43 million revolving credit facility expiring in January 2025, and the $137 million revolving credit facility expiring in April 2026) to Caa2 from Caa1, and the senior unsecured notes to Ca from Caa3. The outlook remains negative. Castle is a Chicago-based provider of database tools and software to public relations and communications professionals. The rating actions reflect that Castle's financial performance is weaker than Moody's anticipated, resulting in very high debt leverage, with debt-to-EBITDA of 10.6x as of September 30, 2024, a weak liquidity profile, and uncertainty regarding the sustainability of the company's debt capital structure. The company's elevated interest expenses on its floating-rate debt constrain its operating cash flow generation, leading to an increased reliance on revolving credit facilities to manage debt servicing. Moody's expectation of continued negative cash flow over the next 12 to 15 months further weakens the liquidity profile. RATINGS RATIONALE Castle's Caa2 CFR is constrained by the company's high financial leverage debt-to-EBITDA at 10.6x as of September 30, 2024, and weak liquidity profile. The company's credit quality is also under strain due to its susceptibility to financial market cyclicality and intense competition, given Castle's niche market focus as a provider of software and related services to public relations and communications professionals worldwide. Moody's anticipate minimal revenue growth in 2025, driven by increased activity in mergers, acquisitions, and financial transactions within the PR Newswire segment, alongside pricing initiatives. However, this is likely to be counterbalanced by continued challenges in the Insights and Brandwatch segments, and a dip in CommsCloud's performance as customers transition to the new CisionOne platform. High interest expenses support Moody's expectation for negative cash flow and low interest coverage, calculated as EBITDA minus capital expenditures to interest expense, hovering below 1x. Moody's concern regarding the company's ability to repay or refinance a substantial portion of its term debt prior to or when it matures in January 2027 adds further pressure to Castle's credit profile. All financial metrics cited reflect Moody's standard adjustments. The ratings are supported by the company's leading market position in the public relations software and database niche markets, recurring revenue from software-as-a-service subscriptions that offer revenue predictability, and anticipated still-solid (but lower than historical) profitability rates with EBITDA margins in the 26% - 27% range. While Moody's project modest improvements in profitability driven by cost-saving and price increases initiatives, leverage is expected to stay around 10x over the next 12 to 18 months, with a likely lack of availability under its revolving credit facility during that period. The ongoing litigation with Dow Jones, alleging breach of contract by Castle, amplifies uncertainty and potential liabilities, likely constraining Castle's operational performance and negatively impacting its credit quality through financial strains and reputational risks. Moody's expect that Castle will maintain a weak liquidity profile over the next 12 to 15 months. As of September 30, 2024, the company had $50 million of cash and $35 million available on its $180 million revolving credit facilities. Moody's only consider Castle's revolving facility capacity to be $137 million (maturing in April 2026) as an external liquidity source because the $43 million revolving tranche expires in January 2025. Moody's anticipate that Castle will rely on its revolving credit facilities to fund its debt service and capital expenditures, leaving no availability under them. Moody's also expect negative cash flow in 2025 as a result of weak operating performance, and the high interest expense burden from Castle's all-floating-rate debt capital structure will persist. While Castle's term loans are not subject to financial covenants, the revolving credit facilities are subject to a springing maximum net first-lien leverage ratio of 8x, which is triggered when revolver utilization exceeds 35%, and requires maintaining minimum liquidity of $40 million, comprised of cash and revolver availability. Moody's expect the company to maintain minimal cushion with all covenants. The Caa2 senior secured first-lien credit facility rating is consistent with the Caa2 CFR. The credit facility comprises a $43 million revolving tranche expiring in 2025, a $137 million revolving tranche expiring in 2026, and approximately $2 billion of term loans maturing in 2027. Despite the credit facility's priority in the collateral and senior ranking in the capital structure relative to the company's $300 million senior unsecured bonds due in 2028, the considerable proportion of secured debt relative to the unsecured notes results in only minor first-loss support. The Ca senior unsecured notes rating reflects its subordination to the large amount of senior secured claims in the debt capital structure. The negative outlook reflects Moody's expectation that Castle's financial leverage will remain very high and liquidity will continue to deteriorate throughout 2025, further pressuring credit quality despite the company achieving low single-digit revenue growth and maintaining robust EBITDA margins throughout the period. Additionally, elevated interest costs on the company's floating debt will likely continue to drive negative free cash flow, further pressuring the company's weak liquidity profile. The outlook could return to stable if Moody's expect that Castle will be able to improve its operating performance and increase its free cash flow generation profile towards breakeven levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The negative outlook indicates that rating upgrades are unlikely over the next 12-18 months. Over the longer term, the ratings could be upgraded if Castle demonstrates improvements in operating performance, such as revenue and profit growth, while adopting and adhering to a more conservative financial policy, which results in debt reduction and an improved liquidity profile. The ratings could be downgraded if Castle experiences a weakening of its competitive position, further deterioration in financial performance or liquidity profile, increased refinancing risk, or if Moody's perceive the recovery prospects in the event of default could diminish. The principal methodology used in these ratings was Software published in June 2022. Castle US Holding Corporation (dba Cision), based in Chicago, IL, provides database tools and software to public relations and communications professionals, enabling users to identify and connect with media influencers, manage industry relationships, create and distribute content, monitor media coverage, perform advanced analytics, and measure the effectiveness of their campaigns. The company is controlled by an affiliate of the private equity sponsor Platinum Equity LLC. For the twelve months ended September 30, 2024, Castle generated revenue of $908 million. CENTENNIAL HOUSING: PCO Taps Sak Management as Operations Advisor ----------------------------------------------------------------- Suzanne Koenig, the patient care ombudsman ("PCO") for Centennial Housing & Community Services Corp. seeks approval from the U.S. Bankruptcy Court for the Eastern District of North Carolina to employ Sak Management Services, LLC d/b/a SAK Healthcare as medical operations advisor. The firm's services include: a. conducting interviews of patients, family members, guardians and hospital staff as required; b. reviewing license and governmental permits; c. reviewing adequacy of staffing, supplies, and equipment; d. reviewing safety standards; e. reviewing hospital maintenance issues or reports; f. reviewing patient, family, staff, or employee complaints; g. reviewing risk management reports; h. reviewing litigation relating to the Debtor; i. reviewing patient records; j. reviewing any possible sale, closure, or restructuring of the Debtor and how it impacts patients; k. reviewing other information, as applicable to the Debtor and this case including, without limitation, patient satisfaction survey results, regulatory reports, utilization review reports, discharged and transferred patient reports, staff recruitment plans and nurse/patient/acuity staffing plans; l. reviewing various financial information, including, without limitation, current financial statements, cash projections, accounts receivable reports and accounts payable reports to the extent such information may impact patient care; and m. assisting the Ombudsman with such other services as may be required under the circumstances of this case, including any diligence or investigation required for the reports to be submitted by the Ombudsman. The firm will be paid at these rates: Principals/Executives $500 per hour Senior Managing Director/Vice Presidents $450 Senior Directors/Regional Directors/Directors $400 Staff/Administrative $250 The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Suzanne Koenig, Founder & Chief Executive Officer at SAK Management Services, LLC d/b/a SAK Healthcare, 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: Suzanne Koenig SAK Management Services, LLC 300 Saunders Road, Suite 300 Riverwoods, IL 60015 Tel: (847) 446-8400 Fax: (847) 446-8432 Email: skoenig@sakmgmt.com About Centennial Housing & Community Services Corp. Centennial Housing & Community Services Corp., doing business as Washington Regional Medical Center, is a 25-bed critical access hospital offering a broad range of healthcare services. Centennial Housing & Community Services Corp. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-03469) on October 29, 2024. In the petition filed by Todd Mobley, as chairman of the Board, the Debtor reports total assets of $6,970,517 and total liabilities of $11,730,050. The Debtor is represented by: Jason L. Hendren, Esq. HENDREN, REDWINE & MALONE, PLLC 4600 Marriott Drive Suite 150 Raleigh, NC 27612 Tel: (919) 420-7867 Fax: (919) 420-0475 Email: jhendren@hendrenmalone.com CENTER FOR ALLERGIC: Updates Fairview Center Secured Claim Pay -------------------------------------------------------------- Center for Allergic Diseases, LLC, submitted an Amended Disclosure Statement for Small Business describing Plan of Reorganization dated November 1, 2024. General unsecured creditors are classified in Class 2 and 3, and will receive a distribution of 100% of their allowed claims, to be distributed as follows $284.41 per month and $897.92 per month for 60 months for an aggregate amount of $$17,088.87 for Class 2 and $53,875.75 for Class 3. The Debtor is a limited liability company. The entity was incorporated in 2012. The sole member of Debtor, Sampson Sarpong, was a licensed medical doctor. The Debtor has always been a single member limited liability company. Debtor operated medical facilities in each of the properties located at 12150 Annapolis Road, Bowie, Maryland and 4255 Altamont Place, Unit 202, White Plains, Maryland. During this time period, he had two employees. In 2017 he no longer practiced medicine, at which time, Debtor leased the commercial properties to third-parties. The Disclosure Statement will provide for the payment of Fairview Center Condominium claim as a secured claim under Class 1b and the Disclosure Statement will provide for the payment of Fairview Center Condominium claim as an unsecured creditor under Class 3. Fairview Center Condominium claim will not be paid pursuant to both Classes. Upon the Court's determination whether it is a secured claim or an unsecured claim, such claim for Fairview shall be treated as such and non-applicable provision shall not be applied for in the Chapter 11 Plan. At this time, Debtor believes Fairview Center Condominium claim is an unsecured claim. Any statement of lien must be filed within 2 years of the breach of contract. Some of the above claims included dues greater than 2 years. In addition, Claim 4 is a district court judgment and a district court claims are not liens against real estate. In addition, there is no breakdown of the amount included in the judgment and likely includes amounts claimed in Claims 5 to 7. Therefore, Claims 3, 4, 5, 6 and 7 should be disallowed. There are amounts owed to Fairview Center Condominium II, Inc and Debtor has made payments in 2023 in the amount of $9,327.37 and in 2022 Debtor paid $2,506.87. Debtor believes based on other documentation provided by Fairview Center Condominium II, Inc. that $36,947.36 is estimated amount due through October 2023 for condominium dues and approximately $20,479.59 for estimated CAM electric through October 2023. The electricity has been turned on in the Fairview Center Condominium II, Inc. for Unit 202. Currently, Debtor has discussed the rental of this unit with Hooper & Associates. On September 11, 2024, a tentative tenant presented a letter of interest to lease Unit 202. The Potential Tenant provided tax returns, a P& L statement, a credit report to demonstrate its credit worthiness. They currently operate a healthcare office and are expanding. There is also another potential tenant that operates an insurance company. Debtor is currently finalizing terms for a 3–5-year lease paying $2,690.00 per month plus utilities. This includes $665.00 for CAM charges. The rent would begin November 2024. A late claim was filed by Prince George's County, MD (Proof of Claim No. 10). It was filed past government deadline for claims, however, the claim is post-petition real estate taxes that were due September 30,2024 for 12150 Annapolis Road, Glenn Dale, MD 20769. The annual real estate taxes are $7,021.20 with the interest calculated starting October 2024 at $56.78 until paid. Class 1b consists of the Secured claim of Fairview Center Condominium II, Inc. The amount of secured claim in this Class total $53,875.75 and Pre-petition arrearage $53,875.75. This Class shall receive a monthly payment of $897.92 for 60 months. This Class will receive a distribution of 100% of their allowed claims. This Class is impaired. Like in the prior iteration of the Plan, General Unsecured Claim of Fairview Center Condominium II, Inc. in Class 2 in the amount of $53,875.75 (this is $55,540.75 less the deposit paid in the amount of $1,665.00) shall receive a monthly payment of $897.92 for 60 months. This Class will receive a distribution of 100% of their allowed claims. Payments and distributions under the Plan will be funded from 12150 Annapolis Road, Bowie, MD (Fairwood), the rental income increased in February 2024 from $3,553.50 to $3,660.00. The condominium dues are $1,054.46 per month and the tenant pays the electric and any other utilities. Therefore, the net proceeds are $2,605.54. This will allow $70.29 remaining and is sufficient to pay the creditors under the plan and 100% of unsecured creditors. After the first five months, the payment will increase by $396.15. As of November 1, 2024, Debtor has a Tenant for 4255 Altamont lace, Suite 202. The draft lease has been circulated for signing with the term to commence December 1, 2024 with rent to commence January 1, 2025 in the amount of $2,025.00 for a period of five years with 3% increases beginning year two, January 1, 2026. Tenant is obligated to pay all utility expenses for heat, water, gas, trash electricity, internet, cable and phone, which should include the prorata share of 6.85% of the CAM electric. Tenant shall also pay $665.00 per month for condominium association dues. A full-text copy of the Amended Disclosure Statement dated November 1, 2024 is available at https://urlcurt.com/u?l=nfuR9f from PacerMonitor.com at no charge. About Center for Allergic Diseases Center for Allergic Diseases, LLC, operated medical facilities in each of the properties located at 12150 Annapolis Road, Bowie, Maryland and 4255 Altamont Place, Unit 202, White Plains, Maryland. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 23-17168) on October 4, 2023. Judge Maria Ellena Chavez-Ruark presides over the case. Diana L. Klein, at Klein & Associates, LLC, is the Debtor's legal counsel. CG JERSEY: Seeks Chapter 11 Bankruptcy, Dec. 19 Creditors' Meeting ------------------------------------------------------------------ On November 15, 2024, CG Jersey Inc. filed Chapter 11 protection in the District of New Jersey. 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 Sec. 341(a) to be held on December 19, 2024 at 2:00 PM. About CG Jersey Inc. CG Jersey Inc., doing business as Fratello's Italian Rest, is an Italian restaurant serving seafood, steaks and Italian dishes in Sea Girt, Manasquan, Wall, Spring Lake, Brielle, and the surrounding areas of the Jersey Shore. CG Jersey Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 24-21373) on November 15, 2024. In the petition filed by Christopher G. De Cresce, as president, the Debtor reports estimated assets up to $50,000 and estimated liabilities between $1 million and $10 million. The Debtor is represented by: Melinda D. Middlebrooks, Esq. MIDDLEBROOKS SHAPIRO, P.C. 841 Mountain Avenue First Floor Springfield, NJ 07081 Tel: (973) 218-6877 Fax: (973) 218-6878 E-mail: middlebrooks@middlebrooksshapiro.com CHARTER COMMUNICATIONS: Moody's Rates New Sr. Secured Debt 'Ba1' ---------------------------------------------------------------- Moody's Ratings assigned a Ba1 credit rating to a new backed senior secured revolving credit facility and Term Loan A-7 both due 2030, and Term Loan B-5 due 2031, to be issued at Charter Communications, Inc.'s (Charter or the Company) wholly owned subsidiary Charter Communications Operating, LLC (CCO or the company). Charter Communications Operating Capital Corp. is co-borrower. Charter's Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating, and all instrument ratings are unaffected by the proposed transaction. The negative outlook and SGL-2 Speculative Grade Liquidity are unchanged. Moody's expect Charter to use the net proceeds from this offering to repay certain indebtedness (the refinancing), and for general purposes, including to pay related fees and expenses. The refinancing will improve the maturity profile (amending and effectively extending the existing RCF and TL A-5 2.5 years, to 2030 from 2027, and the existing TL B-2 about five years to 2031 from 2027). Moody's expect the aggregate borrowing costs on the new obligations (net of debt repayment) to be similar to or slightly higher. Leverage will be credit neutral, if materially all available proceeds are used for refinancing. Moody's also do not expect the transaction to materially change the proportional mix or priority of claims in the capital structure and believe the terms and conditions of the newly issued securities are materially the same as existing obligations of the same debt class. RATINGS RATIONALE Charter's credit profile is supported by its substantial scale and share of the cable industry and superior, high-speed network. Charter is the second largest cable company in the United States, with strong EBITDA margins (near 40%, Moody's adjusted, LTM Q3) supported by a large mix of very high-margin broadband wireline internet customers. The business model is also highly predictable, with a diversified footprint and customer base and a largely recurring revenue model with monthly subscriptions. The credit profile is constrained by governance risk as reflected in the G-4 Issuer Profile Score and CIS-4 Credit Impact score. Financial strategy and risk management policy includes targeting net leverage of 4.0-4.5x (Moody's adjusted gross debt to EBITDA was 4.5x at Q3 LTM), which has become an increasingly greater credit risk given certain macro factors (including generally higher interest rates) and more intense competitive dynamics across portions of its footprint evidenced by subscriber losses across all services but mobile. Additionally, free cash flow is constrained (near 4% of debt) due in part to temporarily elevated capital expenditures (over 20% of revenue) and borrowing costs which were about $5.3 billion or 5.4% of debt (based on Moody's adjusted interest expense and gross debt, LTM at Q3). Management also maintains a commitment to distribute a portion of free cash flows to shareholders, typically via share repurchases. As a result, the company has become more dependent on the debt capital markets to roll maturities as internal sources of liquidity (cash and operating cash flows) have declined relative to upcoming debt maturities. Charter is challenged by, and exposed to, significant and persistent unfavorable secular trends and pressure in its wireline voice and video services, evidenced by the high and sustained customer losses due to competition and changes in media consumption. The company has also been losing internet customers due to higher competitive intensity from fixed wireless and wireline overbuilders. Mobile services, while growing quickly, driving top-line revenue and just turned profitable (after subscriber acquisition costs), is still producing negative FCF. Further, Moody's expect run-rate economics (at scale) will be less profitable than wireline cable and voice which will slow the expansion of overall margins. Liquidity is good (SGL-2) supported by positive operating cash flow after mandatory payments (including debt maturities), $5.5 billion available under its revolving credit facility (at last quarter end), and adequate headroom under maintenance covenants. Alternate liquidity is constrained by a partially secured capital structure given most assets are encumbered and any proceeds from a sale would have to first go to repay lenders. The senior secured bank credit facilities and senior secured notes at Charter Communications Operating, LLC, Time Warner Cable LLC, and Time Warner Cable Enterprises LLC are unchanged at Ba1, one notch above the Ba2 CFR. Secured lenders benefit from junior capital provided by the senior unsecured notes issued at CCO Holdings, LLC (co-borrowed by CCO Holdings Capital Corp. (which have no guarantees), the most junior claims and rated B1, with contractual and structural subordination to the secured obligations. Instrument ratings reflect the Ba2-PD Probability of Default Rating with a mix of secured and unsecured debt, which Moody's expect will result in an average rate of recovery of approximately 50% in a distressed scenario. The negative outlook reflects the downside credit risk of rising competitive intensity that is driving customer losses across all services except mobile. Internet customer losses are currently being primarily driven by Charter's exposure to the loss of subsidized support from the Affordable Connectivity Program (ACP) which is constraining broadband subscriber growth and revenue. Moody's expect capital intensity to remain temporarily elevated, constraining free cash flow (FCF). Moody's expect net leverage to approach or be near 4.25x, with a shift in financial policy to the mid-point of the Company's target range of 4.0 to 4.5x. Moody's expect continued cost cuts and discipline, decline in video programming costs, and growth in certain areas of the business (mostly rural broadband builds), to help support EBITDA and margins which continue to expand, and approaching 40% (Moody's adjusted, LTM Q3). FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could consider an upgrade if: -- Leverage (Moody's adjusted gross debt/EBITDA) is sustained below 3.75x, and -- Retained cash flow to net debt (Moody's adjusted) is sustained above 20% An upgrade could also be conditional on a more conservative financial policy, sustained organic and profitable revenue growth, and improved liquidity. Moody's could consider a downgrade if: -- Sustained organic revenue and EBITDA (Moody's adjusted) growth is not expected, -- Leverage (Moody's adjusted gross debt/EBITDA) is not approaching 4.25x, or -- Retained cash flow to net debt (Moody's adjusted) is sustained below 15% Moody's could also consider a negative rating action if liquidity deteriorated, financial policy turned more aggressive, or scale or diversity declined. The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. Charter Communications, Inc., headquartered in Stamford, Connecticut, provides video, data, phone, and wireless services. Across its footprint, which spans 41 states, Charter (the second largest U.S. cable operator) serves approximately 31.7 million customers (internet, video and voice, excluding enterprise) and about 9.4 million mobile lines. The company sells its services under the Spectrum brand. Revenue for the 12 months ended Q3 2024 was approximately $54.9 billion. Charter is a public company with the largest shareholders Liberty Broadband Corporation (unrated) and the Advance/Newhouse family. CITIUS PHARMACEUTICALS: Effects 1-for-25 Reverse Stock Split ------------------------------------------------------------ Citius Pharmaceuticals, Inc. announced Nov. 22 that it will be executing a reverse stock split of its common stock, par value $0.001 per share, at a ratio of 1-for-25. Pursuant to the laws of the State of Nevada and subject to prior approval by the Company's Board of Directors, Citius Pharma was not required to obtain shareholder approval to effectuate the Reverse Stock Split. The Reverse Stock Split became effective at 5:00 pm Eastern Time on Nov. 25, 2024. The Company's common stock began trading on the Nasdaq Capital Market on a split-adjusted basis beginning upon market open on Nov. 26, 2024, under the Company's existing trading symbol "CTXR" with the new CUSIP number 17322U306. The Reverse Stock Split is intended to increase the per share trading price of Citius Pharma's common stock to regain compliance with the minimum bid price requirement of $1.00 per share of common stock for continued listing on the Nasdaq Capital Market. Under Section 78.207 of the Nevada Revised Statutes, the Company may decrease its authorized shares of Common Stock and correspondingly decrease the number of issued and outstanding shares of Common Stock by resolution adopted by the Board of Directors, without obtaining the approval of the stockholders. The Reverse Stock Split was approved by the Company's Board of Directors pursuant to the Nevada Revised Statutes and was effectuated by the filing of a Certificate of Change with office of the Nevada Secretary of State. At the effective time of the Reverse Stock Split, every 25 issued and outstanding shares of the Company's common stock will be combined automatically into one share of the Company's common stock without any change in the par value per share. No fractional shares will be issued in connection with the reverse stock split, and any fractional shares resulting from the Reverse Stock Split will be rounded up to the nearest whole share at the participant level. The reverse stock split will reduce the number of authorized shares of the Company's common stock from 400 million shares to 16 million shares and the ownership percentage of each stockholder will remain unchanged other than as a result of the rounding of fractional shares. The Reverse Stock Split will reduce the number of issued and outstanding shares of the Company's common stock from approximately 193 million to approximately 7.7 million. In addition, the Reverse Stock Split will apply to the Company's common stock issuable upon the exercise of the Company's outstanding warrants and stock options, with proportionate adjustments to be made to the exercise prices thereof and under the Company's equity incentive plans, as applicable. The Company's transfer agent, VStock Transfer LLC, will act as the exchange agent for the reverse stock split. Stockholders holding their shares in book-entry form or in "street name" through a bank, broker, or other nominee will not need to take any action in connection with the reverse stock split. About Citius Pharmaceuticals Inc. Headquartered in Cranford, N.J., Citius Pharmaceuticals, Inc. -- http://www.citiuspharma.com/-- is a late-stage pharmaceutical company dedicated to the development and commercialization of first-in-class critical care products with a focus on oncology, anti-infectives in adjunct cancer care, unique prescription products, and stem cell therapy. Boston, Massachusetts-based Wolf & Company, P.C., the Company's auditor since 2014, issued a "going concern" qualification in its report dated Dec. 29, 2023, citing that the Company has suffered recurring losses and negative cash flows from operations and has a significant accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company experienced negative cash flows from operations of $22,288,687 for the nine months ended June 30, 2024. The Company had working capital of approximately $23,850,000 at June 30, 2024. The Company estimates that its available cash resources will be sufficient to fund its operations through December 2024, which raises substantial doubt about the Company's ability to continue as a going concern within one year after the date that the accompanying condensed consolidated financial statements are issued, said Citius in its Quarterly Report on Form 10-Q for the period ended June 30, 2024. CL CRESSLER: Seeks to Hire PRS Pharmacy Services as Broker ---------------------------------------------------------- CL Cressler Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ PRS Pharmacy Services as broker. The Debtor will need the services of a broker to represent it with respect to the auction of business assets within the Chapter 11. All partners, associates and staff shall be compensated at their appropriate hourly rates, which are based upon experience and seniority. As disclosed in the court filings, PRS Pharmacy Services is a disinterested party as that term is defined in 11 U.S.C. Sec. 101(14), and represents or holds no interest adverse to the interest of the Estate. The firm can be reached through: Harry A. Lattanzio PRS Pharmacy Services P.O. Box 852 Latrobe, PA 15650 Telephone: (724) 539-7820 Facsimile: (724) 539-1388 About CL Cressler CL Cressler Inc. -- https://cppg-rx.com/ -- doing business as Care Capital Management, Inc. and The Medicine Shoppe, is a community healthcare company. CL Cressler sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 24-02143) on Aug. 29, 2024. In the petition filed by Daniel A. Brown, as owner, the Debtor reports total assets of $1,559,353 and total liabilities of $12,231,972. The Debtor is represented by Lawrence V. Young, Esq., at CGA Law Firm. CL CRESSLER: Taps PRS Pharmacy as Staffing Services Provider ------------------------------------------------------------ CL Cressler Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ PRS Pharmacy Services as staffing services provider. The firm will represent the Debtor with respect to the staffing needs within the Chapter 11 until such time that no additional staffing is needed. All partners, associates and staff shall be compensated at their appropriate hourly rates, which are based upon experience and seniority. As disclosed in the court filings, PRS Pharmacy Services is a disinterested party as that term is defined in 11 U.S.C. Sec. 101(14), and represents or holds no interest adverse to the interest of the Estate. The firm can be reached through: Harry A. Lattanzio PRS Pharmacy Services P.O. Box 852 Latrobe, PA 15650 Telephone: (724) 539-7820 Facsimile: (724) 539-1388 About CL Cressler CL Cressler Inc. -- https://cppg-rx.com/ -- doing business as Care Capital Management, Inc. and The Medicine Shoppe, is a community healthcare company. CL Cressler sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 24-02143) on Aug. 29, 2024. In the petition filed by Daniel A. Brown, as owner, the Debtor reports total assets of $1,559,353 and total liabilities of $12,231,972. The Debtor is represented by Lawrence V. Young, Esq., at CGA Law Firm. CLS ELECTRIC: Gets Court Nod to Use Cash Collateral --------------------------------------------------- CLS Electric Corporation received approval from the U.S. Bankruptcy Court for the District of Arizona to use cash collateral in accordance with its agreement with the U.S. Small Business Administration. Pursuant to the court order and the SBA agreement, CLS may continue using cash collateral on the same terms and conditions of the court's previous orders through Jan. 31, 2025. CLS' monthly budget includes a monthly payment of $2,900 to the SBA as adequate protection. About CLS Electric Corporation CLS Electric Corporation sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 24-03283) on April 29, 2024, with up to $500,000 in assets and up to $10 million in liabilities. Jorge Gonzalez, president and chief executive officer of CLS, signed the petition. Judge Eddward P. Ballinger Jr oversees the case. Ronald J. Ellett, Esq., at Ellett Law Offices, P.C., represents the Debtor as bankruptcy counsel. CMG MEDIA: Moody's Affirms 'Caa1' CFR & Alters Outlook to Stable ---------------------------------------------------------------- Moody's Ratings affirmed CMG Media Corporation's (d/b/a "Cox Media Group", "CMG" or the "company") Caa1 corporate family rating and downgraded the probability of default rating to D-PD from Caa1-PD following completion of distressed debt exchanges on all rated debt tranches in the capital structure. The exchanges in aggregate, which are considered a "default" under Moody's definition, were designed to extend debt maturities via negotiated refinancing agreements with existing lenders. In about three business days, the PDR will be upgraded to Caa1-PD from D-PD. The outlook was changed to stable from negative. In connection with this rating action, Moody's assigned B3 ratings to the new Senior Secured First-Lien Term Loan B2 due June 2029 (the "2029 Extended Term Loan") and pending Senior Secured Revolving Credit Facility due June 2027 (the "2027 RCF"), and a Caa3 rating to the new 8.875% Senior Secured Second-Lien Notes due June 2029 (the "2029 Second-Priority Notes"). Moody's also affirmed the B3 rating on the existing $325 million revolver due December 2024 (the "2024 RCF"). With respect to the remaining stub debt instruments that were not exchanged, Moody's affirmed the B3 rating on the $17.2 million outstanding Senior Secured First-Lien Term Loan B due December 2026 (the "2026 Term Loan") and downgraded the rating on the $31.3 million outstanding 8.875% Senior Unsecured Notes due December 2027 (the "2027 Senior Notes") to Ca from Caa3. As of November 15, CMG exchanged $2,056.1 million principal amount of the $2,073 million previously outstanding 2026 Term Loan (~99.2% participation) at par for an equal principal amount of the 2029 Extended Term Loan. Following the conversion, CMG made a $232.5 million prepayment on the 2029 Extended Term Loan resulting in an outstanding principal balance of $1,823.6 million. The company also converted $574.4 million principal amount of the $605.7 million previously outstanding 2027 Senior Notes (~94.8% participation) at par for an equal principal amount of 2029 Second-Priority Notes. The term loan exchange was completed on November 1 and the notes exchange is expected to settle on or about November 18. Additionally, CMG is in the process of finalizing the exchange of its 2024 RCF and Moody's expect a 30% commitment reduction to $227.5 million on the new 2027 RCF. Moody's will withdraw the B3 rating on the 2024 RCF upon its extinguishment and closing of the 2027 RCF. These exchanges follow CMG's discounted repurchases of $409.2 million principal amount of the 2027 Senior Notes in the open market, of which $361 million was purchased for $279 million in 2023 (77.3% discount to par on average) and $48.2 million purchased for $24.7 million in H1 2024 (51.2% discount to par on average). The assigned ratings are subject to review of final documentation and no material change in the size, terms and conditions of the transactions as advised to us. RATINGS RATIONALE Governance risk considerations were a key driver of the rating actions reflecting CMG's highly leveraged balance sheet and debt exchange transactions, which subordinated payment, prepayment and collateral rights of existing debtholders who are not participating in the conversions. While the exchanges did not result in creditors initially recognizing losses on debts relative to their original principal amounts, the transactions induced existing creditors to convert their original debt securities into new securities with a maturity date later than previously agreed to, while other creditors' claims shifted to a subordinate ranking in the debt capital structure behind a new second-lien debt class compared to their initial claims. Further, the transactions are deemed distressed exchanges because the company negotiated maturity extensions with existing lenders rather than pursue refinancings in the capital markets. Although CMG converted the debts at par, reduced roughly 9% of gross debt (which lowers interest expense) and managed to keep the same interest rate on the new debts as the old debts (for the 2029 Extended Term Loan, the rate will increase to SOFR + 420 basis points from SOFR + 360 basis points after December 17, 2026), the transactions in aggregate are credit neutral for the CFR given that pro forma leverage will not change materially as they were executed primarily to extend debt maturities. CMG's Caa1 CFR reflects the company's tolerance for high financial leverage and shareholder-friendly activities evidenced by the sizable dividends paid to the equity sponsor totaling over $850 million since 2019. The credit profile also considers CMG's small scale relative to peers and less diversified footprint (i.e., 13 local TV stations reaching around 11% of US households) following past divestitures. The company's revenue model benefits from a mix of recurring retransmission fees that historically helped to offset the inherent volatility of traditional advertising revenue. Over the next several years, however, Moody's expect retransmission revenue will continue to experience pressure as the rate of traditional subscriber losses outpaces annual fee increases, which constrains the rating. In even numbered years, revenue benefits from material political advertising spend, especially during presidential election years, which can mask pressure in retransmission revenue, but also boosts EBITDA. During election years, CMG generates good free cash flow (FCF), which declines during non-election years. The ratings are supported by CMG's solid market position driven by stations in attractive markets, a strong local news presence (80% of newscasts ranked #1 or #2 in ratings) and diversified network affiliations. However, the credit profile is negatively impacted by the ongoing structural decline in linear TV core advertising as non-political TV advertising budgets continue to erode in favor of digital media. Moody's expect CMG's linear TV core ad revenue will continue to be pressured, which could worsen during periods of weak CPM (cost per thousand impressions) pricing, depressed TV ratings, deteriorating macroeconomic conditions and/or displacement during election years. To offset these challenges, CMG has invested in digital media (around 10% of revenue), however this burdens cash flows in the short-term until these assets become profitable and contribute meaningfully to EBITDA. The revision of the outlook to stable reflects CMG's improved liquidity profile following the expected revolver refinancing and maturity extension and new covenants in the amended credit agreement requiring excess cash to pay down the 2029 Extended Term Loan, which support Moody's view that the company's credit metrics are appropriately positioned within the Caa1 rating. Pro forma for the exchange transactions, Moody's estimate CMG's gross leverage at 30 September 2024 was around 6.5x (or 6.7x inclusive of the $75 million seller notes at CMG Holdings, Inc., an indirect parent). While political advertising revenue in 2024 will boost EBITDA, Moody's expect leverage will remain in the 6x-6.5x area over the rating horizon due to expected debt reduction despite stalled growth in core advertising and retransmission revenue, and absence of political revenue in 2025 (leverage metrics are Moody's adjusted on a two-year average EBITDA basis). Given the continuing structural and secular pressures in the TV broadcast industry, which heighten operating challenges resulting in low growth in CMG's core revenue, lower-than-expected EBITDA could lead to downside risk to Moody's leverage forecast. The outlook also embeds Moody's expectation that the company will be successful in renewing expiring multichannel video programming distributor (MVPD) contracts over the next 12-24 months. Moody's expect CMG will maintain good liquidity over the coming 12-18 months. At LTM June 30, 2024, FCF (defined by Moody's as cash flow from operations less capex less dividends) totaled -$16 million (Moody's adjusted) and cash and cash equivalents were around $286 million ($359 million estimated at September 30, 2024). Moody's forecast that CMG will generate FCF of around $100 to $130 million in 2024 (presidential election year) declining to around $50 to $75 million in 2025, assuming no dividends are paid to the sponsor. Under terms of the 2029 Extended Term Loan, to the extent CMG generates positive FCF in any fiscal year, beginning in fiscal 2025, 75% of excess cash flow will be used to reduce the 2029 Extended Term Loan, applied in the following fiscal first quarter. In addition, if cash balances at the end of fiscal 2024 are over $125 million, the excess will be used to make a one-time payment on the 2029 Extended Term Loan. Moody's expect the $325 million 2024 RCF will be converted to a downsized $227.5 million committed revolver and extended to June 2027. The new revolver is expected to contain a springing first-lien net leverage covenant set at 6.2x when at least 35% of the facility is utilized. The covenant will step down to 5.5x on June 30, 2026 and 5x on December 31, 2026. Moody's anticipate the 2027 RCF will remain undrawn over the next 12-18 months. However, to the extent CMG draws under the RCF, cash balances in excess of $50 million, measured on the last day of the month, will be used to pay down the outstanding revolver balance five business days later, pending the final RCF business terms. STRUCTURAL CONSIDERATIONS To induce holders of the 2027 Senior Notes to exchange their original debt securities into new securities with an extended maturity date, CMG stripped covenants from the 2027 Senior Notes and collateralized the 2029 Second-Priority Notes with a second-lien on material owned property and assets, effectively subordinating the 2027 Senior Noteholders who did not convert. Holders of the 2026 Term Loan who did not exchange their debt securities into the 2029 Extended Term Loan will retain their first-lien rights and remain pari passu with holders of the 2029 Extended Term Loan and 2027 RCF facilities with respect to existing collateral. However, to the extent any new assets are acquired by the company, the 2026 Term Loan will not be secured to the new collateral and will rank junior to the 2029 Extended Term Loan, 2027 RCF and 2029 Second-Priority Notes, thus subordinating the collateral and prepayment rights of the 2026 Term Loan holders with respect to asset dispositions. The rating on the remaining 2027 Senior Notes is one notch lower than the implied outcome under Moody's Loss Given Default (LGD) framework to reflect their structural subordination to the 2029 Second-Priority Notes, the uncertain mix of first-lien, second-lien and unsecured debt in the capital structure as well as heightened risk of another debt restructuring in the future. FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the structural and secular pressures in CMG's business and sizable debt load, a rating upgrade is unlikely in the near-term. However, an upgrade could occur if the company is able to mitigate the secular pressures in core advertising and retransmission revenue and demonstrate progress expanding its viewership share in the TV broadcast industry and improving the geographic diversity of its local television broadcast stations, while also reducing debt and financial leverage (Moody's adjusted) leading to strong and relatively stable FCF on a two-year average basis. CMG would also need to: (i) exhibit solid organic revenue growth and stable-to-improving EBITDA margins on a two-year average basis; (ii) adhere to conservative financial policies; and (iii) maintain at least good liquidity to be considered for an upgrade. Ratings could be downgraded if core advertising and retransmission revenue continue to exhibit sustained pressures or Moody's expect leverage will be sustained above 6.5x on a two-year average EBITDA basis (Moody's adjusted) as a result of weak operating performance or more aggressive financial policies. A downgrade could also arise if two-year average FCF is negative on a sustained basis (Moody's adjusted) or CMG experienced deterioration in liquidity or covenant compliance weakness. Ratings could also be downgraded if Moody's expect CMG will pursue another balance sheet restructuring or distressed debt exchange. Headquartered in Atlanta, Georgia, CMG Media Corporation is principally a television broadcasting business with complementary radio assets that adds some diversity to the company's portfolio of high quality television stations in large, attractive media markets. CMG owns or operates 13 local network affiliated television stations across nine markets and 50 radio stations in ten markets. The company is an indirect wholly-owned subsidiary of CMG Holdings, Inc., which is majority owned by affiliates of Apollo Global Management, Inc. Moody's estimate revenue totaled approximately $1.1 billion at LTM September 30, 2024. The principal methodology used in these ratings was Media published in June 2021. COASTAL GROWERS: Seeks Chapter 11 Reorganization ------------------------------------------------ Andrew Garner of NewsBreak reports that on November 27, 2024, Coastal Growers LLC announced its filing for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of Alabama, Mobile Division. The filing aims to maximize the business's value, according to the report. As part of the Chapter 11 process, the company intends to sell the business as a going concern to maintain operations, safeguard jobs, and maximize its overall value, the report relates. Coastal Growers, established to help peanut farmers achieve higher returns by sharing in farming and shelling profits, operates a shelling facility in Atmore. Since its launch in 2021, the facility has served as a key center for peanut shelling, storage, and shipping, contributing to regional agricultural growth and economic development, the report relays. "Our mission has always been to deliver value to our grower-owners," said Holly Johnson, Chief Financial Officer of Coastal Growers. "This reorganization is an essential step to reinforce our financial health and ensure the plant's continued success." Coastal Growers reaffirmed its dedication to supporting its growers and remaining a vital part of the Atmore community, according to NewsBreak. "This was not an easy decision, but it is the best path forward for Coastal Growers," Johnson stated. "We are optimistic about the future and remain committed to helping farmers and ensuring success for future generations." About Coastal Growers LLC Coastal Growers LLC is a company that helps peanut farmers achieve higher returns by sharing in farming and shelling profits, and operates a shelling facility in Atmore. Since its launch in 2021, the facility has served as a key center for peanut shelling, storage, and shipping, contributing to regional agricultural growth and economic development, the report relays. Coastal Growers LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ala. Case No. 24-13034) on November 27, 2024. In the petition filed by Holly Johnson, as chief financial officer, the Debtor reports estimated assets between $10 million and $50 million and estimated liabilities between $100 million and $500 million. The case is before Honorable Bankruptcy Judge Henry A. Callaway. Edward J. Peterson, Esq. of JOHNSON, POPE, BOKOR, RUPPEL & BURNS, LLP represents the case. CORREIA CONTRACTING: Sec. 341(a) Meeting of Creditors on Dec. 19 ---------------------------------------------------------------- On November 15, 2024, Correia Contracting LLC filed Chapter 11 protection in the District of Massachusetts. 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 Sec. 341(a) to be held on December 19, 2024 at 3:00 PM. About Correia Contracting LLC Correia Contracting LLC is part of the residential building construction industry. Correia Contracting LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 24-12299) on November 15, 2024. In the petition filed by Paul Correia, as authorized representative, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge Janet E. Bostwick handles the case. The Debtor is represented by: David G. Baker, Esq. DAVID G. BAKER LAW OFFICE 255 Massachusetts Avenue, Ste. 614 Boston, MA 02115 Tel: (617) 340-3680 E-mail: david@bostonbankruptcy.org CUSTOMIZED CLEANING: Hires Johnson & Company as Accountants ----------------------------------------------------------- Customized Cleaning Services, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Michigan to employ Johnson & Company, P.C., as its accountants and financial advisors. The firm will render these services: (a) assist the Debtor in preparing its year-end reports for the tax year ending July 31, 2024; (b) assist the Debtor in preparing the reports required by the United States Trustee, including its balance sheets and income and expense statements; (c) assist in prepare budgets, including updated 13-week cash flows, in support of the Debtor's use of cash collateral and the reports required by the United States Trustee's guidelines; and (d) perform all necessary accounting and financial advisory services and provide all other necessary accounting and financial advice to the Debtor in connection with this Chapter 11, Subchapter V case. The present hourly rate for the accountant and financial advisor is between $85 per hour for bookkeeping services to $275 per hour for accounting services. Bradley A. Johnson's hourly rate is $275. As disclosed in the court filings, Johnson & Company is a "disinterested person" as that phrase is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Bradley A. Johnson, CPA Johnson & Company, P.C. 305 N Michigan Ave Hastings, MI 49058 Telephone: (269) 945-9163 Facsimile: (269) 945-4886 Email: brad@cpajohnson.com About Customized Cleaning Services Customized Cleaning Services, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Mich. Case No. 24-02511) on September 25, 2024, with $500,001 to $1 million in both assets and liabilities. Strobl, PLLC represents the Debtor as legal counsel. CYT MAINTENANCE: Hires Hartman Valeriano Magovern as Counsel ------------------------------------------------------------ CYT Maintenance, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to hire Hartman, Valeriano, Magovern and Lutz, P.C., as counsel. The firm will render these services: a. give the Debtor legal advice with respect to its duties and powers in the instant Chapter 11 proceeding; b. prepare on behalf of the Debtor necessary applications, motions, answers, reports and other legal documents required to be filed in the instant proceeding; c. provide the Debtor with legal advice and assistance in connection with the formulation of a Plan of Reorganization, negotiations with creditors over its terms, and prosecution of the Plan before the Bankruptcy Court for confirmation; d. provide the Debtor with legal advice and assistance in connection with the use of cash collateral, post-petition financing, assumption or rejection of executory contracts, labor negotiations, and other matters relating to its ongoing operations as a debtor in possession under Chapter 11; and e. perform such other legal services as may be required and be in the best interests of the Debtor and its estate. The firm will be paid at its regular hourly rates for legal services. George Lutz, Esq., a shareholder of Hartman, assured the court that the firm does not hold or represent any interest adverse to the Debtor or its estate. The firm can be reached through: George M. Lutz, Esq. Hartman, Valeriano, Magovern & Lutz, P.C. 1025 Berkshire Boulevard, Suite 700 P.O. Box 5828 Wyomissing, PA 19610 Phone: (610) 779-0772 Email: glutz@hvmllaw.com About CYT Maintenance CYT Maintenance, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No. 24-13743) on October 18, 2024, with $0 to $50,000 in assets and $100,001 to $500,000 in liabilities. Judge Patricia M. Mayer presides over the case. David W. Tidd, Esq. represents the Debtor as legal counsel. DARK RHIINO: Gets Interim OK to Use Cash Collateral --------------------------------------------------- Dark Rhiino Security, Inc. received interim approval from the U.S. Bankruptcy Court for the Southern District of Ohio, Eastern Division, to use its secured creditors' cash collateral. The company requires the use of cash collateral to finance the operations of its business and pay administrative fees during its Chapter 11 case. The U.S. Small Business Administration, an undisclosed secured party that filed a UCC-1 financing statement through CT Corporation System, and Anna Day assert an interest in the company's cash collateral. As adequate protection, Dark Rhiino Security will grant the secured creditors replacement liens to the same extent and with the same validity and priority as their pre-bankruptcy liens. The final hearing is set for Dec. 19. Objections are due by Dec. 13. About Dark Rhiino Security Dark Rhiino Security, Inc. filed Chapter 11 petition (Bankr. S.D. Ohio Case No. 24-54658) on November 15, 2024, with $100,001 to $500,000 in assets and $1 million to $10 million in liabilities. Robert T. Smith, Dark Rhiino's chief technology officer, signed the petition. Judge John E. Hoffman, Jr. oversees the case. John W. Kennedy, Esq., at Strip Hoppers Leithart McGrath & Terlecky Co., LPA, represents the Debtor as legal counsel. DELTA HOLDCO: Fitch Affirms & Withdraws 'B-' IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed the ratings of Delta Holdco, LLC (the filer) and Delta Topco, Inc. (the borrower, collectively referred to as Infoblox) at 'B-'. Fitch has also affirmed Delta Topco's first lien secured debt at 'B' with a Recovery Rating of 'RR3' and second lien secured debt at 'CCC'/'RR6'. The Rating Outlook is Stable. Fitch has subsequently withdrawn the ratings due to commercial reasons. Key Rating Drivers Improving FCF: Fitch anticipates an improvement in FCF generation for Infoblox, driven by a successful transition from perpetual licenses to a subscription-based model. This shift has resulted in an increase in recurring revenue as a percent of the total, from mid-80s in fiscal 2020 to low 90s. Additionally, the move to shorter-duration contracts has led to more frequent renewals which, with its strong retention rates, has enabled the company to raise prices. The above have collectively improved profitability levels and enhanced predictability, with EBITDA margins expected to improve from low 30s in fiscal 2024 to high 30s over the rating horizon. High but Declining Leverage: Despite the company taking on incremental debt in May 2024, Fitch expects the company's EBITDA leverage to fall to about 7.0x over the rating horizon through improvements in EBITDA levels. Fitch expects cash-based leverage metrics, such as cash flow from operations (CFO)-capex)/debt to improve from low-to mid-single digits, providing capacity for debt reduction. Fitch expects limited deleveraging as Infoblox's private equity ownership would likely prioritize ROE maximization. These could include acquisitions to broaden its market position and increased dividend payments. Market Leadership: Fitch expects Infoblox Inc.'s market leadership in domain name services (DNS), dynamic host configuration protocol (DHCP) and internet protocol address management (IPAM) (collectively referred to as DDI), to support improved operating performance through the rating horizon. Infoblox has an about 50% share in worldwide DDI software and appliance markets (excluding DNS security) and a higher share for large enterprises, as well as a large installed base that drives product refreshes, expansion opportunities and recurring revenue. Competition includes small niche providers without comprehensive solutions or public cloud service providers focused on larger addressable markets. Reduced Revenue Cyclicality: Fitch expects a higher mix of subscription revenue will reduce cyclicality associated with product refresh cycles. Infoblox's product cycles typically last four years and it should benefit from a product refresh in the next two years, although expansion and new logos, as well as SaaS security solutions adoption, will drive revenue growth. Infoblox's strategic pivot, from hardware and perpetual software licenses to a SaaS provider, should partially offset product refresh cycles with recurring revenue, which is now well over 90% Threat of Larger Entrants: Infoblox faces potential risks that larger players enter the expanding and fragmented DDI market through acquisition and affect industry pricing and profitability by bundling DNS services and leveraging a sales footprint, according to Fitch. The company's competitors include Microsoft's in-house open-source software-based solution provided as an attachment to Windows server and AWS' Route 53. Fitch believes the small size of the DDI market and Infoblox's installed base leadership reduces the threat of new entrants' risk. Derivation Summary Fitch believes Infoblox remains positioned in line with similarly rated peers, due to its market leadership positions and solid cash flow margins. Renewal rates are comparable and consistent for SaaS companies. Infoblox's market share is solid at over 50%, even higher with large enterprise customers, despite the relatively small size of its markets. Fitch expects positive and consistent annual FCF with margins improving to high-single digit range over the rating horizon. This will be driven by increasing recurring revenue mix, solid net bookings amid the company's pivot to shorter duration contracts. Fitch expects cash flow-based leverage metrics to improve to the mid-single digit range over the rating horizon even as operating EBITDA-based leverage metrics are more in-line with the 'CCC' rating category. Key Assumptions - Revenue growth expected in double digits from fiscal years 2024 to 2026 led by growth in subscription revenues through a combination of price increases on renewals, cross sells and new logo sales. Growth is further supported by increasing hardware sales which is expected to benefit from product cycle refresh; - Revenue growth slows down in the low to mid-single-digit range in fiscal 2027 as the company comes off from the peak of its tech refresh cycle; - EBITDA margin declines to low 30s in fiscal years 2025 and 2026 from mid-30s currently due to lower margin earned on hardware sales and subsequently improving to high 30s as tech refresh cycle is completed and the company benefits from operating leverage; - Capex as a percent of revenues assumed in the 2% to 3% range; - Interest rate base rate assumptions for 2024, 2025, 2026 and 2027 are 5.3%, 5%, 4.3% and 3.7%; - Fitch assumes uses of excess cash flows combined with incremental debt proceeds to be used towards acquisitions and dividend distributions. Recovery Analysis Consistent with the vast majority of software providers, Fitch believes Infoblox would be reorganized as a going concern (GC) rather than liquidated were the company to default. To calculate the recovery waterfall, Fitch assumes a GC EBITDA of $195 million, incorporating Fitch's belief that distress would most likely be the result of share losses from the deterioration of product competitiveness. Fitch assumes a reorganization multiple of 7.0x, which is in line with similar leveraged software peers at Fitch. In the 2023 edition of Fitch's Bankruptcy Enterprise Values and Creditor Recoveries case studies, Fitch noted 12 past reorganizations in the Technology sector with recovery multiples ranging from 2.6x to 10.8x. Of these companies, five were in the Software sector: Allen Systems Group, Inc., Aspect Software Parent, Inc., Avaya, Inc., Sungard Availability Services Capital, Inc. and Riverbed Software. Their recovery multiples were 8.4x, 5.5x, 7.5x, 4.6x and 8.3x, respectively. The 7.0x multiple is supported by Infoblox's strong margins, highly recurring revenues, strong competitive position and improving FCF profile. After taking administrative claims into account, Fitch estimates an 'RR3' Recovery Rating for the first-lien credit facilities reflecting Fitch's belief that lenders should expect to recover 51%-70% in a restructuring scenario. The recovery model also implies a 'RR6' Recovery Rating for the second-lien term loan. This reflects Fitch's belief that lenders can expect to recover 0%-10% of their value in a restructuring scenario. RATING SENSITIVITIES Rating sensitivities do not apply as the ratings have been withdrawn. Liquidity and Debt Structure Adequate liquidity: Fitch expects Infoblox's liquidity will remain adequate and will be supported by: i) $107.7 million of cash and cash equivalents as of April 30, 2024; and ii) $200 million of undrawn amounts under the first-lien senior secured RCF following the transaction in May 2024. Fitch's forecast for positive annual FCF improving to high-single digit range also supports liquidity. Issuer Profile Infoblox is a market leading provider of DDI automation solutions, which includes DNS, DHCP and IPAM for more than 13,000 enterprise, government and service provider customers. It provides solutions via purpose-built physical and virtual appliances in a distributed grid architecture. 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 ----------- ------ -------- ----- Delta Topco, Inc. LT IDR B- Affirmed B- LT IDR WD Withdrawn senior secured LT B Affirmed RR3 B senior secured LT WD Withdrawn Senior Secured 2nd Lien LT CCC Affirmed RR6 CCC Senior Secured 2nd Lien LT WD Withdrawn Delta Holdco, LLC LT IDR B- Affirmed B- LT IDR WD Withdrawn DELUXE CORP: Fitch Assigns 'B' LongTerm IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating (IDR) of 'B' to Deluxe Corporation (Deluxe). The Rating Outlook is Stable. Additionally, Fitch has assigned a 'BB' rating with a Recovery Rating of 'RR1' to the company's new senior secured notes. The ratings and Outlook reflect Deluxe's growth in the payment and data solutions segment, strong merchant partnerships, improving EBITDA margins, and positive free cash flow. The ratings are constrained by secular industry headwinds in the print segment, which limit revenue growth over the forecast period and moderately high leverage. Key Rating Drivers Moderate Leverage: Deluxe plans to refinance its existing senior secured credit facilities with new secured debt consisting of revolving credit facility of $400 million, Term Loan A of $500 million and new $400 million of senior secured notes. The transaction will extend the debt maturities to 2029. Fitch anticipates that EBITDA leverage will remain slightly below 4.0x range post-transaction, given the substantial ongoing restructuring costs primarily due to Project NorthStar, as well as secular declines in the print segment. Fitch expects restructuring charges to decrease from FY 2025 following the completion of Project NorthStar and EBITDA leverage to decline to about the mid-3.0x range by FY 2026. Fitch expects Term Loan A amortization to be paid out of FCF. Management has expressed commitment to deleveraging and maintaining a long-term net leverage target of 3.0x. Secular Industry Headwinds: Fitch believes the print industry will continue experiencing volume declines as digital devices reduce demand for printed products. Deluxe's print segment represented 58% of its FY 2023 revenue. Fitch expects the company's print segment will face ongoing headwinds, with revenue declining in the low- to mid- single-digits during the forecast period. However, EBITDA margins have still improved due to Deluxe's transformation into a comprehensive payment solutions provider, cost reduction initiatives through Project NorthStar, and strategic business dispositions. Modest and Improving FCF: Despite facing secular decline in the print segment, Fitch expects Deluxe will continue to generate positive and improving free cash flow as defined by Fitch, thereby enhancing its near-term credit strength. The stable cash flow generated from the print segment allows Deluxe to re-invest in its payments and data business. Additionally, a key goal of Project NorthStar is improvement in operation efficiency and FCF. Fitch expects the company's FCF margins to show a gradual expansion over the forecast period. Diversifying Revenue: Fitch believes that Deluxe's transformation into a payment solutions provider could continue to strengthen its operating profile over time. The company is investing in unique service capabilities and technological advancements reinforcing partner relationships, fueling the growth of its payment and data segment, with revenues increasing from approximately 38% in FY 2021 to about 42% LTM FY 2024. Fitch expects payment and data to generate over 50% of revenue by FY 2027. The company is also transitioning to a recurring revenue model for the B2B Payments segment. Deluxe's payment solutions support over 4,000 financial institutions, including 180 of the top 200, as well as small and medium-sized businesses (SMBs) across various services. Competitive Landscape: Deluxe's end markets in the payment and data segment are highly competitive and fragmented, which could affect the IDR over time. Deluxe faces meaningful tech disruption and pricing competition from legacy fintech companies, large established technology providers, and new software-centric fintechs. Fitch believes there are very limited barriers to entry, and switching costs are moderate and differ based on the company's offerings. Derivation Summary Fitch assesses Deluxe's ratings relative to various printing, fintech and services issuers. Fitch rates Quad/Graphics (B+/Positive), the second-largest commercial printing company in the U.S., which has also diversified its revenue through marketing solutions. Compared to Deluxe, Quad operates with lower leverage in the low 2.0x range and higher interest coverage, although Deluxe has higher EBITDA margins. Fitch also rates R.R. Donnelley (B/Stable), which provides printing and supply chain solutions. RRD holds a strong competitive position due to its scale and size. However, RRD has lower EBITDA margins as compared to Deluxe and EBITDA leverage in low 4.0x range. In the payment segment, Fitch rates MoneyGram International Inc. (B/Stable), which provides cross-border peer to peer payments and money transfers. MoneyGram has lower EBITDA margins and higher EBITDA leverage as compared to Deluxe Corporation. Key Assumptions - Revenue decline of low single digit in FY 2024, improving growth from FY 2025 in the low single digit range; - Payment and data segment growth at mid-single digits from FY 2025, offset by the print business' YoY decline at 4%; - EBITDA margin improving marginally over the forecast period; - Restructuring cost of $~50 million in FY 2024, declining to $25 million in FY 2025 and $10 million thereafter; - Dividends annually in the range of $55 million-$60 million; - Capex remains steady at 4.5%-4.7% range of revenue across forecast. Recovery Analysis For entities rated 'B+' and below, where default is closer and recovery prospects are more meaningful to investors, Fitch undertakes a tailored, or bespoke, analysis of recovery upon default for each issuance. The resulting debt instrument rating includes a Recovery Rating (graded from 'RR1' to 'RR6') and is notched from the IDR accordingly. In this analysis, there are three steps: (i) estimating the distressed enterprise value (EV); (ii) estimating creditor claims; and (iii) distribution of value. Key Recovery Rating Assumptions: Fitch assumes that Deluxe would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach: Deluxe's GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. The GC EBITDA is assumed at $280 million and reflects a secular decline in commercial printing and highly competitive and fragmented nature of the payment industry. This has resulted in 'BB' rating with a Recovery Rating of 'RR1'/97% to the company's new senior secured notes. An EV multiple of 5x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered that historical bankruptcy case study exit multiples in the Technology, Media and Telecom sector have ranged from 4.0x-7.0x, with a median of 5.9x. The recovery analysis assumes that the company's revolving credit facility is fully drawn to the extent of borrowing base to provide liquidity in a distress situation. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Total revenue growth sustained in single digits over a multiyear period; - EBITDA leverage sustained below 3.5x. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Failure to execute on payments and data growth leading to further revenue declines; - Sustained negative FCF; - EBITDA leverage sustained above 4.5x; - EBITDA coverage sustained below 3.0x. Liquidity and Debt Structure Debt & Liquidity: Deluxe's liquidity is supported by cash balance of $23 million in cash as of June 30-24 and availability on the refinanced revolving credit facility of $400 million. Deluxe is in the process of refinancing its credit facilities with new secured debt consisting of revolving credit facility of $400 million, Term Loan A of $500 million and new $400 million of secured notes maturing 2029. The company also has existing unsecured notes of $475 million. Fitch expects the company to maintain roughly $300 million of undrawn capacity under the new $400 million facility, and to fund Term Loan A amortization payments with FCF. Issuer Profile Deluxe Corporation specializes in print and payment solutions. Its payment and data solutions encompass merchant services, B2B payments, and data solutions, handling over $2 trillion in annual payment volume. The legacy print business includes checks and promotional products. Date of Relevant Committee 01 November 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 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 ----------- ------ -------- Deluxe Corporation LT IDR B New Rating senior secured LT BB New Rating RR1 DELUXE CORP: Moody's Rates New $400MM Secured Notes ‘Ba3’ ------------------------------------------------------------- Moody's Ratings affirmed Deluxe Corporation’s credit ratings, including its B1 corporate family rating, the B1-PD probability of default rating and the B3 senior unsecured rating. Moody's also assigned a Ba3 rating to Deluxe's proposed $400 million senior secured notes currently being marketed. Deluxe's speculative grade liquidity (SGL) rating was downgraded to SGL-3 from SGL-2. The outlook is stable. The rating actions follow Deluxe's announcement this morning [1] that it is seeking to refinance its existing senior secured credit facility (unrated) maturing in June 2026 with new secured debt, consisting of a 5-year $400 million of senior secured notes and a 5-year $900 million senior secured credit facility (unrated) comprised of a $400 million revolver and a $500 million term loan. The proposed refinancing is credit positive because it extends Deluxe's 2026 debt maturities by three years on a leverage-neutral basis and without a material increase in interest expense. The ratings affirmation reflects Moody's expectation for steady progress in delevering and improved free cash flows primarily due to margin improvement following the realization of benefits from restructuring activities. Despite secular volume decline in Print, its largest segment, Moody's expect Deluxe to profitably grow its Merchant Services, B2B Services and Data Solutions. This growth should offset the revenue decline in its Print business, resulting in break-even to low-single digit percent revenue growth. The proposed senior secured notes are rated Ba3, one notch above the CFR, reflecting their senior position in the capital structure ahead of the B3 rated unsecured notes that would provide loss absorption in a distress scenario. RATINGS RATIONALE Deluxe's B1 CFR continues to reflect the company's large exposure to the structurally declining check business, secular pressures facing promotional print products from digital substitution and execution risk associated with its ongoing transformation to a payment technology company and cross-selling activities. There is uncertainty over the future pace of decline in its Print segment which represents 58% of the company's YTD September 2024 revenue (33% of the 58% share is generated from checks and check-related products). However, Moody's expect the company's leverage to improve over the next 12-18 months as the company delivers on its 3-year North Star initiative that targets to grow annual free cash flow by $100 million and increase comparable (net of business exits) EBITDA by an additional $80 million by the end of 2026. Without the benefit of restructuring add-backs of $57 million to EBITDA, the company's Moody's adjusted leverage was 4.4x as of LTM 9/2024, down from 5.2x at the end of 2023. Moody's expect leverage to approach 3.6x (Moody's adjusted, without restructuring add-backs to EBITDA) by the end of 2025 and under 3x by the end of 2026 through a combination of debt repayment (specifically mandatory term loan amortization) and EBITDA growth. The credit profile garners further support from the company's large scale, strong relationships with its clients and multiyear contracts with most of its financial institution clients, and strong market position in the check printing businesses. Its Print business, despite declining check volumes, has been managed prudently with cost cuts. Deluxe's SGL-3 rating reflects Moody's expectation that the company will maintain adequate liquidity over the next 12 to 18 months. As of September 30, 2024, Deluxe had $41 million in cash and roughly $217 million available on its $500 million revolver (unrated). Moody's expect that the revolver balance will be reduced over time from the application of the company's free cash flow. In addition to the revolver, Deluxe has access to an accounts receivable financing facility with a capacity of up to $80 million, subject to a borrowing base. The AR facility, which had $66 million drawn at the end of Q3 2024, has a March 2027 termination date, and Moody's expect the borrowing capacity to remain at around $80 million over the next 12-18 months. Deluxe reported $772 million in interest rate swap notional amounts at the end of Q3 2024, with expirations between September 2025 – June 2026, which should protect from fluctuations in cash interest expense. Moody's expect Deluxe to generate free cash flow of around $70 million next year. This is an improvement over $42 million in 2023, but still limited given the company's $38 million term loan amortization pro forma for refinancing and $1.6 billion of balance sheet debt as of Q3 2024. Moody's defines free cash flow as cash flow from operations less capex and dividends. The proposed senior secured credit facility, comprised of $400 million revolver and $500 million term loan (both unrated), is expected to be governed by three maintenance covenants: a maximum total net leverage of 4.25x, a maximum senior secured net leverage of 3.5x and a minimum interest coverage of 3x. The total net leverage and the senior secured net leverage covenants will step down to 4x and 3.25x, respectively, starting with the quarter ending June 30, 2026. Moody's expect that Deluxe will have at least a 15% headroom against the requirement over the next 12-18 months. The company's CIS-4 ESG score indicates that the rating is lower than it would have been if ESG risk exposures did not exist. Ongoing demographic and societal shifts have led to secular volume declines in Deluxe's checks and promotional print business. The company is also exposed to social risks through its collection of sensitive consumer data. The company's financial policy targets moderate leverage but is also tolerant of operating above its leverage target level for extended period. The instrument ratings reflect the probability of default of the company, as reflected in the B1-PD probability of default rating, an average expected family recovery rate of 50% at default given the mix of secured and unsecured debt and the notes' ranking in the capital structure. The existing $500 million unsecured notes are ranked below the proposed $400 million senior secured notes, the $900 million senior secured credit facilities due 2029 (unrated) and the $80 million AR securitization facility due March 2027 (unrated). As a result, the unsecured notes are rated B3, two notches below the CFR reflecting their most junior position in the capital structure and the resultant loss absorption in a distress scenario. The stable ratings outlook reflects Moody's expectation for continued focus on delevering, growing free cash flow and EBITDA. Moody's expect that growth in Payments and Data products and services will offset the revenue and decline in Print over the next 12-18 months resulting in break-even to low single digit percent rate in organic revenue growth. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company improves its liquidity and sustains steady organic revenue growth in the mid-single digit range, Debt/EBITDA below 4x (without restructuring add-backs to EBITDA) and FCF/Debt above 10%. Both metrics are Moody's adjusted. A downgrade could result if revenue continues to decline or more aggressive financial policies are implemented before long-term financial targets are achieved. The ratings could be downgraded if FCF/Debt is maintained in the mid-single digit percent range or below or if Moody's expect Debt/EBITDA (without restructuring add-backs to EBITDA) to be sustained above 5x. All metrics incorporate Moody's standard adjustments. The principal methodology used in these ratings was Media published in June 2021. Headquartered in Minneapolis, MN, Deluxe Corporation is a provider of payment solutions mainly to businesses and financial institutions. The services include checks, treasury management, forms, marketing solutions and data-driven marketing. The company generated LTM September 2024 revenue of approximately $2.1 billion DESTINATIONS TO RECOVERY: Seeks Court OK to Use Cash Collateral --------------------------------------------------------------- Destinations to Recovery, LLC asked the U.S. Bankruptcy Court for the Central District of California for authority to use cash collateral on an interim basis to pay its expenses. The company also requested authorization to send a $5,000 retainer to Sub Chapter V trustee, Mark Shaft, to ensure that he can continue to perform his duties in its Chapter 11 case. The retainer is to be paid from the cash collateral. BMO Bank and Kapitus, LLC assert an interest in the company's cash collateral. As adequate protection for the use of cash collateral, the company offers a replacement lien, but only with the same validity, priority and extent that the purported creditors have a valid claim or security interest in its accounts receivable or other assets. A court hearing is set for Dec. 18. About Destinations to Recovery Destinations to Recovery, LLC operates an IPO and PHO rehabilitation center located at 20951 Burbank Blvd, Woodland Hills, California. Destinations to Recovery sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 1:24-bk-11877-MB) on November 8, 2024, with up to $1 million in both assets and liabilities. Daniel Samson, president and CEO of Destinations to Recovery, signed the petition. Eric Bensamochan, Esq., at The Bensamochan Law Firm, Inc., represents the Debtor as legal counsel. DIOCESE OF ROCKVILLE: Updates Restructuring Plan Disclosures ------------------------------------------------------------ The Roman Catholic Diocese of Rockville Centre, New York and the Additional Debtors submitted a Disclosure Statement for the Modified Chapter 11 Plan of Reorganization dated November 1, 2024. The Plan, among other things, resolves, addresses and discharges all claims against the Debtor and all Abuse Claims against the Additional Debtors. These Abuse Claims will be channeled to the Trust established on the Effective Date under the Plan. Pursuant to the Plan, the sole recourse for holders of such Abuse Claims, whenever asserted, lies against the Trust, subject to a limited exception. The Plan provides that the Trust will be established with a minimum cash contribution of $179.8 million on the Effective Date, augmented by an additional $23 million potentially payable on or within weeks of the Effective Date. Over the following four years, there are additional cash contributions to the Trust aggregating $35 million. It is anticipated that over $320 million will be contributed to the Trust. Insurance Rights The Debtor will be seeking approval of certain insurance settlements. If approved, rights under the court-approved settlement and sale of certain insurance policies, namely, the right to the sale proceeds of $85.525 million in cash, will be transferred to the Trust. Abuse Claimants entitled to recovery from the Trust will be entitled to share in the sale proceeds through the Trust regardless of the time period of the claimed Abuse. The Insurance Rights attributable to the coverage years of 1956 76, provided by a predecessor to Arrowood, a non-settling insurer will be transferred to the Trust, which will be responsible to file and pursue claims against Arrowood and to pursue any other party to the extent necessary to obtain recourse against Arrowood, Arrowood's statutory liquidator in Delaware and/or the fund. There are approximately 370 Abuse Claims alleging misconduct within this coverage period. Process for Review, Determination and Distributions to Abuse Claimants The Trust Allocation Protocol is the document that states the process for the evaluation and determination of Abuse Claims in Class 4. The Abuse Claims Reviewer, William Bettinelli, will consider all facts and evidence presented by the Abuse Claimant in the Abuse Claimant's filed proof of claim. Abuse Claimants may also submit a supplement to the Abuse Claims Reviewer. The process for making supplemental submissions will be included in a separate notice. The Abuse Claims Reviewer will first conduct an initial evaluation of each Abuse Claim. In such initial evaluation, he will determine (a) whether the Abuse Claimant has proven by credible evidence that the Abuse was perpetrated by a perpetrator of the Debtor and, (b) for claims filed after the bar date, whether a valid legal excuse (as defined in the definition of Future Abuse Claim in the Plan) exists. Hypothetical Abuse Claimant A: Abuse Claimant A was abused in 1978, and timely filed a proof of claim in the Bankruptcy Case. The Abuse Claims Reviewer will be supplied with Abuse Claimant A's proof of claim. If the Abuse Claimant chooses to do so, Abuse Claimant A may submit supplemental information regarding the claim to the Abuse Claims Reviewer. The Abuse Claims Reviewer then conducts an initial evaluation of the claim and any supplemental information provided by Abuse Claimant A and determines that Abuse Claimant A has established that he/she has a credible claim against the Diocese that was timely filed. The Abuse Claim Reviewer then reviews the claim and considers the factors and allocates 50 points to Abuse Claimant A. After the Abuse Claims Reviewer has completed his review of the Abuse Claims (other than Future Abuse Claims), then the Trustee will calculate the value of an individual "point" after all Abuse Claims, except Future Abuse Claims, have been reviewed. To do so, the Trustee will determine how much of the money then in the Trust is available to be distributed (leaving enough money in the Trust to cover expenses of the Trust) and divides that by the total number of points. The Trustee determines that the amount of funds available for distribution is $200,000,000 and the Abuse Claims Reviewer awards 100,0000 points, then each point will be worth $2,000. Abuse Claimant A would then be entitled to receive a distribution of $100,000 (50 pts multiplied by $20,0000). To receive the distribution, Abuse Claimant A will need to execute an acknowledgment and release form. The acknowledgment and release form will acknowledge the release by Abuse Claimant A of the Debtor and the Additional Debtors through the Plan and will also release claims relating to the Diocese's Insurance Policies against the Settling Insurers. For the avoidance of doubt, if Abuse Claimant A has Abuse Claims against a party that is not covered under the Plan, Abuse Claimant A will retain those claims. For example, if Abuse Claimant A has a claim against the Diocese of Brooklyn, Abuse Claimant A will still retain its claims against the Diocese of Brooklyn, including with respect to the Diocese of Brooklyn's insurance policies even if those policies were issued by a Settling Insurer. Hypothetical Abuse Claimant B: Abuse Claimant B was abused in 1975, and timely filed a proof of claim in the Chapter 11 Case. The process for determining the points to be awarded to Abuse Claimant B are the same as those as for Abuse Claimant A. Because Abuse Claimant B was abused during the insurance coverage period of the Non-Settling Insurer, then Abuse Claimant B may be authorized by the Trustee to pursue his/her Claim in any court of competent jurisdiction, subject to and in accordance with the Plan, only to determine any liability that the Debtor and/or any Additional Debtor may have regarding an Abuse Claim and the amount of that liability. Abuse Claimant B will be responsible for the expenses relating to the pursuit of such a claim. Abuse Claimant B will be required to assign any recoveries due from (a) the estate of Arrowood Indemnity Company and (b) the New York Property/Casualty Security Fund administered by the New York Liquidation Bureau, which is part of the New York State Department of Financial Services, and which has been appointed as ancillary receiver of Arrowood by the Supreme Court of the State of New York; or (c) any other receiver, liquidator, liquidation bureau, guaranty association, or security fund that may provide recoveries in connection with Insurance Policies issued by the Non-Settling Insurer (Arrowood). If Abuse Claimant B refuses to do so, Abuse Claimant B will not be entitled to share in the proceeds from the Settling Insurers. If Abuse Claimant B unreasonably fails to file a proof of claim with the ancillary receiver of Arrowood or unreasonably fails to render necessary assistance to the Trust in pursuing of recovery from Arrowood, then Abuse Claimant B shall forfeit any future distribution from the Trust. Like in the prior iteration of the Plan, except to the extent that a holder of an Allowed General Unsecured Claim against the Debtor agrees to less favorable treatment of such Claim, in exchange for full and final satisfaction, settlement, release, and discharge of, and in exchange for, each Allowed General Unsecured Claim, each holder thereof shall, subject to the holder's ability to elect Convenience Claim treatment on account of the Allowed General Unsecured Claim, receive the lesser of (I) such holder's Pro Rata share of the GUC Plan Distribution (which is $2 million, less Convenience Claims), and (II) payment in full of the Allowed General Unsecured Claim. The Plan contemplates Trust Assets of $234.8 million from the Debtor and Additional Debtors, exclusive of certain insurance assets. The Plan will not become effective unless, among other things, certain funding is available on the Effective Date and the Trust is established and funded. The Trust Assets are: * $176.8 million, which includes, without limitation, the Ecclesia Contribution, the DOE Contribution, the CemCo Effective Date Cash Contribution, the proceeds of the Exit Facility, and the proceeds of the CemCo Loan; * subject to the terms and conditions of Article V.V of the Plan, the Charities Contribution ($7 million); * the Seminary Contribution ($16 million); * the CemCo Deferred Cash Contribution ($10 million); and * subject to Article V.W of the Plan, the Additional Debtors Deferred Contribution ($25 million). A full-text copy of the Disclosure Statement dated November 1, 2024 is available at https://urlcurt.com/u?l=VJabl8 from Epiq Corporate Restructuring, LLC, claims agent. Counsel for the Debtor: Corinne Ball, Esq. Todd Geremia, Esq. Benjamin Rosenblum, Esq. Andrew Butler, Esq. JONES DAY 250 Vesey Street New York, NY 10281-1047 Tel: (212) 326-3939 Fax: (212) 755-7306 E-mail: cball@jonesday.com brosenblum@jonesday.com tgeremia@jonesday.com abutler@jonesday.com About The Roman Catholic Diocese of Rockville Centre, New York The Roman Catholic Diocese of Rockville Centre, New York, is the seat of the Roman Catholic Church on Long Island. The Diocese has been under the leadership of Bishop John O. Barres since February 2017. The State of New York established the Diocese as a religious corporation in 1958. The Diocese is one of eight Catholic dioceses in New York, including the Archdiocese of New York. The Diocese's total Catholic population is approximately 1.4 million, roughly half of Long Island's total population of 3.0 million. The Diocese is the eighth largest diocese in the United States when measured by the number of baptized Catholics. To deal with sexual abuse claims, the Roman Catholic Diocese of Rockville Centre, New York, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-12345) on Sept. 30, 2020, listing as much as $500 million in both assets and liabilities. Judge Martin Glenn oversees the case. The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal North America, LLC, as restructuring advisor, and Sitrick and Company, Inc., as communications consultant. Epiq Corporate Restructuring, LLC is the claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Diocese's Chapter 11 case. The committee tapped Pachulski Stang Ziehl & Jones, LLP and Ruskin Moscou Faltischek, PC as its bankruptcy counsel and special real estate counsel, respectively. Robert E. Gerber, the legal representative for future claimants of the Diocese, is represented by the law firm of Joseph Hage Aaronson, LLC. DNR REAL ESTATE: Hires Vivona Pandurangi as Bankruptcy Counsel -------------------------------------------------------------- DNR Real Estate, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Vivona Pandurangi, PLC as bankruptcy counsel. The firm's services include: (a) serve as general bankruptcy counsel; (b) prepare schedules and related forms; (c) represent the Debtor at hearings before the Bankruptcy Court; (d) advise the Debtor of its duties and responsibilities under the Bankruptcy Code; (e) assist in preparation of monthly operating reports; (f) analyze the Debtor's financial matters; (g) advise the Debtor in connection with executory contracts; (h) draft documents to reflect agreements with creditors; (i) resolve motions for relief from stay and adequate protection; (j) negotiate for obtaining financing and use of cash collateral, as necessary; (k) determine whether reorganization, dismissal, or conversion is in the best interests of the Debtor and its creditors; (l) work with the creditors' committee and other counsel, if any; (m) draft any disclosure statement and plan of reorganization; and (n) handle other matters that arise in the normal course of administration of this bankruptcy estate. The firm will be paid at an hourly rate of $400 plus reimbursement for expenses incurred. The Debtor paid the firm a prepetition retainer in the amount of $1,738. Ashvin Pandurangi, Esq., an attorney at Vivona Pandurangi, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ashvin Pandurangi VIVONA PANDURANGI, PLC 211 Park Ave. Falls Church, VA 22046 Tel: (571) 969-6540 Fax: (571) 699-0518 Email: ashvinp@vpbklaw.com About DNR Real Estate, LLC DNR Real Estate, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 24-12070) on November 5, 2024, listing up to $50,000 in both assets and liabilities. Ashvin Pandurangi, Esq. at Vivona Pandurangi, PLC represents the Debtor as counsel. EAST ORANGE SD: Moody's Puts 'Ba1' Issuer on Review for Withdrawal ------------------------------------------------------------------ Moody's Ratings has placed East Orange School District, NJ's Ba1 issuer rating under review for potential withdrawal. The district had approximately $50.3 million in debt outstanding as of the end of fiscal 2023. RATINGS RATIONALE / RATING OUTLOOK / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The district's Ba1 issuer rating has been placed under review for potential withdrawal owing to a lack of sufficient forward-looking financial information to maintain the rating. If sufficient information is not received in the next 90 days, Moody's will take appropriate rating action which could include the withdrawal of the district's ratings. PROFILE East Orange School District, NJ serves the City of East Orange (A2) in Essex County, NJ (Aa1 stable). The district provides pre-K-12 education to approximately 9,100 students. METHODOLOGY The principal methodology used in this rating was US K-12 Public School Districts published in July 2024. ENJOY SA: Creditors Agree to Postpone Repayment Until Dec. 6 ------------------------------------------------------------ Valentine Hilaire of Bloomberg Law reports that Enjoy SA's creditors have agreed to extend the delay on "repayment conditions" until December 6, 2024, according to court filing. Enjoy previously announced on November 4 that the U.S. Bankruptcy Court had recognized its reorganization plan. Previously, creditors had agreed to extend date to November 29, 2024. About Enjoy SA Enjoy SA owns and/or operates hotels and casinos. Enjoy SA sought relief under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-10433) on March 15, 2024. Honorable Bankruptcy Judge Philip Bentley handles the case. Foreign Representative's Counsel is Pedro A. Jimenez, Esq., at PAUL HASTINGS LLP. ENOVA INTERNATIONAL: Moody's Affirms 'B1' CFR, Outlook Stable ------------------------------------------------------------- Moody's Ratings has affirmed Enova International, Inc.'s B1 corporate family rating and B2 senior unsecured ratings. The issuer outlook remains stable. RATINGS RATIONALE Enova's ratings reflect the firm's strong online non-prime consumer and small and medium business (SMB) lending businesses, which have proved resilient despite inflationary headwinds and pressure on the company's cost base driven by a rising interest rate environment. Enova reported a ratio of net income to average managed assets (NI/AMA) of approximately 4.5% in the first nine months of 2024 (annualized), down slightly from 4.9% in the previous year. Meanwhile, the firm's capitalization has remained strong at roughly 20% tangible common equity to tangible managed assets (TCE/TMA), although the firm's leverage has gradually increased following significant deleveraging that took place following the firm's bargain purchase gain on the acquisition of OnDeck Capital in 2020, now the largest portion of Enova's SMB lending business. At the same time, the ratings reflect the firm's high charge-off and delinquency rates across both the consumer and business verticals. Nevertheless, Enova has not experienced the same rapid deterioration in asset quality metrics as other non-prime lending peers. The firm's SMB business is a much larger contributor to earnings than prior to the pandemic and the acquisition of OnDeck Capital, and carries with it significantly lower loss rates than Enova's consumer business. But the consumer business has also seen lower loss rates as Enova has grown its near-prime lending more rapidly than other segments further down the consumer credit spectrum. Nevertheless, losses have ticked up in recent periods, which remains a credit risk, but the firm's strong margins, significant investments in technology, and disciplined unit economics approach to originations should allow it to navigate moderately higher credit losses. The stable outlook reflects Moody's expectation that Enova will demonstrate strong earnings and adequate capitalization over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Enova's ratings could be upgraded if the firm is able to reduce its overall legal and regulatory risks while maintaining strong profitability and TCE/TMA above 20%. Enova's ratings could be downgraded if the firm experiences a significant degradation in asset quality, if profitability as measured by NI/AMA declines and remains below 4%, or if Moody's expect TCE/TMA to decline and remain below 17%. The principal methodology used in these ratings was Finance Companies published in July 2024. EPIC COMPANIES: Plan Exclusivity Period Extended to May 5, 2025 --------------------------------------------------------------- Judge Shon Hastings of the U.S. Bankruptcy Court for the District of North Dakota extended EPIC Companies Midwest, LLC, and affiliates' exclusive periods to file a plan of reorganization and obtain acceptance thereof to May 5, 2025 and July 6, 2025, respectively. As shared by Troubled Company Reporter, the Debtors claim that they believe that the limited proposed extension to formulate and file a plan sought in the Motion will be beneficial to the estates, will allow the plan to be based on more accurate information, and will result in a more efficient use of their estates' assets for the benefit of all creditors. The Debtors explain that the requested extensions of the exclusive period and solicitation period are essential to allow the Debtors to proceed with the plan process as contemplated by the Bankruptcy Code. Moreover, the possibility of multiple plans would inevitably lead to unnecessary and costly confrontations that would likely cause a dramatic increase in the professional fee burden borne by the estates and reduce potential distributions to creditors. Th Debtors assert that an acceptable plan can be developed within the requested extensions of the exclusivity period and solicitation period but reserve the right to request additional extensions. The Debtors' request for an extension is modest and does not impermissibly extend the dates for filing and solicitation past the time periods provided for in Section 1121(d)(2)(A) and (B) of the Bankruptcy Code. Accordingly, the exclusivity period and solicitation period should be extended to afford the Debtors a full and fair opportunity to negotiate, propose, and seek acceptance of a plan. Attorneys for the Debtors: Michael S. Raum, Esq. FREDRIKSON & BYRON, P.A. 51 Broadway, Suite 400 Fargo, ND 58102-4991 701.237.8200 Email: mraum@fredlaw.com Steven R. Kinsella, Esq. Katherine A. Nixon, Esq. FREDRIKSON & BYRON, P.A. 60 South 6th Street, Suite 1500 Minneapolis, MN 55402-4400 Tel: 612.492.7000 E-mail: skinsella@fredlaw.com knixon@fredlaw.com About EPIC Companies Midwest EPIC Companies Midwest, LLC is a real estate investing and development firm in Minot, N.D. EPIC and its affiliates filed voluntary Chapter 11 petitions (Bankr. D.N.D. Lead Case No. 24-30281) on July 8, 2024. Patrick Finn, chief restructuring officer, signed the petitions. At the time of the filing, EPIC reported $10 million to $50 million in both assets and liabilities. Judge Shon Hastings oversees the cases. Steven Kinsella, Esq., at Fredrikson & Byron, PA represents the Debtors as legal counsel. The U.S. Trustee for Region 12 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by the law firm of Stinson, LLP. EVOFEM BIOSCIENCES: Incurs $2.37 Million Net Loss in Third Quarter ------------------------------------------------------------------ Evofem Biosciences, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $2.37 million on $4.50 million of net product sales for the three months ended Sept. 30, 2024, compared to net income of $66.01 million on $5.11 million of net product sales for the three months ended Sept. 30, 2023. For the nine months ended Sept. 30, 2024, the Company reported a net loss of $5.82 million on $12.26 million of net product sales, compared to net income of $55.09 million on $13.38 million of net product sales for the same period in 2023. As of Sept. 30, 2024, the Company had $23.94 million in total assets, $90.07 million in total liabilities, $4.76 million in convertible and redeemable preferred stock, and a total stockholders' deficit of $70.89 million. Evofem stated, "If the Company is not able to obtain the required funding through a significant increase in revenue, equity or debt financings, license agreements for Phexxi and/or SOLOSEC, or other means, or is unable to obtain funding on terms favorable to the Company, or if there is another event of default affecting the notes payable, or if the Company is enjoined from using the Phexxi mark, there will be a material adverse effect on commercialization operations and the Company's ability to execute its strategic development plan for future growth. If the Company cannot successfully raise additional funding and implement its strategic development plan, the Company may be forced to make further reductions in spending, including spending in connection with its commercialization activities, extend payment terms with suppliers, liquidate assets where possible at a potentially lower amount than as recorded in the condensed consolidated financial statements, suspend or curtail planned operations, or cease operations entirely. Any of these could materially and adversely affect the Company's liquidity, financial condition and business prospects, and the Company would not be able to continue as a going concern. The Company has concluded that these circumstances and the uncertainties associated with the Company's ability to obtain additional equity or debt financing on terms that are favorable to the Company, or at all, and otherwise succeed in its future operations raise substantial doubt about the Company's ability to continue as a going concern." Management Comments "We continue to advance Evofem's strategy to grow revenues organically and through strategic acquisitions and alliances," said Saundra Pelletier, CEO of Evofem Biosciences. "In the third quarter we closed several business development transactions that we expect will diversify and strengthen our revenue streams. We acquired and recently relaunched SOLOSEC as the only single-dose oral treatment FDA-approved for both bacterial vaginosis and trichomoniasis. We also forged an agreement that paves the way for the commercialization of Phexxi in the GCC, starting with the UAE. In addition, we launched a market development collaboration with Pearsanta, a subsidiary of Aditxt, for its endometriosis diagnostic. Further post-merger support from Aditxt and its ecosystem should help catalyze our growth trajectory and our ability to execute our mission to improve women's lives through diversified and differentiated diagnostic, preventive, and therapeutic offerings." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1618835/000149315224046060/form10-q.htm About Evofem Evofem Biosciences, Inc., is a San Diego-based commercial-stage biopharmaceutical company with a strong focus on innovation in women's sexual and reproductive health. The Company's first commercial product, Phexxi, was approved by the FDA on May 22, 2020. Phexxi is the first and only FDA-approved, hormone-free prescription contraceptive vaginal gel. Walnut Creek, Calif.-based BPM, LLP, the Company's auditor since 2023, issued a "going concern" qualification in its report dated March 26, 2024, citing that the Company has suffered recurring losses from operations; negative cash flows from operations since inception; has received a notice of default for its convertible notes, and does not have sufficient capital to repay such obligations (which are now currently due); and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. FAITH VICTORY: Unsecureds Will Get 100% over 2 Years ---------------------------------------------------- Faith Victory Christian Center, Inc., filed with the U.S. Bankruptcy Court for the Western District of New York a Disclosure Statement describing Chapter 11 Plan dated October 16, 2024. The Debtor is a Not-for-profit Corporation under NY law. The Debtor owns 2 separate and distinct real estate parcels. Prior to 2023, the Debtor did not properly exempt the buildings for tax purposes and several years of back property taxes threaten the loss of both parcels at a tax foreclosure sale. In order to protect the real property, the Debtor filed this case. The parcel at 531 Post Ave., Rochester, NY 14619 is the main church building used by the Debtor and its congregation. The other parcel, located at 664 Hudson Ave., Rochester, NY 14621, is under contract to be sold to fund the Plan. Marketing the 664 Hudson Ave. property for sale. The Plan will be funded from the proceeds of the sale of 664 Hudson Ave., Rochester, NY 14621. The Court has entered an Order authorizing the sale. Class 2 consists of General Unsecured Claims. This Class will receive a distribution of 100% of their allowed claims plus federal post judgment interest. Payments over 2 years. This Class is unimpaired. Payments and distributions under the Plan will be funded by the sale of 664 Hudson Ave. Should the current buyer not close for an reason, the property will immediately be relisted for sale with the existing approved Broker. A full-text copy of the Disclosure Statement dated October 16, 2024 is available at https://urlcurt.com/u?l=yFRgvg from PacerMonitor.com at no charge. Attorney for the Debtor: Mikal J. Krueger, Esq. McConville Considine Cooman & Morin, P.C. 300 Meridian Centre Blvd., Suite 110 Rochester, NY 14618 Main Phone: 585.546.2500 Direct Dial: 585.512.3546 Main Fax: 585.546.7218 Email: mkrueger@mccmlaw.com About Faith Victory Christian Center Faith Victory Christian Center, Inc., is a Not-for-profit Corporation under NY law. The Debtor filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 23-20481) on Sept. 25, 2023, with $100,001 to $500,000 in both assets and liabilities. Mikal J. Krueger, Esq., at McConville Considine Cooman & Morin, P.C., is the Debtor's legal counsel. FARADAY FUTURE: Will Change its Stock Ticker Symbol to "FFAI" ------------------------------------------------------------- Faraday Future Intelligent Electric Inc. announced Nov. 25 that it plans to change its Nasdaq ticker symbol from "FFIE" to "FFAI" in early 2025. This change aligns with the Company's continued focus on its AI strategy that includes its new FX brand strategy. Surveys conducted over the past year also consistently showed a preference for changing the ticker symbol from "FFIE" to "FFAI." The Company plans to announce the date and detailed plans for the official stock ticker symbol change and "FF AI Open Day" in January 2025. "Since its establishment, AI has been an FF cornerstone," said Matthias Aydt, Global CEO of Faraday Future. "The stock ticker "FFAI" better reflects the Company's strategic direction. With FF's AI technology empowering the FX strategy and the gradual implementation of this strategy, we aim to create AIEVs with extreme price-experience ratio, addressing gaps in the U.S. AIEV market, including AI cabins. Our goal is to drive the comprehensive AI transformation of the U.S. EV industry." About Faraday Future Los Angeles, CA-based Faraday Future (NASDAQ: FFIE) -- http://www.ff.com-- designs and engineers next-generation intelligent, connected, electric vehicles. FF manufactures vehicles at its production facility in Hanford, California, with additional future production capacity needs addressed through a contract manufacturing partner in South Korea. FF is also exploring other potential contract manufacturing options in addition to the contract manufacturer in South Korea. The Company has additional engineering, sales, and operational capabilities in China and is exploring opportunities for potential manufacturing capabilities in China through a joint venture or other arrangement. New York, NY-based Mazars USA LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated May 28, 2024, citing that the Company has incurred operating losses since inception, has continued cash outflows from operating activities, and has an accumulated deficit. These conditions raise substantial doubt about its ability to continue as a going concern. FINANCE OF AMERICA: Swings to $203.7-Mil. Net Income in Fiscal Q3 ----------------------------------------------------------------- Finance of America Companies Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net income of $203.7 million on $290.1 million of total revenues for the three months ended September 30, 2024, compared to a net loss of $174.9 million on -$70.4 million of total revenues for the three months ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported a net income of $178.3 million on $443.8 million of total revenues, compared to a net loss of $382.8 million on -$41.5 million of total revenues for the same period in 2023. As of September 30, 2024, the Company had $28.95 billion in total assets, $28.49 billion in total liabilities, and $456.46 million in total equity. Graham A. Fleming, Chief Executive Officer commented, "We're very pleased with this quarter's results, which exceeded our volume guidance and delivered strong GAAP earnings performance along with a return to profitability in adjusted net income. We continue to focus on our strategic initiatives, and now with a stronger balance sheet, are well-positioned for continued growth." A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/33r3h698 About Finance of America Plano, Texas-based Finance of America Companies Inc. is a financial services holding company. Through its operating subsidiaries, it operates as a modern retirement solutions platform, providing customers with access to an innovative range of retirement offerings centered on the home. In addition, Finance of America offers capital markets and portfolio management capabilities to optimize distribution to investors. For the full year 2023, Finance of America Companies reported a net loss of $218.16 million, compared to a net loss of $715.53 million in 2022. * * * As reported by the Troubled Company Reporter in November 2024, Fitch Ratings has downgraded the Long-Term Issuer Default Ratings (IDRs) of Finance of America Companies Inc. and its subsidiaries, Finance of America Equity Capital LLC and Finance of America Funding LLC (together, FOA) to 'RD' (Restricted Default) from 'C'. The action follows the completion of the company's debt restructuring on Oct. 31, 2024, which Fitch views as a distressed debt exchange (DDE). Fitch has also upgraded FOAs IDRs to 'CCC' from 'RD' subsequent to the DDE. Fitch has assigned a rating of 'CCC-' with a Recovery Rating of 'RR5′ to Finance of America Funding, LLC's new $196 million senior secured notes due in 2026 and $147 million convertible senior secured notes due in 2029 issued as part of the exchange. Concurrently, Fitch has also downgraded Finance of America Funding LLC's unsecured debt rating to 'RD" from 'C'/'RR6′ and withdrawn the rating as 98% of the notes were exchanged into the new secured notes. FIREPAK INC: Gets Interim OK to Use Cash Collateral Until Dec. 31 ----------------------------------------------------------------- Firepak Inc. received interim approval from the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, to use cash collateral to pay its operating expenses. The interim order signed by Judge Robert Mark approved the use of cash collateral for the period from Nov. 7 to Dec. 31 in accordance with the company's projected budget. As adequate protection, Regions Bank and the U.S. Small Business Administration were granted replacement liens on and security interests in the company's post-petition cash and cash equivalents to the same extent and with the same priority and validity as their pre-bankruptcy liens and security interests. In addition, Regions Bank and the SBA will receive monthly payments of $2,637.25 and $2,500, respectively. As of the petition date, Firepak owes $139,603 to Regions Bank and $496,424 to the SBA. The final hearing is set for Dec. 11. About Firepak Inc. Firepak Inc. specializes in the design and layout of fire sprinkler systems, modifications to existing fire sprinkler systems, new installations, tenant build outs, retrofit of existing buildings, and inspections and repairs of all types of fire sprinkler systems. Firepak sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-21725) on November 7, 2024, with total assets of $1,454,421 and total liabilities of $2,424,737. Linda Leali, Esq., serves as Subchapter V trustee. Judge Robert A. Mark handles the case. The Debtor is represented by Carlos de Zayas, Esq., at Lydecker, LLP. FRANCHISE GROUP: Wants Litigation Protection for CEO ---------------------------------------------------- Randi Love of Bloomberg Law reports that Franchise Group, a bankrupt company backed by B. Riley Financial Inc., is seeking to prevent shareholders from pursuing claims against its CEO, arguing that such actions would interfere with its reorganization efforts. In a filing submitted Wednesday, November 27, 2024, to the U.S. Bankruptcy Court for the District of Delaware, Franchise Group Inc. (FRG) stated that a lawsuit filed in July by shareholders in the Delaware Chancery Court against CEO Andrew Laurence, former CEO Brian Kahn, Kahn's investment firm, and B. Riley is part of the company's estate, according to Bloomberg Law. The company argued that allowing the shareholders' claims against Laurence would effectively amount to legal action against FRG itself, potentially disrupting the bankruptcy proceedings, the report states. GAUCHO GROUP: Seeks Court OK to Use Cash Collateral --------------------------------------------------- Gaucho Group Holdings, Inc. asked the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, for authority to use cash collateral. The company requires the use of cash collateral to fund necessary operating expenses in accordance with its projected budget, with a 10% variance. 3i, LP appears to hold a blanket lien on, among other personal property, the company's cash collateral. The principal balance due 3i on the petition date was $4 million. Gaucho has contested 3i's lien and claim in pre-bankruptcy litigation. Gaucho believes that 3i's substantial equity cushion of over $10 million, based upon the company's valuation of its assets of approximately $15.8 million, is enough to protect 3i's interest in the cash collateral. About Gaucho Group Holdings Gaucho Group Holdings, Inc. is a Delaware holding company headquartered in Miami, Fla., which owns certain subsidiaries including operating companies that own a winery, boutique hotel and real property in Argentina. Gaucho filed Chapter 11 petition (Bankr. S.D. Fla. Case No. 24-21852) on November 12, 2024, with $10 million to $50 million in both assets and liabilities. Nathan G. Mancuso, Esq., at Mancuso Law, P.A. is the Debtor's legal counsel. GAUCHO GROUP: Seeks to Hire Mancuso Law P.A. as Counsel ------------------------------------------------------- Gaucho Group Holdings, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Mancuso Law, P.A. as counsel. The firm will provide these services: a. give advice to Debtor with respect to its powers and duties as debtor-in-possession and the continued management of its business operations; b. advise Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the Court; c. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; d. protect the interests of Debtor in all matters pending before the Court; and e. represent Debtor in negotiation with its creditors in the preparation of a plan. The firm will be paid at the rate of $400 per hour, and a retainer in the amount of $50,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Nathan G. Mancuso, Esq., a partner at Mancuso Law, P.A, 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: Nathan G. Mancuso, Esq. Mancuso Law, P.A. Boca Raton Corporate Centre 7777 Glades Rd., Suite 100 Boca Raton, FL 33434 Tel: (561) 245-4705 Fax: (561) 226-2575 Email: ngm@mancuso-law.com About Gaucho Group Holdings, Inc. Gaucho Group Holdings Inc operates as a holding company. The Company, through its subsidiaries, provides luxury real estate and consumer marketplace with collection of wine, hospitality, fashion brands, and real estate holdings. Gaucho Group Holdings serves customers in the United States and Argentina. Gaucho Group Holdings Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fl. Case No. 24-bk-21852) on November 12, 2024. GB SCIENCES: Incurs $191K Net Loss in Second Quarter ---------------------------------------------------- GB Sciences, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $190,526 on $0 of sales revenue for the three months ended Sept. 30, 2024, compared to a net loss of $434,233 on $0 of sales revenue for the three months ended Sept. 30, 2023. For the six months ended Sept. 30, 2024, the Company reported a net loss of $475,544 on $0 of sales revenue compared to a net loss of $707,354 on $0 of sales revenue for the six months ended Sept. 30, 2023. As of Sept. 30, 2024, the Company had $93,771 in total current assets, $5.87 million in total liabilities, and a total stockholders' deficit of $5.78 million. The Company has sustained net losses since inception, which have caused an accumulated deficit of $110,542,536 at Sept. 30, 2024. The Company had a working capital deficit of $5,347,659 at Sept. 30, 2024, compared to a deficit of $4,992,115 at March 31, 2024. In addition, the Company has consumed cash in its operating activities of $129,671 for the six months ended Sept. 30, 2024, compared to $517,825 used in operating activities for the six months ended Sept. 30, 2023. GB Sciences stated, "Management has been able, thus far, to finance the losses through debt financing, a public offering, private placements and obtaining operating funds from stockholders. The Company is continuing to seek sources of financing. There are no assurances that the Company will be successful in achieving its goals. "In view of these conditions, the Company's ability to continue as a going concern is dependent upon its ability to obtain additional financing or capital sources, to meet its financing requirements, and ultimately to achieve profitable operations. Accordingly, there is substantial doubt about the Company to continue as a going concern for a period of twelve months from the date of these financial statements were made available. Management believes that its current and future plans provide an opportunity 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/1165320/000143774924036323/gblx20240930_10q.htm About GB Sciences GB Sciences, Inc., is a plant-inspired, biopharmaceutical research and development company creating patented, disease-targeted formulations of cannabis- and other plant--inspired therapeutic mixtures for the prescription drug market through its wholly owned Canadian subsidiary, GbS Global Biopharma, Inc. Coral Springs, Florida-based Assurance Dimensions, the Company's auditor since 2020, issued a "going concern" qualification in its report dated Aug. 30, 2024, citing that the Company incurred a net loss of $1,361,677 and cash used in operations of $975,698 for the year ended March 31, 2024. In addition, the Company had an accumulated deficit of $110,066,992 and working capital deficit of $4,992,115 at March 31, 2024. These factors raise substantial doubt about the Company's ability to continue as a going concern. GB SCIENCES: Incurs $285K Net Loss in First Quarter --------------------------------------------------- GB Sciences, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $285,018 on $0 of sales revenue for the three months ended June 30, 2024, compared to a net loss of $273,121 on $0 of sales revenue for the three months ended June 30, 2023. As of June 30, 2024, the Company had $91,451 in total current assets, $5.68 million in total liabilities, and a total stockholders' deficit of $5.59 million. The Company has sustained net losses since inception, which have caused an accumulated deficit of $110,352,010 at June 30, 2024. The Company had a working capital deficit of $5,267,133 at June 30, 2024, compared to a deficit of $4,655,504 at June 30, 2023. In addition, the Company has consumed cash in its operating activities of $21,991 for the three months ended June 30, 2024, compared to $105,301 used in operating activities for the three months ended June 30, 2023. GB Sciences said, "Management has been able, thus far, to finance the losses through debt financing, a public offering, private placements and obtaining operating funds from stockholders. The Company is continuing to seek sources of financing. There are no assurances that the Company will be successful in achieving its goals. "In view of these conditions, the Company's ability to continue as a going concern is dependent upon its ability to obtain additional financing or capital sources, to meet its financing requirements, and ultimately to achieve profitable operations. Accordingly, there is substantial doubt about the Company to continue as a going concern for a period of twelve months from the date of these financial statements were made available. Management believes that its current and future plans provide an opportunity to continue as a going concern. The accompanying unaudited interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event the Company is unable 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/1165320/000143774924036322/gblx20240630_10q.htm About GB Sciences GB Sciences, Inc. is a plant-inspired, biopharmaceutical research and development company creating patented, disease-targeted formulations of cannabis- and other plant--inspired therapeutic mixtures for the prescription drug market through its wholly owned Canadian subsidiary, GbS Global Biopharma, Inc. Coral Springs, Florida-based Assurance Dimensions, the Company's auditor since 2020, issued a "going concern" qualification in its report dated Aug. 30, 2024, citing that the Company incurred a net loss of $1,361,677 and cash used in operations of $975,698 for the year ended March 31, 2024. In addition, the Company had an accumulated deficit of $110,066,992 and working capital deficit of $4,992,115 at March 31, 2024. These factors raise substantial doubt about the Company's ability to continue as a going concern. GOL LINHAS: To Finalize Agreement Resolving Tax Obligations ----------------------------------------------------------- Leonardo Lara of Bloomberg News reports that Gol Linhas intends to seek authorization from the Bankruptcy Court for the Southern District of New York to finalize a settlement agreement with Brazil's Attorney General's Office of the National Treasury (PGFN) and the Special Secretariat of the Federal Revenue (RFB). This agreement aims to resolve the company's tax liabilities, including social security, non-social security, and other tax-related obligations, as detailed in Gol's filing. The agreement remains subject to processing by the relevant authorities, according to the report. Gol also stated that the transaction will not impact its net financial debt and is included in the Plan Support Agreement, which provides for the conversion of a significant portion of the company's debt and obligations into equity, the report cites. About Gol GOLL4.SA GOL Linhas Aereas Inteligentes S.A. provides scheduled and non-scheduled air transportation services for passengers and cargo; and maintenance services for aircraft and components in Brazil and internationally. The company offers Smiles, a frequent-flyer program to approximately 20.5 million members, allowing clients to accumulate and redeem miles. It operates a fleet of 146 Boeing 737 aircraft with 674 daily flights. The company was founded in 2000 and is headquartered in Sao Paulo, Brazil. GOL Linhas Aereas Inteligentes S.A. and its affiliates and its subsidiaries voluntarily filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 24-10118) on Jan. 25, 2024. GOL Linhas estimated $1 billion to $10 billion in assets as of the bankruptcy filing. The Debtors tapped Milbank Llp as counsel, Seabury Securities LLC as restructuring advisor, financial advisor and investment banker, Alixpartners, LLP, as financial advisor, and HUGHES Hubbard & Reed LLP as aviation related counsel. Kroll Restructuring Administration LLC is the claims agent. GRUPO HIMA: Amends Plan to Include Luma Administrative Claim ------------------------------------------------------------ Grupo Hima San Pablo, Inc., and its affiliates, the DIP Agent, and the Unsecured Creditors' Committee (the "UCC") submitted a First Amended Disclosure Statement for First Amended Consolidated Plan of Liquidation dated November 1, 2024. The Debtors commenced these chapter 11 cases to effectuate a sale of substantially all of their assets, subject to higher or better offers received in connection with an orderly sale process. Class 1 consists of the Luma Energy Administrative Claim. Luma Energy Administrative includes Luma's estimated post-petition and 503(b)(9) claims that total approximately $2.9 million. The Liquidation Analysis assumes Luma Energy Administrative Claim is fully paid under both the low and high recovery scenarios. Class 9 consists of General Unsecured Claims. The Debtors estimate that there will be General Unsecured Claims in the amount of approximately $391.9 million. Such claims include estimated outstanding accounts payable and accrued expenses for each applicable Debtor. Estimate excludes amounts for Claims on account of contract damages, any deficiency claims from secured claimants, and potential litigation claims. The Liquidation analysis assumes there will be no recovery on account of General Unsecured Claims. Class 12 consists of Equity Interests. The Liquidation analysis assumes there will be no recovery on account of Equity Interests. On the Effective Date, (i) the Liquidating Trust shall be established pursuant to the Liquidating Trust Agreement; (ii) the Liquidating Trustee shall be appointed as trustee of the Liquidating Trust; (iii) except as otherwise provided herein, the Debtors and/or the DIP Agent, as applicable, shall transfer the Initial Liquidating Trust Funding Amount to the Liquidating Trust; and (iv) all Liquidating Trust Causes of Action and Liquidating Trust Assets shall be transferred to and vested in the Liquidating Trust. A full-text copy of the First Amended Disclosure Statement dated November 1, 2024 is available at https://urlcurt.com/u?l=It6bH7 from Epiq Corporate Restructuring, LLC, claims agent. Attorneys for the Debtors: Wigberto Lugo Mender, Esq. Alexis A. Betancourt Vincenty, Esq. Lugo Mender Group, LLC 100 Carr. 165 Suite 501 Guaynabo, PR 00968-8052 Tel: (787) 707-0404 Fax: (787) 707-0412 Email: wlugo@lugomender.com About Grupo Hima San Pablo Grupo HIMA San Pablo, Inc. serves as a diversified healthcare services holding company pursuant to a corporate reorganization of several businesses related by common ownership. Through its subsidiaries and affiliates, Grupo HIMA San Pablo primarily owns and operates hospital facilities and other healthcare related businesses. As of August 2023, the HIMA GROUP operates four hospitals, with over 1,200 licensed beds, including an Oncological Hospital, a multi-specialty physician practice management company, Home Care Service (including infusion therapies and wound care), a free-standing ambulatory center and a 16-ambulance service company. Grupo HIMA San Pablo and its affiliates filed Chapter 11 petitions (Bankr. D. P.R. Lead Case No. 23-02510) on Aug. 15, 2023. In the petition signed by its chief executive officer, Armando J. Rodriguez-Benitez, Grupo HIMA San Pablo disclosed $500 million to $1 billion in assets and $100 million to $500 million in liabilities. Judge Enrique S. Lamoutte Inclan oversees the cases. Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC and Pietrantoni Mendez & Alvarez, LLC serve as the Debtors' bankruptcy counsel and special counsel, respectively. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on Sept. 7, 2023. Porzio, Bromberg & Newman, P.C. is the committee's legal counsel. Edna Diaz De Jesus is the patient care ombudsman appointed in the Debtors' Chapter 11 cases. GSE GLOBAL: Seeks to Hire Ford & Crane as Bankruptcy Counsel ------------------------------------------------------------ GSE Global seeks approval from the U.S. Bankruptcy Court for the District of Utah to hire Ford & Crane PLLC to handle its Chapter 11 case. The firm will be billed at its regular hourly rate of $360, plus reimbursement for expenses incurred. Adam D. Ford, Esq., attorney at Ford & Crane, 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: Adam D. Ford, Esq. FORD & CRANE PLLC 150 W. Commonwealth Ave., #204 Salt Lake City, Utah 84115 Telephone: (213) 915-4291 Email: adam.ford@fordcranelaw.com About GSE Global GSE Global, a company in Sheridan, Wyo., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Utah Case No. 24-24810) on September 23, 2024, with $1 million to $10 million in both assets and liabilities. Wali BGohar Shah, manager, signed the petition. Adam Ford, Esq., at Ford & Huff, LC represents the Debtor as legal counsel. HADAD DESIGN: Unsecureds Will Get 62.3% of Claims in Plan --------------------------------------------------------- Hadad Design and Construction Inc. filed with the U.S. Bankruptcy Court for the Southern District of Texas a Small Business Plan of Reorganization under Subchapter V dated October 16, 2024. Since its formation in August 2014, the Debtor, operating under the assumed name of Kitchen and Bath Décor and More has provided design and general contracting services for residential remodeling, focusing on the transformation of kitchens and bathrooms. The Debtor seeks to reorganize its business operation by focusing on the strength of its ability to design renovations and deliver products to the construction site, while leaving the actual installation to independent teams. The Debtor intends to use cash generated by this reorganized business to pay its creditors, including the reimbursement of those funds paid where customers did not receive an equivalent value in exchange for their payments. The Debtor believes it is likely that its projected Disposable Income will be more than adequate to pay all Allowed Claims in full, with interest and applicable statutory penalties. For these reasons, HDC asserts that this Plan provides Fair and Equitable treatment to the Allowed Claims of all creditors and interest holders without interjecting any uncertainty over the amounts that may be ultimately realized in the liquidation of HDC's nonexempt assets under an alternative Chapter 7 liquidation. This Plan of Reorganization proposes to pay creditors of Hadad Design and Construction, Inc. d/b/a Kitchen and Bath Décor and More from the Debtor's future Disposable Income. Non-priority unsecured creditors holding Allowed Claims will receive distributions, which the proponent of this Plan has valued at approximately 62.3 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 3 consists of General Unsecured Claims. Holders of Allowed General Unsecured Claims will be paid approximately 62.3 percent of their Allowed Claims in 21 quarterly cash payments in pro rata payments. The aggregate, quarterly cash payment will be based upon the Debtor's projected Disposable Income. Total projected distributions per quarter, with the first payment being due by the end of the third month following the Effective Date of the Plan. This Class is impaired. Class 4 consists of the equity interest of the sole equity member of HDC, Elias Haddad. Elias Haddad will retain all equity membership interests in the reorganized Debtor. However, until all Allowed Claims provided for in this Plan are paid in full. On, or about, June 24, 2024, $270,000.00 was transferred by Debtor's daughter, Tara Anderson, to attorney, Thomas L. Hunt's IOLTA account, for the purpose of funding payment of the secured, Class 1 claim of 5826 Interests, Ltd. The source of these funds was proceeds from a loan secured by property owned by Ms. Anderson. The remaining funds for distribution will come from Debtor's Disposable Income earned after the Petition Date. After the Effective Date, the Reorganized Debtor may, in its sole business judgment, sell property that has vested with the Reorganized Debtor and apply the proceeds from the sale to payment of Allowed Claims under this Plan ahead of the schedule. A full-text copy of the Plan of Reorganization dated October 16, 2024 is available at https://urlcurt.com/u?l=9XrxJi from PacerMonitor.com at no charge. About Hadad Design and Construction Hadad Design and Construction Inc. is a full service kitchen and bathroom remodeling company. It offers kitchen cabinets, bathroom cabinets, countertops, backsplash, tiles, flooring, etc. Hadad Design and Construction sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-33277) on July 18, 2024. In the petition filed by Elias Haddad, as president and director, the Debtor estimated assets between $500,000 and $1 million and estimated liabilities between $1 million and $10 million. The Honorable Bankruptcy Judge Christopher M. Lopez oversees the case. The Debtor is represented by: Leonard Simon, Esq. PENDERGRAFT & SIMON LLP 2777 Allen Parkway Suite 800 Houston TX 77019 Tel: 713-528-8555 Email: lsimon@pendergraftsimon.com HOOPER'S RE: Case Summary & One Unsecured Creditor -------------------------------------------------- Debtor: Hooper's Re Holding LLC 2205 MT Hwy 35 Kalispell, MT 59901 Business Description: Hooper's Re is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: November 26, 2024 Court: United States Bankruptcy Court District of Montana Case No.: 24-90233 Debtor's Counsel: Matt Shimanek, Esq. SHIMANEK LAW PLLC 317 East Spruce Street Missoula, MT 59802 Tel: 406-544-8049 Email: matt@shimaneklaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Philip Aitken as managing member. The Debtor listed Martha Lopez located at 40 Pheasant Run Whitefish, MT 59937 as its sole unsecured creditor holding a claim of $53,000 for money loaned. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/UZHITXA/HOOPERS_RE_HOLDING_LLC__mtbke-24-90233__0001.0.pdf?mcid=tGE4TAMA HOSPITAL FOR SPECIAL: PCO Hires Fellers Snider as Attorney ---------------------------------------------------------- Deborah Burian, the patient care ombudsman ("PCO") for Hospital for Special Surgery, LLC, seeks approval from the U.S. Bankruptcy Court for the Western District of Oklahoma to employ Fellers Snider as attorney. The firm will provide these services: a. give the PCO legal advice with respect to her powers and duties as a patient care ombudsman, including advice with respect to, and assistance in, the preparation and filing of any reports required to be submitted by the PCO; b. prepare on behalf of the PCO all necessary applications, answers, orders, pleadings, reports, and other legal papers; and c. perform all other legal services for the PCO which may be necessary herein. The firm will be paid at s $550 per hour The firm will be paid a retainer in the amount of $7,500. Fellers Snider will also be reimbursed for reasonable out-of-pocket expenses incurred. Stephen J. Moriarty, Esq., a partner at Fellers Snider, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Stephen J. Moriarty, Esq. Fellers, Snider, Blankenship, Bailey & Tippens, P.C. 100 N. Broadway, Suite 1700 Oklahoma City, OK 73102 Tel: (405) 232-0621 Fax: (405) 232-9659 Email: smoriarty@fellerssnider.com About Hospital for Special Surgery, LLC Hospital for Special Surgery, LLC is a Medicare-certified surgical specialty hospital in Oklahoma City that specializes in diagnostic, surgical and rehabilitative services. Hospital for Special Surgery sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 24-12862) on October 7, 2024, with total assets of $8,285,647 and total liabilities of $21,797,844. Steve Hockert, chief executive officer, signed the petition. Judge Janice D. Loyd oversees the case. The Debtor is represented by Mark A. Craige, Esq., at Crowe & Dunlevy. HYPERSCALE DATA: To Issue Dividend of 1M Shares of Series F Stock ----------------------------------------------------------------- Hyperscale Data, Inc., announced that it plans to issue a special one-time dividend of 1,000,000 shares of a newly designated Series F Exchangeable Preferred Stock to all common stockholders and holders of the Series C Convertible Preferred Stock on an as-converted basis. The record date for the Distribution has been set for Dec. 13, 2024. Stockholders who own the Company's stock at the close of trading on that date will be eligible to receive the shares of Series F Preferred Stock. Further, the Company has set a payment date of Dec. 23, 2024, subject to adjustment. On the record date, the Company anticipates there will be approximately 1,109,895 shares of common stock and approximately 6,101,299 common stock equivalents, based on the current conversion price of the Company's Series C Convertible Preferred Stock, issued and outstanding, for an aggregate of approximately 7,211,194 shares of Eligible Capital Stock. Consequently, the number of shares of Series F Preferred Stock issuable is approximately 0.139 for each share of Eligible Capital Stock. The foregoing figures reflect the implementation of the one-for-thirty-five reverse stock split that was effectuated on Nov. 25, 2024. There will never be a public trading market for the Series F Preferred Stock. The CUSIP number of the Series F Preferred Stock is 09175M 887. The Series F Preferred Stock has a $1.00 liquidation preference and will not pay a dividend. Each share of Series F Preferred Stock will be exchangeable, at the option of its holder, for (i) 10 shares of Class A Common Stock of Ault Capital Group, Inc., a wholly owned subsidiary of the Company and a Nevada corporation and (ii) five shares of Class B Common Stock of ACG, at any time beginning on the later of (i) one year after issuance of the Series F Preferred Stock and (ii) the date of the registration under the Securities Act of 1933, as amended, of all of the foregoing shares of ACG Class A Common Stock and ACG Class B Common Stock. ACG is a holding company that provides mission-critical products that support a diverse range of industries, including a metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, and medical/biopharma. Once this distribution will have been effectuated, the Company's sole business will be its ownership of Sentinum, Inc. through which it operates its Bitcoin mining business as well as its High Power Computing and AI operations. The Distribution has been approved by the NYSE American. About Hyperscale Data Hyperscale Data, Inc., formerly known as Ault Alliance, Inc., is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through the Company's wholly and majority-owned subsidiaries and strategic investments, the Company owns and/or operates data centers at which it mines Bitcoin and offers colocation and hosting services for the emerging artificial intelligence ecosystems and other industries, and provides mission-critical products that support a diverse range of industries, including a metaverse platform, oil exploration, crane services, defense/aerospace, industrial, automotive, medical/biopharma, consumer electronics, and textiles. New York, New York-based Marcum LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 16, 2024, citing that the Company has a working capital deficiency, has incurred net losses, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. IHEARTCOMMUNICATIONS INC: Moody's Reviews Caa1 CFR for Downgrade ---------------------------------------------------------------- Moody's Ratings has placed iHeartCommunications, Inc.'s ratings under review for downgrade, including Caa1 Corporate Family Rating, Caa1-PD Probability of Default Rating, Caa1 ratings on the backed senior secured term loan B and backed senior secured notes and Caa3 senior unsecured notes. The company's speculative grade liquidity rating remains unchanged at SGL-2. Previously, the outlook was negative. The ratings under review for downgrade follows iHeart's announcement of a debt exchange offer to address the outstanding $5.2 billion of debt maturing between 2026-2028. The two transactions outlined in the exchange offers, which are the Comprehensive and Alternative, may potentially have different impacts on the ratings outcome. If the exchange offers are successfully completed as proposed at the expiration date on December 16, 2024, Moody's would likely classify the debt exchange as distressed exchanges which Moody's would consider a default. In addition, there is a possibility the ratings on the existing term loan and notes that are not exchanged could be downgraded from the current ratings under certain scenarios where the debt would become subordinated to the new debt. Governance considerations, as reflected in the company's Credit Impact Score of CIS-5 and governance issuer profile score (IPS) of G-5, were a key driver of the rating action. The rating review will focus on an evaluation of the final capital structure of the transaction executed including any changes to the organizational structure, obligors, guarantors, terms and conditions of existing and new debt obligations, the priority of claims in the waterfall of the different debt tranches, the amount of the residual stub debt, and the implications of new interest rates and maturity schedule on cash flow. Moody's will also focus on the quantum of debt post debt exchange and the sustainability of the capital structure. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS On November 7, 2024, iHeart filed an 8-K outlining the transaction support agreement (TSA) the company entered into with a group of creditors now representing approximately 85% of the principal amount of debt. Subsequently, on November 18, 2024, iHeart announced that it had commenced offers to exchange any and all of the outstanding $5.2 billion of debt maturing between 2026-2028 based on the Comprehensive Transaction subject to minimum participation levels of 95% across all debt tranches, or the Alternative Transaction if the minimum participation levels are not satisfied. Under the Comprehensive Transaction, the existing term loan and notes due 2026-2028 will be exchanged into new term loan and notes due 2029-2031. While the term loan and notes due 2026 will be exchanged close to par, the secured notes due 2027 will be exchanged at a 12% discount, and the notes due 2028 and unsecured notes due 2027 will be exchanged at a 21% discount. The senior unsecured notes will be exchanged to senior secured second lien notes. With 95% participation, (i) although non-participating term loan holders retain the liens and guarantees, they will be subject to a turn over provision which requires the applicable stub agent to turn over both any proceeds and recoveries to first, participating secured first lien debt and second, participating secured second lien debt, (ii) non-participating secured notes holders will have liens and guarantees released, and (iii) non-participating unsecured notes holders will have guarantees released. If the minimum participation is not met, the company is likely to pursue the Alternative Transaction. Under this transaction, the existing term loan and notes will be exchanged into new term loan and notes due 2029-2031 issued by an unrestricted subsidiary (UnSub) that is to be formed with certain drop-down assets (FCC licenses, Katz and ad tech companies). While the exchange price for all the tranches will be the same as the Comprehensive Transaction; the participating holders of the senior secured term loan and notes will have 0.5% exchanged into new senior secured first lien term loan and notes issued by the remaining company (RemainCo). iHeartMedia + Entertainment Inc will be the issuer of the intercompany loan in the amount of approximately $3.5 billion, subject to change depending on the participation rate. The non-participating term loan and notes will remain in the RemainCo secured by assets excluding the drop-down assets. Based on the consent outlined in the TSA ranging between approximately 41%-95%, (i) non-participating term loan, 2026 and 2027 secured notes holders will be subject to turn over which requires turn over of proceeds and recoveries to the intercompany loan while liens and guarantees will be retained, (ii) non-participating holders of the 2028 secured notes will not be subject to turn over unless participation of 50.1% is achieved and liens and guarantees will be retained, and (iii) non-participating unsecured notes holders will have guarantees released. iHeart's Caa1 CFR reflects elevated financial leverage from weak radio advertising demand and continuing negative secular pressures in radio broadcast. Moody's adjusted debt to EBITDA remains high at 8.9x (excluding Moody's standard lease adjustments and no add backs for restructuring costs) and 8.4x (including Moody's standard lease adjustments and no add backs for restructuring costs) as of the twelve months ended September 2024. Moody's expect leverage to further decline to low-8x in 2024 benefiting from the additional political ad dollars; however, there is limited visibility into the operating performance in 2025 as political revenue rolls off and the radio industry continue to face challenges to maintain listenership. iHeart benefits from its size as the largest radio operator in the US as well as its geographic diversity and leading market positions in most of the approximately 160 markets in which it operates. iHeart also derives significant strength from its diversified service offering including podcasting, the iHeartRadio service, live events, syndicated network, and data analytics services. Moody's expect iHeart's podcasting and digital services will continue to be a source of growth going forward. The SGL-2 rating reflects Moody's expectation that iHeart will maintain good liquidity over the next 12 to 15 months supported by $432 million of cash on the balance sheet as of September 2024 and borrowing base availability of $426.3 million of the $450 million ABL revolving credit facility due May 2027 (not rated by us). Moody's expect free cash flow as a percentage of debt to remain in the low-single digit percentage. Moody's expect capital expenditures to remain approximately $90-$95 million which is lower than $103 million in 2023 and meaningfully lower compared to $161 million in 2022 following the completion of the consolidation of its real estate footprint. iHeartCommunications, Inc. (iHeart) with its headquarters in San Antonio, Texas, is the leading terrestrial radio operator and podcasting service provider in the US. In addition, iHeart operates its iHeartRadio digital platform, data analytics services, live events, syndicated networks, and the Katz Media Group. iHeart emerged from Chapter 11 bankruptcy protection and separated from Clear Channel Outdoor Holdings, Inc. in Q2 2019. Revenue was approximately $3.8 billion for the last twelve months ending September 2024. The principal methodology used in these ratings was Media published in June 2021. INDOCHINE RESTAURANT: Hires Red Bike Advisors as Accountant ----------------------------------------------------------- Indochine Restaurant, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of North Carolina to employ Red Bike Advisors, LLC and its director, Richard Pasquantonio, as accountant. The firm will be retained to manage only compliance issues, including missing returns, with the IRS. It will be paid at these rates: Partners & Directors $460/hour CPA and CFE Staff Accountants $380/hour EA Staff Accountants $330/hour Associates $225/hour Administrative Staff $85/hour Richard Pasquantonio, a director at Red Bike Advisors, assured the court that his firm is a "disinterested person" within the meaning of 11 U.S.C. 101(14). The firm can be reached through: Richard Pasquantonio Red Bike Advisors LLC 1650 Military Cutoff Rd. #104 Wilmington, NC 28403 Tel: (910) 256-3456 Email: hello@redbikeadvisors.com About Indochine Restaurant Indochine Restaurant, LLC operates a restaurant in Wilmington, N.C., serving Thai and Vietnamese Asian cuisine. Indochine Restaurant sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-03490) on October 4, 2024, with up to $50,000 in assets and up to $10 million in liabilities. Solange Thompson, manager, signed the petition. The Debtor is represented by George Mason Oliver, Esq., at The Law Offices of Oliver & Cheek, PLLC. INNOPHOS HOLDINGS: Moody's Rates Amended $440MM Term Loan 'B1' -------------------------------------------------------------- Moody's Ratings assigned ratings to the new debt to be issued by Innophos Holdings, Inc. (New) ("Innophos") including a B1 rating on its amended and extended $440 million first lien term loan due March 2029 and a Caa1 rating on its new 11.5% second lien senior secured notes due June 2029. Simultaneously, Moody's affirmed the company's B2 Corporate Family Rating, B2-PD Probability of Default rating, B1 senior secured first lien term loan and Caa1 senior unsecured notes have been affirmed. Also, the Caa1 rating on the PIK toggle notes of Iris Holdings, Inc.'s were affirmed. Holders of Innophos' $275 million senior unsecured notes due 2028 and $175 million PIK toggle notes due 2026 (Iris Holdings, Inc.) can exchange their notes at par into the new second lien notes. The ratings on the unsecured and PIK toggle notes will be withdrawn once the debt is repaid. The outlook remains stable. "Due to weaker financial performance over the past year, as a result of downstream destocking and a slow recovery in end-market demand, Innophos is making changes to existing capital structure to address its HoldCo notes that mature in 2026," stated John Rogers, Senior Vice President at Moody's Ratings and lead analyst on Innophos. The analyst also stated that "The company's ratings had incorporated the additional leverage from the HoldCo notes, as they had an early maturity date relative to the rest of the capital structure." RATINGS RATIONALE The affirmation of the B2 CFR reflects its market position in specialty phosphates, exposure to a number of more stable end markets and backward integration into phosphoric acid, which meaningfully improves margins except in a downturn. Management has taken a number of actions to improve procurement and production, and reduce costs. The most important of these was to expand phosphoric acid production in Mexico, which will improve its profitability by vastly reducing external purchases. The company's ratings are constrained by an elevated level of balance sheet debt and very weak credit metrics on an LTM basis. The B2 rating also reflects the limited organic growth rates, small scale, narrow product portfolio and concentration in North America. Innophos' ratings also consider the company's competitive position in higher growth end markets where it is looking to expand, such as natural ingredients and enzymes. In these markets, it competes with much larger companies such as International Flavors and Fragrances, Inc. (Baa3 stable) and Givaudan SA (Baa1 negative) with greater financial flexibility and more diverse product offerings. The ratings also consider its private equity ownership, which has previously increased debt to fund shareholder distributions. Innophos' credit metrics are stressed for the B2 CFR with LTM September 30, 2024 adjusted Debt/EBITDA of 7.0x and Retained Cash Flow/Debt of 4.7% (metrics include HoldCo notes); however free cash flow is positive despite weak margins, elevated interest costs and higher than normal capital spending. Credit metrics should improve further in 2025 due to higher operating rates at its facilities and the absence of high cost inventory. Moody's expect full year 2025 Debt/EBITDA of closer to 6.0x, Retained Cash Flow/Debt in the high single digits and free cash flow of at least $20 million. Capex is expected to remain elevated in 2025 due to a number of manufacturing cost improvement projects planned. More importantly, phosphate rock and phosphoric acid prices are expected to remain at levels that will support a solid base of profitability in 2025. The B1 rating on the first lien term loan reflects its senior position in the capital structure with a first lien on assets that are not part of the asset backed lending ("ABL") facility and a second lien on assets that are part of the ABL facility. The Caa1 rating on the second lien notes reflects their subordinated position in the capital structure relative to the ABL and term loan. Marketing terms for the new first lien term loan and second lien notes (final terms may differ materially) include more restrictive covenants. The size of an unlimited incremental credit facility is subject to 2.75x first lien net leverage ratio, 3.75x secured net leverage ratio or 2.0 fixed charge coverage ratio. The indenture is expected to prohibit the designation of unrestricted subsidiaries, preventing collateral "leakage" to such subsidiaries, as well as to restrict the company and guarantors from transferring material assets and material intellectual property, other than in connection with a bona fide sale to an unaffiliated party. The indenture is also expected to include "Chewy", "Incora", "Envision" and "At Home" protections. The shared non-guarantor debt incurrence cap (shared between the credit facilities, ratio debt and acquisition/acquired debt baskets) may not exceed the greater of $45 million and 35% of the closing EBITDA. Investment and debt baskets cannot be used in connection with any LME (to be defined in the indenture), and amendments to any LME protections require 100% lender consent. The indenture is expected to provide limitations on up-tiering transactions, requiring 100% lender consent for payment and/or lien subordination. LIQUIDITY Innophos has very good liquidity with cash of $43 million as of September 30, 2024. Availability under its $175 million ABL revolving credit facility should be over $120 million subsequent to the close of the transaction. Additionally, Moody's expect the company to continue to generate free cash flow in 2025. The ABL is expected to be used to support short-term working capital requirements and interest payments over the next 12 months. The ABL facility has a springing covenant when availability fall below 10% of the borrowing base or $17.5 million. ABL borrowing are expected to remain well below the level required trigger the covenant. The first lien term loan is not expected to have any maintenance covenants. OUTLOOK The stable outlook incorporates the expectation that free cash flow will remain positive on a rolling 4 quarter basis and that leverage will decline below 6.0x withing the next 18-24 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Although it is highly unlikely given the company's projected credit metrics in 2025, Moody's could upgrade the ratings if adjusted leverage is sustained below 5.0x, RCF/Debt is sustained at over 12% and the private equity sponsor is committed to not taking additional cash dividends that increase balance sheet debt. Moody's could downgrade the ratings if adjusted leverage is sustained above 6.5x, free cash flow remains negative for a sustained period of time, a substantial deterioration in liquidity occurs, or if the company makes a significant debt-financed acquisition or dividend to the sponsor. Headquartered in Cranbury, New Jersey, Innophos Holdings, Inc. (New) is a producer of specialty phosphate salts, acids, ingredients and related products used by food and beverage, pharmaceutical, industrial and agricultural end markets. The company also offers botanical, enzyme and mineral based nutritional ingredients. Innophos was acquired by private-equity sponsor One Rock Capital Partners, LLC for $932 million. The company generates annual revenues of roughly $900 million. The principal methodology used in these ratings was Chemicals published in October 2023. JOURNEY HEALTH: Hires Cooney Law Offices as Bankruptcy Counsel -------------------------------------------------------------- Journey Health Care MGMT Services, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Cooney Law Offices, LLC as counsel. The firm will assist the Debtor in the administration of its Estate and represent the Debtor on matters involving legal issues that are present or are likely to arise in the case, to prepare any legal documentation on behalf of the Debtor, to review reports for legal sufficiency, to furnish information regarding legal actions and their resulting consequences, and for all necessary legal services connected with Chapter 11 proceedings, including the prosecution and/or defense of any adversary proceedings. The hourly rates charged by Cooney Law Offices' attorneys and paralegals are as follows: James R. Cooney, Esq. $425 Ryan J. Cooney, Esq. $375 Paul R. Toigo $325 Paralegal $150 Ryan Cooney, a partner at Cooney Law Offices, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ryan J. Cooney, Esq. Cooney Law Offices LLC 223 Fourth Avenue, 4th Floor Pittsburgh, PA 15222 Telephone: (412) 392-0330 Facsimile: (412) 392-0335 Email: rcooney@cooneylawyers.com About Journey Health Care MGMT Services Journey Health Care MGMT Services, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 24-22772) on November 12, 2024, listing $100,001 to $500,000 in both assets and liabilities. Judge Gregory L Taddonio presides over the case. Ryan J Cooney, Esq. at Cooney Law Offices LLC represents the Debtor as counsel. KAM REALTY: Seeks to Hire Rodney D. Shepherd as Legal Counsel ------------------------------------------------------------- Kam Realty, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Rodney D. Shepherd, Esq., as counsel. Rodney Shepherd, Esq., a practicing attorney in Pittsburgh, to handle its Chapter 11 case. The firm will be paid at the rate of $300 per hour. The Debtor paid the firm a retainer of $2,500. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Rodney D. Shepherd, 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: Rodney D. Shepherd, Esq. 2403 Sidney Street Suite 208 Pittsburgh, PA 15203 Tel: (412) 471-9670 About Kam Realty, LLC Kam Realty, LLC, filed a Chapter 11 bankruptcy petition (Bankr. W.D. Pa. Case No. 24-22697) on Nov. 1, 2024. The Debtor hires Rodney D. Shepherd, Esq., as counsel. KARPATIA TRUCKS: Updates Restructuring Plan Disclosures ------------------------------------------------------- Karpatia Trucks USA LLC submitted an Amended and Restated Plan of Reorganization dated October 16, 2024. This Plan deals with all property of Debtor and provides for treatment of all Claims against Debtor and its property. Class 3 shall consist claims for General Unsecured Claims not otherwise classified in the Plan. Debtor will pay the Holders of Class 3 General Unsecured Claims a pro-rata share of the Total Unsecured Distribution (i.e. $15,150.57) based on such Holder's Allowed Class 3 Claim as compared to the total of all Allowed Unsecured Claims in Class 3. Debtor shall pay such Unsecured Total Distribution in annual pro-rata payments commencing on the 15th day of December following the Effective Date and continuing each December thereafter for a total of 3 payments. The Debtor anticipates and projects but does not warrant the following Holders of Class 3 Claims under Class 3: Aerotek Inc. ($50,083.53); Bennett Thrasher ($7,500.00); Bigmet Project Owner LLC ($8,058.00); Taylor English Duma LLP ($5,000.00); US Customs & Border Protection ($8,528.28); Milyan, LLC ($5,000.00); and Tai Beuchamp ($15,670). Upon confirmation, Debtor will be charged with administration of the Case. Debtor will be authorized and empowered to take such actions as are required to effectuate the Plan. Debtor will file all post-confirmation reports required by the United States Trustee's office. Debtor will also file the necessary final reports and may apply for a final decree after substantial consummation at such time as debtor deems appropriate unless otherwise required by the Bankruptcy Court. Debtor shall be authorized to reopen this case after the entry of a Final Decree to enforce the terms of the Plan including for the purpose of seeking to hold a party in contempt or to enforce the confirmation or discharge injunction or otherwise afford relief to Debtor. The source of funds for the payments pursuant to the Plan is Debtor's revenue. A full-text copy of the Amended and Restated Plan dated October 16, 2024 is available at https://urlcurt.com/u?l=rjGy9w from PacerMonitor.com at no charge. Attorney for Debtor: JONES & WALDEN LLC Cameron M. McCord, Esq. 699 Piedmont Ave NE Atlanta, Georgia 30308 Phone: (404) 564-9300 About Karpatia Trucks Karpatia Trucks USA, LLC is a manufacturer and refurbisher of food trucks, trailers, containers, and other mobile food vehicles. It has locations in the USA (Atlanta), Europe (Rotterdam, Budapest and Sofia) and Mexico (Mexico City). The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-21234) on Nov. 1, 2023, with up to $50,000 in assets and $1 million to $10 million in liabilities. Tim de Visser, manager, signed the petition. Cameron M. McCord, Esq., at Jones & Walden, LLC represents the Debtor as legal counsel. KENNISON STRATEGIC: Seeks to Hire Thompson Law Group as Counsel --------------------------------------------------------------- Kennison Strategic Development Co. LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Thompson Law Group, P.C. as its counsel. The firm will render these services: a. give legal advice with respect to the Debtor's powers and duties as debtor-in-possession; b. take all necessary action to protect and preserve the Debtor's estate; c. prepare all necessary motions, answers, reports, orders, and other legal papers in connection with the administration of the Debtor's estate; d. perform any and all other legal services for the Debtor in connection with its Chapter 11 case; and e. perform such legal services as the Debtor may request with respect to any matter appropriate in assisting the Debtor's effort to reorganize. The firm will be paid at these rates: Attorneys $350 per hour Paralegals $90 per hour In addition, the firm will seek reimbursement for expenses incurred. Prior to the petition date, the firm received a retainer of $7,000. Brian Thompson, Esq., an attorney at Thompson Law Group, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Brian C. Thompson, Esq. Thompson Law Group, PC 125 Warrendale Bayne Road, Suite 200 Warrendale, PA 15086 Tel: (724) 799-8404 Fax: (724) 799-8409 Email: bthompson@thompsonattorney.com About Kennison Strategic Development Kennison Strategic Development Co. LLC is engaged in activities related to real estate. Kennison Strategic Development Co. LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 24-21944) on August 8, 2024. In the petition filed by Mark Kennison, as president, the Debtor reports estimated assets between $1 million and $10 million and estimated liabilities up to $50,000. The Debtor is represented by Brian C. Thompson, Esq. at Thompson Law Group, P.C. KINGDOM EMPOWERMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Kingdom Empowerment International Ministry d/b/a Kingdom Empowerment International Ministries 6632-6646 Bustleton Avenue Philadelphia, PA 19149 Business Description: Kingdom Empowerment is a Pennsylvania non-profit corporation. Chapter 11 Petition Date: November 29, 2024 Court: United States Bankruptcy Court Eastern District of Pennsylvania Case No.: 24-14289 Judge: Hon. Patricia M Mayer Debtor's Counsel: Dimitri L. Karapelou, Esq. MUSI, MERKINS, DAUBENBERGER & CLAR, L.L.P. 21 W. Third Street Media, PA 19063 Tel: (610) 891-8806 Email: dlk@mmdlawfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Margufta Bellevue as president and chairwoman of the Board. 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/JYFA4OQ/Kingdom_Empowerment_International__paebke-24-14289__0001.0.pdf?mcid=tGE4TAMA KODIAK BP: Moody's Affirms ‘B1’ CFR, Outlook Stable ------------------------------------------------------- Moody's Ratings affirmed Kodiak BP, LLC's B1 corporate family rating and B1-PD Probability of Default Rating. At the same time, Moody's assigned a B2 rating to the company's proposed $1.64 billion senior secured first lien term loan B due 2031. The outlook remains stable. Moody's expect that the terms and conditions of the proposed senior secured term loan will be similar to Kodiak's existing B2-rated senior secured term loan. Proceeds from the new term loan will be used to fund a $440 million dividend, to refinance the company's existing term loan due 2028, and to pay related fees and expenses. At closing of the transaction, the rating for the refinanced term loan will be withdrawn. The transaction will increase Kodiak's leverage and interest burden but also extend the company's debt maturity profile. Moody's now project adjusted debt-to-EBITDA will be 4.6x at year-end 2024, which includes debt-financed dividends paid in 2024. The currently proposed debt-financed dividend of $440 million is in addition to the $450 million distribution already paid in March. In total, the company has returned $1.6 billion since early 2021 to its owners. RATINGS RATIONALE The affirmation of the B1 CFR recognizes Moody's expectation of continued good operating performance and cash flow generation, with adjusted EBITDA margin sustained in the range of 13.% — 14% through 2025. Kodiak benefits from good liquidity, meaningful scale and end market dynamics that support modest long-term growth. At the same time, products distributed by Kodiak are easily available from other distributors or the large home centers, making it difficult to achieve large price increases and expand market share. Future capital deployment for returns to shareholders is an ongoing credit risk given the history of debt-financed distributions. Other constraining factors include high debt leverage, with interest coverage, defined as adjusted EBITA-to-interest expense, of around 2.8x by late 2025. Moody's project Kodiak will have good liquidity, generating decent free cash flow (prior to discretionary dividends) through 2025. Kodiak has access to a $350 million asset based revolving credit facility that is being extended to 2029, which is governed by a borrowing base calculation that fluctuates with business seasonality, and is more than sufficient to meet working capital needs due to seasonal demands. Kodiak uses the revolving credit facility for working capital, letters of credit and bolt-on acquisitions. The stable outlook reflects Moody's view that Kodiak will continue to perform well, generating good margins. Good liquidity, no material near-term debt maturities and end market dynamics that support modest long-term growth further support the stable outlook. The B2 rating on Kodiak's senior secured term loan, one notch below the corporate family rating, results from its subordination to company's asset based revolving credit facility. The term loan has a first lien on substantially all noncurrent assets and a second lien on assets securing the company's asset based revolving credit facility (ABL priority collateral). Marketing terms for the new credit facility (final terms may differ materially) include the following: incremental pari passu debt capacity up to the greater of $388 million and 100% of consolidated EBITDA, plus unlimited amounts subject to pro forma first lien net leverage of 4.5x. There is no inside maturity sublimit. A "blocker" provision 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 the debt or the liens unless such lenders can ratably participate in such priming debt. Amounts up to 100% of unused capacity from the builder basket may be reallocated to incur debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade could occur if end markets remain supportive of organic growth such that adjusted debt-to-EBITDA is sustained below 4x. Preservation of at least good liquidity, reduction in private-equity ownership and more predictable financial policies regarding capital deployment would support upward ratings movement. A ratings downgrade could occur if adjusted debt-to-EBITDA remains above 5x or interest coverage, defined as adjusted EBITA-to-interest expense, is trending towards 1.5x. Negative ratings pressure may also transpire if the company experiences weakening of liquidity or adopts more aggressive shareholder return initiatives or acquisitions. Kodiak, headquartered in Englewood, Colorado, is a national distributor of building materials and installs assorted products throughout the home. Court Square Capital Partners, through its affiliates, owns 71% of Kodiak and management control the preponderance of the remaining shares. Kodiak's revenue for the 12 months ending June 30, 2024 was $2.8 billion. The principal methodology used in these ratings was Distribution and Supply Chain Services published in February 2023. LA LOBA: Hires Maureen J. Shanahan as General Insolvency Counsel ---------------------------------------------------------------- La Loba De Wall St, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Maureen J. Shanahan as general insolvency counsel. The firm will provide these services: a. completion of the documents required by the UST, preparation of status reports, review and consultation concerning Monthly Operating Reports, and personal attendance at all hearings, included but not limited to the Status Conference, Initial Debtor Interview, the meeting of creditors pursuant to Bankruptcy Code section 341 (a) or any continuance thereof, all status conferences; preparation of any first day motions and employment applications and all hearings on motions, the disclosure statement and plan; b. consultation with Debtor's representative concerning documents needed and reports to be prepared and consultation with other professionals to be employed by Debtor; c. assistance to Debtor in preparation of documents for compliance with the requirements of the Office of the United States Trustee; d. negotiations with creditors regarding the amount and payment of their claims; e. discussions with Debtor's representative concerning the Disclosure Statement and Chapter 11 Plan of Reorganization and any amendments/changes to the same; f. preparation of the Disclosure Statement and Chapter 11 Plan of Reorganization and any amendments/changes to the same; g. submission of ballots to creditors, tally of ballots and submission to the Court; h. response to any objections to disclosure statement and/or Plan; i. response to any motion for relief from stay, motions to dismiss or any other motions or contested matters. The firm will be paid at these rates: Attorneys $550 per hour Paralegal $150 per hour The firm was paid a retainer in the amount of $5,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Maureen J. Shanahan, Esq., disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Maureen J. Shanahan, Esq. P.O. Box 789 Pacific Palisades, CA 90272 Tel: (310) 804-2107 Fax: (310) 496-1260 About La Loba De Wall St, LLC The Debtor owns a commercial building located at 1147 S. Wall St., Los Angeles, CA 90015 having an appraised value of $4.5 million. La Loba De Wall St LLC in Los Angeles, CA, sought relief under Chapter 11 of the Bankruptcy Code filed its voluntary petition for Chapter 11 protection (Bankr. C.D. Cal. Case No. 24-19243) on Nov. 12, 2024, listing $6,270,900 in assets and $3,507,955 in liabilities. Marisela Nuno as managing member, signed the petition. Judge Vincent P Zurzolo oversees the case. Maureeen J. Shanahan, Esq. serve as the Debtor's legal counsel. LA ZAMORANA COCKTAIL: Hires Gandia-Fabian Law Office as Counsel --------------------------------------------------------------- La Zamorana Cocktail Lounge, Corp., d/b/a La Bodega Vasca d/b/a La Zamorana Coctel Lounge, Corp., seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Gandia-Fabian Law Office as its legal counsel. The Debtor requires an attorney to: a. give legal advice regarding its duties, powers and responsibilities in its Chapter 11 case under the laws of the United States and Puerto Rico where it conducts its operations or business, or is involved in litigation; b. advise the Debtor to determine whether a reorganization is feasible and, if not, help the Debtor in the orderly liquidation of its assets; c. assist in negotiations with creditors for the purpose of arranging the orderly liquidation of assets or for proposing a viable plan of reorganization; d. prepare legal papers; e. appear before the bankruptcy court or any court in which the Debtor asserts a claim interest or defense directly or indirectly related to this bankruptcy case; and f. perform other necessary legal services for the Debtor. The firm will be paid at these rates: Mary Ann Gandia-Fabian $300 per hour Senior Attorney $300 per hour Junior Attorney $250 per hour Accounting Analyst $125 per hour In addition, the firm will be reimbursed for out-of-pocket expenses incurred. The firm received a retainer from the Debtor in the amount of $10,000. Mary Ann Gandia-Fabian, Esq., a partner at Gandia-Fabian Law Office, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Mary Ann Gandia-Fabian, Esq. Gandia-Fabian Law Office P.O. Box 270251 San Juan, PR 00928 Tel: (787) 390-7111 Fax: (787) 729-2203 Email: gandialaw@gmail.com About La Zamorana Cocktail Lounge, Corp. La Zamorana Cocktail Lounge, Corp. d/b/a La Bodega Vasca d/b/a La Zamorana Coctel Lounge, Corp., filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 24-04892) on Nov. 13, 2024. The Debtor hires Gandia-Fabian Law Office as legal counsel. LA ZAMORANA COCKTAIL: Hires Jimenez Vazquez as Counsel ------------------------------------------------------ La Zamorana Cocktail Lounge, Corp., d/b/a La Bodega Vasca d/b/a La Zamorana Coctel Lounge, Corp., seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Jose Victor Jimenez of Jimenez Vazquez & Associates, PSC. The firm will assist the Debtor's legal counsel with the filing of schedules; preparation of monthly operating reports and cash flow forecasts; drafting of reorganization payment plan; and other bankruptcy related activities. The firm will be paid at these rates: Jose Victor Jimenez Vazquez $185 per hour Senior Staff Consultant $85 per hour Staff Accountant $65 per hour The retainer is $4,000. As disclosed in court filings, Jimenez Vazquez & Associates does not represent interests adverse to the Debtor's estate. The firm can be reached through: Jose Victor Jimenez CPA, CVA Jimenez Vazquez & Associates, PSC P.O. Box 3774 Bayamon, PR 00958 Tel: (787) 447-0098 Fax: (939) 338-2362 Email: jvjimenez@jimenezvazquezcpa.com About La Zamorana Cocktail Lounge, Corp. La Zamorana Cocktail Lounge, Corp. d/b/a La Bodega Vasca d/b/a La Zamorana Coctel Lounge, Corp., filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 24-04892) on Nov. 13, 2024. The Debtor hires Gandia-Fabian Law Office as legal counsel. LASERSHIP INC: Moody's Appends 'LD' Designation to PDR ------------------------------------------------------ Moody's Ratings has appended a limited default (/LD) designation to LaserShip, Inc.'s (dba OnTrac) probability of default rating, revising it to Caa3-PD/LD from Caa3-PD. There are no changes at this time to the company's Caa3 corporate family rating, the Caa2 rating on its senior secured first lien bank credit facilities, the Ca rating on its senior secured second lien term loan and the negative outlook. The /LD designation appended to the PDR will be removed in three business days. On November 14, 2024, OnTrac closed a transaction with a majority of its existing first lien and second lien lenders. The transaction created various tranches of new priority debts, including $300 million of new money in the form of a super priority first lien first out (FLFO) term loan. Existing first lien revolver lenders have agreed to a new first out revolver at similar terms while existing first lien and second lien term loan lenders have agreed to exchange into several different tranches of new first lien term loans. The transaction also extends maturity dates into 2029. OnTrac has offered remaining lenders the opportunity to participate in the exchange transaction, which is expected to close in November. Remaining first lien term loan lenders that consent can exchange their debt at 75 cents into a combination of new first lien second out (FLSO) and first lien third out (FLTO) term loan tranches. Remaining second lien lenders that consent can exchange their debt at 70 cents into a separate tranche of a FLTO term loan. Any existing debt that does not participate in the exchange will become subordinated in payment and lien priority to the newly created priority debts. Moody's view the transaction as a distressed exchange, which resulted in a limited default under Moody's definition. The transaction constitutes a loss for certain lenders given the discounted exchange and likely averts a potential payment default given OnTrac's weak liquidity prior to the transaction. OnTrac's liquidity will improve following the transaction as the company's revolving credit facility will be undrawn and availability unders its accounts receivable securitization facility will increase. However, the transaction does not materially reduce OnTrac's total debt. Therefore, financial leverage is expected to remain very high and interest coverage will remain weak. Moody's will reevaluate OnTrac's ratings once there is clarity around the outcome of the exchange and the resulting capital structure. LaserShip, Inc. (dba OnTrac) is a last mile parcel delivery provider with a focus on business to consumer deliveries for leading e-commerce retailers across apparel, health and beauty, food, and mass merchandise markets. Revenue for the twelve months ended June 30, 2024 was approximately $2.3 billion. LJB LLC: Seeks to Hire Gary W. Cruickshank as Legal Counsel ----------------------------------------------------------- LJB, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Massachusetts to employ Gary W. Cruickshank, attorney practicing in Boston, Massachusetts, as counsel. Mr. Cruickshank will render these services: (a) assist and advise the Debtor in the formulation and presentation of a Plan of Reorganization and Disclosure Statement; (b) advise the Debtor as to its duties and responsibilities; and (c) perform such other legal services as may be required during the course of this Chapter 11 case. The attorney will be paid at his hourly rate of $425. Mr. Cruickshank also received an advance payment of $9,258, Mr. Cruickshank disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Gary W. Cruickshank, Esq. 10 Post Office Square, Suite 800 South Boston, MA 02109 Telephone: (617) 330-1960 Email: gwc@cruickshank-law.com About LJB LLC LJB LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 24-12236) on November 7, 2024, with $1 million to $10 million in both assets and liabilities. Kenneth L. Brown, manager, signed the petition. Judge: Janet E Bostwick oversees the case. Gary W. Cruickshank, Esq., represents the Debtor as legal counsel. LL FLOORING: Unsecureds' Recovery "TBD" in Liquidating Plan ----------------------------------------------------------- LL Flooring Holdings, Inc. and affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a Disclosure Statement for Joint Plan of Liquidation dated October 16, 2024. Prior to the F9 Sale and the Sandston DC Sale, LL Flooring was one of North America's leading specialty retailers of flooring. LL Flooring was founded by Thomas Sullivan in 1994 as Lumber Liquidators Holdings, Inc. and changed its corporate name to LL Flooring Holdings, Inc. effective January 1, 2022. As of the Petition Date, the Company operated approximately 430 retail stores across forty-six states in the United States. Approximately 219 of those retail stores were sold to F9 as a going-concern and, as of the date hereof, the Debtors have closed approximately 94 of those retail stores and rejected the corresponding Unexpired Leases. The Debtors are conducting liquidation sales at the remaining locations and anticipate concluding such sales by November 30, 2024. On September 4, 2024, F9 filed the Limited Objection of F9 Investment, LLC, F9 Brands, Inc., and LumliQ2, LLC to the Motions of Debtors, objecting to the Debtors’ pivot to a liquidation process and encouraging an extension of the Case Milestones. Around the same time, F9 submitted a revised going-concern bid to the Debtors that provided greater value to the Debtors and their Estates. The Debtors immediately engaged with F9 and, on September 6, 2024, entered into an asset purchase agreement with F9 (the "F9 APA") for a purchase price of $1,000,000 for intellectual property and certain furniture, fixtures and equipment, plus the Inventory Price, plus all Assumed Cure Costs (the "F9 Going Concern Sale"). On August 30, 2024, the Debtors filed the Motion of Debtors for Entry of an Order (I) Authorizing Debtors to Enter into and Perform Under Sandston Distribution Center Purchase Agreement; (II) Authorizing the Private Sale of Certain of Debtors' Assets Free and Clear of Liens, Claims, and Encumbrances; and (III) Granting Related Relief (the "DC Private Sale Motion"), seeking authority to sell the Sandston DC, the land on which the Sandston DC is built, and certain intangible personal property for a purchase price of $104,750,000. Following a contested hearing on September 16, 2024, the Bankruptcy Court approved the F9 Going Concern Sale and the DC Private Sale Motion. Together, the F9 Sale and the Sandston DC Sale preserved the Debtors' business as a going concern, saved approximately 800 employee jobs, and generated sufficient sale proceeds, along with the proceeds of the ongoing parallel liquidation sales, to repay the obligations under the Prepetition ABL Agreement and the DIP ABL Facility in full and provided a path to satisfying Administrative Claims and facilitating a wind down of the Debtors' Estates through the Plan. The next phase of the Chapter 11 Cases is the Confirmation and consummation of the Plan, pursuant to which the Debtors will (a) pay Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Class 1 Secured Claims, and Allowed Class 2 Other Priority Claims in full, or otherwise render such Claims Unimpaired, (b) appoint the Liquidating Trustee pursuant to the mechanics set forth in the Plan, and (c) establish a Liquidating Trust to distribute the remaining Cash of the Debtors and the proceeds of the Liquidating Trust Assets to Holders of Allowed Class 3 General Unsecured Claims. Class 3 consists of General Unsecured Claims. On the Effective Date, or as soon as reasonably practicable thereafter, except to the extent that a Holder of an Allowed General Unsecured Claim and the Debtors or the Liquidating Trustee, as applicable, agree to less favorable treatment for such Holder, in full and final satisfaction of the Allowed General Unsecured Claim, each Holder thereof will receive its pro rata right to recovery from the Liquidating Trust. Holders of other general unsecured claims in Class 3 are impaired and their projected recovery is still "to be determined", according to the Disclosure Statement. Class 5 consists of all Interests in the Debtors. On the Effective Date, all Interests shall be canceled, released, and extinguished, and will be of no further force or effect, and Holders of such Interests shall not receive any distributions under the Plan on account of such Interest. Subject in all respects to the provisions of the Plan concerning the Professional Fee Reserve, the Debtors or the Liquidating Trustee (as applicable) shall fund distributions under the Plan with Cash on hand on the Effective Date and all other Liquidating Trust Assets. On the Effective Date, the Liquidating Trust will be established pursuant to the Liquidating Trust Agreement, which will be Filed with the Bankruptcy Court as part of the Plan Supplement. Upon establishment of the Liquidating Trust, title to the Liquidating Trust Assets shall be deemed transferred to the Liquidating Trust without any further action of the Debtors or any managers, employees, officers, directors, members, partners, shareholders, agents, advisors, or representatives of the Debtors. A full-text copy of the Disclosure Statement dated October 16, 2024 is available at https://urlcurt.com/u?l=uwr3V0 from Stretto, Inc., claims agent. The firm can be reached through: Lisa Laukitis, Esq. Elizabeth M. Downing, Esq. Angeline J. Hwang, Esq. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP One Manhattan West New York, NY 10001 Telephone: (212) 735-3000 Facsimile: (212) 735-2000 Email: Lisa.Laukitis@skadden.com Edmon L. Morton, Esq. Kenneth J. Enos, Esq. Elizabeth S. Justison, Esq. S. Alexander Faris, Esq. Young Conaway Stargatt & Taylor, LLP 1000 N. King St. Wilmington, DE 19801 Telephone: (302) 571-5728 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. Lead Case No. 24-11680) on August 11, 2024. In the petitions signed by Holly Etlin as chief restructuring officer, LL Flooring disclosed total assets of $501,117,025 and total debt of $416,298,035 as of July 31, 2024. Judge Brendan Linehan Shannon oversees the cases. 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. MCR HEALTH: Hires Forvis Mazars as Health Care Consulting Advisor ----------------------------------------------------------------- MCR Health, Inc., seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Forvis Mazars, LLP as health care consulting advisor. The firm will provide these services: a. assist management with their review of MCR Health, Inc.'s (the "Health Center") chart of accounts to determine potential modifications to improve reporting capabilities related to the presentation of financial information; b. assist management with creation of the annual operational budget (budget) of the Health Center's financial operations. The budget will be based upon data, such as trial balance, internal financial statements, strategic and operational plan, and practice management system reports, provided by the Debtors; c. assist management in planning for and oversight of the budgeting process by facilitating meetings with management and others as identified by the Debtors; d. assist management with their development of certain financial information included in the Service Area Competition or Non-Competing Continuation federal grant applications submitted to HRSA; e. assist training that focused on development of financial and other systems that aid in Health Center compliance with federal regulations to include The Uniform Grants Guidance (2 CFR 200), Section 330 of the PHS Act, the Department of Health and Human Services Grants Policy Statement, and the Health Center Compliance Manual issued by HRSA/BPHC; f. assist with building the budget through the Health Center's budgeting tool according to trial balance information, management's assumptions, and other financial information provided by the Debtors; and g. provide the completed budget to the Debtors in the format the budgeting tool uses for reporting. The firm will be paid at these rates: Partner $640 per hour Director $480 per hour Manager $430 per hour Senior Associates $275 per hour Associate $240 per hour The firm holds a retainer in the amount of $15,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Eric Rogers, a partner at Forvis Mazars, 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: Eric Rogers Forvis Mazars, LLP 910 East St Louis Street Springfield, MO 65806 Tel: (417) 865-8701 About MCR Health, Inc., MCR Health, Inc. and AllCare Options, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 24-06604) on November 8, 2024, with $10 million to $50 million in both assets and liabilities. Mary Ruiz, board chair, signed the petitions. Judge Roberta A. Colton oversees the cases. Steven M. Berman, Esq., at Shumaker, Loop & Kendrick, LLP, represents the Debtors as legal counsel. MEDLIN EXPEDITED: Sec. 341(a) Meeting of Creditors on Dec. 18 ------------------------------------------------------------- On November 14, 2024, Medlin Expedited + Leasing LLC filed Chapter 11 protection in the Eastern District of Tennessee. According to court documents, the Debtor reports $1,607,849 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. A meeting of creditors under Sec. 341(a) to be held on December 18, 2024 at 11:00 AM. About Medlin Expedited + Leasing LLC Medlin Expedited + Leasing LLC is part of the general freight trucking industry. Medlin Expedited + Leasing LLC sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tenn. Case No. 24-32009) on November 14, 2024. In the petition filed by Susan Medlin, as chief manager, the Debtor reports total assets of $895,225 and total liabilities of $1,607,849. Honorable Bankruptcy Judge Suzanne H. Bauknight handles the case. The Debtor is represented by: Thomas H. Dickenson, Esq. HODGES, DOUGHTY & CARSON, PLLC P.O. Box 869 Knoxville, TN 37901-0869 Tel: 865-292-2307 Fax: 865-292-2321 Email: tdickenson@hdclaw.com METHANEX CORP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Methanex Corporation's Long-Term Issuer Default Rating (IDR) at 'BB+' and its unsecured debt at 'BB+' with a Recovery Rating of 'RR4'. Fitch has also assigned a 'BB+' IDR to Methanex US Operations Inc. and a 'BB+'/'RR4' rating to its new senior unsecured notes. The Rating Outlook is Stable. Methanex's position is one of the largest global suppliers of methanol, with a global distribution network and around 13.3 million metric tonnes (MT) of nameplate production capacity (pro forma its OCI acquisition). The ratings reflect its low cost production, solid historical FCF and balanced capital allocation. Leverage will be elevated following Methanex's purchase of OCI N.V.'s methanol assets. Fitch expects the company will prioritize debt reduction after the acquisition closes. The rating also incorporates the volatility of methanol prices and the cost of maintaining shipping and storage facilities. The Stable Outlook reflects a stable demand environment, with realized prices sufficient to support debt reduction. Fitch has also affirmed and withdrawn the rating on Methanex's revolving credit facility as it is not relevant to the rating agency's coverage, as the revolver currently has no outststandings and will be replaced with a new revolver in the short to medium term. Key Rating Drivers Temporarily Elevated Leverage: Fitch expects Methanex's EBITDA leverage will exceed 4x following the OCI acquisition, temporarily exceeding the downgrade threshold of 3.5x. Fitch believes Methanex can manage this leverage in a mid-cycle price environment and will focus on debt reduction post-acquisition. The company has a track record of debt reduction, including a planned repayment of its $300 million notes due in December 2024. Methanex is funding a large part of the OCI acquisition with shorter-dated, prepayable term loans. FCF Generation: Methanex consistently generates positive FCF across various price cycles. Fitch believes the company's low-cost production and management's willingness to reduce dividends support its FCF profile. With spending on the new Geismar 3 (G3) plant in Louisiana concluding in 2024, Fitch expects Methanex's capex needs will fall to maintenance levels, which will improve FCF and provide additional capacity for debt repayment. Gas Supply Supports Low-Cost Production: Methanex primarily relies on natural gas as its main feedstock and largest expense. The company's North American plants benefit from access to low cost, abundant, well-hedged gas. The OCI acquisition will further enhance this cost profile. Methanex's plants outside North America have credit-friendly contract structures that include a low initial fixed gas price and a variable component shared between Methanex and the gas supplier as methanol prices rise. This countercyclical structure lowers the company's costs during down-cycles. Added Scale and Diversification: The OCI acquisition provides additional methanol production capacity and increased access to low-cost, reliable North American natural gas feedstock, mitigating intermittent supply risk in other regions. The acquisition increases production capacity by around 20% and leverages Methanex's existing logistics and marketing network, further supporting those efforts. It also introduces ammonia production and exposure to agricultural and industrial end-uses. Supportive Demand: Methanol demand is increasingly driven by energy applications, including MTO plants, gasoline blendstocks (MTBE), vehicle fuel in China, bunker fuel substitutes, and industrial boiler fuel. Growing interest in maritime fuel from new dual fuel vessel orders and retrofits further supports demand, mitigating some methanol price volatility, tied to natural gas and oil prices. Parent-Subsidiary Linkage: According to Fitch's Parent-Subsidiary Linkage Rating Criteria, the IDRs of Methanex Corp. and its wholly-owned subsidiary Methanex US Operations Inc. are equalized at 'BB+'. Fitch follows the stronger subsidiary path, as the parent's credit profile is bolstered by the subsidiary's direct ownership of U.S.-based assets. The equalization reflects open legal ring-fencing and open access and control between the stronger subsidiary and Methanex Corp. Derivation Summary Methanex exhibits higher cash flow volatility than other investment grade chemical companies. Its single product focus on methanol makes it less diversified than integrated chemical producers such as Celanese Corp (BBB-/Stable) and Olin Corporation (BBB-/Stable). However, Methanex has greater scale and less volatility than Consolidated Energy Limited (CEL, BB-/Stable), because it has less exposure to the fertilizer end market. Both Methanex and CEL have pursued expansion opportunities, with Methanex completing its G3 plant expansion and acquiring methanol and ammonia assets from OCI, while CEL acquired a majority stake in Oman Methanol Company. Methanex's YE 2023 EBITDA leverage of 5.0x compares favorably to peer CEL's. Fitch anticipates that Methanex's leverage will decline to approximately 3.4x at YE 2024 as methanol prices improve, the G3 complex ramps to capacity and as the company repays upcoming maturities. Fitch expects Methanex's EBITDA leverage to climb above its 3.5x downgrade sensitivity in 2025 from the pending OCI acquisition, but then decline as the company applies excess cash flow to debt repayment. By contrast, Fitch expects CEL's EBITDA leverage to improve but still stay elevated at 5.1x at YE 2024, remaining temporarily outside its downgrade sensitivity of 4.5x. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer - Methanex closes on the OCI acquisition in the first half of 2025; - Methanol prices of about $345-350/MT over the forecast period; - Fitch does not anticipate any major capacity expansions over the forecast period, and capex is largely at maintenance levels; - No share repurchases through 2027, dividends remain largely stable; - Methanex repays its $300 million note due December 2024 through a combination of cash and temporary revolver borrowings, and focuses future FCF on repaying its acquisition term loans. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Mid-cycle EBITDA leverage sustained below 2.5x; - Additional product diversification, potentially from further exposure to ammonia. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Mid-cycle EBITDA leverage durably above 3.5x; - Heightened acquisition activity that is largely debt-financed; - Structurally lower methanol prices, potentially caused by industry overexpansion and/or weaker than forecast demand; - Change in capital allocation that prioritizes shareholder returns over debt reduction. Liquidity and Debt Structure Solid Liquidity: As of Q3 2024, Methanex had $511 million in cash and full access to its $500 million revolving credit facility, as the company completed construction of the G3 production facility using internal cash flow. Fitch expects that Methanex will repay its $300 million note due 2024 with a combination of cash and a temporary draw on its revolver. Fitch expects this revolver will be replaced by a new revolver with two multi-year tranches upon the close of the OCI acquisition. After the 2024 note, debt maturities are well-staggered, including the expected three- and four-year term loans incurred as part of the OCI acquisition. Fitch expects that Methanex will use future FCF to pay down the term loans given their prepayable structure. Issuer Profile Methanex is one of the largest global suppliers of methanol. It has about 13.3 million MT of nameplate methanol and ammonia production capacity, pro forma for its announced OCI acquisition, across New Zealand, the U.S., Trinidad, Egypt, Canada, and Chile. 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 ----------- ------ -------- ----- Methanex Corp. LT IDR BB+ Affirmed BB+ senior unsecured LT BB+ Affirmed RR4 BB+ senior unsecured LT WD Withdrawn Methanex US Operations Inc. LT IDR BB+ New Rating senior unsecured LT BB+ New Rating RR4 METHANEX US: Moody's Rates New $500MM Senior Unsecured Notes 'Ba2' ------------------------------------------------------------------ Moody's Ratings assigned a Ba2 rating to the proposed $500 million backed senior unsecured notes to be issued by Methanex US Operations Inc., a wholly owned subsidiary of Methanex Corporation (Methanex). Proceeds from the proposed notes will be used in conjunction with a new term loan and rollover equity to fund Methanex's previously announced acquisition of OCI N.V.'s (Ba1, under review for downgrade) global methanol business. Methanex US Operations Inc.'s outlook is assigned stable. The proposed notes will be cross-guaranteed to Methanex resulting in all the senior unsecured notes being ranked equally. There is no change to Methanex's existing Ba1 corporate family rating (CFR), Ba1-PD probability of default rating, (P)Ba1 senior unsecured shelf rating, and existing Ba1 senior unsecured notes ratings, currently under review for downgrade. The SGL-1 Speculative Grade Liquidity Rating (SGL) also remains unchanged. If the transaction closes as proposed and in alignment with current assumptions, Moody's expect that a downgrade of Methanex's existing ratings would be limited to one notch and the rating on the currently proposed notes would be affirmed at Ba2. If for any reason the acquisition is not completed, the notes will be subject to a special mandatory redemption at a price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest, and Moody's would withdraw the rating on the notes. The purchase of OCI's 50% stake in Natgasoline LLC (Natgasoline) is subject to the resolution of an ongoing dispute between OCI and Proman USA. Methanex will have the option of proceeding with a smaller scope transaction if the final resolution is unfavorable or substantially delayed, which could result in lower pro-forma leverage. The $2.05 billion transaction includes OCI's methanol and ammonia operations based in Beaumont, Texas, idled capacity in the Netherlands and 50% ownership in the Natgasoline LLC (B3 negative) joint venture with Proman USA through Consolidated Energy Limited (B2 negative). The deal includes the assumption of about $430 million of net debt and leases from OCI and Natgasoline. RATINGS RATIONALE Methanex's CFR is currently under review for downgrade, reflecting that while the acquisition enhances the company's business profile, higher financial leverage will reduce the company's resiliency to operational or industry volatility, and historically inconsistent operating rates at the acquired facilities further contribute to execution risks. The pace of deleveraging will be dependent on a supportive price environment and G3 production ramping up. Post transaction, Moody's expect Methanex to allocate free cash flow toward debt repayment. With the company's reduced capital needs following the buildout of G3, Moody's forecast strong free cash flow which will enable deleveraging in most price environments. However, an initially higher debt load will weaken Methanex's resiliency to industry or operational volatility, which could limit the company's financial flexibility post transaction. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Moody's review will focus on the final post-transaction asset base, capital structure and Moody's assessment of execution risks, macroeconomic conditions, cash generation and deleveraging capacity at the time the deal closes. Moody's expect to conclude the review once regulatory approvals are secured and the deal has closed, potentially in the first half of 2025. Methanex Corporation, based in Vancouver, British Columbia, is the one of the world's largest producers of methanol. The principal methodology used in this rating was Chemicals published in October 2023. MISS AMERICA: Chapter 11 Dismissal Hearing Postponed Pending Event ------------------------------------------------------------------ Vince Sullivan of Law360 Bankruptcy Authority reports that on November 27, 2024, a Florida bankruptcy judge postponed a hearing on the motion to dismiss the Chapter 11 case of an entity associated with the Miss America pageant until after the competition concludes in January 2025, allowing discovery to proceed between the two parties contesting the organization's ownership. About Miss America Competition LLC Miss America Competition LLC is an annual competition open to women from the United States between the ages of 18 and 28. The competition's inception as a "bathing beauty review" was an act of rebellion during a time when women weren't permitted to wear swimsuits in public. In 1945, the organization started awarding scholarships to the winner instead of prize money, making Miss America one of the first organizations in the United States to offer college scholarships to women. Miss America Competition LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-22288) on November 22, 2024. In the petition filed by Glenn Straub, as sole member and manager, the Debtor reports estimated assets between $500,000 and $1 million and estimated liabilities between $1 million and $10 million. Honorable Bankruptcy Judge Erik P. Kimball handles the case. The Debtor is represented by: Craig I. Kelley, Esq. KELLEY KAPLAN & ELLER, PLLC 1665 Palm Beach Lakes Blvd The Forum - Suite 1000 West Palm Beach, FL 33401 Tel: 561-491-1200 E-mail: craig@kelleylawoffice.com MS FREIGHT: Files Chapter 11 Bankruptcy --------------------------------------- On November 25, 2024, MS Freight Co. Inc. filed Chapter 11 protection in the Northern District of Mississippi. According to court documents, 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. About MS Freight Co. Inc. MS Freight Co. Inc., doing business as MS Sales & Service, is a leading trucking company. MS Freight Co. Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Miss. Case No. 24-13745) on November 25, 2024. In the petition filed by Will White, as president, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. The Debtor is represented by: Craig M. Geno, Esq. LAW OFFICES OF CRAIG M. GENO, PLLC 601 Renaissance Way Suite A Ridgeland, MS 39157 Tel: 601-427-0048 NATIONAL ASSOCIATION: Trustee Hires SL Biggs as Accountant ---------------------------------------------------------- Jeremy W. Faith, the Chapter 11 Trustee for National Association Of Television Program Executives, Inc., seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ SL Biggs as Accountant. The firm will provide these services: -- review the ledger, books, and records of the Debtor to determine tax consequences relative to the disposition of assets, and advise accordingly; -- review prior year's tax payments are recoverable through net operating loss carry backs, and amend prior year tax returns in connection therewith; -- prepare Federal and State tax returns, and accompanying accounting, statements and schedules; and -- coordinate the filing of returns with the State and Federal taxing authorities; -- prepare all bankruptcy accounting required to prepare tax returns. The firm will be paid at these rates: Partners $650 to $730 per hour Managing Directors $575 to $650 per hour Directors $550 to $625 per hour Senior Managers $400 to $495 per hour Managers $395 to $425 per hour Senior/Junior Accountants $225 to $325 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. As disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Brian Landau SL Biggs, a division of SingerLewak LLP 10960 Wilshire Boulevard, Suite 1100 Los Angeles, CA 90024 Tel: (310) 477-3924 About National Association of Television Program Executives, Inc. The National Association of Television Program Executives (NATPE) is a professional association of television and emerging media executives established in 1963. NATPE sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-11181) on Oct. 11, 2022, with up to $50,000 in assets and up to $1 million in liabilities. Judge Martin R. Barash oversees the case. Leslie A Cohen, Esq., at Leslie Cohen Law, PC, serves as the Debtor's counsel. NOVA CHEMICALS: Fitch Assigns BB- Rating on $400MM Sr. Unsec. Notes ------------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' with a Recovery Rating of 'RR4' rating to NOVA Chemicals Corporation's (NOVA) $400 million proposed senior unsecured notes. The debt issuance will be used to refinance the 2026 Term Loan. Key Rating Drivers Ongoing Refinancing Efforts: The refinancing of NOVA's 2025 and 2026 maturities with a $500 million unsecured Delayed Draw Term Loan (DDTL) and the new unsecured notes, respectively, and the extension of its $1.5 billion revolving credit facility to April 2028 represents an important step in the company's management of its debt maturity profile. Fitch believes that the transactions will afford the company a degree of financial flexibility and materially lower refinancing risk in the near-term before its next significant maturity comes due in 2027. Though Fitch expects that the company will be successful in its multi-year refinancing effort, changes in market access or the operating environment that impede NOVA's ability to improve the maturity profile in a timely manner may lead to negative ratings pressure. Elevated Leverage, Improving Operations: A weakening macroeconomic environment, including a period of sharp destocking which lasted through 2023, put pressure on NOVA's earnings and cash flow generation. Additionally, NOVA suffered two unplanned outages at its Corunna ethylene production facility due to a mechanical issue within a third-party proprietary technology. The Corunna cracker is the sole source of ethylene feedstock for its three polyethylene-producing assets in Ontario, and the outage alongside macroeconomic headwinds led to YE 2023 EBITDA leverage above 10.0x. Fitch believes that this period represented the peak of leverage, with issues with the Corunna cracker having been resolved and destocking having largely subsided. These factors should spur material EBITDA-driven deleveraging throughout the ratings horizon, particularly as the olefin and polyolefin markets improve, and could lead to positive FCF generation. Sustained Low-Cost Position: NOVA benefits from low-cost feedstock at its Geismar, Louisiana, Joffre, Alberta and Corunna, Ontario sites. Assets have access to some of the most prolific shale oil & gas basins and the Joffre assets are near Canadian oil sands operations and integrated into the Alberta Ethane Gathering System. Fitch expects North American ethylene production to remain cost advantaged despite low global operating rates. Increased Focus on Sustainability: Fitch believes that NOVA's new Circular Solutions business line, which focuses on producing lower-emission, recycled solutions, will remain a key target for investment during periods of greater cash flow and financial access. Notably, the company is in the process of constructing a recycling plant in Connersville, IN. Fitch believes that polyethylene producers who are successfully able to secure both supply and demand commitments in North America will be able to enjoy premium pricing on recycled products. Derivation Summary NOVA and Westlake Chemical Corporation (BBB/Stable) are both regional producers concentrated in ethylene and polyethylene production, but Westlake benefits from greater scale and product diversification. Both producers have globally competitive cost bases and have some specialized characteristics resulting in some margin uplift from pure commodity chemical producers. Though NOVA and Westlake's North American asset bases do provide the companies with a relative cost advantage, the companies lack the scale and geographic diversification of Dow Chemical (BBB+/Stable) and LyondellBasell (BBB/Stable). These three peers have demonstrated a greater degree of capital discipline than NOVA, each electing to repay debt during a period of record margins and cash flow in 2021 and early 2022 while NOVA paid $1.2 billion in sponsor dividends. NOVA therefore operates with EBITDA leverage far higher than that of its peers, with YE 2023 leverage greater than 10.0x compared to LyondellBasell at 2.1x. Key Assumptions - Corunna production drives 2024 recovery with modest operational improvement thereafter, partially aided by the completion of Ontario asset buildout. - Fitch-calculated EBITDA margins recover sharply in 2024, slowly continuing toward 2019 levels in 2025-2026; - Capex approximately in line with depreciation and amortization; - No additional M&A or sponsor dividends modeled in the forecast, though Nova may elect to pursue one or both of these options to the extent that FCF generation is strong; - Limited debt repayment beyond successful execution of the company's refinancing strategy. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Demonstrated commitment to operating with EBITDA Leverage durably below 4.5x, including voluntary debt repayment; - FCF expected to be generally neutral to positive through the cycle. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage durably above 5.5x, potentially driven by persistently low utilization rates; - Failure to improve the maturity profile in a timely manner; - FCF expected to be generally negative through the cycle, straining liquidity; - Continued aggressive capital deployment via ongoing dividends or elevated capital spending. Liquidity and Debt Structure Sufficient Liquidity: At Sept. 30, 2024, NOVA had total liquidity consisting of $225 million in readily available cash and over $1.3 billion in revolver availability. The company has largely addressed its near-term maturities as of its new unsecured issuance, and Fitch believes NOVA will be able to successfully address its maturities in a timely manner, with its next significant maturity coming in 2027. Issuer Profile NOVA produces and sells ethylene, polyethylene and co-products as well as expandable polystyrene and advanced foam resins. These products are used in a wide variety of downstream applications. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. Entity/Debt Rating Recovery ----------- ------ -------- NOVA Chemicals Corporation senior unsecured LT BB- New Rating RR4 NOVA CHEMICALS: Moody's Rates Unsecured Notes Ba3, Outlook Stable ----------------------------------------------------------------- Moody's Ratings affirmed NOVA Chemicals Corporation's Ba2 corporate family rating, Ba2-PD probability of default rating and Ba3 senior unsecured notes ratings. At the same time, Moody's assigned a Ba3 rating to NOVA's proposed $400 million senior unsecured notes due 2031 and upgraded the rating on the $400 million senior secured notes due 2028 to Baa3 from Ba1. The outlook remains stable. Proceeds from the new notes will be used to repay $400 million outstanding under NOVA's secured term loan A due April 2026. In combination with $500 million in commitments under an unsecured delayed draw term loan from Abu Dhabi banks that will be used to repay the 2025 notes, NOVA will enjoy a more comfortable maturity profile with better flexibility to absorb industry volatility and any payments arising from resolution of the ongoing Dow litigation. The upgrade of the senior secured notes to Baa3 reflects the shift of NOVA's capital structure towards a higher concentration of unsecured liabilities following the refinancing of the secured term loan. RATINGS RATIONALE NOVA's Ba2 CFR reflects its: 1) large scale within the ethylene and polyethylene markets; 2) competitive manufacturing assets in North America with access to cost-advantaged ethane; and 3) strong ownership profile with a history of flexible dividend payments and track record of liquidity support. The rating is constrained by : 1) high exposure to inherent cyclicality of prices and input costs leading to volatile margins and cash flows given limited product and geographic diversity; 2) lack of forward integration at Geismar which weighs on profitability; and 3) recent track record of tight liquidity management and operational challenges. NOVA has adequate liquidity. As of Q3-24 sources total close to $2 billion, consisting of over $225 million in cash, Moody's forecast for around $450 million of free cash flow through 2025 and availability of about $1.37 billion under the $1.5 billion revolving credit facility (expiring April 2026) after accounting for drawings of about $130 million. NOVA also has access to two accounts receivable securitization facilities, with $224 million drawn as of Q3-24 under the program consisting of $100 million expiring December 2025 and $175 expiring January 2026. While the range of potential outcomes is wide, the company may also be subject to additional litigation payments to Dow. Moody's expect NOVA to remain in compliance with its financial covenants. The company has some flexibility to raise alternate liquidity through asset sales. NOVA's senior unsecured debt is rated Ba3, one notch below the Ba2 CFR, reflecting subordination to the $1.5 billion secured revolving credit facility (expiring April 2026) and $400 million senior secured notes due 2028. The senior secured notes are rated two notches above the CFR at Baa3, reflecting priority ranking ahead of NOVA's unsecured debt. The stable outlook reflects Moody's expectation for volume growth supporting a decline in debt/EBITDA toward 4x through 2025 and strong free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if debt to EBITDA is likely to be sustained above 5.5x, or if the company generates sustained negative free cash flow or experiences repeat operational setbacks. The ratings could be upgraded if NOVA sustains debt to EBITDA under 3.5x and successfully executes on the full ramp-up of AST2. An upgrade would also require a more conservative financial policy. NOVA Chemicals Corporation is privately-owned by Mubadala Investment Company, and is a Calgary, Alberta-headquartered producer of ethylene and polyethylene products. The principal methodology used in these ratings was Chemicals published in October 2023. NXT ENERGY: Reports C$1.48 Million Net Loss in Fiscal Q3 -------------------------------------------------------- NXT Energy Solutions Inc. announced the Company's financial and operating results for the quarter ended September 30, 2024. Financial and Operating Highlights: Key financial and operational highlights during the third quarter of 2024: * On September 24, 2024 the Company announced that it entered into a contract with its Strategic Alliance Partner, Synergy E&P Technologies Limited to provide a repeat SFD survey in Africa for an oil and gas exploration company; * On August 21, 2024 the Company entered into a contract to provide a geothermal SFD survey to Alberta Geothermal Resource Recovery Inc; * NXT received an advance payment of US$175,000 for its upcoming Southeast Asia SFD survey; * cash and short-term investments at September 30, 2024 was approximately $0.94 million. * net working capital was approximately (C$2.94) million at September 30, 2024 versus approximately (C$1.85) million at December 31, 2023; * the Company recorded SFD-related revenues of approximately C$0.60 million YTD 2024, C$nil for Q3-24; * a net loss of C$1.48 million was recorded for Q3-24, including stock-based compensation expense, amortization expense and remeasurement gain, all totaling approximately C$0.04 million; * a net loss of C$6.28 million was recorded for YTD 2024, including SBCE, amortization expense and remeasurement loss, all totaling approximately C$2.06 million; * net loss per common share for Q3-24 was C$0.02 per share (basic) and C$0.02 per share (diluted); * net loss per common share for YTD 2024 was C$0.08 per share (basic) and C$0.08 per share (diluted); * cash flow used in operating activities was approximately C$1.32 million during Q3-24, compared to C$0.95 million used in Q3-23; * cash flow used in operating activities was approximately C$2.58 million during YTD 2024, compared to C$3.36 million used in YTD 2023; * general and administrative expenses increased by approximately C$0.16 million (19%) in Q3-24 as compared to Q3-23; and * G&A expenses increased by approximately C$0.34 million (13%) in YTD 2024 as compared to YTD 2023. Key financial and operational highlights occurring subsequent to Q3-24: * NXT was awarded an SFD survey by AL-Haj Enterprises Private Limited in the Northern Suleiman Fold Belt, to commence in Q2-25; * NXT's SFD awarded Best Exploration Technology at the 2024 Gulf Energy Information Excellence Awards; and * On November 1, 2024 the Company announced it will receive USC$900,000 (approximately CDNC$1,252,080) for convertible debentures from Ataraxia under the same terms as the subscription agreement signed between Ataraxia and NXT in 2023, at a conversion price of USC$0.24 per common share. As of the date of this MD&A, the Company has received USC$500,000 (approximately CDNC$695,600). A full-text copy of the Company's report filed on Form 6-K with the U.S. Securities and Exchange Commission is available at: https://tinyurl.com/59xbes7e About NXT Energy NXT Energy Solutions Inc. is a Calgary-based technology company whose proprietary SFD survey system utilizes quantum-scale sensors to detect gravity field perturbations in an airborne survey method. This system can be used both onshore and offshore to remotely identify areas with exploration potential for traps and reservoirs. The SFD survey system enables the Company's clients to focus their hydrocarbon exploration decisions concerning land commitments, data acquisition expenditures, and prospect prioritization on areas with the greatest potential. SFD is environmentally friendly and unaffected by ground security issues or difficult terrain and is the registered trademark of NXT Energy Solutions Inc. NXT Energy Solutions provides its clients with an effective and reliable method to reduce time, costs, and risks related to exploration. Calgary, Canada-based MNP LLP, the Company's auditor since 2023, issued a "going concern" qualification in its report dated March 27, 2024, citing that the Company's current cash position is not expected to be sufficient to meet the Company's obligations and planned operations for a year beyond the date of the auditor's report, unless additional financing is obtained or new revenue contracts are completed. This raises substantial doubt about the Company's ability to continue as a going concern. NXT Energy Solutions reported a net loss of CC$5.45 million for the year ended December 31, 2023, compared to a net loss of CC$6.73 million for the year ended December 31, 2022. OG LIVING: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: OG Living LLC 317 Farmington Drive Plantation, FL 33317 Business Description: OG Living offers Pergola, Cabana, Magnatrack, StruXure Screen installation services. Chapter 11 Petition Date: November 29, 2024 Court: United States Bankruptcy Court Southern District of Florida Case No.: 24-22597 Judge: Hon. Scott M Grossman Debtor's Counsel: Chad P. Pugatch, Esq. LORIUM LAW 101 NE 3rd Ave. Suite 1800 Fort Lauderdale, FL 33301 Tel: 954-462-8000 Email: cpugatch@loriumlaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by George John Wohlford as managing member. 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/4NSYTFA/OG_Living_LLC__flsbke-24-22597__0001.0.pdf?mcid=tGE4TAMA ORIGINAL MOWBRAY'S: Hires Grobstein Teeple as Financial Advisors ---------------------------------------------------------------- Original Mowbray's Tree Service, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Grobstein Teeple LLP as its financial advisors. The firm will provide these services: a. obtain and evaluate financial records; b. evaluate assets and liabilities of the Debtor and Estate; c. evaluate tax issues related to the Debtor and Estate; d. assist with tax compliance issues; e. assist with the preparation of a plan and disclosure statement; f. provide tax and tax consulting services; g. provide valuation services as required; h. provide litigation consulting if required; and i. provide accounting and consulting services, including the preparation of monthly operating reports The firm will be paid at these rates: Partners $425 to $700 per hour Managers/Directors $325 to $485 per hour Professionals $145 to $375 per hour Paraprofessionals $115 to $200 per hour The firm received a retainer of $45,000. Grobstein Teeple LLP will also be reimbursed for reasonable out-of-pocket expenses incurred. Howard B. Grobstein, a partner at Grobstein Teeple 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: Howard B. Grobstein Grobstein Teeple LLP 6300 Canoga Avenue, Suite 1500W Woodland Hills, CA 91367 Tel: (818) 532-1020 About Original Mowbray's Tree Service Original Mowbray's Tree Service Inc., doing business as Mowbray's Tree Service, is a family owned and operated business committed to providing its client-partners with solution to their vegetation management needs. It offers hazard tree mitigation, integrated vegetation management, mechanized tree removal, emergency response, crane services, and green waste & debris management. Original Mowbray's Tree Service sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-12674) on Oct. 18, 2024, with $10 million to $50 million in both assets and liabilities. Brian Weiss, chief restructuring officer, signed the petition. Judge Theodor Albert oversees the case. The Debtor tapped Raines Feldman Littrell, LLP as general bankruptcy counsel; Force Ten Partners, LLC as restructuring advisor; and Grobstein Teeple, LLP as financial advisor. OU MEDICINE: Moody's Ups Bond to Ba2 & Alters Outlook to Stable --------------------------------------------------------------- Moody's Ratings has upgraded OU Medicine, Inc.'s (now OU Health, OUH) (OK) revenue bond rating to Ba2 from Ba3. The outlook was revised to stable from positive. OUH had approximately $1.5 billion of debt at FYE 2024. The upgrade to Ba2 is due to significant financial improvement from material supplemental Medicaid funding, which will drive a sustained reduction in operating leverage. RATINGS RATIONALE The Ba2 rating reflects strong governance ties with and demonstrable financial support from the State of Oklahoma and The University Hospital's Trust (the Trust), OUH's sole corporate member. These closely aligned public bodies provide significant funding for capital and operating needs. OUH's position as the sole academic medical center in the state and alignment with its faculty practice plan supports strategies to grow high acuity services in a very competitive market. Material recurring Medicaid and state funding and very good volume growth will help sustain significant financial improvement and adequate covenant headroom, following several years of near breaches. Nevertheless, OUH's cashflow is now entirely reliant on several Medicaid and state funding programs. Despite expected improvement, liquidity will remain weak and, combined with a high debt load, will result in low cash-to-debt. RATING OUTLOOK The stable outlook reflects maintenance of 8%-9% operating cashflow margins, which will help keep debt-to-cashflow at 5-6x. The outlook also reflects some improvement in liquidity to 60-65 days cash. Moody's could consider a positive outlook if OUH is on pace to exceed 70 days cash on hand and 40% cash-to-debt. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -- Increase in cash-to-debt to above 40% -- Sustained growth in liquidity to above 70 days cash on hand -- Maintenance of 8%-9% operating cashflow margin FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -- Sustained reduction in operating cashflow margin to below 8% -- Decline in cash on hand or cash-to-debt to below 50 days and 25%, respectively -- Adverse change in relationships with the state or related entities LEGAL SECURITY OU Medicine, Inc. is the borrower and sole member of the obligated group. OU Medicine, Inc. owns (in the case of Oklahoma Children's Hospital leases) and operates the three hospitals and clinics included in the obligated group. OU Health Partners (the faculty practice plan) is currently not part of the obligated group. Security for the bonds includes unrestricted receivables and a mortgage on certain property. The MTI allows for a replacement master indenture if certain rating and financial tests are met. PROFILE OU Health operates 3 hospitals, including flagship adult and children's hospitals in Oklahoma City and a community hospital in Edmond, and includes a faculty practice plan. The hospitals serve as teaching and training facilities for students enrolled at the University of Oklahoma Health Sciences Center. METHODOLOGY The principal methodology used in these ratings was Not-for-profit Healthcare published in October 2024. P&L DEVELOPMENT: Fitch Hikes LongTerm IDR to 'CCC+' --------------------------------------------------- Fitch Ratings has removed P&L Development Holdings, LLC (PLD) and P&L Development, LLC from Rating Watch Positive and upgraded the Long-Term Issuer Default Ratings (IDRs) to 'CCC+' from 'CCC'. Fitch has also assigned a 'CCC+' rating with a Recovery Rating of 'RR4' to P&L Development LLC's and PLD Finance Corp.'s secured notes. The rating actions reflect the company's reduced refinancing risk, as well as continued operating improvement driving positive FCF. Fitch has withdrawn the ratings on the old senior secured bonds as they have been redeemed. Key Rating Drivers Exchange Addresses Near-Term Refinancing Risk: The recently executed exchange of secured bonds due 2025 for bonds due 2029, combined with the company's extension of its ABL maturity to 2027, addresses near-term refinancing risk. Fitch concluded the proposed transactions did not constitute a distressed debt exchange. Fitch believed creditors were indifferent between the old and the new terms, which include higher principal, higher cash coupon, incremental PIK interest and additional collateral. While the new bonds will moderately increase the debt load and increase cash interest expense, Fitch expects that the company will transition to neutral to positive FCF during the forecast period. Consistent FCF generation will improve its ability to service debt and reduce ABL borrowings. Capital Structure Remains Stressed: Fitch expects leverage will decline to the mid- to high-single-digit range from the low double-digit range during 2025 through 2027. Fitch believes the path to a sustainable capital structure would require continued organic revenue growth along with improved operating efficiencies. Deleveraging Requires Profitable Growth: Fitch assumes that the company will deleverage and continue improving FCF primarily through EBITDA growth and tighter working capital management. Fitch believes the company will need to execute on its legacy business, as well as successfully build on its relatively new products and a number of new contract manufacturing wins. In addition, the company continues to focus on achieving operating efficiencies to improve margins. The sales-leaseback transaction for two PLD facilities provided extra liquidity to pay down debt, including the mortgage on one of its facilities. Improving Operations: PLD is improving its operating performance, particularly margins, through price increases, cost savings initiatives, working capital efficiency and new product growth. Operating headwinds faced in recent years such as supply-chain challenges, inflationary input costs and transportation expenses have meaningfully moderated. As a result, EBITDA margin has improved and FCF was positive for the first nine months of 2024. Fitch expects this improvement will be durable. Dependable Demand: Consumer healthcare products benefit from relatively reliable demand. Sales tend to be recession-resistant as most people prioritize healthcare needs. These products can be purchased without a physician's prescription and offer relief for some non-critical medical issues. In addition, private label brands offer less costly alternatives to brand name products, attracting cost-conscious consumers, while at the same time offering higher margins to retailers. PLD also doesn't have to negotiate with third-party payers for product placement. PLD recently received FDA approval for its omeprazole formulation (generic version of Prilosec) which is expected to be launched in early 2025. Quality Track Record: Product quality and reliability of supply are also important to PLD's customers. PLD has stated that it has never lost a customer or had a major quality issue. The company focuses on the three most important factors for its customers: quality, reliability of supply and providing a backup to the overwhelmingly dominant supplier in the market, Perrigo. Pricing in the segment is important but appears rational given the scale of the largest player, Perrigo, and the much smaller second-largest player, PLD. Derivation Summary PLD's rating (CCC+) reflects the company's successful refinancing of near-term maturities and the recent and expected continued operating improvements. PLD's ratings recognize its position in a generally durable healthcare segment, although with significantly smaller scale, margins and FCF relative to peers. PLD's closest peer is Perrigo Plc (BB/Negative), whose higher rating reflects its scale, diversification and lower leverage. Fitch also compares PLD to other lower-rated healthcare pharmaceutical manufacturers such as Mallinckrodt (B-/Positive) and Bausch Health (CCC), which benefit from similar factors as PLD. However, these two issuers have more contingent liabilities, which is common for the pharmaceutical industry. Parent-Subsidiary Linkage The approach taken is a weak parent (P&L Development Holdings, LLC) and a strong subsidiary (P&L Development, LLC). Using Fitch's PSL criteria, the agency concludes there is open ring-fencing and access and control. As such, Fitch rates the parent and subsidiary at the consolidated level with no notching between the two. Key Assumptions - High single-digit to low double-digit organic revenue growth during the forecast period; - Margins gradually and moderately improving due to a favorable sales mix shift driven by new product launches, cost reduction and the moderation of headwinds from inflation/supply-chain disruptions; - FCF becomes positive during the forecast period; - EBITDA leverage (total debt/EBITDA) gradually declines throughout the forecast period. Recovery Analysis In accordance with Fitch's Recovery Rating (RR) methodology, issue ratings are derived from the IDR and the relevant RR. Fitch's recovery analysis assumes a going-concern enterprise value (GCEV) for a reorganized firm of approximately $356 million. This includes Fitch's estimate of the value of the Rogue royalty income that also secures the notes. Fitch assumes a 10% administrative fee will be deducted from the GCEV. Fitch has assumed a going-concern EBITDA of $55 million, which reflects Fitch's view that the reorganization would be driven by an inability to execute an orderly refinancing and reflects the current run-rate EBITDA which it would likely enter with the next major refinancing. An EBITDA multiple of 6.0x is used to calculate the enterprise value which compares to the low to mid-6x observed for restructured healthcare companies and at the lower end of the 6.0x-7.0x range assumed for smaller, high-yield pharmaceutical firms. This may be slightly conservative, given the relatively less scrutinized pricing environment and potentially onerous litigation profile compared to prescription drug manufacturers. However, PLD is significantly smaller in scale than its largest peer, Perrigo. Acquisition multiples in the sector range from mid-single digits to mid-teens, depending on the attractiveness of the asset in terms of the exclusivity, diversity and growth potential of the target's product portfolio. However, PLD acquired the Teva OTC business for roughly 3x PLDH's view of adjusted EBITDA after renegotiating the cost of the active pharmaceutical ingredient from Nicobrand. This is likely due to Teva viewing this business as non-core and focusing on its other segments. Fitch assumes the $125 million ABL is fully drawn and $9 million of structurally senior debt is outstanding at the time of reorganization. In addition, the analysis assumes that the company's $30 million receivables facility is fully utilized. The $500 million of secured notes have average recovery prospects in a reorganization scenario, which maps to a 'CCC+'/'RR4' rating and is the same as the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Continued operating performance with profitable margins driving consistently positive FCF generation; - Improving EBITDA leverage to below 7.0x; - EBITDA interest coverage trending upward toward 2.0x. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA interest coverage trending toward below 1.5x; - Durably negative FCF. Liquidity and Debt Structure At Sept. 30, 2024, the company had $3 million in cash and cash equivalents and $85 million availability on its $125 million ABL which matures in 2027. Subsequent to the recent refinancing, PLD currently has approximately $13 million in cash and cash equivalents. FCF has turned positive over the last four quarters. Issuer Profile PLD manufactures, packages and sells private-label consumer health products. Its portfolio includes medicines to treat pain, allergies, digestive disorders, insomnia, cough/cold and motion sickness. PLD also makes first aid items, electrolyte replacements, diagnostics, nutrient/vitamin gummies, supplements, creams/lotions, smoking cessation aids and nutritional shakes. 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 ----------- ------ -------- ----- P&L Development Holdings, LLC LT IDR CCC+ Upgrade CCC PLD Finance Corp. senior secured LT CCC+ New Rating RR4 senior secured LT WD Withdrawn CCC- P&L Development, LLC LT IDR CCC+ Upgrade CCC senior secured LT CCC+ New Rating RR4 senior secured LT WD Withdrawn CCC- PAR PACIFIC: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of Par Pacific Holdings, Inc. and Par Petroleum, LLC (collectively, Par) at 'B+', and ABL at 'BB+' with a 'RR1' Recovery Rating. Additionally, Fitch has downgraded Par's term loan facility to 'B+'/'RR4' from 'BB-'/'RR3'. The downgrade reflects a material increase in the company's absolute debt quantum, reducing the expected recovery of the term loan in a bankruptcy scenario. The Rating Outlook is Stable. The rating reflects the exposure of Par to niche, lower-competition markets and diversification through less cyclical retail and logistics segments. Other contributing factors include Par's limited size and geographic diversification, uncertainty of cash flows inherent to refiners and an unfavorable long-term regulatory environment. The Stable Outlook reflects a weak refining environment offset by countercyclical retail and logistics performance. Key Rating Drivers Increased Term Debt: Par's incremental $100 million term loan increases the company's gross debt quantum but provides additional liquidity in the near term. The proceeds of the term loan are being used to reduce outstanding borrowings under the ABL. Fitch believes the increased liquidity enhances Par's short-term credit quality, considering higher-than-normal capex related to turnarounds and a weak refining environment. Conversely, the incremental term loan may heighten leverage in stress scenarios given the increased absolute debt quantum. Weakening Refining Fundamentals: Par's refining segment has experienced significant margin compression in 2024 due to weakening refining sector fundamentals. Fitch forecasts elevated leverage in 2024 and 2025 as weak crack spreads limit refining EBITDA contributions. However, Par's diversification into logistics and retail somewhat offsets the weak refining environment, supporting leverage metrics during downturns. Limited Scale; Niche Market Exposure: Niche markets in the Western U.S. with unique market drivers and favorable supply and demand dynamics counterbalance Par's relative lack of geographic diversification, limited size and below-average system-wide refinery complexity (NCI composite estimate 7.5). Par's refineries are located in PADDs IV and V, with no exposure to the Southern, Midwestern or Eastern U.S. Additionally, Fitch views Par, with 219 thousand barrels per day (mbpd) of throughput capacity, as a small- to medium-sized refiner relative to U.S. peers. Although size generally restrains the credit profile, niche market access allows Par to differentiate itself from peers while supporting underlying cash flows. In Hawaii, Par operates the only active refinery in a state with total capacity below daily average demand on the islands. Market dynamics in Hawaii are closer to APAC than North America, providing additional diversification. Non-refining Diversification: Par operates significant Logistics and Retail segments, which make up approximately 35% of EBITDA in a midcycle environment. The segments' countercyclical performance is key to cash-flow generation during refining downturns. The Billings acquisition included notable related logistics assets in addition to a long-term agreement to supply regional Exxon-branded retail sites. The retail segment operates 120 locations under various brand names spread across Hawaii and the Pacific Northwest. Significant Turnarounds: Fitch expects significant capex outlays in 2024 and 2025 as large turnarounds are completed at the Billings, MT refinery. The investments are expected to improve reliability and operational performance at the asset, acquired by Par in 2023. Additionally, capex in 2024 and 2025 will reflect investments in Par's Hawaii sustainable aviation fuel (SAF) project. The company will also complete material turnarounds at the Hawaii and Wyoming refineries in 2026. Simplified Capital Structure: In June 2024, Par increased ABL capacity to $1.4 billion, replacing a portion of its supply and offtake (S&O). Fitch treats both the ABL and the S&O agreement as debt and expects the ABL to maintain similar borrowings to the S&O agreement through the cycle. However, Fitch expects the ABL to have a materially lower cost of capital. Par maintains a separate inventory management agreement focused on crude oil at the Hawaii refinery. Regulatory Pressure: Refiners face several unfavorable regulatory headwinds that will cap long-term demand for refined products domestically. These include renewable identification numbers (RINs) cost under the Renewable Fuel Standard program, higher corporate average fuel economy standards and regulation of greenhouse gas emissions. Par is investing in energy transition assets to offset potential regulatory exposure, such as the Hawaii SAF project. Derivation Summary Par's refining footprint (219mbpd) is on the lower end of its peer group, including Delek US Holdings (BB-/Stable; 302mbpd); PBF Holding Company, LLC (BB/Stable; 1,023mbpd); HF Sinclair Corporation (BBB-/Stable; 678mbpd); and CVR Energy, Inc. (BB-/Stable; 206.5mbpd). Par's assets are located in PADDs IV and V, which is unique among the peer group. PBF (PADD V) and HF Sinclair (PADD IV) have refineries in similar regions, but the majority of their assets are located in PADDs I-III. Par's refineries are unique in the niche markets they serve, which typically take advantage of local market conditions and unique supply-demand dynamics. Par is diversified through its logistics and retail assets, which differentiates the company from pure-play refiners such as PBF and Vertex. Delek also has logistics assets, while HF Sinclair and CVR are diversified into other non-refining segments. CVR's advantaged asset quality and relative diversity increase its credit quality relative to Par. While Par is notably smaller than Delek in terms of both refining and non-refining segments, Fitch expects Par to operate with lower leverage through the cycle given improved EBITDA margins and a lower gross debt burden. Delek's PADD III positioning is positive relative to the PADD IV and V Par positions, but niche markets and supply-demand imbalance offset this. Key Assumptions - Brent price assumptions of $80/bbl in 2024, $70/bbl in 2025, $65/bbl in 2026, $65/bbl in 2027 and $60/bbl thereafter; - WTI price assumptions of $75/bbl in 2024, $65/bbl in 2025, $60/bbl in 2026, $60/bbl in 2027 and $57/bbl thereafter; - Capex in line with management guidance and turnaround schedules; - Interest rate/SOFR assumptions in line with Chatham Financial Fed Median. Recovery Analysis Fitch examined Par on both a going concern (GC) and liquidation value (LV) basis and expects it would be reorganized as a GC in the event of bankruptcy. Fitch assumed an 80% draw on the $1.4 billion ABL facility. In conjunction with the upsizing of the ABL, the company closed its supply and offtake agreement at its Hawaii refinery and replaced it with crude oil focused inventory intermediation agreement. Fitch deducts outstanding intermediation property in equivalent amounts from both the inventory figure in the LV and the corresponding obligation under the inventory intermediation agreement. Par does not hold title to this inventory, and it is not considered collateral. The company records the Citigroup Energy Inc. (Citi) titled inventory amount as inventory on the balance sheet with a corresponding liability until final sale to a third party. The remaining inventories' titles are held by Par. Fitch has assumed this portion of the inventory recovers at an advance rate of 80%. Fitch applied a 10% administrative claim to the GC enterprise value (EV). Fitch's GC EBITDA reflects Par's recovery from a scenario in which near-term liquidity constraints result in default and bankruptcy. Fitch uses a 5.5x EBITDA multiple to arrive at its GC EV, reflecting diversification through retail and logistics segments. Other contributing factors include Par's niche market position and favorable supply-demand dynamics in Hawaii. Fitch's GC EBITDA of $288 million includes assumptions for the likely need of a super senior working capital facility in a bankruptcy scenario, excludes the value of Citi titled inventory and reflects financing expenses related to current intermediation agreements. The figure is based on a recovery year after the nadir year in its stress case scenario. The GC EBITDA also reflects increased long-term midcycle price expectations and material investment into energy transition projects. Par's distribution of value results in the ABL facility recovering at 'RR1', ahead of the first-lien term loan, which recovers at 'RR4'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Significant increase in size, scale and diversification, particularly in non-refining segments; - Midcycle EBITDA leverage maintained at or below 3.0x. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Decline in refining sector fundamentals or deterioration of Par's market position; - Sustained ABL utilization over 50% of availability or significant increase to term debt; - Midcycle EBITDA leverage maintained at or above 4.0x. Liquidity and Debt Structure Improving Liquidity Profile: Par's liquidity is approximately $632.5 million as of 3Q24. The proceeds of the company's $100 million incremental term loan will be used to reduce ABL borrowings, improving the company's liquidity position. Manageable Refinancing Risk: Par has minimal near-term refinancing risk with the ABL expected to mature in 2028 and the term loan maturing in 2030. Issuer Profile Par Pacific Holdings, Inc and its subsidiaries are owners and operators of essential energy infrastructure in PADD IV and V markets with 219 mboepd in refining capacity, 120 retail fuel locations in Hawaii and the Pacific Northwest and related logistics assets. 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 ----------- ------ -------- ----- Par Pacific Holdings Inc. LT IDR B+ Affirmed B+ Par Petroleum, LLC LT IDR B+ Affirmed B+ senior secured LT BB+ Affirmed RR1 BB+ senior secured LT B+ Downgrade RR4 BB- PAR PETROLEUM: $100MM Loan Add-on No Impact on Moody's 'Ba3' CFR ---------------------------------------------------------------- Moody's Ratings announced that Par Petroleum, LLC's proposed $100 million term loan add-on does not affect its ratings, including the Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, and B1 backed senior secured term loan rating. The outlook is stable. The $100 million add-on debt is fungible with the existing senior secured term loan due 2030, and will be treated as a single class of debt with identical terms and provisions to Par's existing secured term loan. The transaction is neutral to the company's credit metrics as Par will use proceeds from the add-on to pay off a portion of its outstanding revolver balance. The pro forma outstanding term loan balance is $642 million. Par's Ba3 CFR reflects the diversification of the company's businesses across an integrated asset base and strong credit metrics offset by modest scale. The company's Billings, Montana refinery, marketing, and logistics acquisition in mid-2023 improved its scale and geographic diversification and also increased the company's exposure to the western United States. The refining business is highly cyclical and the industry's margins have been challenged in 2024, but Par benefits from the integrated nature of its refining asset base and the value chain diversification and EBITDA stability of its logistics and retail businesses. The stable outlook reflects Moody's expectation for Par to maintain solid credit metrics and liquidity through 2025. Par Petroleum, LLC (Par), headquartered in Houston, Texas, is a subsidiary of Par Pacific Holdings, Inc., a publicly traded energy company with refining, logistics and retail operations across several states including Hawaii, Montana, Washington, and Wyoming. PERIMETER FOODS: Hires Barry Strickland & Company as Accountant --------------------------------------------------------------- Perimeter Foods, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Virginia to employ Barry Strickland & Company as accountant. The firm will assist the Debtor in tax preparation works, provide tax advice, and perform bookkeeping services. Barry Strickland & Company will be paid at $350 per hour. The firm holds a retainer of $8,628. It will also be reimbursed for reasonable out-of-pocket expenses incurred. Barry I. Strickland, a partner at Barry Strickland & Company, 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: Barry I. Strickland Barry Strickland & Company P.O. Box 9228 Richmond, VA 9410 Atlee Commerce Blvd., Suite 1, Ashland, VA 23005 Telephone: (804) 550-8500 Facsimile: (804) 550-8505 About Perimeter Foods, LLC Perimeter Foods, LLC, doing business as Robert Rothschild Farm Foods, is a fruit and vegetable preserving and specialty food manufacturing business. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Va. Case No. 24-50529) on September 23, 2024, with up to $50,000 in assets and up to $10 million in liabilities. David MacDonald, member and manager, signed the petition. Hannah W. Hutman, Esq., at Hoover Penrod, PLC represents the Debtor as legal counsel. PIONEERS MEMORIAL: Fitch Alters Outlook on 'B' IDR to Positive -------------------------------------------------------------- Fitch Ratings has affirmed Pioneers Memorial Healthcare District's (PMHD) Issuer Default Rating (IDR) at 'B'. Fitch has also affirmed the $14.25 million series 2017 revenue bonds at 'B'. The Rating Outlook has been revised to Positive from Negative. Entity/Debt Rating Prior ----------- ------ ----- Pioneers Memorial Healthcare District (CA) LT IDR B Affirmed B Pioneers Memorial Healthcare District (CA) /General Revenues/1 LT LT B Affirmed B The Positive Outlook revision reflects PMHD's receipt of a $28 million loan from California as part of the state's Distressed Hospital Loan Program; it is an interest free loan with an 18-month grace period payable over six years. This has rapidly improved PMHD's unrestricted liquidity at FYE24, now equal to an improved 95.5 days cash on hand and 43.7% total debt outstanding, shoring up PMHD's key balance sheet metrics — at least for the near term. PMHD will be applying for a loan forgiveness program, whereby the $28 million of the Distressed Hospital Loan would remain on the books in PMHD's liquidity, but would no longer need to be repaid. The net effect would be to further boost cash to total debt outstanding to 61.9%. Core operating metrics improved significantly in fiscal 2024 compared to fiscal 2023, aided by revenue cycle strategies, a reduction in contract labor expenses and the acquisition of a 99-bed skilled nursing facility (SNF), which offers additional logistical advantages to PMHD and is profitable on its own. Fitch notes legislative bill AB918 which resulted in a proposal that said PMHD and Heffernan Hospital District (NR) would dissolve and become part of a new Imperial Valley Healthcare District. It is currently unknown what the implementation of bill AB918 would mean for the bond ratings, although a completely new organization structure would need to be evaluated on its own merits. Additional information about the forgiveness program and about whether or not the PMHD district will be dissolved in favor of consolidating the two hospitals, PMHD and El Centro Regional Medical Center, into a new Imperial Valley Hospital District should be known in calendar 2025. Fitch criteria allow for the financial assessment and final rating to differ. Despite a 'bb' financial assessment, Fitch believes that the credit remains in the 'B' category until the Distressed Hospital Loan is forgiven and operations stabilize above breakeven. SECURITY The series 2017 revenue bonds are secured by a gross revenue pledge and further secured by a debt service reserve fund. The series 2012 and 2004 ULTGO bonds are payable from an unlimited ad valorem tax pledge on all taxable properties within the district boundaries, without limitation as to rate or amount. KEY RATING DRIVERS Revenue Defensibility - 'b' Leading Market Share, Very Weak Payor Mix PMHD provides specialized medical services to residents of Imperial County and the city of Calexico, maintaining a leading market position in the area. Fitch views the district as vulnerable to reimbursement risk due to elevated exposure to Medi-Cal (Medicaid) and self-pay, which together comprised 44.5% of gross revenue in fiscal 2024. The district benefits from its affiliation with Scripps Health, receiving support in consulting services, purchasing and branding opportunities. In addition, it receives support and expertise in pediatric and neonatal services through an agreement with Rady Children's Hospital and Health Center. The district receives some of its financial support from property taxes. These funds are used to support operations and pay debt service on the district's GO bonds. For the fiscal years ended June 30, 2023 and 2024, the district recognized ad valorem property tax revenue of $3.336 million and $1.489 million, respectively. Fitch views the ability to make debt service payments on those series of debt as highly likely given the unlimited nature of the tax levy supporting the GO bond debt service and the low tax rate; per Fitch's criteria, the IDR constrains the GO rating at the 'B' level. In Fitch's view, tax revenue does not improve PMHD's revenue defensibility assessment given the limited contribution to support operations. Operating Risk - 'b' Operations Improved PMHD's operating profile assessment is very weak, driven by the district's history of slim operating margins that were further disrupted in recent years due to the COVID-19 pandemic and subsequent labor shortage. Imperial County experienced several COVID-19 surges and reliance on contract labor significantly increased. Over the prior five fiscal years (not including fiscal 2024), operating profitability has been consistently weak with the operating margin averaging -1.7% between fiscal 2019 and fiscal 2023. However; in fiscal 2024, PMHD's operating margin improved to positive 5.5%, largely driven by implementing consultant recommendations related to revenue cycles, reducing contract labor and other cost management measures. PMHD also benefited from the acquisition of a 99-bed SNF in April 2023 and an increase in patient volumes (specifically obstetrical census) as PMHD is now the only provider in the area for such services. The district's elevated plant age and long-term capex requirements provide the hospital with very limited operating flexibility. The average age of plant was nearly 30 years at FYE24. The district will need to undertake structural and non-structural capital upgrades in order to use its facilities beyond 2030 due to seismic requirements. Fitch views significant (for PMHD's size) capital investments will be required over the longer term should California's seismic requirements remain at current levels. Management is evaluating the size and scope of required projects over the next couple of years and will have more information in the medium term. Financial Profile - 'bb' Balance Sheet Received a Boost PMHD received a $28 million loan from California as part of the state's Distressed Hospital Loan Program; it is an interest free loan with an 18-month grace period payable over six years. This has boosted PMHD's unrestricted liquidity to $40.1 million as of FYE24, equal to 95.5 days cash on hand and 43.7% total debt outstanding. Fitch believes this loan provides an adequate liquidity cushion for the district in the near term. Fitch's forward-looking scenario analysis expects PMHD's key liquidity and leverage metrics will stabilize in the near term aided by the recent support from the state and ongoing revenue cycle and cost management efforts. However, barring loan forgiveness, which would boost cash to long-term debt to approximately 60%, should the loan continue to need to be paid off, key financial metrics could once again be weakened as days cash on hand would fall to 28.8 days and cash to debt would be sub-21% based on fiscal 2024's financials. As a result, despite the near-term liquidity cushion, Fitch is currently assessing PMHD's leverage and liquidity position as weak/'bb'. Asymmetric Additional Risk Considerations There are no asymmetric risks associated with the rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - If operations do not stabilize at improved positive levels such as were seen in fiscal 2024, this could result in a reoccurrence of declining balance sheet metrics, particularly if the full $28 million in Distressed Hospital Loan must be repaid; - A material change to the organizational structure such that PMHD is the surviving entity, but with all of El Centro's debt added to the credit profile. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - If operating performance stabilizes at improved levels; - Successful resolution to the Distressed Hospital Loan program such that the $28 million in currently temporary loans are forgiven; - Cash-to-adjusted debt improving to 60%, including in a forward-looking stress scenario, could warrant an upgrade. PROFILE PMHD is a hospital district located in Imperial County, CA approximately 120 miles east of San Diego. The district owns and operates a 107-bed acute care hospital and numerous outpatient physician, primary and specialty clinics throughout Imperial County. PMHD provides healthcare services to residents of the Imperial Valley with its main campus located in Brawley in addition to health clinics in Brawley and Calexico. Total revenue as of audited fiscal 2024 (June YE) was $165.9 million, inclusive of ad valorem tax revenue. Sources of Information In addition to the sources of information identified in Fitch's applicable criteria specified below, this action was informed by data from Lumesis. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. PODS LLC: Moody's Cuts CFR to B3, Outlook Negative -------------------------------------------------- Moody's Ratings downgraded PODS LLC's corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD, and senior secured first lien bank credit facility ratings to B3 from B2. The outlook is negative. The downgrade of PODS' ratings reflects Moody's expectation revenue and profitability will continue to face headwinds from soft existing home sales resulting from higher interest rates. Leverage is also materially higher than Moody's anticipated it would be when the outlook was changed to negative in March 2024. Moody's expect debt-to-EBITDA will remain high and free cash flow will be marginally positive over the next 12-18 months. Moody's believe the company faces increasing refinancing risk because its revolving credit facility expires in March 2026. The negative outlook reflects Moody's expectation that PODS' credit metrics will remain weak as relatively high interest rates continue to negatively impact the housing market. Moody's expect PODS will grow revenue 4% over the next year, although earnings will remain well below levels realized over the past few years. The negative outlook also reflects Moody's expectation that the company will maintain at least adequate liquidity. RATINGS RATIONALE PODS' ratings reflect its moderate scale and high leverage reflective of an aggressive financial policy that focused on debt-funded distributions, acquisitions of franchises and significant capital expenditures. A continuation of soft home sales has caused container utilization rates to decline, which is weakening revenue, profitability and cash flow generation. However, the ratings also reflect PODS' strong brand recognition and solid niche market position. The company's service offerings for its target market provides significant flexibility and cost benefits to consumers. PODS stands out from its competitors, who are smaller and offer more limited services, thanks to its large fleet of over 270,000 containers in circulation, which is significantly more than any other company in this niche market. The company's cost structure also involves a number of variable expenses, with the operating model benefitting from container utilization that requires limited personnel and minimal maintenance costs. Moody's expect PODS' liquidity to remain adequate over the next year, although refinancing risk is growing. The company's liquidity is supported by $16 million of cash as of November 18, 2024 and approximately $55 million available on its $100 million revolver after letters of credit. Revenue and profitability growth will remain constrained, and managing working capital remains key to PODS' cash flow. Container inventory levels have declined over the last few quarters but working capital related cash outflows continued over the same period. PODS had negative $56 million of free cash flow for the twelve months ended September 30, 2024 despite significantly lower capital expenditures following an elevated level of investment in containers in 2023. PODS' bank revolving credit facility expires in March 2026, and hence will become current in March 2025. The company actively uses this revolver for both borrowings and letters of credit, and hence it is a key component of its capital and liquidity structure. Following this, the company's $1.5 billion bank term loan matures in March 2028. Given PODS' weak operating performance and very high financial leverage, there is a risk that banks will choose not to extend PODS' revolver expiration date past the term loan maturity date. This could force the company to amend or refinance its entire capital structure over the next year. Moody's expect PODS to address any such refinancing needs well in advance of the revolver's expiration. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if PODS does not materially improve its operating performance, reduce financial leverage, or does not bolster its liquidity – including addressing its refinancing needs well in advance of its revolver's expiration. The ratings could be upgraded if PODS improve its operating performance and liquidity, addresses refinancing risks, and materially reduces its financial leverage. The principal methodology used in these ratings was Surface Transportation and Logistics published in December 2021. PODS LLC (Portable On Demand Storage) is a leader in consumer focused containerized moving and storage. The company offers a full range of services including moving within or between cities, storage at a customer's site and storage at one of PODS' warehouses. PODS has been owned by Ontario Teachers' Pension Plan since 2015. PRAIRIE SEEDS ACADEMY: Moody's Rates 2024 School Bonds 'Ba2' ------------------------------------------------------------ Moody's Ratings has assigned an initial Ba2 rating to Prairie Seeds Academy, MN's Charter School Lease Revenue and Refunding Bonds (Prairie Seeds Academy Project), Series 2024 with a proposed par amount of $27.3 million. The outlook is stable. The bonds will be issued by the City of Brooklyn Park, MN on behalf of the charter school academy. RATINGS RATIONALE The Ba2 rating reflects the academy's stable competitive profile supported by its unique program, maintenance of enrollment at full capacity and moderate student waitlist. The academy's academic performance remains below average. The school's financial operations are adequate, with healthy spendable liquidity balanced against relatively narrow operating margins and pro forma maximum annual debt service (MADS) coverage. The rating also reflects the school's increasing leverage. Governance considerations are a driving credit factor and include the school's capable management team and stable board structure. RATING OUTLOOK The stable outlook reflects the likelihood that the academy will maintain a steady competitive profile, resulting in enrollment and revenue growth following the expansion of its school facilities. It also reflects the likelihood that revenue growth will result in the maintenance of satisfactory spendable liquidity and annual debt service coverage. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING -- Strengthening of the academy's competitive profile, including maintenance of full enrollment, bolstering of student waitlist, and improved academic performance -- Improvement to operating margins, cash on hand above 150 days, and annual debt service coverage above 1.5x -- Material moderation of the academy's debt and overall leverage FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING -- Weakened competitive profile including softening of enrollment demand or deterioration of academic performance -- Maintenance of narrow operating margins below 10%, days cash on hand below 100, or annual debt service coverage at or below 1.1x -- Significant increases to the academy's debt or overall leverage LEGAL SECURITY The Series 2024 bonds are secured by lease payments, which will be paid by state aid, including building lease aid and general education revenue, received from the State of Minnesota (Aaa stable). The bonds are further secured by a first mortgage lien on the entire K-12 school facility. USE OF PROCEEDS Proceeds from the Series 2024 bonds will be used to refinance outstanding debt of the school, finance new capital projects, and to pay for the cost of issuance. Approximately $14 million of the proceeds will fully refund the school's outstanding Charter School Lease Revenue Refunding Bonds, Series 2015. The outstanding bonds were issued to refund previously issued bonds used to finance the costs of the acquisition and renovation of school's facility. The school will use $13.8 million of the current proceeds to finance the acquisition, construction and equipping of an approximately 44,800 square foot addition, including a gym and additional classrooms, to the existing facility. The remainder of the proceeds will be used to pay for the cost of issuing the bonds, including a fully funded debt service reserve fund (DSRF). PROFILE Prairie Seeds Academy is a non-profit charter school located in the City of Brooklyn Park, MN. Founded in 2004 the school offers a common core education model with a unique focus on the development and preservation of Hmong language and culture. The school operates a single facility providing K-12th grade education to approximately 860 students. The school's is authorized by the Osprey Wilds Environmental Learning Center and its current five-year charter is valid through June 30, 2030. METHODOLOGY The principal methodology used in this rating was US Charter Schools published in April 2024. PURDUE PHARMA: Obtains Limited Extension for Ch. 11 Deal Talks -------------------------------------------------------------- Hilary Russ of Law360 Bankruptcy Authority reports that on November 26, 2024, a New York bankruptcy judge extended Purdue Pharma LP's deadline to finalize a new settlement with certain Sackler family members, who own the bankrupt OxyContin manufacturer. Mediators confirmed they have completed a term sheet and are making significant progress toward reaching an agreement, the report relates. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP, as legal counsels; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk, LLC, is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rhode Island and Washington state, plus some Canadian local governments and other Canadian entities. In early March 2022, Purdue Pharma reached a nationwide settlement over its role in the opioid crisis, with the Sackler family members boosting their cash contribution to as much as $6 billion. The settlement was hammered out with attorneys general from the eight states -- California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont and Washington -- and D.C. who had opposed the previous settlement. QSR STEEL: Unsecured Creditors to Get Share of Income for 3 Years ----------------------------------------------------------------- QSR Steel Corporation, LLC, filed with the U.S. Bankruptcy Court for the District of Connecticut a Subchapter V Plan of Reorganization dated October 16, 2024. The Debtor is a Connecticut limited liability company and was initially incorporated under the name Quality Stair & Rail, LLC on February 9, 2000. On October 30, 2007, the Debtor changed its name to QSR Steel Corporation, LLC. The Debtor is a structural steel company that provides structural steel and miscellaneous metals to building owners and contractors throughout Connecticut and the Northeast. The Debtor manufactures miscellaneous metals, ladders, structural steel, rails and stairs. For the past twenty-four years, the Debtor has been involved in thousands of building projects generating millions of dollars in revenue. The Debtor operates its business from its facility located in Hartford, Connecticut and employs approximately thirty-five people. The Debtor has two members, Glenn Salamone and David Rusconi, each of whom hold 50% of the membership interests in the company. Mr. Salamone serves as the functional equivalent of a chief executive officer of the Debtor and is in charge of its operations. Glenn Salamone will continue to serve as the Reorganized Debtor's managing member and head of operations and will manage the Reorganized Debtor's affairs after confirmation of this Plan. Based upon the Debtor's historical sales, its postpetition performance, and Mr. Salamone's extensive experience in the industry and the customer relationships he has developed over many years, the Debtor has prepared the three-year projections (the "Projections"), which the Debtor believes are reasonable and achievable. These Projections reflect the Reorganized Debtor's Projected Disposable Income during the three-year period of the Plan. "Disposable Income" means the income that is received by the Reorganized Debtor that is not reasonably necessary to be expended for the payment of expenditures necessary for the continuation, preservation or operation of the Reorganized Debtor's business. On or about the Effective Date of the Plan and for the duration of the Plan, the Reorganized Debtor, to the extent deemed necessary, may borrow the funds needed to pay the unpaid administrative expenses of the bankruptcy and/or other Plan obligations from its affiliate, Arch Construction Company, which is also owned by Mr. Salamone and Mr. Rusconi. In accordance with Bankruptcy Code sections 1191(c)(3)(A)(i) and (ii), this Plan and the Projections demonstrate that the Reorganized Debtor will have sufficient future earnings to provide regular, quarterly Pro Rata Distributions of Projected Disposable Income to Holders of Allowed General Unsecured Claims over the Commitment Period. Although not expected to be needed, the Exit Financing will provide the Reorganized Debtor a backstop to pay all remaining unpaid Allowed Administrative Claims in this Subchapter V Case or other Plan obligations. Class 5 consists of all Allowed General Unsecured Claims. Except to the extent that a Holder of an Allowed General Unsecured Claim and the Debtor or the Reorganized Debtor, as applicable, agree to less favorable treatment of such Holder's Allowed General Unsecured Claim, each Holder of an Allowed General Unsecured Claim shall receive, in full and complete satisfaction, settlement, discharge, and release of, and in exchange for, its Allowed General Unsecured Claim: * such Holder's Pro Rata share of the Reorganized Debtor's Projected Disposable Income (as set forth on Exhibit A to this Plan) during the Commitment Period, payable as follows: -- Year 1: From April 1, 2025 to March 31, 2026, the amount of $93,981.00 payable on a quarterly basis beginning on April 1, 2025; -- Year 2: From April 1, 2026 to March 31, 2027, the amount of $196,715.50, payable on a quarterly basis beginning on April 1, 2026; -- Year 3: From April 1, 2027 to March 31, 2028, the amount of $522,983.02, payable on a quarterly basis beginning on April 1, 2027; and * to the extent there are any Litigation Recoveries, and they exceed the Projected Disposable Income to be Distributed under this Plan, such Holder's Pro Rata Share of 50% of such Litigation Recoveries, payable on the next quarterly payment date after the Debtor receives such Litigation Recoveries. However, the maximum Distribution to a Holder of a Class 3 Claim shall not exceed the total Allowed amount of such Holder's Claim. For the avoidance of doubt, in no event shall any Litigation Recoveries less than the amount of Projected Disposable Income be distributed to Creditors. If the Plan is confirmed as a consensual Plan, Mr. Salamone and Mr. Rusconi will agree to withdraw and/or forgo any Claims they may have for indemnity against the Debtor. Class 5 is Impaired. Class 6 consists of all Interests in the Debtor. Holders of Interests in the Debtor shall retain such Interests. Class 6 is Unimpaired. Unless otherwise set forth in the Plan, pursuant to Bankruptcy Code sections 363 and 1123 and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under the Plan, on the Effective Date, the provisions of the Plan shall constitute a good faith compromise and settlement of all Claims and Interests and controversies resolved by the Plan. To the extent necessary to enable the Debtor to pay Allowed Administrative Expenses or other Plan obligations, the Debtor reserves the right to obtain one or more loans or advances from Arch Construction Company, the repayment of which shall be subordinated to the payment of Allowed General Unsecured Claims under the Plan. The Reorganized Debtor will continue to operate with the primary purpose of conducting its business of provides structural steel and miscellaneous metals to building owners and contractors throughout Connecticut and the Northeast, as well as the manufacture of miscellaneous metals, ladders, structural steel, rails, and stairs. A full-text copy of the Subchapter V Plan dated October 16, 2024 is available at https://urlcurt.com/u?l=sCMIB3 from PacerMonitor.com at no charge. QSR Steel Corporation, LLC is represented by: Irve Goldman, Esq. Pullman & Comley, LLC 850 Main Street, P.O. Box 7006 Bridgeport, CT 06601-7006 Tel: (203) 330 2000 Fax: (203) 576 8888 Email: igoldman@pullcom.com kmayhew@pullcom.com jkaplan@pullcom.com About QSR Steel Corporation QSR Steel Corporation, LLC, is a one-stop, full service structural steel company based in Hartford, Conn., offering everything from steel buildings to stairs and railings. The Debtor filed a Chapter 11 petition (Bankr. D. Conn. Case No. 24-20562) on June 18, 2024, with $2,838,179 in assets as of March 31, 2024 and $2,124,057 in liabilities as of March 31, 2024. Glenn Salamone, member, signed the petition. Irve J. Goldman, Esq., at Pullman & Comley, LLC, is the Debtor's legal counsel. RG AVIATION: Files Chapter 11, Dec. 20 Creditors' Meeting --------------------------------------------------------- On November 22, 2024, RG Aviation LLC filed Chapter 11 protection in the Eastern District of Pennsylvania. 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 Sec. 341(a) to be held on December 20, 2024 at 10:00 AM. About RG Aviation LLC RG Aviation LLC is a limited liability company. RG Aviation LLC sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Pa. Case No. 24-14201) on November 22, 2024. In the petition filed by Rafael Guerrero, as authorized representative, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge Patricia M. Mayer handles the case. The Debtor is represented by: Shawn Lau, Esq. LAU & ASSOCIATES PC 4228 Saint Lawrence Ave Reading, PA 19606 Tel: (610) 370-2000 Email: shawn_lau@msn.com ROTI RESTAURANTS: Hires TAGex Brands as Auctioneer -------------------------------------------------- Roti Restaurants, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ TAGex Brands as auctioneer. The firm will facilitate the liquidation of surplus and non-functioning assets, including unused equipment, furniture, fixtures, and supplies. The firm will be paid the amount of $9,525 for the services rendered. Neal Sherman, Chief Executive Officer at TAGex Brands, 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: Neal Sherman TAGex Brands 200 Canal View Blvd Suite 302 Rochester, New York 14623 Tel: (800) 572-4480 About Roti Restaurants, LLC Roti Restaurants own and operate fast-casual restaurants offering Mediterranean menu with house-made meats, crisp vegetables, and flavor-forward sauces. Roti Restaurants, LLC and its affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-12410) on Aug. 23, 2024. The petitions were signed by Justin Seamonds as manager. At the time of filing, Roti Restaurants, LLC estimated $50,000 in assets and $1 million to $10 million in liabilities. Judge Donald R. Cassling presides over the case. Michael P. Richman, Esq. at RICHMAN & RICHMAN LLC represents the Debtors as counsel. The Debtors hired Ravinia Capital LLC, led by Thomas Goldblatt, as their investment banker. The U.S. Trustee for Region 11 appointed Ira Bodenstein as Subchapter V trustee for Roti Restaurants. SAMYS OC: Seeks Court Nod to Use Cash Collateral ------------------------------------------------ Samys OC, LLC asked the U.S. Bankruptcy Court for the District of Kansas for authority to use the cash collateral of its secured creditors. The company requires the use of cash collateral for payroll and other operating expenses. Dream First Bank and the U.S. Small Business Administration assert an interest in Samys' cash collateral for the loans they provided to the company. As of the petition date, the company owes Dream First Bank and SBA $8.4 million and $500,000, respectively. As adequate protection, Samys proposed to pay a monthly, interest-only payment of $48,227 to Dream First Bank and $1,562 to SBA beginning this month. In addition, the company proposed to grant both secured creditors replacement liens in its post-petition assets. The court is set to hold an evidentiary hearing on Dec. 17. Samys operates four Old Chicago restaurants in Kansas and is facing financial difficulties and has filed for bankruptcy. The company is embroiled in a legal dispute with its co-owner, Cairo, which has led to financial strain. Additionally, a default on a loan guarantee by one of the owners has triggered further legal actions. To address these issues and protect its assets, the company has initiated bankruptcy proceedings. The company owes significant debts to the secured creditors and its assets may not be sufficient to cover these liabilities, according to its attorney, Nicholas Grillot, Esq., at Hinkle Law Firm, LLC. About Samys OC Samys OC, LLC operates four Old Chicago restaurants in Kansas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 24-11166) on November 14, 2024, with up to $50,000 in assets and up to $50 million in liabilities. Amro M. Samy, managing member, signed the petition. Judge Mitchell L. Heren oversees the case. Nicholas R. Grillot, Esq., at Hinkle Law Firm, LLC, represents the Debtor as bankruptcy counsel. SC HEALTHCARE: Seeks to Extend Plan Exclusivity to March 17, 2025 ----------------------------------------------------------------- SC Healthcare Holding, LLC, and affiliates asked the U.S. Bankruptcy Court for the District of Delaware to extend their exclusivity periods to file a plan of reorganization and obtain acceptance thereof to March 17, 2025 and May 14, 2025, respectively. Since the Petition Date and during the First Extension Period, the Debtors have worked diligently to ensure a smooth transition into chapter 11 while preserving and maximizing the value of the Debtors' estates for the benefit of all stakeholders. The Debtors explain that since commencing these Chapter 11 Cases, the sale processes required significant effort from the Debtors and their advisors. Those efforts required multi-party negations with the Debtors' lenders (including prepetition lenders and the debtor-in-possession lender (the "DIP Lender")), the Committee, U.S. Trustee, and other interested parties. Obtaining approval of the Sales and completing the other tasks attendant to operating during chapter 11 required the full attention of the Debtors, their employees, and their professional advisors. Moreover, the Debtors intend to seek Court approval in the near term with respect to a purchase price allocation among all secured lenders, which has and will continue to require significant efforts from Debtors and other interested parties. The Debtors submit that the complexity of these Chapter 11 Cases warrants the further extension of the Exclusive Periods so that the Debtors may focus their efforts on negotiating and ultimately prosecuting a viable plan that has the support of, among other parties, the Debtors' prepetition lenders, DIP Lender (as applicable), the Committee, the U.S. Trustee and other key stakeholders. The Debtors claim that since commencement of these Chapter 11 Cases, the Debtors have endeavored to establish and maintain cooperative working relationships with their creditor constituencies. Importantly, the Debtors are not seeking the extension of the Exclusive Periods to delay administration of these Chapter 11 Cases or to exert pressure on their creditors but, rather, to continue the orderly, efficient, and cost effective chapter 11 process. Thus, the Debtors submit that this factor also weighs in favor of further extending the Exclusive Periods. The Debtors assert that termination of the Exclusive Periods would adversely impact the administration of these Chapter 11 Cases. If the Court were to deny the Debtors' request for further extension of the Exclusive Periods, upon the expiration of the Exclusive Filing Period, any party in interest would be free to propose a chapter 11 plan for the Debtors and solicit acceptances thereof. The Debtors further assert that such a ruling could foster a chaotic environment for the Debtors and their estates, significantly delay the administration of these Chapter 11 Cases, and otherwise impair the Debtors' ability to prosecute these Chapter 11 Cases without any corresponding benefit to the Debtors' estates and creditors. And, indeed, the Committee does not object to the relief requested herein. Counsel for the Debtors: Andrew L. Magaziner, Esq. Shella Borovinskaya, Esq. Carol E. Cox, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 E-mail: amagaziner@ycst.com sborovinskaya@ycst.com ccox@ycst.com - and - Daniel J. McGuire, Esq. Gregory M. Gartland, Esq. WINSTON & STRAWN LLP 35 W. Wacker Drive Chicago, IL 60601 Tel: (713) 651-2600 Fax: (312) 558-5700 Tel: (312) 558-5600 E-mail: dmcguire@winston.com E-mail: ggartland@winston.com - and - Carrie V. Hardman, Esq. 200 Park Avenue New York, New York 10166 Tel: (212) 294-6700 Fax: (212) 294-4700 E-mail: chardman@winston.com About Petersen Health Care Inc. SC Healthcare Holding, LLC, et al., comprise one of the largest nursing home operators in the United States and work in partnership with physicians, skilled nurses, and other health care providers in order to provide various healthcare and rehabilitation services for elderly citizens in Illinois, Missouri, and Iowa. SC Healthcare Holding, LLC, and its affiliates, including Petersen Health Care, Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10443) on March 20, 2024. In the petition signed by David R. Campbell as authorized signatory, SC Healthcare disclosed up to $100 million to $500 million in assets and $100 million to $500 million in liabilities. Judge Hon. Thomas M. Horan oversees the case. Young Conaway Stargatt & Taylor, LLP, and Winston & Strawn LLP, serve as the Debtors' legal counsel. SIX RIVERS: Ongoing Operations to Fund Plan Payments ---------------------------------------------------- Six Rivers Construction, LLC, filed with the U.S. Bankruptcy Court for the U.S. Bankruptcy Court for the District of Maine a Plan of Reorganization for Small Business. The Debtor is a limited liability company formed under the laws of the State of Maine. The Debtor first began operating in 2012 taking on small handyman like projects. The Plan Proponent's financial projections show that the Debtor will have projected disposable income of $146,000.00. The total amount paid pursuant to the Plan is $146,000.00 which amount includes the initial distribution and the three annual distributions ("Plan Cash"). The final Plan payment is expected to be paid on or before the date that is 36 months after the Effective Date of this Plan. The Debtor's plan provides for annual distributions of Plan Cash to be funded primarily from the Debtor's business operations. The Debtor will therefore have sufficient disposable income to fund this Plan and satisfy its creditors allowed administrative, secured claims and nonpriority unsecured claims. This Plan under chapter 11 of the Bankruptcy Code proposes to pay creditors of the Debtor from Plan Cash. During the pendency of the Plan, the Debtor shall make periodic payments into Debtor's Counsel's trust account totaling $146,000.00. Except as otherwise provided in the Plan, such funds shall be distributed to creditors in a total of four distributions ("Initial Distribution" and three "Annual Distributions"). The Initial Distribution shall begin within seven days of the Effective Date of this Plan. The Debtor shall file and serve a Notice of Substantial Consummation not later than 14 days following the Initial Distribution. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 5.35% of the claim amount. This Plan also provides for payment of administrative claims. Class 9 unsecured rent claim of The Grant Group is impaired. The arrears due are $10,110.98 and shall be paid in the second Annual Distribution. The underlying lease is hereby assumed. In addition to the payment outlined herein, the Debtor shall continue to make regular monthly lease payments directly to the Class 9 creditor pursuant to the terms of the underlying lease. Class 10 claims of all remaining non-priority general unsecured creditors are impaired. Holders of Allowed Unsecured Claims will receive pro rata distributions from Plan Cash after payment of Counsel Fees. While the Debtor is making ongoing payments on the claims as outlined in the Plan, Class 10 creditors shall not seek payment from any guarantor. Class 11 claim of the interests of Equity Security Holder Byron Bouchard in property of the Debtor's estate is unimpaired. The Equity Security Holder are not taking a distribution under this Plan on account of his equity. Upon entry of the Confirmation Order, all property of the Debtor's estate shall vest in the Debtor, free and clear of all liens, claims and encumbrances, except to the extent provided in this Plan, pursuant to Section 1141(b) of the Code. The Debtor shall have adequate means for implementation of this Plan pursuant to Section 1123(a)(5) of the Code through the ongoing business operations of the Debtor and any other funds generated or received by the Debtor and not allocated or paid pursuant to this Plan that may become available. A full-text copy of the Plan of Reorganization dated November 1, 2024 is available at https://urlcurt.com/u?l=xN740H from PacerMonitor.com at no charge. Counsel to the Debtor: Tanya Sambatakos, Esq. Molleur Law Office 190 Main Street, 3rd floor Saco, ME 04072 Tel: (207) 283-3777 Email: tanya@molleurlaw.com About Six Rivers Construction Six Rivers Construction offers construction services for residential and commercial projects. Six Rivers Construction filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No. 24-20164) on Aug. 6, 2024, listing $1 million to $10 million in both assets and liabilities. The petition was signed by Byron Bouchard as managing member. Judge Peter G. Cary presides over the case. Tanya Sambatakos, Esq., at Molleur Law Firm, is the Debtor's bankruptcy counsel. SKILLZ INC: Posts $21.1 Million Net Loss in Fiscal Q3 ----------------------------------------------------- Skillz, Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $21.1 million on $24.6 million of revenues for the three months ended September 30, 2024, compared to a net loss of $33.5 million on $36.4 million of revenues for the three months ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported a net loss of $21.8 million on $75.1 million of revenues, compared to a net loss of $85.8 million on $121 million of revenues for the same period in 2023. As of September 30, 2024, the Company had $390.2 million in total assets, $190.7 million in total liabilities, and $199.5 million in total stockholders' equity. "Our third quarter operating performance was marked by continued execution on our strategic operating priorities as we further position Skillz to generate sustainable top-line growth and positive cash flow," said Andrew Paradise, Skillz' CEO. "Paying Monthly Average Users (pMAU) in the quarter was stable on a quarterly sequential basis. By focusing our customer acquisition spend on targeted channels we again achieved system-wide payback approaching six months. We are optimistic that continued execution on our strategic initiatives will position Skillz to generate positive Adjusted EBITDA on a run-rate basis in 2025." Gaetano Franceschi, Skillz' CFO, added, "Our focus on disciplined operating expense management, including on user acquisition spend to ensure we achieve expected system-wide payback, continues to drive year over year improvements in our Adjusted EBITDA loss and our quarterly cash burn. Our strong balance sheet, including more than $300 million in cash and restricted cash as of September 30, 2024, provides us with the flexibility to deploy capital on our turnaround initiatives such as the development and introduction of new product features, as well as to begin to transition toward increasing our user acquisition spend to generate profitable growth." A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/mvtywm3h About Skillz Inc. Las Vegas-based Skillz Inc. -- https://www.skillz.com -- is a mobile games platform dedicated to fostering competition and excellence through its technology. The Skillz platform enables developers to create multi-million dollar franchises by incorporating social competition into their games. Leveraging its patented technology, Skillz hosts billions of casual eSports tournaments for millions of mobile players worldwide, with the goal of becoming the home of competition for all. Skillz reported a net loss of $101.36 million in 2023, a net loss of $438.87 million in 2022, a net loss of $187.92 million in 2021, and a net loss of $149.08 million in 2020. * * * As reported by the TCR in January 2024, S&P Global Ratings retained its ratings on Skillz Inc., including its 'CCC+' issuer credit rating, following the assignment of the new management and governance (M&G) assessment. S&P said, "S&P Global Ratings assigned a new M&G modifier assessment of negative to Skillz following the revision to our criteria for evaluating the credit risks. The terms management and governance encompass the broad range of oversight and direction conducted by an entity's owners, board representatives, and executive managers. These activities and practices can impact an entity's creditworthiness and, as such, the M&G modifier is an important component of our analysis." SMART COMMUNICATIONS: Case Summary & 18 Unsecured Creditors ----------------------------------------------------------- Two affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Smart Communications Holding, Inc. 24-07106 10491 72nd St. Seminole, FL 33777 Smart Communications Holding, LLC 24-07108 10491 72nd St. Seminole, FL 33777 Chapter 11 Petition Date: November 30, 2024 Court: United States Bankruptcy Court Middle District of Florida Judge: Hon. Roberta A Colton Debtors' Counsel: Daniel R. Fogarty, Esq. STICHTER, RIEDEL, BLAIN & POSTLER, P.A. 110 E. Madison St. Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 E-mail: dfogarty@srbp.com Each Debtor's Estimated Assets: $10 million to $50 million Each Debtor's Estimated Liabilities: $50 million to $100 million The petitions were signed by Jonathan D. Logan as president. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/35ZEI3Y/Smart_Communications_Holding_Inc__flmbke-24-07106__0001.0.pdf?mcid=tGE4TAMA List of Smart Communications Holding, Inc.'s 18 Unsecured Creditors: Entity Nature of Claim Claim Amount 1. ShenZhen Meridian $748,000 Technology Co. Ltd. Room 2809, West Building, Qui Shi Bldg. Zhu Zi Ling, Fu Tian District Shenzhen, China 51804 2. Swank Motion Pictures, Inc. $146,307 10795 Watson Road, St. Louis, MO 63127 3. Florida Custom Mold, Inc $107,846 1806 Gunn Hwy, Odessa, FL 33556 4. Cents LLC $105,709 6801 Holabird Ave. Dundalk, MD 21222 5. Wintel Corp. $100,018 2741 NW 82nd Ave Doral, FL 33122 6. Versa Technology, Inc. $38,940 5224 Bell Ct. Chino, CA 91710 7. xByte Technologies $22,351 4614 19th St Ct E. Bradenton, FL 34203 8. I.D. Tel $11,929 55 Canal S. Staten Island, NY 10304 9. CDW Direct LLC $8,128 200 N Milwaukee Ave, Vernon Hills, IL 60061 10. Westfield Insurance $2,500 One Park Circle P.O. Box 5001 Westfield Center, OH 44251 11. Priority1 $399 401 W. Capitol Ave. Little Rock, AR 72201 12. Assets America, Inc. Unknown 800 5th Ave #101 Seattle, WA 98104 13. GGC Brennan Industrial, LLC Lease Unknown Attn: Michael W. Brennan 9450 W. Bryn Mawr, #750 Rosemont, IL 60018 14. Janice Logan, as Trustee Unknown of the James Logan Family Trust c/o David E. Schoenfeld, Esq. 100 N. Tampa St., #2900 Tampa, FL 33602 15. Lattice Incorporated Contract Unknown 7150 N. Park Dr., #500 Dispute Pennsauken, NJ 08109 16. McNees Wallace & Nurick LLC Unknown 100 Pine Street Harrisburg, PA 17101 17. Melvin W. Engelke, III Lawsuit Unknown c/o Dean Kent, Esq. 101 E. Kennedy Blvd., #2700 Tampa, FL 33602-5150 18. Mt. View Business Plaza, Lease Unknown LLC P.O. Box 821048 Vancouver, WA 98682 SOLIGENIX INC: Reports Net Loss of $1.7 Million in Fiscal Q3 ------------------------------------------------------------ Soligenix, Inc. filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $1,719,381 with no reported revenues for the three months ended September 30, 2024, compared to a net loss of $1,662,702 on $130,440 of total revenues for the three months ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported a net loss of $5,279,210 on $119,371 of total revenues, compared to a net loss of $4,320,835 on $594,547 of total revenues for the same period in 2023. As of September 30, 2024, the Company had $10,476,979 in total assets, $4,541,791 in total liabilities, and $5,935,188 in total stockholders' equity. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/ybwjmcbk 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. During the year ended December 31, 2023, Soligenix incurred a net loss of $6,140,730. SPENCER SPIRIT: Moody's Affirms 'B1' CFR, Outlook Remains Stable ---------------------------------------------------------------- Moody's Ratings has affirmed Spencer Spirit IH LLC's ("Spencer Spirit") B1 corporate family rating, B1-PD probability of default rating and B1 senior secured first lien term loan B rating. The outlook remains stable. The affirmations reflect the company's significant uptick in revenue and EBITDA since 2019 as well as its market leading position in Halloween celebration products through its Spirit Halloween Superstores LLC segment. The affirmations also consider Moody's view that the company will maintain good liquidity and debt/EBITDA and EBITA/Interest will remain solid at about 1.6x and 5.0x, respectively over the next 12-18 months. RATINGS RATIONALE Spencer Spirit IH LLC's B1 CFR is constrained by its limited scale and reliance on mall traffic and discretionary spending by 18-24year-olds at its Spencer Gifts LLC line. While the company continues to invest in its digital and omnichannel capabilities, it remains exposed to the secular shift to online spending. Spencer Spirit's limited scale, very high seasonality, with the vast majority of earnings and cash flow generated in the third quarter (coinciding with Halloween), also constrains its credit profile. Spencer Spirit benefits from solid execution, which has driven consistent growth in its Spirit Halloween business line and led the company to become a market leader for Halloween costumes, home décor, animatronics and accessories offsetting sales weakness at Spencer Gifts (which is coming off its 2021 pandemic peak, but is still well above pre-COVID levels). The rating is also supported by the company's low Moody's debt/EBITDA compared to similarly rated retail peers, which Moody's project to be about 1.6 times over the next 12-18 months (rising to a modest 1.8 times at peak revolver drawings). Moody's expect Spencer Spirit to have good liquidity over the next 12-18 months, including high cash balances except for peak seasonal working capital periods and ample availability under its asset-based revolving credit facility (ABL) revolver. The stable outlook reflects Moody's expectation that Spencer Spirit will continue to maintain solid credit metrics for the rating category and good liquidity over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would require a significant increase in scale and diversification that would reduce seasonality, while maintaining at least good liquidity and sustained revenue and earnings growth in both Spencer's and Spirit. An upgrade would also require maintenance of conservative financial strategies, such that debt/EBITDA is sustained below 3.0 times and EBITA/interest expense above 3.0 times. The ratings could be downgraded if operating performance deteriorates, particularly outside of historical day-of-week Halloween fluctuations. The ratings could also be downgraded if the company undertakes more aggressive financial strategies, or if liquidity weakens. Quantitatively, the ratings could be downgraded if debt/EBITDA is sustained above 4.0 times or EBITA/interest is below 2.0 times. Spencer Spirit IH LLC ("Spencer Spirit") is an intermediate holding company of Spencer Gifts LLC and Spirit Halloween Superstores LLC. The company operated 681 Spencer's and 1,506 Spirit stores at its peak during the last-twelve-month period ending February 3, 2024 and generated revenue of about $1.85 billion for the last-twelve-months ended August 3, 2024. Spencer Spirit is predominantly owned by senior management. The principal methodology used in these ratings was Retail and Apparel published in November 2023. SPIRIT AIRLINES: Fitch Lowers LongTerm IDR to 'D' ------------------------------------------------- Fitch Ratings has downgraded Spirit Airlines' Long-Term Issuer Default Rating (IDR) to 'D' from 'CC'. Fitch has also downgraded Spirit IP Cayman Ltd.'s and Spirit Loyalty Cayman Ltd.'s senior secured debt to 'CCC-' with a Recovery Rating of 'RR2' from 'CCC'/'RR2'. Fitch has additionally downgraded Spirit's 2017-1 class B certificates to 'CCC+' from 'B-' and removed the rating from Rating Watch Negative. Fitch has affirmed Spirit's 2017-1 class AA, 2017-1 class A, and 2015-1 class A certificates as shown below. The rating actions follows Spirit's chapter 11 bankruptcy filing. Key Rating Drivers Chapter 11 Bankruptcy Filing: Spirit filed for chapter 11 bankruptcy on November 18, driving the downgrade of Spirit's IDR to 'D'. As part of the filing Spirit Airlines has entered into a Restructuring Support Agreement, which outlines a plan for the equitization of $410 million of outstanding senior secured notes and $385 million of convertible notes. Additionally, the company has secured debtor-in-possession (DIP) financing of $300 million to maintain operations during the bankruptcy proceedings. Holders of Spirit's $1.1 billion loyalty program notes are expected to receive $700 million in new notes as part of the exit financing as well as 76% of the new common equity. Spirit expects to exit bankruptcy in the first quarter of 2025. Constrained Financial Flexibility: The bankruptcy filing follows a period of weak financial performance that strained its financial flexibility. Spirit faced the maturity of its 2025 loyalty bonds and 2026 convertible notes. Refinancing efforts were hampered by ongoing operating losses and cash outflows. The company reported sharply negative operating margins through the first six months of the year and expects to generate a negative operating margin of roughly -26% for the third quarter on lower yields and higher total operating expenses compared to the prior year. Spirit has assured customers that operations will continue as normal, but still faces the risk that customers may opt to book away towards other carriers, thus accelerating the company's cash burn. Shrinking Footprint: Spirit will attempt to regain profitability by shrinking its operations, and focusing on its most profitable markets. Post-bankruptcy margin expansion will depend in part on customer acceptance of its new product offerings along with a sustained demand for leisure travel, which Fitch expects to hold up in 2025. Spirit recently announced an agreement to sell 23 aircraft, or nearly 11% of its fleet, to GA Telesis, LCC consisting of a mix of A320 and A321 CEOs. The sale is expected to generate gross proceeds of $519 million. Spirit estimates the net proceeds of the sale combined with discharging aircraft-related debt will benefit its liquidity by approximately $225 million through YE 2025. EETC Ratings: 2017-1 Class AA and Class A Certificates: Fitch has affirmed the class AA and A certificates without placing the ratings on Rating Watch Negative as Spirit's bankruptcy filing indicated that holders of secured aircraft indebtedness will continue to be paid in ordinary course of business and will not be impaired through the restructuring process. The class AA certificate ratings are primarily driven by Fitch's top-down approach, which implies a 'AA-' rating. However, Spirit's IDR of 'D' caps the class AA certificates at 'A+', due to senior tranches are precluded from reaching the 'AA' category under Fitch's EETC criteria if the underlying airline is rated 'B-' or lower. The ratings for the class A certificates for both the 2017-1 and 2015-1 transactions are derived through Fitch's top-down approach. Loan-to-values (LTVs) for both transactions continue to maintain a moderate level of cushion at the current rating category. Both also benefit from strong levels of overcollateralization with LTVs at 84.3% for the 2015-1 certificates and 88.4% for the 2017-1 certificates in Fitch's 'A' level stress scenario. The ratings for the senior tranches continue to be supported strong market values for the A320 and A321 CEO aircraft, which are trading 3.5% to 9.4% above current base values used in Fitch's models. Class B Certificate Ratings: Fitch typically notches subordinated tranche EETC ratings from the airline's IDR based on three primary variables: 1) the affirmation factor (0-3 notches) 2) the presence of a liquidity facility, (0-1 notch) and 3) recovery prospects (0-1 notch). The four-notch uplift from Spirit's 'RD' IDR reflects a moderate-to-high affirmation factor (+2 notches), the benefit of a liquidity facility (+1 notch), and solid recovery prospects in a stress scenario (+1). Affirmation Factor: Fitch chose not to assign the maximum +3 notch affirmation factor uplift for the 2017-1 despite Spirit's filing confirming secured aircraft debtholders will not be impacted by the restructuring process. The uplift continues to be limited by the shrinking proportion of Spirit's total fleet represented by the transaction as the company continues to grow. The collateral aircraft are becoming marginally less attractive as Spirit takes delivery of more A320 and A321 NEOs, which are more fuel efficient. However, the deferral of most of 2025 and 2026 deliveries of the NEOs coupled with recent asset sale of 23 A320 and A321 CEOs will increase the importance of these aircraft in its fleet. Pro forma for the aircraft sales, the 2017-1 collateral pool represents approximately half of remaining owned aircraft in Spirit's fleet, supporting the moderate-to-high affirmation factor. Derivation Summary EETC RATINGS The class AA certificates and class A certificates rated in both of Spirit's EETC transactions are in line with other EETC class AA and A certificate ratings in Fitch's coverage. The level of overcollateralization and LTVs are consistent with similar-rated certificates. The class B certificates are rated lower than other subordinated EETC certificates with similar credit profiles, due to Spirit's IDR. Key Assumptions Key assumptions primarily relate to EETC ratings, since Spirit has filed for bankruptcy. Key assumptions within the rating case for the issuer include a harsh downside scenario in which Spirit declares bankruptcy, chooses to reject the collateral aircraft, and where the aircraft are remarketed in the midst of a severe slump in aircraft values. Fitch's models also incorporate a full draw on liquidity facilities and include assumptions for repossession and remarketing costs. Recovery Analysis Fitch's recovery analysis assumes Spirit will be reorganized as a going concern (GC) in bankruptcy rather than liquidated. The analysis incorporates a going-concern EBITDA estimate of $220 million and a 5x multiple. Fitch's GC EBITDA estimate of $220 million remains the same as prior estimates and reflects Spirit's recent track record of operating losses and uncertainty around its turnaround plans. The GC EBITDA assumption is below levels generated through the pandemic downturn. Fitch believes that pandemic period profits through 2024 are temporarily depressed due to a confluence of factors but profits may continue to be constrained by intense competition and rising costs. The choice of this multiple considered the following factors: - Historical bankruptcy case study exit multiples for peer companies ranged from 3.1x to 6.8x; - Spirit's 5x multiple is at the mid-point of the range, which given the company's potential growth over time, is offset by profitability and competitive headwinds; - The value available to holders of the loyalty program assets is dependent upon the size of Spirit's loyalty member base and associated cash flows. Fitch views Spirit's initial bankruptcy document filings as likely supportive of recovery estimate of RR2 given the senior secured debtholders allocation of $700 million in new debt along with equity in the post-bankruptcy company. RATING SENSITIVITIES Rating sensitivities for Spirit's IDR are not applicable given the company's chapter 11 filings. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Class AA and A Certificates - Negative rating actions could be driven by an unexpected decline in collateral values. Senior tranche ratings could also be affected by a perceived change in the affirmation factor. Class B Certificates Fitch currently views the Affirmation Factor for each Spirit EETC as moderate to high. This could weaken over time as the collateral aircraft age and become a smaller portion of Spirit's total fleet. Negative actions could be driven by lower recovery prospects driven by weaker aircraft values. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Class AA and A Certificates The class AA and A certificate ratings are primarily based on a top-down analysis based on the value of the collateral. Upgrades may be driven by stable or increasing values for the A321 and A320 along with continued principal amortization leading to improved collateral coverage. An upgrade to the class AA certificates is unlikely, given Spirit's IDR is at 'D'. Class B Certificates The class B certificates are linked to Spirit's corporate rating. Therefore, if Spirit were upgraded, the class B certificates would be upgraded in lock-step as well. Issuer Profile Spirit Airlines, Inc. is a Florida-based ultra-low-cost air carrier. 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 ----------- ------ -------- ----- Spirit Airlines, Inc. LT IDR D Downgrade CC Spirit Airlines Pass Through Trust Certificates Series 2017-1 senior secured LT A+ Affirmed A+ senior secured LT A Affirmed A senior secured LT CCC+ Downgrade B- Spirit Loyalty Cayman Ltd. senior secured LT CCC- Downgrade RR2 CCC Spirit IP Cayman Ltd. senior secured LT CCC- Downgrade RR2 CCC Spirit Airlines Pass Through Trust Certificates Series 2015-1 senior secured LT A Affirmed A SPIRIT AIRLINES: Moody's Cuts CFR to Ca & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Ratings downgraded Spirit Airlines, Inc.'s (Spirit) probability of default rating to D-PD from Caa2-PD and its corporate family rating to Ca from Caa2. At the same time, Moody's downgraded Spirit IP Cayman Ltd.'s (Spirit IP) backed senior secured rating to Ca from Caa2. Spirit's speculative grade liquidity rating was downgraded to SGL-4 from SGL-3. The outlook changed to stable from negative. These actions reflect governance considerations associated with the company's announcement [1] that it filed for protection under Chapter 11 of the US Bankruptcy Code. The filing follows sustained operating losses driven in part by increased competition in Spirit's key markets, the grounding of aircraft due to Pratt & Whitney geared turbofan engine issues and the failed merger with JetBlue. These issues made the upcoming refinancing of Spirit IP's $1.1 billion 8% backed senior secured notes maturing in 2025 unlikely. The downgrade of these notes' rating reflects the diminished recovery prospects. RATINGS RATIONALE On November 18, 2024, Spirit entered into a prearranged Chapter 11 process in the US Bankruptcy Court for the Southern District of New York. The company has received backstopped commitments for a $350 million equity investment and $300 million in debtor-in-possession (DIP) financing, both from existing bondholders, as a part of a Restructuring Support Agreement (RSA). Per the terms of the RSA, which has been agreed upon by a supermajority of both Spirit's convertible bondholders and Spirit IP's loyalty bondholders, $1.6 billion of debt will be extinguished with holders receiving in exchange $795 million of equity and $840 million of new bonds. Subsequent to the actions, Moody's will withdraw all of its ratings and outlooks for Spirit and Spirit IP given the company's bankruptcy filing. Spirit Airlines, Inc., headquartered in Miramar, Florida, is a leading low-cost US airline providing service to destinations throughout the US, Latin America and the Caribbean. Revenue was $5.1 billion for the 12 months ended June 30, 2024. SRM-DOUBLE L LLC: Hires Parsons Behle & Latimer as Counsel ---------------------------------------------------------- SRM-Double L, LLC seeks approval from the U.S. Bankruptcy Court for the District of Idaho to employ Parsons Behle & Latimer as counsel. The firm's services include: (a) advising the Debtor with respect to its powers and duties as Debtor in possession in the continued management and operation of its businesses and properties; (b) advising and consulting on the conduct of this Chapter 11 Case; (c) advising the Debtor in connection with corporate transactions and corporate governance, negotiations, consent solicitations, credit agreements, financing agreements, and other agreements with creditors, equity holders, prospective acquirers and investors, reviewing and preparing of documents and agreements, and such other actions; (d) reviewing and preparing pleadings in connection with this Chapter 11 Case; (e) attending meetings and negotiating with representatives of creditors and other parties in interest; (f) representing the Debtor with respect to litigations; (g) advising the Debtor with legal issues related to the Debtor's financial circumstances; (h) performing all other ancillary necessary legal services for the Debtor in connection with the prosecution of this Chapter 11 Case; (i) taking all necessary legal actions to protect and preserve the Debtor's estate as the Debtor requests; and (j) taking any necessary action on behalf of the Debtor as the Debtor requests to obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto. The firm will be paid at these hourly rates: Brian M. Rothschild, Shareholder $465 Elliot McGill, Associate $360 Alexander S. Chang, Law Clerk $325 On September 18, 2024, the Debtor paid a $5,000 retainer for bankruptcy-related consultation services. On October 17, 2024, the Debtor paid $40,000 to negotiate the sale of assets, consult on restructuring or liquidation, and, ultimately, prepare the Chapter 11 Case for filing. Brian M. Rothschild, Esq., at Parsons Behle, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Brian M. Rothschild, Esq. Parsons Behle & Latimer 800 W Main St Suite 1300 Boise, Idaho 83702 Tel: (208) 562-4900 Fax: (801) 536-6111 Email: BRothschild@parsonsbehle.com About SRM-Double L, LLC SRM-Double L is a farm equipment manufacturer that specializes in potato equipment. SRM-Double L, LLC in Heyburn ID 83336, sought relief under Chapter 11 of the Bankruptcy Code filed its voluntary petition for Chapter 11 protection (Bankr. D. Idaho Case No. 24-40671) on Nov. 14, 2024, listing $13,849,586 in assets and $22,804,289 in liabilities. John Stokes as member. PARSONS BEHLE & LATIMER serve as the Debtor's legal counsel. SRM-DOUBLE L LLC: Seeks to Hire Ampleo Turnaround as Accountant --------------------------------------------------------------- SRM-Double L, LLC seeks approval from the U.S. Bankruptcy Court for the District of Idaho to hire Ampleo Turnaround and Restructuring LLC, as accountant and financial advisor. The firm will render these services: (a) assist the Debtor in preparing for and filing a Chapter 11 bankruptcy petition, or exploring other alternatives; (b) manage short-term cash, and serve as the Debtor's financial advisor throughout the Chapter 11 proceeding; (c) work with counsel to accomplish a 363 sale of the Debtor's assets; (d) comply with all filing and ongoing reporting requirements; (e) communicate with creditors and administer claims; and (f) perform other tasks as required by the Client and/or counsel in support of a Chapter 11 filing. The firm will be paid at these rates: Matthew R. McKinlay $335 per hour Douglas Charboneau $300 per hour Other professionals as needed at their prevailing rates. The firm will be paid a retainer in the amount of $30,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Matthew McKinlay, managing partner at Ampleo, 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: Matthew McKinlay Ample 13601 W. McMillan Rd. #102 PMB 320 Boise, ID 83713 Tel: (208) 761-5222 About SRM-Double L, LLC SRM-Double L is a farm equipment manufacturer that specializes in potato equipment. SRM-Double L, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Idaho Case No. 24-40671) on Nov. 14, 2024, listing $13,849,586 in assets and $22,804,289 in liabilities. The petition was signed by John Stokes as member. Brian Michael Rothschild, Esq. at Parsons Behle & Latimer represents the Debtor as counsel. STAR PUMP: Case Summary & 11 Unsecured Creditors ------------------------------------------------ Debtor: Star Pump Down Service, LLC 555 Estates Dr. Lewisville, TX 75077-4809 Business Description: Star Pump Down is dedicated to providing services in the pump down industry. Chapter 11 Petition Date: November 29, 2024 Court: United States Bankruptcy Court Western District of Texas Case No.: 24-11506 Judge: Hon. Shad Robinson Debtor's Counsel: Stephen W Sather, Esq. BARRON & NEWBURGER, P.C. 7320 N. MoPac Expressway 400 Austin, TX 78731 Tel: (512) 649-3243 E-mail: ssather@bn-lawyers.com Total Assets: $5,146,614 Total Liabilities: $7,061,694 The petition was signed by Chad Elliott as president. 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/XZMOCBY/Star_Pump_Down_Service_LLC__txwbke-24-11506__0001.0.pdf?mcid=tGE4TAMA STOLI GROUP: Seeks Chapter 11 Bankruptcy w/ Subsidiary ------------------------------------------------------ Jonathan Randles of Bloomberg News reports that Stoli Group (USA) LLC, the U.S. subsidiary of Stoli Group and owner of the Stoli vodka and Kentucky Owl bourbon brands, has filed for bankruptcy. The company, along with its whiskey business, Kentucky Owl American, filed for Chapter 11 protection on November 27, 2024 in Texas, reporting over $100 million in assets and liabilities ranging between $50 million and $100 million, the report states. According to its website, Stoli Group owns a portfolio of 12 spirits and wine brands, including Stoli vodka, distilled in Latvia, Elit vodka, Bayou vodka, Villa One tequila, Achaval Ferrer wine, and Kentucky Owl whiskey. Stoli's U.S. division reported facing financial challenges, the report relays. About Stoli Group (USA) LLC Stoli Group (USA) LLC is a producer, manager, and distributor of a global portfolio of spirits and wines. Stoli Group (USA) LLC and its Kentucky Owl American sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-80146) on November 27, 2024. In the petition filed by Chris Caldwell, as president and global chief executive officer, the Debtor reports estimated assets between $100 million and $500 million and estimated liabilities between $10 million and $50 million. Honorable Bankruptcy Judge Scott W. Everett handles the case. Debtors' Counsel: Holland N. O'Neil, Esq. Stephen A. Jones, Esq. Mary Rofaeil, Esq. Zachary C. Zahn, Esq. FOLEY & LARDNER LLP 2021 McKinney Avenue Suite 1600 Dallas, TX 75201 Tel: (214) 999-3000 Fax: (214) 999-4667 Email: honeil@foley.com sajones@foley.com mary.rofaeil@foley.com zzahn@foley.com - and - Ann Marie Uetz, Esq. FOLEY & LARDNER LLP 500 Woodward Avenue, Suite 2700 Detroit, MI 48226-3489 Tel: (313) 234-7100 Fax: (313) 234-2800 Email: auetz@foley.com - and - Michael J. Small, Esq. FOLEY & LARDNER LLP 321 North Clark Street, Suite 3000 Chicago, IL 60654-4762 Tel: (312) 832-4500 Fax: (312) 832-4700 Email: msmall@foley.com TENET HEALTHCARE: Moody's Raises CFR & Senior Secured Notes to Ba3 ------------------------------------------------------------------ Moody's Ratings upgraded Tenet Healthcare Corporation's Corporate Family Rating to Ba3 from B1 and Probability of Default Rating to Ba3-PD from B1-PD. Moody's also upgraded Tenet's senior secured first and second lien notes to Ba3 from B1 and senior unsecured notes to B2 from B3. The outlook is stable. The ratings upgrade reflects Tenet's material deleveraging after it paid down approximately $2.1 billion in debt earlier this year using the proceeds from hospital asset sales. The upgrade also reflects Moody's expectation that the company will continue to grow its revenue and EBITDA primarily through the expansion of the ambulatory care business, which now contributes approximately 45% of the company's EBITDA. Moody's expect that the company will use prudent financial policies to manage share buybacks/distributions commensurate with its free cash flow and will maintain debt/EBITDA in the 4.0-5.0 times range. Governance risk considerations, especially management's efforts to pay down a significant amount of debt using proceeds from asset sales and an intention to operate the company at lower financial leverage, are material to this rating action. RATINGS RATIONALE Tenet's Ba3 CFR reflects the company's significant scale, good business diversity, moderately high financial leverage and very good liquidity. In addition to acute care hospitals, the company has a sizeable portfolio of ambulatory surgery centers (ASCs) and a revenue cycle management business which add business diversity. Moody's expect that the company will operate with debt/EBITDA sustained in the 4.0-5.0 times range. Tempering these strengths, Tenet's Ba3 CFR is constrained by some geographic concentration in Texas and California where around 43% of the company's licensed beds are located. The company's shareholder-friendly policies are also constraining factors. The stable outlook reflects Moody's view that Tenet will continue to operate with significant scale and diversity while maintaining moderately high financial leverage. Moody's expect Tenet to maintain very good liquidity over the next 12-18 months. The company's liquidity is supported by Moody's expectation of more than $500 million in annual free cash flow (after distributions to Non-Controlling Interests) along with over $2.8 billion in cash (excluding $1.0 billion earmarked for tax payment in the fourth quarter of 2024), and a fully available $1.5 billion ABL revolver as of September 30, 2024. Tenet's senior secured first lien notes are rated Ba3, the same as the Ba3 corporate family rating. This reflects their senior position to the unsecured notes, offset by the ABL revolver's superior position to the first lien notes because the ABL is secured by high-quality collateral (receivables). The first lien notes are secured by a first priority pledge of the capital stock of Tenet's domestic subsidiaries and benefit from guarantees provided by domestic hospital subsidiaries. However, the notes lack a pledge of subsidiary assets resulting in what Moody's consider to be a weak collateral package. Tenet's secured second lien notes are also rated Ba3, reflecting the same collateral package and guarantees as the first lien notes, although the second lien notes have a subordinate claim. The unsecured notes are rated B2, two notches below the CFR. This reflects their unsecured nature, lack of guarantees from the operating subsidiaries and effective subordination to a considerable amount of secured debt as well as accounts payable. Tenet's CIS-3 indicates that ESG considerations have limited impact on the current credit rating but could potentially have a negative impact over time. The company's social risk exposures (S-4) primarily include human capital and responsible production. Among social risks, the company is exposed to a scarcity of qualified human capital as it relies heavily on specialized labor, which often requires extensive licensing. The company could face liabilities related to patient care if it becomes a target of medical malpractice litigations and/or if it ends up violating industry regulations. Additionally, the company is exposed to changes in reimbursement rates by its payors -- including government payors – and a push towards reducing overall healthcare costs. Tenet's G-3 score (changed from G-4) reflects the company's financial strategy and risk management highlighted by improving, though moderately high, financial leverage. The company's E-3 score reflects the company's exposure to physical climate risks including wildfires and hurricanes that can disrupt operations, notably in the states of California, Florida and Texas where approximately 54% of total beds are located. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Tenet's ratings could be downgraded if the company's operating performance weakens due to any reason including potential missteps in executing an aggressive ASC business expansion strategy. Negative rating pressure may arise if the company's financial policies were to become more aggressive through material debt-funded acquisitions or more aggressive returns to shareholders. Ratings could be downgraded if debt/EBITDA is sustained above 5.0 times or if free cash flow after non-controlling interest distributions were to materially decline. The ratings could be upgraded if Tenet can realize the additional benefits from its recent cost and operating initiatives, including increased profit margins. Further, the ratings could be upgraded if Tenet sustains and improves its free cash flow and sustains debt/EBITDA below 4.0 times. Tenet, headquartered in Dallas, Texas, operates 49 acute care and specialty hospitals and ownership/interest in more than 686 other healthcare facilities, including outpatient facilities, surgical hospitals, ambulatory surgery centers, imaging centers, off-campus emergency departments and micro-hospitals. Revenues for the twelve months ended September 30, 2024 were approximately $21 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. THUNDER ROAD: Hires Feinman Law Offices as Legal Counsel -------------------------------------------------------- Thunder Road Realty LLC seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to employ Feinman Law Offices as counsel. Feinman Law Offices will give legal advice regarding its duties under the Bankruptcy Code, prepare a bankruptcy plan, and provide legal other services. 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. The firm will be paid a retainer of $30,000. Michael Feinman, Esq., disclosed in a court filing that his firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael B. Feinman, Esq. Feinman Law Offices 69 Park Street, Second Floor Andover, MA 01810 Telephone: (978) 494-6669 Facsimile: (978) 475-0852 Email: mbf@feinmanlaw.com About Thunder Road Realty LLC Thunder Road Realty LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Mass. Case No. 24-12281) on Nov. 14, 2024. The Debtor hires Feinman Law Offices as counsel. TILI LOGISTICS: Seeks to Use Cash Collateral Until Feb. 14 ----------------------------------------------------------- Tili Logistics Corporation asked the U.S. Bankruptcy Court for the Southern District of California for authority to use cash collateral until Feb. 14 next year. The company requires the use of cash collateral to fund its operating expenses. The terms of use would be using the cash collateral in exchange for replacement liens and a super-priority administrative claim if the replacement liens prove to be inadequate. In addition, the company could establish a separate debtor-in-possession account into which the cash collateral amount would be deposited at the end of each month and reported on its monthly operating report. The company's primary creditor, Love's Financial, holds a security interest in the company's cash collateral, which includes the $12,300 in receivables. A court hearing is set for Dec. 5. About Tili Logistics Corporation Tili Logistics Corporation is a trucking company in San Diego, Calif. Tili Logistics sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Cal. Case No. 24-02128) on June 8, 2024. In the petition signed by Sergio Casas-Silva, Jr., as executive vice president, the Debtor reports estimated assets between $100,000 and $500,000 and estimated liabilities between $1 million and $10 million. The Honorable Bankruptcy Judge Christopher B. Latham oversees the case. The Debtor is represented by Steven E. Cowen, Esq., at S.E. Cowen Law. TOLEDO GAS: Sec. 341(a) Meeting of Creditors on Dec. 18 ------------------------------------------------------- On November 21, 2024, Toledo Gas Gathering LLC filed Chapter 11 protection in the Eastern District of Texas. According to court filing, the Debtor reports between $1 million and $10 million in debt owed to 1 and 49 creditors. A meeting of creditors under Sec. 341(a) to be held on December 18, 2024 at 1:00 PM. About Toledo Gas Gathering LLC Toledo Gas Gathering LLC is a limited liability company. Toledo Gas Gathering LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 24-60730) on November 21, 2024. In the petition filed by Raymond S. Russell, as member manager, the Debtor reports estimated assets and liabilities between $1 million and $10 The Debtor is represented by: Wyatt J. Shirley, Esq. CURTIS LAW, P.C. 901 Main Street Suite 6515 Dallas, TX 75202 Tel: 214-752-2222 Email: wshirley@curtislaw.net TRINITY EXCAVATORS: Seeks Cash Collateral Access ------------------------------------------------ Trinity Excavators, LLC and TE Construction Group, LLC asked the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, for authority to use the cash collateral of Third Coast Bank SSB and other secured creditors. Third Coast Bank holds first position liens on the companies' assets, which secure the loans it provided to the companies. These assets include accounts receivable, equipment and personal property. The companies believe they owe the bank no less than $4 million, which exceeds any expected recovery of the cash collateral. In addition to Third Coast Bank, Libertas, CloudFund, LLC (Delta Bridge), Slate Advance LLC, Instafunders, and Blade Funding Inc. assert an interest in the companies' cash collateral. Gregory Hauswirth, Esq., one of the attorneys representing the companies, said there is no need to provide adequate protection to Third Coast Bank since there is no diminution in value for the duration of the period of use of its cash collateral. In case there is diminution in value of the collateral and Third Coast Bank is not adequately protected under the proposed budget, the companies will pay a monthly installment of $5,000 for the obligations owed to the bank, according to the attorney. A court hearing is set for Dec. 18. About Trinity Excavators Trinity Excavators, LLC operates in the nonresidential building construction industry. Trinity Excavators sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 24-35266) on November 6, 2024, with $1 million to $10 million in both assets and liabilities. Brian Buttry, president of Trinity Excavators, signed the petition. Judge Jeffrey P. Norman oversees the case. Harrison A. Pavlasek, Esq., at Forshey Prostok, LLP, represents the Debtor as legal counsel. TRUIST INSURANCE: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Truist Insurance Holdings, LLC (TIH) and Panther Platform Midco, L.P.'s (Panther) Long-Term Issuer Default Ratings (IDRs) at 'B' and removed the Rating Watch Evolving (RWE). Additionally, Fitch has affirmed TIH's senior secured revolver term loan and notes at 'B+ with 'RR3' Recovery Rating and second lien term loan at 'CCC+'/'RR6'. The Rating Outlook is Stable. Fitch has also withdrawn McGriff Insurance Services, LLC's Long-Term IDR and removed McGriff as the co-borrower of debt under TIH. On Oct. 2, 2024, Fitch placed TIH and Panther on RWE, reflecting uncertainty over TIH's capital structure post McGriff divestiture. The affirmations reflect the company's sustained leverage over the ratings horizon, despite revenue and EBITDA impacts on the company's business, supported by partial payment of its debt instruments. Additionally, the ratings reflect TIH's continued solid market position in insurance brokerage, stable and recurring business model, solid EBITDA margins and exposure to a recession resilient end market. However, weak balance sheet metrics, including high EBITDA leverage (debt/EBITDA) and low interest coverage, continue to weigh against the ratings. Fitch has withdrawn McGriff's Long-Term IDR and no longer considers it a co-borrower of TIH debt following its acquisition by Marsh & McLennan Companies, Inc. (MMC; A-/Stable), completed on Nov. 15, 2024. This debt is no longer relevant to Fitch's coverage because McGriff is no longer issuing debt, following its acquisition by MMC, completed on Nov. 15, 2024. Fitch will no longer have sufficient information from the company to maintain its ratings. Key Rating Drivers High Leverage, Weak Coverage: TIH was spun off from Truist Financial Corporation (NYSE: TFC; A/Stable) and acquired by private equity firms Stone Point Capital and CD&R, among others. TIH has relatively weak credit metrics, with pro forma EBITDA leverage in the mid-to high-7.0x range as of June 2024. With the sale of McGriff, the company is partially reducing its debt, and its EBITDA leverage is expected to decline to the low-7x over the ratings horizon. EBITDA interest coverage is relatively low, and expected to be in the mid- to high-1.0x range in the next few years. This is near Fitch's negative sensitivity threshold for the 'B' IDR. Fitch would look for improvement in interest coverage over time. Competitive Position: Fitch believes TIH is well positioned in the fragmented U.S. broker industry, with significant scale compared to many brokers but smaller than a few global leaders. Fitch estimates 2025 revenues of over $2.5 billion and EBITDA of nearly $750 million post-McGriff acquisition by MMC. TIH's business includes the largest U.S. insurance wholesaler (CRC), one of the largest MGA platforms (AmRisc & Starwind), a leading life insurance wholesaler (Crump), and a leading independent commercial title agent (Kensington Vanguard). Organic Growth: Fitch believes TIH's historic growth profile is positive and expects the company to benefit from solid pricing and economic trends in the near term. Organic revenue growth, excluding McGriff, averaged 8% over the past three years and 9% over the past five years. TIH's business features high client retention and resilient organic growth. The company continues to expand its presence in various end markets and regions through producer recruitment. Diversified Revenue Profile: TIH's ratings benefit from some diversification across its business, although the company is heavily concentrated in P&C brokerage that comprises 80% of revenue. TIH provides a full range of brokerage, consulting and advisory services, including benefits, property and casualty, life and title insurance. Nearly all of its business is derived in the U.S. but it has diversified its regional exposure via M&A and producer recruitment over the past few years, with some concentration in the southeastern U.S. TIH has limited concentration in terms of carriers and clients. Stable Industry: TIH operates a predictable business model in an industry that has performed well across economic cycles. The insurance brokerage industry remained stable even during economic shocks like the 2008-2009 financial crisis and the 2020 COVID-19 pandemic. Major insurance brokers experienced only low- to mid-single-digit organic declines in 2008 to 2010. Fitch attributes this to the essential nature of insurance and benefits services and the brokerage business model's adjustable cost structure. Healthy Cash Flows: The company is expected to generate mid-single-digit FCF margins as a percentage of revenue in the coming years. Fitch views the underlying cash generation profile as reasonably healthy. Fitch believes cash flow generation would improve materially unless all of excess cash flow is diverted to debt funded M&A or shareholder capital returns over the forecast period. Derivation Summary TIH competes in a fragmented insurance brokerage and benefits services landscape, including local/regional companies, national agents and large multi-national brokers. Fitch rates several comparable companies in the insurance brokerage and business services industries in terms of scale, operating profile, and business model. TIH is one of the largest U.S. insurance brokers, with revenue of $3.4 billion in 2023. However, it remains relatively small and has higher financial leverage compared to larger global brokers such as Marsh & McLennan Companies, Inc. (A-/Stable), Aon plc (BBB+/Negative), Willis Towers Watson plc (BBB/Positive), Arthur J. Gallagher & Co. (BBB+/Stable) and Ryan Specialty Holdings, Inc. (BB+/Stable). Fitch also rates Navacord Intermediate Holdings, Inc. (B/Stable), which similarly highly leveraged. The 'B' rating reflects TIH's strong historic growth profile, solid profitability, and diversification among its customers and business segments. This is offset by a high EBITDA leverage, and relatively weak interest coverage. Key Assumptions - Wholesale and specialty business expected to show organic revenue growth of 6%-6.5% a year over the ratings horizon plus incremental revenue from new M&A. Fitch-calculated EBITDA margins are estimated at 28%-30%; - Cash taxes and working capital remain a modest use of cash flow in the next few years; - Debt to be partially paid down from the sale proceeds of McGriff in November 2024. TIH may continue to execute on its growth-driven M&A strategy in the brokerage space from 2025, with cash outflows related to purchase and integration costs from M&A; - SOFR to decline to the high 4% range over the ratings horizon. RECOVERY ANALYSIS - For entities rated 'B+' and below, where default is closer and recovery prospects are more meaningful to investors, Fitch undertakes a tailored, or bespoke, analysis of recovery upon default for each issuance. The resulting debt instrument rating includes a Recovery Rating or published 'RR' (graded from RR1 to RR6), and is notched from the IDR accordingly. In this analysis, there are three steps: (i) estimating the distressed enterprise value (EV); (ii) estimating creditor claims; and (iii) distribution of value. - Fitch assumes TIH would emerge from a default scenario under the going concern approach liquidation. Key assumptions used in the recovery analysis are as follows: (i) Going concern EBITDA - Fitch estimates a going concern EBITDA of approximately $558 million, or below the company's current run-rate EBITDA. This lower level of EBITDA considers competitive and/or company-specific pressures that hurt earnings in the future while also considering that its M&A strategy could lead to a much higher EBITDA base before any risk of bankruptcy. (ii) EV Multiple - Fitch assumes a 6.5x multiple, which is validated by historic public company trading multiples, industry M&A and past reorganization multiples Fitch has seen across various industries. Based on current metrics and assumptions, the waterfall analysis generates a ranked recovery of 58% in the 'RR3' band, indicating a 'B+' rating for the first lien debt instruments. For second lien debt, the result of recovery analysis is 'RR6', which is two notches below the IDR and results in a 'CCC+' rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage, defined as debt/EBITDA, is sustained below 6.5x; - (CFO-Capex)/Debt sustained above 5%. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Interest coverage, defined as EBITDA/interest paid, sustained below 1.5x; - (CFO-Capex)/Debt sustained near 1% or below; - EBITDA leverage, defined as debt/EBITDA, is sustained above 8.0x; - Deterioration in operating fundamentals that lead to weaker revenue trends, margin underperformance, and compression of cash flows. Issuer Profile TIH is the one of the largest insurance brokers in the United States operating across P&C (80% of 2023 revenue; including McGriff), Benefits (12%), Life (5%) and Title (3%) insurance segments. 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 ----------- ------ -------- ----- Panther Platform Midco, L.P. LT IDR B Affirmed B Truist Insurance Holdings, LLC LT IDR B Affirmed B senior secured LT B+ Affirmed RR3 B+ Senior Secured 2nd Lien LT CCC+ Affirmed RR6 CCC+ McGriff Insurance Services, LLC LT IDR WD Withdrawn B TWO RIVERS: Hires Langley & Banack, Inc. as Legal Counsel --------------------------------------------------------- Two Rivers Ventures, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Langley & Banack, Inc. as counsel. The firm will advise the Debtor with respect to its duties and powers in this case and handle all matters which come before the court in this case. William Davis, Jr., Esq., an attorney at Langley & Banack, will be paid at his hourly rate of $400. The firm estimated that a retainer in the amount of $20,000 will be needed for this case. Mr. Davis disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: William R. Davis Jr., Esq. Langley & Banack, Inc. 745 E. Mulberry, Suite 700 San Antonio, TX 78212 Telephone: (210) 736-6600 Facsimile: (210) 735-6889 Email: wrdavis@langleybanack.com About Two Rivers Ventures, LLC Two Rivers Ventures, LLC in New Braunfels, TX, sought relief under Chapter 11 of the Bankruptcy Code filed its voluntary petition for Chapter 11 protection (Bankr. W.D. Tex. Case No. 24-52292) on Nov. 13, 2024, listing $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Lee Lichlyter as president, signed the petition. Judge Craig A Gargotta oversees the case. LANGLEY & BANACK, INC. serve as the Debtor's legal counsel. UNITED BELIEVERS: Gets Green Light to Use Cash Collateral --------------------------------------------------------- United Believers Community Baptist Church got the green light from the U.S. Bankruptcy Court for the Western District of Missouri to use cash collateral to pay its operating expenses. The church's cash collateral consists of cash generated from the collection of its pre-bankruptcy accounts receivable, accounts and inventory. At the time of the filing, United Believers Community Baptist Church had bank account balances of approximately $8,801. United Believers Community Baptist Church does not believe that any creditor holds duly perfected liens on its accounts receivables, inventory and accounts, however, there is a recording by the U.S. Small Business Administration. Even if the SBA has a lien, the amount of cash collateral is minimal bank account balances of $8,801, according to Colin Gotham, Esq., attorney for United Believers Community Baptist Church. About United Believers Community Baptist Church United Believers Community Baptist Church is a religious organization in Kansas City, Mo. United Believers filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 24-41363) on Sept. 24, 2024, listing as much as $1 million to $10 million in both assets and liabilities. G. Matt Barberich, Jr. of B. Riley Advisory Services is the Subchapter V trustee. Judge Brian T Fenimore oversees the case. Evans & Mullinix, P.A. serves as the Debtor's legal counsel. UPSTREAM LIFE: A.M. Best Cuts Fin. Strength Rating to C++(Marginal) ------------------------------------------------------------------- AM Best has downgraded the Financial Strength Rating to C++ (Marginal) from B- (Fair) and the Long-Term Issuer Credit Rating to "b" (Marginal) from "bb-" (Fair) of Upstream Life Insurance Company (Upstream Life) (Dallas, TX). In addition, the outlook of these Credit Ratings (ratings) have been revised to negative from stable. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best's interactive rating process. The ratings reflect Upstream Life's balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and weak enterprise risk management (ERM). The rating downgrades reflect an Aug. 5, 2024, consent order by the Texas Department of Insurance outlining certain events at Upstream Life. These events exposed gaps in the corporate governance of the company and contributed to the ERM program being assessed as weak. The negative outlooks reflect the potential impact of organizational changes on Upstream Life's future operations. US FOODS: Moody's Affirms 'Ba2' CFR & Alters Outlook to Positive ---------------------------------------------------------------- Moody's Ratings changed the outlook for US Foods, Inc. to positive from stable. Concurrently, Moody's affirmed the company's Ba2 corporate family rating, Ba2-PD probability of default rating, Ba2 senior secured bank credit facilities ratings, and Ba3 senior unsecured global notes ratings. The SGL-1 speculative grade liquidity rating (SGL) remains unchanged. The outlook change to positive and ratings affirmation reflect the company's solid financial performance and credit metrics improvement. US Foods continues to deliver on its organic case growth and operating margin expansion plans. As a result, Moody's-adjusted debt/EBITDA declined to 3.3x and pro-forma for the October refinancing and lower interest rates, EBITA/interest expense improved to 3.6x. Moody's expect revenue and operating income growth and stable debt levels to result in further credit metrics improvement over the next 12-18 months. RATINGS RATIONALE US Foods' Ba2 CFR reflects the company's scale and market position as a top 3 competitor with national reach in the US food distribution sector. The credit profile also benefits from the company's diversified operations across multiple end markets and the sector's relatively resilient performance through economic cycles. Under its relatively new executive leadership, the company has executed well on its strategic plan, particularly since the start of 2023, leading to productivity and market share gains despite restaurant traffic declines. In addition, the rating is supported by governance considerations, including US Foods' commitment to maintaining net leverage of 2.0-3.0x, which equates to roughly 2.5-3.5x Moodys'-adjusted debt/EBITDA. Over the next 12-18 months, Moody's expect solid performance to continue and leverage to decline to 3.0x Moody's-adjusted debt/EBITDA from 3.3x as of September 29, 2024. Moody's project very good liquidity, including solid positive free cash flow, lack of near-term debt maturities and full availability after letters of credit under the $2.3 billion asset-based revolver (unrated). US Foods' rating is constrained by the fragmented and highly competitive nature of the food distribution industry, which results in a low operating margin and an elevated risk of M&A activity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if US Foods generates sustained earnings growth, reflecting increasing market share and margin expansion in line with the company's strategic plan. Quantitatively, the ratings could be upgraded if Moody's-adjusted debt/EBITDA is maintained under 3.5 times and EBITA/interest expense above 4 times. An upgrade would also require maintaining a balanced financial strategy and very good liquidity. The ratings could be downgraded if US Foods' operating performance declines or the company adopts a more aggressive financial strategy, including debt-financed acquisitions or debt-financed share repurchases. Quantitatively, the ratings could be downgraded if Moody's-adjusted debt/EBITDA is sustained above 4.0 times or EBITA/interest expense below 3.25 times. A sustained deterioration in liquidity for any reason could also lead to a downgrade. Headquartered in Rosemont, Illinois, US Foods, Inc. is a leading North American broadline foodservice distributor with revenue of around $36.7 billion for the twelve months ended September 29, 2024. The company serves the restaurant, healthcare, hospitality, education, and other end markets. The principal methodology used in these ratings was Distribution and Supply Chain Services published in February 2023. UWHARRIE CHARTER: Moody's Affirms Ba2 on 2022A/B Revenue Bonds -------------------------------------------------------------- Moody's Ratings has affirmed the Ba2 rating on Uwharrie Charter Academy, NC's revenue bonds. The school has approximately $60 million in debt outstanding as of fiscal 2023. The outlook is stable. RATINGS RATIONALE The Ba2 rating reflects adequate coverage levels of over 1.2x and liquidity of about 140 days cash on hand, supported by growing enrollment to over 2,000 students and increased per pupil funding. Unaudited fiscal 2024 is projected to finish with a modest surplus and above budget driven by conservative budgeting and grants received late in the year. Offsetting these strengths are the school's weak academics and elevated leverage from debt and pension obligations. RATING OUTLOOK The stable outlook reflects the likelihood that the school will achieve and maintain its enrollment target based on its supportive waitlist. Increased enrollment will support further revenue growth, continued positive operating performance, and modest leverage reduction. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -- Sustained liquidity growth to over 150 days cash on hand -- Significant improvement in academics, as measured by the NC School Performance Grade -- Moderation of adjusted debt relative to cash FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -- Material weakening of demand profile, enrollment, and waitlist -- Additional debt plans leading to weaker leverage or coverage -- Softening of liquidity to less than d100 days cash on hand LEGAL SECURITY The Series 2022 Bonds are special, limited obligations of the Public Finance Authority Wisconsin, payable solely from revenues derived from a loan agreement with Uwharrie Green School, Inc. Under the loan agreement, the academy has pledged to make payments derived from Uwharrie Charter Academy's principal source of revenue which is state funding derived from its charter school operations. The school has also executed a deed of trust and leasehold mortgage covering its real estate (the facility site, including the middle school facility, expansion facility, and the former government loan facility and athletic facility) as a source of payment for the debt. PROFILE Uwharrie Charter Academy serves around 2,200 students in grades K-12. The school uses a STEAM-based curriculum It is one of only two charter schools in its service area. The school's charter was renewed thru 2033 by the North Carolina Board of Education (SBE) for the maximum ten-year period. METHODOLOGY The principal methodology used in these ratings was US Charter Schools published in April 2024. VG IMPERIAL: Amends Plan to Include Dept. of Labor Priority Claim ----------------------------------------------------------------- VG Imperial Inc. submitted a Revised Amended Plan of Reorganization for Small Business dated November 1, 2024. The Revised Amended Plan of Reorganization describes the proposed treatment of secured creditors, unsecured priority creditors and general unsecured creditors, from ongoing business operations and funds accumulated on the Debtor's DIP account as of the petition date. This Plan provides for one class of secured claims, one class of general unsecured claims and one class of equity holders. All priority claims will be paid in full on the effective date of the Plan. The priority claim of the New York State Department of Labor filed in the amount of $35.64 will be paid in full on the effective date of the Plan. Like in the prior iteration of the Plan, General unsecured claims are not secured by property of the estate. The claim of NYS Department of Labor will not receive any treatment as this claim was filed in the amount of $0. As a result, Class 1 is impaired and is entitled to vote pursuant to Section 1126(f) of the Bankruptcy Code. Equity interest holder Viktor V. Ryptyk retains his interest. The Plan will be financed by continuing the reorganized business operations of the Debtor as well as by funds accumulated in the Debtor in Possession bank account. A full-text copy of the Revised Amended Plan dated November 1, 2024 is available at https://urlcurt.com/u?l=Xf0Okr from PacerMonitor.com at no charge. Attorney for the Debtor: Alla Kachan, Esq. Law Offices of Alla Kachan, PC 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Telephone: (718) 513-3145 Email: alla@kachanlaw.com About VG Imperial Inc. VG Imperial Inc. is a corporation located at 1760 66th Street, Apr 2R, Brooklyn, NY 11204. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42627) on October 21, 2022. In the petition signed by Viktor V. Ryptyk, president, the Debtor disclosed up to $500,000 in both assets and liabilities. Judge Nancy Hershey Lord oversees the case. The Law Offices of Alla Kachan, PC, is the Debtor's legal counsel. VILROSE VENTURES: Hires Tittle Law Group PLLC as Counsel -------------------------------------------------------- Vilrose Ventures, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Tittle Law Group, PLLC as counsel. The firm will provide these services: a. provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession in the continued operation of its business and the management of its property; b. take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on behalf of the Debtor, the defense of any actions commenced against the Debtor, negotiations concerning litigation in which the Debtor is involved, and objections to claims filed against the Debtor's estate; c. prepare on behalf of the Debtor necessary motions, answers, orders, reports, and other legal papers in connection with the administration of its estate; d. assist the Debtor in preparing for and filing a plan of reorganization at the earliest possible date; e. perform any and all other legal services for the Debtor in connection with the Debtor's Chapter 11 Case; and f. perform such legal services as the Debtor may request with respect to any matter, including, but not limited to, corporate finance and governance, contracts, antitrust, labor, and tax. The firm will be paid at these rates: Brandon J. Tittle, Esq. $625 per hour Associates $495 per hour Paralegals $285 to $385 per hour The firm received a retainer in the amount of $8,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Brandon J. Tittle, Esq., a partner at Tittle Law Group, PLLC, 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: Brandon J. Tittle, Esq. Tittle Law Group, PLLC 1125 Legacy Dr., Ste. 230 Frisco, Texas 75034 Tel: (972) 731-2590 Email: btittle@tittlelawgroup.com About Vilrose Ventures, LLC Vilrose Ventures, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No. 24-44071) on Nov. 4, 2024, disclosing under $1 million in both assets and liabilities. The Debtor hires Tittle Law Group, PLLC as counsel. WELLPATH HOLDINGS: Moody's Withdraws Caa3 CFR on Bankruptcy Filing ------------------------------------------------------------------ Moody's Ratings has withdrawn Wellpath Holdings, Inc.'s ratings including the Caa3 Corporate Family Rating, the D-PD Probability of Default Rating, the Caa3 ratings on the backed senior secured first lien revolving credit facility and the backed senior secured first lien term loan and the C rating on the backed senior secured second lien term loan. The outlook prior to withdrawal was stable. The action follows the commencement of Chapter 11 bankruptcy proceedings. RATINGS RATIONALE The ratings withdrawal follows the announcement that Wellpath has initiated Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas on November 11, 2024. Wellpath Holdings, Inc. ("Wellpath"), headquartered in Nashville, Tennessee, provides medical, dental, and behavioral health services to patients in local detention facilities, federal and state prisons and behavioral healthcare facilities. Wellpath is privately owned by H.I.G. Capital. The company generated revenues of approximately $2.4 billion for the twelve months ended June 30, 2024. WESTMINSTER-CANTERBURY: Fitch Affirms 'BB+' IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' ratings on approximately $492 million of tax-exempt fixed rate revenue bonds issued by the City of Virginia Beach Development Authority on behalf of Westminster Canterbury on Chesapeake Bay Obligated Group (WCCB). Fitch has also affirmed WCCB's 'BB+' Issuer Default Rating (IDR). The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Westminster-Canterbury on Chesapeake Bay (VA) LT IDR BB+ Affirmed BB+ Westminster-Canterbury on Chesapeake Bay (VA) /General Revenues/1 LT LT BB+ Affirmed BB+ The 'BB+' ratings reflect Fitch's view of WCCB's forward-looking financial and operating risk profile. The ratings reflect the scope of management's growth strategy, including the additional debt issued in late 2023 to finance WCCB's campus expansion plans for a new 226-unit independent living (ILU) tower. Occupancy for existing ILUs remains consistently favorable, averaging 93.5% for FY 2024. Debt issued to finance the Bay Tower project increased WCCB's outstanding debt by about 7X the amount of debt outstanding for the obligated group at FYE 2023. This includes WCCB's guarantee of $12 million of debt incurred outside of the OG for an affiliate. The partial debt guarantee supported Opus Select's acquisition of a 172-unit age-restricted rental community located near the WCCB campus. Opus Select continues to perform well with 96% occupancy and serves as a feeder to WCCB's lifecare facilities. Operating metrics are supported by strong cash flows from net entrance fees. As of unaudited FY 2024 (September 30), Fitch calculated cash/adjusted debt was modest at 21% (reflecting the material increase in leverage), an operating ratio of 105% and liquidity of 628 DCOH (DCOH is per WCCB's calculation). During the construction period, cash to adjusted debt and the operating ratio will remain materially more constrained and aligned with the non-investment grade rating. However, Fitch believes that the ILU project once stabilized will further enhance WCCB's competitive position and be accretive to operations. SECURITY The bonds are secured by a gross revenue pledge of the OG and a first mortgage lien. The bonds funded a debt service reserve fund (DSRF). Series 2018 bondholders share an on-parity security interest in the DSRF. KEY RATING DRIVERS Revenue Defensibility - 'a' Good Occupancy; Favorable Location and Market Position WCCB is well positioned as the leading upscale life plan community (LPC) in its primary market area (PMA), supported by its Virginia Beach beachfront location, a popular destination for seniors. The area is characterized by favorable wealth and income levels relative to surrounding communities and the commonwealth of Virginia. There are two smaller competing LPCs within WCCB's PMA. There are also two LPCs outside of the PMA located in Newport News, VA and Suffolk, VA, but they do not represent meaningful competition. Given WCCB's favorable location and the strength of the local housing market, WCCB's entrance fees are priced affordably, given the demand for services as evidenced by a 454-member waitlist. Operating Risk - 'bb' Consistent Cash Flow and Improving Operations; Sizable Capital Plans WCCB's operating metrics are adequate, supported by robust cash flow performance due to strong entrance fee turnover and WCCB's largely non-refundable contract mix. Although growth of operating expenses, particularly dining, housekeeping, and general and administrative expenses exceeded the growth of resident service revenues in FY 2024. This resulted in a negative NOM, and expenses came within 1% of management's budget. WCCB's adjusted net operating margin, including entrance fees from turnover units, remained robust at 33%. WCCB's operating ratio fell to 104.5% from 95.4%, reflecting increases operating expenses. NOM and NOMA are expected to remain constrained until new units from the Bay Tower project are in service. Current maximum annual debt service (MADS) reflects a sufficient 8% of FY 2024 revenues, with 5.7x coverage (and 0.3x from revenues only). WCCB's operating performance is expected to be pressured over the next few years during project construction, especially after 30 villa units were taken out of service and demolished last year to make room for the Bay Tower. Between fiscal years 2024 and 2027, Fitch's base case scenario reflects a negative NOM, with NOMA declining to about 24% before achieving positive NOM and NOMA once the project is completed and begins to fill. Capital-related metrics will also weaken significantly, but both operations and capital-related metrics should rebound once the Bay Tower project is completed and reaches stabilization in fiscal 2029. Financial Profile - 'bb' Debt Issuance to Constrain Balance Sheet WCCB has historically maintained largely midrange capital-related metrics, with MADS representing an average of 9.0% of revenues and debt to net available averaging 3.8x over the past five fiscal years. With the series 2023 debt, and once post-stabilization debt service requirements commence, WCCB's debt burden (MADS/revenues) increases to 25%, weakening its capital-related metrics. Debt service and coverage requirements on project debt are not applicable until the first full fiscal year after the project reaches stabilized occupancy, expected in fiscal 2029. Once stabilized, MADS increase from the current approximately $5 million level to $25 million per year. This conservatively includes debt service associated with WCCB's partial guarantee of non-OG debt for Opus Select. MADS coverage during construction and fill-up is expected to remain at or above 4.0x, and to decline to approximately 1.3x when MADS increases post stabilization. While the new tower is expected to achieve a 94% occupancy rate in fiscal 2029, WCCB projects it will be able to meet its 1.2x minimum debt service coverage covenant at 62% occupancy should new tower fill-up occur more slowly than expected. However, the current pace of pre-sales suggests that fill-up should occur on or ahead of schedule. WCCB's capital-related ratios and financial profile are consistent with a 'bb' assessment due to the 'Midrange' revenue defensibility and weaker operating risk profiles. In a forward-looking stress case, cash-to-adjusted debt recovers to above 30% by year five, although is very compressed prior to that during the construction phase of the project. Asymmetric Additional Risk Considerations There are no asymmetric additional risk considerations. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - New project construction or fill-up issues that constrain operations or the balance sheet beyond what is contemplated under Fitch's stress scenario analysis; - Material weakening of DCOH below 200 days, or cash/adjusted debt failing to rebound to above 30% once the new tower project has reached stabilized occupancy; - Failure to sustain MADS coverage in excess of 1.2x after the issuance of the new debt and upon stabilized occupancy. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Pursuant to current financing plans a rating upgrade is unlikely until, at the earliest, the Bay Tower has established stabilized occupancy; - An operating ratio approaching a sustained level at or below 100%. PROFILE WCCB is a type A (lifecare) LPC located on a 12.2-acre site fronting the Chesapeake Bay in Virginia Beach, VA. The LPC opened in 1982 and currently comprises 423 ILUs (30 villas were taken off line and demolished to allow for construction of the new Bay Tower project), 80 assisted living and memory care units, and 108 skilled nursing facility beds. Construction of WCCB's Bay Tower, which is 30% complete, will be substantially finalized by November/December 2026 and will add 226 ILUs. Presales are at 80%. The WCCB OG had total operating revenues of $65 million and total assets of $698 million (including $416 million of funds held for construction of the Bay Tower) as of fiscal year-end 2024. Fitch bases its financial analysis on the results of the OG, which consists of WCCB (the senior living campus) and the Westminster-Canterbury on Chesapeake Foundation (the foundation). WCCB OG accounted for 84% of total assets and 78.5% of total revenues of the consolidated entity in FY 2023 (FY 2024 consolidating statements have not yet been released). WCCB also has six non-OG affiliated organizations, Westminster-Canterbury at Home, LLC; Senior Options, LLC; S.O. Realty, LLC; Ballentine Home Corporation; and Senior Options Community, which was created to acquire Opus Select, a 172-unit, age 62+ rental apartment community located near the WCCB campus. The non-OG entities are minimally additive to consolidated operating performance. The financial results of these affiliates are not included in the metrics outlined in this report. Sources of Information In addition to the sources of information identified in Fitch's applicable criteria specified below, this action was informed by information from Lumesis. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. WIN PRODUCTIONS: Seeks to Hire Sgro Hanrahan Durr as Attorney ------------------------------------------------------------- Win Productions, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Sgro, Hanrahan, Durr, Rabin & Reinbold, LLP as its attorney. The firm will render these services: (a) give the Debtor legal advice with respect to its rights, powers and duties as Debtor-in-Possession in connection with the administration and management of the bankruptcy estate and its property; (b) take such action as may be necessary with respect to claims filed in the bankruptcy case; (c) prepare applications, motions, complaints, orders and pleadings as may be necessary in connection with the appropriate administration of this case; (d) represent the Debtor with respect to inquiries and negotiations concerning creditors; (e) initiate, defend or otherwise participate on behalf of the Debtor in all proceedings before this Court; and (f) perform other legal services on behalf of the Debtor as may be required to aid in the proper administration of the bankruptcy estate. The firm will be paid at these rates: Attorneys $250 per hour Paralegal $75 per hour The firm received a retainer in the amount of $15,000. Jeana Reinbold, a partner at Sgro, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeana K. Reinbold, Esq. SGRO, HANRAHAN, DURR, RABIN & REINBOLD, LLP 1119 S. 6th Street Springfield, IL 62703 Tel: (217) 789-1200 E-mail: jeana@casevista.com About Win Productions, LLC Win Productions, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-70901) on Nov. 9, 2024, listing $1 million to $10 million in assets and $10 million to $50 million in liabilities. The petition was signed by Wyatt Bradshaw as authorized manager. Judge Mary P Gorman presides over the case. Jeana K. Reinbold, Esq. at SGRO, HANRAHAN, DURR, RABIN & REINBOLD, LLP represents the Debtor as counsel. YUNHONG GREEN: Reports $1.19 Million Net Loss in Fiscal Q3 ---------------------------------------------------------- Yunhong Green CTI Ltd filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $1,193,000 on $2,540,000 of net sales for the three months ended September 30, 2024, compared to a net loss of $967,000 on $1,923,000 of net sales for the three months ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported a net loss of $2,182,000 on $11,788,000 of net sales, compared to a net loss of $720,000 on $11,033,000 of net sales for the same period in 2023. As of September 30, 2024, the Company had $20,619,000 in total assets, $10,686,000 in total liabilities, and $9,933,000 in total stockholders' equity. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/4ka3mrk6 About Yunhong Green Barrington, Ill.-based Yunhong Green CTI Ltd develops, produces, distributes and sells a number of consumer products throughout the United States and in several other countries, and it produces film products for commercial and industrial uses in the United States. The Company's principal lines of products include Novelty Products consisting principally of foil and latex balloons and related gift items; and Flexible Films for food and other commercial and packaging applications. Yunhong reported a net loss of $235,000 for the 12 months ended Dec. 31, 2023, compared to a net loss of $1.47 million for the 12 months ended Dec. 31, 2022. Lakewood, Colorado-based BF Borgers CPA PC, the Company's former auditor, issued a "going concern" qualification in its report dated March 29, 2024, citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. The Company dismissed BF Borgers as its auditor after the firm and its owner, Benjamin F. Borgers, were charged by the Securities and Exchange Commission with deliberate and systemic failures to comply with PCAOB standards in audits and reviews included in over 1,500 SEC filings from January 2021 through June 2023. The charges included false representations of compliance with PCAOB standards, fabrication of audit documentation, and false statements in audit reports. Borgers agreed to a $14 million civil penalty and a permanent suspension from practicing before the Commission. The Company appointed Wolf & Company, P.C. as its new auditor, effective April 1, 2024. [*] Moody's Takes Action on 5 Bonds From 5 US RMBS Deals -------------------------------------------------------- Moody's Ratings has upgraded the ratings of four bonds and downgraded the rating of one bond from five US residential mortgage-backed transactions (RMBS), backed by option ARM and subprime mortgages issued by multiple issuers. A comprehensive review of all credit ratings for the respective transactions has been conducted during a rating committee. The complete rating actions are as follows: Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR6 Cl. 2-A-1, Downgraded to Caa1 (sf); previously on Feb 2, 2024 Downgraded to B3 (sf) Issuer: J.P. Morgan Mortgage Acquisition Trust 2007-HE1 Cl. AV-4, Upgraded to A1 (sf); previously on Feb 2, 2024 Upgraded to Baa2 (sf) Issuer: Structured Asset Investment Loan Trust 2005-3 Cl. M4, Upgraded to A3 (sf); previously on Feb 2, 2024 Upgraded to Ba1 (sf) Issuer: Structured Asset Securities Corp Trust 2006-BC6 Cl. A5, Upgraded to Aaa (sf); previously on Feb 7, 2024 Upgraded to Aa2 (sf) Issuer: WaMu Mortgage Pass-Through Certificates, Series 2006-AR9 Cl. 2A, Upgraded to Baa1 (sf); previously on Feb 13, 2024 Upgraded to Ba1 (sf) RATINGS RATIONALE The rating actions reflect the current levels of credit enhancement available to the bonds, the recent performance, analysis of the transaction structures, and Moody's updated loss expectations on the underlying pools. The rating downgrade is primarily due to a deterioration in collateral performance, and decline in credit enhancement available to the bond. The rating upgrades are a result of the improving performance of the related pools, and an increase in credit enhancement available to the bonds. The rating upgrades also reflect the further seasoning of the collateral and increased clarity regarding the impact of borrower relief programs on collateral performance. Information obtained from loan servicers in recent years has shed light on their current strategies regarding borrower relief programs and the impact those programs may have on collateral performance and transaction liquidity, through servicer advancing. Moody's recent analysis has found that in addition to robust home price appreciation, many of these borrower relief programs have contributed to stronger collateral performance than Moody's had previously expected, thus supporting the upgrades. The rating upgrade on class 2A of WaMu Mortgage Pass-Through Certificates, Series 2006-AR9 also includes an assessment of the tail end risk of the deal with shifting interest pay mechanism that does not have compensating mechanism of support, such as credit enhancement floor. No actions were taken on the other rated classes in these deals because their expected losses remain commensurate with their current ratings, after taking into account the updated performance information, structural features, credit enhancement and other qualitative considerations. Principal Methodologies The principal methodology used in these ratings was "US RMBS Surveillance Methodology" published in July 2022. Factors that would lead to an upgrade or downgrade of the ratings: Up Levels of credit protection that are higher than necessary to protect investors against current expectations of loss could drive the ratings of the subordinate bonds up. Losses could decline from Moody's original expectations as a result of a lower number of obligor defaults or appreciation in the value of the mortgaged property securing an obligor's promise of payment. Transaction performance also depends greatly on the US macro economy and housing market. Down Levels of credit protection that are insufficient to protect investors against current expectations of loss could drive the ratings down. Losses could rise above Moody's expectations as a result of a higher number of obligor defaults or deterioration in the value of the mortgaged property securing an obligor's promise of payment. Transaction performance also depends greatly on the US macro economy and housing market. Other reasons for worse-than-expected performance include poor servicing, error on the part of transaction parties, inadequate transaction governance and fraud. Finally, performance of RMBS continues to remain highly dependent on servicer procedures. Any change resulting from servicing transfers or other policy or regulatory change can impact the performance of these transactions. In addition, improvements in reporting formats and data availability across deals and trustees may provide better insight into certain performance metrics such as the level of collateral modifications. [^] BOND PRICING: For the Week from November 25 to 29, 2024 ----------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 2U Inc TWOU 2.250 40.218 5/1/2025 99 Cents Only Stores LLC NDN 7.500 6.280 1/15/2026 99 Cents Only Stores LLC NDN 7.500 12.344 1/15/2026 99 Cents Only Stores LLC NDN 7.500 12.344 1/15/2026 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 41.084 2/15/2028 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 42.741 2/15/2028 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 40.916 2/15/2028 Amyris Inc AMRS 1.500 0.953 11/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 At Home Group Inc HOME 7.125 32.029 7/15/2029 At Home Group Inc HOME 7.125 32.029 7/15/2029 Audacy Capital LLC CBSR 6.750 2.876 3/31/2029 Audacy Capital LLC CBSR 6.500 3.706 5/1/2027 Audacy Capital LLC CBSR 6.750 2.876 3/31/2029 Avon Products Inc AVP 8.450 20.250 3/15/2043 Azul Investments LLP AZUBBZ 7.250 64.319 6/15/2026 Azul Investments LLP AZUBBZ 7.250 64.192 6/15/2026 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Bank of America Corp BAC 5.550 99.694 12/3/2025 Bank of America Corp BAC 5.550 99.796 7/3/2025 Beasley Mezzanine Holdings BBGI 8.625 59.000 2/1/2026 Beasley Mezzanine Holdings BBGI 8.625 59.972 2/1/2026 Biora Therapeutics Inc BIOR 7.250 59.267 12/1/2025 BuzzFeed Inc BZFD 8.500 92.740 12/3/2026 Castle US Holding Corp CISN 9.500 46.074 2/15/2028 Castle US Holding Corp CISN 9.500 46.270 2/15/2028 CorEnergy Infrastructure Trust Inc CORR 5.875 70.250 8/15/2025 Cornerstone Chemical Co LLC CRNRCH 10.250 50.750 9/1/2027 Curo Oldco LLC CURO 7.500 2.980 8/1/2028 Curo Oldco LLC CURO 7.500 13.320 8/1/2028 Curo Oldco LLC CURO 7.500 2.980 8/1/2028 Cutera Inc CUTR 2.250 14.514 6/1/2028 Cutera Inc CUTR 4.000 14.006 6/1/2029 Cutera Inc CUTR 2.250 30.442 3/15/2026 Danimer Scientific Inc DNMR 3.250 9.887 12/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 0.620 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 0.650 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 0.750 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 0.594 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 0.750 8/15/2026 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 0.574 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 5.375 0.594 8/15/2026 Energy Conversion Devices Inc ENER 3.000 0.762 6/15/2013 Enviva Partners LP / Enviva Partners Finance Corp EVA 6.500 25.000 1/15/2026 Enviva Partners LP / Enviva Partners Finance Corp EVA 6.500 20.750 1/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 34.000 7/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 33.500 7/15/2026 Federal Farm Credit Banks Funding Corp FFCB 1.625 99.940 12/3/2024 Federal Farm Credit Banks Funding Corp FFCB 1.010 97.016 12/2/2024 Federal Home Loan Banks FHLB 1.150 99.332 12/6/2024 Federal Home Loan Banks FHLB 0.500 99.295 12/9/2024 Federal Home Loan Banks FHLB 0.500 97.607 12/26/2024 Federal Home Loan Banks FHLB 0.650 99.013 12/9/2024 Federal Home Loan Banks FHLB 1.200 69.942 12/27/2024 Federal Home Loan Banks FHLB 1.000 99.820 12/3/2024 Federal Home Loan Banks FHLB 0.550 97.534 12/26/2024 Federal Home Loan Banks FHLB 1.170 97.531 12/27/2024 Federal Home Loan Banks FHLB 1.650 85.130 2/24/2025 Federal Home Loan Banks FHLB 1.000 99.308 12/9/2024 Federal Home Loan Mortgage FHLMC 4.000 68.735 2/28/2025 First Republic Bank/CA FRCB 4.375 1.000 8/1/2046 First Republic Bank/CA FRCB 4.625 0.885 2/13/2047 GoTo Group Inc LOGM 5.500 39.705 5/1/2028 GoTo Group Inc LOGM 5.500 37.451 5/1/2028 Goldman Sachs Group Inc/The GS 3.000 100.000 12/2/2024 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 3.541 6/1/2026 H-Food Holdings LLC / Hearthside Finance Co Inc HEFOSO 8.500 3.541 6/1/2026 Hallmark Financial Services HALL 6.250 20.325 8/15/2029 Homer City Generation LP HOMCTY 8.734 38.750 10/1/2026 Inotiv Inc NOTV 3.250 31.000 10/15/2027 Invacare Corp IVC 5.000 0.667 11/15/2024 Invacare Corp IVC 5.000 1.002 11/15/2024 JPMorgan Chase Bank NA JPM 2.000 90.016 9/10/2031 Ligado Networks LLC NEWLSQ 15.500 31.500 11/1/2023 Ligado Networks LLC NEWLSQ 17.500 3.500 5/1/2024 Ligado Networks LLC NEWLSQ 15.500 18.500 11/1/2023 Ligado Networks LLC NEWLSQ 17.500 7.483 5/1/2024 Lightning eMotors Inc ZEVY 7.500 1.000 5/15/2024 Luminar Technologies Inc LAZR 1.250 49.250 12/15/2026 MBIA Insurance Corp MBI 16.178 4.197 1/15/2033 MBIA Insurance Corp MBI 16.178 4.197 1/15/2033 Macy's Retail Holdings LLC M 6.700 86.744 7/15/2034 Macy's Retail Holdings LLC M 6.900 85.608 1/15/2032 Mashantucket Western Pequot Tribe MASHTU 7.350 50.851 7/1/2026 Morgan Stanley MS 1.800 79.228 8/27/2036 Origin Bank OBK 4.250 92.948 2/15/2030 Pathfinder Bancorp Inc PBHC 5.500 72.687 10/15/2030 Polar US Borrower LLC / Schenectady International Group Inc SIGRP 6.750 47.000 5/15/2026 Polar US Borrower LLC / Schenectady International Group Inc SIGRP 6.750 47.107 5/15/2026 Provident Trust I MTB 8.290 95.116 4/15/2028 Rackspace Technology Global RAX 3.500 29.625 2/15/2028 Rackspace Technology Global RAX 3.500 29.625 2/15/2028 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Rite Aid Corp RAD 7.700 1.681 2/15/2027 Rite Aid Corp RAD 6.875 3.616 12/15/2028 Rite Aid Corp RAD 6.875 3.616 12/15/2028 RumbleON Inc RMBL 6.750 93.090 1/1/2025 Select Medical Corp SEM 6.250 100.937 8/15/2026 Shutterfly LLC SFLY 8.500 47.500 10/1/2026 Shutterfly LLC SFLY 8.500 88.500 10/1/2026 Spanish Broadcasting System SBSAA 9.750 66.000 3/1/2026 Spanish Broadcasting System SBSAA 9.750 66.250 3/1/2026 Spirit Airlines Inc SAVE 1.000 35.000 5/15/2026 Spirit Airlines Inc SAVE 4.750 28.000 5/15/2025 Stem Inc STEM 0.500 26.750 12/1/2028 Stem Inc STEM 4.250 23.625 4/1/2030 TPI Composites Inc TPIC 5.250 30.266 3/15/2028 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Tricida Inc TCDA 3.500 9.000 5/15/2027 Veritas US Inc / Veritas Bermuda Ltd VERITS 7.500 97.202 9/1/2025 Veritas US Inc / Veritas Bermuda Ltd VERITS 7.500 98.263 9/1/2025 Veritone Inc VERI 1.750 41.250 11/15/2026 Virgin Galactic Holdings Inc SPCE 2.500 44.500 2/1/2027 Vitamin Oldco Holdings Inc GNC 1.500 0.474 8/15/2020 Voyager Aviation Holdings LLC VAHLLC 8.500 13.837 5/9/2026 Voyager Aviation Holdings LLC VAHLLC 8.500 13.837 5/9/2026 Voyager Aviation Holdings LLC VAHLLC 8.500 13.837 5/9/2026 Vroom Inc VRM 0.750 55.500 7/1/2026 WRKCo Inc SW 4.650 99.658 3/15/2026 WRKCo Inc SW 4.650 99.659 3/15/2026 WW International Inc WW 4.500 23.081 4/15/2029 WW International Inc WW 4.500 22.697 4/15/2029 Webster Financial Corp WBS 4.000 97.123 12/30/2029 Wells Fargo & Co WFC 6.000 100.000 12/5/2024 Wesco Aircraft Holdings Inc WAIR 8.500 15.044 11/15/2024 Wesco Aircraft Holdings Inc WAIR 9.000 41.747 11/15/2026 Wesco Aircraft Holdings Inc WAIR 13.125 1.102 11/15/2027 Wesco Aircraft Holdings Inc WAIR 8.500 15.044 11/15/2024 Wesco Aircraft Holdings Inc WAIR 9.000 41.747 11/15/2026 Wesco Aircraft Holdings Inc WAIR 13.125 1.102 11/15/2027 ********* 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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