/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/250204.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 4, 2025, Vol. 29, No. 34 Headlines 1945 OHIO STREET: Hires Bach Law Offices Inc. as Attorney 1945 OHIO STREET: Hires Lee & Associates as Real Estate Broker 6 SUNSET LANE: Seeks Chapter 11 Protection in New Jersey ADB ENTERPRISES: Gets OK to Use Cash Collateral Until Feb. 7 ADIENT GLOBAL: Moody's Rates New $795MM Sr. Unsecured Notes 'B2' ADVOCATES FOR OPPORTUNITY: Hires Van Horn Law Group as Counsel AEROCISION PARENT: Court Narrows Claims in Liberty Hall Lawsuit AKOUSTIS TECHNOLOGIES: Committee Taps Alvarez & Marsal as Advisor AKOUSTIS TECHNOLOGIES: Committee Taps Young Conaway as Co-Counsel ANGIE'S TRANSPORTATION: Gets Extension to Access Cash Collateral ANGIE'S TRANSPORTATION: Gets OK to Use PACCAR's Cash Collateral APS HOLDINGS: Court to Hold Cash Collateral Hearing on Feb. 6 APS HOLDINGS: Hires Johnson Pope Bokor Ruppel & Burns as Counsel ARCHROCK PARTNERS: Moody's Raises CFR to 'Ba3', Outlook Stable ARTISTIC HOLIDAY:Seeks Chapter 11 Protection in Florida ASCEND PERFORMANCE: $1.09BB Bank Debt Trades at 24% Discount ASHCROFT URBAN: Liquidity Issues Cue CCAA Filing, GT as Monitor ATLANTIC GOLF: Seeks Chapter 11 Protection in New Jersey AVAYA INC: $810MM Bank Debt Trades at 16% Discount AVENTIV TECHNOLOGIES: $1.04BB Bank Debt Trades at 30% Discount BEXIN REALTY: Court Extends Cash Collateral Access to Feb. 28 BMF INC: Sec. 341(a) Meeting of Creditors on February 28 BROOKFIELD PROPERTIES: Moody's Alters Outlook on Ba3 CFR to Stable BULLETPROOF DOG: Court Denies Chelsea's' Bid to Use Cash Collateral C M HEAVY: Seeks to Hire Whitten Burrage as Special Counsel CARROLLCLEAN LLC: Plan Exclusivity Period Extended to April 28 CASA GARCIA'S: Seeks to Hire Greenleaf Associates as Accountant CASA GARCIA'S: Seeks to Hire Pepper and Nason as Attorney CASTLE US: EUR554.1MM Bank Debt Trades at 40% Discount CHATEAU CREOLE: Dwayne Murray Appointed as Chapter 11 Trustee CITYMARK CAPITAL: Roystone Wins Bid for Withdrawal of Reference CONNECT HOLDING: $2.49BB Bank Debt Trades at 16% Discount CONTAINER STORE: Set to Close Only Location in Staten Island CORREIA CONTRACTING: Loses Bid to Stay Bankruptcy Case Dismissal D DUNCAN FLORISTRY: Gets Final OK to Use Cash Collateral D. RUSSELL THOMAS: Taps Dunham Hildebrand Payne Waldron as Counsel DEALER SALES: Court Extends Cash Collateral Access to Feb. 11 DENNIS A. PERRY: Alden Liable for $586,752.36 in LUPTCL Damages DIAMOND COMIC: Taps Raymond James & Associates as Investment Banker DIGITAL GRAPHICS: Court Extends Cash Collateral Access to March 11 DIOCESE OF ROCHESTER: Court Stays Sexual Abuse Suits DIRECTV FINANCING: Moody's Rates New 1st Lien Loan & Sec. Notes B1 E.W. SCRIPPS: Fitch Lowers LongTerm IDR to 'CCC' EDGEWATER GENERATION: S&P Affirms 'BB-' Senior Secured Debt Rating ENTECCO FILTER: Court Extends Cash Collateral Access to Feb. 21 EXPRESS MOBILE: Case Summary & 20 Largest Unsecured Creditors FLEXSYS HOLDINGS: $475MM Bank Debt Trades at 27% Discount FLORA FOOD: Fitch Lowers Rating on Senior Secured Debt to 'B' FRANCHISE GROUP: Mediation Not Appropriate in Freedom Lender Case FULLER'S SERVICE: Seeks Chapter 11 Protection in Illinois GIP II BLUE: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable GOODY'S FLEET: Court OKs Continued Use of Cash Collateral GROOMORE INC: Seeks to Hire Ordinary Course Professionals H & H RENTAL: Seeks to Hire J.M. Cook P.A. as Legal Counsel H-FOOD HOLDINGS: $415MM Bank Debt Trades at 39% Discount HALL CONSTRUCTION: Gets OK to Use Cash Collateral Until Feb. 19 HEALTHCHANNELS INTERMEDIATE: $385M Bank Debt Trades at 22% Off HESS MIDSTREAM: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable HONDUCRETE REDI: Case Summary & 12 Unsecured Creditors IDEANOMICS INC: Seeks to Hire Ordinary Course Professionals IFR FOUNDATION: Seeks to Hire Norred Law LLC as Legal Counsel ILEARNINGENGINES INC: Taps Faegre Drinker Biddle as Counsel INDUSTRIES RAD: Gets CCAA Initial Stay Order; E&Y as Monitor INDY US: $2.27BB Bank Debt Trades at 15% Discount JASMINE R ELMORE: Gets Interim OK to Use Cash Collateral JL DANIELS: Sec. 341(a) Meeting of Creditors on March 6 JOANN INC: Could Lay Off 475 Ohio Logistics Workers JOHN H. HAJJAR: Dropped from Shanghai Fosun Lawsuit JUNK IT PLUS: Court Extends Cash Collateral Access to March 11 K&NN TRUCKING: Hires Dias Law Group Ltd. as Attorney KENBENCO INC: Court to Hold Cash Collateral Hearing Today LASERSHIP INC: $953MM Bank Debt Trades at 32% Discount LIGADO NETWORKS: Creditor Slams 'Exorbitant' $115MM DIP Loan Fees LONESTAR FIBERGLASS: Gets OK to Use Cash Collateral Until April 2 LOTUS OASIS: Sec. 341(a) Meeting of Creditors on February 28 MARINE WHOLESALE: U.S. Granted Summary Adjudication in Tax Lawsuit MEADOWLARK HILLS: Fitch Affirms 'BB+' IDR, Outlook Stable MEDICAL PROPERTIES: Moody's Raises CFR to 'B3', Outlook Stable MIC GLEN: Moody's Rates New $573.7MM First Lien Term Loan 'B3' MID-ATLANTIC RHEUMATOLOGY: Case Summary & 5 Unsecured Creditors MILFORD HOUSE: Seeks to Hire Andre L. Kydala as Bankruptcy Counsel MMA LAW FIRM: Court Extends Cash Collateral Access to April 30 MMV F&B II: Case Summary & Seven Unsecured Creditors MOSAIC SWNG: Seeks Chapter 11 Protection in Texas MOTUS GROUP: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable MULTIPLAN CORP: S&P Lowers ICR to 'SD' on Debt Restructuring NANOSTRING: Court Narrows Claims in 10x v. Prognosys Patent Suit NEOLPHARMA INC: Hires C. Conde & Assoc. as Counsel NEPTUNE BIDCO: $2.50BB Bank Debt Trades at 16% Discount NEPTUNE BIDCO: $3.35BB Bank Debt Trades at 14% Discount NEWPORT VENTURES: Auxilior Seeks Chapter 11 Trustee Appointment NIGHTINGALE PROPERTIES: Centre Square Likely to be Sold to Pay Debt NORTHEASTERN SCHUYLKILL: S&P Lowers Sewer Bond Rating to 'B+' NUTRACAP HOLDINGS: Hires Rountree Leitman Klein as Attorney OASIS AUTO: Seeks Chapter 11 Protection in Texas ONYX OWNER: Hires Morris Nichols Arsht as Bankruptcy Counsel OREGON TOOL: $850MM Bank Debt Trades at 47% Discount ORIGINAL MOWBRAY'S: Gets Final OK to Use Cash Collateral OYSTER LLC: Seeks to Hire Andre L. Kydala as Bankruptcy Counsel PARKCLIFFE DEV'T: Stalking Horse Bidder Loses Bid to Stay Auction PARTY EMPORIUM: Hires Block Realty & Auction as Auctioneer PECF USS: $2BB Bank Debt Trades at 36% Discount PHYSICIAN PARTNERS: $150MM Bank Debt Trades at 54% Discount POLARITYTE INC: Court Confirms Chapter 11 Plan of Liquidation PREMIER BRANDS: S&P Upgrades ICR to 'B-' on Debt Refinancing PREMIUM CRANE: Court Extends Cash Collateral Access to March 27 QSR STEEL: Court Extends Access to Cash Collateral Until March 31 QUAD/GRAPHICS INC: Fitch Alters Outlook on 'B+' IDR to Stable RACKSPACE TECHNOLOGY: $2.30BB Bank Debt Trades at 66% Discount RAPID DRY: Court Approves Interim Use of Cash Collateral RATHER OUTDOORS: $365MM Bank Debt Trades at 16% Discount RC MEADOWLANDS: New Jersey Property Up for Sale on March 24 REDSTONE HOLDCO: $450MM Bank Debt Trades at 56% Discount ROIZMAN DEVELOPMENT: 3 Apt. Units Face Decay Amid Receivership SHAWN AND SUZANNE STEVENS: Eligible to Proceed Under Subchapter V SIERRA ENTERPRISES: S&P Raises ICR to 'B-', Outlook Stable SKYLINE HOLDING: Hires Herbert K. Ryder as Bankruptcy Counsel SORTIS HOLDINGS: Settlement Plan Would End Bankruptcy Push STL HOLDING: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable STONEPEAK NILE: Fitch Assigns 'BB+' LongTerm IDR, Outlook Stable STONEPEAK TAURUS: S&P Affirms 'B' ICR, Alters Outlook to Negative STONEYBROOK FAMILY: Case Summary & 16 Unsecured Creditors STRONGHOLD CONSTRUCTION: Wins Final Approval to Use Cash Collateral TEMADA INC: Hires Joel Marcus Inc. as Financial Professional TEMPLETON REAGAN: Case Summary & Five Unsecured Creditors TRITON INTERNATIONAL: S&P Rates Perpetual Preference Shares 'BB+' TV TRANSPORT: Hires Barnabi Law Firm LLC as Counsel TXNM ENERGY: S&P Rates $550MM Junior Subordinated Notes 'BB+' UNIPHARMA LLC: Ruling in Nutradose v. Santamarta Suit Affirmed UNIVERSAL BIOCARBON: Case Summary & 20 Top Unsecured Creditors UNIVERSITY OF THE ARTS: Receives Offer from 1228 Spruce LLC UTZ BRANDS: S&P Assigns 'B' Rating on First-Lien Term Loan VANDEVCO LIMITED: Available Cash and Capital Events to Fund Plan VOBEV LLC: To Seek Approval to Sell to Stalking Horse WARRIOR MET: Moody's Affirms 'B1' CFR, Outlook Remains Stable WEST TECHNOLOGY: $901.1MM Bank Debt Trades at 29% Discount WHITTAKER CLARK: Hires Clement & Murphy PLLC as Appellate Counsel WINESTEAD LLC: Court Extends Cash Collateral Access to June 30 YELLOW CORP: Sells More Terminals, Raising Cash Reserves ZARIFIAN ENTERPRISES: Hires Gregory K. Stern as Attorney ZARIFIAN ENTERPRISES: Hires Zeigler & Associates as Accountant [] Corporate Reorganizations Lead U.S. Bankruptcy Filings in 2024 [^] BOND PRICING: For the Week from January 27 to 31, 2025 ********* 1945 OHIO STREET: Hires Bach Law Offices Inc. as Attorney --------------------------------------------------------- 1945 Ohio Street LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Bach Law Offices, Inc. as attorney. The firm will provide these services: a. represent the Debtor in matters concerning negotiation with creditors; and b. prepare a plan and disclosures statement, examining and resolving claims filed against the estate, preparation and prosecution of adversary matters, and otherwise to represent each Debtor in matters before the bankruptcy court. The firm will be paid at $425 per hour. The firm was paid a retainer in the amount of $11,738. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Paul M. Bach, Esq., a partner at Bach Law Offices, Inc., disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Paul M. Bach, Esq. Penelope N. Bach, Esq. Bach Law Offices, Inc. P.O. BOX 1285 Northbrook, IL 60062 Telephone: (847) 564 0808 About 1945 Ohio Street LLC 1945 Ohio Street LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). 1945 Ohio Street LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-18816) on December 17, 2024. In the petition filed by Ernest Edwards, as managing member, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge Janet S. Baer handles the case. The Debtor is represented by: Paul M. Bach, Esq. BACH LAW OFFICES P.O. Box 1285 Northbrook, IL 60065 E-mail: paul@bachoffices.com 1945 OHIO STREET: Hires Lee & Associates as Real Estate Broker -------------------------------------------------------------- 1945 Ohio Street LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Lee & Associates as real estate broker. The firm will market and sell the real estate owned by the Debtor located at 1945 Ohio Street, Lisle, Illinois. The firm will be paid a commission of 5 percent of the sales price. Michael Plumb, a partner at Lee & Associates, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael Plumb Lee & Associates 5707 Corsa Avenue, Suite 201B Westlake Village, CA 91362 Tel: (818) 812-1208 About 1945 Ohio Street LLC 1945 Ohio Street LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). 1945 Ohio Street LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-18816) on December 17, 2024. In the petition filed by Ernest Edwards, as managing member, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge Janet S. Baer handles the case. The Debtor is represented by: Paul M. Bach, Esq. BACH LAW OFFICES P.O. Box 1285 Northbrook, IL 60065 E-mail: paul@bachoffices.com 6 SUNSET LANE: Seeks Chapter 11 Protection in New Jersey -------------------------------------------------------- On January 31, 2025, 6 Sunset Lane, LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for the District of New Jersey. According to court filing, the Debtor reports $1,427,073 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. About 6 Sunset Lane LLC 6 Sunset Lane LLC is the fee simple owner of the real property located at 6 Sunset Lane, Monmouth Beach, NJ 07705, which is currently valued at $1.7 million. 6 Sunset Lane LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 25-11005) on January 31, 2025. In its petition, the Debtor reports estimated total assets of $1,700,000 and estimated liabilities of $1,427,073. The Debtor is represented by: Andrew J. Kelly, Esq. THE KELLY FIRM, P.C. 1011 Highway 71, Suite 200 Spring Lake, NJ 07762 Tel: 732-449-0525 Fax: 732-449-0592 Email: akelly@kbtlaw.com ADB ENTERPRISES: Gets OK to Use Cash Collateral Until Feb. 7 ------------------------------------------------------------ ADB Enterprises, LLC got the green light from the U.S. Bankruptcy Court for the District of New Mexico to use its secured creditors' cash collateral until Feb. 7. The interim order signed by Judge Robert Jacobvitz approved the use of cash collateral to pay the company's post-petition business expenses based on its budget with a 10% deviation cushion. Independence Bank/Northeast Bank, Secured Lender Solutions, Innovation Refunds, Amazon Capital Services, and the U.S. Small Business Administration hold or may hold liens or security interests in the cash collateral. As protection, secured creditors will be granted replacement liens in certain post-petition assets of ADB in case of any diminution in value of their interest in the collateral. ADB's secured creditors can be reached through: Independent Bank/Northeast Bank 250 W. 55th St. Ste. 1502 New York, NY 10019 Secured Lender Solutions P.O. Box 2576 Springfield, IL 62708 Innovation Refunds 4350 Westown Pkwy Wdm, IA 50266 Amazon Capital Services, Inc. Attn: Jeff Bezos – CEO 410 Terry Ave. N Seattle, WA 98109 About ADB Enterprises ADB Enterprises, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.M. Case No. 24-11214) on November 13, 2024, with up to $100,000 in assets and up to $10 million in liabilities. Daniel Behles, Esq., at 709 Consulting, LLC serves as Subchapter V trustee. Judge Robert H. Jacobvitz oversees the case. The Debtor is represented by: Jason Michael Cline Jason Cline, LLC Tel: 505-595-0110 Email: jason@attorneyjasoncline.com ADIENT GLOBAL: Moody's Rates New $795MM Sr. Unsecured Notes 'B2' ---------------------------------------------------------------- Moody's Ratings assigned a B2 rating to Adient Global Holdings Ltd's proposed $795 million senior unsecured notes. All other ratings for Adient, including the B1 corporate family rating, the B1-PD probability of default rating, the Ba2 senior secured rating, the B2 senior unsecured rating and the SGL-1 Speculative Grade Liquidity rating were not affected with this rating action. Additionally, the Ba2 senior secured bank credit facility rating at wholly owned subsidiary Adient US LLC was not affected at this time. The outlooks at both Adient and Adient US LLC were not impacted and remain stable. Proceeds from the proposed issuance are expected to be used to repay Adient's 2026 senior unsecured notes. RATINGS RATIONALE Adient's B1 CFR reflects its position as a global leader in automotive seating, highlighted by long-standing relationships with all major automotive original equipment manufacturers (OEM), with strong geographic and customer diversification. Seating trends are expected to remain supportive to margin growth as the company's steady innovation positions it to capture the industry's accelerated deployment of light vehicle seating comfort features. The roll-off of lower margin legacy contracts, particularly in late 2025 and through 2026, will provide additional margin opportunity that will help offset flat-to-lower light vehicle production volumes. More consistent profitability stems from tighter cost controls, good platform launch execution and a more favorable customer/product mix. However, margins remain modest relative to peers. Nevertheless, free cash flow is likely to remain solidly positive and financial leverage moderate to allow financial flexibility to manage the automotive industry's cyclicality. For Adient's fiscal 2025, Moody's expect an EBIT margin of around 3% and debt-to-EBITDA near 3.5x. The SGL-1 Speculative Grade Liquidity Rating reflects Moody's expectation that Adient will maintain very good liquidity. Moody's expect the company to have cash of at least $750 and substantial availability under Adient US LLC's unrated and undrawn $1.25 billion asset-based lending (ABL) facility. Free cash flow should again be solidly positive in fiscal 2025 but lower than the fiscal 2024 level because of an increase in restructuring outlays and capital expenditures. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded with demonstration of a sustained and/or improving EBIT margin, even during periods of more subdued global light vehicle production. EBITDA-to-interest in excess of 6x and debt-to-EBITDA maintained below 4x would also be key considerations for an upgrade. The ability to manage volatile raw material inputs and continued good execution of platform launches and ongoing restructuring actions that support margin resiliency and expansion would also be necessary for a rating upgrade. The ratings could be downgraded if margins meaningfully weaken, free cash flow falls toward breakeven, EBITDA-to-interest remains below 4x or debt-to-EBITDA approaches 5x. Deteriorating liquidity, including extended reliance on the ABL facility for working capital needs or cash falling significantly below $700 million could also result in a negative rating action. Adient plc, the parent company of Adient Global Holdings Ltd, is one of the world's largest automotive seating manufacturers with long-standing relationships with many, including the largest, global automotive OEMs. Automotive seating solutions include complete seating systems, frames, mechanisms, foam, head restraints, armrests, trim covers and fabrics. Adient operates in the Chinese automotive seating market through several joint ventures. Revenue for the twelve months ended December 31, 2024 was $14.5 billion. The principal methodology used in this rating was Automotive Suppliers published in December 2024. ADVOCATES FOR OPPORTUNITY: Hires Van Horn Law Group as Counsel -------------------------------------------------------------- Advocates For Opportunity, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Van Horn Law Group as counsel. The firm will provide these services: a. give advice to the Debtor with respect to its powers and duties as a debtor in possession and the continued management of its business operations; b. advise the 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 interest of the Debtor in all matters pending before the court; and e. represent the debtor in negotiation with its creditors in the preparation of a plan. The firm will be paid at these rates: Chad Van Horn $500 per hour Law Clerks/Paralegals/Associates $175 to $350 per hour The firm was paid a retainer in the amount of $20,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Chad T. Van Horn, Esq, a partner at Van Horn Law Group, 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: Chad T. Van Horn, Esq. Van Horn Law Group, P.A. 500 NE 4th Street, Suite 200, Fort Lauderdale, FL 33301 Tel: (954) 765-3166 Email: chad@cvhlawgroup.com About Advocates For Opportunity, Inc., Advocates For Opportunity, Inc., filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 12-13019) on Feb. 7, 2012, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Chad T. Van Horn, Esq. AEROCISION PARENT: Court Narrows Claims in Liberty Hall Lawsuit --------------------------------------------------------------- Judge Karen B. Owens of the United States Bankruptcy Court for the District of Delaware dismissed Counts I, II, and IV in the adversary proceeding captioned as LIBERTY HALL CAPITAL PARTNERS FUND I, L.P., Plaintiff, v. CITIZENS BANK, N.A., ALLY BANK, SIEMENS FINANCIAL SERVICES, INC., CHANNEL FUNDING, LLC, MONROE CAPITAL MML CLO IX, LTD., MONROE CAPITAL MML CLO X, LTD., and MRCC SENIOR LOAN FUND I FINANCING SPV, LLC, Defendants, Adv. Pro. No. 23-50772 (KBO) (Bankr. D. Del.). Before the Court are two Motions to Dismiss filed by Siemens Financial Services, Inc. seeking to dismiss the complaint of Liberty Hall Capital Partners Fund I, L.P. pursuant to Rules 12(b)(1) and (b)(6) of the Federal Rules of Civil Procedure, made applicable to these proceedings by Rule 7012(b) of the Federal Rules of Bankruptcy Procedure. AeroCision Parent, LLC, and its debtor affiliates filed for chapter 11 bankruptcy protection on July 31, 2023. One day prior, the Debtors entered into a restructuring support agreement with its various secured lenders. The RSA contemplated that the Debtors, Liberty Hall, and the Lenders would take certain actions to restructure and recapitalize the Debtors' capital structure through a pre-packaged chapter 11 plan. Among other things, they agreed that the Debtors' current debt facilities and future debtor-in-possession financing to be provided by the Lenders would be converted into exit facilities that would also provide new funding to the Debtors upon emergence from bankruptcy. In particular, pursuant to the RSA, the parties agreed to convert Liberty Hall's approximate $2.5 million claim for bridge loan financing advanced to the Debtors shortly before the Petition Date into a New Super Senior Lien Facility. The Lenders' claims would be converted into loans under the New Super Senior Lien Facility, a New First Lien Facility, and a New Holdco Term Loan Facility. All other claims of the Debtors would be paid in the ordinary course of business, reinstated, or remain unimpaired. The Debtors promptly moved to assume the RSA, which the Court approved. About one month later, the RSA and RSA Plan began to fall apart. The Debtors announced that challenges had arisen under the existing RSA Plan. Shortly thereafter, the Debtors pivoted to a sale process. The Court approved the sale approximately one month later and, in early March 2024, confirmed the Debtors' plan of liquidation. Meanwhile, the RSA terminated. Liberty Hall and the Lenders blamed each other, alleging that the other breached. Liberty Hall commenced this adversary proceeding in December 2023 against the Lenders. An action against Liberty Hall was already pending. Liberty Hall's Complaint contains four counts. Counts I and II assert claims for promissory estoppel and unjust enrichment, respectively, arising from an alleged promise made to Liberty Hall by the Lenders regarding the treatment of Liberty Hall's Bridge Financing claim. In Counts III and IV, Liberty Hall asserts that the Lenders' behavior during the bankruptcy case breached the RSA's express and implied good faith requirements, resulting in the failure of the RSA Plan. Following consummation of the sale, the Debtors paid the proceeds to the Lenders to fully satisfy their postpetition financing claims and partially satisfy their prepetition secured claims. Liberty Hall was left with an unsecured claim against the Debtors in an approximate amount of $5.2 million, which includes the Bridge Financing. Under the Plan of Liquidation, this claim along with approximately $30 million other unsecured claims will receive an undetermined pro rata recovery not exceeding $500,000 in the aggregate. Through Counts III and IV, Liberty Hall seeks to be compensated for its losses from the failed RSA. The Lenders moved to dismiss the Complaint for failure to state a claim under Federal Rule 12(b)(6). Thereafter, the parties engaged in mediation. The mediation resulted in a settlement of all pending claims between Liberty Hall and the Lenders except for Siemens. Siemens then filed a second motion to dismiss for lack of subject-matter jurisdiction under Federal Rule 12(b)(1). . The Court permitted the Debtors to bind themselves to the terms of the RSA through assumption because it determined that it was in the best interest of the estates and parties in interest for the reasons just explained. It emphasizes that while not all restructuring support agreements result in a confirmed plan, it is alleged in Counts III and IV that Siemens caused its termination through bad faith behavior, which strikes at the integrity of the Debtors' bankruptcy process. Moreover, while the alleged promises in Counts I and II regarding the Bridge Financing were made prior to the execution of the RSA, they were a component of the parties' multi-step process to reorganize the company on a consensual basis through confirmation of the RSA Plan. For these reasons, the Court determines that Liberty Hall's claims are inseparable from the bankruptcy context and that it has "arising in" jurisdiction. Siemens argues that the claims of Liberty Hall should be dismissed as precluded by the Court's final order approving debtor-in-possession financing and use of cash collateral. The Court does not agree. With respect to the claims of Counts I and II, Siemens argues that the stipulations and holdings of the Final DIP Order preclude Liberty Hall from claiming that the Bridge Financing is senior in priority to its claims. According to the Court, this argument misses the mark. The provisions of the Final DIP Order relied upon by Siemens address the priority of the Lenders' claims against the Debtors. Liberty Hall has filed an unsecured claim against the Debtors for the Bridge Financing and is not seeking secured (let alone, senior secured) status in this proceeding. Rather, it seeks damages directly from Siemens for its failure to repay the Bridge Financing in the wake of the Debtors' failed restructuring. The Court says the Final DIP Order does not affect these claims. Siemens also argues that Liberty Hall's claims of Counts III and IV were released by the Final DIP Order. According to the Court, this argument is of no merit. Third party claims such as those alleged by Liberty Hall against Siemens are unaffected by the Final DIP Order, which only addresses estate claims and causes of action in its release provision, the Court finds. For these reasons, the Court orders the following: 1. Counts I, II, and IV of the Complaint are dismissed. 2. The remainder of the relief requested by the Motions to Dismiss is denied. A copy of the Court's decision dated Jan. 28, 2025, is available at https://urlcurt.com/u?l=GSICJE from PacerMonitor.com. About AeroCision Parent AeroCision Parent, LLC and affiliates are are part of an organization known as Bromford Group, a global manufacturing business in the aerospace, defense, and power generation industry that was founded in the United Kingdom in 1973. Bromford supplies turbine engine and related components to all major OEM's, including many of the industry's most prominent manufacturers, like General Electric Aviation, Pratt & Whitney, and Rolls Royce, among others. The manufacturers use Bromford's components to manufacture engines for aircraft and other vehicles. The Debtors sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11032) on July 31, 2023. In the petition signed by David Nolletti, chief restructuring officer, the Debtor disclosed up to $500 million in both assets and liabilities. Judge Karen B. Owens oversees the case. Young Conaway Stargatt & Taylor, LLP represents the Debtors as legal counsel, Riveron Consulting, LLC as restructuring advisor, Jefferies LLC as investment banker, and Epiq Corporate Restructuring, LLC as notice, claims, solicitation and balloting agent and administrative advisor. AKOUSTIS TECHNOLOGIES: Committee Taps Alvarez & Marsal as Advisor ----------------------------------------------------------------- The official committee of unsecured creditors of Akoustis Technologies, Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America, LLC as its financial advisor. The firm will provide these services: a. assist in the assessment and monitoring of cash flow budgets, liquidity and operating results; b. assist in the review of Court disclosures, including the Schedules of Assets and Liabilities, the Statements of Financial Affairs, Monthly Operating Reports, and Periodic Reports; c. assist in the analysis of any assets and liabilities and any proposed transactions for which Court approval is sought; d. assist in the review of the Debtors' proposed key employee retention plan and key employee incentive plan; d. attend meetings with the Debtors, the Debtors' lenders and creditors, potential investors, the Committee and any other official committees organized in these chapter 11 cases, the U.S. Trustee, other parties in interest, and professionals hired by the same, as requested; e. assist in the review of any tax issues; f. assist in the investigation and pursuit of causes of actions; h. assist in the review of the claims reconciliation and estimation process; i. assist in the review of the sales or dispositions of the Debtors' assets; j. assist in the review and/or preparation of information and analysis necessary for the confirmation of a plan in these chapter 11 cases; and k. render such other general business consulting or such other assistance as the Committee or its counsel may deem necessary, consistent with the role of a financial advisor and not duplicative of services provided by other professionals in these chapter 11 cases. The firm will be paid at these rates: Managing Directors $1,100 to $1,575 Directors $850 to $1,100 Associates $625 to $825 Analysts $450 to $600 The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Mark Greenberg, a partner at Alvarez & Marsal North America, 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: Mark Greenberg Alvarez & Marsal North America, LLC 600 Madison Avenue,8th Floor New York, NY 10022 Tel: (917) 841-8334 Email: mgreenberg@alvarezandmarsal.com About Akoustis Technologies Akoustis Technologies, Inc. -- http://www.akoustis.com/-- is a high-tech BAW RF filter solutions company that is pioneering next-generation materials science and MEMS wafer manufacturing to address the market requirements for improved RF filters -- targeting higher bandwidth, higher operating frequencies and higher output power compared to legacy polycrystalline BAW technology. The Company utilizes its proprietary and patented XBAW(R) manufacturing process to produce bulk acoustic wave RF filters for mobile and other wireless markets, which facilitate signal acquisition and accelerate band performance between the antenna and digital back end. Superior performance is driven by the significant advances of poly-crystal, single-crystal, and other high purity piezoelectric materials and the resonator-filter process technology which enables optimal trade-offs between critical power, frequency and bandwidth performance specifications. Akoustis owns and operates a 125,000 sq. ft. ISO-9001:2015 registered commercial wafer-manufacturing facility located in Canandaigua, NY, which includes a class 100 / class 1000 cleanroom facility -- tooled for 150-mm diameter wafers -- for the design, development, fabrication and packaging of RF filters, MEMS and other semiconductor devices. Akoustis is headquartered in the Piedmont technology corridor near Charlotte, North Carolina. Akoustis and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 24-12796) on Dec. 16, 2024. Akoustis disclosed $53,371,000 in total assets against $122,586,000 in total debt as of Sept. 30, 2024. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped K&L Gates, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel. Raymond James & Associates, Inc. as investment banker; Getzler Henrich & Associates, LLC as financial advisor; and C Street Advisory Group as strategic communications advisor. Stretto is the claims agent and has launched the page https://cases.stretto.com/Akoustis. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. AKOUSTIS TECHNOLOGIES: Committee Taps Young Conaway as Co-Counsel ----------------------------------------------------------------- The official committee of unsecured creditors of Akoustis Technologies, Inc. and its affiliates seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Young Conaway Stargatt & Taylor, LLP as its co-counsel. The firm will provide these services: (a) advise the Committee with respect to its rights, powers, and duties in connection with these Chapter 11 Cases and all related and ancillary proceedings, including, without limitation, any adversary proceedings and foreign recognition proceedings; (b) represent the Committee in connection with matters generally arising in these Chapter 11 Cases, including in connection with any hearings, conferences, mediations or other proceedings pending before the Court, any other federal, state or appellate court, or the U.S. Trustee, as well as any other ancillary proceedings related to or in connection with the Debtors and/or the Chapter 11 Cases, including foreign proceedings; (c) assist and advise the Committee in consulting with the Debtors regarding the administration of these Chapter 11 Cases; (d) assist the Committee in its review, analysis and negotiation of any potential compromises or settlements and the assumption and rejection of executory contracts and unexpired leases; (e) assist with the Committee's investigation of the acts, conduct, assets, liabilities, intercompany relationships, claims and financial condition of the Debtors, the existence of estate causes of action, and the Debtors' businesses, including, without limitation, reviewing and investigating prepetition transactions, the operation of the Debtors' businesses, and the desirability of the continuance of such businesses; (f) assist and advise the Committee in connection with any sale of the Debtors' assets, including negotiating bid procedures and proposed asset purchase agreements; (g) assist and advise the Committee in the formulation, review, analysis, and negotiation of any chapter 11 plan(s) that may be filed and the accompanying disclosure statement; (h) take all necessary actions to protect and preserve the interests of the Committee and creditors holding general unsecured claims against the Debtors' estates, including (i) the investigation and possible prosecution of actions enhancing the Debtors' estates and (ii) the review and analysis of claims filed against the Debtors' estates; (i) assist the Committee in protecting, preserving, and maximizing the value of the Debtors' estates; (j) assist and advise the Committee with respect to its communications with the Debtors' unsecured creditor body regarding significant matters in these Chapter 11 Cases; (k) represent the Committee at all hearings and other proceedings; (l) review and analyze applications, orders, statements, and schedules filed with the Court and advise the Committee with respect thereto; (m) prepare such pleadings, including, without limitation, motions, applications, orders, memoranda, complaints, answers, objections, replies, and responses and applications as may be necessary in furtherance of the Committee's interests and objectives; (n) respond to inquiries, as appropriate, from individual creditors and customers as to the status of, and developments in, these Chapter 11 Cases; and (o) perform such other legal services as may be required and are in the interests of the Committee. Compensation will be payable to Young Conaway on an hourly basis, plus reimbursement of actual and necessary expenses incurred by Young Conaway. The firm's current hourly rates are: 2024 2025 Matthew B. Lunn $1,110 $1,190 Kara Hammond Coyle $1,005 $1,085 Jared W. Kochenash $630 $680 Chad A. Corazza (paralegal) $375 $385 Matthew Lunn, a partner at Young Conaway Stargatt & Taylor, 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: Matthew B. Lunn, Esq. Kara Hammond Coyle, Esq. Jared W. Kochenash, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Email: mlunn@ycst.com kcoyle@ycst.com jkochenash@ycst.com About Akoustis Technologies Akoustis Technologies, Inc. -- http://www.akoustis.com/-- is a high-tech BAW RF filter solutions company that is pioneering next-generation materials science and MEMS wafer manufacturing to address the market requirements for improved RF filters -- targeting higher bandwidth, higher operating frequencies and higher output power compared to legacy polycrystalline BAW technology. The Company utilizes its proprietary and patented XBAW(R) manufacturing process to produce bulk acoustic wave RF filters for mobile and other wireless markets, which facilitate signal acquisition and accelerate band performance between the antenna and digital back end. Superior performance is driven by the significant advances of poly-crystal, single-crystal, and other high purity piezoelectric materials and the resonator-filter process technology which enables optimal trade-offs between critical power, frequency and bandwidth performance specifications. Akoustis owns and operates a 125,000 sq. ft. ISO-9001:2015 registered commercial wafer-manufacturing facility located in Canandaigua, NY, which includes a class 100 / class 1000 cleanroom facility -- tooled for 150-mm diameter wafers -- for the design, development, fabrication and packaging of RF filters, MEMS and other semiconductor devices. Akoustis is headquartered in the Piedmont technology corridor near Charlotte, North Carolina. Akoustis and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 24-12796) on Dec. 16, 2024. Akoustis disclosed $53,371,000 in total assets against $122,586,000 in total debt as of Sept. 30, 2024. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped K&L Gates, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel. Raymond James & Associates, Inc. as investment banker; Getzler Henrich & Associates, LLC as financial advisor; and C Street Advisory Group as strategic communications advisor. Stretto is the claims agent and has launched the page https://cases.stretto.com/Akoustis. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. ANGIE'S TRANSPORTATION: Gets Extension to Access Cash Collateral ---------------------------------------------------------------- Angie's Transportation, LLC and STL Equipment Leasing Co., LLC obtained a court order extending the companies' authority to use the cash collateral of their lenders from Jan. 26 to Feb. 9. The order, signed by Judge Brian Walsh of the U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, approved the use of the lenders' cash collateral on an interim basis to pay the expenses set forth in the companies' projected budget. The lenders are Siemans Financial Services, Inc., Daimler Truck Financial, BMO Bank N.A., Triad Bank, Volvo Financial Services, and Regions Equipment Finance Corp. and Regions Commerical Equipment Finance Corp. The primary collateral of these lenders consists of tractors, trailers, and other equipment. The next hearing will be held on Feb. 5. Triad Bank can be reached through its counsel: Robert E. Eggmann, Esq. Carmody MacDonald P.C. 120 South Central Avenue, Ste. 1800 St. Louis, MO 63105 Tel: (314) 854-8600 Fax: (314) 854-8660 Email: ree@carmodymacdonald.com Volvo can be reached through its counsel: Miranda S. Swift, Esq. Stinson LLP 1201 Walnut, Suite 2900 Kansas City, MO 64106 Tel: (816) 842-8600 Email: miranda.swift@stinson.com -- and -- Benjamin Court, Esq. Terri Running, Esq. Stinson LLP 50 South Sixth Street, Suite 2600 Minneapolis, MN 55402 Tel: (612) 335-1500 Email: benjamin.court@stinson.com terri.running@stinson.com REF and RCEF can be reached through their counsel: Joseph J. Trad, Esq. Lewis Rice LLC 600 Washington Ave., Suite 2500 St. Louis, MO 63101 Tel: 314-444-7600 Fax: 314-612-7691 Email: jtrad@lewisrice.com About Angie's Transportation Angie's Transportation, LLC, a trucking company in St. Louis, Mo., and STL Equipment Leasing Co, LLC filed Chapter 11 petitions (Bankr. E.D. Miss. Lead Case No. 24-44594) on December 16, 2024. At the time of the filing, Angie's reported $1 million to $10 million in assets and $500,000 to $1 million in liabilities while STL reported $1 million to $10 million in both assets and liabilities. Judge Brian C. Walsh handles the cases. The Debtors are represented by Andrew Magdy, Esq., at Schmidt Basch, LLC. ANGIE'S TRANSPORTATION: Gets OK to Use PACCAR's Cash Collateral --------------------------------------------------------------- Angie's Transportation, LLC and STL Equipment Leasing Co., LLC received final approval from the U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, to use the cash collateral of PACCAR Financial until March 16. PACCAR is a secured creditor of Angie's Transportation, with valid liens on three tractors owned by the company. As protection for the use of its collateral, PACCAR will be granted replacement liens on its collateral to the same extent and with the same validity and priority as its pre-bankruptcy liens. In addition, PACCAR will receive "adequate protection" payments, including an initial payment of $1,100 and monthly payments of $1,300 due on or before the 15th day of each month until further order of the court or the effective date of a confirmed plan of reorganization. About Angie's Transportation Angie's Transportation, LLC, a trucking company in St. Louis, Mo., and STL Equipment Leasing Co, LLC filed Chapter 11 petitions (Bankr. E.D. Miss. Lead Case No. 24-44594) on December 16, 2024. At the time of the filing, Angie's reported $1 million to $10 million in assets and $500,000 to $1 million in liabilities while STL reported $1 million to $10 million in both assets and liabilities. Judge Brian C. Walsh handles the cases. The Debtors are represented by Andrew Magdy, Esq., at Schmidt Basch, LLC. APS HOLDINGS: Court to Hold Cash Collateral Hearing on Feb. 6 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, is set to hold a hearing on Feb. 6, at 9:30 a.m., on the motion by APS Holdings of FL Inc. to use cash collateral. The court previously authorized the company to use the cash collateral of its lenders on an interim basis until the Feb. 6 hearing. The interim order issued by the court on Jan. 24 granted lenders a replacement lien on the company's assets on which they held a lien as of the petition date. The lenders' cash collateral includes the company's cash, accounts receivable, and other business proceeds. About APS Holdings of FL Inc. APS Holdings of FL Inc. is a Tampa-based corporation operating as APS Windows & Doors. It was formerly known as Architectural Product Sales, Inc. APS Holdings of FL filed Chapter 11 petition (Bankr. M.D. Fla. Case No. 25-00145) on January 10, 2025. In its petition, the Debtor reported between $1 million and $10 million in both assets and liabilities. Judge Roberta A. Colton handles the case. The Debtor is represented by: Edward J. Peterson, III Johnson Pope Bokor Ruppel & Burns, LLP 400 N Ashley Dr. #3100 Tampa, FL 33602 Tel: 813-225-2500 Email: edwardp@jpfirm.com APS HOLDINGS: Hires Johnson Pope Bokor Ruppel & Burns as Counsel ---------------------------------------------------------------- APS Holdings of FL, Inc d/b/a APS Windows & Doors seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Johnson Pope Bokor Ruppel & Burns, LLP as counsel. The firm will provide these services: a. give the Debtor legal advice with respect to their duties and obligations as Debtor in Possession or "DIP"; b. take necessary steps to analyze and pursue any avoidance actions, if in the best interest of the estate; c. prepare on behalf of the Debtor the necessary motions, notices, pleadings, petitions, answers, orders, reports and other legal papers required in this Chapter 11 case; d. assist the Debtor in taking all legally appropriate steps to effectuate compliance with the Bankruptcy Code; and e. perform all other legal services for the Debtor which may be necessary herein including the sale of all the Debtor's property assets. The firm will be paid at $525 per hour. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Edward J. Peterson, Esq., a partner at Johnson Pope Bokor Ruppel & Burns, 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: Edward J. Peterson, Esq. Johnson Pope Bokor Ruppel & Burns, LLP 400 North Ashley Drive, Ste. 3100, Tampa, Florida 33602 Tel: (813) 225-2500 Email: edwardp@jpfirm.com About APS Holdings of FL, Inc APS Holdings of FL Inc. operating as APS Windows & Doors and formerly known as Architectural Product Sales, Inc., is a Tampa-based corporation. APS Holdings of FL Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 25-00145) on January 10, 2025. In its petition, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge Roberta A. Colton handles the case. Edward J. Peterson at Johnson, Pope, Bokor, Ruppel & Burns, LLP, represents the Debtor as counsel. ARCHROCK PARTNERS: Moody's Raises CFR to 'Ba3', Outlook Stable -------------------------------------------------------------- Moody's Ratings upgraded the ratings of Archrock Partners, L.P. (Archrock), including its Corporate Family Rating to Ba3 from B1, Probability of Default Rating to Ba3-PD from B1-PD and backed senior unsecured notes ratings to B1 from B2. The Speculative Grade Liquidity Rating (SGL) remains unchanged at SGL-3. The outlook is changed to stable from positive. "The upgrade in Archrock's credit ratings reflects the improvement in its profitability, scale and business profile," commented James Wilkins, Moody's Ratings Vice President - Senior Analyst. "Moody's expect the company to generate positive free cash flow when its growth capital spending moderates." RATINGS RATIONALE The upgrade of Archrock's CFR reflects strong operating performance, improving credit metrics and favorable industry fundamentals in the company's US markets. The company has grown the revenue of its Contract Operations segment as a result of increasing average operating horsepower, raising prices and the acquisition of Total Operations and Production Services, LLC (TOPS), which closed in August 2024. Its Aftermarket Services segment also benefits from the increase in operating horsepower. Higher revenue and profit margins have driven improvement in cash flow from operations. However, continued investment through higher capital expenditures has limited positive free cash flow generation. Its increased scale following the TOPS acquisition and higher earnings have improved Archrock's credit metrics. The conservative funding of the TOPS acquisition with a significant equity component was in line with the company's financial policy targeting leverage (Debt / EBITDA) in the range of 3.0x to 3.5x. Moody's expect earnings growth will result in the leverage falling in the target range during 2025. Archrock benefits from a leading position in natural gas compression services, basin diversity, reasonably stable gross profit margins and growing demand for the company's compression services. It has a fleet of large horsepower and electric drive compression equipment totaling ~4.4 million horse power that enjoy higher profit margins than other segments of the compression equipment market. The company's long-term relationships with its high credit quality customer base, with whom it typically has fee-based contracts, provides stability. Archrock's profitability is correlated to natural gas production volumes, which is a driver of its utilization rates. It has benefited from the multi-year growth in US natural gas production, and has a significant market position in the Permian Basin, the largest and fastest-growing region for the US oil and gas industry. The rating is constrained by exposure to volatile commodity prices, short-term contracts, meaningful debt levels and limited free cash flow generation in favorable market conditions. The SGL-3 Speculative Grade Liquidity Rating reflects adequate liquidity supported by access to a $1.1 billion asset-based revolving credit facility that matures in May 2028. The company had $446 million of borrowings outstanding under the revolver and $650 million of available borrowing capacity, after accounting for $4.1 million of letters of credit, as of September 30, 2024. The credit agreement financial covenants include a minimum interest coverage of 2.5x, a maximum Senior Secured Debt to EBITDA of 3.0x and a maximum Total Debt to EBITDA of 5.25x. Moody's expect the company to remain in compliance with its financial covenants at least through mid-2026. Alternate sources of liquidity are limited as its assets are pledged as collateral to the revolver. Archrock's next notes maturity is the $300 million backed senior unsecured notes due April 2027. The revolving credit facility has springing maturity dates of December 2, 2026, and December 3, 2027, if any notes due 2027 or notes due 2028, respectively, remain outstanding as of such date. The stable outlook reflects Moody's expectation that Archrock will continue to integrate the acquired TOPS business, grow earnings and maintain credit metrics supportive of its credit rating. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Archrock's ratings could be upgraded if the firm focuses on debt reduction and de-levers such that it is expected to maintain Debt/EBITDA below 3.5x in a mid-cycle earnings scenario while generating consistent positive free cash flow and adhering to conservative financial policies. If Archrock's leverage rises above 4.5x on a sustained basis, then the ratings could be downgraded. The principal methodology used in these ratings was Oilfield Services published in January 2023. Houston, Texas-based Archrock Partners, L.P. is a limited partnership and a leading provider of natural gas contract compression services to customers throughout the United States. Archrock, Inc., a publicly traded company, owns all of the limited partner and the general partner interests in Archrock Partners, L.P. ARTISTIC HOLIDAY:Seeks Chapter 11 Protection in Florida ------------------------------------------------------- On January 29, 2025, Artistic Holiday Designs LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for the Middle District of Florida. According to court filing, the Debtor reports $12,675,226 in debt owed to 100 and 199 creditors. The petition states funds will be available to unsecured creditors. About Artistic Holiday Designs LLC Artistic Holiday Designs LLC specializes in creating innovative and captivating holiday lighting displays for both commercial and public spaces. Partnering with Leblanc Illuminations, they offer unique, dynamic decor solutions that stand out from traditional holiday decorations. Their mission is to transform holiday environments into memorable destinations through exceptional service, cutting-edge design, and reliable technical products. Artistic Holiday Designs LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.: 25-00153) on January 29, 2025. In its petition, the Debtor reports total assets of $8,777,840 and total liabilities of $12,675,226. Honorable Bankruptcy Judge Caryl E. Delano handles the case. The Debtor is represented by: Michael Dal Lago, Esq. DAL LAGO LAW 999 Vanderbilt Beach Rd. Suite 200 Naples FL 34108 Tel: 239-571-6877 Email: mike@dallagolaw.com ASCEND PERFORMANCE: $1.09BB Bank Debt Trades at 24% Discount ------------------------------------------------------------ Participations in a syndicated loan under which Ascend Performance Materials Operations LLC is a borrower were trading in the secondary market around 76.4 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $1.09 billion Term loan facility is scheduled to mature on August 27, 2026. About $1.04 billion of the loan has been drawn and outstanding. Ascend Performance Materials Operations LLC is an integrated propylene based producer of Nylon 6,6. SK Titan Holdings LLC bought the company from Solutia in 2009 and a small remaining equity interest in 2011. Headquartered in Houston, Texas, Ascend generated about $3.2 billion of revenues in 2021. ASHCROFT URBAN: Liquidity Issues Cue CCAA Filing, GT as Monitor --------------------------------------------------------------- The Ontario Superior Court of Justice pronounced an initial order ("Initial Order") pursuant to the Companies' Creditors Arrangement Act, as amended, with respect to Ashcroft Urban Developments Inc., 2067166 Ontario Inc., 2139770 Ontario Inc., 2265132 Ontario Inc., Ashcroft Homes - La Promenade Inc., 2195186 Ontario Inc., Ashcroft Homes - Capital Hall Inc., and 1019883 Ontario Inc. ("Companies"). The Initial Order appointed Grant Thornton Limited as the monitor in the proceedings. According to Aird Belris, Ashcroft has faced ongoing liquidity challenges due to rising interest rates and declining occupancy levels. Attempts to restructure through forbearance agreements and asset sales proved insufficient, prompting creditors to pursue a receivership to safeguard their investments and expedite asset realization. The proceedings, initiated under the Companies' Creditors Arrangement Act, were met with strong opposition from secured creditors representing more than 80% of Ashcroft's secured debt. The secured creditors instead supported a co-ordinated receivership as the most effective path forward. In accordance with section 23(1) (a) of the CCAA and the Initial Order, a copy of the Initial Order and other materials relevant to the proceedings is available on the Monitor's Website at: https://www.doanegrantthornton.ca/AshcroftHomes. If you have any questions, please contact the Monitor at Ashcroft@doane.gt.ca. Monitor can be reached at: Doane Grant Thornton LLP Suite 1100, Centrium Place 332 - 6 Avenue SW Calgary, AB T2P 0B2 Tel: +1 403 260 2500 Fax: +1 403 260 2571 Lawyers for the Companies: Mann Lawyers LLP Attn: Alexander Bissonnette 300-11 Holland Avenue Ottawa ON K1Y 4S1 Email: alexander.bissonnette@mannlawyers.com Tel: 613-722-1500 Blue Rock Law LLP Attn: David Mann, K.C. 705-215 9th Avenue Calgary, AB T2P 1K3 Email: david.mann@bluerocklaw.com Tel: 1-587-317-0643 Ashcroft Urban Developments Inc. operates in real estate, focusing on multi-residential developments for seniors, students, and general residents. ATLANTIC GOLF: Seeks Chapter 11 Protection in New Jersey -------------------------------------------------------- On January 30, 2025, Atlantic Golf Management Corporation filed Chapter 11 protection in the U.S. Bankruptcy Court for the District of New Jersey. According to court filing, the Debtor reports estimated assets 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 Atlantic Golf Management Corporation Atlantic Golf Management Corporation is primarily involved in the operation of golf courses, open to the general public on a contract or fee basis. Atlantic Golf Management Corporation sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 25-10975) on January 30, 2025. In its petition, the Debtor reports estimated assets up to $50,000 and estimated liabilities between $1 million and $10 million. The Debtor is represented by: Valerie Palma DeLuisi, Esq. LAW OFFICES OF NICHOLAS J. PALMA, ESQ. P.C. 1425 Broad Street Clifton, NJ 07013 Tel: 973-471-1121 Email: vpd@palmalawfirm.com AVAYA INC: $810MM Bank Debt Trades at 16% Discount -------------------------------------------------- Participations in a syndicated loan under which Avaya Inc is a borrower were trading in the secondary market around 84.4 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $810 million Payment in kind Term loan facility is scheduled to mature on August 1, 2028. The amount is fully drawn and outstanding. Avaya Inc. provides communication software and services. The Company offers unified communications, as well as contact centers, cloud, and collaboration services. Avaya serves clients worldwide. AVENTIV TECHNOLOGIES: $1.04BB Bank Debt Trades at 30% Discount -------------------------------------------------------------- Participations in a syndicated loan under which Aventiv Technologies LLC is a borrower were trading in the secondary market around 69.7 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $1.04 billion Term loan facility is scheduled to mature on July 31, 2025. The amount is fully drawn and outstanding. Carrollton, Texas-based Aventiv Technologies LLC is a diversified technology company that provides innovative solutions to customers in the corrections and government services sectors. Aventiv is the parent company to Securus Technologies and AllPaid. BEXIN REALTY: Court Extends Cash Collateral Access to Feb. 28 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York issued a second interim order authorizing Bexin Realty Corporation to use its lender's cash collateral until Feb. 28. The second interim order authorized the company to use the cash collateral of Cathay Bank to pay the expenses set forth in its budget, with a 10% variance. As protection, Cathay Bank will be granted replacement liens on Bexin's assets subordinate only to certain carve-outs, including U.S. trustee fees and clerk's filing fees. The bank will also be granted a superpriority administrative expense claim senior to all other administrative expense claims and unsecured claims against the company's estate. The company's authority to use cash collateral will terminate if certain events occur, including a default under the order; a conversion of the company's Chapter 11 case to one under Chapter 7; or the appointment of a Chapter 11 trustee. A final hearing is scheduled for Feb. 27. About Bexin Realty Corporation Bexin Realty Corporation is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Bexin Realty filed Chapter 11 petition (Bankr. S.D.N.Y. Case No. 24-12080) on November 27, 2024, listing between $10 million and $50 million in both assets and liabilities. Bahram Benaresh, president of Bexin Realty, signed the petition. Judge Martin Glenn handles the case. The Debtor is represented by: Jonathan S. Pasternak, Esq. Davidoff Hutcher & Citron, LLP 605 Third Avenue, 34th Floor New York, NY 10158 Tel: (212) 557-7200/646-428-3124 Fax: (212) 286-1884 Email: jsp@dhclegal.com BMF INC: Sec. 341(a) Meeting of Creditors on February 28 -------------------------------------------------------- On January 30, 2025, BMF Inc. filed Chapter 11 protection in the U.S. Bankruptcy Court for the District of Puerto Rico. According to court filing, the Debtor reports between $1 million and $10 million in debt owed to 50 and 99 creditors. The petition states funds will be available to unsecured creditors. A meeting of creditors under Sec. 341(a) to be held on February 28, 2025 at 10:00 AM via Telephonic Conference. About BMF Inc. BMF Inc. is primarily involved in the manufacturing of beverages. BMF Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 25-00356) on January 30, 2025. In its petition, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge Edward A. Godoy handles the case. The Debtor is represented by: Hector Eduardo Pedrosa Luna, Esq. THE LAW OFFICES OF HECTOR EDUARDO PEDROSA LUNA P.O. Box 9023963 San Juan PR 00902-3963 Tel: 787-920-7983 Email: hectorpedrosa@gmail.com BROOKFIELD PROPERTIES: Moody's Alters Outlook on Ba3 CFR to Stable ------------------------------------------------------------------ Moody's Ratings affirmed Brookfield Properties Retail Holding LLC's ('Brookfield Retail' or 'the company') Ba3 Corporate Family Rating and its B1 senior secured notes, backed senior secured notes and senior secured bank credit facilities ratings. The rating outlook was changed to stable from negative. The affirmation reflects the strong operating performance of the company's mall properties, improved capital access for higher quality malls and demonstrated support from its parent companies, Brookfield Property Partners L.P. and Brookfield Corporation ("Brookfield Corp", A3 stable). The stable outlook reflects Moody's expectation that Brookfield Retail will be able to replace its expiring credit facilities with new financing that extends its debt maturity schedule, and its parent entities will continue to provide capital support. Moody's also expect the company to maintain strong operating performance and improve its fixed charge coverage ratio. RATINGS RATIONALE Brookfield Retail's ratings are supported by its large and diversified portfolio of primarily high-quality enclosed malls, solid operating track record and support from its parent companies. Conversely, the rating is constrained by the company's weak leverage and coverage ratios, limited financial flexibility, and thin buffer relative to the financial covenants in its credit documentation. Moody's expect that Brookfield Retail's leverage metrics will remain weak over the next 12- 18 months and its fixed charge coverage ratio will stay in the 1.2-1.35x range in the same period. Including the assets and the related debt in the company's unconsolidated joint ventures on a proportionate basis, its effective leverage (Debt + preferred as a proportion of gross assets) was 60.4% and its secured leverage was 59.6% at the end of the third quarter of 2024. For the 12 months ended September 2024, Brookfield Retail's net debt to EBITDA, including pro-rata share of unconsolidated joint ventures, was 12.0x and its fixed charge coverage was 1.2x. Brookfield Retail's liquidity is weak, with significant debt maturities in 2025 and 2026, including its revolver, term loan and a secured note. The company's unencumbered asset ratio is less than 5%. Moody's expect that Brookfield Retail will obtain a new credit facility to replace the revolver that expires in May 2025 and the $1.2 billion term loan that matures in August 2025. Additionally, Brookfield Retail has $4.3 billion of non-recourse mortgage debt, including its proportionate share of joint venture mortgage debt, maturing in 2025. Its 2026 debt maturities include $1.5 billion of non-recourse consolidated and joint venture mortgage debt, $547 million of consolidated recourse mortgage debt and $833 million of recourse corporate debt. The cushion on the company's fixed charge ratio covenant is thin and Moody's expect it to remain low, less than 10 bps above the limit of 1.35x, over the next 2-4 quarters. In the interim, support from its parents would help Brookfield Retail avoid a breach, should the metric weaken beyond current forecasts. The company owns a predominantly high-quality portfolio of malls, as reflected in its strong operating metrics. Brookfield Retail's excellent sales per square foot, $783 on a trailing 12-months basis, and portfolio lease rate, 96.2% at the end of the third quarter of 2024, highlight the quality of its portfolio. The company's portfolio is leased to a diverse tenant base and its lease expiration schedule is well-laddered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade would be predicated on solid occupancy and growing same-store cash NOI, net debt/EBITDA under 11.0x and fixed charge coverage over 2.0x. Maintaining ample liquidity to meet near- and intermediate-term obligations would also be a key consideration for an upgrade. Brookfield Retail's ratings could be downgraded if it is unable to refinance upcoming recourse debt maturities at reasonable terms or if capital support from its parents is needed to maintain covenant compliance. Deterioration in operating performance or weakening financing conditions would also cause downward rating pressure. The company's ratings could also be downgraded if net debt/EBITDA, including its pro-rata share of joint venture debt and earnings, remains above 12.5x or if its fixed charge coverage drops below 1.2x. Brookfield Properties Retail Holding LLC, a Delaware limited liability company, through its subsidiaries and affiliates, is an owner and operator of primarily Class A regional malls. As of September 30, 2024, the company was the owner, either entirely or with joint venture (JV) partners, of 104 retail properties in the US. The principal methodology used in these ratings was REITs and Other Commercial Real Estate Firms published in February 2024. BULLETPROOF DOG: Court Denies Chelsea's' Bid to Use Cash Collateral ------------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, issued an order denying the motion filed by Chelsea’s Bed & Biscuits, LLC, an affiliate of Bulletproof Dog Training, LLC, to authorize use of cash collateral. The court denied the motion following confirmation of the companies' joint Chapter 11 plan of reorganization on Jan. 27, which rendered the motion moot. About Bulletproof Dog Training Bulletproof Dog Training, LLC and its affiliates sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 24-01700) on June 14, 2024. In the petitions signed by its manager, William Thomas, Bulletproof Dog Training disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Jason A. Burgess oversees the cases. The Debtors are represented by: Daniel R Fogarty, Esq. Stichter, Riedel, Blain & Postler, P.A. Tel: 813-229-0144 Email: dfogarty.ecf@srbp.com C M HEAVY: Seeks to Hire Whitten Burrage as Special Counsel ----------------------------------------------------------- C M Heavy Machinery, LLC filed a second amended application seeking approval from the U.S. Bankruptcy Court for the Eastern District of Oklahoma to employ Whitten Burrage as special counsel. The firm will provide these services: a. provide legal advice and services with respect to prosecution of a breach of contract and bad faith civil litigation case against Debtor's insurer, AXIS Insurance Company, and Debtor's insurance agent, Caden Bolles and Bolles & Associates, LLC d/b/a Multi County Insurance, and preparation of any associated pleadings pertaining thereto, relating to an insurance claim submitted by Debtor in September 2023 pertaining to a fire loss that occurred in August 2023; and b. provide legal advice and services with respect to adjudication and the recovery of damages, costs, and attorney's fees and the judgments obtained by Debtor against its insurer Axis Insurance and its insurance agency Caden Bolles and Bolles & Associates, LLC d/b/a Multi County Insurance, including damages for breach of contract, bad faith, recovery of costs and attorney's fees, pre-judgment interest, and punitive damages and preparation of any associated pleadings, hiring of expert witnesses, and/or related work thereto; Whitten Burrage's contingency fee agreement is a hybrid fee arrangement with a reduced 10 percent fee with any recovery or settlement up to $1,406,971 and a 50% contingency fee with a recovery or settlement for amounts above $1,406,971. Blake Sonne, a partner at Whitten Burrage, 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: Reggie Whitten, Esq. Michael Burrage, Esq. Blake Sonne, Esq. Hannah Whitten, Esq. WHITTEN BURRAGE 512 N. Broadway Ave., Suite 300 Oklahoma City, OK 73102 Telephone: (405) 516-7800 Facsimile: (405) 516-7859 Emails: mburrage@whittenburragelaw.com rwhitten@whittenburragelaw.com bsonne@whittenburragelaw.com hwhitten@whittenburragelaw.com About C M Heavy Machinery, LLC C M Heavy Machinery, LLC sells and rents a full range of heavy machinery and equipment. It is based in Okemah, Okla. C M Heavy Machinery filed Chapter 11 petition (Bankr. E.D. Okla. Case No. 24-80617) on August 8, 2024, with total assets of $19,152,335 and total liabilities of $5,491,300. C M President Clint Meadors signed the petition. Judge Paul R. Thomas oversees the case. The Debtor is represented by Maurice VerStandig, Esq., at The Verstanding Law Firm, LLC. CARROLLCLEAN LLC: Plan Exclusivity Period Extended to April 28 -------------------------------------------------------------- Judge Nremda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas extended CarrollCLEAN, LLC's exclusive periods to file a plan of reorganization and obtain acceptance thereof to April 28, 2025 and June 27, 2025, respectively. As shared by Troubled Company Reporter, the Debtor is a manufacturer of cleaning supplies for third-party brands with operations in the DFW metroplex. Pursuant to Sections 1107 and 1108 of the Bankruptcy Code, the Debtor is continuing as debtor-in-possession. The Debtor submits that cause exists because it has stabilized its business, efficiently and successfully managed its estate and requires additional time to attempt a sale of its assets to a strategic purchaser. The Debtor has filed its schedules of assets and liabilities and statements of financial affairs, kept its lease obligations current; and obtained the Court's approval for use of cash collateral. The Debtor claims that having made substantial progress to date, additional, significant work is required before the company can prepare a meaningful disclosure statement, propose a chapter 11 plan of reorganization and emerge from chapter 11. CarrollCLEAN, LLC, is represented by: Howard Marc Spector, Esq. Sarah M. Cox, Esq. SPECTOR & COX, PLLC 12770 Coit Road, Suite 850 Dallas, TX 75251 Telephone: (214) 365-5377 Facsimile: (214) 237-3380 Email: hspector@spectorcox.com sarah@spectorcox.com About CarrollCLEAN, LLC CarrollCLEAN, LLC, sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 24-42039) on August 29, 2024, listing up to $50,000 in both assets and liabilities. Judge Brenda T Rhoades presides over the case. Howard Marc Spector, Esq. at Spector & Cox, PLLC, is the Debtor's counsel. CASA GARCIA'S: Seeks to Hire Greenleaf Associates as Accountant --------------------------------------------------------------- Casa Garcia's Co. seeks approval from the U.S. Bankruptcy Court for the Southern District of West Virginia to employ Greenleaf Associates, Inc. as accountant. The firm will provide monthly accounting services, prepare all period tax filings, and prepare all annual returns. The firm will be paid a flat fee of $300 per month, and $150 for preparation of monthly operating reports. Michael E. Greenleaf, a partner at Greenleaf Associates, Inc., disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Michael E. Greenleaf Greenleaf Associates, Inc. 1994 Lucile Ave. Los Angeles, CA 90039 Tel: (323) 660-5800 About Casa Garcia's Co. Casa Garcia's Co. is a restaurant operator located at Riverwalk Plaza in South Charleston, West Virginia. Casa Garcia's Co. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.W. Va. Case No. 25-20007) on January 20, 2025. In its petition, the Debtor reports estimated assets between $50,000 and $100,000 and estimated liabilities between $100,000 and $500,000. The Debtor is represented by Andrew S. Nason, Esq., at Pepper & Nason. CASA GARCIA'S: Seeks to Hire Pepper and Nason as Attorney --------------------------------------------------------- Casa Garcia's Co. seeks approval from the U.S. Bankruptcy Court for the Southern District of West Virginia to employ Pepper and Nason as attorney. The firm will provide these services: a. give the Debtor legal advice with respect to their powers and duties as debtor-in-possession in the continued operation of its business and management of its property; b. prepare on behalf of the Debtor as debtor-in-possession necessary applications, answers, orders, and other legal papers; and c. perform all other legal services for the debtor-in-possession which may be necessary herein. The firm will be paid at these rates: William W. Pepper and Andrew S. Nason $475 per hour Emmett Pepper $390 per hour The firm was paid a retainer in the amount of $20,293. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. As disclosed in court filings, the attorneys at Pepper and Nason are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: William W. Pepper, Esq. Andrew S. Nason, Esq. Emmett Pepper, Esq. Pepper and Nason 8 Hale Street Charleston, WV 25301 Tel: (304) 346-0361 Fax: (304) 346-1054 Email: info@PepperNason.com About Casa Garcia's Co. Casa Garcia's Co. is a restaurant operator located at Riverwalk Plaza in South Charleston, West Virginia. Casa Garcia's Co. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.W. Va. Case No. 25-20007) on January 20, 2025. In its petition, the Debtor reports estimated assets between $50,000 and $100,000 and estimated liabilities between $100,000 and $500,000. The Debtor is represented by Andrew S. Nason, Esq., at Pepper & Nason. CASTLE US: EUR554.1MM Bank Debt Trades at 40% Discount ------------------------------------------------------ Participations in a syndicated loan under which Castle US Holding Corp is a borrower were trading in the secondary market around 60.4 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The EUR554.1 million Term loan facility is scheduled to mature on January 29, 2027. The amount is fully drawn and outstanding. Castle US Holding Corporation provides database tools and software to public relations and communications professionals. CHATEAU CREOLE: Dwayne Murray Appointed as Chapter 11 Trustee ------------------------------------------------------------- David Asbach, the Acting U.S. Trustee for Region 5, asked the U.S. Bankruptcy Court for the Eastern District of Louisiana to approve the appointment of Dwayne Murray as Chapter 11 trustee for Chateau Creole Apartments, LLC. Counsel for the U.S. trustee has consulted with the following parties in interest regarding the appointment of Mr. Murray: Ryan Richmond, counsel for the company; Hank Arnold and Katie Dysart, counsel for Federal National Mortgage Association; and Leo Congeni, counsel for Damon Baldone. To the best of the U.S. trustee's knowledge, Mr. Murray's connections with Chateau, creditors and other parties-in-interest, their respective attorneys and accountants, the U.S. trustee, and persons employed in the Office of the U.S. Trustee are limited to the connections set forth in Mr. Murray's verified statement. A copy of the application is available for free at https://urlcurt.com/u?l=QL1q4F from PacerMonitor.com. About Chateau Creole Apartments Chateau Creole Apartments is primarily engaged in renting and leasing real estate properties. Chateau Creole Apartments, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 24-10608) on March 29, 2024, listing $1 million to $10 million in both assets and liabilities. The petition was signed by Damon J. Baldone as manager. Judge Meredith S Grabill presides over the case. Ryan J. Richmond, Esq. at Sternberg, Naccari & White, LLC represents the Debtor as counsel. CITYMARK CAPITAL: Roystone Wins Bid for Withdrawal of Reference --------------------------------------------------------------- Judge Tana Lin of the United States District Court for the Western District of Washington granted Plaintiff Roystone on Queen Anne LLC's motion for withdrawal of reference in the case captioned as ROYSTONE ON QUEEN ANNE LLC, a Washington Limited Liability Company, Plaintiff, v. CITYMARK CAPITAL LLC, a foreign corporation, Defendant, CASE NO. 2:24-cv-02130-TL (W.D. Wash.). The Court also immediately refers this case to Chief U.S. Bankruptcy Judge Alston for all pretrial proceedings in accordance with this Order. On Aug. 28, 2024, Roystone filed a civil complaint against Defendant Citymark Capital LLC in King County Superior Court. Roystone's state-court complaint comprised five claims: fraud, breach of contract, bad faith, tortious interference, and violation(s) of the Washington Consumer Protection Act. In big-picture terms, the state case concerns a business relationship gone bad: A financially struggling Roystone negotiated with Citymark over the latter's potential investment in Roystone. During the negotiations, Citymark sought confidential financial information about Roystone, which Roystone provided after Citymark executed a nondisclosure agreement. But the deal fell through. Several months later, Roystone filed for bankruptcy. Later events led Roystone to surmise that Citymark had never intended to consummate its investment. Roystone sued. On Oct. 4, 2024, Citymark removed the case from King County Superior Court to U.S. Bankruptcy Court, Western District of Washington. Citymark predicated removal on both bankruptcy jurisdiction under 28 U.S.C. Sec. 1334 and diversity jurisdiction under 28 U.S.C. Sec. 1332. On Nov. 20, 2024, Roystone filed the instant Motion for Withdrawal of Reference. On Dec. 4, 2024, Citymark moved to dismiss Roystone's complaint. One week later, on Dec. 11, 2024, Roystone amended its complaint against Citymark. On Jan. 9, 2025, the Bankruptcy Court held a hearing on Roystone's motion. The District Court finds that none of the causes of action depends on the bankruptcy laws. Therefore, it concludes that the action at issue is non-core. Judge Lin explains that the complicated procedural posture of the case, combined with Roystone's unorthodox position, weighs heavily in favor of having the Bankruptcy Court continue to preside over this case. As to Roystone's refusal to consent to a jury trial conducted by the Bankruptcy Court, this is not dispositive when deciding on a motion for withdrawal of a reference. Finally, this action does not raise substantive issues of bankruptcy law. She points out that delaying the effective date of withdrawal will not give rise to any undue costs or delays, even if the Court is ultimately called upon to make a final judgment, given the efficiencies of having the bankruptcy court deal with the issues in the first instance. Even though this action may not raise substantive issues of bankruptcy law, a district court may exercise its discretion not to withdraw a reference immediately where the bankruptcy court is already familiar with the relevant facts and issues and the issues triable by a jury are not yet ripe for trial. The factor of forum shopping is not relevant, as only the District Court has the power to enter final judgment on this proceeding. Therefore, while the District Court's withdrawal of the reference to bankruptcy court is appropriate, it remains prudent for the bankruptcy court to handle pretrial proceedings. Should the case require a jury trial, then the District Court will assume jurisdiction. A copy of the Court's decision dated Jan. 27, 2025, is available at https://urlcurt.com/u?l=N939de from PacerMonitor.com. CONNECT HOLDING: $2.49BB Bank Debt Trades at 16% Discount --------------------------------------------------------- Participations in a syndicated loan under which Connect Holding II LLC is a borrower were trading in the secondary market around 83.9 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $2.49 billion Payment in kind Term loan facility is scheduled to mature on October 3, 2031. The amount is fully drawn and outstanding. Connect Holding II LLC provides wireline telecommunication services. CONTAINER STORE: Set to Close Only Location in Staten Island ------------------------------------------------------------ Jessica Jones-Gorman of silive.com reports that the Container Store has announced it will be closing its only Staten Island location in New Springville, with the store set to close permanently on February 16, 2025. Shoppers have until then to purchase remaining items, the report said. Signage posted outside the store reads, "You can find all the same amazing products, including custom spaces, at containerstore.com or at any of our other nine New York and New Jersey locations." A company representative confirmed the closure via email, stating that it is not related to the Chapter 11 filing completed on January 28, 2025 but rather part of a "normal course closure." The representative did not specify whether a clearance or liquidation sale will occur, the report states. The Texas-based retailer, with approximately 100 locations across the country, filed for Chapter 11 bankruptcy protection in December. In its announcement, the company stated it needed to refinance its debt in order to "strengthen its financial position, support growth efforts, and ensure long-term profitability." The company, known for its storage and organizational products, has faced declining sales, largely due to a challenging housing market marked by high prices and rising mortgage rates. In its latest earnings report, officials raised concerns about the company's future, citing "substantial doubt" about its ability to continue operating, citing factors such as "decreased consumer spending in the store and organization category and heightened price sensitivity," the report states The Container Store in Staten Island Mall opened in 2017, occupying the space once used by the Sears automotive garage. It was the 90th location in the U.S. and the sixth in New York, according to silive. About Container Store Group Inc. Container Store Group Inc. is a company renowned for for selling closet organizers and storage solutions. Container Store Group Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex.) on December 22, 2024. In its petition, the Debtor reports assets and liabilities between $100 million and $500 million. Honorable Bankruptcy Judge Alfredo R Perez handles the case. Debtors' Legal Counsel is Timothy A. ("Tad") Davidson II, Esq., Ashley L. Harper, Esq., and Philip M. Guffy, Esq., at HUNTON ANDREWS KURTH LLP, in Houston, Texas. Debtors' Legal Counsel is George A. Davis, Esq., Hugh Murtagh, Esq., Tianjiao (TJ) Li, Esq., and Jonathan J. Weichselbaum, Esq., at LATHAM & WATKINS LLP, in New York, and Ted A. Dillman, Esq., in LATHAM & WATKINS LLP, in Los Angeles, California. Debtors' Investment Banker is HOULIHAN LOKEY CAPITAL, INC. Debtors' Claims, Noticing & Solicitation Agent is VERITA GLOBAL (Previously KURTZMAN CARSON CONSULTANTS LLC). CORREIA CONTRACTING: Loses Bid to Stay Bankruptcy Case Dismissal ---------------------------------------------------------------- In the case captioned as CORREIA CONTRACTING, LLC, Movant/Appellant, v. WILLIAM K. HARRINGTON, UNITED STATES TRUSTEE FOR REGION 1, Respondent/Appellee, Civil Action No. 24-cv-13097-GAO (D. Mass.), Judge George A. O'Toole, Jr. of the United States District Court for the District of Massachusetts denied Correia Contracting, LLC's emergency motion to stay the order of the United States Bankruptcy Court for the District of Massachusetts to dismiss its Chapter 11 bankruptcy case pending appeal. On Dec. 16, 2024, Correia Contracting filed a notice of appeal regarding the bankruptcy court's decision to dismiss the debtor's Chapter 11 bankruptcy case. On Dec. 19, 2024, the debtor-appellant filed in the District Court an emergency motion to stay the dismissal order pending resolution of the appeal. In this circumstance, granting a stay pending appeal requires the movant to satisfy a standard similar to the familiar one applied to an appeal concerning the grant or denial of a preliminary injunction: (1) likelihood of success on the merits of the appeal, (2) likelihood of irreparable harm in the absence of a stay, 4 (3) whether the balance of equities tips in movant's favor, and (4) whether the stay is consistent with the public interest. The first two elements are the most significant. The District Court finds the Debtor has failed to establish a likelihood of success on the merits of its appeal. The bankruptcy court offered two compelling reasons for dismissing the case. The first reason is that the Debtor had ample time to prove to the U.S. Trustee that there was builder's risk insurance as required by 11 U.S.C. Sec. 1112(b)(4)(c) but failed to do so. Additionally, there are important procedural requirements that the Debtor failed to satisfy, the omission of which constitutes another sufficient basis for denying the stay. The Debtor did not follow Federal Rule of Bankruptcy Procedure 8007 and Local Rule 203.8007, which ordinarily require motions to stay to be filed first in the bankruptcy court except when doing so would be "impracticable." Instead, the Debtor filed its emergency motion for stay pending appeal directly in the District Court, claiming the bankruptcy court's denial of its prior motions twice suggested that a third motion would probably be futile. A copy of the Court's decision dated Jan. 29, 2025, is available at https://urlcurt.com/u?l=rdFigK from PacerMonitor.com. 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. at DAVID G. BAKER LAW OFFICE. D DUNCAN FLORISTRY: Gets Final OK to Use Cash Collateral -------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Missouri, Southeastern Division granted D Duncan Floristry and Boutique, LLC final authorization to use cash collateral. The final order signed by Judge Brian Walsh approved the company's use of cash collateral to pay operating expenses in accordance with its budget. D Duncan is indebted to First State Community Bank on three separate loans, with a total balance of $931,965.80. The principals of the company also have two other loans with FSCB. As protection for the use of its cash collateral, First State Community Bank was granted first priority replacement liens on any post-petition assets of D Duncan's estate to the same extent and with the same validity as its interests in the estate's assets. Other creditors, including Square Financial, Forward Finance, Fundbox, Rapid Advance, and Reliant Funding, were also granted replacement liens on any post-petition assets of the estate. The replacement liens are subject to the following carve-out: (i) allowed professional fees and expenses of the company's bankruptcy counsel, not to exceed $25,000; and (ii) other allowed professional fees and expenses granted by the court. First State Community Bank can be reached through its counsel: Paul H. Berens, Esq. Bradshaw, Steele, Cochrane, Berens & Billmeyer, L.C. 3113 Independence, P.O. Box 1300 Cape Girardeau, MO 63702-1300 Telephone: (573) 334-0555 Facsimile: (573) 334-2947 Email: PaulB@BradshawSteele.com About D Duncan Floristry D Duncan Floristry and Boutique, LLC is a company based in Cape Girardeau, Mo., which creates floral designs for weddings, anniversaries, funerals and birthdays. D Duncan filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Mo. Case No. 24-10677) on December 12, 2024, with $1,098,900 in assets and $1,461,129 in liabilities. Seth Albin of Summers Compton Wells, Attorneys At Law serves as Subchapter V trustee. Judge Brian C. Walsh oversees the case. The Debtor is represented by David M. Dare, Esq., at Herren, Dare & Streett. D. RUSSELL THOMAS: Taps Dunham Hildebrand Payne Waldron as Counsel ------------------------------------------------------------------ D. Russell Thomas, P.C. seeks approval from the U.S. Bankruptcy Court for the Middle District of Tennessee to hire Dunham Hildebrand Payne Waldron, PLLC as counsel. The firm will provide these services: a. rendering legal advice with respect to the rights, power, and duties of the Debtor in the management of his assets; b. investigating and, if necessary, instituting legal action on behalf of the Debtor to collect and recover assets of the estate of the Debtor; c. preparing all necessary pleadings, orders and reports with respect to this proceeding and to render all other necessary or proper legal services; d. assisting and counseling Debtor in the preparation, presentation, and confirmation of a plan of reorganization; e. representing Debtor as may be necessary to protect its interests; and f. performing all other legal services that may be necessary and appropriate in the general administration of Debtor's estate. The firm's hourly rates are: Attorneys $400 per hour Paralegals $175 per hour The firm has received a total of $10,000 as a retainer. As disclosed in the court filings, Dunham Hildebrand Payne Waldron does not believe it represents any interest adverse to Debtor or its estate and is believed to be a "disinterested person" under Bankruptcy Code Secs. 101(14) and 327. The firm can be reached through: Gray Waldron DUNHAM HILDEBRAND PAYNE WALDRON, PLLC 9020 Overlook Boulevard, Suite 316 Brentwood, TN 37027 Tel: (629) 777-6519 Email: gray@dhnashville.com About D. Russell Thomas, P.C. D. Russell Thomas, P.C. a professional corporation operating in Murfreesboro, Tennessee. D. Russell Thomas, P.C. sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Tenn. Case No. 25-00027) on January 3, 2025 In its petition, the Debtor reports estimated assets up to $50,000 and estimated liabilities between $500,000 and $1 million. Honorable Bankruptcy Judge Nancy B. King handles the case. Denis Graham (Gray) Waldron, Esq. of Dunham Hildebrand Payne Waldron, PLLC represents the Debtor as counsel. DEALER SALES: Court Extends Cash Collateral Access to Feb. 11 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division issued a second interim order extending Dealer Sales Solutions LLC's authority to use cash collateral from Jan. 14 to Feb. 11. The second interim order authorized the company to use cash collateral to pay the expenses set forth in its budget, which shows total operating expenses of $71,310 for January, $71,962 for February, and $72,150 for March. The U.S. Small Business Administration, a senior creditor, and SellersFunding Corp will have a post-petition lien on the cash collateral with the same validity, priority, extent, and value as their respective pre-bankruptcy liens. As additional protection, the second interim order approved the monthly payments of $3,113.75 to SellersFunding until the loan is paid in full or until confirmation of a Chapter 11 plan. The next hearing is scheduled for Feb. 11. About Dealer Sales Solutions Dealer Sales Solutions LLC is primarily engaged in the sale of motor vehicle supplies, accessories, tools, equipment, and new motor vehicle parts. Dealer Sales Solutions sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-06734) on December 11, 2024, with total assets of $457,160 and total liabilities of $2,890,604. Daniel A. Rowland, chief executive officer, signed the petition. Judge Grace E. Robson oversees the case. The Debtor is represented by: Jeffrey S. Ainsworth, Esq. BransonLaw, PLLC 1501 E. Concord Street Orlando, FL 32803 Tel: 407-894-6834 Email: jeff@bransonlaw.com DENNIS A. PERRY: Alden Liable for $586,752.36 in LUPTCL Damages --------------------------------------------------------------- Judge Meredith S. Grabill of the United States Bankruptcy Court for the Eastern District of Louisiana makes findings of fact and conclusions in the following adversary cases: (1) PERRY ASSOCIATES, LLC; CRESCENT CITY PROPERTY REDEVELOPMENT ASSOCIATION, LLC; CRESCENT CITY MEDICAL SERVICES, INC.; PRIVATE CONNECTION AUTO, LLC; 4330 STATE STREET DRIVE, LLC; & 1100 SOUTH JEFFERSON DAVIS PARKWAY, LLC, PLAINTIFFS, V. DENNIS A PERRY & DEALS ON WHEELS, LLC, DEFENDANTS, ADV. NO. 21-1002; and (2) DENNIS PERRY, PLAINTIFF, V. DARRYL FISH, DEFENDANT, ADV. NO. 21-1024 The parties to the numerous contested matters filed in the bankruptcy case, as well as the claims and counterclaims asserted in the two adversary proceedings, agreed to bifurcate the resolution of those disputes between liability and damages. After a four-day trial on the merits of all of the disputes, this Court issued an Amended and Superseding Memorandum Opinion and Order detailing the history and timeline of events occurring among the parties and memorializing the Court's findings of liability. The Court sustained claim objections filed by Dennis Perry and disallowed the following Proofs of Claim filed against the estate in Perry's bankruptcy case: (i) Proof of Claim No. 22 filed by Darryl Fish; (ii) Proof of Claim No. 25 filed by Dr. Alden; (iii) Proof of Claim No. 26 filed by Dr. Alden; (iv) Proof of Claim No. 27 filed by Private Connection Auto LLC; (v) Proof of Claim No. 28 filed by Private Connection Auto LLC; and (vi) Proof of Claim No. 29 filed by Crescent City Property Redevelopment Association, LLC. The Court sustained in part and overruled in part Perry's objection to Proof of Claim No. 31, filed by Dr. William Alden, and allowed a general unsecured claim against the estate in the amount of $6,700. The Court further sustained in part and overruled in part Perry's objection to Proof of Claim No. 32, filed by Dr. Alden, and allowed a general unsecured claim against the estate in the amount of $12,000. The Court also granted certain motions filed by Perry: (i) Motion To Terminate Joint Venture Agreements in Order To Trigger Sale Provisions and Motion for Accounting, (ii) Debtor's Motion To Avoid Quit Claim Deed, and (iii) Motion To Cancel Collateral Mortgage, And the Court denied as moot the Debtor's Motion To Reject Joint Venture Agreement on 9th Street as Executory Contract, and denied the Motion for Relief from the Automatic Stay, filed by Dr. Alden. The Court consolidated claims asserted in the Alden Creditors Adversary with the contested matters initiated by the objections to the proofs of claim. Thus, the Court's rulings on those claim objections also resolved the claims asserted by the Alden Creditors in that adversary proceeding. The Court further ruled in the Liability Opinion in favor of Perry on all counterclaims asserted by him in his Reconventional Demand, finding that Dr. Alden is liable to Perry for damages for: (i) fraud committed under article 1953 of the Louisiana Civil Code and (ii) violation of the Louisiana Unfair Trade Practices and Consumer Protection Law, LA. REV. STAT. ANN. Secs. 51:1401–1428. The Court subsequently held a two-day evidentiary hearing on April 15 and April 16, 2024, solely on the quantum of damages that should be assessed, if any, against Dr. Alden and in favor of Perry for Dr. Alden's commission of fraud against Perry and his violations of the LUPCPL. It considered testimony from the following witnesses: Dennis A. Perry; Rebecca Ahysen; Gerard Reidling; John Eason; Gilberto Eyzaguirre; Ciera Jenkins; Michael Flash; Patrick Gros; and Darryl Fish. The parties stipulated at the Quantum Trial to the qualification of Patrick Gros as an expert in accounting and financial analysis. The Court finds Perry to be a generally credible and earnest witness. He appeared to answer questions posed to him truthfully to the best of his recollection. The Court affords significant weight to Perry's testimony regarding: (i) his business losses caused by Dr. Alden's fraudulent actions, (ii) litigation expenses related to disputes with Dr. Alden, and (iii) his own mental and emotional distress, suffering, and changes in quality of life. The Court finds the expert testimony of Patrick Gros to be credible on the issues of financial losses experienced by Perry as a result of Dr. Alden's fraudulent actions. It gives much weight to Gros's testimony at trial in connection with his expert report. Perry alleges that he suffered injuries due to Dr. Alden's egregious, unethical, and fraudulent actions, including: (i) loss of profits and/or excess business losses, (ii) incurrence of attorneys' fees and litigation costs, and (iii) infliction of severe psychological and emotional distress. The Court finds that Dr. Alden's fraudulent transactions intentionally diverted Perry's resources and placed undue financial strain on Perry. The Court finds that Perry suffered actual monetary losses as a result of Dr. Alden's actions. Specifically, the Court finds that Dr. Alden caused Perry to suffer: (i) excess losses at Deals on Wheels in 2017; (ii) losses on automobile inventory due to forced sales or surrender of automobile inventory; (iii) lost rent on two immovable properties that Dr. Alden fraudulently encumbered; and (iv) payments to Dr. Alden on a debt that had already been satisfied. Although Perry and Dr. Alden engaged in relatively small, one-off financial transactions between 2012 and 2015, the transactions leading to all of the disputes between Perry and Dr. Alden started in 2015 with the NextGear Promissory Note and the execution of the Collateral Mortgage. Perry's tax returns from 2014 through 2020 show an abnormally high loss in 2017 due to losses at Deals on Wheels. Given the findings of fact herein and the Liability Opinion, in which this Court found that Dr. Alden's egregious, unethical, and fraudulent conduct toward Perry constituted violations of the LUPCPL, the Court concludes that Dr. Alden is personally liable to Perry under the LUPCPL as follows: For loss of profits and/or excess losses on multiple business ventures, Dr. Alden is liable to Perry for damages in the amount of $354,376.40. For infliction of severe psychological and emotional distress, Dr. Alden is liable to Perry for damages in the modest amount of $5,000. Because this Court has awarded general damages for violation of the LUPTCL, the Court is required to award reasonable attorneys' fees and costs. The Court finds that Dr. Alden is liable to Perry for attorneys' fees in the amount of $209,496.04 and costs in the amount of $17,879.92 for violations of LUPCPL. The Court entered n Order as follows: Dr. William Alden is liable to Dennis Perry for damages for violations of the Louisiana Unfair Trade Practices and Consumer Protection Law, LA. REV. STAT. ANN. Secs. 51:1401–1428, in the total amount of $586,752.36. The damages award against Dr. William Alden in the amount of $586,752.36 shall be payable by Dr. William Alden to Dennis Perry within sixty days of this Order The Court grants post-judgment interest to Perry and the rate that will be in effect on the date of the entry of the judgment will be 4.19% per annum. This Court's award of post-judgment interest will accrue during the period from the date the judgment is rendered until the date the judgment is satisfied. The Court will hold a hearing on April 3, 2025, at 10:00 a.m. in person at the United States Bankruptcy Court, 500 Poydras Street, Courtroom B-709, New Orleans, Louisiana 70130 to assess compliance with this Order and, in the event of non-compliance, to assess whether additional action should be taken by the Court to ensure compliance with this Order. A copy of the Court's decision dated Jan. 28, 2025, is available at https://urlcurt.com/u?l=R5Nsii from PacerMonitor.com. Dennis A. Perry filed for Chapter 11 bankruptcy protection (Bankr. E.D. La. Case No. 20-11986) on November 30, 2020, listing under $1 million in both assets and liabilities. The Debtor is represented by Robin DeLeo, Esq. DIAMOND COMIC: Taps Raymond James & Associates as Investment Banker ------------------------------------------------------------------- Diamond Comic Distributors seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ Raymond James & Associates, Inc. as investment banker. The firm will render these services: a. review and analyze the Debtors' business, operations, properties, financial condition and Interested Parties; b. evaluate the Debtors' debt capacity, including by advising the Debtors generally as to available financing and assist in the determination of an appropriate capital structure; c. evaluate potential Transaction alternatives and strategies; d. prepare documentation within Raymond James's expertise that is required in connection with a Transaction; e. identify Interested Parties regarding one or more particular Transactions; f. contact Interested Parties on behalf of the Debtors and with prior written consent by the Debtors, which Raymond James, after consultation with the Debtors' management, believes meet certain industry, financial, and strategic criteria and assist the Debtors in negotiating and structuring a Transaction; and g. advise the Debtors as to potential Business Combination Transactions. The firm will be compensated as follows: i. Monthly Advisory Fee and Database Expense Amount. Upon the execution of the Engagement Letter and on the first business day of every month thereafter during the term of the Engagement Letter, the Debtors shall pay Raymond James an amount equal to $50,000 (the "Advisory Fee"). Additionally, the Debtors will pay Raymond James a flat expense charge of $5,000 for Raymond James's access to electronic financial databases pertinent to this engagement, upon the Debtors' execution of the Engagement Letter (the "Database Expense Amount"). ii. Financing Transaction Fee. If, during the Term or during the twelve (12) months following any termination of the Engagement Letter (the "Tail Period"), any Financing Transaction is agreed upon and subsequently closes (the "Financing Transaction Closing"), whether on a stand-alone basis or to consummate any other Transaction, the Debtors shall pay Raymond James immediately and directly out of the proceeds of the placement, at the Financing Transaction Closing of each Financing Transaction as a cost of sale of each Financing Transaction, a non-refundable cash transaction fee (the "Financing Transaction Fee") equal to the sum of: 1) 1.5 percent of the Proceeds of any senior secured debt, 2) 3 percent of the Proceeds of all other debt, and 3) 6 percent of equity or equity-linked securities raised. Notwithstanding the foregoing, in the event that the incumbent senior secured lender provides debtor-in-possession financing (the "DIP Financing"), the debtor-in-possession financing fee (the "DIP Financing Fee") shall equal $150,000, one-half of which shall be paid upon the closing of the DIP Financing and one-half of which shall be paid upon entry of a final order approving the DIP Financing and shall be fully credited against the Business Combination Transaction Fee. iii. Business Combination Transaction Fee. If, during the Term or during the Tail Period, any Business Combination Transaction closes (the "Business Combination Closing" and together with any Financing Transaction Closing, each a "Closing"), regardless of when such Business Combination Closing occurs, the Debtors shall pay Raymond James immediately and directly out of the proceeds at the Business Combination Closing, as a cost of sale of such Business Combination Transaction, a non-refundable cash transaction fee (the "Business Combination Transaction Fee" and together with any Financing Fee, each a "Transaction Fee") based upon the Transaction Value. The Business Combination Transaction Fee shall be equal to the greater of (i) $1,250,000 or (ii) the sum of (A) 3.5 percent of Transaction Value up to $35,000,000 and (B) five percent of Transaction Value greater than $35,000,000. v. Expense Reimbursement. Regardless of whether a Transaction is consummated, the Debtors will reimburse Raymond James, upon the earlier of (a) thirty (30) days of the Debtors' receipt of an invoice from Raymond James or (b) the Closing of any Transaction, by wire transfer of immediately available funds via wire transfer instructions set forth in Raymond James's invoice for such amounts to the Debtors, for all expenses (including, without limitation, the fees and disbursements of its outside legal counsel) reasonably incurred by Raymond James in connection with entering into and performing the services pursuant to this Agreement ("Expenses"). The Debtors paid Raymond James $150,000 in fees and $16,000 as reimbursement for Raymond James's actual and estimated expenses. As disclosed in a court filing, Raymond James & Associates is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Geoffrey Richards Raymond James & Associates, Inc. 880 Carillon Parkway St. Petersburg, FL 33716 Phone: (727) 567-1000 About Diamond Comic Distributors Founded in 1982, Diamond Comic Distributors offers a multi channel platform of publishing, marketing and fulfillment services, coupled with an unparalleled global distribution network for its retailers, publishers and vendors. Diamond Comic Distributors sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 25-10308) on January 14, 2025. Honorable Bankruptcy Judge David E. Rice handles the case. DIGITAL GRAPHICS: Court Extends Cash Collateral Access to March 11 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, extended Digital Graphics Plus, LLC's authority to use cash collateral from Jan. 14 to March 11. The interim order approved the use of cash collateral to pay U.S. trustee quarterly fees and operating expenses set forth in the company's projected budget. The budget shows total projected expenses of $53,974 from January to March 2025. The U.S. Small Business Administration, a secured creditor, will be granted a replacement lien on cash collateral to the same extent and with the same validity and priority as its pre-bankruptcy lien. Digital Graphics Plus was ordered to maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the secured creditor. The next hearing is scheduled for March 11. About Digital Graphics Plus Digital Graphics Plus, LLC provides graphic design and printing services. Its offerings typically include a range of products such as promotional materials, custom signage, marketing collateral, and digital solutions aimed at enhancing branding and visibility for businesses. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-05422) on October 4, 2024, with up to $50,000 in assets and up to $500,000 in liabilities. Judge Grace E. Robson oversees the case. The Debtor is represented by: Jeffrey S. Ainsworth, Esq. BransonLaw PLLC 1501 E. Concord Street Orlando, FL 32803 Tel: 407-894-6834 Email: jeff@bransonlaw.com DIOCESE OF ROCHESTER: Court Stays Sexual Abuse Suits ---------------------------------------------------- Alex Wittenberg of Law360 reports that on January 30, 2025, a New York bankruptcy judge granted a stay on sexual abuse claims filed under the state's Child Victims Act against the Roman Catholic Diocese of Rochester, citing a 2022 Second Circuit ruling that confirms such legal actions against debtors are barred by bankruptcy's automatic stay. About The Diocese of Rochester The Diocese of Rochester in upstate New York provides support to 86 Roman catholic parishes across 12 counties in upstate New York. It also operates a middle school, Siena Catholic Academy. The diocese has 86 full-time employees and six part-time employees and provides medical and dental benefits to an additional 68 retired priests and two former priests. The diocese generated $21.88 million of gross revenue for the fiscal year ending June 30, 2019, compared with a gross revenue of $24.25 million in fiscal year 2018. The Diocese of Rochester filed for Chapter 11 bankruptcy protection (Bankr. W.D.N.Y. Case No. 19-20905) on Sept. 12, 2019, amid a wave of lawsuits over alleged sexual abuse of children. In the petition, the diocese was estimated to have $50 million to $100 million in assets and at least $100 million in liabilities. Bond, Schoenec & King, PLLC and Bonadio & Co. serve as the diocese's legal counsel and accountant, respectively. Stretto is the claims and noticing agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the diocese's Chapter 11 case. Pachulski Stang Ziehl & Jones, LLP, and Berkeley Research Group, LLC, serve as the committee's legal counsel and financial advisor, respectively. DIRECTV FINANCING: Moody's Rates New 1st Lien Loan & Sec. Notes B1 ------------------------------------------------------------------ Moody's Ratings has assigned B1 ratings to DIRECTV Financing, LLC's (DIRECTV) proposed $750 million senior secured first lien term loan B due February 2031 and $1.75 billion senior secured notes due February 2031. The net proceeds from the aggregate $2.5 billion of proposed issuances will be used to fund a $1.625 billion dividend to the company's shareholders with the remainder expected to primarily be used to pay down a like amount of existing debt outstanding when optimal. All other ratings including the company's B1 corporate family rating and negative outlook are unchanged. RATINGS RATIONALE DIRECTV's B1 CFR reflects the company's more aggressive financial policy as specifically evidenced by its decision to pursue a $1.625 billion debt-funded dividend, which is a negotiated component of an agreement by TPG Capital (TPG) to purchase all of AT&T Inc.'s (AT&T, Baa2, stable) remaining 70% equity stake in DIRECTV. This debt-funded dividend represents a significant change from DIRECTV's historical financial policy objectives and Moody's prior expectations and will elevate debt leverage above the company's previous modest target of around 1.25x (Moody's adjusted). Moody's currently expect DIRECTV's pro forma debt leverage (Moody's adjusted) to be around 1.9x at year-end 2024 before increasing to around 2.0x at year-end 2025. Debt leverage (Moody's adjusted) could be lower than these levels if continued cost efficiencies are more readily realized and more favorable operating results are achieved under evolving business strategy changes and enhancements. Maintenance of steady EBITDA margins in the mid-20% area and the potential for consistent debt pay downs with all available discretionary free cash flow are a key consideration in support of DIRECTV's credit profile. On an operational level, subscriber losses make continued cost cutting a critical part of ensuring that DIRECTV is able to maintain and optimize cash flow generation at levels sufficient to fund steady tax-based cash distributions to its owners given the company's legal structure as a limited liability company. Operating cost efficiency efforts have targeted G&A reductions, including customer service operations and the streamlining of customer acquisition costs. Disciplined maintenance capital investing and targeted growth capital investments are also a part of this focus on optimizing cash flow generation. DIRECTV's total subscriber base remains in steady decline at all segments except the company's small DIRECTV via Internet segment. DIRECTV via Satellite subscribers contracted at a 17.5% rate on a year-over-year basis through September 30, 2024 to 6.7 million subscribers, slightly less than the Q2 2024 pace but still at a very high contraction level. These negative fundamental subscriber trends have resulted in DIRECTV via Satellite subscribers declining by almost 60% since a year-end 2019 total of 16.0 million. The company still has currently sizable overall scale of 9.7 million subscribers in total after adding in 3.0 million subscribers from the DIRECTV via Internet, DIRECTV STREAM and U-verse business categories. DIRECTV's substantial programming content distribution and spend enables some negotiating advantage in content provider contract discussions versus smaller video distribution peers. DIRECTV has conceded that it cannot predict unexpected sizable falloffs of subscribers and can only operate under limited visibility and on a business as usual basis largely by extrapolating current decline trends over the near to intermediate term. Such limited visibility negatively impacts financial flexibility, especially if the current pace of negative industry subscriber trends and churn were to materially worsen. The company faces growth pressures as revenue and profits are generated from its US linear pay television distribution business, which is facing negative, secularly-driven trends. These negative trends include consumers moving to direct-to-consumer video-on-demand services and terminating traditional linear bundled pay TV services such as those provided by DIRECTV. The company needs to urgently evolve and transition its current linear bundled television distribution exposure, strengthen its competitive positioning and significantly slow the pace of revenue and subscriber contraction through innovative offerings. On September 24, 2024 DIRECTV drew $468 under its $500 million revolving credit facility due August 2028, the full amount then available given $32 million in letters of credit outstanding. This $468 million drawdown and balance sheet cash were invested into a $500 million term loan issued by DISH DBS Issuer LLC, an unrestricted subsidiary of DISH DBS Corporation (DBS). DBS is a wholly-owned subsidiary of DISH Network Corporation, which is a subsidiary of EchoStar Corporation (Caa2 negative). Approximately $460 million of this $500 million term loan was sold by DIRECTV before year-end 2024 with proceeds used to partially pay down the outstanding revolver draw except for outstanding letters of credit; the remaining $40 million portion is expected to be sold during the quarter ending March 31, 2025 with proceeds used to pay down outstanding revolver balances. As such, Moody's expect DIRECTV to have a good liquidity profile going forward, supported by solid free cash flow generation and full availability under its $500 million revolving credit facility due August 2028 excluding any outstanding letters of credit. The company also had cash on the balance sheet of $190 million as of September 30, 2024. Moody's expect that the company will maintain cash balances at sufficient levels to operate its business. The company has already fully retired TPG Capital's (TPG) senior preferred equity and AT&T's junior preferred equity. While the term loan maturing in August 2027 no longer amortizes at 9% annually due to a voluntary prepayment funded with proceeds from a term loan maturing in August 2029, the 2029 term loan does amortize at 9% annually and the proposed new 2031 term loan will amortize at 10% annually. Other than that, the company's existing term loans and proposed new term loan have the same terms, including a 50% excess cash flow sweep with first lien net leverage-based step-downs to 25% and 0%. The excess of the company's free cash flow after tax-based cash distributions to equity holders and after any required debt repayments will likely be applied in an optimal way based on DIRECTV's amended and, in Moody's view, more aggressive financial policy. After making tax-based cash distributions to equity holders, the company could use its excess free cash flow to make discretionary dividend distributions to the company's shareholder(s) or reduce absolute debt balances outstanding to better withstand secular decline pressures on its overall credit metrics. The revolving credit facility due 2028 includes a springing first lien net leverage ratio covenant of 2.25x which is tested when more than 35% of the revolver is drawn. The revolver also has a springing maturity to any remaining August 2027 debt maturities, if outstanding. Moody's expect the company to maintain sufficient cushion under this covenant over Moody's forward outlook period. DIRECTV's ESG Credit Impact Score of CIS-4 reflects governance risks associated with a more aggressive financial policy which includes plans for a $1.625 billion debt-funded dividend, higher debt leverage and full private equity ownership. DIRECTV will be fully private equity owned under a negotiated equity stake sale by 70% owner AT&T. Moody's believe that under AT&T's historical influence DIRECTV's financial policies were guided toward being more meaningfully conservative in scope. The successful evolution of the company's go-forward business strategy remains unclear in terms of its linear bundled television distribution exposure. DIRECTV's management has a three-year-plus record operating as a standalone company since its separation from AT&T in 2021. The board of directors lacks independence because its four independent directors (out of nine total) are non-voting members only. Until TPG's purchase of AT&T's 70% economic stake, AT&T and TPG share equal voting control. The negative outlook reflects the potential for continuing elevated levels of subscriber declines over the next few quarters due to accelerating secular pressures on linear bundled television distribution in the US. The negative outlook also reflects uncertainty regarding the nature of the financing that will enable the purchase of AT&T's stake in DIRECTV, as well as the potential for more aggressive financial policy under the company's 100% ownership by a private equity firm. As the synergy-driven value creation potential of an acquisition of DBS dissipates quickly with the passage of time following a November 2024 deal termination, the rekindling of acquisition discussions are viewed as unlikely by DIRECTV management. However, under the remote chance that an agreement can be reached Moody's would expect more elevated debt leverage (Moody's adjusted) under a successful combination with DBS, and this could have negative ratings implications given the uncertainty of end market conditions at the time of such a potential future acquisition close. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the secular pressures causing substantial subscriber declines within three of the company's four businesses (DIRECTV via Satellite, DIRECTV STREAM and U-Verse), ratings are constrained at the B1 CFR level and therefore an upgrade is unlikely. However, over time an upgrade could occur if the company invests in new sustainable businesses such that it generates steady and material revenue growth and continues to maintain low debt leverage (Moody's adjusted). Given industry secular pressures, ratings could be downgraded if the pace of subscriber declines at DIRECTV via Satellite does not slow over the next several quarters to nearer a low double-digit contraction pace on a year-over-year basis before beginning to flatten to levels necessary to facilitate both debt reduction and debt leverage (Moody's adjusted) sustained at a consistent range below 1.75x. Additional ratings pressure could result if management further amends its financial policy to a more aggressive posture or if liquidity was insufficient to address near term debt maturities and the cash needed to fund its business for the next 18 months. The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. Headquartered in El Segundo, CA, DIRECTV Financing, LLC is a US pay TV distributor with the bulk of its subscribers accessing the company's product via DBS. DIRECTV had approximately 9.7 million subscribers and $19.7 billion in revenue for the latest 12 months period ending September 30, 2024. Currently, the company's majority economic shareholder is AT&T and its sole minority shareholder is TPG; voting control is split on a 50/50 basis. E.W. SCRIPPS: Fitch Lowers LongTerm IDR to 'CCC' ------------------------------------------------ Fitch Ratings has downgraded The E.W. Scripps Company's (Scripps) Long-Term Issuer Default Rating (IDR) to 'CCC' from 'B', due to constrained liquidity and increased refinancing risk. The senior secured issue rating was downgraded to 'B-' from 'BB' with a Recovery Rating of 'RR2' from 'BB'/'RR1'. Additionally, the senior unsecured issue ratings were downgraded to 'CC'/'RR6' from 'B+'/'RR3'. The downgrades reflect debt maturities becoming current within a year and a diminishing likelihood of smooth refinancing in a slower, non-political year, heightening the risk of a distressed debt exchange (DDE). Elevated two-year average EBITDA leverage, due to a prolonged advertising downturn and higher 2023 costs, is partially offset by anticipated 2024 election year gains. However, declining cable subscribers and a weakening advertising market add pressure. Scripps faces $1.3 billion of debt maturities shortly, starting with the revolver and Term Loan B-2 in 2026 and the unsecured notes in 2027. Limited capital market access at current levels and strained liquidity impact financial flexibility. Key Rating Drivers Heightened Refinancing and DDE Risk: Scripps faces approximately $1.3 billion in debt maturities over the next two years, with the revolving credit facility and the $723 million term loan B due this year, followed by $426 million of 5.875% unsecured notes maturing in July 2027. Although the revolving credit facility provides the company with over $400 million of availability, it expires on Jan. 7, 2026, challenging Scripps' liquidity position in a year with no major global media events and evolving secular industry headwinds. The 2025 and 2026 debt maturities are challenges, as a comprehensive refinancing may result in contingent negotiations among secured and unsecured lenders. This in turn can increase the risk of a distressed debt exchange as debt maturities approach. Unsustainable Capital Structure; weakening FCF: During the last acquisition in 2021, Scripps funded the transaction with a mix of cash and $1.85 billion in incremental secured and unsecured debt, and $600 million in preferred equity from Berkshire Hathaway. This significantly increased gross leverage (including the preferreds) to over 6.0x at the closing of the transaction. Since then, the company has focused on deleveraging via FCF generation, expecting higher-margin gains that did not materialize, as the sector faced a prolonged advertising recession, particularly in the national market, over the last four years. This was exacerbated by the macroeconomic impact post-pandemic, accentuated declines in TV cable subscribers as digital streaming platforms consolidated as a solid alternative for cable networks. The shrinking cable subscriber base also impacted the retransmission ecosystem. Sluggish National Advertising Market: The national advertising market has experienced a significant deceleration over the last four years, driven by a high interest rate environment post-pandemic, significantly limited national advertising budgets while facing stronger competition from alternative digital distribution media, and eroding market share from the national advertising market. High Exposure to National Advertising: Post-pandemic the digital advertising products and solutions solidified their position in the market offering more precise and effective targeting for national campaigns than traditional linear media. As a result, key accounts for national advertisers in the automotive, travel, retail, and financial services sectors have not returned to the national advertising market at pre-pandemic levels, significantly undermining Scripps' national advertising performance relative to other peers in the sector with a more balanced profile of national and local media. Retrans Revenue Peaking; Expected Decline: Fitch expects the consistent growth of the high-margin retransmission business might be peaking given the increasing cost structure of cable networks, and as the erosion of its subscriber base continues, with subscribers opting for alternative video content distributors. This trend will increase Scripps' dependence on core advertising, reflecting a more volatile operating profile. Industry Headwinds and Increasing Competition: The diversified media industry has faced significant macroeconomic and operating challenges over the past four years. This culminated in a linear advertising recession from 2H22 into 4Q23 and the writers' and actors' strikes in 2023, which affected content creation. Excluding political advertising demand, the advertising market, both local and national, had inconsistent performance in 2024, with a sluggish national market coupled with a resilient but weaker local performance, accentuating a potential trend as Fitch enters an off-political cycle year. Derivation Summary Scripps' 'CCC' rating reflects the company's limited liquidity, accelerating secular challenges, declining profitability, and sustained elevated leverage. Fitch also notes the refinancing risk over the next 18 to 24 months, as the company faces $1.3 billion in secured and unsecured debt maturities, heightening refinancing risk during a non-political year. The company's profitability and financial flexibility have been challenged by weaker-than-expected national advertising spending and increasingly higher TV cable churn rates, partially offset by resilient local advertising demand and a consistent but decelerating retransmission business. Key Assumptions - Core advertising declines in the high-single digits in 2025, as a result of a slower demand in both local and national during a non-political year , modestly rising in 2026 by low single digits, and then gradually growing at a low to mid-single digits by the end of 2028 capitalizing on the operating resilience of its local advertising operations offset with ongoing secular pressures of the retrans and networks businesses. - For 2026 and 2028, political revenues of around $270 million per election year. - Retransmission and carriage revenue generation is expected to face significant secular challenges primarily driven by increasingly higher tv cable churn rates due to increasing popularity of streaming services, reflecting a declining trend at low-single-digit pace over the next four years. - Scripps Network revenue grows at low single digits during the initial part of the projection but then gradually declines at a low single-digit pace by the end of the projected period driven by lower rate of renewal over the last three years of the rating horizon. - EBITDA margins fluctuate, reflecting even-year political revenues but improving due to a mix shift toward higher-margin retransmission revenue and an improved cost structure resulting in a margin fluctuating between 15% and 23% throughout the rating horizon. Other Assumptions - $210 million of gross proceeds from the divestiture of certain assets. - Capex intensity at 3.0% of total revenue, annually. - Refinancing of upcoming maturities at a higher cost. Recovery Analysis The recovery analysis assumes that Scripps would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. EBITDA Scripps' going-concern EBITDA is based on pro forma LQ8A EBITDA. Fitch assumes post-bankruptcy operating performance emergence under stress due to consistent and increasingly higher declines in TV cable subscribers, a weakened cable network position to effectively manage the cost structure of the retrans segment, impacting revenue and operating profitability, while dealing with sluggish advertising markets. Fitch expects traditional mediums, including television, will again be disproportionately affected by the pullback in advertising and increasingly higher competition from alternative mediums. Fitch updated Scripps' going-concern LQ8A EBITDA to $400 million from $525 million to capture accelerated linear market share declines driven by weaker demand from national brands and local advertisers and ongoing declines in the retrans and network segments, which Fitch does not expect the company to regain. Multiple Fitch employs a 5.5x distressed enterprise value multiple reflecting the value present in the company's Federal Communications Commission licenses in small- and medium-sized U.S. markets. This multiple is in line with the median telecom, media and technology emergence enterprise value/EBITDA multiple of 5.5x. The analysis also incorporates the following: - Public trading enterprise value/EBITDA multiples typically from 8.0x to 11.0x-- Recent M&A transaction multiples of 7.0x to 9.0x including synergies (Gray Television acquired Raycom Media for $3.6 billion in January 2019 including $80 million of anticipated synergies, or 7.8x; Apollo Global Management, LLC acquired Cox Media for $3.1 billion in February 2019 before synergies, or 9.5x; Nexstar Media Group acquired Tribune Media Company in September 2019 for $7.2 billion, including the assumption of debt and $185 million of outlined synergies, or 7.5x; Nexstar then sold 22 stations to three buyers as required under the terms of the Tribune acquisition for a blended 7.5x). - Scripps announced the acquisition of 15 television stations from Cordillera Communications in October 2018 for $521 million, or 8.3x, including $8 million in outlined synergies; the acquisition of eight stations from Nexstar in March 2019 for $580 million at an 8.1x multiple of average two-year EBITDA excluding the New York City CW affiliate, WPIX. Fitch estimates an adjusted, distressed enterprise valuation of roughly $2.2 billion. Debt Fitch assumes a fully drawn revolver ($585 million) in its recovery analysis as credit revolvers are tapped as companies are under distress. Scripps had $2.4 billion in senior secured term loans and notes, $818 million in unsecured debt, and $600 million of preferred equity. The recovery analysis results in a 'RR2' for secured first-lien debt reflecting the superior seniority and ranking in the capital structure, resulting in a two-notch uplift from the IDR of 'CCC' to an issue-level rating of 'B-'. The recovery analysis results in an 'RR6' for the senior unsecured notes, reflecting poor recovery prospects due to its unsecured basis and junior ranking position against senior secured lenders, resulting in a two-notch downgrade from the IDR of 'CCC" to an issue-level rating of 'CC'. Fitch does not rate the preferred equity. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Inability to refinance the 2026 and 2027 debt maturities, or an agreement with lenders that is considered a distressed debt exchange as defined by Fitch's Corporate Rating Criteria. - Further liquidity constraints. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful refinancing of upcoming debt maturities, including the revolving credit facility and the $723 million Term Loan B, both maturing in 2026, as well as $426 million of 5.875% unsecured notes maturing in 2027, while avoiding a distressed debt exchange, as defined by Fitch's Corporate Rating Criteria. - Demonstrated execution of operational improvements resulting in EBITDA margin expansion, leading to a stronger free cash flow (FCF) and improved liquidity position. Liquidity and Debt Structure Constrained Liquidity: As of 3Q24, Scripps reported $35 million in cash and cash equivalents, with approximately $403 million available under its revolving credit facility, net of $7 million in outstanding letters of credit, totaling $438 million in liquidity. The revolving credit facility is set to expire on Jan. 7, 2026, marking the company's next debt maturity. Scripps plans to fully repay the revolver's outstanding balance in 4Q24 through internal free cash flow generation. The company's upcoming debt maturities include the Term Loan B-2 tranche, due May 1, 2026, with about $723 million outstanding. Following this is the 5.875% senior unsecured notes, with $426 million due on July 15, 2027, and the Term Loan B-3 tranche, with $545 million due on Jan. 7, 2028. Both Term Loan B tranches and the revolving credit facility are governed under the same credit agreement, with annual term loan amortization totaling approximately $19 million. Fitch anticipates positive free cash flow generation, averaging around $160 million annually, with minimal reliance on the revolver. The revolving credit facility maintains a maximum first lien net leverage covenant, stepping down from 5.00x to 4.50x by late 2025. As of Sept. 30, 2024, Scripps complied with its financial covenant. Issuer Profile Scripps is the fourth-largest TV broadcaster in the U.S. with 60 stations in 40+ markets, serving audiences through a diversified portfolio of local and national media brands. 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 ----------- ------ -------- ----- The E.W. Scripps Company LT IDR CCC Downgrade B senior secured LT B- Downgrade RR2 BB senior unsecured LT CC Downgrade RR6 B+ EDGEWATER GENERATION: S&P Affirms 'BB-' Senior Secured Debt Rating ------------------------------------------------------------------ S&P Global Ratings affirmed its 'BB-' rating on Edgewater Generation LLC's term loan B (TLB) due August 2030. The '2' recovery rating is unchanged, indicating its expectation for substantial (70%-90%; rounded estimate: 75%) recovery in a default scenario. Based on S&P's view of industry factors, it forecasts a minimum and median debt service coverage ratio (DSCR) of 1.59x (including the post-refinancing period). On Jan. 30, 2025, Edgewater Generation announced a repricing and upsizing of its term loan B (TLB). The project is looking to add up to $100 million to its $950 million outstanding ($975 million original issue) TLB due 2030. Edgewater will use the proceeds from the add-on to fund distributions to its owners and pay transaction-related fees and expenses. Edgewater is a portfolio of four natural gas-fired assets totaling 2.7 gigawatts (GW). The 1.3 GW Fairless Power Station, the portfolio's main asset, is in Pennsylvania within the PJM power market. Also within PJM are the West Lorain and Garrison facilities. West Lorain is a 545-megawatt (MW) peaking facility near Lake Erie in Lorain, Ohio; Garrison is a 309-MW facility in Dover, Del. The portfolio also has exposure to the independent system operator of New England (ISO-NE) via its 510-MW Manchester Street Power Station in Rhode Island. Lotus Infrastructure Partners is the project sponsor. The affirmation reflects S&P's updated base-case forecast for the project following the incremental up to $100 million upsizing of its $950 million outstanding TLB announced Jan. 30, 2025. Edgewater is also seeking to improve pricing from SOFR +425 basis points (bps) to SOFR +350 bps, eliminate the target debt balance, and change the excess cash sweep structure to a 50% excess cash flow sweep from a step-down structure throughout the TLB period. S&P said, "We now forecast a minimum DSCR of 1.59x throughout its asset life and TLB debt outstanding at maturity of about $685 million. Although the sponsor could choose a different refinancing structure, from 2030 we model a fully amortizing loan with a sculpted repayment profile and assume Edgewater will fully repay its debt by 2045. "We expect efficient combined cycle gas turbines (CCGTs) in PJM will remain profitable due to strong energy demand." Energy demand has risen well above historical averages over the past decade due to overall economic growth, the ongoing shift toward electrification, and rising demand by data centers, which is advantageous for efficient assets like Fairless. At the same time, the Fairless facility, which is located on the border of Pennsylvania and New Jersey, is relatively efficient compared to thermal generators in PJM, often setting the marginal price and is not subject to burdensome Regional Greenhouse Gas Initiative (RGGI) cost. Moreover, since the facility is close to the RGGI participating states (i.e. New Jersey, Maryland, and Virginia), which realize higher carbon prices than non-RGGI states in the Western PJM, Fairless remains competitive within the dispatch stack because it can export power to neighboring RGGI states, outbidding local resources. RGGI operates as a carbon cap-and-trade agreement between 11 northeastern states. Carbon-emitting power plants must buy allowances through an auction process. This makes electricity produced by thermal-based power generators more expensive relative to zero-carbon sources like wind, solar, and nuclear. Thermal generators, in a non-RGGI state in the Western PJM--such as Fairless--are not subject to carbon compliance costs, giving them a competitive edge over eastern PJM plants. S&P said, "We believe highly efficient generators, such as Fairless, will benefit from these dynamics, given their low heat rates and high-dispatch nature because we expect them to operate during most hours of the day. We forecast Fairless' energy margin will represent the majority of the portfolio's overall energy margins through the term loan B term. We base our expectation on capacity factors in the mid-70% area and the facility's ability to capture higher margins with an average spark spread in the range of $14 per megawatt hour (MWh)-$15/MWh through 2031. Consequently, we forecast Fairless will generate about $120 million in average annual energy margins through term loan B maturity." S&P foresees higher PJM capacity prices for the future auction. The PJM capacity auction held on July 30, 2024, for delivery years 2025-2026 resulted in prices increasing to $269.92/MW-day from $28.89/MW-day for regional transmission organization (RTO). This was due to a supply and demand imbalance given the lack of sizeable recent investments and the retiring of dispatchable capacity. Other factors, such as higher demand growth projections from AI infrastructure buildout and electrification, also contributed to higher prices. S&P said, "While the capacity price momentum remains strong due to its fundamental nature, we also believe that they will mean-revert in the long run, though at a relatively higher level than we previously expected. In our view, it's likely that the 2026-2027 auction price will continue to clear at the current levels (and potentially higher than our assumptions). "We anticipate that capacity payments will constitute about 40%-45% of Edgewater's overall margins, so higher capacity prices have a positive effect on our forecast of the project's cash flows." A sizable share of coal capacity retirement in the PJM is resulting in better economics for West Lorain. Until 2020, Edgewater's West Lorain plant operated as a periodic-start, oil-fired asset with substantially all gross margin generated from capacity payments and ancillary revenues. As part of the plan to reconnect West Lorain to gas, Edgewater constructed a lateral through which West Lorain could be connected to the newly constructed Nexus Gas Transmission pipeline to source low-cost gas. S&P said, "We generally expect the peaking units will operate at a lower dispatch because these facilities are put into use only when needed during periods of peak power demand. However, the facility's advantageous location with access to low-cost natural gas, and ongoing retirement of coal-based generators in the PJM, is creating dispatch opportunities for West Lorain, resulting in better-than-expected energy margins. The facility generated about $28 million in 2024. Given the stronger outlook for power demand, we forecast West Lorain will yield approximately $18 million-$20 million in additional energy-based cash flow until 2030. "The stable outlook reflects our expectation of adequate debt service coverage during the TLB period, as well as a minimum DSCR of 1.59x during the project life, based on our assumptions, and forward-looking view of the energy and capacity prices in PJM and ISO-NE markets. We expect the project to repay nearly $365 million of its debt through the TLB period (2024-2030). "We will consider a negative rating action if we expect the minimum DSCR will fall and be sustained below 1.35x during the project's life (including the refinancing period)." This could occur if: -- The project experiences lower-than-expected capacity factors, weaker energy margins, or depressed capacity prices; -- Edgewater engages in higher-than-projected capital spending and has operational issues such as forced outages and lower plant availability; or -- The project's cash flow sweeps do not translate to debt paydown, leading to higher-than-expected debt balance at maturity. S&P said, "Although unlikely in the near term, we could consider an upgrade if we envisioned the project achieving DSCRs above 1.8x throughout debt life, including the post-refinancing period. This could occur if the project's financial performance exceeds our forecast due to any other factors (such as improved energy margins, higher dispatch, and substantially improved capacity pricing leading to lower-than-expected debt outstanding at TLB maturity)." ENTECCO FILTER: Court Extends Cash Collateral Access to Feb. 21 --------------------------------------------------------------- Entecco Filter Technology, Inc. received interim approval from the U.S. Bankruptcy Court for the Middle District of North Carolina, Winston-Salem Division, to use cash collateral until Feb. 21, marking the fifth extension since the company's Chapter 11 filing. The court's previous order allowed the company to access cash collateral until Jan. 24 only. The company's cash collateral includes bank account and accounts receivable valued at $348,564 and $376,818, respectively. PNC Bank, National Association has security interest in the cash collateral, with an outstanding debt of approximately $125,000. As adequate protection for PNC's interest in the cash collateral, the court granted the bank a continuing security interest in Entecco's post-petition assets. In case of any default or unauthorized use of funds, PNC can request immediate relief, including termination of the company's ability to use cash collateral. The next hearing is scheduled for Feb. 20. About Entecco Filter Technology Entecco Filter Technology, Inc., is a Delaware-based environmental technology company, specializing in air purification systems and filter products used in various industries. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D.N.C. Case No. 24-50707) with $1 million to $10 million in both assets and liabilities. James David Edgerton, president and chief executive officer, signed the petition. The Debtor is represented by: James C. Lanik Waldrep Wall Babcock & Bailey PLLC Tel: 336-930-7620 Email: notice@waldrepwall.com EXPRESS MOBILE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Express Mobile Diagnostic Services, LLC 4536 State Route 136 Greensburg, PA 15601 Business Description: The Debtor is a medical and diagnostic laboratory that offers x-ray scanning services for all major areas of the body. Chapter 11 Petition Date: January 31, 2025 Court: United States Bankruptcy Court Western District of Pennsylvania Case No.: 25-20255 Debtor's Counsel: Brian C. Thompson, Esq. THOMSON LAW GROUP, P.C. 301 Smith Drive, Suite 6 Suite 200 Cranberry Township, PA 16066 Tel: (724) 799-8404 Fax: (724) 799-8409 Email: bthompson@thompsonattorney.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jamie Bostard as president and CEO. A full-text copy of the petition, including a list of the Debtor's 20 largest unsecured creditors, is available for free on PacerMonitor at: https://www.pacermonitor.com/view/TVZN34I/Express_Mobile_Diagnostic_Services__pawbke-25-20255__0001.0.pdf?mcid=tGE4TAMA FLEXSYS HOLDINGS: $475MM Bank Debt Trades at 27% Discount --------------------------------------------------------- Participations in a syndicated loan under which Flexsys Holdings Inc is a borrower were trading in the secondary market around 73.4 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $475 million Term loan facility is scheduled to mature on November 1, 2028. The amount is fully drawn and outstanding. Flexsys, Inc. was founded in 2000. The company's line of business includes developing or modifying computer software and packaging. FLORA FOOD: Fitch Lowers Rating on Senior Secured Debt to 'B' ------------------------------------------------------------- Fitch Ratings has downgraded Flora Food Management B.V.'s and Flora Food Management U.S's senior secured rating to 'B' from 'B+'. The Recovery Rating is 'RR4'. Fitch has affirmed Sigma Holdco BV's (Flora Food Group) senior unsecured debt at 'CCC+' with a 'RR6'. The downgrade follows the completed EUR325 million add-on senior secured notes issue maturing in 2029, which would lead to lower recovery prospects. The rating is in line with Flora Food Group's 'B' Issuer Default Rating (IDR) Flora Food Group's rating reflects its high leverage and execution risks related to operating in a sector with continued consumption decline of plant-based spreads, including margarine, in many developed markets, which is partly offset by growing demand in emerging markets. These are balanced by a moderately strong business profile with wide geographic diversification, a strong brand portfolio, and high EBITDA margins. The Stable Outlook reflects gradual deleveraging with rating headroom to below 7.5x over 2025-2027. Fitch is withdrawing Flora Food Management B.V.'s 'B+' expected senior secured rating as it is no longer expected to convert to a final rating. Key Rating Drivers Increased Share of Senior Debt: Proceeds from the completed EUR325 million senior secured notes will be used to redeem only a portion of the outstanding senior unsecured US dollar notes and euro notes, leading to today's downgrade of the senior secured rating. Fitch's waterfall analysis results in a ranked recovery for Flora Food Group's term loan B (TLB) and senior secured notes creditors in the 'RR4' band, indicating a 'B' instrument rating, which aligns with the IDR, and is a downgrade from 'B+'/'RR3' previously. Delayed Deleveraging: Fitch projects EBITDA gross leverage will remain above 6.0x over 2024-2027, due to higher-than-expected Fitch-calculated EBITDA gross leverage at end-2023. The metric also declined by a smaller amount than expected to 7.2x at end-2023, from 7.9x at end-2022, as a result of an additional revolving credit facility (RCF) drawdown and lower EBITDA than its projections. The company is publicly committed to deleveraging toward more sustainable levels, which Fitch views at below 6.0x. EBITDA Margin Improvement: Fitch forecasts strong Fitch-adjusted EBITDA margins at 24.5% over 2024-2027, supported by savings from efficiency and value-creation initiatives, as well as high price increases, which drove the margin to 24.3% in 2023 from 21.1% in 2022. Fitch assumes that a further decline in some key raw material costs is likely to be partly offset by higher marketing and promotion spending. Flora Food Group reported a material gross profit margin increase in 1Q24 of nearly 600bp, due to modest commodity deflation and further efficiency savings, despite continuing decline in organic revenue. Robust Free Cash Flow: Fitch projects Flora Food Group will generate strong free cash flow (FCF) of around EUR130 million-EUR250 million annually in 2024-2027, or FCF margins in the mid-to-high single digits. This allows it a higher leverage capacity than peers. Despite increased interest charges, strong FCF will be supported by high operating profitability and limited capex needs in 2024-2027, as well as reduced non-underlying cash costs to EUR45 million in 2023 from around EUR300 million over 2019-2020. Fitch treats EUR30 million of this as ongoing business-reorganisation costs. Modest Revenue Growth: Fitch estimates sales volumes to have stabilised in 2024, due to slowing inflation, which should support consumer spending. Flora Food Group has accelerated innovation, promotion and marketing activities. Fitch expects only modest growth in 2025-2027, given the maturity of the spreads category and the still moderate share of faster-growing nascent categories of plant-based butter, creams and cheese. Efforts to turn around the perception of products, and leveraging on trends favouring consumption of plant-based foods and sustainable packaging remain key. Global Spreads Category Leader: Flora Food Group's rating is supported by its leading position in the global plant-based spread market, with major shares in countries that widely consume the product. Sales are more than 3x higher than those of the second-leading company in Flora Food Group's broader reference market of butter and spreads. The rating also considers Flora Food Group's leading market shares in other high-growth plant-based food categories, but Fitch estimates that these only account for 25% of sales. Flora Food Group has an ESG Relevance Score of '4' for Exposure to Social Impacts, due to declining revenue stemming from consumer concerns in some markets about the healthiness of its products. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Derivation Summary Flora Food Group generates significantly higher FCF than most packaged-food companies with comparable revenue, due to higher-than-average EBITDA margins and low capex needs. Nomad Foods Limited (Nomad; BB/Stable) has a higher rating than Flora Food Group, despite its more limited geographical diversification and smaller business scale. The rating differential is due to Nomad's lower leverage, and less challenging demand fundamentals for frozen food than for spreads. Ulker Biskuvi Sanayi A.S. (Ulker; BB/Stable), a Turkish confectionary producer, also has a higher rating than Flora Food Group, which is due to significantly lower EBITDA gross leverage (2023: 3.1x). This is balanced by Ulker's smaller scale, and lower geographical diversification and EBITDA margins. Key Assumptions Fitch's Key Assumptions Within Its Rating Case for the Issuer - Organic sales growth of 2% in 2024, driven by increased promotions with sales volume recovery, followed by low single-digit annual revenue growth over 2025-2027 - EBITDA margin above 24% in 2024-2027 - Annual capex at around EUR100 million in 2024, reducing to around EUR80 million a year to 2027 - No M&A or dividends Recovery Analysis The recovery analysis assumes that Flora Food Group would remain a going concern (GC) in restructuring and that it would be reorganised rather than liquidated. Fitch assumes a 10% administrative claim in the recovery analysis. Fitch estimates a sustainable, post-reorganisation EBITDA of EUR560 million, on which Fitch bases the enterprise value. Fitch also assumes a distressed multiple of 6.0x, reflecting Flora Food Group's large size, leading market position and high inherent profitability compared with sector peers'. Fitch assumes Flora Food Group's EUR700 million RCF would be fully drawn in a restructuring. Its waterfall analysis generates a ranked recovery for the TLB and senior secured notes creditors in the 'RR4' band, indicating a 'B' instrument rating, in line with the IDR, a downgrade from the previously 'B+'/'RR3' for Flora Food Group's senior secured debt class. The new EUR325 million senior secured add-on notes issued for the partial redemption of the outstanding senior unsecured instruments result in the waterfall analysis output percentage declining to 50% from 53% for the senior secured instruments. For the senior unsecured notes, its analysis generates a ranked recovery in the 'RR6' band, indicating a 'CCC+' rating, with 0% recovery expectations based on current metrics and assumptions, and no impact from the EUR325 million secured debt issue. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Failure to implement Flora Food Group's product development strategy, resulting in a continued organic decline in sales and structural deterioration of EBITDA margins to below 20% - EBITDA leverage above 7.5x for a sustained period - Inability to generate positive FCF margins in the mid-single digits, due to higher-than-expected restructuring charges or unfavourable changes in working capital - EBITDA interest coverage below 2.0x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful execution of the corporate strategy, resulting in growing EBITDA towards EUR900 million - Steady profitability, with FCF in the mid-single digits, on a sustained basis - Refinancing of 2026 debt maturities, resulting in falling EBITDA leverage towards 6.0x Liquidity and Debt Structure Flora Food Group had cash of EUR204 million at end-March 2024 as well as access to an RCF of EUR700 million, of which EUR133 million was drawn. Liquidity is also supported by its projection of strong positive FCF. The company also has access to a factoring line, of which EUR110 million was utilised at end-2023. Flora Food Group successfully refinanced its TLB in 2024, extending maturities to 2028. After its completed EUR325 million senior secured issue with partial repayment of its senior unsecured notes, it will have addressed part of the maturities in 2026, when its remaining euro and dollar bonds are due. Issuer Profile Flora Food Group is the world's largest plant-based food producer, including spreads and butter. 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 Flora Food Group has an ESG Relevance Score of '4' for Exposure to Social Impacts, due to declining revenue stemming from consumer concerns in some markets about the healthiness of its products, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Flora Food Management US Corp senior secured LT B Downgrade RR4 B+ Flora Food Management B.V. senior secured LT B Downgrade RR4 B+ senior secured LT WD Withdrawn B+(EXP) Sigma Holdco BV senior unsecured LT CCC+ Affirmed RR6 CCC+ FRANCHISE GROUP: Mediation Not Appropriate in Freedom Lender Case ----------------------------------------------------------------- Magistrate Judge Christopher J. Burke of the United States District Court for the District of Delaware determined that mediation is not appropriate in the consolidate case captioned as FREEDOM LENDER GROUP, Appellant, v. FRANCHISE GROUP INC., et al., Appellees, Civil Action No. 24-1394-TLA (D. Del.) pursuant to Section 1 of the Procedures to Govern Mediation of Appeals from the United States Bankruptcy Court for the District of Delaware, dated July 19, 2023. Parties jointly agree that their disputes in this case cannot be resolved through mediation and the Court agrees. The Court recommends that the assigned Judge issue an order withdrawing the matter from mediation. A copy of the Court's decision dated Jan. 28, 2025, is available at https://urlcurt.com/u?l=y5cE0R from PacerMonitor.com. About Franchise Group Inc. Franchise Group, Inc., through its subsidiaries, operates franchised and franchisable businesses including The Vitamin Shoppe, Pet Supplies Plus, LLC, Badcock Home Furniture & More, American Freight, Buddy's Home Furnishings and Sylvan Learning Systems, Inc. Franchise Group, Inc. and its affiliates filed their voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-12480) on Nov. 3, 2024, listing $1,000,000,001 to $10 billion in both assets and liabilities. The petitions were signed by David Orlofsky as chief restructuring officer. Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor, LLP are serving as legal counsel, AlixPartners is serving as financial advisor and Chief Restructuring Officer, and Ducera Partners is serving as investment banker to the Company. Paul Hastings LLP is serving as legal counsel and Lazard is serving as investment banker to the first lien ad hoc group. FULLER'S SERVICE: Seeks Chapter 11 Protection in Illinois --------------------------------------------------------- On January 29, 2025, Fuller's Service Center Inc. filed Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Illinois. According to court filing, the Debtor reports between $1 million and $10 million in debt owed to 50 and 99 creditors. The petition states funds will be available to unsecured creditors. About Fuller's Service Center Inc. Fuller's Service Center Inc. based in Hinsdale, IL, is an auto repair shop specializing in tire sales and installations, as well as general vehicle maintenance and repairs. Fuller's Service Center Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 25-01345) on January 29, 2025. In its petition, the Debtor reports estimated assets between $500,000 and $1 million and estimated liabilities between $1 million and $10 million. Honorable Bankruptcy Judge Deborah L. Thorne handles the case. The Debtor is represented by: David K. Welch, Esq. BURKE, WARREN, MACKAY & SERRITELLA, P.C. 330 N. Wabash 21st Floor Chicago, IL 60611 Tel: 312-840-7122 Email: dwelch@burkelaw.com GIP II BLUE: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable -------------------------------------------------------------- Moody's Ratings affirmed GIP II Blue Holding, L.P.'s (HESM Holdco) Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, and Ba3 senior secured 1st lien term loan rating. The outlook remains stable. "Moody's expect the holding company to maintain its current healthy metrics as it continues to reduce its equity interest in the underlying operating company," said Sajjad Alam, a Moody's Ratings Vice President. RATINGS RATIONALE HESM Holdco's Ba3 CFR is supported by the predictable cash distributions it receives from Hess Midstream LP (HESM, unrated) and its principal subsidiary, Hess Midstream Operations LP (HESM Opco, Ba1 stable), and its conservative standalone leverage and coverage metrics. The company benefits from HESM Opco's significant scale, growing operating cash flow, long term fee-based contracts, and strong strategic importance to Hess Corporation's (Hess, Baa3, ratings under review for upgrade) Williston Basin production operations. The CFR is restrained by HESM Holdco's partial ownership interest in HESM, the structural subordination to substantial operating company debt, and reliance on distributions from HESM to service the holding company debt. The CFR also assumes that if the company further reduces its ownership in HESM, it will also likely prepay the term loan to maintain a low leverage level for the pro-forma ownership. Moody's expect the company to maintain adequate liquidity through mid-2026. HESM Holdco's only source of cash flow is distributions made by HESM. These distributions should comfortably cover HESM Holdco's debt service requirements, which includes interest payments and annual 1% mandatory principal amortization of the term loan. The term loan also benefits from structural enhancement in the form of an excess cash flow sweep. Any remaining cash flow will be distributed out to its private owners or used for debt reduction. The company can easily comply with the only maintenance covenant in its credit agreement through 2026, a debt service coverage ratio requirement in excess of 1.05x. The senior secured term loan is rated Ba3, which is aligned with its Ba3 corporate family rating (CFR), reflecting only one class of debt in the company's capital structure. HESM Holdco's rating outlook is consistent with the stable outlook of HESM Opco and assumes the holding company will receive sufficient distributions and maintain low financial leverage through 2026. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS HESM Holdco's ratings could be upgraded if HESM Opco was upgraded alongside HESM Holdco maintaining stand-alone leverage and coverage metrics at strong levels. The ratings could be downgraded if HESM Opco is downgraded. HESM Holdco could also be downgraded if its stand-alone financial leverage were to rise above 4x, or if its liquidity weakens. GIP II Blue Holding, L.P. is a holding company owned by Global Infrastructure Partners (which is wholly-owned by BlackRock, Inc., Aa3 negative) that has partial equity interests in the general partner and common units of Hess Midstream LP, a publicly traded midstream energy company with operations in the Williston Basin of North Dakota. The principal methodology used in these ratings was Midstream Energy published in February 2022. GOODY'S FLEET: Court OKs Continued Use of Cash Collateral --------------------------------------------------------- Goody's Fleet Solutions, LLC received fourth interim approval from the U.S. Bankruptcy Court for the Middle District of Florida to use cash collateral. The fourth interim order approved the use of cash collateral to pay the company's operating expenses set forth in its budget, with a 10% variance. As protection, secured creditors will be granted replacement liens on their cash collateral, with the same validity and priority as their pre-bankruptcy liens. In addition, Goody's was ordered to maintain insurance coverage for its property in accordance with its obligations under the loan and security documents with secured creditors. About Goody's Fleet Solutions Goody's Fleet Solutions, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-05407) on September 11, 2024, with up to $50,000 in assets and up to $500,000 in liabilities. Michael Markham, Esq., serves as Subchapter V trustee. Judge Roberta A. Colton presides over the case. The Debtor is represented by: Buddy D. Ford, Esq. Buddy D. Ford, P.A. Tel: 813-877-4669 Email: buddy@tampaesq.com GROOMORE INC: Seeks to Hire Ordinary Course Professionals --------------------------------------------------------- GrooMore Inc. seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire retain professionals utilized in the ordinary course of business. These OCPs have provided legal, technical, accounting, consulting, and/or other related services to the Debtors, upon which they rely on to manage their day-to-day operations. The Debtors seek to pay OCPs 100 percent of the fees and expenses incurred. The Debtors do not believe that any of the OCPs have an interest materially adverse to them, their estates, creditors, or other parties in interest in connection with the matter upon which they are to be engaged. The OCPs include: Andreea, Inc. -- Accounting Lesowitz Gebelin LLP -- Litigation About GrooMore Inc. GrooMore Inc., a company based in Atlanta, Ga., operates a cloud-based pet grooming software platform providing scheduling, payment processing, and business management solutions for pet grooming businesses. GrooMore sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 25-10018) on January 9, 2025. In its petition, the Debtor reported assets between $100,000 and $500,000 and estimated liabilities between $500,000 and $1 million. Joseph C. Barsalona II, Esq., at Pashman Stein Walder Hayden, P.C. represents the Debtor as legal counsel. H & H RENTAL: Seeks to Hire J.M. Cook P.A. as Legal Counsel ----------------------------------------------------------- H & H Rental Broker, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of North Carolina to hire J.M. Cook, P.A. as counsel. The firm will provide these services: a. prepare on behalf of the Debtor, necessary applications, complaints, answers, orders, reports, motions, notices, plan of reorganization, disclosure statement and other papers necessary in Debtor's reorganization case; b. assist the Debtor in evaluating the legal basis for, and effect of, the various pleadings that will be filed in the Chapter 11 case by the Debtor and other parties in interest; c. perform all necessary legal services in connection with the Debtor's reorganization, including Court appearances, research, opinions and consultations on reorganization options, direction and strategy; d. assist the Debtor in preparing the monthly operating reports and evaluating and negotiating the Debtor's or any other party's Plan of Reorganization and any associated Disclosure Statement; e. commence and prosecute any and all necessary and appropriate actions and/or proceedings on behalf of the Debtor; and f. perform all other legal services for the Debtor which may be necessary and proper in these proceedings and in keeping with his fiduciary duty. The firm will be paid at these rates: Legal $300 per hour paralegal $175 per hour J.M. Cook, P.A. will be paid a retainer in the amount of $2,000, plus $1,738 filing fee. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. J.M. Cook, Esq., a partner at J.M. Cook, 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: J.M. Cook. Esq. J.M. Cook, P.A. 5886 Faringdon Place Suite 100 Raleigh, NC 27609 Tel: (919) 675-2411 Fax: (919) 882-1719 Email: J.M.Cook@jmcookesq.com About H & H Rental Broker, Inc. H & H Rental Broker, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.C. Case No. 25-00105-5) on January 9, 2025. In the petition signed by Tonya Hanks, president, the Debtor disclosed up to $1 million in assets and up to $50,000 in liabilities. JM Cook, Esq., at J.M. Cook, P.A., represents the Debtor as legal counsel. H-FOOD HOLDINGS: $415MM Bank Debt Trades at 39% Discount -------------------------------------------------------- Participations in a syndicated loan under which H-Food Holdings LLC is a borrower were trading in the secondary market around 61.4 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $415 million Term loan facility is scheduled to mature on May 30, 2025. About $403.6 million of the loan has been drawn and outstanding. H-Food Holdings, LLC and Matterhorn Parent, LLC is a food contract manufacturer. HALL CONSTRUCTION: Gets OK to Use Cash Collateral Until Feb. 19 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, granted Hall Construction Co., Inc.'s interim authority to use cash collateral until Feb. 19. The interim order signed by Judge Tiffany Geyer authorized the company to use cash collateral to pay the expenses set forth in its budget, which shows total projected expenses of $30,411.53 per month. Any secured creditor of the company will have a post-petition lien on the cash collateral to the same extent and with the same validity and priority as its pre-bankruptcy lien. The next hearing is scheduled for Feb. 19. About Hall Construction Co. Hall Construction Co. Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-06165) on November 13, 2024, with up to $50,000 in assets and up to $500,000 in liabilities. Judge Tiffany P. Geyer presides over the case. The Debtor is represented by: Scott W. Spradley, Esq. The Law Offices pf Scott W. Spradley, P.A. P.O. Box 1 301 S. Central Avenue Flagler Beach, FL 32136 Tel: 386-693-4935 Email: scott@flaglerbeachlaw.com HEALTHCHANNELS INTERMEDIATE: $385M Bank Debt Trades at 22% Off -------------------------------------------------------------- Participations in a syndicated loan under which Healthchannels Intermediate Holdco LLC is a borrower were trading in the secondary market around 77.6 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $385 million Term loan facility is scheduled to mature on April 3, 2025. About $325.2 million of the loan has been drawn and outstanding. Headquartered in Fort Lauderdale, Fla., HealthChannels provides medical scribing services to hospitals and physician staffing companies. HealthChannels is majority-owned by private equity firm Vesey Street Capital Partners, LLC. HESS MIDSTREAM: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable ----------------------------------------------------------------- Moody's Ratings affirmed Hess Midstream Operations LP's (HESM Opco) Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating, Ba2 senior unsecured notes rating and the Baa1 rating on the company's senior secured 1st lien revolving credit facility and senior secured 1st lien term loan A. The SGL-2 Speculative Grade Liquidity Rating was unchanged. The outlook remains stable. "Moody's expect the company to execute its growth and capital returns plans largely in line with its stated goals while maintaining Debt/EBITDA near 3x," said Sajjad Alam, a Moody's Ratings Vice President. RATINGS RATIONALE HESM Opco's Ba1 CFR is supported by its long term fee-based contracts with Hess Corporation (Hess, Baa3 ratings under review for upgrade), which has a large and growing production platform in the Bakken; highly integrated midstream assets with Hess' production operations in the Williston Basin providing excellent cash flow visibility; and track record of prudent financial policies, including maintaining low financial leverage. Moody's expect the company's ratings to remain on sound footing through 2026 supported by its significant minimum volume commitment contracts, stable capital program and growing free cash flow. HESM Opco's CFR is restrained by its single basin exposure and high customer concentration with Hess. The rating also considers the company's governance structure, including the 50/50 ownership of HESM Opco's general partner by Hess Midstream LP (HESM, unrated) and Global Infrastructure Partners (GIP, which is wholly-owned by BlackRock, Inc., Aa3 negative), as well as the shared ownership of HESM's limited partnership units by Hess, GIP and the general public. Moody's expect the company to maintain good liquidity through mid-2026. HESM Opco had a $1 billion committed revolving credit facility (only $30 million outstanding as of September 30, 2024) that will expire in July 2027. The company should be able to comfortably fund its planned capex and distributions from internal sources through 2026 and deliver a modest amount of free cash flow. Moody's expect the company to maintain ample cushion under the two financial covenants governing the credit facility - a debt/EBITDA ratio not to exceed 5.0x and a secured debt/EBITDA ratio not to exceed 4.0x prior to obtaining an investment grade rating on a senior unsecured basis. Management is expected to refinance the $800 million notes due February 2026 well before its maturity date. The next maturity is in July 2027, when the $400 million term loan matures. HESM Opco's unsecured notes are rated Ba2, one-notch below the Ba1 CFR, given their junior position in the capital structure behind the secured revolving and term loan facilities. The revolver and the term loan rank pari passu with respect to one another and are both rated Baa1, or three notches above the CFR because of their priority claim over the partnership's assets. The stable outlook reflects Moody's expectation of solid operating cash flow, good liquidity and a steady leverage profile. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The CFR could be upgraded if HESM Opco can meaningfully diversify its basin exposure while maintaining its strong contractual position and low financial leverage. A wholly unsecured capital structure would also be expected for an upgrade. HESM Opco could be downgraded should leverage exceed 3.5x or should contract structure erode resulting in increased cash flow volatility and leverage. Hess Midstream Operations LP is the principal subsidiary of Hess Midstream LP, which is a publicly traded midstream energy company that provides fee-based services to Hess Corporation and third-party customers in the Williston Basin area of North Dakota. The principal methodology used in these ratings was Midstream Energy published in February 2022. HONDUCRETE REDI: Case Summary & 12 Unsecured Creditors ------------------------------------------------------ Debtor: Honducrete Redi Mix Inc. 9330 Lyndon B. Johnson Fwy, Suite 900 Dallas, TX 75243 Chapter 11 Petition Date: January 31, 2025 Court: United States Bankruptcy Court Northern District of Texas Case No.: 25-30372 Judge: Hon. Stacey G Jernigan Debtor's Counsel: Robert T DeMarco, Esq. DEMARCO MITCHELL, PLLC 12770 Coit Road, Suite 850 Dallas TX 75251 Tel: (972) 991-5591 E-mail: robert@demarcomitchell.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Juan Ramon Benavides as president. A full-text copy of the petition, which includes a list of the Debtor's 12 unsecured creditors, is available for free on PacerMonitor at: https://www.pacermonitor.com/view/HZZHXMA/Honducrete_Redi_Mix_Inc__txnbke-25-30372__0001.0.pdf?mcid=tGE4TAMA IDEANOMICS INC: Seeks to Hire Ordinary Course Professionals ----------------------------------------------------------- Ideanomics, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to retain professionals utilized in the ordinary course of business. These OCPs have provided legal, technical, accounting, consulting, and/or other related services to the Debtors, upon which they rely on to manage their day-to-day operations. The Debtors seek to pay OCPs 100 percent of the fees and expenses incurred. The Debtors do not believe that any of the OCPs have an interest materially adverse to them, their estates, creditors, or other parties in interest in connection with the matter upon which they are to be engaged. The OCPs include: Doeren Mayhew OCP Cap: $50,000 per month -- Tax Services Kunzler Bean & Adamson OCP Cap: $6,000 per month -- Patent Services About Ideanomics, Inc. New York, N.Y.-based Ideanomics, Inc. is a global electric vehicle company that is focused on driving the adoption of electric commercial vehicles and associated sustainable energy consumption. It is made up of 5 subsidiaries including: VIA Motors, Solectrac, Treeletrik, Wave, and US Hybrid. Ideanomics Inc. and seven of its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-12728) on December 4, 2024. In its petition, the Debtor reports assets between $50 million and $100 million and liabilities ranging from $100 million to $500 million. Foley & Lardner LLP serves as the Debtors' general bankruptcy counsel and Ashby & Geddes, P.A. acts as the Debtors' Delaware co-counsel. The Debtors tapped Epiq Corporate Restructuring as noticing and claims agent. Riveron Management Services, LLC is the Debtors' CRO and financial advisor, and SSG Advisors, LLC is the Debtors' investment banker and financial adviser. IFR FOUNDATION: Seeks to Hire Norred Law LLC as Legal Counsel ------------------------------------------------------------- IFR Foundation Repair Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Norred Law, PLLC as its legal counsel. The firm's services include: a. advising the Debtor of its powers and duties in the management of its property; b. attending meetings and negotiating with representatives of creditors and other parties in interest; c. assisting the Debtor in the preparation of all administrative documents required to be filed; d. preserving the assets and interests of the estate; e. advising the Debtor in connection with any potential sales of assets; f. appearing before the court and the Office of the U.S. Trustee; g. assisting in the formulation of a disclosure statement and plan of reorganization; and h. performing all other necessary legal services for the Debtor. The hourly rates charged by the firm's attorneys and paraprofessionals are as follows: Attorneys $300 to $525 Paraprofessionals $90 to $120 The firm received a $10,000 retainer. As disclosed in court filings, Norred Law is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Warren V. Norred, Esq. Norred Law, PLLC 515 E. Border Arlington, TX 76010 Tel: (817) 704-3984 Email: warren@norredlaw.com About IFR Foundation Repair Inc. IFR Foundation Repair Inc. engages in the business of concrete slab stabilization, pier and beam repair and adjustment, drainage correction, and retaining wall repair in the DFW area. It was founded in 2007 and has been continually operated by its president and chief executive officer Jeff Marshall. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 25-40111-elm11) on January 10, 2025. In the petition signed by Marshall, the Debtor disclosed up to $500,000 in both assets and liabilities. Judge Edward L. Morris oversees the case. Clayton L. Everett, Esq., at Norred Law, PLLC, represents the Debtor as bankruptcy counsel. ILEARNINGENGINES INC: Taps Faegre Drinker Biddle as Counsel ----------------------------------------------------------- iLearningEngines, Inc. and affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Faegre Drinker Biddle & Reath LLP as counsel. The firm's services include: a. advising the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; b. advising and consulting on the conduct of the Chapter 11 cases, including the legal and administrative requirements of operating in Chapter 11; c. attending meetings and negotiating with representatives of creditors and other parties-in-interest; d. taking all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtor's behalf, defending actions or objecting to claims brought against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved; e. preparing pleadings in connection with the Chapter 11 cases, including motions, applications, answers, orders, reports, and papers necessary or otherwise beneficial to the administration of the Debtors' estates; f. representing the Debtors in connection with obtaining authority to continue using cash collateral and post-petition financing; g. advising the Debtors in connection with bid procedures and the bankruptcy sale process; h. appearing before the Court and any appellate courts to represent the interest of the Debtors' estates; i. providing legal advice and performing legal services with respect to matters relating to corporate governance, the interpretation, application, or amendment of the Debtors' material contracts, organizational documents, and matters involving the Debtors with their officers, directors, and managers; j. taking any necessary actions on behalf of the Debtors to negotiate, prepare and obtain approval of a disclosure statement and confirmation of a chapter 11 plan and all documents related thereto, if applicable; k. providing legal advice and legal services with respect to litigation, tax, and other general legal issues for the Debtors to the extent requested by the Debtors; and l. performing all other necessary legal services for the Debtors in connection with the prosecution of the Chapter 11 Cases, including (i) analyzing the Debtors' leases and contracts and the assumption or rejection thereof; (ii) analyzing the validity of liens against the Debtors; and (iii) advising the Debtors on business operations and litigation matters. The firm will be paid at these rates: Partners $1,080 to $1,565 per hour Associates and Counsel $665 to $990 per hour Paraprofessionals $530 per hour The firm was provided a retainer in the amount of $225,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Ian J. Bambrick, Esq., a partner at Faegre Drinker Biddle & Reath 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: Ian J. Bambrick, Esq. Faegre Drinker Biddle & Reath LLP 222 Delaware Avenue, Suite 1410 Wilmington DE 19801 Tel: (302) 467-4200 Email: ian.bambrick@faegredrinker.com About iLearningEngines Inc. iLearningEngines Inc. offers an Artifical Intelligence platform focused on automation of learning and enabling organizations to drive mission critical outcomes at scale. iLearningEngines filed Chapter 11 petition (Bankr. D. Del. Lead Case No. 24-12826) on December 20, 2024. The Debtor reported total assets of $148,848,000 and total debts of $141,036,000 as of September 30, 2024. Judge Laurie Selber Silverstein handles the case. The Debtor is represented by Ian J. Bambrick, Esq., at Faegre Drinker Biddle & Reath, LLP. INDUSTRIES RAD: Gets CCAA Initial Stay Order; E&Y as Monitor ------------------------------------------------------------ Industries RAD Inc. d/b/a Faucher Industries and Rocky Mountain, and Rocky Mountain Bikes Inc. ("RAD") obtained and initial order from the Quebec Superior Court for the District of Montreal sitting as the designed tribunal pursuant to the Companies' Creditors Arrangement Act, issued a temporary and limited order declaring that the Debtors are debtor companies to which the CCAA applies. The Court appointed Ernst & Young Inc. as monitor. The Court number assigned for this matter is 500-11-065967-247. Dina Kovacevic of the Insolvency Insider Canada reports that RAD has incurred significant financial losses over the past two years due to a decline in the Rocky Mountain business and unfavorable market conditions resulting from the Covid-19 pandemic. These financial difficulties resulted in RAD exceeding the limits under its ABL credit facility with its senior secured lender, Wells Fargo. The CCAA proceedings contemplate the implementation of two distinct sales and investment solicitation processes for Rocky Mountain and Faucher Industries funded by an interim facility provided by Wells Fargo, Ms. Kovacevic added. A copy of the initial order and a list of the creditors of the Debtors may be obtained at the monitor's Website at https://www.ey.com/ca/industriesrad. Persons requiring further information not available on the Monitor's Website or who have additional questions may communicate with the monitor by phone at 1-844-479-5044 or by email at industriesrad@ca.ey.com. The Monitor can be reached at: Ernst & Young Inc. Corey Geenen Email: corey.geenen@parthenon.ey.com Michael Nathaniel Email: michael.nathaniel@parthenon.ey.com Counsel for the Monitor: Stikeman Elliott Joseph Reynaud Email: JReynaud@stikeman.com Darien Bhary Email: dbhary@stikeman.com Lee Nicholson Email: leenicholson@stikeman.com Counsel for the Companies: Lavery, de Billy Jean Legault Email: jlegault@lavery.ca Ouassim Tadlaoui Email: otadlaoui@lavery.ca David Choiniere Email: dchoinire@lavery.ca Counsel for Wells Fargo: Norton Rose Charlotte Dion Email: charlotte.dion@nortonrosefullbright.com Noah Zucker Email: noah.zucker@nortonrosefullbright.com Industries RAD Inc. -- https://rad-industries.com/ -- designs and sells bikes. INDY US: $2.27BB Bank Debt Trades at 15% Discount ------------------------------------------------- Participations in a syndicated loan under which Indy US Holdco LLC is a borrower were trading in the secondary market around 84.6 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $2.27 billion Term loan facility is scheduled to mature on March 6, 2028. The amount is fully drawn and outstanding. Indy US Holdco, LLC, is a subsidiary of Intermediate Dutch HoldCo, dba NielsenIQ. Headquartered in Chicago, Illinois, NielsenIQ is a global provider of retail measurement data, services and analytics to consumer and retail customers. JASMINE R ELMORE: Gets Interim OK to Use Cash Collateral -------------------------------------------------------- Jasmine R. Elmore, DDS, PLLC got the green light from the U.S. Bankruptcy Court for the Eastern District of North Carolina, Greenville Division, to use cash collateral. The interim order signed by Judge Joseph Callaway authorized Jasmine R. Elmore, a dental practice in Wilson, N.C., to use cash collateral to fund its operations in accordance with its budget. The budget shows total expenses of $74,068.74 for January and February. Potential secured creditors, including Live Oak Banking Company, Rapid Finance and the U.S. Small Business Administration, will be provided with protection in the form of a replacement lien on post-petition cash and personal property. As additional protection, Live Oak will receive payment in the amount of $5,027.47. The next hearing will be held on Feb. 11. About Jasmine R. Elmore, DDS, PLLC Jasmine R. Elmore, DDS, PLLC owns and operates Wilson Pediatric Dentistry, a pediatric dental practice located near Greenville, NC. The practice offers a wide range of services focused on promoting the healthy growth and development of children's teeth. With an emphasis on preventative care, the Debtor provides treatments that support optimal dental health for young patients. Jasmine R. Elmore, DDS, PLLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 25-00123) on January 13, 2025. In its petition, the Debtor reports total assets of $68,777 and total liabilities of $1,493,926. Honorable Bankruptcy Judge Joseph N. Callaway handles the case. The Debtor is represented by: Danny Bradford Paul D. Bradford, PLLC Tel: 919-758-8879 Email: dbradford@bradford-law.com JL DANIELS: Sec. 341(a) Meeting of Creditors on March 6 ------------------------------------------------------- On January 31, 2025, JL Daniels Group LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Alabama. 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 March 6, 2025 at 11:00 AM at Creditor Meeting Room Birmingham. About JL Daniels Group LLC JL Daniels Group LLC is a limited liability company. JL Daniels Group LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 25-00302 ) on January 31, 2025. In its petition, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. Honorable Bankruptcy Judge D Sims Crawford handles the case. The Debtor is represented by: Jacquese Antoinette Gary, Esq. GARY LAW LLC PO Box 560 Fairfield, AL 35064 Email: jgary@garylawllc.com JOANN INC: Could Lay Off 475 Ohio Logistics Workers --------------------------------------------------- Scott Suttell of Crain's Cleveland Business reports that Joann Inc., the fabric and crafts retailer based in Hudson, Ohio, has informed the state of Ohio about potential layoffs as part of its ongoing Chapter 11 bankruptcy process, with the company seeking a buyer to avoid liquidation. In filings dated January 24, 2025, in compliance with the Worker Adjustment and Retraining Notification (WARN) Act, Joann announced plans to lay off 359 workers at its distribution center located at 5555 Darrow Road in Hudson, and 116 employees at its Omni Fulfillment Center in West Jefferson, near Columbus, the report related. The layoffs are scheduled to begin on March 31, according to Crain's Cleveland Business. Earlier in January, Joann notified the state that 661 employees at its corporate headquarters in Hudson could also face layoffs if the company fails to secure a buyer. The WARN notices stated that Joann is working with its financial stakeholders to assess the company's future and explore potential buyers. If no buyer is found who intends to continue operating the business, Joann may have to shut down its logistics operations in Hudson and West Jefferson. Some of the affected employees in Hudson are unionized with the United Steelworkers, while no union represents employees in West Jefferson, the report states. As part of its bankruptcy proceedings, Joann has a stalking-horse bid from liquidator Gordon Brothers Retail Partners, which sets a minimum value for the company. If higher offers are received by February 12, the company will hold an auction. If no higher bids emerge, Gordon Brothers intends to liquidate the company. Joann's more than 800 stores remain open for now, and the company has launched a dedicated website, JoannRestructuring.com, to update employees and customers on its restructuring efforts, according to report. This marks Joann's second bankruptcy filing in less than a year. After emerging from a pre-packaged Chapter 11 bankruptcy in March 2024, the company has struggled financially, with over $450 million in debt owed to its lenders, the report cites. About Joann Inc. JOANN operates in the fabric and sewing industry with one of the largest assortments of arts and crafts products. JOANN has transformed itself into a fully-integrated, digitally-connected omni-channel retailer. JOANN reported a net loss of $200.6 million for the year ended Jan. 28, 2023. On March 18, 2024, JOANN Inc. and 9 affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10418). JOANN listed $2,257,700,000 in assets against $2,440,700,000 in liabilities as of Oct. 28, 2023. Judge Craig T. Goldblatt oversees the case. The Debtors tapped Latham & Watkins, LLP as legal counsel; Houlihan Lokey Capital, Inc. as investment banker; and Alvarez & Marsal North America, LLC, as financial advisor. Kroll Restructuring Administration, LLC is the noticing agent. JOANN Inc., on April 30, 2024 successfully emerged from its court-supervised financial restructuring process. 2nd Attempt Joann Inc. sought voluntary Chapter 11 petition for the second time under U.S. Bankruptcy Code (Bankr. D. Del. Case No. 25-10068) on Jan. 15, 2025. Kirkland & Ellis is serving as legal counsel to JOANN, with Centerview Partners LLC serving as financial advisor and Alvarez & Marsal North America, LLC serving as restructuring advisor. JOHN H. HAJJAR: Dropped from Shanghai Fosun Lawsuit --------------------------------------------------- In the case captioned as SHANGHAI FOSUN PHARMACEUTICAL (GROUP) CO., LTD., Petitioner, - against - DR. JOHN HAJJAR, M.D., SOVEREIGN MEDICAL SERVICES, INC., and SOVEREIGN CAPITAL HOLDINGS, LLC, Respondents, Case No.: 22-cv-8269 (JLR) (S.D.N.Y.), Judge Jennifer L. Rochon of the United States District Court for the Southern District of New York granted the parties' stipulation of discontinuance solely of respondent Dr. John Hajjar, M.D. On Sept. 28, 2022, Shanghai Fosun commenced the action by filing the Petition to Confirm Arbitration Award and for Pre- and PostJudgment Interest. On June 22, 2023, Shanghai Fosun submitted a letter in the Action, which, inter alia, alerted the Court that Hajjar had commenced a proceeding under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey, and as a result, this Action was stayed solely as to Hajjar, but not as to SMS and SCH. On July 17, 2023, this Court entered an order granting the motion of former counsel to Hajjar, SMS, and SCH to withdraw as counsel. To date, neither SMS nor SCH has appointed replacement counsel, and Hajjar has not retained any replacement counsel and remains pro se in this Action. On Dec. 1, 2023, the Court entered the Memorandum Opinion and Order, pursuant to which, inter alia, Shanghai Fosun's petition and motion to confirm the arbitration award as against only SMS and SCH was granted, and the Court entered a judgment in favor of Shanghai Fosun and against SMS and SCH. On Dec. 7, 2023, the Court entered the Amended Judgment against SMS and SCH. On Nov. 20, 2024, the Bankruptcy Court entered the Second Amended Findings of Fact, Conclusions of Law, and Order Confirming Debtor's First Amended Chapter 11 Plan, which, inter alia, held that (i) Hajjar was released from any claims or causes of action against him arising prior to the effective date of Hajjar's bankruptcy plan, and (ii) none of the releases set forth in Hajjar's bankruptcy plan shall impair, impact, or otherwise affect Shanghai Fosun's claims or causes of action against any non-debtor third parties, including, without limitation, SMS and SCH. The Action is discontinued solely as to Hajjar. The discontinuance of Hajjar in this Action shall not constitute a waiver, impairment or limitation of any claims, collections or causes of action arising from the Amended Judgment that Shanghai Fosun has, or may have, against SMS or SCH, or any of their respective assets, entities or properties, all of which are expressly preserved in full force and effect. A copy of the Court's decision dated Jan. 27, 2025, is available at https://urlcurt.com/u?l=l7463c from PacerMonitor.com. Attorneys for Petitioner Shanghai Fosun Pharmaceutical Group Co., Ltd.: Danielle Vrabie, Esq. Damani Sims, Esq. HAMPTON LLP 30 Rockefeller Plaza New York, NY 10112 Telephone: (212) 653-8700 Facsimile: (212) 653-8701 E-mail: dvrabie@sheppardmullin.com dsims@sheppardmullin.com John H. Hajjar filed for Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 23-14988) on June 8, 2023, listing under $1 million in both assets and liabilities. The Debtor is represented by Anthony Sodono, Esq., at MCMANIMON, SCOTLAND & BUAMANN, LLP. JUNK IT PLUS: Court Extends Cash Collateral Access to March 11 -------------------------------------------------------------- Junk It Plus, LLC received third interim approval from the U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division to use cash collateral until March 11. The interim order authorized the company to use cash collateral to pay expenses, including payments of U.S. Trustee quarterly fees set forth in its projected budget, with a 10% variance. The company projects total operational expenses of $77,119 for February and $76,551 for March. Secured creditors, including the U.S. Small Business Administration and JPMorgan Chase Bank, N.A., will be granted a replacement lien on the collateral. As additional protection, JPMorgan Chase Bank will receive monthly payments of $886.93 starting this month until confirmation of a Chapter 11 plan or until its loan is paid in full. The next hearing is scheduled for March 11. About Junk It Plus Junk It Plus, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-05466) on October 8, 2024, with $100,001 to $500,000 in assets and $1 million to $10 million in liabilities. Jerrett McConnell, Esq., at McConnell Law Group, P.A. serves as Subchapter V trustee. Judge Grace E. Robson presides over the case. The Debtor is represented by: Jeffrey Ainsworth, Esq. Bransonlaw, PLLC 1501 E. Concord Street Orlando, FL 32803 Tel: 407-894-6834 Email: jeff@bransonlaw.com K&NN TRUCKING: Hires Dias Law Group Ltd. as Attorney ---------------------------------------------------- K&NN Trucking LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ Dias Law Group, Ltd. as attorney. The firm will provide these services: a. prepare and file the petition and all appropriate motions, applications, answers, orders, reports and other required materials in connection with the Bankruptcy and administration of the Debtor's estate; b. take necessary action in relation to Debtor's plan of reorganization and related matters; and c. perform the necessary legal services to assist the Debtor in the continuation and completion of the Chapter 11 Bankruptcy case. The firm will be paid at these rates: Attorneys $450 per hour Staff $50 to $250 per hour The firm received a retainer in the amount of $25,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Damon K. Dias, Esq., a partner at Dias Law Group, Ltd., 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: Damon K. Dias Dias Law Group, Ltd. 725 S. 8th Street, Suite 100 Las Vegas, NV 89101 Tel: (702) 380-3011 About K&NN Trucking LLC K&NN Trucking, LLC operates in the general freight trucking industry. K&NN Trucking sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 24-16543) on December 16, 2024. Nathan Nuesca, managing member of K&NN Trucking, signed the petition. As of November 30, 2024, K&NN Trucking had $809,191 in total assets and $1,260,375 in total liabilities. Judge Mike K. Nakagawa presides over the case. Damon K. Dias, Esq., at Dias Law Group, Ltd represents the Debtor as bankruptcy counsel. KENBENCO INC: Court to Hold Cash Collateral Hearing Today --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York, Poughkeepsie Division, is set to hold a hearing today, at 10:00 a.m., on the motion by Kenbenco, Inc. and its affiliates to use cash collateral. The court previously extended the companies' authority to use the cash collateral of secured creditors, Newtek Small Business Finance, LLC and the U.S. Small Business Administration. This interim authority expires on Feb. 5. The interim order issued by the court on Jan. 24 granted both creditors continuing rollover liens and security interests in the companies' assets with the same priority and validity as before the bankruptcy filing. About Kenbenco Inc. Kenbenco, Inc. is an established structural and miscellaneous fabrication company in Saugerties, N.Y. It conducts business under the name Benson Steel Fabricators. Kenbenco and its affiliates, JJ Ben Corporation and Ben Mur, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 24-35470) on May 10, 2024. At the time of the filing, Kenbenco reported $500,001 to $1 million in assets and $1 million to $10 million in liabilities. Judge Kyu Young Paek oversees the cases. The Debtor is represented by: Michelle L Trier Genova, Malin & Trier, LLP 1136 Route 9 Wappingers Falls, NY 12590 Tel: 845-298-1600 Email: michelle@gmtllp.com LASERSHIP INC: $953MM Bank Debt Trades at 32% Discount ------------------------------------------------------ Participations in a syndicated loan under which Lasership Inc is a borrower were trading in the secondary market around 68.1 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $953 million Payment in kind Term loan facility is scheduled to mature on August 10, 2029. LaserShip is a regional last-mile delivery company that services the Eastern and Midwest United States. Founded in 1986, LaserShip is based in Vienna, Virginia, and has sorting centers in New Jersey, Ohio, North Carolina, and Florida. LIGADO NETWORKS: Creditor Slams 'Exorbitant' $115MM DIP Loan Fees ----------------------------------------------------------------- Yun Park of Law360 reports that Ligado Networks LLC's largest unsecured creditor has requested that a Delaware bankruptcy judge reject the company's proposed $115 million Chapter 11 financing package, arguing that Ligado's secured lenders are attempting to secure $100 million in fees as part of the deal. About Ligado Networks Ligado Networks, formerly LightSquared, provides mobile satellite services. The Company's satellite and terrestrial solutions, combined with powerful, lower mid-band spectrum, serve to supplement and broaden mobile coverage across the United States and Canada. On the Web: http://www.ligado.com/ On January 5, 2025, Ligado Networks LLC and certain of its affiliates each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 25-10006). Perella Weinberg Partners LP is serving as investment banker to Ligado, FTI Consulting, Inc. is serving as financial advisor, Milbank LLP is serving as legal counsel, and Richards, Layton & Finger P.A. is serving as co-counsel. Omni Agent Solutions LLC is the claims agent. An ad hoc group of first lien creditors is being advised by Guggenheim Securities, LLC as financial advisor, and by Sidley Austin LLP as counsel. An ad hoc group of crossholding creditors is being advised by Kirkland & Ellis LLP. LONESTAR FIBERGLASS: Gets OK to Use Cash Collateral Until April 2 ----------------------------------------------------------------- Lonestar Fiberglass Components of Texas, LLC received interim approval from the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, to use cash collateral until April 2. The interim order signed by Judge Michael Parker on Jan. 29 authorized the company to use the cash collateral of its secured creditors to pay the expenses set forth in its projected budget. Judge Parker previously issued a bridge order on Jan. 24, allowing the company to use up to $41,387.48 in cash collateral to pay subcontractors, payroll, resin purchases, and miscellaneous purchases. Comerica Bank and other creditors that may have a valid and perfected lien will be granted replacement liens on all post-petition cash collateral and property of Lonestar, to the same extent and with the same priority as their pre-bankruptcy liens. As for adequate protection for Comerica Bank and Essential Funding, the budget forecasts receipts and disbursements along with projected ending cash on a weekly basis. Projected ending cash refers to the actual balance of monies in the company's bank accounts. To the extent that Lonestar's actual ending cash on a weekly basis exceeds projected ending cash, 15% of the excess cash balance will be paid to Comerica Bank while 4% will be paid to Essential Funding during the interim period. The next hearing is set for April 2. About LoneStar Fiberglass Lonestar Fiberglass Components of Texas, LLC manufactures fiberglass swimming pools and spas and sells them directly and through dealers. The company is based in New Braunfels, Texas. Lonestar filed Chapter 11 petition (Bankr. W.D. Texas Case No. 24-52593) on December 19, 2024, listing up to $10 million in both assets and liabilities. Chris Owens, managing member, signed the petition. Judge Michael M. Parker oversees the case. The Debtor is represented by: Morris Eugene White, III, Esq. Villa & White, LLP Tel: 210-225-4500 Email: treywhite@villawhite.com LOTUS OASIS: Sec. 341(a) Meeting of Creditors on February 28 ------------------------------------------------------------ On January 30, 2025, Lotus Oasis Homewood LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Georgia. 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 Section 341(a) to be held on February 28, 2025 at 01:00 PM via Telephone conference. To attend, Dial 888-902-9750 and enter participation code 9635734. About Lotus Oasis Homewood LLC Lotus Oasis Homewood LLC operates in the real estate sector. Lotus Oasis Homewood LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 25-50962 ) on January 30, 2025. In its petition, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. The Debtor is represented by: John A. Christy, Esq. SCHREEDER, WHEELER & FLINT, LLP 1100 Peachtree Street, NE, Suite 800 Atlanta, GA 30309 Tel: (404) 954-9819 E-mail: jchristy@swfllp.com MARINE WHOLESALE: U.S. Granted Summary Adjudication in Tax Lawsuit ------------------------------------------------------------------ Judge Sheri Bluebond of the United States Bankruptcy Court for the Central District of California granted summary adjudication in favor of the United States of America and its agency the Alcohol and Tobacco Tax and Trade Bureau on Phase II of the litigation with Marine Wholesale and Warehouse Co. with respect to the objection to Claim No. 5-1. For several years, Marine Wholesale and Warehouse Co. held an export warehouse proprietor permit issued by Bureau of Alcohol, Tobacco and Firearms, Permit Number EW-CA-5, which allowed it to lawfully receive tobacco products on which the federal excise tax had not been paid, for the purpose of exportation or for consumption beyond the territorial jurisdiction of the United States. Under the applicable law, Marine Wholesale was required to apply for a new permit with the Alcohol and Tobacco Tax and Trade Bureau, or its predecessor agency, ATF, if there was a change in the identity of principal stockholders exercising actual or legal control of the company. If, upon such change, Marine Wholesale failed to file a new application within 30 days, its permit automatically terminated by operation of law. Prior to the events at issue in this proceeding, Marine Wholesale had previously failed to report changes in ownership. Marine Wholesale then applied for new permits and, in conjunction with those applications, reiterated its obligation to notify the TTB (or its predecessor) of reportable changes in ownership. On Dec. 15, 2012, at a meeting of Debtor's Board of Directors, the shares of Debtor were transferred and sold. Marine Wholesale filed for chapter 11 relief on July 12, 2022, Case No. 2:22-bk-13785-BB. On Aug. 8, 2022, the TTB filed its proof of claim in this bankruptcy case in the total amount of $25,225,464.63, comprised entirely of a secured claim (Claim No. 5-1). The Debtor filed an Objection to Claim Number 5, asserting that it does not owe any tax liability to the TTB. In Phase I of the litigation on Debtor's Objection, this Court found, in relevant part, that: 1. The December 15, 2012, transfer of shares resulted in a change of legal control under 27 C.F.R. Sec. 44.107. 2. Such change of legal control was required to be reported to the TTB within 30 days. 3. Marine Wholesale failed to report the change to the TTB within 30 days after the change. 4. Marine Wholesale's EW Permit terminated 30 days after the Dec. 15, 2012, change of legal control. In its Scheduling Order dated Oct. 18, 2024, the Court identified the legal issues to resolve during Phase II of the litigation of the Objection. The primary issue in this phase is whether the exemption from tax found in section 5704(b) of the Internal Revenue Code of 1986 applies, such that a former permit holder -- notwithstanding the automatic termination of its EW Permit -- can be relieved of the liability otherwise imposed by section 5761(c). On Nov. 6, 2024, the Debtor and the United States filed cross motions for summary adjudication. At issue in this Phase II litigation is whether the Debtor remained eligible for the tax exemption created by section 5704(b) after the automatic termination of its permit. The Court finds that it did not. Notwithstanding that conclusion, the Debtor argues that it remained eligible for the tax exemption created by 26 U.S.C. Sec. 5704(b) so long as it operated its business during the relevant time period in accordance with the regulations that govern its day-to-day operations (such as labelling requirements), and that the regulations referenced in section 5704(b) do not include the requirement that it maintain a valid permit. The Court rejects this analysis. The Court points that while the definitions of "export warehouse" and "export warehouse proprietor" that appear in 27 C.F.R. Sec. 44.11 do not specifically reference the need for a permit, the applicable statute and regulations, when read in their entirety, make clear that no one is permitted to operate as an export warehouse proprietor without a valid permit in effect. The Court finds that, at a minimum, 27 C.F.R. Sec. 44.107 is one of the regulations that govern how an export warehouse proprietor must operate in order to qualify for the tax exemption available under 26 U.S.C. Sec. 5704(b). According to the Court, that regulation requires the proprietor to dispose of its tobacco products, make a closing inventory and a closing report after an automatic termination occurs (unless the proprietor timely applies for a new permit). Therefore, even if the Debtor still fell within the definition of an export warehouse proprietor after the termination of its permit, it did not comply with the regulations that govern the operation of its business, and the tax exemption created by section 5704(b) ceased to be available to the Debtor after the automatic termination of its permit, the Court concludes. The holding of the Court in Phase II is that the Debtor may not rely upon 26 U.S.C. Sec. 5704(b) as a defense to liability under 26 U.S.C. Sec. 5761(c). Therefore, the Debtor is liable under section 5761(c), subject to any other defenses that may be available to it, in an amount to be determined in a later phase of this litigation. (The Court makes no determination at this time as to the amount of the Debtor's liability, if any, for taxes or penalties.) The United States retains all arguments as to any defenses or purported defenses that may be asserted by the Debtor in connection with that later determination. Therefore, except to the extent that the Court has modified the proposed form of order lodged by the TTB in response to the arguments advanced by the Debtor in the parties' Dec. 30, 2024 stipulation, any objections interposed by the Debtor to the form of this Order are overruled. A copy of the Court's decision dated Jan. 27, 2025, is available at https://urlcurt.com/u?l=97YMjH from PacerMonitor.com. Attorneys for United States of America: Joseph T. McNally Acting United States Attorney David M. Harris Assistant United States Attorney Chief, Civil Division Jolene Tanner Assistant United States Attorney Chief, Tax Section Federal Building, Suite 7211 300 North Los Angeles Street Los Angeles, CA 90012 Telephone: (213) 894-3544 Facsimile: (213) 894-0115 E-mail: jolene.tanner@usdoj.gov About Marine Wholesale and Warehouse Co. Marine Wholesale and Warehouse Co. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-13785) on July 12, 2022. In the petition signed by Jennifer Hartry, vice president and secretary, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Sheri Bluebond oversees the case. David R. Haberbush, Esq., at Haberbush, LLP is the Debtor's counsel. MEADOWLARK HILLS: Fitch Affirms 'BB+' IDR, Outlook Stable --------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) and the rating on the series 2021A and 2022A health care facilities revenue bonds and series 2021B taxable health care facilities revenue bonds issued by the city of Manhattan, Kansas on behalf of Meadowlark Hills at 'BB+'. The Rating Outlook is Stable. Entity/Debt Rating Prior ----------- ------ ----- Meadowlark Hills (KS) LT IDR BB+ Affirmed BB+ Meadowlark Hills (KS) /General Revenues/1 LT LT BB+ Affirmed BB+ The 'BB+' rating reflects Meadowlark Hills' steady market position as the leading life plan community (LPC) as well as its predominantly type-B contracts, which provide for good profitability despite a high exposure to skilled nursing facility (SNF) operations, particularly those reimbursed by Medicaid. Fitch believes the community's historical track record of strong cost management against a backdrop of a challenged primary market area (PMA) and high exposure to Medicaid warrants a rating in the higher end of the 'BB' category and notes that Meadowlark Hills' financial profile metrics are maintained at levels consistent with the 'BB+' rating throughout Fitch's stress case scenario. The affirmation of the 'BB+' rating also considers Meadowlark Hills' anticipated 43-unit independent living (IL) expansion project tentatively known as the Adler. Akin to the recently completed Monarch, the Adler is expected to be a modern building featuring parking and even higher-end offerings such as penthouse suites and a wellness space. Meadowlark Hills is currently in the design phase of the project and management anticipates construction to begin in early 2026. The community has notified its Passport Members of the project and has collected $1,000 deposits (90% refundable) from over 100 potential residents, but presales are yet to be pursued. The rating incorporates expectations that Meadowlark Hills will secure roughly $46 million in debt financing concurrent with the start of construction. SECURITY Bondholders are granted a security interest in the gross revenues of Meadowlark Hills and a first mortgage lien on the Meadowlark Hills campus. A fully-funded debt service reserve fund provides additional security. KEY RATING DRIVERS Revenue Defensibility - 'bbb' Limited Competition; Solid Demand The 'bbb' revenue defensibility assessment reflects Meadowlark Hills' solid market position as a single-site LPC with limited competition. These factors support solid occupancy, as seen in an improvement of the community's IL occupancy from 91% to 95% from FY23 (June 30 YE) to FY24, despite operating in a challenged PMA, characterized by population declines and high Medicaid exposure. Despite these challenges, Fitch believes that Meadowlark Hills' demand indicators are solid as the community's waitlist has over 600 members and the SNF maintains a five-star quality rating from the Centers for Medicare and Medicaid Services (CMS). Meadowlark Hills faces very little competition as the nearest comparable CCRC is over 50 miles away and the other senior living providers in the immediate PMA are mostly standalone SNF or assisted living (AL) communities. Meadowlark Hill's market draw is currently relatively narrow, with only about 28% of IL entrants originating from other areas of the state (albeit an increase from about 7% in the prior fiscal year) and about 10% originating from outside the state. However, Fitch notes that the recently completed Monarch (which is 100% occupied) and planned four-story Adler project are higher-end offerings with enhanced amenities. Fitch expects these new units will allow Meadowlark Hills to appeal to more affluent residents and diversify its geographic draw. Management implemented a 4% IL entrance fee increase and 2% IL monthly service fee increase in FY24 and has budgeted for a 5.7% increase to IL entrance fees and 2% increase to IL monthly service fees for FY25. Even with the rate increases, Fitch views Meadowlark Hills' rates and affordability as providing moderate price flexibility. The community's weighted average entrance fee of approximately $236,000 compares favorably with average home values in Riley County, KS and the net worth of new IL residents. Operating Risk - 'bbb' Solid Core Profitability; High SNF and Medicaid Exposure Fitch's 'bbb' assessment of Meadowlark Hills' operating risk reflects a historical track record of strong cost management and the community's predominantly type-B contract mix. The midrange assessment also incorporates the cash flow benefits from the usage of entrance fees for health care service payment, which provides for increased balance sheet stability and mitigates risks associated with Meadowlark Hills' high exposure to skilled nursing operations (59% of net resident service revenue) and Medicaid payor mix exposure, which accounted for 33% of SNF net revenues in FY24. Meadowlark's successful Monarch project along with anticipated IL expansion objectives allay asymmetric risks posed by high Medicaid exposure. Meadowlark Hills' occupancy growth, expense controls and fee increases, especially from an approximately 20% increase in the community's Medicaid reimbursement rate following a rebasing of the nursing facility daily Medicaid rate, helped the community to generate a favorable operating ratio, net operating margin (NOM), and NOM-adjusted of 86.6%, 15.1% and 21.8%, respectively, in FY24. In FY24 (October 2023), Meadowlark Hills closed its eight-bed Home Plus community (memory care [MC]), which explains declined MC occupancy over the last year. Due to a variety of factors that depressed margins, including stringent regulations, higher demanded wages, and inconvenient distance from the main campus, management has put the Home Plus community up for sale. The location has not yet sold. Management estimates the Adler IL expansion project will cost roughly $46 million, which it plans to finance with additional debt, of which $32 million will be long term, permanent debt. Management expects to collect approximately $18 million in initial entrance fees, of which $14 million will be applied to pay down temporary debt, with the remainder of $4 million to be retained on the community's balance sheet. Fitch believes this is a reasonable expectation given the successful fill of the Monarch and continued interest reflected by over 100 deposits from Passport members. Meadowlark Hills plans to begin construction in early 2026 and complete construction by late 2027. Meadowlark Hills has a modest debt burden. that Fitch believes will remain stable incorporating the plan of finance for the Adler project. Maximum annual debt service (MADS) equated to a moderate 10.2% of revenues and revenue-only MADS coverage was a strong 1.9x in FY24. The community's debt to net available of 6.8x in FY24 also indicates a modest debt burden. Pro forma ratios factoring in the plan of finance for the Adler project show stability in Meadowlark Hills' capital-related metrics following project stabilization and repayment of the temporary debt. Meadowlark Hills has $2.8 million remaining in the Monarch project fund; these funds will be used for general capital expenditures, allowing the community to preserve liquidity. Other budgeted capital expenditures are for routine needs. Financial Profile - 'bb' Financial Profile Consistent with Rating Through Moderate Stress Given Meadowlark Hills' midrange revenue defensibility and operating risk assessments, Fitch expects the community will maintain a financial profile that is consistent with the 'BB+' rating even during the economic and financial volatility assumed in Fitch's stress case scenario, factoring in the additional debt expected for the Adler project. MADS coverage has averaged 2.3x over the past five years, which is solid for the 'bb' financial profile. Meadowlark Hills' favorable financial performance in recent periods has allowed the community to improve its liquidity position to 36 million at Dec. 31, 2024 from 27.5 million as of FYE 2023, equating to 64.1% of the community's adjusted debt as of Dec. 31, 2024. Unrestricted cash and investments equated to 460 days cash on hand (according to Fitch's calculations) at Dec. 31, 2024, which is neutral to Fitch's assessment of Meadowlark Hills' financial profile. Asymmetric Additional Risk Considerations No asymmetric risks were factored into the rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Weakening in the operations/financial profile or issuance of additional debt such that cash-to-adjusted debt is sustained below 35% and/or MADS coverage is expected to be consistently at or below 1.3x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Improved financial profile such that cash-to-adjusted debt is expected to stabilize above 75% and MADS coverage is consistently above 1.8x; - Reduced concentration of net resident service revenues in skilled nursing; - Improved SNF payor mix where Medicaid consistently accounts for less than 25% of the skilled nursing net revenues. PROFILE Meadowlark Hills is a predominantly type-B LPC located on approximately 55 acres in Manhattan, KS. The campus currently consists of 187 IL units (54 duplexes/cottages and 133 apartments), 38 AL units (all private, with 14 utilized as memory care units) and 133 skilled nursing beds (74 semi-private and 60 private). Meadowlark Hills generated about $34.4 million in total operating revenue at FYE June 30, 2024. 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. MEDICAL PROPERTIES: Moody's Raises CFR to 'B3', Outlook Stable -------------------------------------------------------------- Moody's Ratings upgraded Medical Properties Trust, Inc.'s Corporate Family Rating to B3 from Caa1 and Speculative Grade Liquidity Rating (SGL) to SGL-3 from SGL-4. In the same rating action, Moody's assigned a B2 rating to the new USD and Euro-denominated backed senior secured notes being issued by its primary operating subsidiary, MPT Operating Partnership, LP's (collectively MPT or the REIT). Moody's also affirmed MPT Operating Partnership, LP's backed senior unsecured debt rating at Caa1. The outlook has been revised to stable from negative. The actions reflect Moody's view that MPT's liquidity will improve with the issuance of the secured notes because the proceeds will be used to repay its 2025 and first half 2026 debt maturities, and a portion of the revolver draw. For the same reason, the speculative grade liquidity (SGL) rating was revised to SGL-3 (Adequate liquidity) from SGL-4 (Weak liquidity). The stable outlook reflects Moody's expectation that over the next 2-4 quarters MPT's operating cash flow will remain at about current levels and the REIT will maintain adequate liquidity. RATINGS RATIONALE MPT's B3 CFR reflects the REIT's tenant mix which includes hospital and other medical facility operators with weak credit profiles, high net debt to EBITDA leverage, and its modest fixed charge coverage. Although the REIT has re-tenanted the hospitals that were leased to the now bankrupt health system, Steward Health Care, to five other hospital operators in late 2024, the rent from the new operators is initially a fraction of the rent that was due under the contract with Steward, and will not be equivalent to that level until late 2026. MPT's CFR also reflects its large scale and the geographic diversification in its portfolio. Its international properties, primarily in Europe, accounted for almost half its asset base at the end of the third quarter of 2024. The REIT invests in several types of hospitals and other healthcare facilities, including inpatient rehabilitation hospitals and behavioral health facilities, which serve different patient populations and have different reimbursement mechanisms. Adverse policy changes, such as a potential decrease in Medicaid funding or other actions that result in a higher uninsured population, could weaken the credit profile of some of MPT's tenants. The primary risk mitigant for the REIT is that rent accounts for a small share of its tenants' expenses. With the new secured debt issuance, MPT would be able to address its $1.2 billion 2025 debt maturity, and its $669 million first half 2026 debt maturity. However, the materially higher interest cost for the new debt would weaken the REIT's fixed coverage ratio and its unencumbered asset ratio (unencumbered assets as a share of gross assets) would decline to the 50-60% range, depending on proceeds from the new issuance. The B2 rating assigned to the secured debt issue, one notch above the CFR, reflects its collateral coverage. The Caa1 rating for the senior unsecured notes reflects their subordinate position in the new capital structure and the REIT's smaller unencumbered asset base after the secured debt issue. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS MPT's ratings could be upgraded if the company shows sustained improvement in operating performance and its operating cash flow grows, particularly for properties that were previously leased to Steward Health Care and have now been re-tenanted. The ratings could also be upgraded if the REIT's fixed charge coverage remains above 1.7x and its financial flexibility improves with good liquidity and material room on its covenants. A rating downgrade is likely if the REIT's liquidity weakens or if or if it faces additional tenant challenges within its portfolio. Medical Properties Trust, Inc., headquartered in Birmingham, Alabama, is a REIT that invests in acute care hospitals, behavioral health hospitals, long-term acute care hospitals, inpatient rehabilitation facilities, and other medical and surgical facilities. The REIT conducts its operations through its operating partnership subsidiary, MPT Operating Partnership, LP. The principal methodology used in these ratings was REITs and Other Commercial Real Estate Firms published in February 2024. MIC GLEN: Moody's Rates New $573.7MM First Lien Term Loan 'B3' -------------------------------------------------------------- Moody's Ratings assigned a B3 rating to MIC Glen LLC's proposed $573.7 million senior secured first lien term loan. Concurrently, Moody's affirmed the company's B3 corporate family rating, B3-PD probability of default rating, B3 rating on the $90 million senior secured first lien revolving credit facility and B3 ratings on the $480 million and the $115 million senior secured first lien term loans. The outlook remains stable. The proposed $573.7 million term loan will combine the two existing term loan tranches into one and will result in the term loan pricing of S+350 which will modestly lower the interest expense. Moody's will withdraw the B3 ratings on the $480 million and the $115 million senior secured first lien term loans upon the closing of the transaction. The affirmation of the B3 CFR reflects that the proposed transaction will have no impact on MIC Glen's leverage and will modestly improve EBIT/interest. It also reflects that Moody's expect the company's debt/EBITDA to improve to 5.7x and EBIT/interest to 1.5x by year end-2025 from 6.1x and 1.2x respectively as of the last twelve months ended Q3 2024 on the back of modest improvements in operating performance including contributions from new store openings to EBITDA growth as well as modestly lower interest expense. The B3 rating on the proposed and existing term loans reflects that they are secured by all assets and reflect the entirety of MIC Glen's capital structure. RATINGS RATIONALE The B3 CFR reflects MIC Glen's modest scale based on revenue and restaurant units, as well as its high leverage. It also reflects the company's geographic concentration in south central US (primarily Arkansas, Oklahoma and Missouri) as well as its concentration in the Taco Bell brand. MIC Glen's rating is supported by the strength of the Taco Bell brand, the brand's awareness among consumers and perceived value proposition as evidenced by positive same store sales growth over time. MIC Glen's liquidity is good, supported by cash on hand, an upsized revolving credit facility while its strategy of utilizing sale leasebacks add to its liquidity profile. Moody's expect the higher gross capital spend on new restaurant openings will negatively impact free cash flow, which Moody's expect to be negative before sale leaseback transactions over the next 12 months. The stable outlook reflects Moody's expectation that the company will continue to improve its credit metrics while maintaining good liquidity. It also includes the expectation the company will maintain a balanced financial policy and not enter into debt financed shareholder distributions that will increase leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could result in an upgrade include sustained improvement in credit metrics as well as greater size, scale, and geographic diversification. An upgrade would also require adherence to more conservative financial policies, including a demonstrated willingness to achieve and maintain stronger credit metrics. Quantitatively, ratings could be upgraded if on a sustained basis, debt to EBITDA remained under 5.5 times and EBIT coverage of interest expense was over 1.75 times. A downgrade could occur in the event there were a sustained deterioration in operating performance or the company adopted more aggressive financial strategies, which could include debt-financed dividends. Quantitatively, ratings could be downgraded if on a sustained basis Debt/EBITDA was above 6.75x or EBIT to interest fell below 1.25x. MIC Glen LLC owns and operates 395 units, consisting of 345 Taco Bells, 38 7 Brews and 12 Whataburgers primarily throughout the South-Central region of the US. Revenue for the twelve month period ended September 03, 2024 was $683 million. MIC Glen is majority owned by affiliates of private equity firm Mubadala Capital. The principal methodology used in these ratings was Restaurants published in August 2021. MID-ATLANTIC RHEUMATOLOGY: Case Summary & 5 Unsecured Creditors --------------------------------------------------------------- Debtor: Mid-Atlantic Rheumatology, LLC 231 Najoles Road Millersville, MD 21108 Business Description: The Debtor is a medical group practice located in Millersville, MD that specializes in internal medicine and rheumatology. Chapter 11 Petition Date: January 31, 2025 Court: United States Bankruptcy Court District of Maryland Case No.: 25-10845 Judge: Hon. David E. Rice Debtor's Counsel: Daniel Staeven, Esq. FROST LAW 839 Bestgate Rd. Suite 400 Annapolis MD 21401 Email: daniel.staeven@frosttaxlaw.com Total Assets: $679,494 Total Liabilities: $2,733,985 The petition was signed by Erinn Maury, MD as sole member. A full-text copy of the petition, including a list of the Debtor's five unsecured creditors, is available for free on PacerMonitor at: https://www.pacermonitor.com/view/LOVQASI/Mid-Atlantic_Rheumatology_LLC__mdbke-25-10845__0001.0.pdf?mcid=tGE4TAMA MILFORD HOUSE: Seeks to Hire Andre L. Kydala as Bankruptcy Counsel ------------------------------------------------------------------ The Milford House, LLC seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to employ the Law Firm of Andre L. Kydala to handle its Chapter 11 case. The firm will be paid at its hourly rate of $425. The retainer is $7,500. Andre Kydala, 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: Andre L. Kydala, Esq. Law Firm of Andre L. Kydala 12 Lower Center St. Clinton, NJ 08809 Telephone: (908) 735-2616 Email: kydalalaw@aim.com About The Milford House The Milford House, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 24-22174) on December 11, 2024, with as much as $50,000 in both assets and liabilities. Andre Kydala, Esq., represents the Debtor as legal counsel. MMA LAW FIRM: Court Extends Cash Collateral Access to April 30 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, issued a sixth interim order extending MMA Law Firm, PLLC's authority to use cash collateral from Jan. 24 to April 30. The sixth interim order granted secured creditors, including Equal Access Justice Fund, LP and EAJF ESQ Fund, LP, continuing rollover liens and security interests in MMA Law Firm's assets. The company's authority to use cash collateral will terminate before April 30 if it defaults under the order; its Chapter 11 case is converted to one under Chapter 7; or a Chapter 11 trustee is appointed. About MMA Law Firm MMA Law Firm, PLLC is a Houston-based law firm specializing in insurance claim management, negotiation and litigation. MMA Law Firm filed Chapter 11 petition (Bankr. S.D. Texas Case No. 24-31596) on April 9, 2024, with $100 million to $500 million in assets and $10 million to $50 million in liabilities. Zach Moseley, managing member, signed the petition. Judge Eduardo V. Rodriguez oversees the case. The Debtor is represented by Johnie Patterson, Esq., at Walker & Patterson, P.C. MMV F&B II: Case Summary & Seven Unsecured Creditors ---------------------------------------------------- Debtor: MMV F&B II LLC d/b/a Curry Up Now (Grandscape) 5752 Grandscape Blvd. Suite 310 The Colony, TX 75056 Business Description: The Debtor operates in the restaurant industry specializing in Indian cuisine. Chapter 11 Petition Date: January 31, 2025 Court: United States Bankruptcy Court Eastern District of Texas Case No.: 25-40260 Debtor's Counsel: Joyce W. Lindauer, Esq. ATTORNEY AT LAW & MEDIATOR 12900 Preston Rd. Dallas TX 75230 Tel: (972) 503-4033 E-mail: joyce@joycelindauer.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Ankita Mehta as managing partner. A copy of the Debtor's list of seven unsecured creditors is available for free on PacerMontor at: https://www.pacermonitor.com/view/6HPQR7Y/MMV_FB_II_LLC__txebke-25-40260__0002.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free on PacerMonitor at: https://www.pacermonitor.com/view/ZYXT5VQ/MMV_FB_II_LLC__txebke-25-40260__0001.0.pdf?mcid=tGE4TAMA MOSAIC SWNG: Seeks Chapter 11 Protection in Texas ------------------------------------------------- On January 30, 2025, Mosaic SWNG LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas. According to court filing, the Debtor reports between $50 million and $100 million in debt owed to 50 and 99 creditors. The petition states funds will be available to unsecured creditors. About Mosaic SWNG LLC Mosaic SWNG LLC, doing business as Mosaic Apartments, was established in October 2021 with the exclusive purpose of acquiring and owning the 504-unit multifamily residential property known as "Mosaic Apartments." The apartment complex, built in 1981, is located at 4025 Burke Road, Pasadena, Texas, in Harris County. Mosaic SWNG LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex.Case No. 25-90010) on January 30, 2025. In its petition, the Debtor reports estimated assets and liabilities between $50 million and $100 million each. Honorable Bankruptcy Judge Christopher M. Lopez handles the case. The Debtor is represented by: Melissa A. Haselden, Esq. HASELDEN FARROW, PLLC 708 Main Street 10th Floor Houston, TX 77002 Tel: 832-819-1149 Email: MHaselden@HaseldenFarrow.com MOTUS GROUP: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings affirmed Motus Group, LLC's Long-Term Issuer Default Rating (IDR) at 'B-'. Fitch also affirmed the company's $50 million secured RCF and proposed upsized $600 million first lien secured term loan at 'B' with a Recovery Rating of 'RR3'. The Rating Outlook is Stable. The incremental $84 million first lien term loan will be used to fund a proposed acquisition. Motus Group LLC's rating reflects its small scale, high leverage profile and weaker revenue growth than earlier projected for 2024. Consequently, Fitch-defined free cash flow (FCF) margins are anticipated to breakeven in fiscal 2024, with the expectation of improvement from fiscal 2025. Fitch expects Motus' Fitch-adjusted EBITDA leverage to be approximately 7.6x by the fiscal YE 2024, and remain near 7.0x through the rating period. The (CFO-Capex)/debt is expected to be around 5% by fiscal YE 2027, consistent with other Fitch-rated 'B-' issuers. The rating also reflects the company's strong EBITDA margins and high retention rates. Key Rating Drivers Leverage Remains Elevated: Fitch forecasts gross leverage to fall below 7.0x by 2027, driven by steady mid-single-digit revenue growth and operating leverage. Fitch projects that the company will continue to see top-line growth along with modest EBITDA margin expansion. Given the private equity ownership that is likely to prioritize growth and ROE, Fitch believes accelerated debt repayment is unlikely despite strong FCF generation. Fitch expects capital to be used for acquisitions to accelerate growth or for dividends to equity owners, keeping financial leverage at elevated levels. Improving Interest Coverage and FCF: Fitch forecasts modestly positive FCF for Motus, rising to the low to mid-teens range throughout the rating horizon, supported by higher EBITDA and reduced interest expenses from 2025 onwards. The interest coverage ratio is expected to be 1.2x in 2024, improving to 1.7x-2.0x in subsequent years, driven by enhanced EBITDA margins and lower effective interest rates. High Recurring Revenue and Revenue Retention: Motus benefits from recurring revenue, which were over 90% as of September 2024. A gross retention rate above 90% and a net retention rate over 100% provide significant visibility into future revenue streams. Motus has consistently grown its annual recurring revenue (ARR), indicating a stable recurring revenue base as customers typically renew. A multiyear renewal strategy is in place and has achieved a significant increase YoY of renewals on multiyear contracts. Liquidity Remains Sufficient: Motus's liquidity is supported by positive FCF, full availability on its $50 million secured revolver, and approximately $45 million in cash as of September 2024. There are no near-term debt maturities, and the $50 million revolver maturity will be extended by around 21 months to September 2028, with the first lien term loan due in 2028. Leading FAVR Provider: Motus is a leading employee vehicle reimbursement solutions provider. The company offers end-to-end cloud-based software solutions for fixed- and variable-rate reimbursements (FAVR), which allows companies to reimburse employees for personal vehicle use on a tax-free basis. Growth in the industry is expected as employers continue to shift toward having employees drive their own vehicles and expense tracking and costs. Moderate Revenue Diversity: As of September 2024, vehicle reimbursement programs for expense claims and distribution accounted for approximately 90% of ARR, with the remainder from wireless device expense programs and relocation or remote work services. Motus serves more than 3,000 small and medium-sized businesses, mid-market, and enterprise B2B customers across various industries, with no single industry exceeding 15% of the customer base. Derivation Summary Motus' 'B-' rating is supported by its leading position in the vehicle reimbursement industry and reflects the company's elevated leverage. Fitch views its financial flexibility as relatively more constrained than peers in the technology sector. Its revenue scale, leverage and liquidity profile are consistent with the 'B-' rating. Cash flow metrics and leverage metrics remain in line with other similarly rated software companies. Like other private equity owned issuers, Fitch believes that the company's focus may be on return on equity (ROE) rather than debt reduction. Key Assumptions Fitch's Key Assumptions Within the Rating Case for the Issuer: - Revenue growth in the mid-single digits; - EBITDA margins in the low 40s over the forecast horizon; - Capex at approximately 4%-4.5% of revenue; - Working capital expected to remain in line with historical trends; - No dividends Recovery Analysis Key Recovery Rating Assumptions - The recovery analysis assumes that Proofpoint would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated; - Fitch has assumed a 10% administrative claim with a GC approach; - The recovery analysis assumes that Motus enters a distressed scenario due to challenges surrounding their main business line, vehicle reimbursement due to increased competition. Fitch also assumes their device and location solution segment experiences compressed margins as a result of direct peers ramping up their offerings and competing head-to-head for market share resulting in price battles. Given these challenges, Fitch assumes a going concern EBITDA of $55 million; - Fitch applies an EV multiple of 7.0x EBITDA to the GC EBITDA to calculate a post-reorganization EV. The choice of this multiple considered the following factors; - Fitch's Bankruptcy Enterprise Values and Creditor Recoveries showed that bankruptcy case study exit multiples for technology peer companies ranged from 2.6x to 10.8x; - Of these companies, only five were in the Software sector: Allen Systems Group, Inc. (8.4x); Avaya Inc. (2017: 8.1x and 2023: 7.5x); Aspect Software Parent, Inc. (5.5x), Sungard Availability Services Capital, Inc. (4.6x) and Riverbed Technology Software (8.3x); - After applying the 10% administrative claim, adjusted EV of approximately $350 million is available for claims by creditors resulting in a 'B'/'RR3' for the secured first lien debt and RCF. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - (CFO-capex)/debt trending toward 0%; - EBITDA interest coverage below 1.25x on a sustained basis; - Organic revenue growth sustained near or below 0%, erosion of retention rates, or declines in ARR; - Erosion of liquidity driven by aggressive spending or weaker economic conditions. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA interest coverage above 1.75x on a sustained basis; - (CFO-Capex)/debt above 2.5% on a sustained basis; - Expectations for leverage below 7.5x on a sustained basis; - End market or product diversification from expansion or acquisitions into adjacent markets. Liquidity and Debt Structure Adequate Liquidity: The company's liquidity is projected to be adequate, supported by its FCF generation and pro forma for the transaction approximately $50 million of cash on balance sheet and $50 million of undrawn revolver. Fitch forecasts Motus's FCF to be in the high-single digits in 2025 due to the recent transaction and grow to the mid-to-high teens through 2027, supported by EBITDA margin in the low-40s. Debt Structure: Pro forma the transaction, Motus has $600 million of secured first lien debt due 2028 and $50 million undrawn revolver with extended maturity of 2028. Given the recurring nature of the business and adequate liquidity, Fitch believes Motus will be able to make its required debt payments. Issuer Profile Motus Group, LLC is a "Software as a Service" provider of software solutions for vehicle reimbursement. It also offers reimbursement solutions for wireless devices and relocation/remote work. The company is privately owned by Thoma Bravo and Permira Advisors. 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 ----------- ------ -------- ----- Motus Group, LLC LT IDR B- Affirmed B- senior secured LT B Affirmed RR3 B MULTIPLAN CORP: S&P Lowers ICR to 'SD' on Debt Restructuring ------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on MultiPlan Corp. and MPH Acquisition Holdings LLC (the borrower) to 'SD' (selective default) from 'CC', and removed Multiplan from CreditWatch negative. S&P also lowered its issue-level ratings on MPH Acquisition Holdings senior secured debt and senior unsecured debt to 'D' from 'CC' and 'C', respectively. MultiPlan Corp., through its issuer subsidiary MPH Acquisition Holdings LLC, has completed the exchange of more than 99% of its debt. MPH Acquisition issued new secured debt in exchange for existing debt held by participating lenders. Lenders comprising 99.2% of the company's senior secured term loan 2028, 99.4% of the company's senior secured notes due 2028, and 99.8% of the company's senior unsecured PIK Toggle Notes due 2027, participated in the exchange. Pursuant to the deal, it will issue a new debt mix at par value of the existing debt held by participating lenders. S&P said, "In our view, lenders will receive less than originally promised because the maturity dates on the debt to be exchanged at par value will be extended by three or more years and replaced with a new debt mix, altering the priority and timing of payments. While the interest rates on the new debt are modestly higher on a weighted basis, we believe they are well below what the company would be required to pay for new capital in the current market, and what an issuer with a similar risk profile would have to pay to raise new capital. "We also view the transaction as distressed because without it we think there is a realistic possibility of a conventional default over the medium term. We expect MultiPlan's adjusted financial leverage to be near 8.0x by year-end 2024, and that it has limited ability to materially reduce leverage ahead of very sizable debt maturities in 2027-2028, totaling about $4.6 billion. "We will most likely raise our issuer credit rating on MultiPlan Corp. and MPH Acquisition Holdings to 'B' or 'B-'. We will assess the issue specific ratings based on our traditional recovery analysis considering the updated capital structure. "While this transaction will ultimately extend the company's debt maturity profile, the company will continue to carry heavy debt with financial leverage expected to sustain near 8.0x through 2025. We consider the associated debt service burden as being a significant encumbrance given the company's recent trend of stalled revenue growth and margin compression." MultiPlan is publicly traded and provides data analytics and technology-enabled solutions that aim to bring affordability, efficiency, and fairness to the U.S. health care industry. Through its proprietary data and technology platform, the company provides out-of-network cost management, payment and revenue integrity, data and decision science, business-to-business health care payments, and other services to payors of health care. NANOSTRING: Court Narrows Claims in 10x v. Prognosys Patent Suit ---------------------------------------------------------------- In the case captioned as 10x GENOMICS, INC and PROGNOSYS BIOSCIENCES, INC., Plaintiffs, v. CURIO BIOSCIENCES, INC., Defendant, Civil Action No. 23-1375-MN (D. Del.), Magistrate Judge Christopher J. Burke of the United States District Court for the District of Delaware recommended that the plaintiffs' motion to dismiss the defendant's First through Fourth Counterclaims, filed pursuant to Federal Rule of Civil Procedure 12(b)(6), be granted-in-part and denied-in-part. 10x and Prognosys are biological research companies that specialize in spatial transcriptomics, which is the study of RNA molecules in a cell and the distinct locations of those molecules within the tissue. Prognosys owns a family of patents for "Spatially Encoded Biological Assays" invented by its former CEO and CSO Mark S. Chee, Ph.D. 10x is the exclusive licensee of the Chee patents, and it also owns and licenses a variety of other intellectual property in the field of spatial transcriptomics. Defendant Curio is an early-stage biotechnology company aimed at providing accessible research tools to the life sciences industry. In February 2023, Defendant announced the launch of its Curio Seeker Kit, which would compete with 10x's Visium product line. Defendant's Seeker Kit allows spatial mapping of an entire transcriptome of fresh-frozen tissues, such that users can capture and spatially index mRNA and prepare a sequencing library. In 2022, Plaintiffs brought patent infringement suits in this District against competing companies, including suits filed against Vizgen, Inc., NanoString Technologies, Inc. and Parse Biosciences, Inc. In the NanoString case, a jury found that the defendant infringed seven Prognosys patents that are related to the asserted patents in this case and found that those patents were valid. The jury awarded Plaintiffs over $31 million in damages. As a result of Plaintiffs' litigation against NanoString, NanoString filed for Chapter 11 bankruptcy protection. Then on Dec. 1, 2023, Plaintiffs filed the instant suit against Defendant. Plaintiffs' Complaint alleges that Defendant's Curio Seeker Kit (and associated products, components and services) infringes five of the Chee patents relating to spatially encoded biological assays. Plaintiffs later amended their identification of accused products in the case to also include the Curio Trekker product, which Defendant began commercializing in 2024. On June 20, 2024, Defendant filed its Answer and First Amended Counterclaims. It asserts 14 Counterclaims against Plaintiffs; the first four are at issue in this case. The Antitrust Counterclaims are as follows: First Counterclaim: Conspiracy to Monopolize in Violation of 15 U.S.C. Sec. 2 (against 10x and Prognosys), Second Counterclaim: Attempted Monopolization in Violation of 15 U.S.C. Sec. 2 (against 10x), Third Counterclaim: Violation of the Cartwright Act, Cal. Bus. & Prof. Code Secs. 16720 et seq. (against 10x and Prognosys), and Fourth Counterclaim: Violation of the Unfair Competition Law, Cal. Bus. & Prof. Code Secs. 17200 et seq. (against 10x and Prognosys). Plaintiffs filed the instant Motion on July 5, 2024. In the First Counterclaim, Defendant asserts that 10x and Prognosys have "engaged in an illegal conspiracy to monopolize the emerging market for spatial transcriptomics" in violation of 15 U.S.C. Sec. 2 of the Sherman Act. Plaintiffs make various arguments as to why the First Counterclaim must be dismissed. More specifically, they argue that: (1) the First Counterclaim fails to sufficiently allege a viable agreement or conspiracy to monopolize; (2) it fails to sufficiently allege anticompetitive conduct; and (3) Defendant has pleaded harm to itself, rather than the required harm to competition. The Court need only address the first of these arguments, which is sufficient on its own to warrant grant of the Motion as to the First Counterclaim. The Court recommends that Plaintiffs' Motion be denied as to Plaintiffs' argument that Defendant did not plead actionable anticompetitive conduct. In the First Counterclaim, Curio alleges that 10x and Prognosys engaged in the requisite conspiracy by raising objectively baseless sham patent litigation in this case against Curio. Plaintiffs assert that the counterclaim improperly alleges a conspiracy between Prognosys and 10x -- a patentee and exclusive licensee, respectively. They argue that a patentee and exclusive licensee are often treated as a single economic entity pursuant to antitrust law, and if they are viewed that way, then the two companies are incapable of forming the requisite agreement. The Court recommends that the Motion be granted as to the First Counterclaim, on the ground that Defendant's Answer does not sufficiently plead the existence of an actionable agreement between 10x and Prognosys. That said, it seems possible that Plaintiff might be able to remedy this deficiency by way of the filing of a further amended complaint -- particularly one that speaks more to the nature of 10x's and Prognosys' economic interests regarding the assertion of the patents-in-suit (and how they may be said to differ, if they do). In light of this, and in light of Federal Rule of Civil Procedure 15's admonition that leave to amend should be freely permitted "when justice so requires," Fed. R. Civ. P. 15(a)(2), the Court will recommend that dismissal of the First Counterclaim be without prejudice. The Second Counterclaim alleges attempted monopolization against 10x alone. Plaintiffs argue that Defendant's attempted monopolization claim fails for two reasons: (1) Defendant fails to sufficiently allege that 10x engaged in anticompetitive conduct; and (2) Defendant fails to sufficiently allege a dangerous probability of achieving monopoly power. The Court finds 10x has not demonstrated that this is one of those atypical cases where the instant antitrust claim can be dismissed at the pleading stage on this ground. As an initial matter, as Defendant notes, it did plead facts plausibly asserting that 10x has a dominant market share in the relevant spatial transcriptomics field, that there are significant barriers to entry, and that 10x uses its market position to eliminate new rivals. The Court recommends that the Motion be denied as to the Second Counterclaim. With regard to the Third and Fourth Counterclaims, Plaintiffs argue these claims fail under California antitrust law to the same extent that the First and Second Counterclaims fail under federal antitrust law. The Court agrees that both of these state law counterclaims rise or fall with the federal antitrust counterclaims on which they depend. Therefore, the Court recommends dismissal without prejudice of the Third Counterclaim, which alleges that Plaintiffs violated California's Cartwright Act by conspiring together to form an unlawful trust, because it relies on the conspiracy-related allegations in the First Counterclaim (which the Court has found wanting). With regard to the Fourth Counterclaim, the Court recommends that Plaintiffs' Motion be granted-in-part and denied-in-part. More specifically, it recommends that the Motion be denied as to the portion of this counterclaim that relies on "attempted monopolization in violation of 15 U.S.C. Sec. 2" (i.e, mirroring the allegations as to the Second Counterclaim), and that the Motion be granted without prejudice as to those portions of the Fourth Counterclaim that rely on the conspiracy-related allegations implicated in the First and Third Counterclaims. Plaintiffs also move the Court to bifurcate any of the surviving Antitrust Counterclaims from Plaintiffs' infringement claims, and then to stay those Antitrust Counterclaims. The Court declines to address this aspect of the Motion at this time. In sum, the Court recommends that the Motion be: (1) granted as to the First and Third Counterclaims, without prejudice; (2) denied as to the Second Counterclaim; and (3) granted in part without prejudice as to the Fourth Counterclaim (as to those portions of the counterclaim premised upon the grounds for relief stated in the First and Third Counterclaims) and denied in part as to the Fourth Counterclaim (as the portions of the counterclaim premised upon the grounds for relief stated in the Second Counterclaim). A copy of the Court's decision dated Jan. 29, 2025, is available at https://urlcurt.com/u?l=9pjc94 from PacerMonitor.com. About NanoString Technologies NanoString Technologies, Inc., offers an ecosystem of innovative discovery and translational research solutions and empowers its customers to map the universe of biology. NanoString and affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10160) on Feb. 4, 2024. In the petition signed by R. Bradley Gray, president and chief executive officer, NanoString disclosed $100 million to $500 million in both assets and liabilities. The Debtors tapped Willkie Farr & Gallagher, LLP and Young Conaway Stargatt & Taylor, LLP as legal counsels; AlixPartners, LLP as financial advisor; Weil, Gotshal & Manges LLP as special patent counsel; and Perella Weinberg Partners LP as investment banker. Kroll Restructuring Administration LLC is the Debtors' administrative advisor. Gibson Dunn & Crutcher, LLP, and Sullivan & Cromwell, LLP, serve as counsels to certain DIP lenders. Richards, Layton & Finger and Houlihan Lokey Capital, Inc., act as Delaware bankruptcy counsel and financial advisor to the DIP lenders. Meanwhile, Alston & Bir and Potter Anderson serve as bankruptcy counsel and Delaware counsel, respectively, to the DIP agent. NEOLPHARMA INC: Hires C. Conde & Assoc. as Counsel -------------------------------------------------- Neolpharma, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ the Law Firm of C. Conde & Assoc. as counsel. The firm will render these services: (a) advise the Debtor with respect to its duties, powers and responsibilities; (b) advise the Debtor in connection with a determination whether a reorganization is feasible and, if not, help it in the orderly liquidation of its assets; (c) assist the Debtor with respect to negotiations with creditors for the purpose of arranging the orderly liquidation of assets and/or for proposing a viable plan of reorganization; (d) prepare on behalf of the Debtor necessary legal papers or documents; (e) appear before the bankruptcy court, or any court in which Debtor assert a claim interest or defense directly or indirectly related to this bankruptcy case; (f) perform such other legal services for the Debtor as may be required in these proceeedings or in connection with the operation of/and involvement with its business; (g) provide, if necessary, any and all notary services allowed under Notary Law, which will not constitute or represent any conflict to this attorney or the client; and (h) employ other professional services, if necessary. The firm will be paid at these hourly rates: Carmen Conde Torres, Senior Attorney $350 Associates $300 Junior Attorney $275 Clerical Analyst/Accounting Analyst $150 In addition, the firm will seek reimbursement for expenses incurred. The firm received a retainer of $50,000 from the Debtor. Ms. Conde Torres 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: Carmen D. Conde Torres, Esq. C. Conde & Assoc. 254 De San Jose Street, Suite 5 Old San Juan, PR 00901 Telephone: (787) 729-2900 Facsimile: (787) 729-2203 Email: condecarmen@condelaw.com About Neolpharma, Inc. Neolpharma Inc. is a privately-held company that specializes in the manufacturing of pharmaceutical products. Neolpharma Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No.: 25-00188) on January 22, 2025. In its petition, the Debtor reports total assets of $29,049,165 and total liabilities of $21,068,886. The Debtor is represented by Carmen D. Conde Torres, Esq., at C. CONDE & ASSOC.. NEPTUNE BIDCO: $2.50BB Bank Debt Trades at 16% Discount ------------------------------------------------------- Participations in a syndicated loan under which Neptune Bidco US Inc is a borrower were trading in the secondary market around 84.2 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $2.50 billion Term loan facility is scheduled to mature on October 11, 2028. About $2.45 billion of the loan has been drawn and outstanding. Neptune Bidco US Inc. is an entity created to acquire the assets of Nielsen Holdings Limited via a take-private LBO led by private equity sponsors Evergreen Coast Capital Corporation and Brookfield Business Partners L.P. With headquarters in Oxford, England and New York, NY, and operations in more than 55 countries, Nielsen is a global measurement and data analytics company providing Audience Measurement, Impact and Gracenote content solutions. NEPTUNE BIDCO: $3.35BB Bank Debt Trades at 14% Discount ------------------------------------------------------- Participations in a syndicated loan under which Neptune Bidco US Inc is a borrower were trading in the secondary market around 85.7 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $3.35 billion Term loan facility is scheduled to mature on April 11, 2029. About $3.28 billion of the loan has been drawn and outstanding. Neptune Bidco US Inc. is an entity created to acquire the assets of Nielsen Holdings Limited via a take-private LBO led by private equity sponsors Evergreen Coast Capital Corporation and Brookfield Business Partners L.P. With headquarters in Oxford, England and New York, NY, and operations in more than 55 countries, Nielsen is a global measurement and data analytics company providing Audience Measurement, Impact and Gracenote content solutions. NEWPORT VENTURES: Auxilior Seeks Chapter 11 Trustee Appointment --------------------------------------------------------------- Auxilior Capital Partners, Inc., in its capacity as secured lender and agent for NBH Bank, asked the U.S. Bankruptcy Court for the Central District of California to appoint a trustee to take over the Chapter 11 case of Newport Ventures, LLC. Secured Lender argues that cause exists to order the appointment of a Chapter 11 trustee based upon (i) Newport's incompetence and gross mismanagement of the bankruptcy estate, (ii) the lack of a reasonable likelihood of reorganization, and (iii) such appointment being in the best interests of creditors. Secured Lender claims that Newport relies substantially upon one single individual, Eric Klein, to prepare its Variance Reports. Throughout the duration of this case, it has been represented to Secured Lender that Mr. Klein is often absent or otherwise unavailable and therefore, Newport cannot timely provide the Variance Reports or the supporting and ancillary information required to be delivered to Secured Lender under the First Interim Order and the Further Interim Orders. Newport's current management's inability to provide sufficient or competent accounting and finance staff further underscores Shavand Aryana's gross mismanagement of the company. Auxilior cites that Mr. Aryana has breached his obligations under the terms of the Subordination Agreement both prepetition and postpetition (despite the Subordination Agreement being fully enforceable in this case), by failing to turn over all payments received by him from Newport during the ongoing Events of Default under the Loan Documents. In a court filing, Secured Lender raised the need to appoint an independent trustee to manage the case, saying Newport's current management is (a) woefully incompetent to operate the company's business and manage its affairs and (b) has been grossly mismanaging the company both prepetition and post-petition through Mr. Aryana's self-dealing, refusal to cause the company to comply with its obligations as a debtor-in-possession, all to the detriment of the estate and creditors. Accordingly, appointment of a Chapter 11 trustee is warranted in this case because it is in the best interests of the estate and its creditors. A Chapter 11 trustee that replaces Newport's current management will ensure that (a) the company's assets are properly managed and maintained, (b) the company's business operations are conducted in accordance with industry and commercially reasonable standards, the applicable orders in this case, the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and the United States Trustee Guidelines, and (c) requisite and necessary disclosures are made to the court, creditors, and other case constituents. Attorney for NBH Bank and Auxilior Capital: Lisa M. Peters, Esq. Kutak Rock LLP 1650 Farnam Street Omaha, NE 68102 Telephone: (402) 346-6000 Facsimile: (402) 346-1148 Email: lisa.peters@kutakrock.com About Newport Ventures Newport Ventures, LLC, a company in Orange, Calif., owns and operates a restaurant. Newport Ventures filed Chapter 11 petition (Bankr. C.D. Calif. Case No. 24-12738) on October 26, 2024, with $10 million and $50 million in both assets and liabilities. Shahvand Aryana, principal of Newport Ventures, signed the petition. Judge Theodor Albert oversees the case. The Debtor is represented by Steven M. Kries, Esq. The U.S. Trustee for Region 16 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. NIGHTINGALE PROPERTIES: Centre Square Likely to be Sold to Pay Debt ------------------------------------------------------------------- Paul Schwedelson of Philadelphia Business Journal reports that after two years of uncertainty, Centre Square's receiver has indicated the struggling office complex will "very likely" be sold. Owners Nightingale Properties and InterVest Capital Partners owe more than $375 million on a delinquent CMBS loan tied to the 1.76 million-square-foot property. Wells Fargo initiated foreclosure proceedings in January 2023 on behalf of CMBS trust investors, leading to the property's receivership three months later. Since then, little progress has been made, the report relays. On January 6, 2025, CBRE, the court-appointed receiver, filed a motion in U.S. District Court for the Eastern District of Pennsylvania, requesting the removal of court-mandated updates on the sale process. CBRE argues that publicly disclosing listing details could negatively impact negotiations and lower the final sale price, according to Philadelphia Business Journal. "No broker has been engaged, and the plaintiff has not yet requested a sale, but it is very likely that the process will move forward," CBRE stated in the filing. Centre Square's value has dropped significantly, with a September 2023 appraisal at $223.5 million—less than half its $471 million pre-pandemic valuation. Occupancy has also fallen to 63%, with major tenants, including Dilworth Paxson and Saul Ewing, planning to vacate. CBRE warns that requiring court filings on listing details could cost "tens of millions of dollars" if local media reports the sale before Green Street News, a key real estate industry publication, the report states. Centre Square's situation reflects broader challenges in Philadelphia's office market. TF Cornerstone is finalizing foreclosure on the Wanamaker building with plans to convert office space into residential units. Similarly, Lubert-Adler and Keystone acquired the Bourse and 400 Market St. at a discount, intending to repurpose both properties, according to report. Attempts to reach Centre Square's owners for comment were unsuccessful. CBRE attorney Mark Pfeiffer also declined to comment. About Nightingale Properties LLC Nightingale Properties LLC provides real estate services. About InterVest Capital Partners InterVest Capital Partners is a leading global alternative investment manager focused on specialty finance and real estate investments. NORTHEASTERN SCHUYLKILL: S&P Lowers Sewer Bond Rating to 'B+' ------------------------------------------------------------- S&P Global Ratings lowered its long-term rating on Northeastern Schuylkill Joint Municipal Authority, Pa.'s series 2013 guaranteed sewer revenue bonds by three notches to 'B+' from 'BB+'. The outlook is negative. "The downgrade reflects a continued structural imbalance," said S&P Global Ratings credit analyst Stephanie Linnet. Financial performance has been weak during the last three fiscal years, demonstrated by debt service coverage (DSC) below 1.0x for fiscal years 2022 through 2024, the large amount of delinquencies relative to total operating revenue (which have not materially improved since fiscal 2022), and the thin level of reserves as of fiscal 2024 (unaudited). S&P said, "The negative outlook reflects our expectation of continued liquidity draws and weak DSC budgeted for 2025 due to increasing operating expenses and no planned rate increases. We believe that the rating could be pressured in the near term if the authority is unable to adopt rate increases to provide improved coverage and build reserve levels, which could leave the authority's financial position susceptible to further deterioration from unplanned costs. "The negative outlook reflects further uncertainty regarding whether cost controls will produce credit-supportive DSC, given weak coverage as of unaudited fiscal 2024 and budgeted DSC of 0.6x for fiscal 2025 with no rate increases currently planned. Furthermore, given worsening in budgeted DSC for fiscal 2025, we believe liquidity could decline to levels representing less than 90 days' operating expenses, which could pressure the rating further. "We could lower the rating further by one or more notches if capital needs or operating expenses continue to increase costs and require continued reliance on cash balances to fund the authority's costs. Moreover, if delinquencies continue to place pressure on the authority's financial metrics, we could take a negative rating action. Lastly, we believe the rating could be pressured if the authority is unable to renew its permit and is unable to properly address the violations. "We could return the outlook to stable if we perceive the authority is able to sustain a track record of improved structural balance that we believe is sustainable, resulting in improved reserve levels and stronger DSC." Environmental, social, and governance (ESG) credit factors for this change in credit rating/outlook and/or CreditWatch status: -- Risk management, culture, and oversight NUTRACAP HOLDINGS: Hires Rountree Leitman Klein as Attorney ----------------------------------------------------------- Nutracap Holdings, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Rountree, Leitman, Klein & Geer, LLC as attorney. The firm's services include: a. giving the Debtor legal advice with respect to its powers and duties as Debtor-in Possession in the management of its property; b. preparing on behalf of the Debtor as Debtor-in-Possession necessary schedules, applications, motions, answers, orders, reports and other legal matters; c. assisting in examination of the claims of creditors; d. assisting with formulation and preparation of the disclosure statement and plan of reorganization and with the confirmation and consummation thereof; and e. performing all other legal services for the Debtor as Debtor-in-Possession that may be necessary herein. The firm will be paid at these rates: William A. Rountree, Attorney $595 per hour Will B. Geer, Attorney $595 per hour Michael Bargar, Attorney $535 per hour Hal Leitman, Attorney $425 per hour William Matthews, Attorney $425 per hour David S. Klein, Attorney $495 per hour Elizabeth Childers, Attorney $425 per hour Ceci Christy, Attorney $425 per hour Caitlyn Powers, Attorney $375 per hour Shawn Eisenberg, Attorney $300 per hour Elizabeth Miller, Paralegal $290 per hour Megan Winokur, Paralegal $175 per hour Dorothy Sideris, Paralegal $200 per hour Catherine Smith, Paralegal $150 per hour Law Clerk $175 per hour The firm received a pre-petition retainer in the amount of $75,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Caitlyn Powers, Esq., a partner at Rountree, Leitman, Klein & Geer, 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: Caitlyn Powers, Esq. Will B. Geer, Esq. Rountree, Leitman, Klein & Geer, LLC Century Plaza I 2987 Clairmont Road, Suite 350 Atlanta, Georgia 30329 Telephone: (404) 584-1238 Email: cpowers@rlkglaw.com wgeer@rlkglaw.com About Nutracap Holdings, LLC Nutracap Holdings, LLC is a manufacturer of nutraceuticals and dietary supplements in Norcross, Ga. Nutracap Holdings sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 25-50430) on January 14, 2025, with up to $50 million in both assets and liabilities. Marcos Fabio Lopes e Lima, chief executive officer of Nutracap Holdings, signed the petition. Judge Lisa Ritchey Craig oversees the case. William Rountree, Esq., at Rountree, Leitman, Klein & Geer, LLC, represents the Debtor as legal counsel. OASIS AUTO: Seeks Chapter 11 Protection in Texas ------------------------------------------------ On January 31, 2025, Oasis Auto Spa LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for the Eastern District of Texas. According to court filing, the Debtor reports $5,683,708 in debt owed to 1 and 49 creditors. The petition states funds will not be available to unsecured creditors. About Oasis Auto Spa LLC Oasis Auto Spa LLC is the fee simple owner of a car wash facility located at 5001 Collin McKinney Parkway, McKinney, TX 75070, with an estimated current value of $4 million. Oasis Auto Spa LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex.Case No.: 25-40279) on January 31, 2025. In its petition, the Debtor reports estimated total assets of $5,356,749 and estimated liabilities of $5,683,708. Honorable Bankruptcy Judge Brenda T. Rhoades handles the case. The Debtor is represented by: Robert T DeMarco, Esq. DEMARCO MITCHELL, PLLC 500 N. Central Expressway Suite 500 Plano TX 75074 Tel: (972) 991-5591 E-mail: robert@demarcomitchell.com ONYX OWNER: Hires Morris Nichols Arsht as Bankruptcy Counsel ------------------------------------------------------------ Onyx Owner, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Morris, Nichols, Arsht & Tunnell LLP as bankruptcy counsel. The firm will provide these services: a. perform all necessary services as the Debtor's bankruptcy counsel, including, without limitation, providing the Debtor with advice, representing the Debtor, and preparing necessary documents on behalf of the Debtor in the areas of restructuring and bankruptcy; b. take all necessary actions to protect and preserve the Debtor's estate during this Chapter 11 Case, including the prosecution of actions by the Debtor, the defense of any actions commenced against the Debtor, negotiations concerning litigation in which the Debtor is involved and objecting to claims filed against the estate; c. prepare or coordinate preparation on behalf of the Debtor, as debtor in possession, necessary motions, applications, answers, orders, reports and papers in connection with the administration of this Chapter 11 Case; d. counsel the Debtor with regard to its rights and obligations as debtor in possession; e. coordinate with the Debtor's other professionals in representing the Debtor in connection with this Chapter 11 Case; and f. perform all other necessary legal 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 received an advance retainer in the amount of $100,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Casey B. Sawyer, Esq., a partner at Morris, Nichols, Arsht & Tunnell 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: Robert J. Dehney, Sr., Esq. Daniel B. Butz, Esq. Scott D. Jones, Esq. Casey B. Sawyer, Esq. Echo Yi Qian, Esq. Morris, Nichols, Arsht & Tunnell LLP 1201 Market Street, 16th Floor Wilmington, DE 19801 Tel: (302) 658-9200 Fax: (302) 658-3989 Email: rdehney@morrisnichols.com dbutz@morrisnichols.com sjones@morrisnichols.com csawyer@morrisnichols.co About Onyx Owner, LLC Onyx Owner, LLC's business involves a residential apartment project consisting of 266 residential apartment units and related amenities located at 1100 First Street SE, Washington DC 2003. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-12816) on December 18, 2024. In the petition signed by Joshua Ufberg, authorized signatory, the Debtor disclosed up to $50 million in both assets and liabilities. Robert J. Dehney, Sr., Esq., at Morris, Nichols, Arsht & Tunnell, LLP represents the Debtor as legal counsel. OREGON TOOL: $850MM Bank Debt Trades at 47% Discount ---------------------------------------------------- Participations in a syndicated loan under which Oregon Tool Holdings Inc is a borrower were trading in the secondary market around 52.9 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $850 million Term loan facility is scheduled to mature on October 16, 2028. The amount is fully drawn and outstanding. Oregon Tool Holdings, Inc., headquartered in Portland, Oregon, is a global manufacturer and distributor of professional-grade, consumable parts and attachments for use in forestry, lawn and garden, agriculture and concrete cutting applications. ORIGINAL MOWBRAY'S: Gets Final OK to Use Cash Collateral -------------------------------------------------------- The Original Mowbray's Tree Service, Inc. received final approval from the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, to use cash collateral. The final order authorized the company to use cash collateral to pay expenses in accordance with its 13-week budget. The final order also approved the stipulation between Original Mowbray's and PNC Bank, N.A., allowing the company to use the secured creditor's cash collateral. As protection, PNC Bank will receive monthly payments of $150,000 starting this month. Original Mowbray's owes the bank approximately $7,038,464, according to court filings. PNC Bank can be reached through its counsel: Michael B. Lubic, Esq. K&L Gates, LLP 10100 Santa Monica Blvd., 8th Floor Los Angeles, CA 90067 +1.310.552.5000 +1.310.552.5030 Email: michael.lubic@klgates.com About The 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 is represented by: Robert S. Marticello, Esq. Raines Feldman Littrell LLP Tel: 310-440-4100 Email: rmarticello@raineslaw.com OYSTER LLC: Seeks to Hire Andre L. Kydala as Bankruptcy Counsel --------------------------------------------------------------- Oyster, LLC seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to employ the Law Firm of Andre L. Kydala to handle its Chapter 11 case. The firm will be paid at its hourly rate of $425. The retainer is $7,500. Andre Kydala, 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: Andre L. Kydala, Esq. Law Firm of Andre L. Kydala 12 Lower Center St. Clinton, NJ 08809 Telephone: (908) 735-2616 Email: kydalalaw@aim.com About Oyster LLC Oyster, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 24-22175) on December 11, 2024, with as much as $50,000 in both assets and liabilities. Andre Kydala, Esq., represents the Debtor as legal counsel. PARKCLIFFE DEV'T: Stalking Horse Bidder Loses Bid to Stay Auction ----------------------------------------------------------------- Judge John P. Gustafson of the United States Bankruptcy Court for the Northern District of Ohio denied the motions of STVJ LLC, the stalking horse bidder for Parkcliffe Development, LLC's assets, to: 1) disregard break up bid in connection with the sale of debtor's real property and for order of sale to STVJ LLC; and 2) to stay auction and/or expedite hearing It is ordered that the auction sale shall be reset as expeditiously as possible, consistent with the Court's instructions. The Stalking Horse bid of STVJ was $2.2 Million, and included a number of other provisions related to the offer. STVJ's Motions rely, in large part, on the failure to comply with the requirements of Paragraph 4 of the Bidding Procedures. The introductory paragraph to that document states: "To participate an Acceptable Bidder must deliver to Signature an irrevocable offer for the Real Property, which shall meet the following criteria, in each case of either the First Bid Deadline and the Final Bid Deadline." No evidence was presented that any of the terms in Paragraph 4 were specifically negotiated. Rather, they appear to have originated from Debtor's counsel and were included in the STVJ Stalking Horse bid. The definition of "Qualified Bid Requirements" in Paragraph 1, states as follows: 1. The Stalking Horse Agreement Bid Protections and Breakup Bid Requirements. STVJLLC has agreed to purchase the Real Property and Acquired Assets for Two Million, Two Hundred Thousand Dollars ($2,200,000.00), but permit the solicitation by Signature for bids on behalf of the Debtor for a thirty (30) day period which would expire on December 12, 2024, but the initial bid must be at least $200,000 more than the STVJLLC Bid in order to break up the stalking horse agreement. Therefore any bid submitted before or on Dec. 12, 2024, must be at least $2,400,000.00 and meet all of the criteria set forth in Paragraph Three. For purposes of the Breakup Bid Requirements in Paragraph 1, there were two clear requirements: -- the amount of the offer -- exceeding the "STVJLLC" bid by at least $200,000, and -- the timing: received by Dec. 12, 2024. Two "Breakup Bids" were received prior to the Dec. 12, 2024 deadline. These two bidders will be referred to as "Doctor 1" and "Doctor 2". STVJ asserts that both bids were noncompliant with the provisions of Paragraph 4 of Exhibit 1. Evidence was presented as to the noncompliance at the evidentiary hearing. There is no question that the two bids did not comply with all of -- or even most of -- the many requirements in Paragraph 4. It is also clear that both Doctor 1 and Doctor 2 are no longer part of the Stalking Horse bid process -- having dropped out after making their bids. However, the Stalking Horse Order did not require that the offers of the original breakup bidders continue in order to consider new bids resulting from the post-breakup bid marketing of the Parkcliffe properties. The first bid received was on a form that mirrored, to a large extent, the offer made by STVJ. It was the only bid received that was based on STVJ's bid, and therefore the only one that bears any close relationship to the detailed requirements that are set forth in Paragraph 4. The bid was for $2,400,000, topping STVJ's bid by the required $200,000. On Dec. 12, 2024, based upon the receipt of Doctor 1's bid, the Debtor filed a Notice of Receipt of a Breakup Bid in Connection with the Sale of Debtor's Real Property. For more than a month, STVJ did not file anything indicating that they did not accept the Breakup Bid. On Jan. 13, 2025, the Motion to Disregard Break Up Bid in Connection with the Sale of Debtor's Real Property and for Order of Sale to STVJ LLC was filed. This was the same day as the last day of the Final Bid Deadline. STVJ's explanation for the delay in filing any response to the Notice was that they were not represented by counsel in the Stalking Horse process. At some point, Doctors 1 and 2 dropped out. Other parties made bids, and some then apparently lost interest. At the Evidentiary Hearing, the Court heard telephonic testimony from Ranjit Singh, who testified that he is the sole member of Spectranet Holdings LLC, which appears to be a Delaware LLC. Spectranet submitted a bid of $2,650,000 using a form created by Signature. In addition to all the other defects in the Signature form, the language stated that an irrevocable offer is being made terminated on a date prior to the offer being made. Mr. Singh testified that he was not represented by counsel in preparing the offer. Mr. Singh further testified (with some language issues) in response to questions from Debtor's counsel, that he would comply with all of the provisions in Paragraph 4 of the Bid Requirements. Also submitted was evidence of Spectranet's ability to fund the purchase of Debtor's assets up to "$4.5M USD" at any time for the transaction. On cross-examination, it was revealed that -- at the time of the Jan. 24, 2025 Hearing -- Spectranet was not licensed to do business in the State of Ohio. The Court also heard testimony from one of STVJ's members regarding the time they had put in on this purchase, and that the $50,000 break up fee would not fully compensate them for their time. The Court finds that the even granting all of the defects that STVJ's counsel pointed out in each of the offers, the proper course is to move to the auction phase. Judge Gustafson says the stalking horse process is inherently less regimented than the auction process. It is intended to develop interest in the property being sold and draw higher bids for the property being offered for sale. It is also usually a multi-step process, as it was here. The final step being a sale under Section 363 of the Bankruptcy Code. It is important to remember that in this process, the court still has to approve the sale of the property, either to the stalking horse bidder, or to one of the subsequent bidders. If the stalking horse process is completed without any bidders stepping forward to bid on the property, that is strong evidence that the property is being sold for 'value'. Where, as here, there is another bidder -- Spectranet -- offering a significantly higher price, the evidence provided by the stalking horse process, to support 'value', is greatly lessened. An 'adequate price' is one element that must be found in order for a Section 363 sale outside the ordinary course of business to be approved. He adds that while a bankruptcy court may place great weight on the business judgment of the debtor in evaluating the adequacy of the price to be paid, it appears under the present circumstances, the Debtor would join the secured creditor in opposing a sale for the amount of the Stalking Horse bid. Moreover, it appears that -- if it believed the Spectranet offer was superior to the Stalking Horse bid -- it would have a fiduciary duty to take that position. The Court holds that the Stalking Horse Order should be interpreted according to its intended purpose: "to maximize the recovery on, and realizable value of Debtor's Real Estate." In so ordering, this Court expects the auction bidding to be based on a new written submission confirming the testimony of Mr. Singh regarding the terms of the Spectranet bid, as mirroring the STVJ bid in all material respects. If there is another bidder wishing to participate, specifically Soul Path Housing LLC, it must also enter into a written offer that mirrors STVJ Stalking Horse bid terms. Notwithstanding the language of the Stalking Horse Order re: the required good faith deposit, bidders will be required to have delivered a $100,000 deposit to AREA Title Company at least 48 hours prior to the auction being held. Debtor is directed to set up the auction process, and conduct an auction pursuant to this decision and the procedures outlined in the Stalking Horse Order. A copy of the Court's decision dated Jan. 28, 2025, is available at https://urlcurt.com/u?l=TavHuf from PacerMonitor.com. About Parkcliffe Development Parkcliffe Development, LLC owns 10 real properties, all located in Ohio, having a total current value of $2.96 million. Parkcliffe Development filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-30814) on April 30, 2024, listing $3,672,259 in assets and $6,244,978 in liabilities. Parkcliffe President Wayne H. Bucher signed the petition. Judge John P Gustafson presides over the case. Steven L. Diller, Esq., at Diller and Rice, LLC represents the Debtor as legal counsel. Leilani Pelletier has been appointed as patient care ombudsman in the Debtor's Chapter 11 case. PARTY EMPORIUM: Hires Block Realty & Auction as Auctioneer ---------------------------------------------------------- Party Emporium, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Arkansas to employ Block Realty & Auction as auctioneer. The firm will auction the Debtor's assets located in Conway, Arkansas. The firm will be paid 25 percent of gross sale proceeds, plus a $500 flat fee for marketing and setup/listing. Paul Colvin, a partner at Block Realty & Auction, 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: Paul Colvin Block Realty & Auction 633 S. Barrington Road Springdale, AR 72762 Tel: (479) 361-9700 About Party Emporium, LLC Party Emporium, LLC is engaged in the business of retail costume and party supply in Fort Smith and Conway, Arkansas. Party Emporium sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Ark. Case No. 24-72049) on Dec. 7, 2024, with $390,191 in assets and $1,259,574 in liabilities. Melody Sanford, managing member of Party Emporium, signed the petition. Judge Bianca M. Rucker oversees the case. Stanley V. Bond, Esq., at Bond Law Office serves as the Debtor's bankruptcy counsel. PECF USS: $2BB Bank Debt Trades at 36% Discount ----------------------------------------------- Participations in a syndicated loan under which PECF USS Intermediate Holding III Corp is a borrower were trading in the secondary market around 63.9 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $2 billion Term loan facility is scheduled to mature on December 15, 2028. About $206 million of the loan has been drawn and outstanding. PECF USS Intermediate Holding III Corporation is the issuing entity for a debt extended to United Site Services Inc., a provider of portable sanitation and related site services. PHYSICIAN PARTNERS: $150MM Bank Debt Trades at 54% Discount ----------------------------------------------------------- Participations in a syndicated loan under which Physician Partners LLC is a borrower were trading in the secondary market around 45.9 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $150 million Term loan facility is scheduled to mature on December 22, 2028. About $148.5 million of the loan has been drawn and outstanding. Physician Partners LLC (dba Better Health Group) is a value-based primary care physician group and managed service organization network that services over 250,000 members, with over 1,000 providers and 111 owned centers. Private equity firm, Kinderhook Industries, is an investor in Better Health Midco, LLC with LTM revenue as of June 30, 2023 of approximately $1.1 billion. POLARITYTE INC: Court Confirms Chapter 11 Plan of Liquidation ------------------------------------------------------------- Judge Kevin R. Anderson of the United States Bankruptcy Court for the District of Utah will confirm the Amended Chapter 11 Plan of Liquidation Dated Aug. 15, 2024, filed by PolarityTE, Inc., a Delaware corporation, PolarityTE, MD Inc., a Nevada corporation, and PolarityTE, Inc., a Nevada corporation under Sec. 1191(a). The Court finds the Plan complies with, and the Debtors satisfy, all applicable confirmation requirements. After the Petition Date, the Debtors sought and obtained approval from the Bankruptcy Court for procedures to run a bid and sale process for the sale of substantially all their assets. At the conclusion of that process, the Debtors moved for approval of the sale of substantially all the Debtors' operating assets to Grander Acquisition LLC. On July 31, 2023, the Court approved the sale of substantially all the Debtors' operating assets to Grander for the price of $6,500,000 and the assumption of certain liabilities. The Debtors continue to operate and manage their property as debtors in possession under sections 1107 and 1108 of the Bankruptcy Code. No examiner or trustee has been appointed in the Chapter 11 Cases. Confirmation of the Plan is governed by section 1129 of the Bankruptcy Code. The Court concludes Debtors have proven by a preponderance of the evidence that all subsections of section 1129 of the Bankruptcy Code have been satisfied in respect of the Plan. The Plan complies with the applicable provisions of the Bankruptcy Code and not by any means forbidden by law. The Claims or Equity Interests placed in each Class are substantially similar to other Claims or Equity Interests in each such Class. In addition to Administrative Expense Claims and Priority Claims, which are not classified under the Plan, the Plan designates three classes of Claims and one class of Equity Interests based upon differences in their legal nature or priority. The Secured Claim is separately classified in Class 2. The Priority Claims are classified separately in Class 1 from General Unsecured Claims in Class 3. And Interests are separately classified in Class 4. Thus, there is a valid legal reason for separately classifying the various classes of Claims and Equity Interests under the Plan, and such Classes do not unfairly discriminate between holders of Claims or Equity Interests. Classes 1 through 3 are all unimpaired under the Plan. Class 4 is specified as impaired under the Plan. Article IV of the Plan specifies the treatment of impaired Claims and Equity Interests. The Plan provides for the same treatment for each Claim and Equity Interest in each respective class unless the holder of a particular Claim or Equity Interest has agreed to less favorable treatment with respect to such Claim or Interest. Article VI of the Plan provides adequate and proper means for implementation of the Plan. The Plan is a liquidating plan, and so the means of liquidating and distributing the Debtor's remaining assets, is the Liquidating Trust. The Plan provides that John Curtis will be the Liquidating Trustee, subject to the appointment of a Successor Trustee under the provisions of the Liquidating Trust Agreement. The Debtors proposed the Plan in good faith and not by any means forbidden by law. They filed the proposed Plan with the legitimate and honest purpose of maximizing available value for the benefit of its creditors. Any payments made or to be made under the Plan for services or for costs and expenses in or in connection with the Bankruptcy Case, including all fees and expenses incurred by professionals in connection with the Plan and incident to the Case, has been approved by, or are subject to the approval of, the Court as reasonable and under 11 U.S.C. Sec. 330. Each class of Claims that is impaired and entitled to vote under the Plan either voted to accept the Plan or shall receive as much as they would receive under Chapter 7 of the Bankruptcy Code. Each Class of Claims that is impaired under the Plan and entitled to vote has accepted or is deemed to accept the Plan. Except to the extent the holder of a particular Claim has agreed to a different treatment of such Claim, the Plan provides that Administrative Expense Claims pursuant to 11 U.S.C. Sec. 507(a)(1) and Priority Claims pursuant to 11 U.S.C. Sec. 507(a)(2)-(8), shall be treated in accordance with the provisions of 11 U.S.C. Sec. 1129(a)(9). There are sufficient funds on hand to pay all Priority Claims in full on the Effective Date. The Plan does not discriminate unfairly with respect to any impaired Class of Claims and is fair and equitable and thus may be confirmed under section 1129(b)(2)(C) of the Bankruptcy Code. A copy of the Court's decision dated Jan. 27, 2025, is available at https://urlcurt.com/u?l=7UFqMI from PacerMonitor.com. Attorneys for Debtors: J. Thomas Beckett, Esq. Brian M. Rothschild, Esq. Darren Neilson, Esq. PARSONS BEHLE & LATIMER 201 South Main Street, Suite 1800 Salt Lake City, UT 84111 Telephone: 801.532.1234 Facsimile: 801.536.6111 E-mail: TBeckett@parsonsbehle.com BRothschild@parsonsbehle.com DNeilson@parsonsbehle.com ecf@parsonsbehle.com About PolarityTE Inc. PolarityTE is focused on developing regenerative treatments for some of the most complex wounds -- where disease burden on patients and families is immense and current therapeutic options are often limited or do not exist. PolarityTE, Inc., a Delaware corporation, PolarityTE MD, Inc. and PolarityTE, Inc., and PolarityTE, Inc., (a Nevada Corporation) concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D Utah Lead Case No. 23-22358). The petitions were signed by Richard Hague as CEO and president. Each Debtor estimated $500,000 to $1 million in assets and up to $50,000 in liabilities. Brian M. Rothschild, Esq. and Darren Neilson, Esq. at PARSONS BEHLE AND LATIMER represent the Debtor as counsel. After the Petition Date, the Debtors sought and obtained approval from the Bankruptcy Court to run a sale process for the sale of substantially all their assets. On July 31, 2023, the Court approved the sale of substantially all the Debtors' operating assets to Grander Acquisition LLC for $6,500,000. PREMIER BRANDS: S&P Upgrades ICR to 'B-' on Debt Refinancing ------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on U.S.-based-Premier Brands Group Holdings LLC to B-' from 'CCC'. S&P also assigned its 'CCC+' rating and '5' recovery rating to its new $64.9 million first-lien term loan B-1, indicating its expectation of modest (10%-30%; rounded estimate: 20%) recovery in the event of default. S&P is also withdrawing its ratings on the company's previous term loan. The stable outlook reflects S&P's expectation that Premier will continue to generate positive free operating cash flow over the next 12 months while maintaining leverage below 5x and interest coverage above 2x. Premier refinanced its capital structure with a new $245 million asset-based lending (ABL) revolver, $20 million first-in, last-out (FILO) term loan, $64.9 million first-lien term loan B-1, and $1.3 million first-lien term loan B-2. The refinancing alleviates near term maturity concerns and improves its liquidity position. PBG's new $245 million ABL revolver, $20 million FILO term loan, and $64.9 million first-lien term loan B-1 are now due in 2029. S&P said, "We view this as credit positive, as its previous capital structure would have otherwise become current in February 2025. The $1.3 million first-lien term loan B-2 is due at the end of 2025 and represents a portion of the company's previous term debt that was owned by management and rolled over at par. However, this stub portion is immaterial to our analysis given its small size, and we expect it to be repaid by the end of this year." S&P said, "We revised our liquidity assessment to adequate from less than adequate. Pro forma for the transaction, we estimate the company had about $106 million of total liquidity, including $1 million of pro forma cash and about $105 million of availability under its new ABL revolver (while complying with its covenants). This facility is the company's largest source of liquidity, and Premier could fund its entire operations over the next 12 months through its ABL revolver given our expectations for about $65 million of principal liquidity uses over the next 12 months, including working capital needs. Premier generated about $27 million of free operating cash flow (FOCF) as of the last 12 months (LTM) ended Sept. 30, 2024, largely due to normalized working capital needs following excess inventory clearance in 2023. We forecast Premier to continue generating positive cash flow of approximately $13 million-$20 million annually over the next two years, driven by our expectation for working capital needs remaining at normalized levels. "Operating performance exceeded our prior expectation for 2024, and we expect leverage to remain at similar levels this year absent potential impacts from future tariffs. Premier's S&P-adjusted leverage improved to about 3.6x as of the LTM ended Sept. 30, 2024 compared to our previous expectation of 4.6x. We now forecast the company to maintain lower leverage of approximately 4x in 2025, which will provide some headroom in its credit measures to protect against tariff-related downside risks to its current ratings. Nonetheless, we will continue to monitor any future tariff-related developments. "We forecast S&P Global Ratings-adjusted EBITDA margin to weaken by 100 basis points (bps) to about 7% in 2025. The company's margin improved to about 8% as of the LTM ended Sept. 30, 2024, compared to our previous expectation that it would weaken to 6% this year. This was driven primarily by EBITDA growth from better cost management on overseas purchases, higher retail penetration, less discounting, and lower supply chain costs than previously anticipated. We believe that most of the benefits from lower product costs have already been realized in 2024 and we believe that persistent inflationary pressures will keep these costs elevated throughout the rest of 2025, with little room for further cuts. "Premier has actively worked to diversify its supply chain across North America, Europe, Asia, and the Middle East. However, most of its jewelry production is in China and we view high supplier concentration from a single country as a risk, especially in this volatile geopolitical environment. Its jewelry was exempt from the previous round of tariffs and we have not included anticipated impact in our base case projections as it remains uncertain." Consumer discretionary spending remains weak, especially for department stores and big-box retailers. Inflationary pressures have weighed on consumer discretionary pending among lower- to middle-income consumers, who are the target demographic for Premier's jeanswear segment, the company's largest business. S&P said, "In our view, this has contributed to the 2% revenue decline as of the LTM ended Sept. 30, 2024, compared to our previous expectation for 2% revenue growth in 2024. Premier's high concentration in transforming department stores including Macy's and Kohl's is another key risk. Given our expectations for weaker U.S. GDP growth of 2% and U.S. real consumer spending of 2.3% in 2025, we forecast a low-single digit percent decline in jeanswear this year. Offsetting this is favorable demand trends for apparel and jewelry to continue from fiscal 2024 into fiscal 2025, driven by new collections and expanded distribution. This results in our expectation for modest 1%-2% revenue growth annually over the next two years." S&P said, "The stable outlook reflects our expectation that Premier will continue to generate positive free operating cash flow over the next 12 months while maintaining leverage below 5x and interest coverage above 2x. "We could lower our ratings on Premier if we view the company's capital structure as unsustainable. This could result if the company's operating performance deteriorates, resulting in a FOCF deficit and pressured liquidity. "We could raise our ratings on Premier if it develops a consistent track record of positive earnings growth while maintaining tight cost control despite weak demand in a challenging operating environment." PREMIUM CRANE: Court Extends Cash Collateral Access to March 27 --------------------------------------------------------------- Premium Crane, LLC received interim approval from the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, to use cash collateral until March 27, marking the second extension since the company's Chapter 11 filing. The court's previous order issued on Jan. 24 allowed the company to access cash collateral until Jan. 30. The second interim order authorized the company to use cash collateral to pay the expenses set forth in its budget, plus an amount not to exceed 10% for each line item. Secured creditors, including SouthState Bank and M&T Equipment Bank, were granted replacement liens on post-petition assets as protection for the use of their cash collateral. As additional protection, SouthState Bank and M&T Equipment Bank will receive monthly payments of $7,500 and $5,000, respectively. The company's authority to use cash collateral will terminate on the occurrence of certain events, including the entry of a final order or the dismissal of its Chapter 11 case. The next hearing is scheduled for March 27. About Premium Crane Premium Crane, LLC sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-07071) on November 27, 2024, with total assets of $3,041,564 and total liabilities of $3,076,549. Judge Roberta A. Colton oversees the case. The Debtor is represented by: Buddy D Ford, Esq. Buddy D. Ford, P.A. Tel: 813-877-4669 Email: buddy@tampaesq.com QSR STEEL: Court Extends Access to Cash Collateral Until March 31 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut, Hartford Division, granted QSR Steel Corporation, LLC a two-month extension to use the cash collateral of its secured creditors. The order signed by Judge James Tancredi authorized the company to use cash collateral, including proceeds from its accounts receivable, to pay its expenses for the period from Feb. 1 to March 31. The company's budget shows total disbursements of $893,763.44 for the interim period. Liberty Bank, First Citizens Bank & Trust Company and Philadelphia Indemnity Insurance Company were provided with protection in the form of a replacement lien on QSR Steel's assets. Liberty Bank was granted a first lien while the two other creditors were granted subordinate liens. In addition, Liberty Bank will receive a superpriority claim in the event that the replacement lien proves to be inadequate. As of the petition date, QSR Steel owed $659,716 and $40,390.84 to Liberty Bank and First Citizens, respectively. The next hearing is scheduled for March 27. Liberty Bank can be reached through its counsel: Linda c. Hadley, Esq. Gfeller Laurie, LLP West Hartford Center 977 Farmington Avenue, Suite 200 West Hartford, CT 06107 Phone: 860-760-8428/860-760-8400 Fax: 860-760-8401 lhadley@gllawgroup.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. QSR Steel filed Chapter 11 petition (Bankr. D. Conn. Case No. 24-20562) on June 18, 2024, with $2,838,179 in assets and $2,124,057 in liabilities as of March 31, 2024. Glenn Salamone, a member of QSR Steel, signed the petition. Judge James J. Tancredi oversees the case. Irve J. Goldman, Esq., at Pullman & Comley, LLC represents the Debtor as legal counsel. QUAD/GRAPHICS INC: Fitch Alters Outlook on 'B+' IDR to Stable ------------------------------------------------------------- Fitch Ratings has affirmed Quad/Graphics, Inc.'s Long-Term Issuer Default Rating (IDR) at 'B+' and revised the Rating Outlook to Stable from Positive. Fitch has also affirmed the rating of the senior secured credit facility and term loan at 'BB' with a Recovery Rating of 'RR2'. The ratings reflect Fitch's expectation that Quad's EBITDA leverage will remain below 2x and its FCF margin will be in the low single-digit range. The ratings also reflect Quad's deleveraging capacity via significant debt reduction and its leading market position. Despite the company's substantial improvement in EBITDA leverage, the ratings are limited by revenue pressures from secular industry headwinds. Key Rating Drivers Leading Market Position: Quad's ratings reflect its leading market position as the second-largest commercial printer in the U.S. and the 19th-largest marketing agency company, according to the 2024 Ad Age Agency Report. Fitch believes the company's significant scale and size provide economies of scale in a highly competitive and fragmented printing industry. Quad also benefits from longstanding relationships with its clients, with its largest clients averaging over 22 years as customers, a highly contracted revenue base, and low customer concentration. Low Leverage: Fitch anticipates that Quad will continue to reduce its debt by utilizing proceeds from plant closures and cash flow, and estimates EBITDA leverage to be below 2.0x over the forecast period. Additionally, the company has announced plans to further decrease its debt by using a portion of the proceeds from the sale of its European operations. Fitch expects management to persist in its strategy of allocating capital towards debt repayments, dividend distribution and shareholder returns. Quad lowered its long-term net leverage target to 1.5x-2.0x from 1.75x-2.25x. Additionally, the company reinstated dividends in 2024 after a gap of more than three years. Fitch expects the company to continue its dividend and share buyback practices over the forecast period. Secular Industry Headwinds: Fitch believes Quad's business profile will continue to face secular headwinds that limit revenue growth over the forecast period; volume decline will continue in the print industry as digital substitution reduces demand for printed products. According to a recent IBIS report, printing revenue has fallen at a CAGR of 1.1% over the past five years, with expected revenues of $90.3 billion during this period. The pandemic and increased postage rates have accelerated the shift to digital media. The declining demand has led to overcapacity and pricing pressures in the U.S. print industry. Profitability & Financial Flexibility: Fitch expects EBITDA margins to be in the mid-8% range over the forecast period, despite the secular decline in print revenues. The ratings are supported by sufficient liquidity from cash balances, availability under the Quad's revolver, and its expectation of low single-digit FCF margins over the forecast period. Fitch expects Quad to continue with the ongoing cost rationalization and deleveraging to continue through the sale of non-core assets, thereby, enhancing financial flexibility. Diversifying Revenue: Quad is diversifying its revenue base by expanding its higher-growth marketing solutions with new and existing clients. During 2023, approximately 10% of revenue came from agency solutions. Quad's transformation into a marketing solutions provider began in 2014 when the company started making several growth acquisitions and investments. This revenue diversification, combined with continued cost rationalization, will continue to transform Quad's operating profile over the long term. Derivation Summary Quad's rating reflects its low leverage, financial flexibility, supported by sufficient liquidity, cost rationalization efforts, and low single-digit FCF. The ratings are constrained by secular industry headwinds from digital substitution that limit revenue growth. Fitch rates R.R. Donnelley ('B'/Stable), which has a relatively strong competitive position based on the scale and size of its operations. However, R.R. Donnelley's ratings are constrained by its moderately high leverage, low FCF, and secular industry headwinds. Fitch also rates Deluxe Corporation (B/Stable), which specializes in print and payment solutions. Compared with Quad, Deluxe has higher EBITDA margins. However, it operates with higher leverage and lower interest coverage. Fitch believes Quad is well-positioned with EBITDA leverage below the 2.0x range, positive FCF and strong interest coverage relative to other industry peers at the 'B+' rating level. Key Assumptions - Fitch expects a high-single-digit revenue decline in 2025, driven by a 5% decline from the European divestiture and an organic decline in the printing segment due to secular industry headwinds. - Fitch expects a low-single-digit revenue decline to continue in 2026 and 2027; - EBITDA margins in the mid 8% range over the forecast period based on cost-reduction initiatives and plant closures; - Capex of $60 million-$65 million range annually; - Dividends and share buybacks in the $10 million to $15 million range; - Debt reduction in 2025, with cash flow prioritized toward dividend and share-repurchases, resulting in gross EBITDA leverage in below 2.0x range. Recovery Analysis For entities rated 'B+' and below, where default is closer and recovery prospects are more substantial 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. Key Recovery Rating Assumptions: Fitch assumes that Quad would be reorganized as a going concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach: Quad'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 has been reduced to $160 million from $200 million to reflect Quad's ability to maintain EBITDA due to the revenue pressures from the secular decline in commercial printing and divestiture. Additionally, the GC EBITDA also captures the highly competitive and fragmented nature of the industry. An EV multiple of 4x EBITDA is applied to the GC EBITDA to calculate a post-reorganization EV. The choice of this multiple considered the following factors: (i) the historical bankruptcy case study exit multiples in TMT sector have ranged from 4.0x-7.0x, with a median of 5.9x; (ii) the recovery analysis assumes that the company's revolving credit facility is fully drawn to provide liquidity in a distress situation; and (iii) the waterfall results in a recovery rating of 'RR2' for senior secured credit facility. RATING SENSITIVITIES Factors That Could, Individually Or Collectively, Lead To Negative Rating Action/Downgrade - Sustained revenue declines or a higher-than-expected deterioration of EBITDA margins; - EBITDA Leverage at or above 4.0x; - FCFs sustained near zero; - (CFO-Capex)/Debt less than 5%. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Material improvement in operating profile, evidenced by sustained positive low-single-digit revenue growth, stabilization in EBITDA margins and sustaining EBITDA leverage below 3.0x; - Consistently positive FCFs, with FCF margin near mid-single digits; - (CFO-Capex)/Debt above 10%. Liquidity and Debt Structure Sufficient Liquidity: Fitch views liquidity as sufficient, supported by cash balances of $12.5 million and $243 million availability under the revolving facility as of Sept. 30, 2024. Total liquidity is reduced to $196 million under the company's most restrictive debt covenants, and consists of $12.5 million in cash and $26 million of issued letters of credit. Fitch expects FCF margin in low-single-digit range over the forecast period. Debt Structure: Quad's debt structure includes a revolving credit facility totaling $325 million, comprising $17 million maturing in November 2026 and $306.9 million maturing in October 2029. Additionally, the company has a term loan of totaling $365 million, of which $14 million has a maturity date in November 2026. Issuer Profile Quad/Graphics, Inc. (Quad) is the second-largest commercial printing company in the U.S. and one of the largest globally in the very fragmented printing industry. 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 ----------- ------ -------- ----- Quad/Graphics, Inc. LT IDR B+ Affirmed B+ senior secured LT BB Affirmed RR2 BB RACKSPACE TECHNOLOGY: $2.30BB Bank Debt Trades at 66% Discount -------------------------------------------------------------- Participations in a syndicated loan under which Rackspace Technology Global Inc is a borrower were trading in the secondary market around 33.9 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $2.30 billion Term loan facility is scheduled to mature on February 15, 2028. About $56.2 million of the loan has been drawn and outstanding. Rackspace Technology Global, Inc., supports and manages cloud platforms, as well as offers managed hosting, colocation, security, data processing, and enterprise application development. RAPID DRY: Court Approves Interim Use of Cash Collateral -------------------------------------------------------- Rapid Dry, Inc. received interim approval from the U.S. Bankruptcy Court for the Western District of New York to use cash collateral to pay its expenses. The order signed by Judge Carl Bucki authorized the company to use cash collateral in accordance with its budget until a final hearing. Canandaigua National Bank and the U.S. Small Business Administration were granted roll-over or replacement liens to the same extent and with the same priority as their pre-bankruptcy liens. As additional protection, Canandaigua National Bank will receive monthly cash payments of $3,055.71. Canandaigua National Bank can be reached through its counsel: David M. Tang, Esq. Underberg & Kessler, LLP 300 Bausch & Lomb Place Rochester, NY 14604 Telephone: (585) 258-2800 Email: dtang@underbergkessler.com About Rapid Dry Inc. Rapid Dry Inc., doing business as IRock Plumbing, offers 24/7 water damage restoration, cleanup, and dehumidification services. Rapid Dry sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D.N.Y. Case No. 25-10009) on January 6, 2025. In its petition, Rapid Dry reported assets of up to $50,000 and liabilities of between $1 million and $10 million. Judge Carl L. Bucki oversees the case. The Debtor is represented by: Arthur G Baumeister, Jr., Esq. Baumeister Denz LLP 174 Franklin Street, Suite 2 Buffalo, NY 14202 Tel: (716) 852-1300 Fax: (716) 852-1344 Email: abaumeister@bdlegal.net RATHER OUTDOORS: $365MM Bank Debt Trades at 16% Discount -------------------------------------------------------- Participations in a syndicated loan under which Rather Outdoors Corp is a borrower were trading in the secondary market around 84 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $365 million Term loan facility is scheduled to mature on February 11, 2028. The amount is fully drawn and outstanding. Rather Outdoors Corporation operates as a holding company. The Company, through its subsidiaries, provides fishing equipment, such as casting, spinning, rods, tools, and accessories. Rather Outdoors Corp serves customers in the State of Missouri. RC MEADOWLANDS: New Jersey Property Up for Sale on March 24 ----------------------------------------------------------- Thorofare REIT V CNB LLC ("secured party") will sell at a public auction (i) 100% of the issued and outstanding limited liability interest held by RC Meadowlands Holdings LLC ("pledgor"), in RC Meadowlands LLC ("pledged entity"), and (ii) all related rights and property relating thereto, including all items included within the definition of "pledged collateral" as set forth in the pledged and security agreement dated as of March 18, 2022, by pledgor in favor of the secured party. The collateral secures debt owing by the pledged entity and, by extension, pledgor to secured party in an amount of not less than $20 million plus unpaid interest and fees, attorneys' fees and other charges including the costs to sell the collateral ("debt"). Upon information and belief of secured party, without any representation or warranties, the principal asset of the pledged entity is the real property located at 500 Schuyler Avenue aka 1 Disposal Road, North Arlington, New Jersey 07031 ("property"). The public sale will be held on March 24, 2025, at 10:00 a.m. Eastern Time, at the offices of the secured party's counsel, Herrick, Feinstein LLP, One Gateway Center, 9th Floor, Newark, New Jersey. The public sale will be conducted by Matthew D. Mannion of Mannion Auctions LLC. Parties interested in bidding on the collateral must contact the Secured Party's broker, Gary Gabriel of Cushman & Wakefield at (201) 460-3352 x353352 (gary.gabriel@cushwake.com), with a copy to David R. King (dking@herrick.com). Upon execution of a standard non-disclosure agreement, additional documentation and information will be available. Interested parties who do not contact the Broker and do not register by March 10, 2025, at 5:00 p.m. Eastern Time will not be permitted to participate in bidding at the public sale. REDSTONE HOLDCO: $450MM Bank Debt Trades at 56% Discount -------------------------------------------------------- Participations in a syndicated loan under which Redstone Holdco 2 LP is a borrower were trading in the secondary market around 43.6 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $450 million Term loan facility is scheduled to mature on April 27, 2029. The amount is fully drawn and outstanding. Redstone Holdco 2 LP and Redstone Buyer LLC were formed as part of the buyout of the RSA Security business from Dell Inc. ROIZMAN DEVELOPMENT: 3 Apt. Units Face Decay Amid Receivership -------------------------------------------------------------- Melody Simmons of Baltimore Business Journal reports that three Baltimore apartment towers in receivership are grappling with worsening conditions, including broken elevators, leaking pipes, and rodent infestations, according to court records. Maryland officials say they are working with the court to prioritize tenant safety and address these issues. According to Baltimore Business Journal, Esplanade, Temple Gardens, and The Emersonian—historic buildings overlooking Druid Hill Park—entered receivership in mid-2024 following years of neglect and housing violations. Originally built between 1912 and 1926 as upscale residences, the properties fell into disrepair over time. Roizman Development, which purchased them in the early 1990s using $14.6 million in state low-income housing funds, defaulted on its loan when it matured on January 1, 2024. Court documents highlight hazardous conditions, including malfunctioning fire suppression systems, lead paint, and significant structural issues. While some repairs have been made since the receivership process began, many problems remain unresolved. The Maryland Department of Housing and Community Development (DHCD) confirmed its involvement, stating that it conducts regular inspections and compliance reviews while working with the court-appointed receiver to improve conditions. Uncertainty over the buildings' future has raised concerns in Reservoir Hill, a neighborhood undergoing redevelopment. Nearby, MCB Real Estate is transforming an entire block into the mixed-use Reservoir Square, while plans are underway for a 154-unit apartment complex, The Linden, the report states. City Councilman James Torrence, who represents Reservoir Hill, said his office has helped relocate tenants facing unsafe conditions and intervened to prevent improper evictions. "These buildings provide some of the most affordable housing in the area," Torrence said. "But affordability should not come at the cost of unsafe living conditions." About Roizman Development Roizman Development Inc. operates as a real estate development and management company. The Company provides construction services for residential apartments and communities. SHAWN AND SUZANNE STEVENS: Eligible to Proceed Under Subchapter V ----------------------------------------------------------------- Chief Judge B. McKay Mignault of the United States Bankruptcy Court for the Southern District of West Virginia held that bankruptcy case of Shawn Derrick Stevens and Suzanne Marie Stevens will proceed under Subchapter V of Chapter 11. Mrs. Stevens is employed as the Director of Special Education Support for the Cabell County Board of Education. Mr. Stevens is disabled and receives social security income. In 2007, the Debtors formed Cambridge Development, LLC for the purpose of owning and operating two Bellacino's restaurants located in Barboursville and Kanawha City, West Virginia. The Debtors and Mr. Stevens' father held all membership interests in Cambridge Development. The Debtors formed Lesage Properties, LLC in November 2006. Lesage Properties owned four properties and operated a real estate leasing business. The Debtors and Mr. Stevens' father owned all membership interests in Lesage Properties. On Aug. 19, 2024, the Debtors filed this bankruptcy case seeking relief under Chapter 11 of the Bankruptcy Code. On their voluntary petition, the Debtors designated themselves as small business debtors and elected to proceed under Subchapter V. Pending before the Court are several pleadings, including briefing ordered by the Court on the 19th day of November 2024 regarding whether Mr. and Mrs. Stevens are "person[s] engaged in commercial or business activities" pursuant to 11 U.S.C. Sec. 101(51D), 1182(1). On Dec. 18, 2024, the Court held a hearing regarding: (1) the Objection of Acting United States Trustee to Debtors' Designation and Eligibility under Subchapter V and its exhibit in support thereof; (2) the Debtors' Response to Objection of U.S. Trustee to Subchapter V Designation and its affidavit in support thereof; and (3) the supporting briefs filed by the United States Trustee and the Debtors. The UST asserts that the Debtors were not "engaged in commercial or business activities," because there are no bank accounts, account receivables, or litigation claims that they can pursue that would result in a distribution to creditors. At a hearing held on Nov. 15, 2024, in support of their objection, the UST argued that the Debtors have no assets, and thus cannot be winding down. The UST asserts that Cambridge Development ceased its operations and Lesage Properties as administratively dissolved by the Secretary of State in 2011, therefore the timing is too distant from the Petition Date for the Debtors' activities to be considered winding down. The Debtors reiterated that they are attempting to restructure legacy business debt and, thus, are winding down remaining business obligations. The Debtors have not expressed an intention to reinstate or operate their businesses in the future. The Debtors argue that they are engaged in commercial or business activities because they were winding down their businesses on the Petition Date. Upon consideration of the parties' filings and arguments as well as relevant case law, the Court concludes that the Debtors have met their burden to show that they are eligible to proceed under Subchapter V. The Debtors have shown that they are persons engaged in commercial or business activities (as of the Petition Date) whose debts are less than $3,024,725.00 and more than half of their debts arose from their commercial or business activities. The Court concludes that the Debtors were engaged in "commercial or business activities" on the Petition Date through: (1) the rental of real property through Lesage Properties; (2) the liquidation of a business asset postpetition, which is a winddown business activity; and (3) the engagement in discussions, negotiations, and other efforts to restructure and repay indebtedness under personal guarantees of commercial business debt. The UST's Objection is overruled. The Debtors may proceed toward the confirmation of their plan. A copy of the Court's decision dated Jan. 28, 2025, is available at https://urlcurt.com/u?l=iM4xOp from PacerMonitor.com. The Debtors filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D.W.Va. Case No. 3:24-bk-30248) on Aug. 12, 2023. Judge B. McKay Mignault oversees the case. SIERRA ENTERPRISES: S&P Raises ICR to 'B-', Outlook Stable ---------------------------------------------------------- S&P Global Ratings removed all ratings from CreditWatch, where it placed them with positive implications on Sept. 6, 2024, and raised the issuer credit rating to 'B-' from 'CCC+' on California-based Sierra Enterprises LLC. S&P also raised the first-lien senior secured issue-level rating to 'B-' from 'CCC+' with an unchanged '3' recovery rating (60% estimated recovery in the event of a default). The outlook is stable, reflecting S&P's expectation for leverage to improve to low-6x and FFO cash interest coverage to remain above 2x as the company sustains pro forma EBITDA margins near 10% and repays debt with net asset sale proceeds. Sierra Enterprises filed its audit for fiscal-year 2024 (ended Sept. 30, 2024), which confirmed the losses for its Beloit, Wis., facility (LMN). The proceeds from selling the plant will cover claims for a recall at that facility, partially finance the acquisition of Hormel Health Labs LLC, and repay debt. The sale of the LMN plant has improved the company's leverage profile. S&P said, "We estimate pro forma debt to EBITDA as of fiscal-year-end 2024 (excluding EBITDA losses for the roughly nine months Sierra still owned LMN) was 6.6x--a substantial improvement from trailing-12-month leverage well above 12x in prior quarters. We forecast leverage will further improve to 6.3x by fiscal-year-end 2025 as the company repays incremental debt of about $10 million with a portion of the LMN divestiture proceeds and from incremental EBITDA contribution from the Hormel Health acquisition. As such, we no longer view the company's capital structure as unsustainable. "Fiscal 2025 top-line growth will likely be pressured due to lower customer volumes while EBITDA growth will be held back by still-high one-time charges. We forecast a 2%-4% decline in sales next year, primarily reflecting lower volumes with key food service customers currently facing declines in same-store sales. After adjusting out losses at LMN, EBITDA margins in 2024 were depressed due to various one-time charges, including for personnel, transaction-related expenses, and certain recall-related items. "Moreover, we expect EBITDA margin to remain largely flat in 2025 as restructuring and transaction costs (which we typically don't add back) remain elevated, and therefore we are not forecasting significant EBITDA growth from the existing core business. Our 8% EBITDA growth forecast for fiscal 2025 largely reflects incremental EBITDA from the Hormel Health acquisition. We do expect much higher EBITDA growth by 2026 once one-time charges roll off. "Interest coverage has improved and FOCF will likely turn positive, excluding recall claim payouts, but discretionary debt reduction may be negligible. We expect FFO cash interest coverage to modestly decline as interest expense on its second-lien term loan converts from PIK to cash pay, as governed by the facility's fifth amendment. Its first-lien term loan (maturing 2027) converted to all cash pay at the end of July 2024, and we believe its second-lien term loan will covert to cash pay as scheduled in July 2025. We project the added cash interest will result in FFO cash interest coverage to decline to 2.3x by fiscal-year-end 2025 compared with 2.5x at fiscal-year-end 2024. "Still, with EBITDA no longer hampered by LMN-related losses, FOCF should turn positive in 2025 (prior to claim payments). Although the company's normalized FOCF could support more debt repayment, we are only assuming mandatory amortization and debt prepayments from the LMN divestiture in our forecast. This is because we are uncertain what the company may prioritize with excess cash flows, particularly after the sponsor-owner made two preferred equity injections over the past several years that are accreting at a high PIK rate. (We adjust this preferred equity to debt given our view that it is not permanent capital). "The stable outlook reflects the company's improved leverage profile and debt service coverage following the LMN divestiture and our expectation that the company will maintain stable EBITDA margins and generate positive FOCF, enabling the company to reduce leverage to low-6x over the next year." S&P could lower its ratings if operating performance materially weakens, such that S&P believes that the capital structure is unsustainable over the long-term. This could occur possibly if: -- Weaker than expected foodservice volumes at its major customers; -- Product recall claims are much higher than expected resulting in a material deterioration in credit measures; -- FFO cash interest coverage declines below 1.5x; or -- FOCF (after adjusting out restricted cash funded claims) turns negative to the point that the company needs to rely on revolver borrowings to fund operations and any unexpected incremental claims above its restricted cash balances S&P could consider raising the ratings once EBITDA reaches normalized levels with the roll off of its one-time charges and the company: -- Is able to fund all its product recall claims with restricted cash; -- Does not incur additional claims liability related to the product recall; -- Successfully integrates its Hormel Health acquisition; -- Sustains positive FOCF (excluding restricted cash funded claims) beyond 2025; -- Sustains leverage below 7x. SKYLINE HOLDING: Hires Herbert K. Ryder as Bankruptcy Counsel ------------------------------------------------------------- Skyline Holding 365 LLC seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to hire the Law Offices of Herbert K. Ryder, LLC as counsel. The firm's services include: a) advising applicant as to its duties as a debtor-in-possession under the Bankruptcy Code; b) representing applicant at the Sec. 341(a) hearing and at any meetings between applicant and creditors or creditors' committees; c) assisting applicant in obtaining the authorization of the Bankruptcy Court to retain such accountants, appraisers or other professionals whose services applicant may require in connection with the operation of its business or the administration of the Chapter 11 proceedings; d) defending any motions made by secured creditors to enable applicant to retain the use of assets needed for an effective reorganization; e) negotiating with priority, secured and unsecured creditors to achieve a consensual resolution of their respective claims and the incorporation of such resolution into a plan of reorganization; f) filing and prosecution of motions to expunge or reduce claims which applicant disputes; g) representing applicant in the Bankruptcy Court at such hearings as may require applicant's presence or participation to protect the interest of applicant and the bankruptcy estate; h) formulating, negotiating, preparing and filing of a disclosure statement and plan of reorganization (or liquidation) which conforms to the requirements of the Bankruptcy Code and applicable rules of procedure; i) representing applicant at hearings on the approval of the disclosure statement and confirmation of a plan of reorganization and responding to any objections to same filed by creditors or other parties in interest; j) assisting applicant in discharging its obligations in consummating any plan of reorganization which is confirmed; k) advising applicant whether and to what extent any of its assets constitute cash collateral under the Bankruptcy Code and prosecuting applications for authorization to use any such assets; and l) providing such other varied legal advice and services as may be needed by applicant in the operation of its business or in connection with the Chapter 11 proceedings. Herbert Ryder, Esq., the primary attorney in this representation will be compensated on his hourly rate of $350. Mr. Ryder 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: Herbert K. Ryder, Esq. LAW OFFICES OF HERBERT K. RYDER, LLC 531 U.S. Highway 22 East, Suite 182 Whitehouse Station, NJ 08889 Tel: (908) 838-0543 Fax: (908) 838-0544 E-mail: hryder@hkryderlaw.com About Skyline Holding 365 LLC Skyline Holding 365 LLC is a real estate company based in Plainfield, New Jersey. Skyline Holding 365 LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 25-10372) on January 14, 2025. In its petition, the Debtor reports estimated assets between $1 million and $10 million and estimated liabilities $500,000 and $1 million. Honorable Bankruptcy Judge Stacey L. Meisel handles the case. The Debtor is represented by Herbert K. Ryder, Esq., at Law Offices of Herbert K. Ryder LLC, in Whitehouse Station, New Jersey. SORTIS HOLDINGS: Settlement Plan Would End Bankruptcy Push ---------------------------------------------------------- Jonathan Bach of The Oregonian reports that Sortis Holdings has put forward a settlement offer, including a lump-sum cash payment and shares in a subsidiary, in an effort to resolve the creditors' petition that seeks to force the company into bankruptcy. During the pandemic, Sortis Holdings invested in various Northwest brands, resulting in a portfolio of subsidiaries. According to recent court filings, the company is facing alleged debts to over 80 creditors, including vendors and agencies from multiple states. About Sortis Holdings Sortis Holdings, operating as SoHi Brands, operates as a holding company. The Company, through its subsidiaries, provides financial services such as equity capital placement, loan sale advisory, debt restructuring, valuations, strategic capital management, and specialty finance.[BN] STL HOLDING: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed STL Holding Company, LLC's (dba DSLD Homes) ratings, including its Long-Term Issuer Default Rating (IDR) at 'B+', senior unsecured revolving credit facility and senior unsecured notes at 'BB-' with a Recovery Rating of 'RR3'. The Rating Outlook is Stable. DSLD's 'B+' IDR reflects its small scale, limited geographic diversity, volatile cashflow generation and adequate financial flexibility. The company's leading positions within its local markets, low leverage and its land-light strategy are also factored into the rating. The Stable Outlook reflects Fitch's expectation that housing demand will improve modestly in 2025, and that DSLD will maintain significant rating headroom relative to Fitch's negative sensitivities for the 'B+' IDR. Key Rating Drivers Small Scale and Limited Diversification: Fitch views DSLD's small scale and geographic concentration as limiting factors for the IDR. DSLD was the 28th largest homebuilder in the U.S. based on 2023 home deliveries and operates 128 communities across 14 markets in five states. DSLD has meaningful concentration in Louisiana, with about 68% of revenues from this state, exposing it an outsized impact during cyclical downturns in the region. DSLD holds leadership positions in most of its markets and generally compete with other regional homebuilders in these markets. Land-Light Strategy: DSLD has one of the shorter owned-land positions among the builders in Fitch's coverage due to its land-light strategy primarily through finished lot option contracts with developers. Fitch views a land-light strategy positively, as write-downs and impairments charges are limited to option deposit forfeitures during cyclical downturns. However, management typically does not re-trade option agreements and is unlikely to walk away from these option contracts, potentially burdening DSLD with excess land holdings and lower margins during downturns. As of Sept. 30, 2024, DSLD controlled 13,559 lots, with about 39% owned, and the rest controlled through options. Based on LTM closings, DSLD controlled 3.7 years of land and owned 1.5 years of supply, of which 23% are homes in backlog. The company's owned lot position increased in 2023 and 2024 compared to previous years, when its owned less than a one-year supply. Strong Credit Metrics: DSLD's credit metrics are strong for the 'B+' IDR with meaningful rating headroom relative to negative sensitivities. Fitch calculated net debt to capitalization (excluding $50 million of cash classified by Fitch as not readily available for working capital) is forecast to be between 35% and 40% in 2025 before decreasing to the low 30% range in 2026. EBITDA leverage was 2.4x for the LTM ending Sept. 30, 2024 and is forecast to be around 2.2x by YE 2025 and below 2.0x in 2026. Management aims to maintain EBITDA leverage below 2.0x and debt to capitalization of 35%-40%. Volatile Cash Flow: Fitch expects DSLD to generate negative cash flow from operations (CFO) in 2024 due to increased inventory spending and positive CFO in 2025 from lower working capital investments. DSLD generated positive CFO during 2019-2022 and its IDR reflects Fitch's expectation that it will lower land spending if market conditions deteriorate and monetize housing inventory to strengthen cash flow for debt reduction or cash accumulation. The rating may be pressured if management is aggressive with capital allocation priorities during a housing downturn, resulting in consistent negative FCF. Financial Flexibility: DSLD has adequate liquidity with cash, revolver availability and funds from operations to sustain its operations and support modest growth. The company distributes a meaningful portion of its net income to its shareholders, as several subsidiaries are structured as S-corporations, and its shareholders are taxed on part of the company's income. DSLD is likely to fund its growth by accessing debt markets and/or with its cashflow from operations. Ownership Structure: DSLD is a privately held company with concentrated ownership among management and other owners, which poses an increased risk of shareholder friendly activities relative to publicly traded peers. However, there is no one dominant shareholder and the management has maintained discipline in its capital allocation strategy, including a measured growth strategy and refraining from significant cash distributions to shareholders. Modest Improvement in Housing Market: Fitch expects housing activity to improve modestly in 2025, though it will remain below historical averages due to persistent affordability issues and low inventory levels. Homebuilders' ability to address affordability issues through product offerings and mortgage buydowns will make new homes an attractive alternative for potential buyers. DSLD's offering of homes at affordable price points allows the company to targets first-time homebuyers and Fitch expects company's revenues to grow 4%-5% in 2025. Derivation Summary DSLD is similar in size compared with Adams Homes, Inc. (Adams; B+/Stable) in terms of revenue and community count but smaller than Dream Finders Homes, Inc. (Dream Finders; BB-/Positive). DLSD is less geographically diversified than both Adams and Dream Finders, but it has higher deliveries than Adams. DSLD has stronger credit metrics relative to Dream Finders and Adams. All three peers undertake moderate speculative building and have meaningful exposure to entry-level homes, but both DSLD and Dream Finders have greater exposure to other price points and buyer segments. DSLD has lower EBITDA margins than Adams and Dream Finders. It also has a shorter owned-lot position than Adams but longer than Dream Finders. Key Assumptions - Single-family housing starts to increase 3%-4% annually in 2025 and 2026; - Homebuilding revenues to grow 4%-6% during 2025 and 2026; - EBITDA margins of 12.5%-13.5% in 2025 and 2026; - CFO to be 2%-4% of homebuilding revenues in 2025 and 4%-6% of homebuilding revenues in 2026; - FCF to remain neutral to negative in 2025 before turning slightly positive in 2026; - Net debt to capitalization of 35%-40% in 2025 and decline to 30%-35% in 2026; - EBITDA leverage between 2.0x-2.5x in 2025 and decrease to below 2.0x in 2026; - EBITDA interest coverage to remain above 5.0x over the next few years. Recovery Analysis The recovery analysis assumes that DSLD would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated. Fitch assumed a 10% administrative claim. GC Approach The GC EBITDA estimate of $80 million reflects Fitch's view of a post-restructuring sustainable level of EBITDA, on which the agency bases the enterprise value (EV). The GC EBITDA is based on Fitch's assumption that distress would arise from further weakening of the housing market combined with a loss of market share in key markets. Fitch estimates annual revenues of $825 million (25% lower than projected 2024 revenues) and EBITDA margin of 9.8% (200 bps below 2024 projected EBITDA margin) would capture the lower revenue base of the company after a housing downturn, plus a sustainable margin profile after right sizing. Fitch applies a 5.5x GC EBITDA multiple to calculate the post-reorganization EV. The choice of the multiple considered the following factors: - Fitch used a 5.5x multiple to calculate the EV of Adams Homes (B+/Stable) and Landsea Homes (B/Stable). Adams is the 31st largest homebuilder by deliveries, with operations concentrated in the Southeast. Landsea is the 42nd largest homebuilder by deliveries with operations in Arizona, California, Florida, New York and Texas. Fitch used a 6.0x multiple to calculate the EV for Empire Communities Corp. (B-/Stable). Empire is one of the largest low-rise builders in the Greater Golden Horseshoe and Greater Toronto areas and has a growing presence in the U.S. - Trading multiples (EV/EBITDA) for public homebuilders have ranged between 3.5x and 8.5x over the past 24 months. Fitch assumes that the revolving credit facility will be about 75% drawn at the time of distress, considering potential shrinkage in the borrowing base due to contracting inventory levels during a period of weaker demand, leading to a default. The liability waterfall allocation results in a recovery corresponding to an 'RR3' for the unsecured revolver and senior unsecured notes. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Net debt to capitalization sustained above 55%; - (CFO-capex)/debt sustained below 2.5%; - EBITDA interest coverage falls below 2.0x; - Inventory to debt consistently below 1.2x; - Deterioration in the company's liquidity profile, including consistently negative CFO and limited availability under its revolving credit facility. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - The company increases its size and further enhances its geographic diversification and market leadership positions; - Net debt to capitalization consistently below 45% and the company maintains a healthy liquidity position; - Fitch's expectation that EBITDA leverage will sustain below 4.0x; - (CFO-capex)/debt sustained above 5%. Liquidity and Debt Structure DSLD has sufficient liquidity with $37 million of cash and full availability under its $150 million revolving credit facility (RCF) as of Sept. 30, 2024. DSLD debt maturities are well-laddered with no major debt maturities until February 2027, when $150 million of unsecured RCF facility mature. The next maturity is in February 2029 when its senior unsecured notes become due. Issuer Profile STL Holding Company, LLC (dba DSLD Homes) designs, builds and markets detached and attached single-family homes in Louisiana, northwest Florida, Alabama, Mississippi, and east Texas. The company was the 28th largest homebuilder in the U.S. in 2023 based on home deliveries. 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 ----------- ------ -------- ----- STL Holding Company, LLC LT IDR B+ Affirmed B+ senior unsecured LT BB- Affirmed RR3 BB- STONEPEAK NILE: Fitch Assigns 'BB+' LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has assigned Stonepeak Nile Parent LLC (dba ATSG) a first-time 'BB+' Long-Term Issuer Default Rating (IDR). Fitch has also assigned a 'BBB-' rating and Recovery Ratings of 'RR1' to the company's senior secured term loan. The Rating Outlook is Stable. The rating is supported by ATSG's multi-year leasing contracts and airline agreements, which set pricing and minimum volumes, leading to cash flow stability. Its leading position in the cargo aircraft leasing market reflects its high share of B767 freighters. Fitch expects EBITDA leverage of around 3x and CFO-Capex/Debt approaching double digits under moderated capex. ATSG's FCF margin would also trend toward the high single-digit range. The ratings also reflect the potential for opportunistic capital deployment following Stonepeak's acquisition, including temporary increases in leverage. ATSG's concentration in the B767 platform and key customers is also a rating factor. However, the risk is mitigated by e-commerce growth, long-term aircraft-specific contracts, operational entrenchment of non-leasing services, and a limited supply of competitive freighters. Key Rating Drivers Concentrated, Entrenched Customer Base: As of fiscal YE 2023, ATSG's top one and three customers accounted for 34% and 76% of revenue, increasing cash flow risk if customers switch to competitors or change fleet strategy. Despite customer-specific concentration, contracts are linked to individual aircraft and staggered over the next several years. ATSG's comprehensive service offering and control over a meaningful portion of the B767 fleet in the U.S. increase switching costs and mitigate risks. Its largest customer, Amazon, has co-located a cargo hub with ATSG, supporting the durability of the partnership. Contracts Provide Visibility: About 80% of revenues are contracted under multi-year agreements, typically ranging from four to 10 years, providing cash flow stability and predictable returns on aircraft investments. Leasing contracts, making up about 67% of ATSG's EBITDA, provide a high degree of earnings visibility due to pre-determined payment schedules and limited operating cost risks. Crew, maintenance, and insurance (CMI) contracts are more variable, but have fixed long-term pricing, minimum volumes and cost-pass throughs for other expenses, including fuel, moderating margin volatility. Fitch does not believe there is a significant risk of contract cancellations through a rate cycle due to the company's entrenched regional network focus and penalties for breaking contracts. ATSG's contracts tend to be extended by customers at the end of the term. However, it has successfully repositioned aircraft with other customers globally depending on capacity requirements. Leverage Around 3.0x: Fitch does not expect significant deleveraging after transaction close, forecasting EBITDA leverage to be around 3x. While ATSG has capacity to repay debt, investing in growth capital will likely take priority over meaningful debt repayment. Opportunistic capital spending could cause temporarily high leverage in the mid-3x range. But ATSG is expected to keep a measured approach in securing aircraft in line with customer demand and fund aircraft purchases using cash flow. Sponsor dividends are also considered, but Fitch believes these will be balanced with growth investments. Regional Express Cargo Network Niche: ATSG has a leading position in freight aircraft leasing for express networks globally with its extensive medium-widebody aircraft fleet. The express cargo market growth has been fueled by e-commerce expansion and consolidation around cargo hubs. Dedicated cargo networks provide superior service quality and flexibility relative to shipping via passenger networks, crucial for e-commerce providers that prioritize reliability and efficiency. ATSG can rapidly implement dedicated cargo routes for customers, and is expected to benefit from e-commerce growth. Forecasted Positive FCF: Fitch forecasts FCF margins in the mid- to high-single-digit range, assuming modest growth capex and before discretionary dividend distributions, supporting financial flexibility. Growth capex in recent years has led to somewhat variable FCF. ATSG purchases aircraft ahead of placement with customers, but is able to reduce cash flow risks by postponing freighter conversions to preserve liquidity. Fitch expects FCF to be directed towards growth-oriented initiatives and potential dividends balanced, with leverage around 3x on a sustained basis. Aircraft Lessor Considerations: ATSG's fleet is older and less-liquid than fleets of passenger aircraft lessors. However, cargo aircraft have much longer useful lives and demand is generally more stable than passenger airlines. EBITDA leverage around 3x and coverage in the 4x range are consistent with 'BB' to 'BB-' rated passenger lessor peers with similar asset quality. ATSG's ancillary service offerings that complement its dry leasing business offers additional revenue diversification and a more compelling value proposition to freight operators, offsetting asset quality considerations. Derivation Summary Fitch compares ATSG with cargo airline Rand Parent, LLC (dba Atlas Air) (BB/Stable) as a close operational peer in the cargo freight market. Atlas Air is primarily an ACMI/CMI provider with more cash flow variability, exposed to fluctuations on its cost base through the term of its operating agreements. Most of ATSG's cash flow is from dry leasing, insulating it from price and volume risk, leading to minimal operating risk. Atlas is expected to operate with leverage in the low 3x range and coverage in the high 3x range, slightly weaker than ATSG. Compared with passenger airlines like Air Canada (BB/Stable) and Alaska Air Group Inc. (BB+/Stable), freight airlines benefit from a high level of contracted revenue, including multi-year rate agreements, limited fuel price risk and activity minimums, which support cash flow visibility. Conversely, passenger airlines typically have more favorable market positions within the passenger network, supporting competitive positioning. Air Canada is expected to have leverage around 3x, and Alaska will trend toward mid-3x, in line with ATSG's leverage of around 3x in 2025. ATSG's financial profile is similar to 'BB'-rated passenger aircraft lessors, such as Castlelake Aviation Limited (BBB-/Positive) and Griffin Global Asset Management Holdings, Ltd. (BB/Stable). ATSG's EBITDA leverage and coverage are favorable to Castlelake's 7.6x leverage and 2.3x coverage, and Griffin's 9.2x leverage and 1.4x coverage. ATSG has a stronger business profile than typical aircraft lessors, given its operational capabilities and extensive B767 fleet that is well-suited for pallet-based express networks, and is not as exposed to price competition. Key Assumptions - Revenue growth in the mid- to low-single-digit range through the forecast, supported by pricing improvement and fleet growth; - Fitch-defined EBITDA trends in the 30% range through the forecast as costs normalize and pricing improves on certain contracts; - Capex moderates to around $300 million through 2026; - Capital deployment assumed to remain opportunistic, focused on growth investments or shareholder returns; - SOFR rates remain in the 4% range throughout the forecast. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A shift in operating profile that heightens through-the-cycle FCF variability, including weaker contract structures and durations; - EBITDA leverage sustained above 3.3x; - A shift in capital allocation priority that reduces fleet quality and financial flexibility; - EBITDA interest coverage below 3.7x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade is considered unlikely in the near term. However, upgrade factors include: - Continued execution of operational strategy that maintains margin and FCF stability through business cycles; and establishment of a financial policy that leads to EBITDA leverage sustained below 2.7x; - Adherence to a capital allocation strategy that preserves asset quality and financial flexibility; - Transition to a less-encumbered capital structure. Liquidity and Debt Structure ATSG's liquidity at close consists of $30 million cash on hand and full availability on its $400 million revolver. Strong positive discretionary FCF expectations should support the liquidity position through the medium term. The debt structure consists of $1.9 billion in first lien debt that matures in seven years from the closing date. Amortization on the term loan is minimal at 1% per year. Issuer Profile Air Transport Services Group, Inc. (ATSG) is a leading provider of aircraft leasing, air cargo transportation, and related services. Date of Relevant Committee 17 January 2025 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 ----------- ------ -------- Stonepeak Nile Parent LLC LT IDR BB+ New Rating senior secured LT BBB- New Rating RR1 STONEPEAK TAURUS: S&P Affirms 'B' ICR, Alters Outlook to Negative ----------------------------------------------------------------- S&P Global Ratings revised its outlook on Stonepeak Taurus Lower Holdings LLC's (operating as TRAC Intermodal) to negative from stable and affirmed its 'B' long-term issuer credit rating and 'B+' issue rating on its senior secured debt. The negative outlook reflects that S&P could lower its ratings on TRAC if it expects the company's EBIT interest coverage to remain below 1.1x or its funds from operations (FFO) to debt to remain below 12% on a sustained basis. Containerized import volumes improved meaningfully in 2024, increasing about 15% year over year according to the National Retail Federation (NRF), supported by steady macroeconomic conditions and consumer demand. Despite the higher volumes, TRAC's marine pool fleet utilization through the nine months ended Sept. 30, 2024, declined to the high-50% area, compared with about 60% in 2023, and the mid-80% area in 2022. This was because supply chain disruptions have eased significantly over the past two years, resulting in shorter rental periods (lower dwell times due to quicker return of chassis to the pools), affecting utilization rates and pricing to customers. Additionally, there has been an uptick in truckers using their owned or term-leased chassis fleet instead of the pooled assets, further affecting fleet utilization. While this trend has benefited TRAC's smaller term leasing segment, it has not been sufficient to offset the lower pool revenue, since the pool fleet accounts for over 60% of TRAC's total fleet size. S&P said, "We expect moderate growth in import volumes through first-half 2025, supported by front-loading of imports amid uncertainties around U.S. President Donald Trump's tariff policies. Nevertheless, we don't expect a significant improvement in fleet utilization given dwell times are likely to remain at about current levels amid ample supply of chassis, absent any meaningful supply chain inefficiencies. We also note that over the next few years, higher tariffs and potential trade disruptions could result in lower demand for marine chassis. Therefore, we forecast TRAC's revenue in 2024 will decline 10%-15% from 2023 levels, before improving modestly by 2%-5% in 2025. "We forecast S&P Global Ratings-adjusted EBIT margins of 13%-17% through 2025, somewhat lower than the about 20% in 2023 (and close to 40% in 2022), because the decline in revenue has outpaced the decline in costs. While maintenance and repair expenses have reduced somewhat in line with lower fleet utilization, margins have been affected by higher storage costs (amid low utilization), and other fixed costs, including sales, general, and administrative (SG&A) expenses. "We expect capital expenditure (capex) to largely comprise outflows toward the refurbishment of chassis under the South Atlantic Chassis Pool 3.0 (SACP 3.0), with minimal spending on other areas. Therefore, we forecast capex of about $70 million-$90 million annually through 2025. The company's capital structure is largely floating-rate, but its interest-rate hedges provide some stability and visibility on its exposure. However, as some of those hedges expire over the next few years, the company could be exposed to the elevated interest rate environment. "We forecast EBIT interest coverage at about 1x and FFO to debt of 9%-12% through 2025, compared with 1.5x and 13.8% respectively in 2023. In addition, we expect debt to capital to remain above 100% through the forecast period." TRAC had ample availability of about $383 million under its $1.16 billion asset-based loan (ABL) facility as of Sept. 30, 2024. The company's key uses of liquidity include capex and any working capital needs that arise. The ABL facility matures in September 2026, and therefore S&P expects the company to extend the maturity ahead of turning current in September 2025. The second-lien term loan, which is the only other debt in the capital structure, is longer-dated, maturing in 2030. S&P said, "We view Stonepeak Infrastructure Partners, TRAC's owner since early 2020, as a financial sponsor. Since March 2021, the company has paid over $870 million in dividends to Stonepeak, including the proceeds of the $350 million second-lien term loan B issued in January 2022. The company stopped dividend payouts in mid-2023 amid weaker market conditions, and there were no distributions in 2024. We also expect no dividend payments in 2025, given TRAC's relatively weak operating performance. "Nevertheless, we believe the company will continue to periodically undertake dividend payouts to its financial sponsor when the opportunity arises, particularly if earnings improve beyond current expectations." STONEYBROOK FAMILY: Case Summary & 16 Unsecured Creditors --------------------------------------------------------- Debtor: Stoneybrook Family Dentistry d/b/a Wholistic Dental d/b/a Stoneybrook Dental 14835 West Colonial Drive Winter Garden, FL 34787 Business Description: Stoneybrook Family, operating under the names Stoneybrook Dental and Wholistic Dental, provides comprehensive dental services in a state-of-the-art facility, offering everything from general and cosmetic dentistry to specialized treatments like sleep apnea care and wholistic wellness. With advanced technology such as digital X-rays and CEREC same-day crowns, they prioritize patient comfort and education. Chapter 11 Petition Date: January 31, 2025 Court: United States Bankruptcy Court Middle District of Florida Case No.: 25-00604 Judge: Hon. Tiffany P Geyer Debtor's Counsel: Paul N. Mascia, Esq. NARDELLA & NARDELLA, PLLC 135 W. Central Blvd., Ste. 300 Orlando, FL 32801 Tel: 407-966-2680 Fax: 407-966-2681 Email: pmascia@nardellalaw.com Total Assets: $2,573,305 Total Liabilities: $2,911,682 The petition was signed by Dr. Wendi K. Wardlaw as president. A full-text copy of the petition, which includes a list of the Debtor's 16 unsecured creditors, is available for free on PacerMonitor at: https://www.pacermonitor.com/view/3YDLQHI/Stoneybrook_Family_Dentistry__flmbke-25-00604__0001.0.pdf?mcid=tGE4TAMA STRONGHOLD CONSTRUCTION: Wins Final Approval to Use Cash Collateral ------------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina, Asheville Division, issued a final order authorizing Stronghold Construction Inc. to use cash collateral. The final order authorized the company to use the cash collateral of its secured creditors, including First-Citizens Bank & Trust Company and VelocitySBA, LLC, to pay the expenses set forth in its budget, with a 10% variance. As protection, secured creditors were granted replacement liens on post-petition assets acquired using the cash collateral to the same extent and priority as their pre-bankruptcy liens. As additional protection, Stronghold was ordered to make monthly payments of $500 and $3,500 to First Citizens and VelocitySBA, respectively. The company was also ordered to maintain insurance covering the collateral of First Citizens, provide periodic financial reporting, and allow the bank to inspect its collateral. First-Citizens can be reached through its counsel: Jameson A. E. Doub, Esq. Ward and Smith, P.A. P.O. Box 8088 Greenville, NC 27835-8088 Telephone: 252.215.4000 Facsimile: 252.215.4077 Email: jadoub@wardandsmith.com VelocitySBA can be reached through its counsel: Clint S. Morse, Esq. Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P. P.O. Box 26000 Greensboro, NC 27420 Telephone: (336) 271-3124 Email: cmorse@brookspierce.com About Stronghold Construction Inc. Stronghold Construction, Inc. is a professional roofing and restoration services provider in Johnson City, Tenn. Stronghold filed Chapter 11 petition (Bankr. W.D. N.C. Case No. 24-10199) on November 21, 2024, with $1,891,844 in assets and $2,241,228 in liabilities. Lincoln Koontz, president of Stronghold, signed the petition. Judge Ashley Austin Edwards oversees the case. The Debtor is represented by: Michael L. Martinez, Esq. Grier Wright Martinez, PA 521 E. Morehead St., Ste. 440 Charlotte, NC 28202 Tel: (704) 375-3720 Fax: (704) 332-0215 Email: mmartinez@grierlaw.com TEMADA INC: Hires Joel Marcus Inc. as Financial Professional ------------------------------------------------------------ Temada Inc., d/b/a Rembrandt Auto Body, seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Joel Marcus, Inc. as financial professional. The firm will provide these services: a. give advice to the Debtor and assist in the preparation of the Debtor-in Possession's Monthly Operating Reports; b. provided general accounting advise and reports; and c. assist the Debtor in possible adversary proceedings against certain parties. The firm will be paid at $500 per hour. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Joel Marcus, a partner at Joel Marcus, Inc., disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Joel Marcus, CPA Joel Marcus, Inc. 676 West Prospect Road Fort Lauderdale, FL 33309 Tel: (954) 566-8513 About Temada Inc. d/b/a Rembrandt Auto Body Temada Inc., doing business as Rembrant Auto Body, was founded in 2004. The company's line of business includes the retail sale of computers, computer peripheral equipment, and software. Temada Inc. sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-22472) on November 26, 2024, with up to $50,000 in assets and up to $10 million in liabilities. Linda Leali, Esq., at Linda M. Leali, P.A., serves as Subchapter V trustee. Judge Corali Lopez-Castro handles the case. The Debtor is represented by David W. Langley, Esq. TEMPLETON REAGAN: Case Summary & Five Unsecured Creditors --------------------------------------------------------- Debtor: Templeton Reagan Puritan Mill, LLC 850 Piedmont Avenue NE Unit 1607 Atlanta GA 30308 Business Description: Templeton Reagan is involved in the real estate sector. The Debtor is the sole owner of the property at 810 Bay Point Drive, Madeira Beach, Florida, which is currently valued at approximately $1.38 million. Chapter 11 Petition Date: January 31, 2025 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 25-51015 Debtor's Counsel: Louis McBryan, Esq. MCBRYAN, LLC 6849 Peachtree Dunwoody Road Building B-3, Suite 100 Atlanta GA 30328 Tel: 678-733-9322 E-mail: alepage@mcbryanlaw.com Total Assets: $1,940,662 Total Liabilities: $1,213,123 The petition was signed by Michael A. Smith as authorized representative of TRPM, LLC. A full-text copy of the petition, which includes a list of the Debtor's five unsecured creditors, is available for free on PacerMonitor at: https://www.pacermonitor.com/view/RUHPO5Q/Templeton_Reagan_Puritan_Mill__ganbke-25-51015__0001.0.pdf?mcid=tGE4TAMA TRITON INTERNATIONAL: S&P Rates Perpetual Preference Shares 'BB+' ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating to Triton International Ltd.'s proposed series F cumulative redeemable perpetual preference shares (final amount to be determined upon close, but expected to be $100 million or greater). The preferred stock, which S&P will treat as 50% equity and 50% debt when calculating its financial ratios, will rank senior to the company's common stock. S&P said, "Our issue-level rating, two notches below the 'BBB' issuer credit rating, reflects the preferred shares' subordination to the company's other debt instruments (issued at its subsidiaries) and the deferability of their dividend payments. Triton will use the proceeds from this issuance for general corporate purposes, including purchasing containers, paying dividends, and repaying or repurchasing outstanding indebtedness. "The 'BBB' issuer credit rating on Triton indicates that the company will continue to benefit from being the largest marine cargo container lessor globally and owned by Brookfield Infrastructure Partners L.P. We expect EBIT interest coverage around the high-2x and funds from operations (FFO) to debt around 15% through 2024. The outlook is stable." TV TRANSPORT: Hires Barnabi Law Firm LLC as Counsel --------------------------------------------------- TV Transport, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ Barnabi Law Firm, LLC as counsel. The firm will provide these services: a. advise the Debtor with respect to its powers and duties as debtors in possession in the continued management and operation of its business and properties; b. attend meetings and negotiate with representatives of creditors and other parties in interest; c. take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of any action commenced against the Debtor, negotiations concerning all litigation in which the Debtor are involved, if any, and objections to claims filed against the estate; d. prepare on behalf of the Debtor all motions, applications, answers, orders, reports, and papers necessary to the administration of the estates; e. negotiate and prepare on the Debtor's behalf a plan of reorganization, disclosure statement and all related agreements and/or documents, and take any necessary action on behalf of the Debtor to obtain confirmation of such plan; f. represent the Debtor in connection with obtaining post-petition loans; g. advise the Debtor in connection with any potential sale of assets; h. appear before the Bankruptcy Court, any appellate courts, and the United States Trustee and protect the interests of the Debtor's estates before such Courts and the United States Trustee; and i. perform all other necessary legal services and provide all other necessary legal advice to the Debtor in connection with the Chapter 11 Case. The firm will be paid at these rates: Partner $325 per hour Associates $275 per hour Paralegal staff $200 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Charles ("CJ") E. Barnabi Jr., Esq., a partner at Barnabi Law Firm, 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: Charles "CJ" E. Barnabi Jr., Esq. Barnabi Law Firm, LLC 375 East Warm Springs Road, Ste. 104 Las Vegas, NV 89119 Tel: (702) 475-8903 About TV Transport Inc. TV Transport Inc. operating as A-One Exhibits from its Las Vegas headquarters, provides transportation, warehousing, and installation services. The veteran-owned company offers long-haul trucking, air freight, local drayage, and warehousing solutions, serving major clients in the entertainment and hospitality sectors throughout the Las Vegas area. TV Transport Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 25-10207) on January 16, 2025. In its petition, the Debtor reports estimated assets and liabilities between $500,000 and $1 million. Honorable Bankruptcy Judge August B. Landis handles the case. The Debtor is represented by Charles Barnabi, Jr, Esq., at The Barnabi Law Firm, PLLC. TXNM ENERGY: S&P Rates $550MM Junior Subordinated Notes 'BB+' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating to Albuquerque, N.M.-based TXNM Energy Inc.'s $550 million, 5.75%, fixed-rate junior subordinated convertible notes due June 1, 2054. The $550 million issuance includes a $50 million overallotment from the original issue. The company intends to use the net proceeds for general corporate purposes and debt repayment. S&P said, "We classify these notes as hybrid securities with intermediate equity content (50%). This reflects their permanence, subordination, and deferability features. In line with our criteria, we will reclassify the notes as having minimal equity content after June 1, 2034, because the remaining period until maturity will be less than 20 years. "We rate these securities two notches below our 'BBB' long-term issuer credit rating on TXNM Energy to reflect their subordination and management's ability to defer interest payments on the instrument. All our ratings on TXNM Energy and its subsidiaries are unchanged. "The long-term nature of the junior subordinated notes, along with TXNM Energy's limited ability and lack of incentives to redeem them for a long-dated period, meet our standards for permanence. The instruments are subordinated to all of TXNM Energy's existing and future senior debt obligations, satisfying the condition for subordination. In addition, the interest payments are deferrable, which fulfills the deferability element." UNIPHARMA LLC: Ruling in Nutradose v. Santamarta Suit Affirmed -------------------------------------------------------------- In the case captioned as NUTRADOSE LABS, LLC, a Florida limited liability company, Plaintiff-Appellee, versus RAIMUNDO SANTAMARTA, an individual, Defendant-Appellant, BIO DOSE PHARMA, LLC, Florida limited liability company, No. 24-10381 (11th Cir.), Judges Robin S. Rosenbaum, Kevin C. Newsom and Nancy G. Abudu of the United States Court of Appeals for the Eleventh Circuit affirmed the judgment of the the United States District Court for the Southern District of Florida finding that Santamarta was personally liable for Bio Dose's trademark infringement. The trademark at issue in this case is the GlutaDose Mark. In 2019, a company called Unipharma registered the GlutaDose Mark. That year, Unipharma granted Bio Dose a limited, royalty free, and exclusive license to use the GlutaDose Mark. This arrangement was governed by the Trademark License Agreement. In 2020, Unipharma filed for Chapter 11 bankruptcy, and both Bio Dose and Santamarta participated in the bankruptcy as creditors. As part of the bankruptcy, Unipharma sold its assets, including the GlutaDose Mark, to New Vision. This sale was governed by the Asset Purchase Agreement. New Vision then sold the GlutaDose Mark to Nutradose. Meanwhile, Santamarta had been using the GlutaDose Mark without the permission of either New Vision or Nutradose. Consequently, Nutradose sued Bio Dose and Santamarta for trademark infringement under the Lanham Act. In response, Bio Dose and Santamarta raised numerous affirmative defenses. On appeal, Santamarta reprises two of these defenses. First, he maintains that Bio Dose had a license to sell GlutaDose products. Specifically, he argues that the Trademark License Agreement survived the bankruptcy sale, and thereby permitted Bio Dose to use the GlutaDose Mark. Second, he claims that because Bio Dose was a lawful reseller of genuine GlutaDose products, Nutradose's trademark-infringement claim was barred by the first-sale doctrine. Santamarta argues that the district court erred in rejecting two of his affirmative defenses. License Defense Santamarta points to two "carveouts" in the Asset Purchase Agreement that, in his view, confirm the survival of the Trademark License Agreement. But neither provision is on point, the Eleventh Circuit notes. The first one, Schedule 4.9(d), provided that Bio Dose's continued use of Unipharma's intellectual property, including the GlutaDose Mark, was immaterial to the bankruptcy sale. According to the Eleventh Circuit, the second provision on which Santamarta relies -- Provision 6.12 -- is similarly off-base. Provision 6.12 stated that, prior to the sale's closing, Unipharma would terminate all prior arrangements or agreements with Bio Dose and use commercially reasonable efforts to enter into a new contract with Bio Dose. Santamarta is arguing that, because of its redundance with Provision 6.12, Provision 2.4 does not apply to the Trademark License Agreement. The Circuit Judges hold the district court did not err in rejecting Santamarta's license defense. They explain, "Santamarta is mistaken. Provision 6.12 is not duplicative of Provision 2.4. Not all of the arrangements between Unipharma and Bio Dose would necessarily constitute ;liabilities within the meaning of the Asset Purchase Agreement. Any arrangements that imposed an obligation on Bio Dose -- but not on Unipharma -- would fall within Provision 6.12 but not within Provision 2.4. Moreover, Provision 6.12 is a pre-closing covenant, whereas Provision 2.4 prescribes post-closing events." "In short, Provisions 6.12 and 2.4 are not mutually exclusive. It can be true that, before closing, Unipharma was obligated to terminate and renegotiate its pre-existing arrangements with Bio Dose. And it can nevertheless be true that, after closing, regardless of whether Unipharma performed its pre-closing obligation, some of its agreements with Bio Dose -- including the Trademark License Agreement -- were automatically extinguished." First-Sale Doctorine Defense The district court held that the first-sale doctrine did not apply to Santamarta for two reasons: (1) Under Bill Blass, Ltd. v. SAZ Corp., 751 F.2d 152, 153 (3d Cir. 1984), ex-licensees, such as Bio Dose, are not permitted to sell off their inventory; and (2) falsely suggesting affiliation with the trademark owner in a manner likely to cause confusion as to source or sponsorship, as Bio Dose did, constitutes infringement. To justify his claim, Santamarta relies primarily on one case, Davidoff & CIE, S.A. v. PLD International Corp., 263 F.3d 1297 (11th Cir. 2001). In that case the Elevent Circuit ruled: "The resale of genuine trademarked goods generally does not constitute infringement. This is for the simple reason that consumers are not confused as to the origin of the goods: the origin has not changed as a result of the resale." In this case, however, the district court ruled that Bio Dose's misrepresentations did confuse consumers about the origin of the trademarked goods. Specifically, it found that Bio Dose's website did not indicate that Nutradose, versus Bio Dose, originates GlutaDose Products. In other words, the website did not identify Bio Dose as a reseller of Nutradose products. For that reason, the court concluded, the website created the impression that GlutaDose Products originate from Bio Dose. Accordingly, Davidoff & CIE, S.A. does not save Santamarta's reliance on the first-sale doctrine, and the district court did not err in rejecting this defense, the Eleventh Circuit concludes. A copy of the Court's decision dated Jan. 30, 2025, is available at https://urlcurt.com/u?l=UHSyFP from PacerMonitor.com. About Unipharma LLC Unipharma LLC is a healthcare packaging company serving the pharmaceutical and nutraceutical sectors in the development, manufacturing and packaging of liquid, disposable, and single-dose units. Tamarac owns the state of the art 165,000 square foot, FDA-registered, blow-fill-seal ("BFS") and ocnventional seal manufacturing facility build in 2018 located in Tamarac, Florida that, among other things, packages prescription, over the counter and nutraceutical oral and ophtalmic solutions. Unipharma was a Venezuela-based multinational pharmaceutical company. In 2013, it announced that it will invest $50 million to relocate to Tamarac, Florida. In April 2020, the senior secured lender provided notice of various defaults under the Debtors' loans. Tamarac 10200, LLC and Unipharma, LLC each sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 20-23346 and 20-23348) on Dec. 7, 2020. Tamarac was estimated to have at least $10 million in assets and less than $100 million in liabilities as of the bankruptcy filing. Berger Singerman LLP is serving as the Debtors' bankruptcy counsel. SOLIC Capital Advisors, LLC and SOLIC Capital, LLC provides the services of the CRO and other interim officers. Kurtzman Carson Consultants LLC is the claims agent. According to documents attached to the petition, the Debtors have arranged a senior secured debtor-in-possession financing credit facility in an aggregate amount up to $15,600,000. UNIVERSAL BIOCARBON: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Universal Biocarbon, Inc. 2 Guava Lane Canal Point, FL 33438 Business Description: Universal Biocarbon Inc. transforms vegetative biomass, such as yard waste and tree trimmings, into high-quality carbon products like compost, mulch, biochar, and activated carbon. The company promotes sustainability by converting waste materials into environmentally beneficial products, helping reduce landfill waste and emissions. Through a partnership with the Sunshine State Biomass Cooperative, UBC creates a cycle of beneficial reuse, sharing profits with the suppliers of biomass feedstock. Chapter 11 Petition Date: January 30, 2025 Court: United States Bankruptcy Court Southern District of Florida Case No.: 25-10987 Judge: Hon. Erik P Kimball Debtor's Counsel: 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 Email: craig@kelleylawoffice.com Total Assets: $899,953 Total Liabilities: $1,650,534 The petition was signed by David Disbrow as chairman and founder. A full-text copy of the petition, which includes a list of the Debtor's 20 largest unsecured creditors, is available for free on PacerMonitor at: https://www.pacermonitor.com/view/T3RL2LQ/Universal_Biocarbon_Inc__flsbke-25-10987__0001.0.pdf?mcid=tGE4TAMA UNIVERSITY OF THE ARTS: Receives Offer from 1228 Spruce LLC ----------------------------------------------------------- Susan Snyder and Ryan W. Briggs of The Philadelphia Inquirer report that the former student residence hall at the University of the Arts is the latest property to attract a bid, making it the fourth UArts building to receive an offer. A newly-formed entity, 1228 Spruce LLC, named after the Spruce Hall location at 1224-1234 Spruce St., has submitted a $7 million bid. Jeffrey C. Hampton, an attorney from Saul Ewing representing the company, declined to provide any details regarding the company's plans for the building, according to The Philadelphia Inquirer. The company's listed address is a residential property on Lansdowne Road in Havertown, which appears to be owned by Boyden "Erik" Gabell III and Heather Gabell. Neither of the owners could be reached for comment. Boyden Gabell is a cofounder of Paradigm Realty Alliance, and Heather Gabell works as the director of regulatory compliance for Marketsphere Unclaimed Property Specialists. Nine former UArts buildings are being sold in connection with bankruptcy proceedings. The Curtis Institute of Music recently secured the Art Alliance building with a winning bid of $7.6 million, the report states. The bid for the Arts Bank building, once used as a performance and dance space, is under dispute in U.S. Bankruptcy Court in Wilmington. The selected bidder, Quadro Bay LLC, plans to convert the building for residential and commercial use, but Pennsylvania’s attorney general contends the building should remain dedicated to educational and artistic purposes. Lantern Theater Company, which bid $2.61 million—$100,000 less than Quadro Bay—argues it should receive the property. A hearing on this matter is scheduled for next week, according to report. Temple University has placed an $18 million bid on Terra Hall, with a hearing set for next month. There have been no recorded bids for the remaining five properties. UArts unexpectedly shut down in June, leaving students and staff in a difficult position. In bankruptcy liquidation, the priority is to sell assets in order to repay creditors. Alan Root, the attorney representing the UArts bankruptcy trustee, stated earlier this month that the total secured claims amount to roughly $67 million. About The University of the Arts Philadelphia's The University of the Arts is a not-for-profit corporation. UArts was an institution accredited by the Middle States Commission on Higher Education and offered degrees in visual arts and performing arts fields. U of Arts Finance, LLC, and The University of the Arts sought Chapter 7 bankruptcy protection (Bankr. D. Del. Case Nos. 24-12139 and 24-12140) on Sept. 13, 2024. The school listed $93.32 million in assets against $74.18 million in liabilities in schedules attached to the petition. The school said its properties in Philadelphia, which includes several performing arts venues and residence halls, are worth $87.07 million. Secured debt totals $68.96 million, with UMB Bank N.A. (on behalf of noteholders) and TD Bank listed as secured creditors. Montgomery, McCracken, Walker & Rhoads LLP is serving as the Debtors' counsel. UTZ BRANDS: S&P Assigns 'B' Rating on First-Lien Term Loan ---------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating to Utz Brands Inc.'s (borrower Utz Quality Foods LLC) amended, extended, and repriced $630 million first-lien term loan due January 2032 (extended from January 2028). The recovery rating is '3', indicating its expectation for adequate (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. The company refinanced its prior first-lien term loan (which was rated 'B' with a '3' recovery rating) with this amended, extended, and repriced facility. The majority of terms remain the same as in the existing agreement. The refinancing is leverage neutral, with some improvement in overall interest expense. S&P has withdrawn the ratings on the company's $795 million term loan B due in 2028 ($630 million outstanding). S&P said, "Our other ratings, including the 'B' issuer credit rating on parent Utz Brands Inc. are unaffected by this transaction. The outlook remains positive. We could raise the ratings if S&P Global Ratings-adjusted leverage declines to below 5x and the company demonstrates less aggressive financial policies such that leverage is sustained at those levels." Utz's operating performance during the third quarter of fiscal 2024 was slightly weaker than our expectations as the company faced a heightened competitive environment in the potato chips subcategory. However, the company continued to gain market share in most of its subcategories and expanded its gross margins benefitting from its productivity initiatives. The company also affirmed its profit guidance for fiscal year 2024. S&P said, "Although S&P Global Ratings-adjusted leverage increased sequentially, to 5.7x for the 12 months ended Sept. 30, 2024, compared to 5.4x at the end of the second quarter, we forecast the company's operating performance will improve meaningfully in the fourth quarter. We believe the company's increased investments in marketing and new product innovation, continued distribution gains in under-penetrated regions and incremental cost savings from streamlining its supply chain will result in continuing profitability improvements. Given our expectation of profit and cash flow improvements, we project leverage will decline to the low-5x area at the end of fiscal 2024. We forecast leverage will decline below 5x in fiscal 2025." However, the macroeconomic environment remains uncertain. Although the salty snacks category has relatively low private-label penetration, consumers continue to seek value, and trading-down behavior could dampen demand for the company's products and delay S&P's leverage reduction expectations. S&P's ratings on Utz also reflect the company's participation in the fragmented and highly competitive salty snacks category (which is susceptible to changes in consumer preferences as well as health and wellness concerns); its narrow business and product focus; and its customer, brand, and geographic concentration. VANDEVCO LIMITED: Available Cash and Capital Events to Fund Plan ---------------------------------------------------------------- Vandevco Limited and Orland, Ltd., filed with the U.S. Bankruptcy Court for the Western District of Washington a Second Amended Disclosure Statement describing Second Amended Plan of Reorganization dated January 22, 2025. The sole owner of the Debtors is Willamette, a Cayman Islands exempt company. Willamette's 99% owner is Belbadi Engineering, LLC ("Engineering"), a United Arab Emirates ("UAE") entity which in 2021 had approximately 1150 employees and $250 million in annual revenue. In 1996, Willamette formed Orland as an Oregon corporation for real estate ownership and development. In 1996, at a cost of $4 million, Willamette purchased twelve parcels, on 13.29 acres in Tigard, Oregon, along SW Oak Street, next to Washington Square Mall, which is Oregon's largest mall. Orland's initial plan was for a mixed-use development. In 1998, Willamette incorporated Vandevco as a Washington corporation after the City of Vancouver, Washington selected its proposal in a competitive process to select a developer to develop an urban renewal project in downtown Vancouver called the "Vancouvercenter." The Vancouvercenter is a mixed-use residential, retail, and office development on the east side of Esther Short Park in downtown Vancouver. The Debtors filed their bankruptcy cases after four years of hard fought litigation with Cerner Middle East, Ltd. This Disclosure Statement comes after an additional four years of litigation in these bankruptcy cases. At this time, in the business Debtors' judgment further litigation with Cerner is not in the best interest of creditors, including Cerner. While the Debtors have strong convictions that they would succeed on the merits in their opposition to Cerner's claims, they acknowledge that the financial costs of litigation would deplete the Debtors' estates and outweigh the non-financial benefits of achieving justice. Rather than depleting the Debtors' resources through litigation, the Debtors hope to bring these chapter 11 bankruptcy cases to a prompt conclusion through the plan confirmation process. Under the Plan, Cerner may opt for allowance of its alter ego claim against Vandevco, triggering the Debtors' withdrawal of their objections to Cerner's claim against Vandevco, which will occur upon withdrawal of Cerner's claims against Orland, and termination of Cerner's rights to continue any Bankruptcy Court litigation on any issues it has raised or could have raised. The Plan provides dividend dilution protection for Vandevco's unsecured creditors with deemed allowed claims. This protection is to provide them with an escape from dividend dilution in the event Cerner opts in and accepts the Plan's conditions for the Debtors' acquiescence in Cerner's claim against Vandevco. Cerner's opt-in would result in Cerner's 99.2% dividend domination of the general unsecured creditor class. This would result from Cerner's $63 million claim squeeze out of the other unsecured creditors' combined $521,000 in claims. The Plan's protection for the other unsecured creditors is an opt in convenience class for all unsecured creditors with noncontingent, undisputed, liquidated claims of under $275,000. The Plan allows for Cerner to continue its litigation or opt in for a consensual resolution. With or without continued litigation, the Plan vests Vandevco in a Creditors Trust for liquidation. Should Cerner succeed in litigation, Orland will also become corpus of the Creditor's Trust. Should the Debtors prevail in litigation against Cerner, Orland will emerge as a solvent reorganized Orland. Either way, the Trust Administrator will liquidate the assets it administrates and pay dividends to creditors in accordance with the Plan. Class 2 consists of General Unsecured Claim of Trade Creditors of Vandevco and of Orland. Payment to creditors with allowed claims as soon as possible after Effective Date. There will be no interest due on these claims and they will be paid in one lump sum, and in full under the Plan upon the receipt of proceeds from a Capital Event. Opt In for Cerner: Cerner may opt into this class and have its alter ego claim allowed in Vandevco's bankruptcy case in the full amount of $62,893,483.00, for treatment as a general unsecured creditor, with an undisputed, liquidated, non-contingent claim. In the event Cerner elects to opt in, Vandevco, for itself and its successors and assigns, shall withdraw its objections to Cerner's claim with prejudice, which shall trigger the following: * Cerner's relief in the Debtors' bankruptcy cases shall be limited to its Class 2 dividend from Vandevco. * Cerner and its successors and assigns will waive the right to further litigate in the Debtors' bankruptcy cases or either of them and will be estopped from commencing any further litigation, or participating in any further litigation, or continuing any pending litigation in the Debtors' bankruptcy cases, and or in any other court, against the Debtors, their subsidiaries, managers and the following three insiders: (i) Ziad Elhindi; (ii) Nawzad Othman; (iii) The Othman Group, LLC, and; (iv) the professionals from these bankruptcy cases, for any actions that arose in, or are in any way related to the Debtors’ bankruptcy cases, and or Cerner’s proofs of claim. * All pending litigation between Cerner and the Debtors (including, but not limited to Cerner's pending objections to the Debtors' professionals' fee applications) is dismissed with prejudice. * Cerner's claim in Orland's bankruptcy case is withdrawn with prejudice. * Cerner fully releases Willamette Enterprises, Ltd. for all claims known and unknown. Opt-Out for Creditors With Deemed Allowed Claims: To avoid the diluting impact triggered by an opt-in from Cerner, creditors holding a deemed allowed claims of under $275,000 may opt out of Class 2 and into Convenience Class 3, which will have guaranteed funding of 31% of their allowed claims (for up to $160,000) for pro-rata distribution to opting in members. Commencing on the first day of the fifth month following Plan confirmation, interest shall accrue on Class 3 claims at each state's statutory interest rate. Class 3 consists of Unsecured creditors with allowed claims of under $275,000 may opt to remain in the general unsecured creditors' Class 2, and hope to obtain a full, or near 100% dividend in the event that Cerner does not elect the Cerner Opt In and the Court subsequently disallows Cerner’s claims. Alternatively, these creditors may opt into Convenience Class 3, with a guaranteed recovery of 31% of their respective Claims, plus interest at the Plan Interest Rate. By contrast, in a litigation scenario, where Cerner elects to litigate, rather than opting into Class 2, unsecured creditors that do not opt out of class 2 would have the opportunity for payment of their claim in full, or near full, in the event the Court disallows Cerner's claim. Should the Court disallow Cerner's claim, after payment of amounts owed to Class 3 creditors, and then to Class 2 creditors, all remaining funds would be paid to Class 3 creditors until either all claims are paid in full, or no further funds are available for distribution. Payment to creditors with allowed claims as soon as possible after Effective Date. Claims will be paid in full as soon as possible upon the receipt of proceeds from a Capital Event. Class 4 consists of General Unsecured Creditors with Disputed, Contingent Claims. Cerner is the only member of this class. Cerner may litigate for allowance of its claims against each of the Debtors, and disallowance of the Debtors' objections to its claims. Should Cerner prevail, Class 4 would receive pari passu treatment with Class 2, to have the financial effect of a merger between Class 4 and Class 2. Alternatively, Cerner may opt into Class 2 on the terms and conditions set out in Class 2. Under the Plan, payments and distributions for the Plan will be funded from the Debtors' available cash and Capital Events. Absent remarkably quick closings on refinancings, property sales or investment from third parties ("Capital Events"), the Trust Administrator and the Reorganized Orland will lack the requisite liquidity on the Effective Date to pay their administrative claims. And they may lack the requisite liquidity anytime soon to pay their other Plan obligations. A full-text copy of the Second Amended Disclosure Statement dated January 22, 2025 is available at https://urlcurt.com/u?l=o7CDVx from PacerMonitor.com at no charge. The Debtor's Counsel: Joseph A. Field, Esq. FIELD JERGER LLP 621 SW Morrison, Suite 510 Portland, OR 97205 Tel: 503-228-2665 Fax: 503 225-0276 Email: joe@fieldjerger.com About Vandevco Limited and Orland Ltd. Vandevco Ltd. and Orland Ltd. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Lead Case No. 20-42710) on Dec. 6, 2020. At the time of the filing, Vandevco disclosed $31,601,920 in assets and $74,827,369 in liabilities while Orland disclosed $5,171,583 in assets and $62,193,017 in liabilities. Judge Mary Jo Heston oversees the cases. Joseph A. Field, Esq., at Field Jerger, LLP and McDonald Jacobs, P.C. serve as the Debtors' legal counsel and accountant, respectively. Cerner Middle East Limited, a party in interest, is represented by Holland & Knight, LLP. VOBEV LLC: To Seek Approval to Sell to Stalking Horse ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Utah approved the bidding procedures for the sale of substantially all assets of Vobev LLC, free and clear of all liens and other assumed liabilities. A sale hearing is scheduled on Feb. 5, 2025, to approve the sale of the Debtor's assets. An auction was slated for Jan. 27, 2025, at the offices of Ropes & Gray LLP, 1211 6th Avenue, New York, New York 10036. Copies of the bidding procedures and the stalking horse asset purchase agreement are available for free at https://cases.ra.kroll.com/vobev/ or from the Debtor's claims and noticing agent, Kroll Restructuring Administration LLC, via tel: 833-570-5418 (US & Canada Toll Free) and +1 646-650-5707 (international) or via email to VobevTeam@ra.kroll.com. Auction Cancelled On Jan. 7, 2025, the Debtor filed the Notice of Filing of Asset Purchase Agreement by and Between Adonis Acquisition Holdings LLC, as Purchaser, and Vobev, LLC, as Seller On Jan. 24, 2025, the Debtor filed a Notice of Cancellation of Auction and Designation of Stalking Horse APA as the successful bid. Other than the Stalking Horse APA, no other qualified bids were received prior to the bid deadline. A hearing on approval of the sale to Adonis will take place on February 5, 2025 at 2:00 p.m. (M.T.) About Vobev LLC Vobev LLC, a Salt Lake City-based beverage can manufacturer, sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Utah Case No. 24-26346) on Dec. 9, 2024. In its petition, the Debtor disclosed between $500 million and $1 billion in both assets and liabilities. Bankruptcy Judge Joel T. Marker handles the case. The Debtor tapped Ray Quinney & Nebeker PC as counsel, Houlihan Lokey Capital, Inc. as investment banker, and FTI Consulting, Inc. as financial advisor. Kroll Restructuring Administration LLC is the Debtor's claims and noticing agent. WARRIOR MET: Moody's Affirms 'B1' CFR, Outlook Remains Stable ------------------------------------------------------------- Moody's Ratings affirmed Warrior Met Coal, Inc.'s B1 corporate family rating, its B1-PD probability of default rating, and the B1 rating on its senior secured notes. The Speculative Grade Liquidity Rating ("SGL") is unchanged at SGL-1. The ratings outlook remains stable. RATINGS RATIONALE Warrior's B1 CFR is supported by the company's high quality and low-cost metallurgical coal assets. Warrior's two coal mines in Southern Appalachia produce low-vol and high-vol A hard coking coal. Warrior has a good operating history, takes precautionary measures such as buying extra longwall shields, and benchmark-quality coal allows the company to continue to generate good margins even in a weak pricing environment. Warrior is in the process of developing its Blue Creek met coal reserves, where longwall production is expected by 2026. Warrior is also set up well with long-term contracts to export out of the Port of Mobile in Mobile, Alabama, USA. Most customers are blast furnace customers in Europe, South America, and Asia. Warrior also has limited legacy liabilities compared to many coal industry peers and very good liquidity to support operations. The rating is constrained by operational concentration – with the company having fewer mines compared to rated peers in the US – and inherent volatility of metallurgical coal prices. Warrior is in the process of developing its Blue Creek reserves, which will have a production capacity of around 4.8 million short tons per year of low-cost high-vol-A metallurgical coal, based on a single longwall operation. This development will expand Warrior's production capacity by 60%. The total capex associated with the project, which has been revised higher over time due to inflation, is around $995 million to $1.075 billion. Warrior has spent nearly $600 million on the project through September 2024, with 2025 expected to be another capex-heavy year. Longwall production is expected to begin in 2Q 2026. Warrior has been able to fund this project development with internally generated cash flow to date, and Moody's expect them to be able to fund the remainder of the spending with internally available cash flow. Based on a met coal price assumption of $225 per metric ton, Moody's expect Warrior's 2025 EBITDA to be around $320 million. Moody's expect free cash flow burn of around $140-150 million, mainly as a result of elevated capex associated with Blue Creek development. Beyond 2025, Moody's expect Warrior will return to positive free cash flow generation aided by higher production levels and reduced capital spending needs. Moody's expect metrics to remain strong over the next 12-18 months, with Moody's adjusted leverage around 0.5x. Warrior's SGL-1 reflects very good liquidity to support operations over the next 12-18 months. As of September 30, 2024, the company had about $746 million of available liquidity, including $583 million of cash and cash equivalents, $49 million of long-term investments, and about $113.5 million of availability under its $116 million asset-based revolving credit facility. Moody's expect free cash flow burn of around $140-150 million in 2025 as the company funds the development of Blue Creek with cash on hand and internally generated cash flow. The credit agreement contains a minimum fixed charge coverage ratio of 1.0x that is only tested when excess availability falls below certain thresholds. Moody's do not expect this covenant to be tested in the near-term. The stable outlook reflects Moody's view that Warrior is able to remain profitable even in a weak and volatile met coal price environment, and fund the remainder of its capital expenditure requirement for Blue Creek with cash on hand and internally generated cash flow over the next 12-15 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Further ratings upside remains constrained by secular issues facing the coal industry, including expected decline in demand for metallurgical coal due to a shift from blast furnaces to EAFs for steel production, and access to capital issues in the long-run. However, Moody's could consider an upgrade if scale and operational diversity were to improve materially, with better visibility into the long-term sustainable earnings power of the company. Moody's could downgrade the rating with expectations for adjusted financial leverage above 2.0x (Debt/EBITDA), sustained negative free cash flow, or less than $150 million of available liquidity. A labor contract that substantively reduces Warrior's flexibility in a downturn, particularly an increase in fixed costs, could also have negative rating implications. Based in Brookwood, Alabama, Warrior Met Coal, Inc. operates three longwalls in two mines in Brookwood, Alabama, which produce and export metallurgical coal for a diversified customer base of blast furnace steel producers located primarily in Europe, South America and Asia. Warrior's operating assets were acquired in April 2016 from Walter Energy as part of Walter's bankruptcy. Warrior generated roughly $1.6 billion in revenues for the last twelve months ended September 30, 2024. The principal methodology used in these ratings was Mining published in October 2021. WEST TECHNOLOGY: $901.1MM Bank Debt Trades at 29% Discount ---------------------------------------------------------- Participations in a syndicated loan under which West Technology Group LLC is a borrower were trading in the secondary market around 71.1 cents-on-the-dollar during the week ended Friday, January 31, 2025, according to Bloomberg's Evaluated Pricing service data. The $901.1 million Term loan facility is scheduled to mature on April 12, 2027. About $883.1 million of the loan has been drawn and outstanding. West Technology Group, LLC (West) is a leading global provider of technology enabled communication services. The company provides a vast array of essential solutions for a diverse client base that includes Fortune 1000 companies, state and local governments, along with small and medium enterprises in a variety of vertical industries. West has sales and/or operations in the U.S., Canada, Europe, the Middle East, Asia-Pacific, Latin America and South America. WHITTAKER CLARK: Hires Clement & Murphy PLLC as Appellate Counsel ----------------------------------------------------------------- Whittaker, Clark & Daniels, Inc. and affiliates seek approval from the U.S. Bankruptcy Court for District of New Jersey to hire Clement & Murphy PLLC as appellate counsel. The firm will provide these services: a. advise the Debtors concerning appellate procedures including motion practice, stays, briefing on the merits, and other matters related to the Appeals; b. advise the Debtors concerning strategic considerations in connection with the Appeals including formulation and crafting of appellate arguments; c. prepare on behalf of the Debtors all necessary and appropriate motions, merits briefing, responses, notices, and other relevant pleadings to be filed in connection with the Appeals; d. prepare for and appear on behalf of the Debtors in any hearings, oral arguments, or other proceedings as may be required; e. advise the Debtors and their professionals concerning the status of the Appeals; and f. perform all other necessary and appropriate appellate litigation services in connection with the Appeals, for or on behalf of the Debtors, as requested by the Debtors. The firm's current rates are: Partners $1,450 to $2,650 per hour Of Counsel $1,450 per hour Associates $900 to $1,350 per hour Paralegals $425 to $525 per hour The following is provided in response to the request for additional information set forth in Paragraph D.1. of the Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. Sec. 330 by Attorneys in Larger Chapter 11 Cases Effective as of November 1, 2013: a. Clement & Murphy did not agree to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement. b. None of the professionals from Clement & Murphy included in this engagement have varied or will vary their rate based on the geographic location of the bankruptcy case. c. Clement & Murphy did not represent the Debtors in the twelve months prepetition. d. Clement & Murphy has submitted to the Debtors for approval a staffing plan and budget for Clement & Murphy that covers the time period from Jan. 9, 2025, through April 30, 2025. Paul Clement, Esq., a partner at Clement & Murphy, 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: Paul D. Clement, Esq. Clement & Murphy PLLC 706 Duke Street Alexandria, VA 22314 Telephone: (202) 742-8900 Email: paul.clement@clementmurphy.com About Whittaker, Clark & Daniels Whittaker, Clark & Daniels, Inc. and affiliates, Brilliant National Services Inc., Soco West Inc. and L.A. Terminals Inc., were engaged in nonmetallic mineral mining and quarrying. The Debtors sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 23-13575) on April 26, 2023. The Debtors estimated $100 million to $500 million in assets against $1 billion to $10 billion in liabilities as of the bankruptcy filing. The Hon. Michael B. Kaplan is the case judge. The Debtors tapped Kirkland & Ellis LLP as general bankruptcy counsel; Cole Schotz P.C. as co-bankruptcy counsel; and M3 Partners LLC as financial advisor. Stretto, Inc. is the claims agent. The U.S. Trustee for Regions 3 and 9 appointed an official committee to represent talc claimants in the Debtors' Chapter 11 cases. The talc committee is represented by Cooley, LLP. The Hon. Shelley Chapman was appointed as the future claimants' representative (FCR) in the Chapter 11 cases. Willkie Farr & Gallagher, LLP is the FCR's counsel. WINESTEAD LLC: Court Extends Cash Collateral Access to June 30 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, Riverside Division, extended Winestead, LLC's authority to use cash collateral from Jan. 31 to June 30. The court order authorized the company to pay business expenses from the cash collateral pursuant to its budget, with a 10% variance allowed for reasonable expense variances. The order granted a replacement lien to First Bank, the U.S. Small Business Administration, and the California Department of Tax and Fee Administration, and all other creditors asserting a lien on the cash collateral, to the same extent and with the same priority as their pre-bankruptcy liens. As additional protection, the court order approved the monthly payments of $3,168 to the SBA and $2,000 to First Bank. First Bank can be reached through its counsel: Anthony J. Napolitano, Esq. Buchalter, A Professional Corporation 1000 Wilshire Boulevard, Suite 1500 Los Angeles, CA 90017-1730 Direct: (213) 891-5109 Office: (213) 891-0700 Fax: (213) 896-0400 Email: anapolitano@buchalter.com About Winestead LLC Winestead LLC -- https://www.orangecoastwinery.com -- is a restaurant known for offering great lunch, dinner and brunch. It conducts business under the name Wine Ranch Grill and Cellars. Winestead filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-16223) on October 17, 2024, with $100,001 to $500,000 in assets and $1 million to $10 million in liabilities. Judge Mark Houle oversees the case. The Debtor is represented by: J. Luke Hendrix Law Offices Of J. Luke Hendrix Tel: 951-221-3721 Email: luke@jlhlawoffices.com YELLOW CORP: Sells More Terminals, Raising Cash Reserves -------------------------------------------------------- Steven Church of Bloomberg News reports thatYellow Corp., the former trucking company, secured court approval on Thursday, January 30, 2025, to sell more property, adding $66.5 million to its cash reserves. The funds will be allocated to creditors, including pension funds, which have been in dispute with Yellow and its shareholders over the outstanding debt for retirement-related claims. By the end of 2024, Yellow had over $309 million in cash remaining after settling more than $2.3 billion with secured lenders and other creditors. About Yellow Corporation Yellow Corporation -- http://www.myyellow.com/-- operates logistics and less-than-truckload (LTL) networks in North America, providing customers with regional, national, and international shipping services throughout. Yellow's principal office is in Nashville, Tenn., and is the holding company for a portfolio of LTL brands including Holland, New Penn, Reddaway, and YRC Freight, as well as the logistics company Yellow Logistics. Yellow Corporation and 23 affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow Corporation had $2,152,200,000 in total assets against $2,588,800,000 in total liabilities. The petitions were signed by Matthew A. Doheny as chief restructuring officer. The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel; Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel; Kasowitz, Benson and Torres, LLP as special litigation counsel; Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC, as investment banker; and Alvarez and Marsal as financial advisor. Epiq Bankruptcy Solutions is the claims and noticing agent. Milbank LLP serves as counsel to certain investment funds and accounts managed by affiliates of Apollo Capital Management, L.P. while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP serve as counsels to Beal Bank USA and the U.S. Department of the Treasury, respectively. On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped Akin Gump Strauss Hauer & Feld, LLP and Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller Buckfire as investment banker; and Huron Consulting Services, LLC, as financial advisor. ZARIFIAN ENTERPRISES: Hires Gregory K. Stern as Attorney -------------------------------------------------------- Zarifian Enterprises, LLC seeks approval from the U.S. Bankruptcy Court for the Illinois District of Gregory K. Stern, P.C. as attorney. The firm's services include: a. reviewing assets, liabilities, loan documentation, account statements, executory contracts and other relevant documentation; b. preparing list of creditors, list of twenty largest unsecured creditors, schedules and statement of financial affairs; c. giving the Debtor legal advice with respect to its powers and duties as Debtor in Possession in the operation and management of his financial affairs; d. assisting the Debtor in the preparation of schedules, statement of affairs and other necessary documents; e. preparing applications to employ attorneys, accountants or other professional persons, motions for turnover, motion for use of cash collateral, motions for use, sale or lease of property, motion to assume or reject executory contracts, plan, applications, motions, complaints, answers, orders, reports, objections to claims, legal documents and any other necessary pleading in furtherance of reorganizational goals; f. negotiating with creditors and other parties in interest, attending court hearings, meetings of creditors and meetings with other parties in interest; g. reviewing proofs of claim and solicitation of creditors' acceptances of plan; and h. performing all other legal services for the Debtor, as Debtor in Possession, which may be necessary or in furtherance of his reorganizational goals. The firm will be paid at these rates: Gregory K. Stern $650 per hour Dennis E. Quaid $550 per hour Monica C. O'Brien $400 per hour Rachel S. Sandler $400 per hour The firm received a retainer in the amount of $15,000. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Gregory K. Stern, Esq., a partner at Gregory K. Stern, 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: Gregory K. Stern, Esq. Dennis E. Quaid, Esq. Monica C. O'Brien, Esq. Rachel S. Sandler, Esq. Gregory K. Stern, P.C. 53 West Jackson Boulevard, Suite 1442 Chicago, Illinois 60604 Telephone: (312) 427-1558 About Zarifian Enterprises, LLC Zarifian Enterprises, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 25-00188) on May 2, 2024. The Debtor hires Gregory K. Stern, P.C. as attorney. ZARIFIAN ENTERPRISES: Hires Zeigler & Associates as Accountant -------------------------------------------------------------- Zarifian Enterprises, LLC seeks approval from the U.S. Bankruptcy Court for the Illinois District of Zeigler & Associates, Ltd. as accountant. The firm's services include: a. reviewing of general ledger and preparation of financial statements, as needed; b. preparing tax returns, both federal and state; c. providing federal and state income tax advice to the Debtor and negotiating with taxing authorities as necessary; d. aiding and assisting the attorney(s) of record with regard to any legal issues; e. aiding and assisting the Debtor in inventorying books and records and advising the Debtor regarding books and records retention; f. aiding and assisting the Debtor in preparation of budgets and cash flow projections; and e. performing all other accounting services for the Debtor, as Debtor In Possession, which may be necessary or in furtherance of reorganizational goals. The firm will be paid at $205 per hour. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. William Zeigler, CPA, a partner at Zeigler & Associates, Ltd., 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: William Zeigler, CPA Zeigler & Associates, Ltd. 507 Apache Trail Lake Villa, IL 60046-7301 Tel: (847) 265-8215 Fax: (847) 265-8257 About Zarifian Enterprises, LLC Zarifian Enterprises, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 25-00188) on May 2, 2024. The Debtor hires Gregory K. Stern, P.C. as attorney. [] Corporate Reorganizations Lead U.S. Bankruptcy Filings in 2024 ----------------------------------------------------------------- Umer Khan and Sean Longoria and SPGMI Logo reports that in 2024, nearly twice as many U.S. companies filed for bankruptcy with the intent to restructure and continue operations rather than liquidate their assets. Of the 695 bankruptcy filings from public and select private companies, 62.7% (or 436) pursued reorganization—an increase of 12 percentage points from 2023 and the highest proportion recorded since at least the early 2000s, according to S&P Global Market Intelligence. Corporate bankruptcy filings reached their highest level since 2010, driven by prolonged high interest rates, the expiration of COVID-19 relief programs, and growing consumer financial strain. However, filings remain significantly lower than those seen during the 2007–2009 global financial crisis. Recent bankruptcy filings reflect a strong preference for restructuring over liquidation. In December 2024, 48 of the 61 filings sought reorganization, while only 13 pursued liquidation—the lowest monthly total since February 2022. Historically, most companies analyzed by Market Intelligence have opted to restructure rather than shut down entirely. While the balance between reorganizations and liquidations fluctuates, businesses tend to cease operations at higher rates during periods of financial distress. Among the largest corporate reorganizations in Q4 2024 were H-Food Holdings LLC, ViSalus Inc., and NEX SJ LLC, based on reported liabilities at the time of filing. H-Food Holdings and its affiliates, which manufacture baked goods, snacks, and food packaging services, filed for bankruptcy in November 2024, aiming to eliminate more than $1.9 billion in debt and secure $200 million in new capital. The company expects to emerge from bankruptcy in early 2025. In contrast, only two companies filed for liquidation with reported liabilities exceeding $1 billion in 2024—Invitae Corp. and SQRL Service Stations LLC. Invitae, a medical genetics company, filed for Chapter 11 in February 2024 and reached an agreement in April to sell nearly all of its assets to Labcorp Holdings Inc. SQRL initially pursued reorganization in its August 2024 bankruptcy filing, but a court-appointed trustee successfully petitioned to convert the case into a liquidation. Historically, liquidation filings have surged following major economic crises, including the dot-com bubble burst, the Great Recession, and the COVID-19 pandemic. Sector Trends In 2023 and 2024, seven of 11 sectors saw a majority of bankruptcy cases filed as reorganizations, including real estate, energy, information technology, materials, consumer discretionary, industrials, and communication services. The real estate sector recorded the highest percentage of reorganizations at 79.3%, while the utilities sector had the highest proportion of liquidations at 62.5%. [^] BOND PRICING: For the Week from January 27 to 31, 2025 ---------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- 2U LLC TWOU 2.250 40.125 5/1/2025 99 Cents Only Stores LLC NDN 7.500 12.186 1/15/2026 99 Cents Only Stores LLC NDN 7.500 12.186 1/15/2026 99 Cents Only Stores LLC NDN 7.500 12.186 1/15/2026 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 42.303 2/15/2028 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 44.259 2/15/2028 Allen Media LLC / Allen Media Co-Issuer Inc ALNMED 10.500 36.183 2/15/2028 Amyris Inc AMRS 1.500 0.726 11/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 Anagram Holdings LLC/Anagram International Inc AIIAHL 10.000 0.750 8/15/2026 At Home Group Inc HOME 7.125 28.996 7/15/2029 At Home Group Inc HOME 7.125 28.996 7/15/2029 Audacy Capital LLC CBSR 6.750 1.394 3/31/2029 Audacy Capital LLC CBSR 6.500 3.388 5/1/2027 Audacy Capital LLC CBSR 6.750 1.394 3/31/2029 Avon Products Inc AVP 8.450 3.602 3/15/2043 Azul Investments LLP AZUBBZ 7.250 61.500 6/15/2026 Azul Investments LLP AZUBBZ 7.250 67.489 6/15/2026 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Bank of America Corp BAC 5.586 99.942 2/5/2026 Beasley Mezzanine Holdings LLC BBGI 8.625 60.138 2/1/2026 Beasley Mezzanine Holdings LLC BBGI 8.625 60.138 2/1/2026 Biora Therapeutics Inc BIOR 7.250 56.500 12/1/2025 BuzzFeed Inc BZFD 8.500 92.368 12/3/2026 Castle US Holding Corp CISN 9.500 46.823 2/15/2028 Castle US Holding Corp CISN 9.500 46.073 2/15/2028 Citigroup Inc C 4.522 99.789 5/3/2025 CorEnergy Infrastructure Trust Inc CORR 5.875 70.250 8/15/2025 Cornerstone Chemical Co LLC CRNRCH 10.250 50.500 9/1/2027 Cumulus Media New Holdings Inc CUMINT 8.000 35.634 7/1/2029 Cumulus Media New Holdings Inc CUMINT 8.000 35.530 7/1/2029 Curo Oldco LLC CURO 7.500 6.250 8/1/2028 Curo Oldco LLC CURO 7.500 8.851 8/1/2028 Curo Oldco LLC CURO 7.500 6.250 8/1/2028 Cutera Inc CUTR 2.250 9.000 6/1/2028 Cutera Inc CUTR 2.250 13.042 3/15/2026 Cutera Inc CUTR 4.000 8.550 6/1/2029 Danimer Scientific Inc DNMR 3.250 0.625 12/15/2026 Energy Conversion Devices ENER 3.000 0.762 6/15/2013 Enviva Partners LP / Enviva Partners Finance Corp EVA 6.500 24.615 1/15/2026 Enviva Partners LP / Enviva Partners Finance Corp EVA 6.500 24.615 1/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 28.377 7/15/2026 Exela Intermediate LLC / Exela Finance Inc EXLINT 11.500 30.000 7/15/2026 Federal Farm Credit Banks Funding Corp FFCB 1.310 96.461 2/3/2025 Federal Home Loan Mortgage Corp FHLMC 4.800 99.418 2/6/2025 First Republic Bank/CA FRCB 4.375 0.025 8/1/2046 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 3.250 6/1/2026 H-Food Holdings LLC / Hearthside Finance Co Inc HEFOSO 8.500 2.986 6/1/2026 Hallmark Financial Services Inc HALL 6.250 18.515 8/15/2029 Homer City Generation LP HOMCTY 8.734 38.750 10/1/2026 Inotiv Inc NOTV 3.250 42.000 10/15/2027 Invacare Corp IVC 5.000 0.667 11/15/2024 JPMorgan Chase Bank NA JPM 2.000 89.008 9/10/2031 Karyopharm Therapeutics Inc KPTI 3.000 77.777 10/15/2025 Level 3 Financing Inc LVLT 4.625 92.749 9/15/2027 Level 3 Financing Inc LVLT 3.400 90.015 3/1/2027 Level 3 Financing Inc LVLT 4.625 97.226 9/15/2027 Level 3 Financing Inc LVLT 3.400 90.015 3/1/2027 Ligado Networks LLC NEWLSQ 15.500 36.500 11/1/2023 Ligado Networks LLC NEWLSQ 17.500 11.250 5/1/2024 Ligado Networks LLC NEWLSQ 15.500 38.000 11/1/2023 Ligado Networks LLC NEWLSQ 17.500 10.750 5/1/2024 Lightning eMotors Inc ZEVY 7.500 1.000 5/15/2024 Lumen Technologies Inc LUMN 7.200 99.336 12/1/2025 Lumen Technologies Inc LUMN 4.000 92.083 2/15/2027 Lumen Technologies Inc LUMN 5.125 95.515 12/15/2026 Lumen Technologies Inc LUMN 5.125 95.515 12/15/2026 Luminar Technologies Inc LAZR 1.250 57.750 12/15/2026 MBIA Insurance Corp MBI 15.824 3.559 1/15/2033 MBIA Insurance Corp MBI 15.824 3.559 1/15/2033 Macy's Retail Holdings LLC M 6.700 93.271 7/15/2034 Macy's Retail Holdings LLC M 6.900 86.231 1/15/2032 Mashantucket Western Pequot Tribe MASHTU 7.350 51.000 7/1/2026 Morgan Stanley MS 1.800 77.760 8/27/2036 Newmont Corp / Newcrest Finance Pty Ltd NEM 5.300 100.607 3/15/2026 OPKO Health Inc OPK 4.500 99.147 2/15/2025 PECF USS Intermediate Holding III Corp UNSTSV 8.000 31.895 11/15/2029 PECF USS Intermediate Holding III Corp UNSTSV 8.000 31.895 11/15/2029 Polar US Borrower LLC / Schenectady International Group Inc SIGRP 6.750 54.905 5/15/2026 Polar US Borrower LLC / Schenectady International Group Inc SIGRP 6.750 54.905 5/15/2026 Rackspace Technology Global Inc RAX 5.375 26.500 12/1/2028 Rackspace Technology Global Inc RAX 3.500 28.004 2/15/2028 Rackspace Technology Global Inc RAX 5.375 28.352 12/1/2028 Rackspace Technology Global Inc RAX 3.500 28.004 2/15/2028 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Rite Aid Corp RAD 7.700 1.700 2/15/2027 Rite Aid Corp RAD 6.875 3.614 12/15/2028 Rite Aid Corp RAD 6.875 3.614 12/15/2028 Shutterfly LLC SFLY 8.500 49.792 10/1/2026 Shutterfly LLC SFLY 8.500 49.792 10/1/2026 Spanish Broadcasting System Inc SBSAA 9.750 65.958 3/1/2026 Spanish Broadcasting System Inc SBSAA 9.750 65.958 3/1/2026 Spirit Airlines Inc SAVE 1.000 41.000 5/15/2026 Spirit Airlines Inc SAVE 4.750 40.875 5/15/2025 Stem Inc STEM 0.500 26.875 12/1/2028 Sunnova Energy International Inc NOVA 2.625 27.500 2/15/2028 TPI Composites Inc TPIC 5.250 17.899 3/15/2028 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Tricida Inc TCDA 3.500 8.125 5/15/2027 Veritone Inc VERI 1.750 46.250 11/15/2026 Virgin Galactic Holdings SPCE 2.500 43.856 2/1/2027 Vitamin Oldco Holdings Inc GNC 1.500 0.474 8/15/2020 Voyager Aviation Holdings VAHLLC 8.500 9.581 5/9/2026 Voyager Aviation Holdings VAHLLC 8.500 9.581 5/9/2026 Voyager Aviation Holdings VAHLLC 8.500 9.581 5/9/2026 WW International Inc WW 4.500 21.139 4/15/2029 WW International Inc WW 4.500 21.390 4/15/2029 Wesco Aircraft Holdings Inc WAIR 9.000 41.986 11/15/2026 Wesco Aircraft Holdings Inc WAIR 8.500 8.000 11/15/2024 Wesco Aircraft Holdings Inc WAIR 13.125 1.102 11/15/2027 Wesco Aircraft Holdings Inc WAIR 9.000 41.986 11/15/2026 Wesco Aircraft Holdings Inc WAIR 8.500 7.150 11/15/2024 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. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. 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