/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/250318.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, March 18, 2025, Vol. 29, No. 76 Headlines 145 NAVARRO: Gets Interim OK for $17.3MM DIP Loan From ERC 305 EAST: Dismissal of Breach of Fiduciary Duty Claims Affirmed 372 PARKSIDE: Yann Geron Named Subchapter V Trustee ALVOGEN PHARMA: S&P Upgrades ICR to 'CCC+', Outlook Stable AMATA LLC: Court Extends Cash Collateral Access to April 30 AMTECH SYSTEMS: Shareholders Elect 5 Members to BoD ANGIE’S TRANSPORTATION: Court Terminates Use of Lenders' Collateral ARKO CORP: S&P Lowers ICR to 'B' on Weaker Operating Performance ASCENT RESOURCES: Fitch Hikes LongTerm IDR to BB-, Outlook Positive ASTRA ACQUISITION: S&P Revises ICR to 'CCC', Outlook Negative BABCOCK & WILCOX: Loses Summary Judgment Bid in PESRM, et al. Suit BARROW SHAVER: Axis, Force Lose Bid to Stay Plains Adversary Case BIOSIG TECHNOLOGIES: Awaits Nasdaq OK on Equity Rule Compliance BLACKBERRY LIMITED: M. Dickman Steps Down as Gov't Affairs Officer BLUE DUCK: JetTexas Loses Bid to Bifurcate Ownership Issues BLUM HOLDINGS: $33.1M Income in 2024, 'Going Concern' Doubt Remains BOAGGIO'S BREAD: Nicole Nigrelli Named Subchapter V Trustee BREAD FINANCIAL: Fitch Assigns B Rating on $400MM Subordinated Debt C-BOND SYSTEMS: Funding for Acquisition of Gummy Cancelled CALEXICO HOUSING: Moody's Cuts Rating on 1991 Revenue Bonds to B1 CARDIFF LEXINGTON: Swings to $3.30 Million Net Loss in 2024 CARRIAGE SERVICES: S&P Alters Outlook to Positive, Affirms 'B' ICR CELESTIAL PRODUCTS: Gets Final OK to Use Cash Collateral CHAR GRILL: Gets OK to Use Cash Collateral to Purchase Equipment COMTECH TELECOMMUNICATIONS: Expands Net Loss to $48.7M in Q2 CUT & FILL: Gets Extension to Access Cash Collateral CYCLERION THERAPEUTICS: Ernst & Young Raises Going Concern Doubt CYPRESS COVE: Fitch Alters Outlook on 'BB+' IDR to Positive DEL RIO: Gets Interim OK to Use Cash Collateral DILLARD'S CAPITAL I: Fitch Affirms BB Rating on Subordinated Notes DITECH HOLDING: $57,249 Hodges Claim Disallowed DITECH HOLDING: Court Disallows $51,403 Tomblin, Meadows Claim DITECH HOLDING: Court Disallows Abeson Unsecured Claim DITECH HOLDING: Court Disallows Constantine Claim DITECH HOLDING: Court Disallows Gordon Unsecured Claim DITECH HOLDING: Court Disallows Sturzu Unsecured Claim DITECH HOLDING: DITECH HOLDING: $60,000 DeGrand Claim Disallowed DUNIMUS OUTREACH: Jennifer Bennington Named Subchapter V Trustee E.W. SCRIPPS: S&P Cuts ICR to 'CC' on Announced Debt Restructuring ECTUL HOLDINGS: Seeks Chapter 11 Bankruptcy in Florida EGV HOLDINGS: Kathleen DiSanto Named Subchapter V Trustee ELECTRIQ POWER: Assets to be Auctioned Online After Ch. 7 Filing ELETSON HOLDINGS: Reed Smith Loses Bid to Stay Jan. 29 Court Order EMPLOYBRIDGE HOLDING: S&P Cuts ICR to 'SD' on Distressed Exchange ENDO INC: S&P Places 'B+' ICR on Watch Positive Following Merger ENVIVA PELLETS: Court Disallows Portion of V&E's Fee Request EVOKE PHARMA: Reports $5.35M Net Loss on $10.25M in Sales for 2024 EXACTECH INC: Seeks Amendment to DIP Loan EXELA SOLUTIONS: Court Approves Stock Transfer Protocols F21 OPCO: Seeks Ch. 11 Bankruptcy for the 2nd Time, Enters PSA FORTREA HOLDINGS: Moody's Lowers CFR & Senior Secured Debt to B3 FTAI AVIATION: S&P Alters Outlook to Positive, Affirms 'B+' ICR GAINWELL ACQUISITION: Fitch Affirms B- LongTerm IDR, Outlook Stable GBG RANCH: $1.8MM Attorney's Fees Awarded in Benavidez-Hunt Suit GLASS MANAGEMENT: Court Extends Cash Collateral Access to March 31 GLOBAL JOINT: Secured Party Sets April 23, 2025 Auction GLOBAL WOUND: April 8, 2025 Claims Filing Deadline Set GMC HOLDING: April 3, 2024 Foreclosure Auction Set GRESHAM WORLDWIDE: Seeks Cash Access, DIP Loan From Ault HYCROFT MINING: Moss Adams Raises Going Concern Doubt I&I DIAMONDS: Tarek Kiem of Kiem Law Named Subchapter V Trustee INSTANT BRANDS: UST's Objection to Chapter 11 Plan Overruled INSTITUTE OF MGMT: Ohio Loses Summary Judgment Bid Against Founder IYA FOODS: Court Extends Cash Collateral Access to March 29 JAGUAR HEALTH: Reverse Stock Split, Adjournment Proposals Approved JERVOIS GLOBAL: Enters Voluntary Administration After Ch. 11 Filing LEGENDARY FIELD: Zutter Loses Bid for Summary Judgment LIFEWARD LTD: Kost Forer & Kasierer Raises Going Concern Doubt MARKUS CORP: Gets Interim OK to Use Cash Collateral Until March 31 MIGUEL ANGEL ROSARIO: Objection to Creditor Stipulation Denied MITCHELL ROCK: Seeks Cash Collateral Access MITNICK CORPORATE: Moody's Alters Outlook on 'B3' CFR to Negative MIWD HOLDCO II: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable MMEX RESOURCES: Incurs $532K Net Loss in Third Quarter MODIVCARE INC: Posts $201MM Net Loss for FY 2024 MOG PROPERTIES: Gets Interim OK to Use Cash Collateral NEAR NA: Loses Bid to Dismiss Nash CEPA Violation Lawsuit NEPHROS INC: Posts $14.2MM Net Revenue for Fiscal Year 2024 NORDSTROM INC: Moody's Affirms 'Ba2' CFR, Outlook Remains Stable PARAMOUNT DRUG: Seeks Chapter 11 Bankruptcy in New Jersey PINEAPPLE PROPERTIES: Seeks Cash Collateral Access PIPELINE HEALTH: Virruso Remains in Contempt of Confirmation Order PLANO SMILE: Gets Interim OK to Use Cash Collateral QUAD/GRAPHICS INC: Moody's Affirms B1 CFR, Outlook Remains Stable RADIANT ONE: Seeks Cash Collateral Access RED HORSE: Frederick Bunol Named Subchapter V Trustee REMARKABLE HEALTHCARE: Subchapter V Plan Denied Confirmation REMEMBER ME: Gets Interim OK to Use Cash Collateral Until March 27 SCORPIUS HOLDINGS: Assigns Lease, Saves Over $4 Million in Rent SEDGWICK CLAIMS: $750MM Loan Add-on No Impact on Moody's 'B2' CFR SENESTECH INC: Faces Net Loss of $6.18 Million for 2024 SENSEONICS HOLDINGS: KPMG LLP Raises Going Concern Doubt SERES THERAPEUTICS: Posts $136K Net Income in 2024 SMITH MICRO: Net Loss Expands to $48.7 Million in 2024 SORENTO ON YESLER: Seeks to Amend Cash Collateral Order SOUTHERN COLONEL: Gets Interim OK to Use Cash Collateral SOUTHWEST PREPARATORY: S&P Affirms 'BB+' Revenue Bond LT Rating SPIRIT AIRLINES: Exits Chapter 11 With Less Debt and New Financing STEEL FABRICATORS: Has Deal on Cash Collateral Access STOLI GROUP: Seeks to Amend Final Cash Collateral Order SUNNOVA ENERGY: PwC Raises Going Concern Doubt TWIN FALLS: Gets OK to Use Additional $2.95M in Cash Collateral UNIQUE LOGISTICS: Financial Woes Raise Going Concern Doubt URBAN COMMONS: Can Sell Lease Interests Free and Clear of Liens US COATING: Gets Interim OK to Use Cash Collateral Until March 25 US COATING: Soneet Kapila Named Subchapter V Trustee VIASAT INC: R. Suri Retires as Director VICTORIA'S SECRET: S&P Alters Outlook to Stable, Affirms 'BB-' ICR VMR CONTRACTORS: Court Extends Cash Collateral Access to April 11 WORLD AIRCRAFT: First Service Bank's Attorney Fee Request Denied [] Economic Slowdown Signals Concern, Says First American CEO [] Northgate to Auction Brooklyn Property on April 3, 2025 ********* 145 NAVARRO: Gets Interim OK for $17.3MM DIP Loan From ERC ---------------------------------------------------------- 145 Navarro LLC received interim approval from the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, to obtain senior secured superpriority post-petition financing and provide adequate protection. The interim order signed by Judge Christopher Lopez authorized the Debtor to obtain post-petition financing, of which up to $350,000 will be made available to the Debtor on an interim basis. Specifically, the Debtor seeks senior post-petition financing for up to $17.23 million, which includes a new money loan of $8.5 million and a roll-up of prepetition obligations totaling $56,500 on an interim basis, with an additional $8.67 million upon the final order. The financing is provided by ERC Acquisitions IV, LLC. The Debtor's immediate need for financing arises from significant flooding at its 145 Navarro Street property, which requires remediation to prevent environmental risks. The DIP facility will carry a 15% interest rate, with various fees, including a 5% commitment fee and exit fee. The DIP facility is due and payable on the earliest of: (a) the date of closing of a sale of substantially all of the Debtor's assets, (b) September 2025, (c) the date on which the DIP Loans will become due and payable in full whether by acceleration or in accordance with the Interim or Final Order; (d) the payment in full of all outstanding DIP Obligations under the DIP Facility and termination of all commitments, (e) the effective date of any chapter 11 plan of reorganization, or (f) the date of dismissal of the Chapter 11 Case or conversion of the Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code. The DIP parties are required to comply with these milestones: (a) No later than five business days after the filing of the Motion, the Bankruptcy Court must have entered the Interim Order. (b) Not later than five business days after the filing of the Motion, but as soon as reasonably practicable, the Debtor must engage Aaron Asel, partner at Asel & Associates, PLLC, as Chief Restructuring Officer, with powers and authority typical of a CRO under the circumstances, pursuant to an engagement agreement acceptable to DIP Lender. (c) No later than 30 days after the entry of the Interim Order, the Bankruptcy Court must have entered the Final Order. (d) Any plan of reorganization proposed by Borrower must provide for full repayment of the DIP Obligations or as otherwise agreed in writing by the parties. (e) The DIP Obligations must be paid in full by no later than the DIP Maturity Date. The Debtor will use the DIP funds according to an approved budget to remediate environmental damage from flooding, pay fees, and maintain operations. A copy of the motion is available at https://urlcurt.com/u?l=davvV6 from PacerMonitor.com. About 145 Navarro LLC 145 Navarro LLC is a limited liability company. 145 Navarro LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 25-90011) on February 18, 2025. In its petition, the Debtor reports estimated assets and liabilities between $10 million and $50 million each. Honorable Bankruptcy Judge Christopher M. Lopez handles the case. The Debtor is represented by Susan Tran Adams, Esq. at TRAN SINGH, LLP. ERC Acquisitions IV, LLC, as DIP lender, can be reached through its counsel: John D. Cornwell, Esq. Brenda L. Funk, Esq. Alexander R. Perez, Esq. Munsch Hardt Kopf & Harr, P.C. 700 Milam St., Suite 800 Houston, Texas 77002 Telephone: (713) 222-1470 Facsimile: (713) 222-1475 E-mail: jcornwell@munsch.com E-mail: bfunk@munsch.com E-mail: arperez@munsch.com 305 EAST: Dismissal of Breach of Fiduciary Duty Claims Affirmed --------------------------------------------------------------- In the appealed case captioned as LITTLE HEARTS MARKS FAMILY II L.P., Appellant, v. JASON D. CARTER, 61 PRIME LLC, Appellees, No. 23-1202-bk (2nd Cir.), Judges Gerard E. Lynch, Susan L. Carney and Steven J. Menashi of the United States Court of Appeals for the Second Circuit affirmed the judgment of the United States bankruptcy Court for the Southern District of New York and the United States District Court for the Southern District of New York dismissing Little Hearts Marks Family II L.P.'s claims for breach of fiduciary duty and for aiding and abetting breach of fiduciary duty. Plaintiff-Appellant Little Hearts Marks Family II L.P. was a member of 305 East 61st Street Group LLC, a company organized to purchase a building at 305 East 61st Street in Manhattan and convert it into a condominium. Defendant-Appellee 61 Prime LLC was the majority member and manager of the company, and Defendant-Appellee Jason D. Carter was the manager and sole member of Prime. In 2021, 305 East 61st Street Group filed for bankruptcy and eventually sold the building to another company that Carter had created. The plan of liquidation established a creditor trust with the exclusive right to pursue legal claims that belonged to the estate of 305 East 61st Street Group. After the sale of the building, Little Hearts filed its own lawsuit against Prime and Carter in state court, asserting claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Little Hearts sought damages of at least $48,052,000 for its lost capital investment in the company and the loss of its rights under the Operating Agreement, which had granted Little Hearts the right to use and develop designated units in the building. Carter and Prime removed the action to the bankruptcy court. The bankruptcy court dismissed the complaint in its entirety. It held that the claims asserted in the complaint were derivative of injuries to the debtor. As derivative claims, the causes of action belonged to the debtor and, pursuant to the terms of the debtor's plan and the Creditor Trust Agreement, are now vested with the creditor trust. Little Hearts argued that its claims were based on its own contractual rights with respect to the Marks units. The bankruptcy court concluded that the units were not distinct property rights or interests separate from the plaintiff's investment in the debtor but rather that the assignment of specific units to each member represented an agreement amongst the members to reflect their membership interests in the debtor. The district court affirmed the judgment of the bankruptcy court. This appeal followed. The Circuit Judges affirm the judgment insofar as the bankruptcy and district courts dismissed the claims for breach of fiduciary duty and for aiding and abetting breach of fiduciary duty. These claims were derivative of claims that belonged to the debtor company and therefore could be asserted only by the creditor trustee. They vacate the judgment insofar as the bankruptcy and district courts dismissed the claims for breach of contract and for breach of the implied covenant of good faith and fair dealing. These were direct claims that sought to vindicate contractual rights that belonged to Little Hearts. The unjust enrichment claim, meanwhile, must be dismissed as duplicative of the contract claims. They remand for further proceedings consistent with this opinion. A copy of the Court's decision is available at https://urlcurt.com/u?l=vz5dGo Attorney for Plaintiff-Appellant: Andrew Goldenberg, Esq. LEVY GOLDENBERG LLP 75 Broad Street, Suite 2120 New York, NY 10004 Telephone: 929-419-4962 E-mail: andrew@levygoldenberg.com Attorneys for Defendants-Appellees: Gerard S. Catalanello, Esq. James J. Vincequerra, Esq. Kimberly J. Schiffman, Esq. Christopher J. Borchert, Esq. ALSTON & BIRD LLP 90 Park Avenue, 15th Floor New York, NY 10016 Telephone: 212-210-9400 E-mail: gerard.catalanello@alston.com james.vincequerra@alston.com kimberly.schiffman@alston.com christopher.borchert@alston.com About 305 East 61st Street Group Based in New York, 305 East 61st Street Group LLC, a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)), filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 19-11911) on June 10, 2019. At the time of filing, the Debtor was estimated to have assets and debt of $10 million to $50 million. The case is assigned to Hon. Sean H. Lane. The Debtor's counsel is Robert J. Spence, Esq., at Spence Law Office, P.C., in Roslyn, New York. The Debtor's accountant is Singer & Falk. 372 PARKSIDE: Yann Geron Named Subchapter V Trustee --------------------------------------------------- The U.S. Trustee for Region 2 appointed Yann Geron, Esq., at Geron Legal Advisors, LLC as Subchapter V trustee for 372 Parkside Ave Inc. Mr. Geron will be paid an hourly fee of $890 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Geron declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Yann Geron, Esq. Geron Legal Advisors, LLC 370 Lexington Avenue, Suite 1101 New York, NY 10017 Phone: (646) 560-3224 Email: ygeron@geronlegaladvisors.com About 372 Parkside Ave 372 Parkside Ave Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 25-40942) on February 26, 2025, with $1,000,001 to $10 million in assets and liabilities. Judge Nancy Hershey Lord presides over the case. ALVOGEN PHARMA: S&P Upgrades ICR to 'CCC+', Outlook Stable ---------------------------------------------------------- S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'SD' (selective default) on Alvogen Pharma US Inc. S&P also assigned its 'CCC-' issue-level rating, and recovery rating of '6', to the new second-lien term loan. S&P said, "The stable outlook reflects our expectation for S&P Global Ratings-adjusted debt leverage of about 4.5x in 2025 and adequate liquidity over the next 12 months, even as we see heightened uncertainty around financial performance in 2026, as the company seeks to offset a significant decline in revenue and EBITDA from current products with the launch of new products whose success is often unpredictable. "The 'CCC+' rating reflects our view that Alvogen is dependent upon favorable business conditions, including successful launch of several new products, in order to sustain its capital structure. We view Alvogen's business model as riskier than its peers. The company's strategy combines the ability to manufacture complex generic drugs with an aggressive approach to challenging patents of a limited number of branded pharmaceutical products. In contrast, other generics companies generally pursue greater product diversification. "Alvogen's top two products comprised a large proportion of 2024 revenues and we see potential for steep declines in the revenue and EBITDA from these products over the next two years to weigh heavily on credit measures and our ratings if the company is unable to successfully replace that with revenue from new products." Although the company has invested in growing its branded pharmaceuticals business, which offers a more stable source of high-margin revenue growth, this represents just a small proportion of sales to date. The company has at least four meaningfully contributing product launches planned over the next two years. Our base case is more conservative than the company's expectations and assumes only one of these four products will launch through 2026. As such, there is significant upside potential to our forecast, albeit highly uncertain. Often Alvogen's patent challenges can allow their products to enter the market several years before generic entry is otherwise anticipated. As an example, the company received tentative approval for Rifaximin in June 2023, though our current forecast does not anticipate a launch until 2028 when other generic competitors are expected to enter. Other near-term launches could face legal challenges from their originators as well, creating the potential for similar delays. S&P's base case assumes delays in the approval of the company's other products. The new capital structure improves liquidity and the company's debt maturity profile, but the credit profile is constrained by medium-term maturities and rapidly accruing preferred equity, which we treat as debt-like. The new first-lien term loan (not rated) matures in 2028, potentially raising refinancing issues to the forefront in 2027 when it and the ABL (which the company has generally drawn more than 50% of its availability) become current liabilities. The preferred equity from the 2022 amendment continues to accrue at 20% annually and that rate will step up by 500 basis points annually in mid-2026 through mid-2031, potentially growing from about $373 million in 2024, to more than $850 million by mid-2028. Additionally, the new second-lien term loan, although relatively modest in size, will also continue to grow as its paid-in-kind (PIK) component exceeds its mandatory amortization component. Excess cash flow sweeps are scheduled to step down over time if the company reaches certain leverage ratios or meets specific sales milestones with currently unlaunched products. Although S&P expects the company to repay debt and interest expense over the coming year, given the PIK features of the preferred equity and second-lien notes, it expects S&P Global Ratings-adjusted debt will continue to rise over the next three years. S&P expects that liquidity will be adequate over the next 12 months but could become more constrained over time. Alvogen had about $161 million of liquidity at transaction close ($68 million in cash and $93 million in ABL capacity) and we expect about $150 million of cash funds from operations over the next 12 months. While this is more than enough to cover mandatory debt amortization and relatively high capital spending (including purchase of intangibles), our base-case scenario forecasts that headroom on the first-lien term loan's financial covenant will tighten in 2026, assuming only limited success with new products. S&P said, "The stable outlook reflects our expectation for debt leverage of about 4.5x in 2025 and adequate liquidity over the next 12 months, even as we see heightened uncertainty around financial performance in 2026, as the company seeks to offset a significant decline in revenue and EBITDA from current products, with the launch of new products whose success is often unpredictable. "We could lower our rating if we expected Alvogen to default within 12 months. This could occur if sales erosion on existing products is more severe than our base case, or if launches of new products were unsuccessful, resulting in worsening credit metrics and potentially a covenant breach. "We could consider a higher rating if we had more evidence that Alvogen will be able to offset most of the revenue headwinds on existing products with the successful launch of new products and will be able to consistently generate free cash flow." AMATA LLC: Court Extends Cash Collateral Access to April 30 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ilinois, Eastern Division, issued a fourth interim order permitting Amata, LLC to use cash collateral until April 30. The company was authorized to use cash collateral to pay expenses in accordance with its projected budget, with a 15% variance. Non-conforming uses require creditor consent. American Commercial Bank and Trust, a secured creditor, will be provided with protection for the company's use of cash collateral in the form of a replacement lien and payments pursuant to the budget. A final hearing is scheduled for April 30, with objections due by April 25. American Commercial Bank and Trust can be reached through its counsel: John Adam Powers, Esq. Brotschul Potts, LLC 1 Tower Lane, Suite 2060 Oakbrook Terrace, IL 60181 Tel: 312-551-9003 apowers@brotschulpotts.com About Amata LLC Amata, LLC is primarily engaged in renting and leasing real estate properties. Amata filed Chapter 11 petition (Bankr. N.D. Ill. Case No. 24-17012) on November 12, 2024, listing up to $50,000 in assets and up to $10 million in liabilities. Judge David D. Cleary oversees the case. The Debtor is represented by Jeffrey C. Dan, Esq., at Goldstein & Mcclintock, LLLP. AMTECH SYSTEMS: Shareholders Elect 5 Members to BoD --------------------------------------------------- On March 5, 2025, Amtech Systems, Inc., held its 2025 Annual Meeting of Shareholders. At the Annual Meeting, the Company's shareholders considered four proposals. As of January 13, 2025, there were 14,289,066 shares of the Company's common stock issued, outstanding and eligible to vote on the proposals presented at the Annual Meeting. The total number of shares represented in person or by proxy at the Annual Meeting was 10,328,525 or 72.28% of the shares eligible to vote. Proposal 1 – Election of directors The individuals listed below received the highest number of affirmative votes of the outstanding shares of the Company's common stock present or represented by proxy and voting at the Annual Meeting and were elected at the Annual Meeting to serve a one-year term on the Company's board of directors. - Robert M. Averick - Robert C. Daigle - Michael Garnreiter - Asif Y. Jakwani - Michael M. Ludwig Proposal 2 – To approve the ratification of the independent registered public accountants The shareholders ratified the appointment of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending September 30, 2025. Proposal 3 – Advisory vote on named executive officer compensation The shareholders approved, on an advisory basis, the compensation of the named executive officers. Proposal 4 – Amendment to the Company's 2022 Equity Incentive Plan The shareholders approved, the amendment to the Company's 2022 Equity Incentive Plan. A full-text copy of the Form 8-K is available at https://tinyurl.com/5yyxk64u About Amtech Systems Inc. Tempe, Ariz.-based Amtech Systems, Inc. is a global manufacturer of capital equipment, including thermal processing, wafer polishing and cleaning, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies, and light-emitting diodes (LEDs). It sells these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America, and Europe. ANGIE’S TRANSPORTATION: Court Terminates Use of Lenders' Collateral --------------------------------------------------------------------- Regions Equipment Finance Corporation and Regions Commercial Equipment Finance, LLC obtained a court order terminating the use of their collateral by Angie's Transportation, LLC and STL Equipment Leasing Co., LLC. The order signed by Judge Brian Walsh of the U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, terminated the companies' authority to use the collateral of their secured creditors, which consists of 21 trailers and six tractors. Failure of the companies to comply will result in the automatic stay provisions of Section 362 of the Bankruptcy Code being lifted with respect to the secured creditors' collateral, according to the court order. The secured creditors on March 4 asked the bankruptcy court to terminate the use of their collateral after the companies defaulted on their monthly payments. A prior court order required the companies to make monthly payments of $32,500 to the secured creditors as protection for the use of their collateral. The companies allegedly failed to make the payment due on Feb. 15, prompting the secured creditors to issue a notice of default and file a motion terminating the companies' authority to use the collateral. 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 R Magdy at Schmidt Basch, LLC. Regions Equipment Finance Corporation and Regions Commercial Equipment Finance, LLC, as lenders, are represented by: Joseph J. Trad, Esq. John J. Hall, Esq. Patrick F. Ganninger, Esq. LEWIS RICE LLC 600 Washington Avenue, Suite 2500 St. Louis, Missouri 63101 Tek: (314) 444-7600 Fax: (314) 612-7635 jtrad@lewisrice.com jhall@lewisrice.com pganninger@lewisrice.com ARKO CORP: S&P Lowers ICR to 'B' on Weaker Operating Performance ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Richmond, Va.-based convenience store operator and fuel supplier ARKO Corp. to 'B' from 'B+'. At the same time, S&P lowered its issue-level rating on its senior unsecured notes to 'CCC+' from 'B-'. The '6' recovery rating is unchanged. S&P said, "The stable outlook reflects our expectation that ARKO will maintain adjusted interest coverage in the high-1x area and continue to generate positive free operating cash flow (FOCF) as it converts a large portion of its retail operations to wholesale. "The downgrade reflects our expectations for continued weaker performance in ARKO's retail segment. ARKO reported a 6.1% decline in same-store fuel gallons sold and 5.4% decrease in same-store merchandise sold (3.8% excluding cigarettes) in 2024 due to a challenging consumer environment. The company's volumes have lagged the industry, which we believe is due in part to ARKO's exposure to lower income markets where consumers have faced greater economic stress. Additionally, the company's decision to close or convert a number of underperforming retail stores last year indicate a weaker competitive standing, in our view. Lower volumes and inside sales have pressured profitability, with consolidated operating income declining 20% year-over-year. As a result, weaker profitability has caused ARKO's credit protection metrics to deteriorate, including adjusted interest coverage declining to 2.0x. We expect the difficult operating environment will continue in 2025. The resulting pressure on fuel gallons and our expectations for lower inside sales contribution lead us to forecast S&P Global Ratings-adjusted EBITDA declining approximately 5% in 2025." The company's retail store conversion strategy carries execution risk. Over the span of roughly a decade, ARKO grew through acquisitions to become the sixth largest convenience store operator in the U.S. Beginning in Q3'24 the company implemented a transformation plan that includes converting certain retail stores to dealer sites. The company converted 153 sites in 2024 and plans to complete a meaningful number of conversions in 2025, including approximately 100 by the end of Q1'25. This shift will result in lower contribution from inside sales and fuel gross margin in its retail segment. S&P said, "However, retail operating expenses will be reduced, and we expect the company will be able to realize general and administrative savings. Further, we expect ARKO will retain its stronger performing retail stores leading to better store-level productivity. The company expects an incremental $20 million in operating income upon completion of its store conversions. Membership in ARKO's loyalty program increased by about 13% year over year. We expect its enhanced discount offering to its loyalty members will drive further membership growth leading to improved store traffic and productivity in 2025." S&P said, "We project adjusted leverage of about 6.7x and adjusted interest coverage below 2x in 2025. While ARKO grew rapidly through acquisitions in recent years, it added significant lease liabilities for its acquired sites, which we treat as debt. Lower EBITDA generation in 2024 and higher revolver borrowings caused adjusted leverage to increase to 6.3x from 6.0x in 2023 and adjusted EBITDA interest coverage to decline to 2.0x from 2.2x. The company had maintained interest coverage around mid-2x in the years prior. Our expectations for lower EBITDA generation over the next two years lead us to forecast leverage increasing to 6.7x and adjusted interest coverage of about 1.9x. We expect the company to realize working capital benefits as a result of its conversions to wholesale and less inventory needed to supply its reduced retail footprint. We do not forecast any material debt reduction in the near term. To reflect our expectation for weaker credit metrics we revised our financial risk assessment to highly leveraged from aggressive." ARKO's liquidity position affords it some flexibility to implement its strategic initiatives while navigating a softer economy. At the end of 2024, ARKO had total liquidity of $841 million, including $262 million in cash, $448 million available under its M&T and Capital One lines of credit, and $132 million available under its asset-backed lending (ABL) facility. S&P said, "We forecast capital expenditures (capex) of around $115 million 2025, which the company will primarily use for maintenance, remodels, and strategic initiatives including expanding its food program. The company generated $107 million in reported FOCF in 2024, which included approximately $35 million in working capital benefits. We project reported FOCF of at least $50 million in 2025." The stable outlook reflects S&P's expectation that despite forecasted volume declines in 2025, ARKO's fuel pricing strategy and transition to operating more productive retail stores will support positive FOCF and adjusted interest coverage being maintained in the high-1x area over the next 12 months. S&P could lower its rating on ARKO if its FOCF or EBITDA generation declined materially relative to its base case. This could occur if: -- Its operating performance weakens, possibly because of heightened competition and a sharp, sustained decline in its fuel margins or volumes; or -- The company experiences execution issues transitioning retail locations to wholesale sites leading to weaker profitability than S&P expects. S&P could raise its rating on ARKO if the company: -- Strengthens credit metrics, including sustaining EBITDA interest coverage of 2.5x while generating materially positive FOCF; and -- Improves operating performance, including successfully executing its transformation plan, leading to sustained EBITDA growth. ASCENT RESOURCES: Fitch Hikes LongTerm IDR to BB-, Outlook Positive ------------------------------------------------------------------- Fitch Ratings has upgraded Ascent Resources Utica Holdings, LLC's (Ascent) Long-Term Issuer Default Rating (IDR) to 'BB-' from 'B+' and affirmed its secured revolver at 'BB+' with a Recovery Rating of 'RR1' and its unsecured ratings at 'BB-'/'RR4'. The Rating Outlook is Positive. Ascent's upgraded rating reflects expectations of positive FCF over the rating horizon, decreased leverage, above-average production scale and strong hedge book. These factors are offset by relatively high firm transportation costs, which results in netbacks slightly lower than that of its peers. Fitch believes Ascent will maintain access to debt capital markets and generate FCF, although acknowledges that natural gas prices are volatile and debt capital markets can be challenging at times. The Positive Outlook is driven by Fitch's belief that Ascent will maintain low leverage and continue to pay down the revolver over time. Key Rating Drivers Consistent FCF Generation: Ascent's consistent trend of positive FCF generation is a credit positive. It generated around $200 million of FCF in 2024, according to Fitch calculations. Ascent is expected to maintain production in the 2.0-2.2 billion cubic feet equivalent per day (bcfe/d) range, which should allow for positive FCF at Fitch's base case prices. Further FCF growth could be realized by lower firm transportation costs, continued drilling and completion efficiencies. Fitch expects FCF to be used for debt repayment and shareholder distributions. Scale and Operating Profile: Ascent's reserve base and production scale are credit positives. Across both of these metrics, Ascent is meaningfully larger than 'B' category Fitch-rated issuers. The reserve and production scale each align with the 'bbb' category in Fitch's navigator. The company's ability to maintain production while spending below CFO further supports the credit quality. Netbacks Curtailed: Ascent generates strong realized pricing compared with its peers, but this is offset by higher operating costs due to high firm transportation costs. Although firm transportation costs are relatively high, Fitch believes the risk of Ascent being exposed to production mismatches is very low as the volumetric commitments are well below production levels. The various contracts expire over time until 2032; therefore, Fitch does not expect material savings in the near term. Protective Hedging Program: Ascent's strong and consistent hedging policy protects the company's cashflow. For 2025, the company has hedged nearly 80% of expected oil production at $70.36/bbl and around 85% of expected natural gas production at around $3.80/mcf. Natural gas hedging extends as far as 2027 with about 70% of expected gas production hedged in 2026 at $3.72/mcf and about 25% of expected 2027 production hedged at $3.81/mcf. Fitch believes that the hedging program protects current capital spending and debt reduction plans given the pricing environment. Conservative Capital Structure: Ascent's capital structure and capital allocation policies are supportive of the credit quality. Ascent seeks to balance debt repayment with shareholder distributions and targets total debt less than $2 billion. Fitch's forecast shows Ascent generating positive FCF, paying down the revolver and achieving this debt target within the next few years, Leverage remains below 2x throughout the forecast. Peer Analysis Ascent's Fitch-calculated EBITDA leverage of 1.6x as of Dec. 31, 2024 is in line with other peer-rated entities. Ascent, with 3Q24 production of 2,075 mmcfe/d is well larger than B category peers such as Comstock Resources Inc.(B+/Negative) at 1,447 mmcfe/d, and Gulfport Energy Corp. (B+/Stable) at 1,057 mmcfe/d, as well as higher rated peer CNX Resources Corp. (BB+/Stable) at 1,314 mmcfe/dt, but smaller than EQT Corp. (BBB-/Stable) at 5,948 mmcfe/d. Ascent generated Fitch-calculated unhedged, levered netbacks of $0.45/thousand cubic feet equivalent (mcfe) in 3Q24, which is below most other gassy peers such as Gulfport Energy Corp. and Comstock but in line with Appalachian peers CNX and EQT. Ascent generates a relatively high realized price compared with its peers, but this is offset by higher firm transportation costs. Key Assumptions - Henry Hub natural gas price of $2.50 per thousand cubic feet (mcf) in 2025, and $2.75 thereafter; - West Texas Intermediate oil price of $65/bbl in 2025, $60/bbl in 2026 and 2027 and $57/bbl thereafter; - Production flat to modestly down; - Capex of $775 million to $850 million over the forecast horizon; - FCF used for debt reduction and shareholder distributions. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Weakening of commitment to stated financial policy, including the hedging program; - Sustained weaker FCF generation; - Mid-cycle EBITDA leverage sustained above 2.5x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Significant FCF generation that is applied to debt repayment; - Improvement in netbacks relative to peers; - Mid-cycle EBITDA leverage sustained below 1.5x. Liquidity and Debt Structure Ascent had cash on hand of $8 million as of Dec. 31, 2024, and $1,361 million of availability under its RBL after $555 million of borrowings and $84 million of letters of credit. The revolver matures on June 30, 2029. The facility has two financial maintenance covenants: a debt/EBITDA covenant in which the ratio cannot be more than 3.5x and a current ratio covenant in which the ratio cannot be less than 1.00. The company is incompliance with both covenants. The revolver maturity was extended from 2027 to 2029 with a springing maturity 91 days prior to the earliest date that any single series of notes mature if the outstanding principal is greater than or equal to $350 million. Fitch expects FCF to be used to repay revolver borrowings. Issuer Profile Ascent is one of the largest producers of natural gas in the U.S. in terms of daily productions. It is focused on exploring for, developing, producing and operating natural gas and oil properties in the Utica Shale in the Appalachian Basin. 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 ----------- ------ -------- ----- Ascent Resources Utica Holdings, LLC LT IDR BB- Upgrade B+ senior unsecured LT BB- Affirmed RR4 BB- senior secured LT BB+ Affirmed RR1 BB+ ASTRA ACQUISITION: S&P Revises ICR to 'CCC', Outlook Negative ------------------------------------------------------------- S&P Global Ratings revised its ICR on Astra Acquisition Corp. (dba Anthology) to 'CCC' from 'SD'. The outlook is negative. S&P said, "We affirmed our 'CCC+' issue-level rating on the company's $410 million tranche A first-lien debt. "We also affirmed our 'CC' issue-level rating on the company's $617 million tranche B first-lien debt. "The negative outlook reflects our view that Anthology's capital structure is unsustainable without meaningful improvements in profitability and revenue from current levels. We expect free operating cash flow (FOCF) to be negative, EBITDA interest coverage to stay under 0.5x, and the company's liquidity to continue to deteriorate over the next 12 months." Anthology recently entered into waiver agreement under which it will not be required to pay interest on its second-lien debt instrument. As a result, Anthology said that it will lower its annual interest expense by about $60 million. Despite this reduction in interest expense liabilities, Anthology continues to face difficult business conditions, revenue declines and weak liquidity. In S&P's view, there is meaningful risk of a distressed transaction over the next 12 months. S&P said, "Despite lower interest expense, we still view Anthology as having limited financial flexibility over the next 12 months. We project that Anthology will generate negative free operating cash flow (FOCF) in both fiscal 2025 and fiscal 2026. Our base-case assumes that Anthology will face revenue declines in the mid-single-digit percent area in 2025 and 2026. We project S&P adjusted FOCF to debt of about -10% in 2025 and -4% in 2026. Due to continued negative free cash flow generation and declining revenues, we believe that further debt restructuring, asset sales, or equity contributions will be necessary to avoid a default." New leadership is focused on improving profitability longer term. The company's management team is focused on improving customer retention, returning the business to growth, optimizing the gross margin by exiting low value-added solutions, unattractive geographic areas, and renegotiating contracts. Anthology has embarked on a $90 million cost-saving plan and expects total capital expenditure (capex) as a percent of revenues to come down meaningfully. S&P said, "The negative outlook reflects our view that Anthology's capital structure is unsustainable without meaningful improvements in profitability and revenue from current levels. We expect free operating cash flow (FOCF) to be negative, EBITDA interest coverage to stay under 0.5x, and the company's liquidity to continue to deteriorate over the next 12 months. "We could lower our rating to 'SD' or 'D' if Anthology pursues a transaction that we consider tantamount to a default, including a subpar debt exchange or failure to repay its debt in full at maturity." S&P could take a positive action on Anthology to stable if: -- It increases revenue, expands EBITDA margins, and S&P expects business fundamentals will improve over the upcoming 12 months; -- Cash flow stabilizes near break-even after debt service such that S&P views the risk of a default or distressed transaction over the sequent 12 months as low, although in such a scenario S&P would still likely view the capital structure as unsustainable longer term; or -- The owners add liquidity to the balance sheet and S&P no longer forecasts a default over the upcoming 12 months. BABCOCK & WILCOX: Loses Summary Judgment Bid in PESRM, et al. Suit ------------------------------------------------------------------ Judge Meredith S. Grabill of the United States Bankruptcy Court for the Eastern District of Louisiana denied The Babcock & Wilcox Company's second motion for summary judgment in the case captioned as THE BABCOCK & WILCOX COMPANY, PLAINTIFF, V. PHILADELPHIA ENERGY SOLUTIONS REFINING AND MARKETING LLC, PES LIQUIDATING TRUST, WESTPORT INSURANCE COMPANY, XL INSURANCE AMERICA, INC., ALLIANZ GLOBAL RISKS US INSURANCE COMPANY, HDI GLOBAL INSURANCE COMPANY, AND CERTAIN UNDERWRITERS AT LLOYD'S LONDON-SYNDICATE 1221 (NAVIGATORS), ZURICH AMERICAN INSURANCE COMPANY, CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING TO ENNMG1800181, CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING TO ENNMG1800281, CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING TO ENNMG1800282, CERTAIN UNDERWRITERS AT LLOYD'S SUBSCRIBING TO EN100070-18, DEFENDANTS, ADV. NO. 21-1014 (Bankr. E.D. La.). In 2000, B&W and its affiliates filed petitions for chapter 11 bankruptcy relief primarily to deal with asbestos-related personal-liability claims. In 2006, the District Court confirmed the Plan proposed by B&W and its parent company. The Plan created the Asbestos PI Trust, funded with assets of B&W, its debtor-affiliates, as well as certain non-debtor affiliates; under the Plan, the Asbestos PI Trust would be the sole recourse for payment of current and future asbestos-related claims against B&W. All other non-asbestos related claims, include the class of general unsecured creditors, would be resolved directly by the Reorganized Debtors. In other words, those claims would be paid pro rata as directed in the Plan by proceeds generated by the Reorganized B&W's continuing operations. The sole count in the adversary proceeding filed by The Babcock & Wilcox Company seeks: (i) a declaration that the confirmed plan of reorganization in B&W's 2000 bankruptcy case discharged the claims now asserted against B&W entities in a Pennsylvania state court by two of the Defendants, Philadelphia Energy Solutions Refining & Marketing, LLC, and PES Liquidating Trust; and (ii) enforcement of the confirmed Plan's discharge injunction. The Pennsylvania state court action asserts non-asbestos-related products-liability claims against B&W entities stemming from a 2019 explosion at a refinery formerly operated by PESRM that was allegedly caused by the failure of an elbow joint manufactured by B&W and installed in the refinery in the 1970s. B&W and the Defendants filed cross-motions for summary judgment. On July 2, 2024, the Bankruptcy Court denied both motions. Now before the Bankruptcy Court is B&W's second motion for summary judgment and statement of uncontested facts. B&W seeks summary judgment on two alternative theories. The Defendants filed an opposition to the motion as well as their own statement of uncontested facts. To the extent that B&W seeks summary judgment on the basis that the confirmed Plan by its terms discharged the claims asserted by the Defendants in the Pennsylvania state court action, B&W's second motion for summary judgment is denied. To the extent that B&W seeks summary judgment on the issue of whether the Successor Provisions in the confirmed Plan release B&W from any successor liability with respect to the claims now asserted against the B&W entities in the Pennsylvania state court action, B&W's second motion for summary judgment is denied. The Bankruptcy Court interprets B&W's argument as one that would allow a debtor to circumvent due process regarding future claims by drafting language in a plan that obliterates any limit to the types of claims that are subject to a discharge injunction in a confirmed plan. The Bankruptcy Court rejects that assertion. To determine whether the claims asserted by the Defendants in the Pennsylvania state court action are dischargeable prepetition bankruptcy claims that were discharged through B&W's confirmed Plan, the Bankruptcy Court is required to apply the Fifth Circuit's prepetition-relationship test after hearing the parties' evidence as to the two conditions that must exist to satisfy that test. Due process demands it. A copy of the Court's decision is available at https://urlcurt.com/u?l=e6nYDx from PacerMonitor.com. About Babcock & Wilcox Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises is a growing, globally-focused renewable, environmental and thermal technologies provider with decades of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers. B&W's innovative products and services are organized into three market-facing segments which changed in the third quarter of 2020 as part of the Company's strategic, market-focused organizational and re-branding initiative to accelerate growth and provide stakeholders improved visibility into its renewable and environmental growth platforms. Babcock & Wilcox reported net losses of $10.30 million in 2020, $129.04 million in 2019, $724.86 million in 2018, $379.01 million in 2017, and $115.08 million in 2016. As of Sept. 30, 2021, the Company had $729.36 million in total assets, $708.96 million in total liabilities, and $20.40 million in total stockholders' equity. The Babcock & Wilcox Company filed for Chapter 11 bankruptcy (Bankr. E.D. La. Case No. 00-10992) on Feb. 22, 2000, before the Hon. Judge Jerry A. Brown. A plan was confirmed in the case on Jan. 18, 2006. BARROW SHAVER: Axis, Force Lose Bid to Stay Plains Adversary Case ----------------------------------------------------------------- Judge Alfredo R. Perez of the United States Bankruptcy Court for the Southern District of Texas denied Axis Energy Services, LLC and Force Pressure Control, LLC's motion to stay the case captioned as PLAINS MARKETING, L.P., Plaintiff, VS. BARROW SHAVER RESOURCES COMPANY, LLC, et al., Defendants, ADVERSARY NO. 24-3167 (Bankr. S.D. Tex.) pending appeal. Barrow Shaver Resources Company LLC, an independent oil and natural gas company, operates wells in Texas. Starting at least in 2023, it began to use the services of Force Pressure Control, LLC and Axis Energy Services, LLC in connection with its operations. In 2024 because of non-payment, Axis and Force filed Lien Claimant Affidavits against many of the wells that the Debtor operates. The Debtor sells crude oil to Plains Marketing, L.P., the purchaser, under a Crude Oil Purchase Contract. On May 3, 2024, Force sent a letter to Plains stating that it is a mineral lien claimant under Chapter 56 of the Texas Property Code and has a lien against the Debtor totaling $2,054,436.24 plus legal interest, attorney's fees and other matters allowed by law. Force requested, under Chapter 67 of the Texas Property Code, that Plains withhold payment to the debtor up to the amount of Force's claim from all oil and gas proceeds attributable to the operating and working interest in the wells located on the Lease. Similarly, on July 15, 2024, Axis also sent a letter to Plains stating that it is a mineral lien claimant under Chapter 56 and has a lien against the Debtor totaling $452,070.57 and requesting that Plains withhold payment to the Debtor under Chapter 67 of the Texas Property Code. Following these letters, Plains on Aug. 17, 2024, filed a Complaint for Interpleader. Plains informed the Court in its complaint that it has held in suspense certain funds in the amount of $2,506,506.81 which may be subject to these liens. Plains said it was in doubt regarding who should receive the Withheld Funds and pursuant to a stipulation and court order, interplead the funds into the Registry of the Court. On Sept. 6, 2024, the Debtor answered the complaint and crossclaimed against Force and Axis with four causes of actions: (1) Turnover of the Withheld Funds Under 11 U.S.C. Sec. 543, (2) Turnover of the Withheld Funds Under 11 U.S.C. Sec. 542, (3) Axis and Force Willfully Violated the Automatic Stay, and (4) Damages for Willful Violation of the Automatic Stay. Axis and Force subsequently, filed answers to both the Complaint and Crossclaim. On Nov. 11, 2024, Axis and Force both filed Notices of Perfection, Continuation, or Maintenance of Lien Pursuant to 11 U.S.C. 546(b). In December of 2024, Axis and Force filed secured proofs of claims for the work they performed in connection with approximately 30 leased wells. The Court issued an order on Dec. 31, 2024, where it held that based on the plain language of Chapters 56 and 67, the legislative history of Chapter 67, the caselaw regarding the enforcement of Chapter 56 liens, and the differences between Texas and Oklahoma law, Chapter 56 lien claimants are not interest owners entitled to the protections of Chapter 67 under the facts presented.. Therefore, the Court granted the Debtor's Cross-Motion for Partial Summary Judgment and denied Axis and Force's Motion for Summary Judgment. On Jan. 13, 2025, Axis and Force filed a Motion for Leave to Appeal Interlocutory Order, a Notice of Appeal, and a Motion to Stay Pending Appeal. The appeal has been assigned to United States District Judge Andrew S Hanen and docketed at 25-cv-0206. The Motion for Leave to Appeal remains pending. The Debtor filed its objection to Axis and Force's Motion to Stay Pending Appeal on Feb. 3, 2025, and Axis and Force filed their reply on Feb. 6, 2025. The Court conducted an evidentiary hearing on Feb. 12, 2025, on the Motion to Stay Pending Appeal. Courts apply the following four factors: (1) Whether the movant has made a showing of likelihood of success on the merits; (2) Whether the movant has made a showing of irreparable injury if the stay is not granted; (3) Whether the granting of the stay would substantially harm the other parties; and (4) Whether the granting of the stay would serve the public interest. The Court finds Axis and Force have not shown by a preponderance of the evidence that a stay should be granted. None of the factors favor Axis and Force. According to the Court, Axis and Force have not made a showing of likelihood of success on the merits, nor have they made a showing of irreparable injury if the stay is not granted. The stay would harm the debtor, and Axis and Force have not shown how granting the stay would serve the public interest. Therefore, the Court denies the Motion for Stay Pending Appeal. Judge Perez says preventing the Debtor from receiving receivables from Plains is only harming the Debtor further. Those receivables would provide the Debtor with the ability to significantly increase its cash flow and raise the odds that the Debtor successfully completes its Chapter 11. Granting the stay would harm the Debtor because it would not be able to pursue its crossclaims for the release of the withheld funds. A copy of the Court's decision is available at https://urlcurt.com/u?l=a0RPNh from PacerMonitor.com. About Barrow Shaver Resources Company Barrow Shaver Resources Company, LLC is a privately held, independent oil and gas exploration and acquisition company based in Tyler, Texas. Barrow Shaver is engaged in prospect generation, producing properties acquisition, lease acquisition, assembly and marketing of prospects for the exploration and development of oil and natural gas in the prolific producing trends of the East Texas and West Texas Basins. Barrow Shaver Resources Company sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-33353) on Aug. 19, 2024. In the petition signed by James Katchadurian, chief restructuring officer, the Debtor disclosed up to $100 million in both assets and liabilities. Judge Alfredo R. Perez oversees the case. The Debtor tapped Jones Walker LLP as counsel, CR3 Partners, LLC as financial advisor, and Kroll Restructuring Administration, LLC as claims, noticing, and solicitation agent. BIOSIG TECHNOLOGIES: Awaits Nasdaq OK on Equity Rule Compliance --------------------------------------------------------------- On October 18, 2024, BioSig Technologies, Inc. was notified by The Nasdaq Stock Market LLC that the Nasdaq Listing and Hearing Review Council had granted the Company an exception through March 7, 2025, to evidence compliance with Nasdaq Listing Rule 5550(b), namely either the $35 million in market value of listed securities requirement or the alternative requirement of $2.5 million in stockholders' equity for continued listing on The Nasdaq Capital Market. The Company previously sold an aggregate of 5,172,321 shares for an aggregate consideration of $4,847,497 from January 17, 2025 until March 5, 2025, through the Company's At the Market Offering Agreement with H.C. Wainwright & Co., LLC and a Securities Purchase Agreement with certain accredited investors. The Company also entered into an Equity Subscription Agreement with Lind Global Fund III, LP, pursuant to which the Company has the right, but not the obligation, to sell to the Investor from time to time up to $5.0 million of the Company's common stock, $0.001 par value per share, during the next 36 months. As a result of the above-referenced transactions, the Company believes it has stockholders' equity of at least $2.5 million as of March 8, 2025, the Company disclosed in a Form 8-K filing with the U.S. Securities and Exchange Commission. The Company awaits Nasdaq's formal confirmation that it has evidenced compliance with the Equity Rule. Furthermore, if deemed compliant, Nasdaq will continue to monitor the Company to ensure its ongoing compliance with the Equity Rule and, if at the time of its next periodic report the Company does not evidence compliance with the Equity Rule, the Company may be subject to delisting from Nasdaq. About BioSig Technologies Westport, Conn.-based BioSig Technologies, Inc. was initially incorporated on February 24, 2009, under the laws of the State of Nevada and subsequently re-incorporated in the state of Delaware in 2011. The Company is principally devoted to improving the standard of care in electrophysiology with its PURE EP System's enhanced signal acquisition, digital signal processing, and analysis during ablation of cardiac arrhythmias. As of September 30, 2024, the Company had $1.4 million in total assets, $1.7 million in total liabilities, $105,000 in Commitments and contingencies, and $388,000 in total deficit. As of September 30, 2024, the Company had cash of $0.6 million and working capital deficit of $0.9 million. During the nine months ended September 30, 2024, the Company used net cash in operating activities of $4.3 million. These balances create a liquidity concern, which in turn raises substantial doubt about the Company's ability to continue as a going concern. BLACKBERRY LIMITED: M. Dickman Steps Down as Gov't Affairs Officer ------------------------------------------------------------------ On February 28, 2025, Marjorie Dickman stepped down from her position as Chief Government Affairs and Public Policy Officer of BlackBerry Limited to pursue corporate board and other opportunities, the Company disclosed in a Form 8-K filing with the U.S. Securities and Exchange Commission. Ms. Dickman will remain with the Company as Special Advisor to the Chief Executive Officer until May 31, 2025. Ms. Dickman's departure is not the result of any disagreement with the Company on matters related to its strategy, operations, policies or practices. In connection with her departure, the Company entered into a separation agreement with Ms. Dickman on February 27, 2025, under which it agreed to provide certain benefits, including: (i) a lump sum payment of $900,000, less applicable tax withholdings, (ii) continuation of health benefits and payment of monthly insurance premiums for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for an aggregate period of 24 months, (iii) continued vesting of Ms. Dickman's outstanding restricted share units for a period of 24 months, and (iv) a lump sum payment of Ms. Dickman's earned annual bonus for the Company's fiscal year 2025, which ended on February 28, 2025. Ms. Dickman will receive no additional compensation for her service as Special Advisor. The Separation Agreement includes a mutual general release of claims. About BlackBerry Headquartered in Waterloo, Canada, BlackBerry Limited provides intelligent security software solutions. At May 31, 2024, BlackBerry had $1.3 billion in total assets, $581 million in total liabilities, and $742 million in total equity. * * * Egan-Jones Ratings Company on December 18, 2024, maintained its 'CCC' foreign currency and local currency senior unsecured ratings on debt issued by BlackBerry Limited. BLUE DUCK: JetTexas Loses Bid to Bifurcate Ownership Issues ----------------------------------------------------------- Judge Robert L. Jones of the United States Bankruptcy Court for the Northern District of Texas denied the plaintiffs' motion to bifurcate ownership claims in the case captioned as JetTexas Oil, LLC and Garrett Johnson, Plaintiffs, v. Stewart Hoge, James Kondziela, Hoge & Gameros, LLP, Blue Duck Energy, Ltd., Indian Territory Holdings, LLC, Seth Wadley, Wadley Family Investments, LLC, Purple Dog Investments, LLC, Blue Duck GP, LLC, and Stewart B. Hoge, PC, Defendants, Adversary No. 24-02006 (Bankr. N.D. Tex.). The Court has jurisdiction of the motion under 28 U.S.C. Sec. 1334(b). This adversary proceeding was initiated by the Debtor's removal of the pending state court action under which JetTexas had sued Debtor and the other named defendants in the District Court of the 192nd Judicial District of Dallas County, Texas. JetTexas Oil is an LLC owned and controlled by Garrett Johnson. Upon the removal to the Court, JetTexas filed its statement that it did not consent to the Court entering final orders or conducting a jury trial. On Oct. 31, 2024, the Court, after hearing on motion of JetTexas, ordered the appointment of a chapter 11 trustee in the bankruptcy case. Although JetTexas made a jury determine the "ownership issues" concerning the Debtor. It argues that the Court should bifurcate the "ownership issues" and decide those prior to taking up the balance of the causes of action. JetTexas asserts that it is at least a 50 percent owner of the Debtor, if not sole owner. In support of its motion, JetTexas argues that, regardless of consent, the ownership issue is a core matter; thus no jury right exists and the Court has authority to hear and decide it. JetTexas asks for a "bifurcation" of the causes under Federal Rule of Civil Procedure 42(b), which allows parties to move for a separate trial on specific issues. When determining if the bifurcation of claims under Rule 42(b) is appropriate, courts consider whether bifurcation will promote judicial economy and whether the parties will suffer prejudice if the claims are separated. The Court concludes that bifurcation is not appropriate in this case. JetTexas designates the ownership issues as: (1) the fraud claim against Stewart Hoge and Indian Territory Holdings, LLC, and (2) its request for declaratory judgment that Seth Wadley, Wadley Family Investments, LLC, and Purple Dog Investments, LLC do not own any of JetTexas's interests in the Blue Duck entities. The Court finds no compelling reason to bifurcate the two designated issues highlighted by JetTexas. The majority of the allegations should be considered at the same time due to the overlap in evidence and subject matter. According to the Court, bifurcation of these claims does not promote judicial economy or serve the interests of the bankruptcy case. Two trials will increase costs and further delay a final resolution of the many issues raised by this action. A copy of the Court's decision is available at https://urlcurt.com/u?l=vrC4wR from PacerMonitor.com. About Blue Duck Energy, Ltd. Blue Duck Energy Ltd. sought relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-20224) on August 14, 2024. In the petition filed by James Kondziela, as manager of the Debtor's general partner, it listed estimated assets and liabilities between $10 million and $50 million each. The Debtor is represented by Joshua N. Eppich, Esq. at BONDS ELLIS EPPICH SCHAFER JONES LLP. BLUM HOLDINGS: $33.1M Income in 2024, 'Going Concern' Doubt Remains ------------------------------------------------------------------- Blum Holdings, Inc., submitted its annual report on Form 10-K to the Securities and Exchange Commission, revealing net income of $33.10 million on revenues of $12.99 million for the year ending Dec. 31, 2024. This marks a significant improvement compared to the prior year, when the Company incurred a net loss of $14.13 million on revenues of $7.76 million. As of Dec. 31, 2024, the Company had $24.82 million in total assets, $29.56 million in total liabilities, $2.01 million in mezzanine equity, and a total stockholders' deficit of $6.75 million. As of Dec. 31, 2024, the Company had $1.04 million of cash and cash equivalents. Costa Mesa, California-based GuzmanGray, the Company's auditor since 2024, issued a "going concern" qualification in its report dated March 13, 2025. The report cited that the Company has a significant working capital deficiency and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. As of Dec. 31, 2024, the Company reported an accumulated deficit of $421.08 million. The Company has faced considerable losses in previous periods. The Company noted that any future losses could lead to a decrease in the market price of its Common Stock or significantly impact its financial position, its ability to meet its debt obligations as they become due, and its cash flow. "We will likely need additional capital to sustain our operations and will likely need to seek further financing, which we may not be able to obtain on acceptable terms, or at all. If we fail to raise additional capital, as needed, our ability to implement our business model and strategy could be compromised," the Company mentioned in the report. "We have limited capital resources and operations. To date, our operations have been funded primarily from the proceeds of debt and equity financings. We expect to require substantial capital in the near future to fund our future operations. We may not be able to obtain additional financing on terms acceptable to us, or at all. In particular, because marijuana is illegal under federal law, we may have difficulty attracting investors. "Even if we obtain financing for our near-term operations, we expect that we will require additional capital thereafter. Our capital needs will depend on numerous factors including: (i) our profitability; (ii) the release of competitive products by our competition; (iii) the level of our investment in research and development; and (iv) the amount of our capital expenditures, including acquisitions. We cannot provide assurance that we will be able to obtain capital in the future to meet our needs," the Company added. The Company acknowledges that it cannot guarantee the availability of additional financing, or that if such financing is obtained, it will be on terms that are favorable. Should the Company be unable to secure necessary capital, its business, financial health, and operational outcomes could suffer significant negative impacts, potentially leading to a reduction or cessation of operations. The complete text of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1996210/000143774925007468/blmh20241231_10k.htm About Blum Holdings Headquartered in Downey, California, Blum -- www.blumholdings.com -- is a publicly listed parent company with operations across California, dedicated to delivering top-tier medical and recreational cannabis products and associated services. The Company is home to Korova, a brand of high potency products across multiple product categories, currently available in California. The Company formerly operated Blum Santa Ana, a premier cannabis dispensary in Orange County, California, which was sold in June 2024. The Company previously owned dispensaries in California which operated as Blum in Oakland and Blum in San Leandro, which were sold in November 2024. In May 2024, the Company began operating the retail store, Cookies Sacramento, and providing consulting services for two additional dispensaries located in Northern California. The Company is organized into two reportable segments: (i) Cannabis Retail - Includes cannabis-focused retail, both physical stores and non-store front delivery; and (ii) Cannabis Distribution – Includes cannabis distribution operations. BOAGGIO'S BREAD: Nicole Nigrelli Named Subchapter V Trustee ----------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed Nicole Nigrelli, Esq., at Ciardi, Ciardi & Astin as Subchapter V trustee for Boaggio's Bread Inc. Ms. Nigrelli will be paid an hourly fee of $450 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Nigrelli declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Nicole M. Nigrelli, Esq. Ciardi, Ciardi & Astin 1905 Spruce Street Philadelphia, PA 19103 Phone: (215) 557-3550 ext. 115 Email: nnigrelli@ciardilaw.com About Boaggio's Bread Boaggio's Bread Inc. filed Chapter 11 petition (Bankr. D.N.J. Case No. 25-11845) on Feb. 24, 2025, listing under $1 million in both assets and liabilities. E. Richard Dressel, Esq., at Lex Nova Law, LLC serves as the Debtor's counsel. BREAD FINANCIAL: Fitch Assigns B Rating on $400MM Subordinated Debt ------------------------------------------------------------------- Fitch Ratings has assigned Bread Financial Holdings' (BFH; BB-/Positive) $400 million subordinated debt a rating of 'B'. The debt will pay a fixed rate for five years and reset to a new fixed rate against the then-current five-year U.S. treasury security, plus a spread that was determined at issuance, for the next five years. BFH plans to use the proceeds to establish its Tier 2 capital base at the parent and subsidiary, Comenity Capital Bank, and for general purposes, which may include share repurchases. Key Rating Drivers BFH's subordinated debentures are rated two notches below its 'bb-' Viability Rating (VR), which conforms with baseline notching for subordinated debt, according to Fitch's "Bank Rating Criteria." The rating reflects two notches for loss severity and none for non-performance risk. In November 2024, Fitch revised Bread's Rating Outlook to Positive from Stable and affirmed its Issuer Default Rating (IDR) at 'BB-' and VR at 'bb-'. Please see "Fitch Revises Bread Financial Holdings' Outlook to Positive; Affirms IDR at 'BB-'". Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade of BFH's Viability Rating would lead to a downgrade of the expected subordinated debt rating. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upgrade of BFH's Viability Rating would lead to an upgrade of the expected subordinated debt rating. Date of Relevant Committee February 20, 2025 ESG Considerations Bread Financial Holdings, Inc. has an ESG Relevance Score of '4' for Customer Welfare - Fair Messaging, Privacy & Data Security due to for Customer Welfare - Fair Messaging, Privacy, and Data Security due to its exposure to compliance risks including fair lending practices, debt collection practices and consumer data protection, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Bread Financial Holdings, Inc. has an ESG Relevance Score of '4' for Financial Transparency. Due to the company's non-BHC status for regulatory purposes, BFH has exposure to quality of financial reporting and auditing processes, 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 Prior ----------- ------ ----- Bread Financial Holdings, Inc. Subordinated LT B New Rating B(EXP) C-BOND SYSTEMS: Funding for Acquisition of Gummy Cancelled ---------------------------------------------------------- On March 4, 2025, C-Bond Systems, Inc., received notice from its potential funding source that it would not be funding the contemplated acquisition of the assets of Gummy USA, LLC, Creative Manufacturing, LLC, and SureDose, LLC, the Company disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission. On February 25, 2025, the Board of Directors of the Company voted to terminate the non-binding term sheet to acquire the assets of Gummy because it determined that it could not complete sufficient due diligence of Gummy. The Company is using best efforts to file its annual report on Form 10-K for the year ended December 31, 2024 on a timely basis but cannot assure a timely filing due to a lack of capital. About C-Bond Systems Inc. San Antonio, Texas-based C-Bond Systems, Inc. is a nanotechnology company and the sole owner and developer of the patented C-Bond technology. The Company focuses on the implementation of proprietary nanotechnology applications and processes to enhance the strength, functionality, and sustainability of brittle material systems. Boca Raton, Fla.-based Salberg & Company, P.A., the Company's auditor since 2017, issued a "going concern" qualification in its report dated April 1, 2024, noting that the Company had cash used in operations of $1,602,218 in 2023, and a working capital deficit, shareholders' deficit, and accumulated deficit of $1,351,954, $4,324,535, and $60,851,714, respectively, as of December 31, 2023. These matters raise substantial doubt about the Company's ability to continue as a going concern. As of September 30, 2024, C-Bond Systems had $1,418,414 in total assets, $4,255,200 in total liabilities, $2,032,224 in commitments and contingencies, and $4,869,010 in total stockholders' deficit. CALEXICO HOUSING: Moody's Cuts Rating on 1991 Revenue Bonds to B1 ----------------------------------------------------------------- Moody's Ratings has downgraded to B1 from Ba3 the rating on Calexico Housing Authority, CA, Mortgage Revenue Bonds (Calexico Gardens Project) Series 1991 (the "Bonds"). RATINGS RATIONALE The rating action is based on a projected shortfall in funds available to pay debt service in June of 2028. Calexico Housing Authority, CA has placed money in the deal in the past and should there be a new injection of cash into the deal that fully covers the shortfall there could be a very significant upgrade in the rating. Should no funds be placed into the deal, the rating may continue to decline. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING -- An injection of eligible funds which would eliminate any potential debt service shortfall FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING -- No additional eligible funds added to the deal LEGAL SECURITY The principal of, premium, if any, and interest on the Bonds are payable solely from the payments on the GNMA Mortgage Backed Security and from any other moneys constituting a part of the Trust Estate under the Indenture. The principal methodology used in this rating was US Standalone Housing Bonds Secured by Credit-Enhanced Mortgages published in October 2024. CARDIFF LEXINGTON: Swings to $3.30 Million Net Loss in 2024 ----------------------------------------------------------- Cardiff Lexington Corporation filed its annual report on Form 10-K with the Securities and Exchange Commission, disclosing a net loss of $3.30 million on $8.27 million in revenue for the year ending Dec. 31, 2024, compared to a net income of $3.03 million on $11.85 million in revenue for the year ending Dec. 31, 2023. As of Dec. 31, 2024, the Company had $23.93 million in total assets, $16.32 million in total liabilities, $4.92 million in total mezzanine equity, and $2.69 million in total stockholders' equity. Columbus, Ohio-based GBQ Partners, LLC, the Company's auditor since 2024, issued a "going concern" qualification in its report dated March 14, 2025, citing that the Company has experienced recurring losses from operations and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. As of Dec. 31, 2024, the Company had $1,188,185 in cash. To date, the Company has financed its operations primarily through revenue generated from operations, sales of securities, advances from stockholders and third-parties and related party debt. "We believe, based on our operating plan, that current working capital and current and expected additional financing should be sufficient to fund operations and satisfy our obligations as they come due for at least one year from the financial statement issuance date. However, additional funds from new financing and/or future equity raises are required for continued operations and to execute our business plan and our strategy of acquiring additional businesses. "We intend to raise capital for additional acquisitions primarily through equity and debt financings. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. There is no guarantee that we will be able to acquire additional businesses under the terms outlined above," the Company mentioned in the report. The complete text of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/811222/000168316825001610/cardiff_i10k-123124.htm About Cardiff Lexington Headquartered in Las Vegas, NV, Cardiff Lexington Corporation is an acquisition holding company focused on locating undervalued and undercapitalized companies, primarily in the healthcare industry, and providing them capitalization and leadership to maximize the value and potential of their private enterprises while also providing diversification and risk mitigation for its stockholders. Specifically, the Company has and will continue to look at a diverse variety of acquisitions in the healthcare sector in terms of growth stages and capital structures and it intends to focus its portfolio of subsidiaries approximately as follows: 80% will be targeted to established profitable niche small to mid-sized healthcare companies and 20% will be targeted to second stage startups in healthcare and related financial services (emerging businesses with a strong organic growth plan that is materially cash generative). CARRIAGE SERVICES: S&P Alters Outlook to Positive, Affirms 'B' ICR ------------------------------------------------------------------ S&P Global Ratings revised its outlook on Houston-based death care company Carriage Services Inc. (CSV) to positive. S&P also affirmed its 'B' long-term issuer credit rating and its 'B' senior unsecured issue-level rating; the recovery rating on this debt remains '4'. The positive outlook reflects improving credit metrics and the potential for a higher rating in the next 12 months as the company demonstrates its willingness to maintain adjusted debt to EBITDA comfortably at 4x-5x. S&P said, "We now expect S&P Global Ratings-adjusted leverage of 4.5x-4.75x in 2025 and 2026 due to margin improvements. S&P Global Ratings-adjusted leverage came in slightly below our expectations at 4.8x as of year-end 2024 primarily from lower total debt as the company paid down $42 million of amounts outstanding under its RCF. "S&P Global Ratings-adjusted EBITDA margins saw some pressure in 2024 stemming from costs related to severance and external fees that we do not expect will recur in 2025. These costs were partially offset by margin improvements in its cemetery segment as its investments in property enhancements have led to higher-value products and a build-out of its preneed backlog. "In 2025, we expect CSV to maintain stable debt levels and roll off one-time costs, boosting EBITDA margins to 30%-31%. We expect margin expansion will improve leverage to around 4.6x in 2025 compared to 2024. "Despite our expectations for improving credit metrics, there remains some uncertainty in the company's long-term financial policy." The company has appointed a new CFO and has mentioned it is interested mergers and acquisitions (M&A) in 2025. These items present some uncertainty related to long-term leverage, and the company has historically shown willingness to increase leverage above 5x for M&A and other investments. However, over the last year, CSV has prioritized deleveraging, focusing on deploying capex strategically and focusing on organic growth. The company also has a stated long-term leverage target of 3.5x-4x (historically S&P Global Ratings-adjusted leverage is about 0.5x above company-calculated leverage), and management expects to end the year within this range. While this would indicate a more-conservative financial policy, the company has yet to prove a track record of maintaining leverage in its long-term range while also pursuing an M&A growth strategy. Additionally, a significant increase in preneed sales boosted CSV's recent financial results, which is a newer source of revenue that could slow. S&P is also uncertain if the company would pull back on growth investments if operating results underperformed expectations. S&P said, "We forecast the company's leverage to remain mid-4x; however, a relatively large debt-funded transaction could lift leverage above 5x. We believe CSV is incentivized to pursue M&A given its industry is characterized by a low-single-digit percent organic growth rate. These transactions often pressure credit metrics. This risk further supports our need for a proven track record of a more-conservative financial policy before upgrading CSV. "We believe CSV's focus on preneed sales and normal pricing increases will support steady near-term growth amid a normalizing death rate. Funeral volumes continued to be a headwind for CSV through 2024 with funeral contract volumes down 4.9% over the prior year. Much of the headwind is related to the pull-forward effect of COVID-19 on the U.S. death rate and a delayed flu season in the fourth quarter of 2024, which may have shifted some volumes into the first quarter of 2025. However, the company has offset funeral volume slowness with pricing and growth in preneed cemetery sales through resilient demand and marketing efforts. "While we think funeral volumes are still reverting to the long-term trend, we expect demand for preneed cemetery to remain resilient and strategic pricing to mostly offset inflationary pressures. Longer term, population growth and aging will support revenue growth. Additionally, the continued trend toward cremation is a potential risk for the industry, that said CSV has enhanced its offerings and utilized bundling to offset some of the impact. We believe this trend will continue at a gradual pace and should be manageable. "Our positive outlook reflects our expectation for S&P Global Ratings-adjusted debt to EBITDA of mid-4x in 2025 and 2026, which, if sustained, is commensurate with a higher rating. We expect low-single-digit percent organic growth and modest EBITDA margin expansion in 2025 as the company rolls over certain one-time costs incurred the year prior." S&P could revise the outlook on CSV to stable if it expects S&P Global Ratings-adjusted debt to EBITDA to be sustained at or above 5.0x. The scenario could result from: -- Sustained operating challenges from the normalizing death rate or increased competition, limiting its ability to grow in the preneed cemetery space; or -- CSV prioritizing growth through acquisitions and investments, leading S&P has a more-aggressive view of its financial policy. S&P said, "We could raise the rating on CSV over the next 12-months if the company sustains S&P Global Ratings-adjusted debt to EBITDA in line with our base case, maintaining leverage well below 5x. In this scenario, we would expect the company to establish a track record of maintaining leverage at this lower level while also pursuing its growth strategy." CELESTIAL PRODUCTS: Gets Final OK to Use Cash Collateral -------------------------------------------------------- Celestial Products USA, LLC received final approval from the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, to use cash collateral to fund its operations. The final order authorized the company to use cash collateral to pay ordinary and necessary business expenses as set forth in its budget, with a 10% variance allowed. As protection for the use of their cash collateral, the lenders were granted replacement liens on the company's post-petition assets, excluding Chapter 5 causes of action. Professional fees require separate court approval. The order is effective immediately, and the court retains jurisdiction over enforcement and interpretation. About Celestial Products USA Celestial Products USA, LLC is an online retail business based in Fort Worth, Texas. Celestial Products USA filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Texas Case No. 25-40153) on January 16, 2025, listing up to $50,000 in assets and between $1 million and $10 million in liabilities. Areya Holder Aurzada, Esq., at Holder Law serves as Subchapter V trustee. Judge Mark X. Mullin handles the case. The Debtor is represented by: Robert Lane, Esq. The Lane Law Firm, PLLC 6200 Savoy Dr Ste 1150 Houston, TX 77036-3369 Phone: 713-595-8200 Fax: 713-595-8201 Email: chip.lane@lanelaw.com CHAR GRILL: Gets OK to Use Cash Collateral to Purchase Equipment ---------------------------------------------------------------- Char Grill Benson, LLC got the green light from the U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, to use cash collateral to purchase a new gas charbroiler essential for its operations. The cost of replacing the charbroiler is $13,084.56, and purchasing it is necessary to avoid irreparable harm to the business. As protection for the use of their cash collateral, secured creditors were granted a lien on the company's revenue and other assets acquired post-petition to the same extent and priority as they had prior to the company's bankruptcy filing. The secured creditors are Northeast Bank, the U.S. Small Business Administration, BayFirst National Bank, Kapitus, LLC, and BoomFunded. About Char Grill Benson Char Grill Benson, LLC is a local fast-food chain in Benson, N.C., serving charcoal-grilled burgers, fries and shakes. Char Grill Benson filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D.N.C. Case No. 25-00459) on February 7, 2025, listing up to $50,000 in assets and between $1 million and $10 million in liabilities. Jennifer K. Bennington serves as Subchapter V trustee. Judge David M. Warren presides over the case. Philip Sasser, Esq., at Sasser Law Firm is the Debtor's bankruptcy counsel. BayFirst National Bank, as secured creditor, is represented by: Phillip M. Fajgenbaum, Esq. Parker Poe Adams & Bernstein, LLP 620 South Tryon Street, Suite 800 Charlotte, NC 28202 Telephone: (704) 372-9000 phillipfajgenbaum@parkerpoe.com COMTECH TELECOMMUNICATIONS: Expands Net Loss to $48.7M in Q2 ------------------------------------------------------------ Comtech Telecommunications Corp. filed its quarterly report on Form 10-Q, revealing a net loss of $48.74 million on net sales of $126.57 million for the quarter ending Jan. 31, 2025. This contrasts with a net loss of $10.56 million on $134.23 million of net sales for the quarter ending Jan. 31, 2024. For the six months ending Jan. 31, 2025, the Company posted a net loss of $197.15 million on net sales of $242.37 million, compared to a net loss of $12 million on $286.14 million of net sales for the same period in 2024. As of Jan. 31, 2025, the Company had $770.56 million in total assets, $519.54 million in total liabilities, $122.32 million in convertible preferred stock, and $128.71 million in total stockholders' equity. The Company said that its ability to meet its current obligations as they come due may be influenced by its capacity to remain in compliance with the financial covenants stipulated in the Credit Facility and Subordinated Credit Facility, or to secure future waivers or amendments from the lenders if compliance is not maintained. While the Company believes it will be able to obtain such waivers or amendments when necessary, it cannot guarantee that these will be obtained, nor that the terms will be favorable. If the Company is unable to secure these waivers or amendments, the lenders may declare an event of default, leading to the immediate acceleration and repayment of all outstanding principal, interest, and fees under the Credit Facility and Subordinated Credit Facility. "Absent our ability to repay the forgoing amounts upon the declaration of an event of default, the lenders may exercise their rights and remedies under the Credit Facility and Subordinated Credit Facility, which may include, among others, a seizure of substantially all of our assets and/or the liquidation of our operations. If an event of default occurs that allows the lenders to exercise these rights and remedies over the next year beyond the issuance date, we will be unable to continue as a going concern," the Company stated in the report," the Company mentioned in the report. The complete text of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/23197/000002319725000039/cmtl-20250131.htm About Comtech Telecommunications Corp. Headquartered in Chandler, Arizona, Comtech Telecommunications Corp. -- www.comtech.com -- is a provider of satellite and space communications technologies; terrestrial and wireless network solutions; Next Generation 911 ("NG911") and emergency services; and cloud native capabilities to commercial and government customers around the world. Through its culture of innovation and employee empowerment, Comtech leverages its global presence and decades of technology leadership and experience to create some of the world's most innovative solutions for mission-critical communications. Jericho, New York-based Deloitte & Touche LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated Oct. 30, 2024. The report highlighted the Company's ongoing losses and negative cash flow from operations, along with doubts about its capacity to meet the financial covenants outlined in its credit agreement. These issues cast significant uncertainty on the Company's ability to remain a viable company. The Company's cash and cash equivalents were $32.4 million and $19.0 million at July 31, 2024 and 2023, respectively. Over the last three fiscal years, the Company experienced operating losses of $79.9 million, $14.7 million, and $33.8 million in fiscal 2024, 2023, and 2022, respectively. Additionally, during these years, net cash used in operating activities amounted to $54.5 million and $4.4 million in fiscal 2024 and 2023, respectively, while net cash from operating activities was $2.0 million in fiscal 2022. The Company's ability to fulfill its projected liquidity needs over the upcoming year will primarily depend on its capacity to generate positive cash flows from operations, optimize its borrowing limit under the Credit Facility, and/or secure alternative external capital sources. "While we believe we will be able to generate sufficient positive cash inflows, maximize our borrowing capacity and secure outside capital, there can be no assurance our plans will be successfully implemented and, as such, we may be unable to continue as a going concern over the next year beyond the issuance date," the Company mentioned in its Annual Report for the year ended July 31, 2024. CUT & FILL: Gets Extension to Access Cash Collateral ---------------------------------------------------- Cut & Fill, LLC received interim approval from the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division to use cash collateral. The seventh interim order authorized the company to use cash collateral from March 5 until it is terminated as a result of the dismissal or conversion of the company's Chapter 11 case, or the entry of an order directing the cessation of the use of cash collateral. Cut & Fill needs to use cash collateral to pay the expenses set forth in its budget, which shows total projected expenses of $61,297.22 for March. Pension Fund of Cement Masons' Union Local No. 502 was granted replacement liens on all post-petition property of the company, including cash collateral, with the same priority and validity as its pre-bankruptcy liens. As additional protection, CM Funds will receive payment of $1,000 by March 31. Meanwhile, the court ordered Cut & Fill to pay the contributions and dues attributable to work performed post-petition to CM Funds and the Laborers' Pension & Welfare Fund. The next hearing is scheduled for April 2. About Cut & Fill The Cut & Fill, LLC has operated a concrete business since 2019. Rachel McCuen, who serves as the company's managing and sole member, supervises the company's day-to-day operations in Volvo, Ill. Cut & Fill filed Chapter 11 petition (Bankr. N.D. Ill. Case No. 24-13457) on Sept. 12, 2024, listing $183,243 in total assets and $1,492,053 in total liabilities. Rachel McCuen, president of Cut & Fill, signed the petition. Judge Timothy A. Barnes oversees the case. The Debtor is represented by David R. Herzog, Esq., at the Law Offices of David R Herzog. CYCLERION THERAPEUTICS: Ernst & Young Raises Going Concern Doubt ---------------------------------------------------------------- Cyclerion Therapeutics, Inc. disclosed in a Form 10-K Report filed with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2024, that its auditor expressed an opinion that there is substantial doubt about the Company's ability to continue as a going concern. Boston, Massachusetts-based Ernst & Young LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 4, 2025, citing that the Company has suffered recurring losses from operations, has limited financial resources, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Cyclerion said, "We evaluated whether there are conditions and events, considered in the aggregate, which raise substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management's plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of our plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of management's plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. In performing our analysis, management excluded certain elements of our operating plan that cannot be considered probable. Under ASC 205-40, the future receipt of potential funding from future partnerships, equity or debt issuances, and the potential milestones from the Akebia agreement cannot be considered probable at this time because these plans are not entirely within our control and/or have not been approved by the Board of Directors as of the date of these consolidated financial statements. "We have incurred recurring losses since our inception, including a net loss of $3.1 million for the year ended December 31, 2024. In addition, as of December 31, 2024, we had an accumulated deficit of $267.5 million. We expect that our cash and cash equivalents as of December 31, 2024, will be sufficient to fund operations through mid-2025, however we will need to obtain additional funding to sustain operations as we expect to continue to generate operating losses for the foreseeable future. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern." A full-text copy of the Company's Form 10-K is available at: https://tinyurl.com/4mfrc34z About Cyclerion Therapeutics, Inc. Cyclerion Therapeutics, Inc. is a biopharmaceutical company focused on identifying, developing, and delivering promising therapies for central nervous system (CNS) diseases. As of December 31, 2024, the Company had $9.6 million in total assets, $0.7 million in total liabilities, and total stockholders' equity of $8.9 million. CYPRESS COVE: Fitch Alters Outlook on 'BB+' IDR to Positive ----------------------------------------------------------- Fitch Ratings has affirmed Cypress Cove at HealthPark Florida, Inc.'s (Cypress Cove) Issuer Default Rating (IDR) at 'BB+' and the revenue rating on the following Lee County Industrial Development Authority (FL) bond issued on behalf of Cypress Cove at 'BB+': - $43,850,000, (Cypress Cove at HealthPark Florida, Inc. Project) health care facilities revenue bonds series 2022A; - $7,200,000 (Cypress Cove at HealthPark Florida, Inc. Project) health care facilities revenue bonds series 2022B-1; - $16,800,000 (Cypress Cove at HealthPark Florida, Inc. Project) health care facilities revenue bonds series 2022B-2. The Rating Outlook has been revised to Positive from Stable. Entity/Debt Rating Prior ----------- ------ ----- Cypress Cove at Health Park (FL) LT IDR BB+ Affirmed BB+ Cypress Cove at Health Park (FL) /General Revenues/1 LT LT BB+ Affirmed BB+ The 'BB+' rating reflects Cypress Cove's elevated leverage position and thin operating cost flexibility, balanced by a steady market position as a single-site life plan community (LPC) in the generally favorable service area of Fort Myers, FL and strong net entrance fee receipts, which provide for good levels of debt service coverage for the rating level. The Positive Outlook reflects improving capital related metrics and stabilization of the Oaks, Cypress Cove's 48-unit independent living (IL) villa and hybrid home expansion project. Cypress Cove has paid down the $24 million in short-term debt that supported the project after successful fill up in 2024. The Oaks includes a new dining venue and clubhouse with a pub, fitness center, and pool and is within walking distance of Cypress Cove's current campus. Cypress Cove management reports no damages from Hurricane Milton and that it has recovered from the effects of Hurricane Ian, which occurred in the fall of 2022 and caused mostly water damage that was largely concentrated on a few buildings on Cypress Cove's current campus and did not affect the Oaks site. Cypress Cove expects to receive an additional $13 million in funding from the Federal Emergency Management Agency (FEMA) in FY25 for reconstruction costs from Hurricane Ian. Projects have also started with FEMA for reimbursement of interest paid on two lines of credit associated with Hurricane Ian, underground campus wiring and administrative overhead costs for management and consultant costs. Additionally, Cypress Cove is working with FEMA on for mitigation projects on the campus to protect the campus from future storm damage. KEY RATING DRIVERS Revenue Defensibility - bbb Single-Site LPC with Good Market Position The midrange revenue defensibility reflects Cypress Cove's market position as a single-site LPC operating in a relatively competitive service area, with competition from full continuum of care facilities, as well as from providers that offer select continuum of care services, such as standalone assisted living (AL) facilities. Offsetting the competitive service area are Cypress Cove's good demand profile, a steady flow of Medicare rehabilitation referrals provided by Lee Memorial Health System (LMHS), a demographically solid service area with very good population growth, and wealth indicators that are consistent with state and national averages. IL occupancy is consistent with the midrange revenue defensibility assessment as well, with five-year average IL occupancy at 89%. Overall, pricing and rates are in line with area competitors. Cypress Cove's size/scale supports the midrange revenue defensibility assessment given its relationship with Lee Healthcare Recourses (LHR) provides the community resources of scale tantamount to a multi-state LPC. Operating Risk - bbb Moderating Debt Burden; Limited Capex Requirements The midrange operating risk assessment is largely due to improving capital related metrics as revenue from the Oaks begins to flow through operations. This is evidenced by revenue-only maximum annual debt service (MADS) coverage and debt to net available of 1.5x and 6.6x, respectively, in FY24. Fitch considers this level of revenue-only MADS coverage strong for a Type 'A' community. Although improved, cost management remains weaker as operating ratios are well above 105% through the five-year historical period (average of 115%) and in FY24 (107%, unaudited). Management notes a significant reduction in contract labor in FY24. The weaker operating ratios have historically been offset by Cypress Cove's net operating margin - adjusted (NOMA), which averaged about 24.6% over the last five years and was adequate at 23.1% in FY24. The NOMA, which is more consistent with a midrange operating risk assessment, is supported by steady net entrance fee receipts, reflecting the good IL demand at Cypress Cove. Fitch expects capex to moderate below depreciation given that Cypress Cove has minimal capital needs, and that capex has averaged 316.8% of depreciation over the last five fiscal years. Following completion of the Oaks project, average age of plant is healthy at 6.8 years in FY24. Financial Profile - bb Steady Cash Accumulation Through a Moderate Stress Scenario Given Cypress Cove's midrange revenue defensibility and operating risk assessments, and Fitch's forward-looking scenario analysis which is specific to Cypress Cove's asset allocation and applies an operational and entrance fee stress, Fitch expects key leverage metrics to remain consistent with the 'bb' financial profile. Debt service coverage is strong for the rating level, and days cash on hand (DCOH) remains well above 200 days throughout the stress, which is neutral to the assessment. Fitch's baseline scenario, which is a reasonable forward look of financial performance over the next five years given current economic expectations, shows accretion of Cypress Cove's balance sheet as revenue from the Oaks continues to flow through operations. The operating ratio is expected to show improvement relative to historical levels, but it remains elevated over 105% throughout the forward look. On Dec. 31, 2024 (unaudited), Cypress Cove had approximately $33.2 million of unrestricted cash and investments, equal to 232 DCOH, as calculated by Fitch. Cash-to-adjusted debt (inclusive of the debt service reserve fund) was 18.2% at 31 Dec. 2024. Total long-term debt of approximately $182.1 includes about $41.7 million for Cypress Cove's land lease with its parent Lee Healthcare Resources (LHR). The $41.7 million right of use lease represents Cypress Cove's adoption of the updated operating lease accounting standards in FY23. Fitch views the ground lease as credit neutral given the close relationship between Cypress Cove and LHR, including overlapping governance, subordination of the ground lease to MTI debt, and deferring of lease payments as necessary should Cypress Cove experience operating difficulties. Cypress Cove has resumed making lease payments to LHR that previously had been waived until the Oaks project reached stabilization. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Weakening in the financial profile such that cash-to-adjusted debt falls to below 20% and is not expected to improve; - Weaker than expected debt service coverage that falls below 1.5x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Improved financial profile post-project stabilization such that cash-to-adjusted to debt approaches 60% and MADS coverage is consistently above 2x; - Improved operating metrics such that the operating ratio sustains closer to 100%. PROFILE Cypress Cove is a type-A LPC located in Fort Myers, FL. The community consists of 422 IL units, 44 AL unit (ALU) apartments, 44 memory care apartments, and 64 skilled nursing beds. Cypress Cove offers fully-amortizing and 75% refundable entrance fee plans, as well a Type 'B' and Type 'C' contracts. A majority of residents select the Type 'A' fully-amortizing plan. Additionally, Cypress Cove does not take Medicaid in its skilled nursing unit. In FY24, Cypress Cove had total operating revenues of $57.5 million. Opened in 1999, Cypress Cove is situated on a 48-acre parcel of land that is part of 402-acre master development called HealthPark Florida, which also features the HealthPark Medical Center (a 368-bed acute care hospital), that is part of Lee Health (LH), a four-hospital public health system that is located in Lee County, FL. Cypress Cove is not part of LH, but the two organizations mutually benefit from a close working relationship. LHR is the sole corporate member of Cypress Cove. Cypress Cove is located on land owned by LHR for which it pays an annual ground lease payment, of approximately $1.5 million, which is subordinate to debt service payments. LHR is also a support organization for LH. However, LH is not owned by or formally a part of LHR or Cypress Cove. 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. DEL RIO: Gets Interim OK to Use Cash Collateral ----------------------------------------------- Del Rio Parks, LLC received interim approval from the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, to use cash collateral. The Debtor will provide adequate protection to Cantu through ongoing contractual monthly payments in the amount of $3,000 beginning in March and granting automatic post-petition replacement liens to Gilbert and Romelia Cantu in existing pre-bankruptcy collateral. The final hearing is set for April 9. The Cantus hold pre-petition security interests on the Debtor's rents used in the Debtor's operation of the Del Rio Parks, LLC in Del Rio, Texas. The Cantus are owed approximately $475,000 under a Promissory Note dated October 1, 2021 in the original principal amount of $500,000. The Note is secured by a Deed of Trust lien on real property and improvements known as 9670 U.S. Hwy. 90 W, Del Rio, TX 78840 and the rents generated from the operation of the Del Rio Park. The Debtor scheduled the real property with a value in the approximate amount of $700,000 which is pledged to the Cantus, and which adequately protects the interests of the Cantus. The Debtor made a down payment to the Cantus in the amount of $200,000 as a part of the purchase of the real property. The Debtor was current in its payment obligations to the Cantus pre-petition. The Note, however, matured on September 30, 2024. The Debtor attempted to negotiate an extension of the Note, but the Cantus objected such attempts by the Debtor. The Debtor has continued to timely pay the contractual monthly payments to the Cantus after the Note matured. About Del Rio Parks LLC Del Rio Parks, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 25-50409) on March 3, 2025. In the petition signed by Scott Kramer, president, the Debtor disclosed up to $500,000 in both assets liabilities. Judge Michael M. Parker oversees the case. William R. Davis , Jr., Esq., at Langley & Banack, Inc., represents the Debtor as legal counsel. DILLARD'S CAPITAL I: Fitch Affirms BB Rating on Subordinated Notes ------------------------------------------------------------------ Fitch Ratings has revised Dillard's, Inc.'s Rating Outlook to Positive from Stable and affirmed its Long-Term Issuer Default Rating (IDR) at 'BBB-'. Fitch has also affirmed the company's secured credit facility at 'BBB', its unsecured notes at 'BBB-' and its capital securities issued by Dillard's Capital Trust I at 'BB'. The Positive Outlook follows Dillard's progress in improving EBITDA to around $900 million from about $400 million in pre-pandemic 2019, strong FCF generation and low EBITDAR leverage around 0.5x. Dillard's rating is balanced by secular challenges facing mall-based retailers and its scale, which is modest for the rating. Fitch expects recent operating moderation to continue in 2025 due to softening consumer spending on goods categories such as apparel, with EBITDA stabilizing in the high $800 million range from about $920 million in 2024. An upgrade could result from evidence of stabilized revenue and EBITDA trends in the near term. Key Rating Drivers Industry-Leading Performance: Dillard's has navigated recent department store volatility better than its chief competitors. Fitch projects the company's EBITDA will stabilize at more than double pre-pandemic levels with margins around 13%, well above peers. The company's fairly strong performance partly stems from new brand introductions that enhance its merchandise mix and improved gross margins due to a well-controlled inventory, limiting unplanned markdowns. Near-term headwinds have reduced consumer spending on some discretionary goods, including apparel and home. Fitch expects this trend to continue in 2025. Tariffs could further pressure consumer spending if product inflation accelerates. Demonstrated Financial Conservatism: Dillard's ratings benefit from its good financial flexibility and limited debt position. The company has a modest debt load of around $420 million (including giving 50% equity treatment to $200 million subordinated debentures due 2038), compared with over $500 million in projected annual FCF (prior to any special dividends) beginning in 2025 and just over $1 billion of cash and short-term investments at the end of 2024. Dillard's modest debt structure includes $322 million of unsecured notes maturing between 2026 and 2028, which afforded good financial flexibility through economic cycles and even extreme challenges such as the pandemic. Fitch projects the company's EBITDAR leverage to trend around 0.5x over the next two to three years with EBITDAR fixed charge coverage in the mid-teens. Dillard's leverage is low for the rating but balanced by its exposure to the volatile department store industry. Department Store Challenges Remain: Fitch expects department stores will continue to face secular shifts. These shifts have reduced mall visits and altered shopping patterns, negatively affecting the mid-tier apparel and accessories space. The companies with the best chance of maintaining their market shared will be those with significant scale, a strong omnichannel platform (good store and supply chain infrastructure and a robust online presence), strong relationships with vendors and customers, and good cash flow for reinvestment. These competitors may also benefit from weaker players pulling back. EBITDA to Remain Moderate: Dillard's EBITDA decreased to about $920 million in 2024 from a $1.3 billion peak in 2022/2023 because of shifts in consumer spending toward services and away from goods, some softening in consumer health, and a rise in industry-wide promotional activity. Fitch projects Dillard's 2025 EBITDA will decline to the high-$800 million range due to ongoing topline challenges. In the long term, Fitch views flat revenue and EBITDA as the best- case scenario for the secularly challenged department store sector. Dillard's EBITDA scale is somewhat modest for its investment grade rating. Smaller Scale and Scope: Dillard's more modest scale, geographic concentration in key Southern markets and less developed omnichannel model could serve as disadvantages over time in an increasingly competitive space. The company has made good progress on attracting key merchandise vendors and building out e-commerce capabilities, and it has generally performed better than department store peers in recent years. However, Dillard's somewhat smaller scale could limit its longer-term ability to grow e-commerce business and ancillary revenue streams like marketplace and digital advertising. Peer Analysis Fitch's rated U.S. department store coverage also includes national competitors Macy's, Inc. (BBB-/Stable), Kohl's Corporation (BB/Stable) and Nordstrom, Inc. (BB/Stable). Each contends with the challenges affecting the department store industry and are continuously refining strategies to defend their market shares. Initiatives include investments in omnichannel models, portfolio reshaping to reduce exposure to weaker indoor malls, and efforts to strengthen merchandise assortments and service levels. These initiatives have had varying levels of success in recent years, with Dillard's showing the best operating trajectory since 2020. Nordstrom and Kohl's have produced the weakest results across top-line and profitability, while Macy's results have been mixed, with top line declines mitigated by good inventory and expense management, which have limited EBITDA contraction. Kohl's ratings are Under Criteria Observation (UCO) following the publication of Fitch's new lease criteria on Dec. 6, 2024. The UCO designation indicates that the existing ratings may change due to the application of the final criteria. Key Assumptions - Fitch projects Dillard's retail revenue will remain near 2024 levels of $6.3 billion over the next 12-24 months, due to ongoing headwinds negatively affecting discretionary goods categories like apparel. This would yield total revenue, including other revenue streams, of around $6.6 billion, above the $6.3 billion in pre-pandemic 2019. - EBITDA was about $920 million in 2024, well above the approximately $400 million in 2019. This figure could moderate to the high-$800 million range beginning in 2025, given flat top-line projections, increased promotional activity, and higher selling, general, and administrative costs to support investments in omnichannel initiatives. - Fitch expects FCF in the $500 million range annually (before any special dividends) beginning in 2025, given its EBITDA projections and capex of around $150 million. - Fitch expects any excess cash (with cash and short-term investments at just over $1 billion at Feb. 1, 2025) to be diverted towards share repurchases of special dividends given moderate debt and minimal debt maturities. - EBITDAR leverage, which has trended in the 0.5x range since 2021, is expected to remain below 1.0x across the forecast period. - Dillard's capital structure primarily consists of unsecured debt with a fixed interest rate structure. RATING SENSITIVITIES Factors that could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A downgrade could result from sustained low-single-digit sales declines, EBITDA margin degradation to the high-single-digit level, or EBITDAR leverage sustained above 1.5x. Fitch could revise Dillard's Outlook back to Stable if the company is unable to stabilize revenue and EBITDA trends in the near term. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch could upgrade Dillard's to 'BBB' if the company demonstrate stabilizing or improving sales and profitability while maintaining EBITDAR leverage at or below 1x. Liquidity and Debt Structure As of Nov. 2, 2024, Dillard's had $980 million of cash and $775 million available on its $800 million asset-based lending (ABL) credit facility, which matures April 28, 2026. The ABL facility is secured by certain deposit accounts of the company and certain inventory and deposit accounts of certain subsidiaries. The borrowing base is equal to 90% multiplied by the appraised value multiplied by eligible inventory, minus the aggregate amount of all availability reserves. As of Nov. 2, 2024, Dillard's had no borrowings on its ABL, although availability was reduced by $25.319 million of outstanding letters of credit. The company's modest capital structure consists of $321.8 million of unsecured notes due between 2026 and 2028 and $200 million of subordinated debentures due 2038. Fitch assigns 50% equity credit to the subordinated debentures because of their level of subordination and ability to defer interest coupon payments. The debt is issued by Dillard's, Inc. except for the subordinated bonds, which are issued by Dillard's Capital Trust I, a funding vehicle subsidiary. Fitch expects the company to generate annual FCF prior to any special dividends in the $500 million range with projected capex around $150 million. Excess cash could be used for share buybacks or special dividends given minimal near-term debt maturities and low EBITDAR leverage, which Fitch projects to remain below 1.0x across the forecast period. Issuer Profile Dillard's is the fifth largest department store chain in the U.S. in terms of sales. 2024 revenue was $6.3 billion across 244 stores and 28 clearance centers in 30 states concentrated in the southeast, central and southwestern U.S. Summary of Financial Adjustments Financial statement adjustments that depart materially from those contained in the published financial statements of the relevant rated entity or obligor are disclosed below: - EBITDA adjusted to exclude stock-based compensation; - Fitch uses the balance sheet reported lease liability as the capitalized lease value when computing lease-equivalent debt. Sources of Information 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 Prior ----------- ------ ----- Dillard's Capital Trust I Subordinated LT BB Affirmed BB Dillard's, Inc. LT IDR BBB- Affirmed BBB- senior unsecured LT BBB- Affirmed BBB- senior secured LT BBB Affirmed BBB DITECH HOLDING: $57,249 Hodges Claim Disallowed ----------------------------------------------- The Honorable James L. Garrity, Jr., of the United States Bankruptcy Court for the Southern District of New York entered a Memorandum Decision and Order sustaining the objection of the Consumer Claims Trustee in the bankruptcy case of Ditech Holding Corporation with respect to the proof claim filed by Pamela Hodges. The Court disallows and expunges the Claim. Pamela Hodges is acting pro se herein. She filed Proof of Claim No. 527 as an unsecured claim in the amount of $57,249, against Ditech Holding Corp. (f/k/a Walter Investment Management Corp.). The basis of the Claim is listed as "Negligence, Wrongful Foreclosure, Legal Fees Incurred." The Consumer Claims Trustee filed the Thirty-Eighth Omnibus Objection seeking to disallow unsecured proofs of claim, including Claim No. 527, that lack sufficient information or documentation to establish their underlying merits. She asks the Court to sustain the Objection and disallow and expunge the Claim under Rule 7041 of the Federal Rules of Bankruptcy Procedure for failure to prosecute the Claim. After providing the Informal Response in January of 2021, Claimant has demonstrated a pattern of non-engagement with the claims process. Claimant has failed to take meaningful actions to advance the Claim despite multiple opportunities to do so. This delay is problematic because the burden of proof rests with Claimant, who alone possesses the necessary supporting documents. Without Claimant's participation and submission of supporting documentation, neither the Trustee nor the Court can properly evaluate the validity of her Claim. The persistent non-responsiveness spanning multiple notices and communications, demonstrates that Claimant has effectively abandoned the prosecution of her Claim. In the context of these multiple failures, the Court finds that the duration of Claimant's non-engagement is substantial and weighs in favor of expunging the Claim. A copy of the Court's decision is available at https://urlcurt.com/u?l=iylt2P from PacerMonitor.com. About Ditech Holding Corporation Fort Washington, Pennsylvania-based Ditech Holding Corporation and its subsidiaries -- http://www.ditechholding.com/-- are independent servicer and originator of mortgage loans. Ditech Holding and certain of its subsidiaries, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on Feb. 11, 2019, after reaching terms with lenders of a Chapter 11 plan that will reduce debt by $800 million. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Houlihan Lokey as investment banker and AlixPartners LLP as financial advisor. Epiq Bankruptcy Solutions LLC served as claims and noticing agent. Kirkland & Ellis LLP and FTI Consulting Inc. served as the consenting term lenders' legal counsel and financial advisor, respectively. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' cases on Feb. 27, 2019. The creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as its legal counsel and Goldin Associates, LLC, as its financial advisor. On May 2, 2019, the U.S. trustee appointed an official committee of consumer creditors. The consumers committee tapped Quinn Emanuel Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as financial advisor. On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter 11 bankruptcy plan, which became effective four days later. A Consumer Claims Trustee has been appointed in the case and is represented by Richard Levin, Esq., at Jenner & Block, LLP. DITECH HOLDING: Court Disallows $51,403 Tomblin, Meadows Claim -------------------------------------------------------------- The Honorable James L. Garrity, Jr., of the United States Bankruptcy Court for the Southern District of New York entered a Memorandum Decision and Order sustaining the objection of the Consumer Claims Trustee in the bankruptcy case of Ditech Holding Corporation with respect to the proof claim filed by Rebecca Tomblin and Joann Meadows. The Court disallows the claim. Rebecca Tomblin and Joann Meadows timely filed Proof of Claim No. 1613 as a secured claim in the amount of $51,403.00 against Ditech Holding Corporation (f/k/a Walter Investment Management Corp.). They list the basis of the Claim as "mortgage loan." The Plan Administrator and Consumer Claims Trustee jointly filed the Seventy-Second Omnibus Objection seeking to disallow proofs of claim, including the Claim, as "No Basis Consumer Creditor Claims." On or around June 23, 2000, Claimants financed the purchase of a home from Mid State Trust IV and Jim Walter Homes, Inc. The loan was in the amount of $60,000.00 and carried a thirty-year term with a fixed simple interest rate of eleven percent The Note is secured by a Deed of Trust on the real property located at 1102 Crooked Creek Road, Peach Creek, West Virginia 25639. The Mortgage was recorded in Logan County, West Virginia, on Dec. 18, 2000. Claimants state that Mid-State Homes and Walter Mortgage LLC merged on July 1, 2007, and they subsequently remitted their monthly payments to Walter Mortgage Company. They allege that between July 1, 2007, and December 31, 2011, Walter Mortgage Company erroneously applied monthly Mortgage payments to insurance rather than principal and interest and generally misapplied Mortgage payments, forcing the account into delinquency. Claimants assert that on or about March 13, 2012, Walter Mortgage Company merged with Green Tree Servicing LLC, and they subsequently remitted their monthly payments to Green Tree. They allege that between Jan. 1, 2012, and Aug. 31, 2015, Green Tree placed approximately thirty payments into an Unapplied Funds Account rather than applying the payments to the Mortgage. Claimants also allege that on Jan. 12, 2015, Green Tree notified them of loss mitigation options available, after which Claimants requested information from Green Tree regarding the options, and Green Tree did not respond. On Sept. 24, 2015, Ditech notified Claimants that a foreclosure action would be initiated and on Oct. 27, 2015, a Notice of Trustee Sale was issued, and the sale was scheduled. Acknowledging that Claimants are proceeding pro se, the Consumer Claims Trustee liberally construes the State Court Complaint as the basis of the Claim. She interprets the Claim as purporting to assert claims for: (i) breach of contract, (ii) violations of the Truth in Lending Act, (iii) breach of the covenant of good faith and fair dealing, (iv) violations of the West Virginia Consumer and Credit Protection Act, (v) violations of the West Virginia Residential Mortgage Lender, Broker, and Servicer Act, (vi) the tort of outrage, vii) negligence, and (viii) a request declaratory relief. The Consumer Claims Trustee argues that Claimants fail to provide any support for their conclusory allegations in support of these claims and that many of the claims are time-barred. At a Sufficiency Hearing, the Court employs the legal standard of review applied to a motion to dismiss for failure to state a claim upon which relief may be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The Court finds the Claim fails to state a claim to relief against Ditech. Accordingly, the Court sustains the Objection and disallows the Claim. A copy of the Court's decision is available at https://urlcurt.com/u?l=sWQA7V from PacerMonitor.com. About Ditech Holding Corporation Fort Washington, Pennsylvania-based Ditech Holding Corporation and its subsidiaries -- http://www.ditechholding.com/-- are independent servicer and originator of mortgage loans. Ditech Holding and certain of its subsidiaries, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on Feb. 11, 2019, after reaching terms with lenders of a Chapter 11 plan that will reduce debt by $800 million. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Houlihan Lokey as investment banker and AlixPartners LLP as financial advisor. Epiq Bankruptcy Solutions LLC served as claims and noticing agent. Kirkland & Ellis LLP and FTI Consulting Inc. served as the consenting term lenders' legal counsel and financial advisor, respectively. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' cases on Feb. 27, 2019. The creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as its legal counsel and Goldin Associates, LLC, as its financial advisor. On May 2, 2019, the U.S. trustee appointed an official committee of consumer creditors. The consumers committee tapped Quinn Emanuel Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as financial advisor. On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter 11 bankruptcy plan, which became effective four days later. A Consumer Claims Trustee has been appointed in the case and is represented by Richard Levin, Esq., at Jenner & Block, LLP. DITECH HOLDING: Court Disallows Abeson Unsecured Claim ------------------------------------------------------ The Honorable James L. Garrity, Jr., of the United States Bankruptcy Court for the Southern District of New York entered a Memorandum Decision and Order sustaining the objection of the Consumer Claims Trustee in the bankruptcy case of Ditech Holding Corporation with respect to the proof claim filed by Bintu Abeson. The Court disallows and expunges the Claim. Bintu Abeson is acting pro se herein. She filed Proof of Claim No. 23386 as an unsecured claim in an "undetermined" amount against Ditech Holding Corp. (f/k/a Walter Investment Management Corp.). The basis of the Claim is listed as "Insurance." The Consumer Claims Trustee filed the Fifty-Sixth Omnibus Objection seeking to disallow unsecured proofs of claim, including Claim No. 23386, that lacked a sufficient legal basis to establish liability on the part of the Debtors. She asks the Court to sustain the Objection and disallow and expunge the Claim under Rule 7041 of the Federal Rules of Bankruptcy Procedure for failure to prosecute the Claim. After providing the Informal Response in May of 2022, Claimant has demonstrated a pattern of non-engagement with the claims process. Claimant has failed to take meaningful actions to advance the Claim despite multiple opportunities to do so. This delay is problematic because the burden of proof rests with Claimant. Without Claimant's participation, neither the Trustee nor the Court can properly evaluate the validity of her Claim. The persistent non-responsiveness spanning multiple notices and communications, demonstrates that Claimant has effectively abandoned the prosecution of her Claim. In the context of these multiple failures, the Court finds that the duration of Claimant's non-engagement is substantial and weighs in favor of expunging the Claim. A copy of the Court's decision is available at https://urlcurt.com/u?l=mGYcvy from PacerMonitor.com. About Ditech Holding Corporation Fort Washington, Pennsylvania-based Ditech Holding Corporation and its subsidiaries -- http://www.ditechholding.com/-- are independent servicer and originator of mortgage loans. Ditech Holding and certain of its subsidiaries, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on Feb. 11, 2019, after reaching terms with lenders of a Chapter 11 plan that will reduce debt by $800 million. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Houlihan Lokey as investment banker and AlixPartners LLP as financial advisor. Epiq Bankruptcy Solutions LLC served as claims and noticing agent. Kirkland & Ellis LLP and FTI Consulting Inc. served as the consenting term lenders' legal counsel and financial advisor, respectively. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' cases on Feb. 27, 2019. The creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as its legal counsel and Goldin Associates, LLC, as its financial advisor. On May 2, 2019, the U.S. trustee appointed an official committee of consumer creditors. The consumers committee tapped Quinn Emanuel Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as financial advisor. On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter 11 bankruptcy plan, which became effective four days later. A Consumer Claims Trustee has been appointed in the case and is represented by Richard Levin, Esq., at Jenner & Block, LLP. DITECH HOLDING: Court Disallows Constantine Claim ------------------------------------------------- The Honorable James L. Garrity, Jr., of the United States Bankruptcy Court for the Southern District of New York entered a Memorandum Decision and Order sustaining the objection of the Consumer Claims Trustee in the bankruptcy case of Ditech Holding Corporation with respect to the proof claim filed by Ambrose Floyd Constantine Jr. The Court disallows and expunges the Claim. Ambrose Floyd Constantine Jr. is acting pro se herein. He filed Proof of Claim No. 23552 seeking an "undetermined" amount against Reverse Mortgage Solutions, Inc. The basis of the Claim is listed as "wrongful seizure of property" and "fraud" related to a property seizure following a mortgage foreclosure. The Consumer Claims Trustee filed the Second Omnibus Objection seeking to disallow unsecured proofs of claim, including the Claim, that lack sufficient information or documentation to establish their underlying merits. She asks the Court to sustain the Objection and disallow and expunge the Claim under Rule 7041 of the Federal Rules of Bankruptcy Procedure for failure to prosecute the Claim. After filing an Informal Response in April 2020, Claimant has demonstrated a pattern of non-engagement with the claims process. Claimant has failed to take meaningful actions to advance the Claim despite multiple opportunities to do so. This delay is problematic because the burden of proof rests with Claimant, who alone possesses the necessary supporting documents. Without Claimant's participation and submission of supporting documentation, neither the Trustee nor the Court can properly evaluate the validity of his Claim. The persistent non-responsiveness spanning multiple notices and communications, demonstrates that Claimant has effectively abandoned the prosecution of his Claim. In the context of these multiple failures, the Court finds that the duration of Claimant's non-engagement is substantial and weighs in favor of expunging the Claim. A copy of the Court's decision is available at https://urlcurt.com/u?l=kdA5rG from PacerMonitor.com. About Ditech Holding Corporation Fort Washington, Pennsylvania-based Ditech Holding Corporation and its subsidiaries -- http://www.ditechholding.com/-- are independent servicer and originator of mortgage loans. Ditech Holding and certain of its subsidiaries, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on Feb. 11, 2019, after reaching terms with lenders of a Chapter 11 plan that will reduce debt by $800 million. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Houlihan Lokey as investment banker and AlixPartners LLP as financial advisor. Epiq Bankruptcy Solutions LLC served as claims and noticing agent. Kirkland & Ellis LLP and FTI Consulting Inc. served as the consenting term lenders' legal counsel and financial advisor, respectively. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' cases on Feb. 27, 2019. The creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as its legal counsel and Goldin Associates, LLC, as its financial advisor. On May 2, 2019, the U.S. trustee appointed an official committee of consumer creditors. The consumers committee tapped Quinn Emanuel Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as financial advisor. On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter 11 bankruptcy plan, which became effective four days later. A Consumer Claims Trustee has been appointed in the case and is represented by Richard Levin, Esq., at Jenner & Block, LLP. DITECH HOLDING: Court Disallows Gordon Unsecured Claim ------------------------------------------------------ The Honorable James L. Garrity, Jr., of the United States Bankruptcy Court for the Southern District of New York entered a Memorandum Decision and Order sustaining the objection of the Consumer Claims Trustee in the bankruptcy case of Ditech Holding Corporation with respect to the proof claim filed by Demetria A. Gordon. The Court disallows and expunges the Claim. Demetria A. Gordon, acting through counsel, filed Proof of Claim No. 20291 as an unsecured claim in an undetermined amount against Ditech Financial LLC. The basis of the Claim is listed as "Litigation." The Consumer Claims Trustee filed the Twenty-Sixth Omnibus Objection seeking to disallow unsecured proofs of claim, including Claim No. 20291, that lack sufficient information or documentation to establish their underlying merits. She asks the Court to sustain the Objection and disallow and expunge the Claim under Rule 7041 of the Federal Rules of Bankruptcy Procedure for failure to prosecute the Claim. After filing an Informal Response on July 8, 2020, Claimant has demonstrated a pattern of non-engagement with the claims process. Claimant has failed to take meaningful actions to advance the Claim despite multiple opportunities to do so. This delay is problematic because the burden of proof rests with Claimant, who alone possesses the necessary supporting documents. Without Claimant's participation and submission of supporting documentation, neither the Trustee nor the Court can properly evaluate the validity of her Claim. The persistent non-responsiveness spanning multiple notices and communications, demonstrates that Claimant has effectively abandoned the prosecution of her Claim. In the context of these multiple failures, the Court finds that the duration of Claimant's non-engagement is substantial and weighs in favor of expunging the Claim. A copy of the Court's decision is available at https://urlcurt.com/u?l=vOIvgi from PacerMonitor.com. About Ditech Holding Corporation Fort Washington, Pennsylvania-based Ditech Holding Corporation and its subsidiaries -- http://www.ditechholding.com/-- are independent servicer and originator of mortgage loans. Ditech Holding and certain of its subsidiaries, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on Feb. 11, 2019, after reaching terms with lenders of a Chapter 11 plan that will reduce debt by $800 million. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Houlihan Lokey as investment banker and AlixPartners LLP as financial advisor. Epiq Bankruptcy Solutions LLC served as claims and noticing agent. Kirkland & Ellis LLP and FTI Consulting Inc. served as the consenting term lenders' legal counsel and financial advisor, respectively. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' cases on Feb. 27, 2019. The creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as its legal counsel and Goldin Associates, LLC, as its financial advisor. On May 2, 2019, the U.S. trustee appointed an official committee of consumer creditors. The consumers committee tapped Quinn Emanuel Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as financial advisor. On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter 11 bankruptcy plan, which became effective four days later. A Consumer Claims Trustee has been appointed in the case and is represented by Richard Levin, Esq., at Jenner & Block, LLP. DITECH HOLDING: Court Disallows Sturzu Unsecured Claim ------------------------------------------------------ The Honorable James L. Garrity, Jr., of the United States Bankruptcy Court for the Southern District of New York entered a Memorandum Decision and Order sustaining the objection of the Consumer Claims Trustee in the bankruptcy case of Ditech Holding Corporation with respect to the proof claim filed by Andrea Sturzu. The Court disallows and expunges the Claim. Andrea Sturzu is acting pro se. She filed Proof of Claim No. 21532 as an unsecured claim in an undetermined amount, against Ditech Financial LLC. The basis of the Claim is listed as "Customer Fee." The Consumer Claims Trustee filed the Sixth Omnibus Objection seeking to disallow unsecured proofs of claim, including Claim No. 21532, that lack sufficient information or documentation to establish their underlying merits. She asks the Court to sustain the Objection and disallow and expunge the Claim under Rule 7041 of the Federal Rules of Bankruptcy Procedure for failure to prosecute the Claim. After filing a Response in April 2020, Claimant has demonstrated a pattern of non-engagement with the claims process. Claimant has failed to take meaningful actions to advance the Claim despite multiple opportunities to do so. This delay is problematic because the burden of proof rests with Claimant, who alone possesses the necessary supporting documents. Without Claimant's participation and submission of supporting documentation, neither the Trustee nor the Court can properly evaluate the validity of her Claim. The persistent non-responsiveness spanning multiple notices and communications, demonstrates that Claimant has effectively abandoned the prosecution of her Claim. In the context of these multiple failures, the Court finds that the duration of Claimant's non-engagement is substantial and weighs in favor of expunging the Claim. A copy of the Court's decision is available at https://urlcurt.com/u?l=Y4lHtG from PacerMonitor.com. About Ditech Holding Corporation Fort Washington, Pennsylvania-based Ditech Holding Corporation and its subsidiaries -- http://www.ditechholding.com/-- are independent servicer and originator of mortgage loans. Ditech Holding and certain of its subsidiaries, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on Feb. 11, 2019, after reaching terms with lenders of a Chapter 11 plan that will reduce debt by $800 million. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Houlihan Lokey as investment banker and AlixPartners LLP as financial advisor. Epiq Bankruptcy Solutions LLC served as claims and noticing agent. Kirkland & Ellis LLP and FTI Consulting Inc. served as the consenting term lenders' legal counsel and financial advisor, respectively. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' cases on Feb. 27, 2019. The creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as its legal counsel and Goldin Associates, LLC, as its financial advisor. On May 2, 2019, the U.S. trustee appointed an official committee of consumer creditors. The consumers committee tapped Quinn Emanuel Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as financial advisor. On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter 11 bankruptcy plan, which became effective four days later. A Consumer Claims Trustee has been appointed in the case and is represented by Richard Levin, Esq., at Jenner & Block, LLP. DITECH HOLDING: DITECH HOLDING: $60,000 DeGrand Claim Disallowed ---------------------------------------------------------------- The Honorable James L. Garrity, Jr., of the United States Bankruptcy Court for the Southern District of New York entered a Memorandum Decision and Order sustaining the objection of the Consumer Claims Trustee in the bankruptcy case of Ditech Holding Corporation with respect to the proof claim filed by Ronald DeGrand. The Court disallows and expunges the Claim. Ronald DeGrand is acting pro se herein. He filed Proof of Claim No. 23038 as an unsecured claim in the amount of $60,000, against Ditech Holding Corp. (f/k/a Walter Investment Management Corp.). 6 The basis of the Claim is listed as "Principal amount never seems to go down." The Consumer Claims Trustee filed the Sixteenth Omnibus Objection seeking to disallow unsecured proofs of claim, including Claim No. 23038, that lack sufficient information or documentation to establish their underlying merits. She asks the Court to sustain the Objection and disallow and expunge the Claim under Rule 7041 of the Federal Rules of Bankruptcy Procedure for failure to prosecute the Claim. Claimant has demonstrated a pattern of nonengagement with the claims process. Claimant has failed to take meaningful actions to advance the Claim despite multiple opportunities to do so. This delay is problematic because the burden of proof rests with Claimant, who alone possesses the necessary supporting documents. Without Claimant’s participation and submission of supporting documentation, neither the Trustee nor the Court can properly evaluate the validity of his Claim. The persistent non-responsiveness spanning multiple notices and communications, demonstrates that Claimant has effectively abandoned the prosecution of his Claim. In the context of these multiple failures, the Court finds that the duration of Claimant’s non-engagement is substantial and weighs in favor of expunging the Claim. A copy of the Court's decision is available at https://urlcurt.com/u?l=3QOwmI from PacerMonitor.com. About Ditech Holding Corporation Fort Washington, Pennsylvania-based Ditech Holding Corporation and its subsidiaries -- http://www.ditechholding.com/-- are independent servicer and originator of mortgage loans. Ditech Holding and certain of its subsidiaries, including Ditech Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on Feb. 11, 2019, after reaching terms with lenders of a Chapter 11 plan that will reduce debt by $800 million. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Houlihan Lokey as investment banker and AlixPartners LLP as financial advisor. Epiq Bankruptcy Solutions LLC served as claims and noticing agent. Kirkland & Ellis LLP and FTI Consulting Inc. served as the consenting term lenders' legal counsel and financial advisor, respectively. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' cases on Feb. 27, 2019. The creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as its legal counsel and Goldin Associates, LLC, as its financial advisor. On May 2, 2019, the U.S. trustee appointed an official committee of consumer creditors. The consumers committee tapped Quinn Emanuel Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as financial advisor. On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter 11 bankruptcy plan, which became effective four days later. A Consumer Claims Trustee has been appointed in the case and is represented by Richard Levin, Esq., at Jenner & Block, LLP. DUNIMUS OUTREACH: Jennifer Bennington Named Subchapter V Trustee ---------------------------------------------------------------- Brian Behr, the U.S. Bankruptcy Administrator for the Eastern District of North Carolina, appointed Jennifer K. Bennington as Subchapter V trustee for Dunimus Outreach Ministries, Inc. About Dunimus Outreach Ministries Dunimus Outreach Ministries, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 25-00692) on February 27, 2025, with $100,001 to $500,000 in assets and $50,001 to $100,000 in liabilities. Judge Pamela W. Mcafee presides over the case. John G. Rhyne, Attorney At Law represents the Debtor as legal counsel. E.W. SCRIPPS: S&P Cuts ICR to 'CC' on Announced Debt Restructuring ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on The E.W. Scripps Co. to 'CC' from 'B-' and removed all ratings from CreditWatch, where S&P placed them with negative implications on Jan. 8, 2025. S&P said, "We also lowered our issue-level ratings on Scripps' senior secured term loan B3 to 'CC' from 'B+'. "The negative outlook reflects that, upon the completion of the transaction, we expect to lower our issuer credit rating on the company to 'SD' (selective default) and our issue-level rating on its senior secured term loan B3 to 'D'." The E.W. Scripps Co. has announced a debt restructuring under which it proposes to exchange its existing senior secured term loan B2 due 2026 to a new senior secured term loan B2 due 2028 and exchange its senior secured term loan B3 due 2028 to a new senior secured term loan B3 due 2029. S&P views the debt restructuring as distressed and the proposed exchange of the term loan B3 as tantamount to a default. E.W. Scripps has entered into a transaction support agreement with lenders comprising 62% of the aggregate principal amount of its existing term loan B2 lenders and 81% of the aggregate principal amount of its existing term loan B3 lenders. The transaction requires 95% minimum participation from the B3 lenders, with a potential step down to 90% based on certain terms and conditions being met. The transaction is expected to close in April. The company is offering to exchange its existing $543 million term loan B3 due 2028 into a new senior secured term loan B3 due 2029 (less up to $200 million that could be rolled over into a new term loan B2). Holders of the existing term loan B3 that do not participate in the exchange will be subordinated in right of payment to a new term loan B2, new term loan B3, and existing and new revolving credit facilities. S&P said, "In our view, lenders will receive less than originally promised because the maturity will be extended, and nonparticipating lenders will be subordinated. While the interest rate on the new term loan B3 will be 35 basis points (bps) higher than the existing term loan B3, we believe this rate is well below what the company would be required to pay for new capital under current market conditions and what an issuer with a similar risk profile would have to pay to raise new capital." The company is also proposing to exchange its existing $721 million term loan B2 due 2026 into a new senior secured term loan B2 due 2028, minus $385 million that it will repay using proceeds from a new accounts receivable securitization facility and up to $200 million that could be rolled over from existing term loan B3 lenders. Following the transactions, no existing term loan B2 will remain outstanding given a backstop commitment from certain consenting lenders to repay the remaining portion that is not exchanged. At the same time, $208 million of the company's $585 million revolving credit facility will be extended from 2026 to 2027. S&P said, "While we believe lenders of the existing term loan B2 and revolving credit facility will receive less than originally promised because the maturities will be extended, we believe lenders will receive adequate offsetting compensation." The spread on the revolving credit facility will increase to 550 bps from 175-275 bps and the spread on the term loan B2 will increase to 575 bps from 256 bps, which are roughly equal to or slightly above their current market yields. S&P said, "We also view the transaction as distressed because, absent a transaction, we believe there is a realistic possibility of a conventional default within the next several quarters. Scripps ended 2024 with leverage (calculated on an average trailing-eight-quarters basis to balance the financial benefit of political advertising revenue in election years) of about 6.9x and we view the company has limited ability to deleverage over the next few years given secular pressures facing linear television. While the proposed transaction will extend the company's debt maturity profile, the company still has $426 million of senior unsecured notes due in 2027 (with annual maturities thereafter through 2029, and 2031) and the terms of the new proposed debt include a springing maturity to 2027 if $50 million of the 2027 notes remain outstanding. In addition, the terms of the new proposed debt include limitations of using cash or availability under its revolving credit facilities to repay the notes due 2027. We also view the company's growing preferred stock balance (which we included in our calculation of adjusted debt), due to the accruing of paid-in-kind dividends further limits the company's ability to deleverage, as the growing preferred balance mostly offsets the cash savings from the deferred dividends that could go toward debt reduction. The company has been pursuing asset sales to aid in debt reduction, although the proceeds will not significantly reduce the company's $2.6 billion debt burden. "The negative outlook reflects that upon the completion of the transaction, we expect to lower our issuer credit rating on the company to 'SD' (selective default) and our issue-level rating on its senior secured term loan B3 to 'D'. "We will lower our issuer credit rating on Scripps to 'SD' and our issue-level rating on the affected debt to 'D' if it completes the transaction as proposed. "We could raise our rating on Scripps if it does not consummate the transaction, likely to the 'CCC' category. Under this scenario, our rating would reflect the potential for other restructuring initiatives and its ability to refinance its upcoming debt maturities while maintaining healthy free operating cash flow." ECTUL HOLDINGS: Seeks Chapter 11 Bankruptcy in Florida ------------------------------------------------------ On March 8, 2025, Ectul Holdings LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Florida. According to court filing, the Debtor reports $13,302,315 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. About Ectul Holdings LLC Ectul Holdings LLC owns three retail spaces at 1300 Brickell Bay Drive, Miami, FL 33131, including Unit CU-8 (Folio 01-4139-125-3820), Unit CU-9 (Folio 01-4139-125-3830), and Unit CU-11 (Folio 01-4139-125-3850), with a total value of $14 million. Additionally, the Debtor owns a separate property at 1331 Brickell Bay Drive, #4607, Miami, FL 33131, valued at $5 million based on comparable sales. Ectul Holdings LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 25-12521) on March 8, 2025. In its petition, the Debtor reports total assets of $19,000,000 and total liabilities of $13,302,315. The Debtor is represented by: Diego G. Mendez, Esq. MENDEZ LAW OFFICES P.O. Box 228630 Miami, FL 33222 Tel: 305-264-9090 E-mail: INFO@MENDEZLAWOFFICES.COM EGV HOLDINGS: Kathleen DiSanto Named Subchapter V Trustee --------------------------------------------------------- The U.S. Trustee for Region 21 appointed Kathleen DiSanto, Esq., at Bush Ross, P.A., as Subchapter V trustee for EGV Holdings, LLC. Ms. DiSanto will be paid an hourly fee of $350 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. DiSanto declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Kathleen L. DiSanto, Esq. Bush Ross, P.A. P.O. Box 3913 Tampa, FL 33601-3913 Phone: (813) 224-9255 Fax: (813) 223-9620 Email: disanto.trustee@bushross.com About EGV Holdings LLC EGV Holdings LLC, doing business as EG Vodka, focuses on the production and distribution of premium, award-winning vodkas, including unique flavors such as Organic American Vodka and Rosemary & Lavender Vodka. The Company is known for its quality, artisanal spirits, which are available through various retailers and online platforms. EGV Holdings LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 25-01168) on February 26, 2025. In its petition, the Debtor reports estimated assets between $100,000 and $500,000 and estimated liabilities between $1 million and $10 million. Honorable Bankruptcy Judge Roberta A. Colton handles the case. The Debtor is represented by: Amy Denton Mayer, Esq. STICHTER, RIEDEL, BLAIN & POSTLER, P.A. 110 E. Madison St., Suite 200 Tampa, FL 33602 Tel: 813-229-0144 Email: amayer@srbp.com ELECTRIQ POWER: Assets to be Auctioned Online After Ch. 7 Filing ---------------------------------------------------------------- Heritage Global Partners, a subsidiary of Heritage Global Inc. and a worldwide leader in asset advisory and auction services, has been appointed by the U.S. Bankruptcy Court to conduct an online auction of assets from Electriq Power (Case # 9:24-bk-15235), a prominent smart energy storage provider. This auction presents a unique opportunity for businesses and buyers in the alternative energy sector to acquire high-quality equipment at market-driven values. With over $18 million in inventory, the sale features more than 1,000 lots of brand-new solar panels, batteries, inverters, and related equipment. Auction Highlights: -- Product Categories: The auction includes lithium-ion batteries, inverters, solar panels, and a host of other new in-box smart energy products. -- Ideal for: This auction is for everyone. Users, dealers, installers, integrators, and technical professionals seeking premium alternative energy products. David Barkoff, Senior Vice President at HGP commented, "This sale is a rare chance for buyers to bid on thousands of brand-new, in-box products. The sheer volume and quality of the assets available is staggering. This will surely be an exciting event." Auction Details: -- Online Bidding Opens: March 26, 2025 -- Online Bidding Closes: March 27, 2025, starting at 8:00 AM PDT -- Registration and Catalog: Interested parties can view the catalog and register at HGP's Auction Catalog. This auction highlights HGP's expertise in providing liquidity solutions for surplus and distressed assets across industries while delivering seamless monetization strategies that maximize value for both sellers and buyers. About Heritage Global Partners, Inc. HGP is a subsidiary of Heritage Global Inc. (NASDAQ: HGBL). HGP operates under the Industrial Assets business unit and is a full-service auction, liquidation and asset advisory firm which holds a prominent spot in the industrial sectors including Aerospace, Automotive, Aviation, Biotech, Broadcast & Postproduction, Chemical, Electronics Manufacturing, Energy, Food & Beverage, Heavy Construction, Metalworking, Oil & Gas, Pharmaceutical, Plastics, Printing, Real estate, Semiconductor, Solar, Textile & Woodworking, and others. HGP conducts 150-200 auction projects per year, globally. About Heritage Global Inc. Heritage Global Inc. (NASDAQ: HGBL) values and monetizes industrial & financial assets by providing acquisition, disposition, valuation, and lending services for surplus and distressed assets. This aids in facilitating the circular economy by diverting useful industrial assets from landfills and operating an ethical supply chain by overseeing post-sale account activity of financial assets. Specialties consist of acting as an adviser, in addition to acquiring or brokering turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, real estate, and charged-off account receivable portfolios through its two business units: Industrial Assets and Financial Assets. About Electriq Power Holdings Inc. Electriq Power Holdings Inc. is a trusted provider of intelligent energy storage and management solutions for homes and small businesses. Electriq Power Holdings Inc. sought relief under Chapter 7 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-14427) on May 3, 2024. The case is overseen by Honorable Bankruptcy Judge Mindy A Mora. The Debtor is represented by: Frank L Eaton, Esq. Linda Leali, P.A. ELETSON HOLDINGS: Reed Smith Loses Bid to Stay Jan. 29 Court Order ------------------------------------------------------------------ Judge John P. Mastando III of the United States Bankruptcy Court for the Southern District of New York denied the motion filed by Reed Smith LLP and purported Provisional Eletson Holdings Inc. for stay of enforcement of the Jan. 29, 2025 Order in the bankruptcy case of Eletson Holdings Inc. and its affiliated debtors. The Movants seek a stay of the Court's Jan. 29, 2025 Order In Support Of Confirmation And Consummation Of The Court-Approved Plan Of Reorganization pending the resolution of the appeal of the Jan. 29 Order or, in the alternative, a temporary stay of the Jan. 29 Order. The Movants seek a stay of the Jan. 29 Order because they allege that: i) purported Provisional Eletson Holdings Inc. will suffer irreparable injury absent a stay; ii) Reorganized Eletson Holdings will not suffer substantial injury as a result of a stay of the Jan. 29 Order; iii) Movants' appeal has a reasonable possibility of success on the merits; and iv) there is a public interest in granting a stay pending appeal. The former Majority Shareholders of Eletson Holdings Inc. filed a Joinder of the Eletson Holdings Inc. to Motion for Stay of Enforcement of Jan. 29, 2025 Order Pending Appeal. The Court agrees with Reorganized Eletson Holdings Inc. that purported Provisional Eletson Holdings Inc. does not have standing to request a stay pending appeal. To determine whether to grant or deny a motion to stay an order pending appeal, the Court must consider four factors: (1) whether the movant will suffer irreparable injury absent a stay, (2) whether a party will suffer substantial injury if a stay is issued, (3) whether the movant has demonstrated a substantial possibility, although less than a likelihood, of success on appeal, and (4) the public interests that may be affected. The Court finds that all four factors weigh heavily in favor of Reorganized Eletson Holdings Inc. -- the objecting party -- and support denial of the stay pending appeal. The Court agrees with Reorganized Eletson Holdings Inc. that the Movants have not shown that an irreparable injury exists. The Movants have also not demonstrated how assisting with the implementation of the Chapter 11 Plan and Confirmation Order -- the purpose of the Jan. 29 Order -- would violate foreign law. Therefore, any potential injury to the Movants, which has not been evidenced, is remote as there is no foreign law that the Movants are being asked to violate, the Court concludes. The Court also finds there is no risk of irreparable injury to the Movants based on the potential risk of mootness. Reorganized Eletson Holdings Inc. argues that that an appeal has no likelihood of success because the Jan. 29 Order is a nonfinal order that cannot be appealed. To this effect, they also argue that a contempt order is not sufficiently final to be appealable. The Court agrees with Reorganized Eletson Holdings Inc. that the appeal has little possibility of success. The Court finds that Movants will not likely succeed on appeal because the comity argument raised by the Movants has been argued at the District Court level and failed. Movants do not have a substantial possibility of success and therefore a stay pending appeal is not warranted, the Court holds. The Court also agrees with Reorganized Eletson Holdings Inc. that a stay will lead to further harm suffered by the new owners of Reorganized Eletson Holdings Inc. To date, Reorganized Eletson Holdings Inc. has not received the benefit of the bargain of paying $53.5 million to pay off Eletson Holdings Inc.'s pre-existing debts in exchange for ownership and control of Holdings. According to the Court, a stay of the Jan. 29 Order will inevitably lead to further harm to the new holders of Reorganized Eletson Holdings Inc. The Court also agrees with Reorganized Eletson Holdings Inc. that the public interest does not support a stay of the Jan. 29 Order because the public interest is best supported by enforcing orders that seek to implement a confirmation order and by proceeding expeditiously to implement a confirmed, Chapter 11 plan and a confirmation order that has not been stayed. Therefore, the Movants do not prevail on the last factor, the Court finds. A copy of the Court's decision is available at https://urlcurt.com/u?l=MlShrx from PacerMonitor.com. About Eletson Holdings Eletson Holdings Inc. is a family-owned international shipping company, which touts itself as having a global presence with headquarters in Piraeus, Greece as well as offices in Stamford, Connecticut, and London. At one time, Eletson claimed to own and operate one of the world's largest fleets of medium and long-range product tankers and boasted a fleet consisting of 17 double hull tankers with a combined capacity of 1,366,497 dwt, 5 LPG/NH3 carriers with a combined capacity of 174,730 cbm and 9 LEG carriers with capacity of 108,000 cbm. Eletson Holdings, a Liberian company, is Eletson's ultimate parent company and is the direct parent and owner of 100% of the equity interests in the two other debtors, Eletson Finance (US) LLC, and Agathonissos Finance LLC. Eletson and its two affiliates were subject to involuntary Chapter 7 bankruptcy petitions (Bankr. S.D.N.Y. Case No. 23-10322) filed on March 7, 2023 by creditors Pach Shemen LLC, VR Global Partners,L.P. and Alpine Partners (BVI), L.P. The petitioning creditors are represented by Kyle J. Ortiz, Esq., at Togut, Segal & Segal, LLP. On Sept. 25, 2023, the Chapter 7 cases were converted to Chapter 11 cases. The Honorable John P. Mastando, III is the case judge. Derek J. Baker, Esq., represents the Debtors as bankruptcy counsel. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors. The committee tapped Dechert, LLP as its legal counsel. EMPLOYBRIDGE HOLDING: S&P Cuts ICR to 'SD' on Distressed Exchange ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit on Atlanta-based staffing provider EmployBridge Holding Co. to 'SD' (selective default) from 'CC' and our issue-level ratings to 'D' from 'CC'. EmployBridge completed an exchange transaction in which the company issued a new money term loan and second-out exchange term loan to replace the existing draw term loan and first-lien term loan B. S&P said, "We plan to raise our issuer credit rating on EmployBridge as soon as practical to a level that reflects the updated credit position of the company. "The downgrade follows EmployBridge's completion of a debt exchange, which we view as a distressed exchange. We consider the transaction distressed because in our view, the lenders have received less than originally promised. Additionally, our view is that there was not adequate compensation for the maturity date being pushed back until 2030. "We expect to review our issuer credit rating on Employbridge in the coming days. Our review will focus on our forward-looking view of its creditworthiness, which includes the company's capital structure, liquidity position, and our future expectations of the company's credit metrics." EmployBridge Holding Co. provides light industrial staffing solutions across 50 U.S. states and several locations in Canada. The light industrial staffing industry includes a range of end markets, such as logistics, clerical, technicians, machinists, shipping, and last-mile transportation. The company provides its services primarily under the ResourceMFG, ProLogistix, ProDrivers, and Hire Dynamics brands, as well as others. The company is owned by private-equity sponsor Apollo Global Management Inc. and its financial statements are private. ENDO INC: S&P Places 'B+' ICR on Watch Positive Following Merger ---------------------------------------------------------------- S&P Global Ratings placed its ratings on specialty pharmaceutical company Endo Inc., including its 'B+' issuer credit rating, on CreditWatch with positive implications. S&P plans to resolve the CreditWatch when the merger closes, which it anticipates in the second half of the year. Endo Inc. has announced that it is merging with Mallinckrodt PLC, to form a combined specialty and generic pharmaceutical company. S&P said, "We expect Endo's leverage will improve following the close of the merger. We estimate that S&P Global Ratings-adjusted debt to EBITDA will be around 3x, including projected synergies, which is well below our 4x upgrade threshold. The merger is also credit positive for Endo's business risk as it would boost its scale, scope, and diversification. However, the integration also increases operating risk in the near term. "We plan to resolve the CreditWatch placement when the merger closes, likely in the second half of 2025. At that time, we would likely raise the ratings in line with our rating on Mallinckrodt." ENVIVA PELLETS: Court Disallows Portion of V&E's Fee Request ------------------------------------------------------------ Chief Judge Brian F. Kenney of the United States Bankruptcy Court for the Eastern District of Virginia disallowed certain fees on Vinson & Elkins LLP's final application for compensation as special counsel for Enviva Inc. and its affiliates. V&E is seeking $9,292,522.16 in fees and $221,982.65 in expenses. In this case, there was some complexity in allocating the roles of Paul, Weiss as successor 327(a) counsel and V&E as 327(e) special counsel. As a general proposition, V&E retained the Debtors' day to day corporate work, and Paul, Weiss handled the core Chapter 11 matters involving negotiating the plan of reorganization. In the supplement it filed to the final application, V&E states that it was required to review all of its time entries going back to the petition date, identify and segregate entries pertaining to general bankruptcy work from entries pertaining to the special counsel scope of work, and then re-code the applicable entries into new special counsel sub-matters. In other words, V&E is charging the bankruptcy estate for a substantial amount of time spent in reviewing and ferreting out time entries for which it is was never entitled to be compensated, the Court finds. This is "fees for no fees," or charging the bankruptcy estate for efforts not to bill for fees that even V&E acknowledges were never compensable. The Court allows a total of $232,313.05 in fees in the employment and fee applications category of V&E's final application. The balance of the fees in that category are disallowed. A copy of the Court's decision is available at https://urlcurt.com/u?l=fOPSx5 from PacerMonitor.com. About Enviva Inc. Headquartered in Bethesda, Md., Enviva Inc. --https://www.envivabiomass.com -- is a producer of industrial wood pellets, a renewable and sustainable energy source produced by aggregating a natural resource, wood fiber, and processing it into a transportable form, wood pellets. Enviva exports its wood pellets to global markets through its deep-water marine terminals at the Port of Chesapeake, Virginia, the Port of Wilmington, North Carolina, and the Port of Pascagoula, Mississippi, and from third-party deep-water marine terminals in Savannah, Georgia, Mobile, Alabama, and Panama City, Florida. Enviva Inc. and certain affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 24-10453) on March 13, 2024. In the petition signed by Glenn T. Nunziata, interim chief executive officer and chief financial officer, Enviva Inc. disclosed $2,893,581,000 in assets and $2,631,263,000 in liabilities. Judge Brian F. Kenney oversees the cases. The Debtors tapped Vinson & Elkins, LLP as general bankruptcy counsel; Kutak Rock, LLP as local counsel; Lazard Freres & Co., LLC as investment banker; Alvarez & Marsal Holdings, LLC as financial advisor; and Kurtzman Carson Consultants, LLC as notice and claims agent. The U.S. Trustee for Region 4 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Akin Gump Strauss Hauer & Feld, LLP as lead bankruptcy counsel; Hirschler Fleischer, PC as local counsel; Ducera Partners, LLC as investment banker; and AlixPartners, LLP as financial advisor. EVOKE PHARMA: Reports $5.35M Net Loss on $10.25M in Sales for 2024 ------------------------------------------------------------------ Evoke Pharma, Inc., reported a $5.35 million net loss on $10.25 million in net product sales for the year ending Dec. 31, 2024, compared to a $7.79 million net loss on $5.18 million in net product sales for 2023, according to a Form 10-K filed with the Securities and Exchange Commission. As of Dec. 31, 2024, the Company had $17.52 million in total assets, $10.48 million in total liabilities, and $7.04 million in total stockholders' equity. As of Dec. 31, 2024, cash and cash equivalents were approximately $13.6 million. The Company anticipates that based on its current and expanded operating and commercial plans, its existing cash and cash equivalents along with the $14.3 million raised through equity financings in 2024, as well as future cash flows from net product sales of GIMOTI, will be sufficient to fund its operations into the first quarter of 2026. San Diego, California-based BDO USA, P.C., the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 13, 2025. The report cited that the Company has experienced continuous losses and negative operating cash flows since its inception, anticipates ongoing losses in the foreseeable future, and Eversana Life Science Services, LLC holds the authority to end the commercial services agreement for the marketing of Gimoti. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company said its net losses may fluctuate significantly from quarter to quarter and year to year. The Company anticipates that it will be required to raise additional funds through debt, equity or other forms of financing, such as potential collaboration arrangements, to fund future operations and continue as a going concern. "There can be no assurance that additional financing will be available when needed or on acceptable terms. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, and/or suspend or curtail commercialization activities. Any of these actions could materially harm the Company's business, results of operations, financial condition and future prospects. Because the Company's business is entirely dependent on the success of Gimoti, if the Company is unable to secure additional financing, successfully commercialize Gimoti or identify and execute on strategic alternatives for Gimoti or the Company, the Company will be required to curtail all of its activities and may be required to liquidate, dissolve or otherwise wind down its operations," the Company stated in the report. Management Comments "2024 was a transformative year for Evoke Pharma, as we successfully executed on key commercial and strategic initiatives that drove strong revenue growth, expanded patient access to GIMOTI, and reinforced our leadership position in the gastroparesis treatment market," said Matt D'Onofrio, chief executive officer of Evoke Pharma. "Our revenue nearly doubled year-over-year, reaching $10.2 million, and we exceeded our previous guidance while achieving significant growth across key commercial metrics. The transition to ASPN Pharmacies played a crucial role in these results, significantly improving prescription fulfillment rates and patient access. Additionally, our award-winning data presentation at ACG 2024 underscored GIMOTI's clinical utility, particularly for GLP-1 users with diabetic gastroparesis." "Looking ahead to 2025, we remain focused on expanding pharmacy partnerships to further improve patient access to GIMOTI. Our anticipated increased budget allocation from EVERSANA will support enhanced commercialization efforts, including the hiring of field reimbursement managers to help healthcare providers navigate payer policies and streamline patient access to GIMOTI. Additionally, we will continue generating and presenting new data while strategically engaging the gastroenterology community to further solidify GIMOTI's role as the standard of care for diabetic gastroparesis," Mr. D'Onofrio concluded. The complete text of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/1403708/000095017025038712/evok-20241231.htm About Evoke Pharma Headquartered in Solana Beach, California, Evoke -- www.EvokePharma.com -- is a specialty pharmaceutical company focused primarily on the development of drugs to treat GI disorders and diseases. The Company developed, commercialized and markets GIMOTI, a nasal spray formulation of metoclopramide, for the relief of symptoms associated with acute and recurrent diabetic gastroparesis in adults. Diabetic gastroparesis is a GI disorder affecting millions of patients worldwide, in which the stomach takes too long to empty its contents resulting in serious GI symptoms as well as other systemic complications. The gastric delay caused by gastroparesis can compromise absorption of orally administered medications. Prior to FDA approval to commercially market GIMOTI, metoclopramide was only available in oral and injectable formulations and remains the only drug currently approved in the United States to treat gastroparesis. EXACTECH INC: Seeks Amendment to DIP Loan ------------------------------------------- Exactech, Inc. and its affiliated debtors asked the U.S. Bankruptcy Court for the District of Delaware to amend their existing DIP (Debtor-in-Possession) Credit Agreement, which was approved in late 2024. The proposed amendments to the DIP agreement would achieve the following: 1. Increase in DIP Loan Commitments: A $16 million increase in the commitments available under the DIP Facility, raising the total DIP financing to $101 million. This increase is necessary to cover additional liquidity needs due to the ongoing complexity of the Chapter 11 case. 2. Access to Reserved Amount: The Debtors would gain immediate access to previously reserved funds under the DIP Credit Agreement. Initially, $15 million was reserved until a sale and confirmation order was entered by the court. The amendment will provide access to $10 million of this amount upon entry of the Proposed Order, with the remaining $5 million becoming accessible under specific conditions. 3. Modifications to the DIP Agreement: The amendment would also extend key milestones in the case timeline, grant exclusivity protections following the designation of the Stalking Horse Purchaser as the Winning Bidder, and impose certain requirements concerning the Debtors’ Australian subsidiary. The Debtors argue that additional liquidity is required to cover increased expenses due to the complexity of their restructuring process. These expenses include professional fees for their advisors, costs associated with ongoing litigation, and operational costs related to restructuring efforts. In particular, the Debtors are seeking to address issues related to the restructuring of Exactech UK Limited and various matters regarding their ownership interest in an Australian subsidiary. The Debtors have negotiated the terms of the DIP Credit Agreement Amendment with the DIP Lenders. Under the current agreement, the Debtors cannot grant additional liens that would prime existing ones, and no alternative financing options are available to bridge the company to a Chapter 11 exit. The DIP lenders have agreed to the $16 million increase in loan commitments, but this amendment requires approval from the bankruptcy court. A hearing on the matter is set for March 27, 2025 at 10 a.m. A copy of the motion is available at https://urlcurt.com/u?l=VItyZP from PacerMonitor.com. About Exactech, Inc. Exactech Inc. -- https://www.exac.com/ -- is a joint-replacement implant manufacturer owned by TPG Capital. Exactech Inc. and its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-12441) on Oct. 29, 2024. In the petition filed by Donna H. Edwards, as general counsel and senior vice president, Exactech estimated assets and liabilities between $100 million and $500 million each. Young Conaway Stargatt & Taylor, LLP serves as as co-counsel to the Debtors. Riveron Management Services, LLC is the Debtors' chief restructuring officer. Centerview Partners LLC is the investment banker. Kroll Restructuring Administration LLC is the claims agent and administrative advisor. EXELA SOLUTIONS: Court Approves Stock Transfer Protocols -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas entered an order establishing procedures with respect to transfer of, and claim of worthless stock deductions by a majority stockholder with respect to, its beneficial ownership of membership interests issued by Exela Technologies BPA LLC, including options to acquire beneficial ownership of such membership interests. For the purposes of the foregoing, each person that beneficially owns a proportionate ownership interests in Common Stock, Series A Perpetual Convertible Preferred Stock or Series B Cumulative Convertible Perpetual Preferred Stock Issued by Exela Technologies Inc ("ETI Common Stock", "ETI Series A Preferred Stock" and "ETI Series B Preferred Stock", collectively, "ETI Stock") will be considered as owning and equivalent proportionate ownership interests in BPA Membership Interests. In certain circumstances, the Procedures restrict: i) transactions involving, and require notices of the holdings of and proposed transactions by, any person, group of persons, or entity that is or, as a result of such a transaction, would become a Substantial Stockholder of the BPA Membership Interests (including options to acquire beneficial ownership of the BPA Membership Interests) and ii) claims by any Majority Stockholder of a worthlessness deduction under section 165 of the Internal Revenue Code of 1986, as amended, with respect to its beneficial ownership of the BPA Membership Interests. For purposes of the Procedures, a "Substantial Stockholder" is any person or entity that beneficially owns, directly or indirectly at least 4.5 BPA Membership Interests, which includes any person or entity that beneficially owns at least 1,248,000 shares of ETI Common Stock, at least 56,000 shares of ETI Series A Preferred Stock and/or at least 136,000 shares of ETI Series B Preferred Stock, and a "Majority Stockholder" is any person that beneficially owns at least 50 BPA Membership Interests, which includes any person that beneficially owns at least 13,875,000 shares of ETI Common Stock, at least 626,000 shares of ETI Series A Preferred Stock and/or at least 1,514,000 shares of ETI Series B Preferred Stock, or any person that would be a "50-percent shareholder" of BPA Membership Interests if such person claimed a worthless stock deduction with respect to its beneficial ownership of such securities. Any prohibited acquisition or other transfer of, or claim of a worthless stock deduction with respect to, beneficial ownership of BPA Membership Interests will be null and void ab initio and may lead to contempt, compensatory damages, punitive damages, or sanctions being imposed by the Bankruptcy Court. The Procedures are available on the Case Website and on the docket of the Chapter 11 Cases, No. 25-25-90023, which can be accessed via PACER at https://www.pacer.gov. About Exela Technologies Headquartered in Irving, Texas, Exela Technologies, Inc. -- http://www.exelatech.com/-- is a business process automation (BPA) company, leveraging a global footprint and proprietary technology to provide digital transformation solutions enhancing quality, productivity, and end-user experience. Exela Technologies Inc. and several other units sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 25-90024) on March 3, 2025. In its petition, the Debtor reports estimated assets between $500 million and $1 billion and liabilities between $1 billion and $10 billion. Bankruptcy Judge Christopher M. Lopez handles the case. The Debtor is represented by: Timothy Alvin Davidson, II, Esq. Andrews Kurth LLP 600 Travis, Ste 4200 Houston, TX 77002 Phone: 713-220-3810 Fax: 713-220-4285 F21 OPCO: Seeks Ch. 11 Bankruptcy for the 2nd Time, Enters PSA -------------------------------------------------------------- F21 OpCo, LLC ("F21 OpCo" or the "Company"), the operator of Forever 21 stores and the U.S. licensee of the Forever 21 brand, has entered into a Plan Support Agreement ("PSA") with its secured lenders and filed voluntary Chapter 11 cases in the United States Bankruptcy Court for the District of Delaware. The Company plans to conduct an orderly wind-down of its U.S. operations while simultaneously exploring potential going-concern transactions or asset sales. The PSA is designed to streamline the Chapter 11 process efficiently. As part of this plan, the Company will hold liquidation sales at its stores while pursuing a court-supervised marketing and sale process for some or all of its assets. The Company will also seek court approval to market its assets through an auction under Section 363 of the Bankruptcy Code. If a successful sale occurs, the Company may shift from winding down operations to completing a going-concern transaction, maximizing flexibility and value. Forever 21's U.S. stores and website will remain open during the restructuring process. The Company has filed first-day motions seeking court approval to use cash collateral to pay employee wages and benefits and fund operations as usual throughout the Chapter 11 proceedings. Brad Sell, Chief Financial Officer of F21 OpCo, said, "After a thorough strategic review and careful consideration, we decided to file for Chapter 11 to pursue a court-supervised marketing process and explore a going-concern transaction. In the absence of such an outcome, we will implement an orderly wind-down of operations. Despite evaluating all available options, we have been unable to find a sustainable path forward due to competition from foreign fast fashion brands leveraging the de minimis exemption, rising costs, economic challenges affecting our core customers, and shifting consumer preferences. We remain committed to minimizing the impact on employees, customers, vendors, and stakeholders during this process." He added, "We are incredibly grateful to our employees for their dedication and to our customers and partners for their continued support throughout our journey as a fashion industry leader." Forever 21's non-U.S. locations, operated by other licensees, are not impacted by the Chapter 11 filings. Authentic Brands Group retains ownership of the Forever 21 intellectual property and may license the brand to other operators. International stores and e-commerce sites will continue to operate normally. The Company's proposed advisors include Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young Conaway Stargatt & Taylor, LLP as legal counsel, BRG as financial advisor, RCS Real Estate Advisors as real estate advisor, SSG Capital Advisors, LLC as investment banker, and Reevemark as communications advisor. About F21 OpCo F21 OpCo, LLC is the operator of Forever 21 stores and licensee of the Forever 21 brand in the United States. F21 OpCo sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 25-10469) on March 16, 2025. In its petition, the Debtor reports estimated assets between $100 million and $500 million and estimated liabilities between $1 billion and $10 billion. The Company's proposed advisors include Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young Conaway Stargatt & Taylor, LLP as legal counsel, BRG as financial advisor, RCS Real Estate Advisors as real estate advisor, SSG Capital Advisors, LLC as investment banker, and Reevemark as communications advisor. About Forever 21 Inc. Founded in 1984 by South Korean husband and wife team Do Won Chang and Jin Sook Chang and headquartered in Los Angeles, Calif., Forever 21, Inc. -- http://www.forever21.com/-- is a fast fashion retailer of women's, men's and kids clothing and accessories and is known for offering the hottest, most current fashion trends at a great value to consumers. Forever 21 delivers a curated assortment of new merchandise brought in daily. Forever 21, Inc. and seven of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12122) on Sept. 29, 2019. According to the petition, Forever 21 has estimated liabilities on a consolidated basis of between $1 billion and $10 billion against assets of the same range. As of the bankruptcy filing, the Debtors operated 534 stores under the Forever 21 brand in the U.S. and 15 stores under beauty and wellness brand, Riley Rose. The Debtors tapped Kirkland & Ellis LLP as legal advisor; Alvarez & Marsal as restructuring advisor; and Lazard as investment banker; and Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel. Prime Clerk is the claims agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Oct. 11, 2019. The committee is represented by Kramer Levin Naftalis & Frankel LLP and Saul Ewing Arnstein & Lehr LLP. Counsel to the administrative agent under the Debtors' prepetition revolving credit facility and the Debtors' DIP ABL financing facility are Morgan, Lewis & Bockius LLP and Richards, Layton & Finger, PA. Counsel to the administrative agent under the Debtors' DIP term loan facility is Schulte Roth & Zabel LLP. * * * In February 2020, the company was purchased by a consortium that includes Authentic Brands Group, Simon Property Group and Brookfield Property Partners for $81.1 million. As part of the deal, ABG and Simon will each own 37.5% of the fast-fashion retailer, while Brookfield controls the remaining 25% of Forever 21's operating and intellectual property businesses. FORTREA HOLDINGS: Moody's Lowers CFR & Senior Secured Debt to B3 ---------------------------------------------------------------- Moody's Ratings downgraded the ratings of Fortrea Holdings Inc ("Fortrea") including the Corporate Family Rating to B3 from B1 and the Probability of Default Rating to B3-PD from B1-PD, with a negative outlook. Concurrently, Moody's downgraded the rating of the senior secured credit facilities and notes to B3 from B1. The Speculative Grade Liquidity rating (SGL) remains at SGL-3. This rating action concludes the review for downgrade initiated on March 4, 2025. The ratings downgrade reflects ongoing deterioration in Fortrea's credit metrics, including debt/EBITDA of 9.8 times as of December 31, 2024, on Moody's adjusted basis. Moody's expects earnings will continue to weaken in 2025. The decrease in Fortrea's profitability is the result of operational headwinds related to slower conversion of booked business into revenue, less favorable revenue mix (pre-spin projects vs. post-spin awards), as well as higher cost to establish stand-alone operations, following separation from Labcorp. The ratings downgrade also reflects Moody's expectations of weakness in the company's liquidity, reflected in negative free cash flow and Fortrea's reliance on its revolving credit facility for operational needs. The negative outlook reflects Moody's expectations for ongoing softness in earnings. As a result, Moody's expects that Fortrea will be challenged to reduce leverage and improve profitability, over the next 12 months. Governance risk factors are material to the rating action. Governance risk considerations are driven by the company's execution risk and management's track record reflected in significantly higher financial leverage and weaker liquidity, than initially anticipated. RATING RATIONALE Fortrea's B3 Corporate Family Rating considers the company's very high financial leverage with Moody's adjusted debt/EBITDA of 9.8x (inclusive of $300 million securitization facility), for the twelve-month period ended December 31, 2024. The rating also reflects ongoing headwinds in profitability underpinned by margin compression, less favorable revenue mix and material cost to establish stand-alone operations. Fortrea's rating also encompasses the risks inherent in the pharmaceutical services industry, including project delays and cancellations. The company benefits from its considerable size, geographic footprint, and established market position as a pharmaceutical contract research organization (CRO). Fortrea's SGL-3 Speculative Grade Liquidity rating reflects Moody's views that liquidity will be adequate over the next 12-15 months. Fortrea reported cash and cash equivalents of approximately $119 million as of December 31, 2024. Over the next 12 months, Moody's anticipates that Fortrea will be cash flow consumptive. Fortrea's liquidity is supported by a $450 million revolving credit facility expiring in 2028. There were no borrowings under the facility as of December 31, 2024. The revolver contains a total leverage covenant, and an EBITDA-based interest coverage covenant. Moody's expects Fortrea to maintain sufficient cushion under the covenants, following its securing a second amendment in less than a year, which created additional covenant headroom through December 2026. The B3 instrument ratings, which are in line with the Corporate Family Rating, reflect the presence of only one class of debt within the capital structure. ESG CONSIDERATIONS Fortrea's CIS-5 (previously CIS-4) indicates that the rating is lower than it would have been if ESG risk exposures did not exist and that the negative impact is more pronounced than for issuers scored CIS-4. Social risk (S-3) considerations relate to pharmaceutical drug pricing, which could have both positive and negative effects for Fortrea. Legislation that reduces drug prices such as the recently passed US Inflation Reduction Act could have a negative impact on Fortrea if pharmaceutical customers look to trim expenses or reduce the scope of existing projects. Additionally, large mergers could result in customer consolidation and pricing pressure. However, drug pricing pressure in the US may spur the need for Fortrea's customers to invest more heavily in R&D, which would be a benefit. Among governance risk (G-5, previously G-4) considerations are management's track record reflected in significantly weaker operating performance, higher financial leverage, and weaker liquidity than management initially projected. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Fortrea is unable to improve operating performance or if Fortrea's credit metrics continue to weaken, and the company's performance further deteriorates. Additionally, weakening in liquidity or if the probability of default increases, the rating could be downgraded The ratings could be upgraded if the company is able to deliver sustained profitable growth with an improvement in liquidity underpinned by free cash flow. Furthermore, for the ratings to be upgraded Fortrea would need to successfully manage its strategic initiatives and external growth opportunities (i.e., acquisitions), under conservative financial policies. Quantitatively, debt/EBITDA sustained below 5.0 times on Moody's adjusted basis would support an upgrade.. Fortrea Holdings Inc - headquartered in Durham, NC - is a leading global contract research organization ("CRO") providing comprehensive phase I through IV biopharmaceutical product and medical device services to pharmaceutical, biotechnology and medical device organizations. Fortrea Holdings Inc was spun off from Labcorp in June 2023. Revenue for the twelve months ended December 31, 2024, pro forma for divestitures of Endpoint Clinical and Patient Access was approximately $2.7 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. FTAI AVIATION: S&P Alters Outlook to Positive, Affirms 'B+' ICR --------------------------------------------------------------- S&P Global Ratings revised the outlook on FTAI Aviation Ltd. to positive from stable and affirmed the 'B+' issuer credit rating and issue ratings. S&P's positive outlook reflects its expectation that FTAI's credit metrics will continue to improve, supported by recent acquisitions and strategic initiatives as well as favorable demand conditions. S&P Global Ratings expects continued earnings growth for FTAI Aviation Ltd., supported by strong industry tailwinds as well as several strategic acquisitions and initiatives executed and announced over the past 18 months. Growing air travel demand, in conjunction with undersupply of new aircraft, has resulted in aging fleets across the industry. The shortage of engines has made quick and cost-efficient engine repairs even more important to aircraft owners. Through FTAI's MRE business, the company acquires and repairs unserviceable engines and offers module exchanges for aircraft using its own stock of refurbished engines, resulting in shorter time out of service compared with other maintenance providers. The company also owns and leases aircraft, which generates leasing income as well as a pipeline for its engine repair business. S&P expects continued undersupply of new aircraft, new engine reliability issues, and growing travel demand to support demand for FTAI's MRE business over the next 12 months. Strong utilization and higher lease rates also support lease revenue growth. FTAI has scaled its MRE operations significantly over the past 18 months. The company acquired QuickTurn in December 2023 and Lockheed Martin Commercial Engine Solutions in September 2024, which expanded its capacity for CFM56 engine repairs. The company also announced in February 2025 the acquisition of a maintenance facility in Rome, which will be rebranded to QuickTurn Europe, expanding the company's capacity and geographic footprint. FTAI has also taken measures to improve operating efficiency, including the termination of its management agreement with Fortress. The joint venture with Chromalloy to manufacture five Parts Manufacturer Approval hot-section parts for the CFM56 engine, which should allow for more cost-effective repairs, is in the process of being certified by the Federal Aviation Administration. In January 2025, FTAI announced its Strategic Capital Initiative (SCI), a special-purpose vehicle into which it will sell on-lease aircraft. FTAI will own a 20% minority interest in the fund and expects to raise third-party capital to deploy as much as $4 billion into aircraft acquisitions. In February 2025, the fund received a $2.5 billion commitment from Atlas SP Partners. FTAI will be the exclusive MRE provider to the engines owned by the SCI. S&P said, "We anticipate FTAI will initially sell 46 of its 109 aircraft (as of Dec. 31, 2024). As a result, we anticipate the business will become more asset light and generate a growing proportion of its earnings from MRE activity rather than leasing earnings." The company has raised significant debt to finance these strategic initiatives. While credit metrics have improved, the increase in debt partly offsets earnings growth in our credit metric forecasts. FTAI's reported debt was $3.5 billion as of Dec. 31, 2024, up approximately 37% year over year. The fast pace of these changes and the potential for FTAI to execute additional debt-financed initiatives temper our expectations for further credit metric improvement. S&P said, "We expect FTAI's weighted average debt to EBITDA to improve to near 4.0x over the next 12 months, from 9.0x as of year-end 2024. Leverage was elevated in 2024 due to the $300 million management internalization fee. Given we expect most of the company's prospective earnings to come from MRE activities rather than operating leasing, we think debt to EBITDA better reflects the company's financial strength than EBIT interest coverage. "The positive outlook reflects our expectation that FTAI will continue to gradually improve its credit metrics, supported by strong demand conditions as well as the additional capacity from the SCI and recent maintenance facility acquisitions." S&P could revise the outlook to stable over the next year if debt to EBITDA rises and remains above 4x. This could occur if: -- The company's earnings underperform our expectations because of an inability to continue to expand its MRE operations or because leasing demand subsides; or -- The company significantly increases its debt to finance strategic investments or pay additional shareholder returns. S&P could raise its ratings on FTAI over the next year if it expects its debt to EBITDA to remain below 4x while organic growth remains strong. GAINWELL ACQUISITION: Fitch Affirms B- LongTerm IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Gainwell Acquisition Corp's Long-Term Issuer Default Rating (IDR) at 'B-'. The Rating Outlook is Stable. Fitch has also affirmed the senior secured first-lien term loan rating at 'B+' with a Recovery Rating of 'RR2'. Fitch's actions affect approximately $4.3 billion of outstanding debt. The affirmation reflects Fitch's expectation that Gainwell's operational performance could be higher than previously projected due to continued growth in revenues and EBITDA margin expansion. Gainwell is on a higher EBITDA trajectory with normalized level of Medicaid Enterprise System (MES) costs, continued cost management and significant progress towards previously announced $200 million of cost saving initiatives. Fitch expects Gainwell's EBITDA leverage to decrease to approximately 8.7x by the end of fiscal 2025 and below 8.0x by 2026, with successful implementation of remaining cost saving measures. Key Rating Drivers Profitability Revival After Temporary Dip: Fitch calculates Gainwell's 2025 projected EBITDA margins at around 25%, about 400 basis points higher than a year ago. Margin growth is primarily driven by stabilizing MES implementation costs and significant progress on its cost transformation plan, having already actioned around 75% of the $200 million plan. Gainwell has identified an additional $45 million of savings related to further operational efficiencies. Fitch believes EBITDA margins could reach 30% over the next few years, if the remaining cost-saving measures are successfully executed. Potential Impact of Medicaid Cuts: Weaker revenue growth in low-single digits is a possibility for the sector amid uncertainty about Medicaid spending and enrollment. However, the Centers for Medicare & Medicaid Services (CMS) has taken steps to implement modular MMIS technologies to improve interoperability and reduce fraud. Fitch believes services such as fraud detection, claims management, and related healthcare IT services will remain crucial for payers. Vendors like Gainwell might not see substantial revenue declines, even with major Medicaid cuts, given the essential role of their solutions. High Leverage Profile: With EBITDA margin improvement, Fitch expects gross leverage to decrease to about 8.7x in fiscal 2025, versus a high of 11.1x in 2024. Fitch views Gainwell's leverage as high for the rating category, and it is near the upper 3.9x-8.8x range for Fitch-rated health care IT issuers in the 'B' rating category. Fitch believes the company's liquidity remains sufficient. Leverage is supported by its dependable growth prospects over the longer term, strong market position, low capital intensity and low cyclicality, with leverage moderating toward 7.0x by the end of the rating horizon. Improving FCF Prospects: Gainwell recorded high MES implementation costs, temporarily affecting profitability and FCF generation in the last two years. Fitch anticipates some stabilization in fiscal 2025, with higher profitability balancing out with the heavy interest expense burden. Fitch expects positive FCF margins in the low-to-mid single digits starting fiscal 2026, supported by cost cutting measures, operational efficiencies and potentially lower interest rates. Strong Market Position: Gainwell is the primary Medicaid Management Information System (MMIS) vendor in 32+ states/territories, serving 51 when including adjacent or modular offerings. It covers about 70 million beneficiaries across its portfolio of offerings, out of 80 million in the Medicaid program. CMS's push for modularity and interoperability has heightened competition and moderated Gainwell's growth rate. However, Fitch expects the company's leadership position, long-term contracts and high retention rates to provide support during re-determination of contracts. Countercyclical Demand: Fitch expects Gainwell's performance to correlate with Medicaid spending and enrollment, given the essential nature of health expenditures. Medicaid enrollment is countercyclical, with high growth during economic downturns as job losses increase eligible beneficiaries, raising demand for the company's offerings. However, due to heightened industry competition, Fitch anticipates Gainwell's revenue growth will be in the low-single digits. This growth will be propelled by new contract wins and implementations but partially offset by potential Medicaid spending cuts. Improper Payments Could Support Growth: According to the Kaiser Family Foundation, Medicaid spending grew about 5.5% in 2024 and is expected grow about 3.9% in 2025. CMS reports that improper payments are declining but are still more than 5% of outlays under Medicaid and the Children's Health Insurance Program. These improper payments are due to eligibility and claims processing complexity, lack of sufficient documentation, shifting regulatory requirements, fraud, and waste. This situation creates opportunities for vendors like Gainwell to effectively administer Medicaid programs. Peer Analysis Fitch expects Gainwell to demonstrate minimal cyclicality and durable resistance to economic cycles due to the counter cyclical aspects of Medicaid enrollment. Fitch sees high visibility into long-term revenue growth, but the company faces risks from an evolving marketplace. Potential regulatory changes may also increase competition or reduce growth in Medicaid expenditures and enrollment over time. Fitch compares Gainwell to few Fitch-rated healthcare IT peers, including athenahealth Group Inc. (B/ Negative) and Waystar Holding Corp. (BB-/ Positive). Fitch rates Gainwell lower than these peers due to its higher leverage profile and negative free cash flow generation in the recent years because of increased MES implementation costs. Compared to other Fitch-rated health care IT peers in the 'B' rating category, Gainwell's profitability metric scores are lower, with Fitch forecasting EBITDA margins in the high 20%, compared with the 32% average for peers. Fitch expects Gainwell's gross leverage to be approximately 8.7x in fiscal 2025, which falls near the upper 3.9x-8.8x range for Fitch-rated health care IT peers. Fitch expects Gainwell's leverage to gradually decline to 7.0x by fiscal 2028, driven by higher profitability. Key Assumptions - Organic revenue growth in the low-single digits; - EBITDA margins expanding to high 20%-range; - Capital intensity 2.0% of revenue; - Debt repayment limited to mandatory amortization; - Interest rate forecasted to be 4.50% in FY26, going down to 4.00% in FY27 and FY28, respectively; - Refinancing of first-lien revolver facility and term loans prior to maturity. Recovery Analysis Key Recovery Rating Assumptions - The recovery analysis assumes that Gainwell would be reorganized as a going-concern in bankruptcy rather than liquidated; - A 10% administrative claim. Going-Concern (GC) Approach The estimated GC EBITDA reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation (EV). Fitch contemplates a scenario where the growing trend of modular MMIS offerings intensifies market competition and leads to loss of market share for Gainwell. This shift is expected to cause a slowdown in revenue growth, with lower profitability stemming from additional significant MES costs. Consequently, Fitch expects Gainwell would likely be reorganized with a similar product strategy and higher than planned levels of operating expenses as the company reinvests to develop competing products, ensure customer retention and defend against competition. Under this scenario, Fitch believes EBITDA margins would decline such that the resulting GC EBITDA is about 18% below fiscal 2026 expected EBITDA level. An EV multiple of 7.0x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: - Comparable Reorganizations: In the 2024 "Telecom, Media and Technology Bankruptcy Enterprise Values and Creditor Recoveries" case study, the median TMT multiple of reorganization EV/EBITDA is around 5.9x. Among the companies covered in this study, five were in the software subsector: SunGard Availability Services Capital, Inc. (4.6x), Aspect Software, Inc. (5.5x), Allen Systems Group, Inc. (8.4x), Avaya, Inc. (8.1x in 2017, 7.5x in 2023) and Riverbed Technology Software (8.3x). Long-term contracts ranging from 6 to 10 years, average client relationship of 10 to 20 years, with low customer concentration, and mission critical nature of Gainwell's solutions support the high-end of the range; - M&A Multiples: A study of 273 precedent transactions in the health care IT industry during 2015-2020 established median EV/EBITDA transaction multiples ranging 9x to 18x, depending on the specific product area. In addition, HMS was acquired at a 15.5x multiple, excluding synergies. Fitch evaluated the following qualitative and quantitative factors that are likely to influence the GC valuation: - The company plays a pivotal role by providing a comprehensive suite of MMIS services to states to effectively administer Medicaid programs; - Barriers to entry are high relative to software issuers, as deep domain and regulatory expertise are required to develop necessary solutions; - The revenue and cash flow outlook are favorable because longstanding secular trends support revenue growth, while moderate margin expansion and low capital intensity promote higher FCF margins; - Revenue certainty is high as a result of 90%+ recurring revenue profile, typical contract duration of six to 10 years, 100% client retention and the countercyclicality of Medicaid; Fitch believes these factors reflect a particularly attractive business model that is likely to generate significant interest, resulting in a recovery multiple at the high-end of Fitch's range. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA interest coverage below 1.0x for a sustained period; - (CFO-capex)/debt below 0% for a sustained period; - Erosion of the company's competitive advantage or market position. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - (CFO-capex)/ debt sustained above 3%; - EBITDA leverage sustained below 7.5x; - EBITDA interest coverage sustained above 1.5x; - Organic growth sustained above high single digits. Liquidity and Debt Structure Fitch expects Gainwell to maintain adequate liquidity, given moderating MES implementation costs resulting in stronger margins, a highly variable cost structure, and low capital intensity. Liquidity is currently comprised of approximately $45 million in cash, and an undrawn $400 million RCF. Liquidity is further supported by Fitch's forecast for positive FCF generation over the rating horizon in low-to-mid single digits. Gainwell has first lien senior secured facilities, including an undrawn $400 million revolver, and an outstanding amount of $4,310 million term loan which amortizes at 1% per annum. Gainwell also has a second lien senior secured term loan of $1,459 million. The revolver and the first lien term loan mature in 2027, and the second lien term loan matures in 2028, providing the company ample headroom. Issuer Profile Gainwell is a software and solutions provider that supports the administration and operation of government Medicaid programs and other Health & Human Services (HHS) initiatives through a Medicaid Management Information Systems (MMIS). 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 ----------- ------ -------- ----- Gainwell Acquisition Corp. LT IDR B- Affirmed B- senior secured LT B+ Affirmed RR2 B+ GBG RANCH: $1.8MM Attorney's Fees Awarded in Benavidez-Hunt Suit ---------------------------------------------------------------- Judge Jeffrey Norman of the United States Bankruptcy Court for the Southern District of Texas approved in part and denied in part the motion for the award of attorney's fees filed by plaintiff's counsel in the case captioned as NORMA BENAVIDEZ-HUNT, Plaintiff, VS. G.B.G. RANCH, LTD. THE ESTATE OF NORMA Z. BENAVIDES GUILLERMO BENAVIDES Z MANUAL A. BENAVIDES CARL MICHAEL BARTO, Defendants, ADVERSARY NO. 16-5005 (Bankr. S.D. Tex.). Ms. Hunt is awarded total attorneys' fees and costs of $1,797,561.45 to be paid by Guero Benavides. This adversary was filed on Aug. 16, 2016. After years of litigation, interim judgments, and a trial over three and one-half years on all remaining issues starting on Aug. 28, 2019, continuing on Aug. 30, 2019, Nov. 6, 2019, May 3, 2021, May 4, 2021, through May 7, 2021, and November 30, 2021, through Dec. 2, 2021. Closing arguments were heard on March 8, 2022, through March 9, 2022. Judge Jones issued a Memorandum Opinion on Dec. 4, 2022, which found fraud on the court, voided a transfer of the Residuary Trust's interest to Guero Benavides, his children and his affiliates/trust and that any release or exculpation provided to any non-debtor parry under the confirmed plan is not binding on Ms. Hunt. The Memorandum Opinion also awarded Ms. Hunt reasonable attorney's fees to be paid by Guero Benavides as the party responsible for implementing the Plan but intentionally failing to do so. Counsel for Ms. Hunt filed their Motion for the Award of Attorneys' Fees on Jan. 3, 2023 requesting a total amount of $2,579,023.70 in fees and expenses from Feb. 19, 2016, through Nov. 28, 2022. A hearing was held on Aug. 17, 2023, on the Motion for the Award of Attorneys' Fees. Judge Jones decided to award $2,293,009.35 in fees and expenses. Judge Jones resigned on October 16, 2023, and this case was reassigned to Judge Norman. Judge Norman entered an Order on the Motion for the Award of Attorneys' Fees based on the transcript of the hearing and awarded Ms. Hunt attorneys' fees and costs of $2,293,009.35 to be paid by Guero Benavides. Thereafter a Final Judgment was entered by Judge Norman in the adversary awarding Ms. Hunt her reasonable attorneys' fees to be paid by Guero Benavides, individually. The Final Judgment and the Order on Attorneys' Fees were both appealed on Dec. 19, 2023. The District Court remanded the Order on Attorneys' Fees as to Amount Awarded on Nov. 14, 2024, but affirmed the remainder of the Final Judgment. The District Court found that the Bankruptcy Court's award of attorneys' fees was not an abuse of discretion; however, that the amount awarded lacked sufficient support. Hearing was held on Feb. 27, 2025, to address the remanded issue of attorneys' fees. The Court has reviewed the billing submitted by Jordan & Ortiz, P.C. and Broocks Law Firm. The Jordan billing contains entries by Shelby Jordan, Antonio Ortiz and Chrystal Madden. The Broocks billing contains entries by Ben Broocks, William Broocks, Ben Broocks, Jr. The Court reduces Jordan's billing by $4,207.00 and Broocks billing by $7,512.50 for a total reduction of the fees requested of $11,719.50. The Court allows fees billed by Shelby Jordan, Ben Broocks and Chrystal Madden, disallowing the remaining requested fees of $7,792.50. The Court will reduce the attorneys' compensation awarded because of unsuccessful appeals. The total deduction for unsuccessful appeals is $185,067.50. The total reduction for travel in the Jordan billing is $6,630.00. Entries for travel by Ben Broocks will be reduced by half, or $43,200.00. In addition, the Court reduces the multiple entries for travel by other employees of the Broocks Firm for travel on the same dates totaling $3,600.00. The Court reduces the requested fees by $6,287.50 for clerical entries. A copy of the Court's decision is available at https://urlcurt.com/u?l=Q1bfFE from PacerMonitor.com. About GBG Ranch GBG Ranch, LTD, a Texas Limited Partnership, owns the surface estate of three ranches in the vicinity of Laredo, Webb County, Texas. GBG Ranch sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 14-50155) in Laredo, Texas on July 8, 2014, to seek relief from the contentious and costly intra-family litigation that had been ongoing for several years. The petition was signed by Manuel A. Benavides, president. The Benavides family, consisting of the matriarch, Norma, her two sons, Guillermo ("Memo") and Manuel ("Guero"), and various entities owned and controlled by them in varying percentages, have been embroiled in acrimonious litigation since early 2011. The parties to these lawsuits (which were consolidated into a single lawsuit under Case No. 2011 CVF 000194-D1) are various factions of the Benavides family and organizations controlled by them which are suing each other on a multiplicity of claims including efforts to wrest control over the Ranches from the current management of the Debtor and to displace the current management of the Debtor. The Debtor removed the litigation to the Bankruptcy Court on July 9, 2014. The litigation has been abated by the agreement of the parties pending further order of the Bankruptcy Court. The Debtor believes that the litigation can and will be resolved by the Bankruptcy Court, either by agreement or judgment subsequent to the confirmation of the Plan. In schedules filed Dec. 9, 2014, the Debtor disclosed $54,111,258 in assets and $4,401,493 in liabilities as of the Chapter 11 filing. The company is represented by the Law Office of Carl M. Barto. Leslie M. Luttrell and the Luttrell + Villareal Law Group serve as special counsel. In October 2014, the Court, with the agreement of the Debtor, Memo and Quita Wind, appointed Ronald Hornberger as the Chapter 11 Examiner under 11 U.S.C. Sec. 1106. GLASS MANAGEMENT: Court Extends Cash Collateral Access to March 31 ------------------------------------------------------------------ Glass Management Services, Inc. received another extension from the U.S. Bankruptcy Court for the Northern District of Illinois to use the cash collateral of Old National Bank. The company was authorized to use cash collateral until March 31 to pay the expenses set forth in its budget, plus an amount not to exceed 10% for each line item. The company projects total operational expenses of $227,023.87. Old National Bank's interest in the assets will be protected by replacement liens on post-petition assets, according to the interim order penned by Judge Janet Baer. The bank will also be granted a superpriority administrative expense claim in case of diminution in value of its collateral and will receive monthly payments of $30,000 from Glass Management starting this month, which the bank can automatically debit from the company's account. Glass Management Services was ordered to keep the bank's collateral insured. The next hearing is scheduled for March 26. About Glass Management Glass Management Services, Inc. is a construction contractor based in Illinois, specializing in glazing services. Established with a focus on high-profile projects, the company has been involved in significant developments, including the Obama Presidential Library, Terminal 5 at O'Hare Airport, and multiple Chicago Public Schools and CTA transit stations. Glass Management Services sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-14036) with $3,029,997 in assets and $11,989,444 in liabilities. Ernest B. Edwards, president of Glass Management Services, signed the petition. Judge Janet S. Baer presides the case. The Debtor is represented by: David P Leibowitz, Esq. Leibowitz, Hiltz & Zanzig, LLC Tel: 312-566-9008 Email: dleibowitz@lodpl.com GLOBAL JOINT: Secured Party Sets April 23, 2025 Auction ------------------------------------------------------- Emerald Creek Capital 3 LLC ("secured party"), in its capacity as administrative agent, offers for sale at public auction on April 23, 2025, at 11:00 a.m. (prevailing Eastern Time) at the offices of Herrick, Feinstein LLP, 2 Park Avenue, New York, New York, pursuant to the New York Uniform Commercial Code: (i) 100% of the issued and outstanding shares of capital stock of Global Joint Venture Inc. ("Debtor"); (ii) all other collateral pledged under the amended and restated pledge and security agreement dated as of April 7, 2023 ("security agreement"), between Hung Kwong, Leung Chung Lew, Kam Hung Ng, Patrick Wu and 139 Bowery Holdings LLC ("pledgors"), as pledgors and secured party; and (iii) all other tangible and intangible property in respect of which secured party is granted any lien, security interest, claim, liability, charge or encumbrance of any kind or nature under the loan documents ("collateral"). The pledgors are the owners of all of the issued and outstanding shares of capital stock of the Debtor. The Debtor executed an acquisition loan note in favor of the secured party pursuant to that certain acquisition loan note dated as of July 10, 2019, in the principal sum of $3,409,447.39. The Debtor executed a building loan note in favor of the secured party pursuant to that certain building loan note dated July 10, 2019, in the principal amount of $26,195,340.37. The Debtor executed a project loan note in favor of the secured party pursuant to that certain project loan note dated as of July 10, 2019, in the principal sum of $2,395,212.24. Any individual desiring to bid at the sale must register with the broker, 135 West 36th Street, 5th Floor, New York, New York 10018, Attention: Robert A. Knakal, bk@bkrea.com, at 917-509-9501, and Jas Saini, Jas@bkrea.com at (571) 447-0489, and must satisfy the requirements for becoming a qualified bidder. Any individual intending to attend the sale must contact secured party's counsel, Stephen B. Selbst, sselbst@herrick.com at 212-59201405 at least 72 hours prior to the sale date to obtain access to the offices of the secured party's counsel located at 2 Park Avenue, New York, New York. All attendees must also show a government-issued photo identification to building security before they will be granted access to the sale auction. For further information contact: Robert A. Knakal, bk@bkrea.com, at 917-509-9501, and Jas Saini, Jas@bkrea.com at (571) 447-0489, or secured party's counsel, Stephen B. Selbst of Herrick Feinstein LLP at 2 Park Avenue, New York, New York or email: sselbst@herrick.com, or via phone at 212-59201405. GLOBAL WOUND: April 8, 2025 Claims Filing Deadline Set ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas set April 8, 2025, at 5:00 p.m. (prevailing Central Time) as last date and time for persons or entities to file proofs of claim against Global Wound Care Medical Group. The Court also set July 14, 2025, at 5:00 p.m. (prevailing Central Time) as deadline for governmental units to file their claims against the Debtor. All proof(s) of claim can be filed (i) electronically through Kurtzman Carson Consultants LLC dba Verita Global ("Verita"), at https://www.veritaglobal.net/gwc; (ii) electronically through PACER (Public Access to Court Electronic Records), at https://ecf.txsb.uscourts.gov; or (iii) by delivering the original proof(s) of claim to Verita by first class mail, overnight mail, or hand delivery at the following address: GWC Claims Processing Center c/o KCC dba Verita 222 N Pacific Coast Highway, Suite 300 El Segundo, CA 90245 Copies of the Bar Date Order, the Schedules, and other information regarding the Debtor's Case are available for inspection free of charge on the Debtor's bankruptcy administration website, at https://www.veritaglobal.net/gwc, maintained by the Debtor’s claims and noticing agent, Verita. Copies of the Schedules and other documents filed in this Case may also be examined between the hours of 8:00 a.m. and 5:00 p.m. (prevailing Central Time), Monday through Friday, at the Office of the Clerk of the Court, 515 Rusk Avenue, Houston, TX 77002. Proof of claim forms and a copy of the Bar Date Order may be obtained by visiting Verita's website at https://www.veritaglobal.net/gwc. Verita cannot advise you how to file, or whether you should file, a proof of claim. Questions concerning the contents of this Notice and requests for copies of filed proofs of claim should be directed to Verita by visiting https://www.veritaglobal.net/GWC/inquiry or by calling Verita at (866) 967-0671. Please note that neither Verita's staff, counsel to the Debtor, nor the Clerk of the Court’s Office is permitted to give you legal advice. About Global Wound Care Medical Group Global Wound Care Medical Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 24-34908) on Oct. 21, 2024, with $100 million to $500 million in both assets and liabilities. Owen B. Ellington, M.D., president of Global Wound Care Medical Group, signed the petition. Judge Eduardo V. Rodriguez oversees the case. Casey W. Doherty, Jr., Esq., at Dentons US, LLP serves as the Debtor's legal counsel while Verita Global serves as notice, claims and balloting agent. Suzanne Richards is the patient care ombudsman appointed in the Debtor's case. GMC HOLDING: April 3, 2024 Foreclosure Auction Set -------------------------------------------------- Pursuant to the final judgment of foreclosure and sale ("judgment") entered on Jan. 16, 2025, in the total sum of $3,162,322.34, plus post-judgment default interest and expenses of the sale, wherein U.S. Bank National Association, is the plaintiff and GMC Holding LLC, et al., are defendants. The receiver will sell at public foreclosure sale the real property located at 378 and 380 East 139th Street, Bronx, New York 10022 (Block 2301, Lots 21 and 22), all that certain plot, piece or parcel of land situate, lying, and being in the City of New York, County of Bronx and State of New York ("mortgage premises"), free and clear of any other liens, claims, interests and encumbrances, with such liens, claims, interests and encumbrances to attach to the sale proceeds. The Receiver will conduct the public auction sale to sell the mortgage premises on April 3, 2025, at 10:00 a.m. (prevailing Eastern Time) outside of the public entrance of the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York 10016. The undersigned will accept the highest bid offered by a bidder and will require that successful bidder to (i) provide proper government-issued identification, (ii) immediately execute terms of sale for purchase of the collateral, and (iii) pay by certified or bank check 10% of the sum bid, made payable to Stephen J. Ginsberg, Esq., as receiver. Cash will not be accepted. The plaintiffs reserves all rights to credit bid its allowed claim in satisfaction with the underlying debt and is not required to post a deposit. Any bidder seeking to participate in the auction and seeking information regarding the assets must contact the Receiver, Stephen J. Ginsberg, Esq., by telephone at (516) 880-7219 or by email at sginsberg@moritthock.com. GM Holdings LLC is a property management company dedicated to commercial and residential realty. GRESHAM WORLDWIDE: Seeks Cash Access, DIP Loan From Ault -------------------------------------------------------- Gresham Worldwide, Inc. asked the U.S. Bankruptcy Court for the District of Arizona for authority to use cash collateral and obtain an additional $600,000 in debtor-in-possession financing from Ault Lending LLC. The Debtor seeks to continue using cash collateral through June 30, 2025 in accordance with the proposed budget to continue operations and manage financial obligations. The Expanded $600,000 DIP loan is necessary to cover operational costs until the Debtor's Chapter 11 reorganization plan is confirmed. The Expanded DIP Loan will be subject to the same terms as the existing DIP loan, which was originally approved by the court in October 2024. The existing DIP loan has a borrowing limit of $1.25 million, and the Debtor has been able to manage cash effectively enough to operate without needing to tap into the full loan balance until now. However, as of March 31, 2025, the Debtor expects to have reached the borrowing limit on the existing DIP loan, making the Expanded DIP Loan necessary to continue operations beyond that point. The Expanded DIP Loan has a 4% annual interest rate, which is considered below-market. Secured Creditors (Arena and Walleye) are the primary stakeholders whose interests are being protected. The court has already determined that Arena's claims are adequately protected through mechanisms such as equity cushions, replacement liens, and adequate protection payments of $60,000. A copy of the motion is available at https://urlcurt.com/u?l=ttn7Jb from PacerMonitor.com. About Gresham Worldwide Gresham Worldwide, Inc. designs, manufactures, and distributes purpose-built electronics equipment, automated test solutions, power electronics, supply and distribution solutions, as well as radio, microwave, and millimeter wave communication systems and components for a variety of applications with a focus on the global defense industry and the healthcare market. Gresham Worldwide sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 24-06732) on Aug. 14, 2024. In the petition filed by Lutz P. Henckels, chief financial officer, the Debtor disclosed $32,859,000 in assets and $39,786,000 in liabilities as of June 30, 2024. Judge Scott H. Gan oversees the case. Patrick A. Clisham, Esq., at Engelman Berger, PC serves as the Debtor's legal counsel. The U.S. Trustee appointed an official committee of unsecured creditors in this Chapter 11 case. The committee tapped Stinson, LLP as legal counsel. Ault Lending LLC, as DIP Lender, is represented by: Christopher C. Simpson, Esq. Warren J. Stapleton, Esq. Andrew B. Haynes, Esq. OSBORN MALEDON, P.A. 2929 North Central Avenue 20th Floor Phoenix, Arizona 85012-2793 HYCROFT MINING: Moss Adams Raises Going Concern Doubt ----------------------------------------------------- Hycroft Mining Holding Corporation disclosed in a Form 10-K Report filed with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2024, that its auditor expressed an opinion that there is substantial doubt about the Company's ability to continue as a going concern. Dallas, Texas-based Moss Adams LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated March 5, 2025, citing that the Company has suffered recurring losses from operations and does not anticipate generating positive cash flows from operations in the near term which raises substantial doubt about its ability to continue as a going concern. Since ceasing mining operations in 2021 and completing gold and silver recovery in 2022, the Company has incurred significant operating losses. As the Company does not anticipate generating positive cash flow from operations in the near term, it remains dependent on unrestricted cash to meet its obligations over the next 12 months from the filing of these financial statements. During the year ended December 31, 2024, the Company used $35.9 million of cash in operating activities, primarily attributable to a Net loss of $60.9 million, the cash impact of which was equal to $38.1 million. The Company's ability to continue as a going concern over the next 12 months from the filing of these financial statements depends on various cost control measures, including the potential to defer expenditures, reduce exploration and development activities, or secure additional capital if necessary. There can be no assurance that the Company will be successful in its plans. The Company is subject to certain debt covenants under the Sprott Credit Agreement that require the Company to ensure that, at all times, its Unrestricted Cash is at least $15 million and its Working Capital is at least $10.0 million, as such terms are defined in the Sprott Credit Agreement. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Company's Form 10-K is available at: https://tinyurl.com/mt88mt99 About Cyclerion Therapeutics, Inc. Hycroft Mining Holding Corporation (formerly known as Mudrick Capital Acquisition Corporation) was incorporated under the laws of the state of Delaware on August 28, 2017. Hycroft is a U.S.-based gold and silver exploration and development company that owns the Hycroft Mine in the prolific mining region of Northern Nevada. As of December 31, 2024, the Company has $140.1 million in total assets, $173.6 million in total liabilities, and total stockholders' deficit of $33.4 million. I&I DIAMONDS: Tarek Kiem of Kiem Law Named Subchapter V Trustee --------------------------------------------------------------- The U.S. Trustee for Region 21 appointed Tarek Kiem, Esq., at Kiem Law, PLLC as Subchapter V trustee for I&I Diamonds, LLC. Mr. Kiem will be paid an hourly fee of $300 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Kiem declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Tarek Kiem, Esq. Kiem Law, PLLC 8461 Lake Worth Road, Suite 114 Lake Worth, FL 33467 Tel: (561) 600-0406 Email: tarek@kiemlaw.com About I&I Diamonds LLC I&I Diamonds LLC is a jewelry retailer, doing business from 6564 North State Road 7 Coconut Creek, Florida. I&I Diamonds LLC sought relief under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 25-12017) on February 26, 2025. In its petition, the Debtor reports estimated assets up to $50,000 and estimated liabilities between $100,000 and $500,000. Honorable Bankruptcy Judge Scott M. Grossman handles the case. The Debtor is represented by: Joe M. Grant, Esq. LORIUM LAW 197 South Federal Highway, Suite 200 Boca Raton, FL 33432 Tel: (561) 361-1000 Email: jgrant@marshallgrant.com INSTANT BRANDS: UST's Objection to Chapter 11 Plan Overruled ------------------------------------------------------------ Judge Marvin Isgur of the United States Bankruptcy Court for the Southern District of Texas overruled the limited objection filed by the United States Trustee to the confirmation of Instant Brands' Chapter 11 plan. On Feb. 23, 2024, the Court entered its order confirming the Chapter 11 plan, which contains exculpation provisions. The U.S. Trustee objects to the exculpation of Instant Brands' independent directors for their conduct in connection with the reorganization. The U.S. Trustee alleges that the exculpation is not permitted under Fifth Circuit precedent. The plan and the confirmation order limit the independent directors' exculpation to conduct performed during the administration of the Chapter 11 case. The exculpation provision excludes willful misconduct and gross negligence and is limited to conduct within the scope of the independent directors' duties as management for the debtor-in-possession. The exculpation is valid as written in the plan and modified by the Court in its confirmation order. The Court finds independent directors are "Exculpated Parties" under the plan. The U.S. Trustee's plan objection is overruled. A copy of the Court's decision is available at https://urlcurt.com/u?l=ReaPTI from PacerMonitor.com. About Instant Brands Instant Brands designs, manufactures and markets a global portfolio of innovative and iconic consumer lifestyle brands: Instant, Pyrex, Corelle, Corningware, Snapware, Chicago Cutlery, ZOID and Visions. Instant Brands Holdings Inc. and Instant Brands Inc., and their affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90716) on June 12, 2023. In the petition signed by Adam Hollerbach, chief restructuring officer, the Debtors disclosed up to $1 billion in both assets and liabilities. Judge David R. Jones oversees the case. Davis Polk & Wardwell LLP's Brian M. Resnick, Steven Z. Szanzer and Joanna McDonald serve as counsel to the Debtors. The Debtors also tapped Haynes and Boone, LLP as Texas counsel, Stikeman Elliott LLP as Canadian counsel, AlixPartners, LLP as financial advisor, Guggenheim Securities LLC as investment banker, and Epiq Corporate Restructuring, LLC as claims, noticing, agent, solicitation and administrative advisor. DLA Piper LLP (US) serves as counsel to the Official Committee of Unsecured Creditors. Ropes & Gray LLP serves as counsel to the DIP Lenders, and Moelis & Company LLC and Ankura Consulting Group, LLC act as advisors to the Term DIP Secured Parties. Skadden, Arps, Slate, Meagher & Flom LLP and Norton Rose Fulbright and Norton Rose Fulbright Canada LLP serve as counsel and FTI Consulting as financial advisor to the ABL DIP Secured Parties. Kramer Levin Naftalis & Frankel LLP serves as counsel to Cornell Capital. INSTITUTE OF MGMT: Ohio Loses Summary Judgment Bid Against Founder ------------------------------------------------------------------ Judge Guy Humphrey of the United States Bankruptcy Court for the Southern District of Ohio denied the State of Ohio's motion for summary judgment in the case captioned as Ohio Attorney General, Plaintiff, v. Jeanette C. Harris, Defendant, Adv. No. 23-3003 (Bankr. S.D. Ohio). On Aug. 31, 2022, the debtors, Earl G. Harris and Jeanette C. Harris, filed a joint petition for relief under Chapter 7 of the Bankruptcy Code. On March 2, 2023 the state of Ohio, through the Ohio Attorney General filed an adversary proceeding against Jeanette Harris. Ohio's complaint concerns Harris's dual role in certain community schools and, as will be explained, the management companies that had a direct or indirect relationship with these schools. In Count I, the complaint sought to find Harris strictly liable for at least $2,198,651, plus interest for strict liability as a public official for funds received by two management companies that entered into contracts with the community schools. The second count seeks a finding that Harris breached her fiduciary duty of loyalty in this dual role with the community schools and the management companies. Count III seeks to find Harris liable under the faithless servant doctrine for all compensation she received from the community schools due to her violation of the fiduciary duty of loyalty. Count IV seeks to find any judgment against Harris non-dischargeable pursuant to Sec. 523(a)(7) of the Bankruptcy Code. On March 23, 2023, Harris sought to dismiss the complaint for failure to state a claim. Ohio voluntarily agreed to dismiss Count I. The Court otherwise denied Harris's motion to dismiss. It also denied Harris's motion to strike the appendix to Ohio's complaint, a 496 page audit of the community schools prepared by the Auditor for the State of Ohio, dated June 30, 2011. On Dec. 6, 2024, Ohio filed for summary judgment on the remaining three counts, seeking a judgment in the total amount of $876,829, which represents compensation Harris received, and a finding that this judgment is non-dischargeable under Sec. 523(a)(7) of the Bankruptcy Code. Harris founded four different schools known as the Richard Allen Academies or Richard Allen Schools starting in 1999. Harris was President of the Schools from 2002 until January 3, 2009, and was President/CEO of the Schools from 2009 through 2012. Harris also founded the Institute of Management Resources. IMR had a contract with the Schools to provide management services. The Schools did not require competitive bidding for IMR to receive these contracts, although it appears this was not required under state law. Harris signed contracts on behalf of IMR. Harris also owned another management company known as the Institute of Charter School Management and Resources. Harris was the sole shareholder, CEO, and President of ICSMR from 2000 until at least 2018. The Schools had contracts with IMR, and IMR in turn had separate contracts with ICSMR to provide services to IMR. As the President or CEO of the Schools, there is no doubt that Harris had fiduciary duties to the Schools. It is also not in dispute that Harris was an officer of IMR, and IMR paid ICSMR for certain consulting duties. Harris was paid by ICSMR, a company she wholly owned and controlled. Therefore, the record is clear that, at an absolute minimum, Harris had significant involvement in the Schools, ICR, and ICSMR. Harris argues that material issues of fact exist as to whether she breached her duty of loyalty to the Schools. In the record before the Court, again, there is not a material dispute of fact that Harris was a fiduciary of the Schools. But it is not clear from the summary judgment record what specific actions Harris took in breach of her fiduciary duty to the Schools, the Court finds. The record only shows Harris receiving a significant yearly salary from ICSMR, but there's little in the summary judgment record for this Court to determine whether the compensation paid to her by ICSMR was reasonable compensation in part, in whole, or not at all for the services which IMR and ICSMR provided to or on behalf of the Schools. According to the Court, Ohio must show that Harris breached specific fiduciary duties to the Schools and that the breach of those duties resulted in specific harm. Additionally, the exact basis for the level of Harris's compensation with ICSMR, if any, that is not related to the Schools is also not clear from the record. But it also appears some of the revenue of ICSMR, although how much is not known to the Court, is unrelated to IMR or the Schools. According to the Court, Ohio needs to demonstrate that Harris acted not in the best interests of the Schools, but instead in the best interest of IMR, ICSMR, and ultimately herself. At this point, no link between the overpayments to the Schools established by the audit, and Harris's compensation and the actions she took has been made. According ot he Court, Ohio needs to establish Harris's breach of loyalty or breach of any other fiduciary obligation to the Schools proximately led to the ultimate harm to the Schools. Ohio's argument largely rests on the premise that Harris violated her duty of loyalty based upon her simultaneous roles with IMR, ICSMR, and the Schools. These roles certainly create a considerable concern for any fiduciary because the financial interests of IMR, ICSMR, and the Schools were not aligned. Still, Ohio, at least at the summary judgment stage, does not point to specific contracts, transactions, or actions by Harris that were negotiated or entered into in bad faith or that otherwise were inconsistent with her fiduciary duties to the Schools, the Court finds. Instead, the argument is apparently that Harris signed agreements that ultimately, even if indirectly through ICSMR, generally benefited her rather than the Schools. The damages Ohio seeks, the forfeiture of compensation that Harris received from ICSMR, has not been established on this record, the Court concludes. That is, Ohio has not established through its summary judgment motion that Harris breached specific fiduciary duties by authorizing the payment of the funds to IMR and then to ICSMR and then to herself or by failing to recover those overpayments from IMR on behalf of the Schools. The Court determines there are material issue of fact regarding the remaining counts in the complaint (Counts II, III, and IV), and denies Ohio's motion for summary judgment. A copy of the Court's decision is available at https://urlcurt.com/u?l=lyF4b1 from PacerMonitor.com. About Institute of Management and Resources Institute of Management and Resources, Inc., is a tax-exempt, nonprofit corporation that provides management consulting services to educational institutions. Institute of Management and Resources sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio Case No. 18-30821) on March 22, 2018. In the petition signed by Katie Harvey, secretary, the Debtor estimated assets and liabilities of $1 million to $10 million. Judge Beth A. Buchanan oversees the case. The Debtor tapped the Law Offices of Ira H. Thomsen as its legal counsel. IYA FOODS: Court Extends Cash Collateral Access to March 29 ----------------------------------------------------------- Iya Foods Inc. received another extension from the U.S. Bankruptcy Court for the Northern District of Illinois to use cash collateral. The interim order authorized the company to use cash collateral until March 29 to pay the expenses set forth in its budget. The budget shows total weekly expenses of $36,553.39 for the week ending Mar. 2; $70,171.77 for the week ending March 9; and $1,140.00 for the week ending March 16; $33,794.63 for the week ending March 23; $28,440.11 for the week ending March 30; $31,638.11 for the week ending April 6. The U.S. Small Business Administration and Village Bank and Trust, N.A. were granted a post-petition security interest in and lien on assets that secured their pre-bankruptcy claims. The next hearing is set for April 26. About Iya Foods Inc. Iya Foods Inc. is a company that specializes in producing and offering African superfoods. Its products are plant-based, gluten-free, non-GMO, kosher, and free from preservatives, additives, or artificial ingredients. The company focuses on creating nutritious and delicious ingredients that can be used in a variety of recipes, making them accessible to people with dietary preferences or restrictions, such as those following vegan or gluten-free diets. Iya Foods filed Chapter 11 petition (Bankr. N.D. Ill. Case No. 25-00341) on January 10, 2025, listing between $100,000 and $500,000 in assets and between $1 million and $10 million in liabilities. Judge Deborah L. Thorne handles the case. The Debtor is represented by Justin R. Storer, Esq., at the Law Office of William J. Factor. Village Bank and Trust, N.A., a secured creditor, is represented by: Andrew H. Eres, Esq. Dickinson Wright PLLC 55 W. Monroe, Suite 1200 Chicago, IL 60603 Phone; 312-377-7891 Email: aeres@dickinson-wright.com JAGUAR HEALTH: Reverse Stock Split, Adjournment Proposals Approved ------------------------------------------------------------------ Jaguar Health, Inc., revealed the outcome of the vote at its Special Meeting of Stockholders on March 13, 2025. During the Special Meeting, the Company's stockholders authorized two resolutions, which were as follows: (1) Proposal to approve an amendment to the Company's Third Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of the Company's issued and outstanding voting common stock, par value $0.0001 per share, at a ratio of not less than 1-for-15 and not greater than 1-for-40, with the exact ratio, if approved and effected at all, to be set within that range at the discretion of the Company's board of directors and publicly announced by the Company on or before March 13, 2026 without further approval or authorization of the Company's stockholders; and (2) Proposal to approve one or more adjournments of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to approve Proposal 1. "Jaguar has multiple expected near-term catalysts. The Company is supporting three proof-of-concept (POC) investigator-initiated trials (IIT), and conducting two Phase 2 studies, of crofelemer, our novel plant-based anti-secretory prescription drug, for the rare diseases short bowel syndrome with intestinal failure (SBS-IF) and/or microvillus inclusion disease (MVID) in the US, European Union, and/or Middle East/North Africa regions. The first POC IIT results are expected to be available in the second quarter of 2025, with additional POC IIT results expected throughout 2025. In accordance with the guidelines of specific EU countries, published data from clinical investigations in MVID and SBS-IF could support reimbursed early patient access to crofelemer for these debilitating conditions," Lisa Conte, Jaguar's president and CEO, said. "Additionally, the Company expects that if even just a very small number of MVID patients show benefit with crofelemer, this may potentially allow pathways for regulatory approval in the US and other regions and qualify crofelemer for participation in PRIME, a European Medicines Agency (EMA) program providing enhanced interaction and early dialogue with drug developers of novel medicines targeting unmet medical needs, and in the U.S. Food and Drug Administration's (FDA) Breakthrough Therapies program. If a drug is designated as breakthrough therapy, the FDA will expedite the development and review of the drug." Jaguar also remains focused on development of crofelemer for cancer therapy-related diarrhea (CTD). As announced, the analysis of the prespecified subgroup of adult patients with breast cancer from the Company's recently conducted Phase 3 prophylactic OnTarget clinical trial for diarrhea in adult patients with solid tumors receiving targeted therapy with or without standard chemotherapy indicate that crofelemer achieved statistically significant results in this subgroup. These results were the subject of a December 11, 2024 poster presentation at the San Antonio Breast Cancer Symposium. The Company has requested a meeting with the FDA to discuss the results of OnTarget in breast cancer patients and potential pathways to bring crofelemer to this patient population as efficiently as possible, and expects the meeting to take place in the second quarter of 2025. About Jaguar Health Jaguar Health, Inc. -- http://www.jaguar.health/-- is a commercial stage pharmaceuticals company focused on developing novel proprietary prescription medicines sustainably derived from plants from rainforest areas for people and animals with gastrointestinal distress, specifically associated with overactive bowel, which includes symptoms such as chronic debilitating diarrhea, urgency, bowel incontinence, and cramping pain. Jaguar family company Napo Pharmaceuticals (Napo) focuses on developing and commercializing human prescription pharmaceuticals for essential supportive care and management of neglected gastrointestinal symptoms across multiple complicated disease states. Napo's crofelemer is FDA-approved under the brand name Mytesi for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. Jaguar family company Napo Therapeutics is an Italian corporation Jaguar established in Milan, Italy in 2021 focused on expanding crofelemer access in Europe and specifically for orphan and/or rare diseases. Jaguar Animal Health is a Jaguar tradename. Magdalena Biosciences, a joint venture formed by Jaguar and Filament Health Corp. that emerged from Jaguar's Entheogen Therapeutics Initiative (ETI), is focused on developing novel prescription medicines derived from plants for mental health indications. Larkspur, California-based RBSM, LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 1, 2024, citing that the Company has an accumulated deficit, recurring losses, and expects continuing future losses. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company has incurred net losses since its inception. For the years ended Dec. 31, 2023 and 2022, the Company had net losses of $41.9 million and $48.4 million, respectively, and expects to incur additional losses in the near-term future. At Dec. 31, 2023, the Company had an accumulated deficit of $308.2 million and accumulated comprehensive loss of $652,000. To date, the Company has generated only limited revenue, and it may never achieve revenue sufficient to offset its expenses. JERVOIS GLOBAL: Enters Voluntary Administration After Ch. 11 Filing ------------------------------------------------------------------- Jervois Global Limited (TSX-V: JRV) (ASX: JRV) (OTC: JRVMF) announced on March 12, 2025 that David Hardy and Gayle Dickerson of KPMG were appointed as joint and several voluntary administrators of Jervois Global Limited (Administrators Appointed) and certain subsidiaries listed in the below schedule. Companies and their various subsidiaries are a leading global supplier of advanced manufactured cobalt products. The Group's principal asset base is comprised of an operating cobalt facility in Finland, a non-operational cobalt mine in the United States and a non-operating nickel-cobalt refinery in Brazil. The appointment followed the entry of an order by the U.S. Bankruptcy Court for the Southern District of Texas on 6 March 2025 (Houston time) approving the chapter 11 plan of reorganisation of Jervois Texas, LLC and certain debtor subsidiaries. On 28 January 2025 (AEDT), Jervois Texas, LLC and the Debtor Subsidiaries commenced chapter 11 cases by filing voluntary petitions for relief under the U.S. Bankruptcy Code. This appointment was anticipated as the next step of the restructuring support agreement agreed with the Company's lender, Millstreet Capital Management LLC and detailed in the Chapter 11 Plan (as approved by the Confirmation Order). The Chapter 11 Plan includes that Millstreet plans to submit a Deed of Company Arrangement proposal to the Administrators in respect of the Companies. KPMG Australia's Turnaround and Restructuring Services Partner, Ian Sutherland, said "The immediate focus of the Administrators is ensuring continuity of the underlying operations of the Companies. The Companies intend to operate on a business-as-usual basis and do not envisage any changes to the various operations of the Companies." For clarity, there are other subsidiaries of the Company (in particular related to operations in Finland, Brazil and the U.S.) which are not subject to the appointment of voluntary administrators. The operations of these other subsidiaries are expected to continue in the normal course and vendors, suppliers, customers and employees of these companies remain unaffected by the appointment of the Administrators in Australia over the Companies. Interested parties Any interested party wishing to submit a sale or recapitalisation proposal in respect of the Companies should contact the Administrators at jervoisgroup@kpmg.com.au. The Administrators further invite expressions of interest in respect of the Companies' mining tenements related to the Nico Young nickel-cobalt project in Young, New South Wales, Australia to be submitted by 5:00pm AEDT on 19 March 2025. These tenements were not impacted by the Chapter 11 Cases. First statutory meeting of creditors A first statutory meeting of creditors of the Company will take place on 24 March 2025 at 10:00am AEDT. A meeting notice setting out the time and location for the first meeting of creditors will be distributed to the Company's creditors in advance of the meeting. Annual General Meeting and financial reporting The Company gives notice of intention to rely upon: -- section 6A of ASIC Corporations (Externally-Administered Bodies) Instrument 2015/251 (Instrument) made under sections 250PAA, 341, 341A, 601QA, 926A, 951B, 992B and 1217 of the Corporations Act 2001 (the Act) for relief from holding an annual general meeting during the deferral period; and -- section 8 of the Instrument to defer relevant financial reporting obligations under Part 2M.3 of the Act. Notices to convene an extraordinary general meeting The Administrators are aware of the directors of the Company having received notices under section 249D of the Act, purporting to direct the directors to convene an extraordinary general meeting of the Company. Pursuant to section 198G of the Act, the Company's directors' powers are suspended, and do not have power to convene a general meeting. The Administrators do not propose to convene a general meeting of the Company and will proceed to discharge their statutory duties in accordance with the Act. Further information As previously advised, during this process, Jervois shares are suspended from trading on the TSX-V, the ASX and US OTC market. Further information can be found at https://kpmg.com/au/en/home/creditors/jervois-group.html. About Jervois Global Jervois Global Limited (ASX: JRV) (TSX-V: JRV) (OTC: JRVMF) and its affiliates are global suppliers of advanced manufactured cobalt products, serving customers in the powder metallurgy, battery and chemical industries. The Debtors' principal asset base is comprised of an operating cobalt facility in Finland and non-operating plants in both the United States and Brazil. On January 28, 2025, Jervois Texas, LLC and seven affiliated debtors, including Jervois Global Limited filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. The Debtors' bankruptcy cases are seeking joint administration under Case No. 25-90002 and are pending before the Honorable Judge Christopher M. Lopez in the United States Bankruptcy Court for the Southern District of Texas. The Debtors tapped SIDLEY AUSTIN LLP as restructuring counsel, MOELIS & COMPANY as investment banker, and FTI CONSULTING, INC., as restructuring advisor. STRETTO, INC., is the claims agent. LEGENDARY FIELD: Zutter Loses Bid for Summary Judgment ------------------------------------------------------ Chief Judge Craig A. Gargotta of the United States Bankruptcy Court for the Western District of Texas denied John Zutter's motion for summary judgment in the case captioned as RANDOLPH N. OSHEROW, Chapter 7 Trustee and the Bankruptcy Estates of Legendary Field Exhibits, LLC; AAF Players, LLC; AAF Properties, LLC; Ebersol Sports Media Group, Inc.; LFE 2, LLC; and We are Realtime, LLC Plaintiff, v. THOMAS DUNDON; JOHN ZUTTER; and DUNDON CAPITAL PARTNERS, LLC, Defendant, ADV. NO. 22-05078-CAG (Bankr. W.D. Tex.). The remaining claims for the Court's consideration in this adversary proceeding are (1) breach of fiduciary duty and (2) unjust enrichment. This case arises from the creation and dissolution of an alternative professional football league called the Alliance of American Football, a developmental league conceptualized by individuals with close ties to the sport of American football for highly touted collegiate players and former NFL players to gain exposure and garner interest from NFL teams. In its early stage, the AAF was set to be financed by Reggie Fowler, a former part owner of the Minnesota Vikings. The AAF founders were unaware that Fowler engaged in criminal activity that resulted in the League's deprivation of liquidity as it entered its inaugural season in 2019. One week into its first season, AAF leadership recognized it lacked the sufficient funds necessary to maintain league operations, including making player payroll. To remedy this, Charles Ebersol, one of the AAF founders, engaged Thomas Dundon, an alleged millionaire investor who owned Top Golf and a hockey team, in a series of phone calls to discuss financial aid scenarios. In a separate adversary, DCP alleges that Ebersol fraudulently induced DCP to make an investment. In Trustee's view, subsequently, Dundon allegedly sent Ebersol a term sheet providing that Dundon would send the AAF an investment of $5.1 million immediately and up to $70 million upon request. Ebersol purportedly inquired about the discrepancy between the term sheet and the $250 million investment. The Complaint further alleges that Ebersol received assurances from Dundon that the deal had not materially changed and Dundon still intended to invest $250 million. The parties later discovered that the term sheet, which included series 2 preferred stock and outlined the $70 million cap on capital contributions, lacked signatures. DCP ultimately provided an approximate $70 million investment prior to the AAF's bankruptcy. The parties agree that had this funding not been provided, the AAF would not have survived more than a few days. Prior to the AAF's bankruptcy petition, Defendant and Dundon entered into a document titled a "Release Agreement" in which the AAF and its former majority shareholder Fowler agreed to release each other from any claims related to the Series One Term Sheet and requiring Fowler to support the DCP Term sheet and related change in ownership and control of the AAF to Dundon. . In this adversary, the focus is on Dundon's alleged "righthand man" -- Zutter. Through its allegations, Trustee argues that Defendant worked alongside Dundon to "takeover" the AAF as sole directors and decisionmakers, infiltrating the AAF from the inside out before sabotaging the league's contracts, running the AAF as leanly as possible, all with the intention of turning the company into a prepackaged bankruptcy option for Dundon to acquire. Trustee alleges Defendant, alongside Dundon, failed to maximize the value of the player contracts, gave free advertising to Dundon-affiliated entities, and engaged in other instances of self-dealing to benefit Defendant as a DCP partner and Dundon. In its First Amended Complaint, Trustee alleged that Defendant breached his fiduciary duties of loyalty, care, and fair dealing and unjustly enriched himself through his position at the AAF and partnership with Dundon Capital Partners, LLC. Trustee alleges that Defendant: (1) failed to "paper up" Dundon's $250 million commitment, (2) knew Dundon would not provide funding and failed to disclose this information and made self-interested decisions regarding AAF operations, (3) voted to enter into contracts in the best interest of himself, (4) failed to employ a rational decision-making process, and (5) failed to act prudently in carrying out his fiduciary duties. In its Motion for Summary Judgment, Defendant focuses primarily on waiver and proper pleading under Delaware law. Defendant counters that summary judgment should be granted on the grounds of: (1) waiver through the AAF's certificate of incorporation, (2) Defendant's lack of approving the Release Agreement, (3) the alleged fiduciary duties improperly duplicating contractual duties, and (4) lack of sufficient specificity with regards to pleading unjust enrichment To reiterate, Defendant argues that the Court should dismiss Trustee's fiduciary duty claims against Zutter because "the AAF waived any such claims for breaches of duty of care, Zutter never approved or participated in the voting on the Release Agreement, and the Trustee improperly asserts contract claims as fiduciary claims." Trustee's allegations, which for summary judgment purposes are taken as true, indicate that advertising deals, weekly rent, and instructions to run the League as leanly as possible flowed through and from Defendant. Trustee's evidence creates a plausible factual inquiry as to whether Defendant operated as a shadow director such that this Court could apply the entire fairness standard and hold him liable for a breach of fiduciary duty and self-dealing. Because there are genuine disputes of material fact as to (1) whether Defendant operated as a controlling shadow director and (2) whether the evidence satisfies the entire fairness test, Defendant's Motion for Summary Judgment predicated upon the defense of him not physically voting on the Release Agreement's approval is denied. Defendant argues that the Court should dismiss Trustee's fiduciary duty claims based on the duty of care because the ESMG restated certificate of incorporation bars such claims. He argues that Delaware corporate law permits a certificate of incorporation to limit the personal liability of a director or officer for any breach of the duty of loyalty or for acts or omissions not in good faith. Because Trustee has coupled its duty of care claims with duty of loyalty and good faith claims, the Court may not grant Defendant's dismissal because such claims are non-exculpated. Further, Defendant cannot have it both ways -- claim the exculpation clause's protection for directors while disclaiming liability for the ESMG's board's decision related to the Fowler Release Agreement because Defendant was not technically a director earlier that same day. Defendant argues that Trustee's claims related to "papering up" the oral agreement and failure to disclose Dundon's lack of intent to comply with the agreement are improperly duplicative of contract claims. He contends that that Delaware law prohibits court review of a breach of fiduciary duty claim that "completely overlaps" with a breach of contract claim. The Court finds the fiduciary duty Trustee alleges in its Complaint is not solely duplicative of a breach of contract claim. Trustee is not asserting breach of contract as a claim in this adversary -- only breach of fiduciary duty and unjust enrichment. If the Court were to dismiss the breach of fiduciary duty claim based on it being duplicative of a breach of contract claim, then the entire adversary would very nearly be disposed of in its entirety despite there being genuine issues of material fact. Defendant's argument to dismiss based on this Delaware principle of law is denied. Defendant further argues that he was not unjustly enriched because he received no benefit. Trustee counters that there is a genuine issue of material fact related to the determination of a following valuations: whether (1) Defendant and Dundon obtained benefits from tax writeoffs; (2) there was a monetary equivalent of that benefit received through the advertising; and, (3) routing funds to DCP instead of AAF operations directly prior to the bankruptcy resulted in an unjust benefit to Defendant. According to the Court, Trustee is correct in its contention that genuine issues of material fact remain as to whether Defendant received an unjust benefit from a tax perspective, through his free advertising offers, and from pushing funds to DCP as opposed to the AAF immediately before the AAF entered bankruptcy. The Court finds it is apparent that there is a genuine issue of material fact as to whether Defendant indeed obtained a benefit under this theory of the case. As such, Defendant's request for dismissal on the unjust enrichment claim is denied. A copy of the Court's decision is available at https://urlcurt.com/u?l=gBbXPC from PacerMonitor.com. The Chapter 7 cases are N RE: LEGENDARY FIELD EXHIBITIONS, LLC, AAF PLAYERS, LLC; AAF PROPERTIES, LLC; EBERSOL SPORTS MEDIA GROUP, INC.; LFE 2, LLC; WE ARE REALTIME, LLC., Chapter 7, Debtors, Jointly Administered Under Case No. 19-50900-cag, Case No. 19-50902-cag., 19-50903-cag, 19-50904-cag, 19-50905-cag, 19-50906-cag (Bankr. W.D. Tex.). LIFEWARD LTD: Kost Forer & Kasierer Raises Going Concern Doubt -------------------------------------------------------------- Lifeward Ltd. disclosed in a Form 10-K Report filed with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2024, that its auditor expressed an opinion that there is substantial doubt about the Company's ability to continue as a going concern. Tel-Aviv, Israel-based Kost Forer Gabbay & Kasierer, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 7, 2025, citing that the Company has suffered recurring losses from operations, has negative cash flows from operating activities, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. The Company has incurred losses since inception and expects to continue to incur losses for the foreseeable future. The Company's accumulated deficit as of December 31, 2024 was $264.8 million and negative cash flows from operating activities during the year ended December 31, 2024 was $21.7 million. The Company's cash and cash equivalent on December 31, 2024 totalled $6.7 million. As of December 31, 2024, the Company's cash and cash equivalents position is not sufficient to fund the Company's planned operations for at least the next 12 months. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The current cash balance, historical trend of cash used in operations and lack of certainty regarding a future capital raise, raises substantial doubt about our ability to continue as a going concern for the next twelve months from the date of issuance of these financial statements. The inability to borrow or raise sufficient funds on commercially reasonable terms, would have serious consequences on our financial condition and results of operations. A full-text copy of the Company's Form 10-K is available at: https://tinyurl.com/yazswnnm About Lifeward Ltd. Lifeward Ltd., a medical device company, designs, develops, and commercializes technologies that enable mobility and wellness in rehabilitation and daily life for individuals with physical and neurological conditions in the United States, Europe, the Asia-Pacific, and internationally. As of December 31, 2024, the Company has $30.5 million in total assets, $11.6 million in total liabilities, and total stockholders' equity of $18.8 million. MARKUS CORP: Gets Interim OK to Use Cash Collateral Until March 31 ------------------------------------------------------------------ Markus Corp received interim approval from the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, to use cash collateral until March 31. The company needs to use cash collateral to finance its ongoing operations and prevent liquidation, which would harm creditors' interests. Markus owes money to the U.S. Small Business Administration and Village Bank & Trust, N.A. These creditors have perfected liens on the company's assets, including cash, bank deposits and accounts receivable, which constitute cash collateral. As protection, both lenders were granted a replacement lien on substantially all of the company's assets to the same extent and with the same validity as their pre-bankruptcy liens. The lenders will also be granted an administrative expense claim as additional protection. The next hearing is set for March 26. About Markus Corporation Markus Corp is an owner and operator of three semi-trucks and hauls cargo for its client. Markus filed Chapter 11 petition (Bankr. N.D. Ill. Case No. 25-03310) on March 4, 2025, listing up to $100,000 in assets and up to $1 million in liabilities. Markus President Marek Kusmierczyk signed the petition. Judge Timothy A. Barnes oversees the case. Arthur Corbin, Esq., at Corbin Law Firm, LLC, represents the Debtor as bankruptcy counsel. MIGUEL ANGEL ROSARIO: Objection to Creditor Stipulation Denied -------------------------------------------------------------- Judge Maria de los Angeles Gonzalez of the United States Bankruptcy Court for the District of Puerto Rico denied Debtor Miguel Angel Rivera Rosario's objection to the approval of a stipulation filed by Wigberto Lugo Mendere, the Chapter 7 trustee, and LSREF2 Island Holdings, LTD, Inc. Debtor listed in his schedules secured claims in the amount of $556,873.99. It also listed priority claims in the amount of $18,942 and general unsecured claims in the amount of $297,642.17. Moreover, the Claims Register reflects total claims filed by creditors in the amount of $7,537,238.57. No objection to any of these claims has been filed. Filed on Dec. 6, 2024, the Stipulation settled a damages claim held by Debtor against LSREF2 for the alleged malicious prosecution in relation to the foreclosure of a real property owned by Debtor. The Debtor included the Claim in Schedule B filed with the instant petition on July 28, 2023 in the amount of $5,000,000. On Dec. 26, 2024, Debtor opposed the approval of the Stipulation and requested the abandonment of the Claim. Debtor argued that the Trustee is abusing his discretion and acting inappropriately by favoring LSREF2 in settling a millionaire complaint for the totally insignificant and ridiculous sum of $20,000. He further asserted that after various years of arduous litigation between himself and LSREF2, the Trustee is violating his right to have a day in court. Moreover, Debtor pointed out that the Trustee had filed a notice of abandonment on May 17, 2024 abandoning the Claim, which triggered him to file a new complaint in the District Court. However, Debtor explained that he dismissed this new complaint without prejudice once the Trustee filed an amended notice of abandonment eliminating the Claim from the abandoned assets after withdrawing the original notice of abandonment. In this case, the Court finds the Trustee exercised sound business judgment in deciding to settle the Claim for $20,000. In making this decision, the Trustee acknowledged that the outcome of litigating the Claim was uncertain and that pursuing a new case would require significant investments of estate funds and time -- efforts likely to outweigh any potential benefits to the estate. This is particularly relevant considering the seven years of litigation the Debtor has already funded, which have yielded no results. Moreover, the Stipulation allows for the expeditious administration of the estate, allowing creditors to receive prompt distributions of estate funds. Therefore, the Court will not intervene as the Stipulation falls within the scope of the Trustee's business judgment, which is entitled to great deference. The Court emphasizes that although Debtor has repeatedly claimed that pursuing the Claim could lead to a multi-million-dollar judgment that would result in a surplus, he has failed to establish a reasonable possibility of successfully litigating the Claim and obtaining the substantial amount necessary for a surplus after payment of all claims and the Trustee's fees. Actually, the amount of the filed claims surpasses the value of the Claim as per the schedules filed in this case. And furthermore, Debtor has not addressed the costs associated with the litigation of the Claim, nor the potential detriment to the estate in doing so. The Trustee also asserted that Debtor lacks standing to oppose the approval of the Stipulation. The Court concurs with the Trustee that Debtor lacks standing to object to the Stipulation in this case. A copy of the Court's decision is available at https://urlcurt.com/u?l=iUbsMS from PacerMonitor.com. Miguel Angel Rivera Rosario filed for Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 23-02291) on July 28, 2023, listing under $1 million in both assets and liabilities. The Debtor was represented by Nilda Gonzalez Cordero, Esq. The case was converted to Chapter 7 on November 22, 2023. Wigberto Lugo Mender is the Chapter 7 Trustee. MITCHELL ROCK: Seeks Cash Collateral Access ------------------------------------------- Mitchell Rock, Inc. asked the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, for determination regarding the existence of cash collateral and the authorization to use any such cash collateral. The lenders that have provided equipment loans to the Debtor and may have security interests in various assets, including accounts, receivables, and other related assets are Commercial Credit Group, Renasant Bank, and First Citizens Bank & Trust Company. The Debtor challenged the Lenders' claims of having perfected security interests in cash collateral, particularly in the Debtor's accounts and receivables. The Debtor has not found any UCC-1 filings that would confirm these security interests. The Debtor argued that using operational cash is crucial for continuing business operations, paying employees, and preserving the value of assets. This would also provide confidence to customers and suppliers. The Debtor also sought adequate protection for the lenders in relation to the use of their cash collateral, if any exists. A copy of the motion is available at https://urlcurt.com/u?l=hmvJsn from PacerMonitor.com. About Mitchell Rock, Inc. Mitchell Rock, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 25-00701-TOM11) on March 7, 2025. In the petition signed by Chad Anthony Mitchell, owner, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Tamara O. Mitchell oversees the case. Frederick M. Garfield, Esq., at Spain & Gillon, LLC, represents the Debtor as legal counsel. MITNICK CORPORATE: Moody's Alters Outlook on 'B3' CFR to Negative ----------------------------------------------------------------- Moody's Ratings affirmed the ratings of Mitnick Corporate Purchaser, Inc. (Veracode), including the B3 Corporate Family Rating, the B3-PD Probability of Default Rating, the Ba3 backed senior secured super-priority revolving credit facility due 2027, and the B3 backed senior secured term loan due 2029. The outlook changed to negative from stable. The negative outlook reflects the company's declining revenues and Moody's expectations that liquidity will continue to weaken from negative free cash flow over the next 12 to 18 months. RATINGS RATIONALE The B3 CFR and negative outlook reflect elevated financial leverage of about 9x (on a Moody's adjusted basis), gross retention rates in the low 80s range that have been negatively impacted by competitive factors, a slowdown in new and expansion business, and, more recently, negative free cash flow that could persist given declines in Annual Recurring Revenues (ARR). The proliferation of generative AI in code development and testing has emerged as an opportunity as well as a potential headwind for Veracode, as it provides a new revenue stream and source of efficiency, while it also makes it easier for legacy and newer competitors to bolster their competing offerings. Governance considerations include the company's elevated financial leverage and an acquisitive financial strategy that could lead to a reduced liquidity position. The company continues to benefit from new customer wins, particularly with state and local governments and in the European market as well from upsell bookings, including from its AI vulnerability and remediation tools. A strategic shift towards the broader application risk management, beyond the traditional application security testing, could also increase upsell and new bookings as customers look to have a unified view of their application vulnerabilities and risks. Veracode maintains a good market position with a number two position in the application vulnerability management market with about a 12% market share, according to International Data Corporation (IDC). Liquidity is adequate, characterized by a $13 million cash balance and about $62 million of revolver availability at December 31, 2024. But Moody's expects negative free cash flow, term loan amortization and deferred acquisition payments will reduce liquidity in the next 12 months. The revolver contains a maximum first lien net leverage ratio financial covenant set at 12.5x, which springs at 40% utilization. Moody's expects increasing reliance on the revolver but the company will have ample operating cushion under the financial covenant, if it were to apply. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if liquidity becomes weak, revenue declines accelerate over the next 12 months, or Moody's do not expect a meaningful improvement in revenues and free cash flow in FY' 2027. The ratings could be upgraded if Veracode generates sustained revenue and operating cash flow growth and maintains a more conservative financial policy with leverage sustained below 7x debt/EBITDA and free cash flow to debt exceeding 5%. Headquartered in Burlington, MA, Mitnick Corporate Purchaser, Inc. (Veracode) is a global provider of application risk management software and services. The company offers static application security testing (SAST), dynamic AST (DAST), interactive AST (IAST), software composition analysis (SCA), as well as manual penetration testing services, developer security education, policy management and analytics. More recently, the company also offers a risk management solution that provides a unified view of application vulnerabilities and risks across multiple workloads and environments. It serves around 2,600 customers across a wide range of industries, in both the Enterprise and SMB segments. Revenue for the last twelve months ended December 31, 2024, were about $275 million. The principal methodology used in these ratings was Software published in June 2022. MIWD HOLDCO II: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDR) of MIWD Holding Company LLC (dba MITER Brands, MITER) and MIWD Holdco II LLC at 'BB-'. Fitch has also affirmed the 'BB+' issue rating with a Recovery Rating of 'RR2' on the senior secured notes and senior secured term loan B, and the 'BB-'/'RR4' issue rating on the senior unsecured notes. The borrower under the senior secured notes and senior secured term loan B will be revised to PGT Innovations, LLC (PGT) and MITER Brands Acquisition Holdco, Inc. (co-borrowers). The Rating Outlook is stable. MITER's IDR reflects its improved scale and diversification in the highly fragmented U.S. windows and doors market, strong profitability metrics and consistent FCF generation. The IDRs also reflect elevated leverage from its growth strategy, high exposure to the residential new construction market, and a concentrated product portfolio. Key Rating Drivers Temporarily Elevated Leverage: Fitch-calculated pro forma EBITDA leverage was 4.6x for the LTM ended Sept. 30, 2024. Fitch projects EBITDA leverage to decrease to about 4.3x by YE 2025 due debt reduction, as MITER focuses on deleveraging. Management aims to maintain net leverage, excluding preferred equity, below 3.0x on a long- term basis. Similar to the Milgard acquisition in 2019, Fitch expects MITER to reduce leverage to its target within 18-24 months following the PGT acquisition. Strong Profitability Supports Deleveraging: MITER has demonstrated high profitability, with a Fitch-calculated EBITDA margin of 22.7% in FY 2023. Fitch projects EBITDA margin to decrease to 19.5%-20.5% in FY 2024 and FY 2025 due to subdued big-ticket remodelling demand as a result of high interest rates and PGT's lower margin business. MITER's strong profitability, coupled with the limited capital intensity should lead to strong FCF generation, which Fitch expects will be allocated towards debt reduction. Improved Scale and Diversification: Pro forma revenue and EBITDA are expected to exceed $3.0 billion and $600 million in 2024, respectively. Fitch expects this increased scale to enhance MITER's bargaining power with trade partners, with the PGT acquisition improving the company's geographic, product and customer mix, mitigating risk. Fitch anticipates MITER will gain about $50 million in synergies from increased operating leverage due to the PGT acquisition. Strong FCF: Fitch expects FCF margins to remain in the low- to high-single digit percentages during the next few years, supporting debt reduction. Adjusted for member tax distributions, FCF margins are forecasted to be between 3% and 4% in 2025 and between 6% and 7% in 2026, down from 10.6% in 2023, with a neutral forecast for 2024 due to the PGT-related transaction costs. Fitch anticipates capex as a percentage of sales will be 3%-4% in 2025 and 2026. Growth Strategy: MITER has demonstrated its willingness to pursue transformational acquisitions, such as PGT in 2024 and Milgard in 2019. The company also focuses on organic growth by expanding capacity through new plants and adding lines at existing ones. Fitch views the company's growth strategy as balanced from a business profile standpoint. However, sizable acquisitions carry integration risks and, combined with higher leverage and weaker FCF generation, could weaken the company's financial profile. Concentrated Product Portfolio: MITER's product portfolio is concentrated on windows and patio doors. The U.S. windows market is susceptible to competitive pressures and construction cyclicality, and is sensitive to interest rates, negatively impacting the credit profile. MITER's product portfolio spans various price points, and its strong national market position offers competitive advantages over smaller peers. About 55% of sales are generated from the residential R&R market and 45% from new residential construction. Ownership and Distributions: MITER is a majority-family owned and operated business with Koch Equity Development (KED) participating as a significant minority shareholder and preferred equity holder. Fitch expects the company to make regular distributions to its owners, funded with FCF or debt proceeds, to enable redemption of their preferred equity investment, to the extent allowable under the secured debt covenants. Peer Analysis MITER is strongly positioned relative to its 'B' category Fitch-rated building products peers, such as New AMI I, LLC (dba Associated Materials) (B/Stable) and Chariot Buyer LLC (dba Chamberlain) (B-/Stable). However, MITER's credit metrics are meaningfully weaker than those of low-investment-grade (IG) building products peers, including Masco Corporation (BBB/Stable), Fortune Brands Innovations, Inc. (BBB/Stable) and James Hardie International Group Ltd. (BBB/Stable). MITER has stronger credit metrics and cashflow generation, and its financial policy is more conservative than those of Associated Materials and Chamberlain. Compared with IG peers, MITER has a smaller scale, above-average exposure to cyclical new residential construction, a higher leverage tolerance from its acquisitive growth strategy and a more concentrated product portfolio, which weigh on its credit profile. However, the company's profitability metrics and FCF generation are comparable to those of these IG peers. Fitch applies its "Parent and Subsidiary Linkage Rating Criteria" to rate each entity in the group, using the stronger subsidiary (MIWD Holdco II LLC), weaker parent (MIWD Holding Company LLC) path. Fitch considers Holdco II to have a stronger credit profile than Holding Company because of its unrestricted access to group cash flows. Holding Company is the issuer of the financial statements and has no operations or debt. Fitch categorizes 'legal ring-fencing' as 'porous' and 'access and control' as 'open'. Fitch has assessed the Standalone Credit Profile of Holdco II and the consolidated group credit profile as 'bb-'. Therefore, no upward notching applies to Holdco and the Holding Company and Holdco II are rated 'BB-'. Key Assumptions - Organic revenue remains flat in 2025 and grows by 4%-5% in 2026; - EBITDA margin of 19.5%-20.5% in 2025 and 20.5%-21.5% in 2026; - Capex to be 3%-4% of revenues; - FCF margin of 3%-4% in 2025 and 6%-7% in 2026; - FCF applied to mandatory term loan prepayments as well as some voluntary prepayments in 2025 and 2026; - Average SOFR of 4.25% in 2025 and 4.0% in 2026; - EBITDA leverage of 4.0x-4.5x at YE 2025 and 3.0x-4.0x at YE 2026. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Expectation that EBITDA leverage will be sustained above 4.5x; - Sustained deterioration in operating performance, resulting in EBITDA margins contracting to the low-double digit percentages, resulting in low-single digit FCF margins; - (CFO-capex)/debt sustained below 3.5%. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Fitch's expectation that EBITDA leverage will be sustained below 3.5x; - The company improves the diversity of its business by meaningfully reducing exposure to residential new construction activity, broadening product offerings or significantly increasing scale; - (CFO-capex)/debt consistently above 7.5%. Liquidity and Debt Structure MITER has good liquidity with $347 million in cash as of Sept. 30, 2024 and $170 million availability under its $325 million asset-backed loan (ABL) RCF. MITER has a well-distributed debt maturity schedule, with $325 million ABL revolver maturing in 2029 and $500 million in senior unsecured notes due in 2030. Additionally, the term loan has a quarterly amortization of 0.25% of the principal amount until it matures in 2031. Fitch expects the company to continue to generate consistently positive FCF despite higher interest payments, further supporting its liquidity position. Issuer Profile MITER Brands is one of the largest manufacturers of vinyl, aluminum, and fiberglass windows and patio doors in the U.S., selling its products into the new construction and R&R residential markets through third-party distribution. Summary of Financial Adjustments Fitch considers outstanding preferred equity issued by MIWD Newco Holdco LLC as non-debt of the rated entity, per Section 7 of Appendix 1: Main Analytical Adjustments under its Corporate Rating Criteria. Fitch determined that the preferred shares are a form of a shareholder loan, as they are held by KED. The preferred equity is structurally subordinated, outside the restricted group under secured documentation, and lacks cross-default and cross-acceleration provisions that impact the relative probability of default of rated-entity debt, resulting in the non-debt classification. The instrument is also payment-in-kind for life. Fitch adjusts historical reported EBITDA by adding back non-cash stock-based compensation expense, non-cash inventory step-up charges and one-time transaction fees to arrive at Fitch adjusted EBITDA. 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 ----------- ------ -------- ----- MIWD Holdco II LLC LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- senior secured LT BB+ Affirmed RR2 BB+ MIWD Holding Company LLC LT IDR BB- Affirmed BB- MMEX RESOURCES: Incurs $532K Net Loss in Third Quarter ------------------------------------------------------ MMEX Resources Corporation submitted its quarterly report on Form 10-Q to the Securities and Exchange Commission, reporting a net loss of $531,555 on zero revenue for the three months ending Jan. 31, 2025, compared to a net loss of $418,668 on zero revenue for the same period in 2024. For the nine months ended Jan. 31, 2025, the Company posted a net loss of $1.46 million on zero revenue, compared to a net loss of $2.04 million on zero revenue for the nine months ending Jan. 31, 2024. As of Jan. 31, 2025, the Company had $1.02 million in total assets, $6.16 million in total liabilities, and a total stockholders' deficit of $5.14 million. "Since inception, our operations have primarily been funded through private debt and equity financing, and we expect to continue to seek additional funding through private or public equity and debt financing. Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. However, there can be no assurance that we will be successful in our efforts to raise additional debt or equity capital or that amounts will be adequate to meet our needs. These factors, among others, raise substantial doubt that we will be able to continue as a going concern for a reasonable period of time," the Company stated in the report. The full text of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1440799/000147793225001722/mmex_10q.htm About MMEX Since 2016, the focus of MMEX Resources Corporation's business has been to build crude oil distillation units and refining facilities (CDUs) in the Permian Basin in West Texas. The Company revised its business plan in 2021 to move MMEX to clean energy production, leveraging its history, management and business relationships from the traditional energy sector. Since 2021 MMEX has expanded its focus to the development, financing, construction and operation of clean fuels infrastructure projects powered by renewable energy. The Company has formed three special purpose entities of the Company - one to transition from legacy refining transportation fuels by producing them as ultra clean fuels with carbon capture, a second which plans to produce blue hydrogen from natural gas and utilize the hydrogen to produce electric power and a third which plans to produce green hydrogen converted to green ammonia in the United States and internationally. These three sub-divisions will be operating respectively as Pecos Clean Fuels & Transport, LLC, Trans Permian H2Hub, LLC and Hydrogen Global, LLC. The planned projects are designed to be powered by solar and wind renewable energy. Through April 30, 2024, the Company has had no revenues and has reported continuing losses from operations. Houston, TX-based M&K CPAS, PLLC, the Company's auditor since 2013, issued a "going concern" qualification in its report dated July 29, 2024, citing that the Company has recurring net losses, working capital deficit, and stockholders' deficit as of April 30, 2024, which raises substantial doubt about its ability to continue as a going concern. The Company recorded a net loss of $8,194,086 for fiscal year ended April 30, 2024, compared to a net loss of $4,513,882 for the fiscal year ended April 30, 2023. MODIVCARE INC: Posts $201MM Net Loss for FY 2024 ------------------------------------------------ ModivCare Inc. reported in a Form 10-K filing with the U.S. Securities and Exchange Commission that it had $201,278,000 in net loss for the year ended December 31, 2024, compared to $204,460,000 in net loss for the year ended December 31, 2023. At December 31, 2024, the Company had 1,654,332,000 in total assets, 1,692,806,000 in total liabilities, and (38,474,000 in total stockholders' deficit. During the year ended December 31, 2024, the Company has experienced financial challenges, including increased transportation and caregiver costs that have not been offset by corresponding reimbursement rate increases from payors, the loss of certain contracts, and membership declines. These factors have negatively impacted cash flow generation and liquidity. Additionally, the Company has experienced lengthened collection periods due to complexities in Medicare, Medicaid, and nongovernmental payor arrangements, resulting in delays between recognizing revenue for services rendered and collecting cash owed for our services. This prolonged cash conversion cycle places further strain on liquidity and working capital. As a result, the Company is likely to require additional liquidity in order to support ongoing operations over the next year. The Company also entered into Amendment No. 5 to its Credit Agreement which, among other things, established an incremental term loan facility in an aggregate principal amount of $75.0 million. The Incremental Term Loan is a short-term facility with a maturity date of January 10, 2026 and, as a result of the factors described above, the Company is likely to require additional liquidity in order to satisfy its existing debt obligations due within one year from the date of the issuance of these consolidated financial statements. As a result of the foregoing, the Company is not expected to have the ability to meet one or more financial covenants under its existing credit agreements. Failure to meet these covenants or others could cause obligations under the Revolving Credit Facility, the Term Loan Facility, the Incremental Term Loan, and the Company's Notes due 2029, to become immediately due and payable, and the Company would not have sufficient liquidity to satisfy such obligations. In such event, the Company would be required to restructure its existing debt or to seek additional equity or debt financing to meet its obligations. Furthermore, these factors raise substantial doubt about the Company's ability to satisfy its obligations as they become due within one year from the issuance date of these financial statements. Accordingly, Management has concluded that substantial doubt exists about the Company's ability to continue as a going concern. To address these concerns, Management has implemented cost optimization measures, renegotiated contract terms, and secured amendments to its credit agreements, including a temporary financial covenant holiday. Management is actively pursuing further financing options, evaluating strategic asset divestitures, long-term covenant relief and implementing operational efficiencies to improve liquidity. There can be no assurance that additional financing, additional liquidity from asset divestitures or long-term covenant relief will be available on terms acceptable to the Company, or at all, or in amounts sufficient to enable the Company to satisfy its obligations as they become due or to sustain operations in the future. A full-text copy of the Form 10-K is available at https://tinyurl.com/23xzd5xa About ModivCare ModivCare Inc. is a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions for public and private payors and their members. * * * S&P Global Ratings lowered its issuer credit rating on ModivCare Inc. to 'CCC+' from 'B-'. The outlook is negative. MOG PROPERTIES: Gets Interim OK to Use Cash Collateral ------------------------------------------------------ MOG Properties LLC received interim approval from the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, to use cash collateral. The Debtor requires the continued use of cash collateral to pay operating expenses. The Texas Comptroller of Public Accounts has a blanket security interest in all of Debtor's assets including, but not limited to, equipment and account receivables. The amount owed by the Debtor to the Texas Comptroller is $67,178. At the time of the Debtor's bankruptcy filing, the balance of the Debtor's bank account was overdrawn as a result of a levy by the Texas Comptroller. The book value of Debtor's equipment and other personal property is approximately $56,000. As protection, the Texas Comptroller will be provided with protection in the form of replacement liens on all post-petition inventory and accounts receivable. In addition, the Debtor was ordered to pay $4,000 to the Texas Comptroller on April 1, May 1 and June 1. Then, the Texas Comptroller will receive a monthly payment of $2,000 beginning July 1 until the confirmation of the Debtor's Chapter 11 plan of reorganization. The final hearing is set for April 23. About MOG Properties LLC MOG Properties, LLC operates a outside bar venue in New Braunfels, Texas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 25-50369-mmp) on February 28, 2025, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Judge Michael M. Parker oversees the case. Morris E. White, III, Esq., at Villa & White LLP, represents the Debtor as legal counsel. NEAR NA: Loses Bid to Dismiss Nash CEPA Violation Lawsuit --------------------------------------------------------- Judge Zahid N. Quarishi of the United States District Court for the District of New Jersey denied without prejudice the defendants' motion to dismiss the case captioned as BRIAN NASH, Plaintiff, v. NEAR NORTH AMERICA, INC., et al., Defendants, Case No. :24-cv-06623-ZNQ-JBD (D.N.J.). This action arises out of Plaintiff's alleged retaliatory termination in violation of the Conscientious Employee Protection Act, N.J.S.A. 34:19-3. Plaintiff Brian Nash is a citizen of New Jersey and the former Vice President of Business Development at Defendant Near North America, Inc. Former defendant NNA, a Delaware corporation with its principal place of business in Pasadena, California, was in the business of purchasing and reselling consumer data. Defendant Gladys Kong Kong was NNA's Chief Operating Officer and Defendant Laurent Castaillac was NNA's Vice President of Sales, both of whom are residents of California. On Sept. 18, 2023, Plaintiff filed a single-count Complaint in the Superior Court of New Jersey, Monmouth County, in which he alleged a violation of CEPA. In December 2023, all three "Near" Defendants filed for relief under Chapter 11 of the Bankruptcy Code and the matter was stayed. On March 29, 2024, the matter was dismissed without prejudice for lack of prosecution. On April 2, 2024, the Superior Court, Monmouth County, reinstated the Complaint against Defendants Castaillac and Kong. On May 31, 2024, Defendants Castaillac and Kong removed the matter to this Court on diversity jurisdiction grounds and subsequently filed their Motion on July 12, 2024. Defendants move to dismiss the Complaint in the first instance for lack of personal jurisdiction under Rule 12(b)(2). Alternatively, Defendants move to dismiss the Complaint for failure to state a claim under Rule 12(b)(6), arguing that Plaintiff's CEPA claim fails as a matter of law. Defendants argue that Plaintiff has not established that the Court has general jurisdiction over Defendants because Defendants are domiciled in California. Defendants assert that Plaintiff has failed to establish that the Court has specific jurisdiction over Defendants because Plaintiff's allegations do not arise from Defendants' contacts with New Jersey. Defendants claim that Plaintiff has failed to allege that Defendants "purposefully directed" their activities at the state of New Jersey. Plaintiff argues that the Court has specific jurisdiction because Defendants committed "intentional wrongdoing" when they terminated Plaintiff's employment in retaliation for protected activities. Even the most liberal reading of the Complaint demonstrates to the Court that Defendants' only "purposeful conduct" toward New Jersey consisted of communicating with Plaintiff during his employment and to inform him of his termination. The Complaint has not demonstrated that Defendants had significant contacts with New Jersey such that it "specifically targeted New Jersey through business activities beyond merely employing a New Jersey resident." At best, Plaintiff alleges that Defendants committed an unlawful act against a New Jersey resident. Accordingly, absent allegations or evidence of Defendants' purposeful targeting of New Jersey, the Court finds that it lacks personal jurisdiction over Defendants. Given the circumstances, rather than dismiss the Complaint in this instance as Defendants seek, the Court will instead Order Plaintiff to show cause in writing by March 31, 2025 as to why this matter should not be transferred to the appropriate District Court in California under 28 U.S.C. Sec. 1631. A copy of the Court's decision is available at https://urlcurt.com/u?l=LV2Vyp from PacerMonitor.com. About Near Intelligence Near Intelligence Inc. -- https://www.near.com -- publicly traded software firm that provides data insights to major companies including Wendy's Co. and Ford Motor Co. Near is a global, privacy-led data intelligence platform curates one of the world's largest sources of intelligence on people and places. Near's patented technology analyzes data to deliver insights on approximately 1.6 billion unique user IDs across 70 million points of interest in more than 44 countries. With a presence in Pasadena, San Francisco, Paris, Bangalore, Singapore, Sydney, and Tokyo, Near serves enterprises in a diverse spectrum of industries including retail, real estate, restaurant, travel/tourism, telecom, media, and more. Near Intelligence Inc. and its affiliates sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11962) on Dec. 8, 2023. In the petition filed by CFO John Faieta, the Debtor estimated assets between $50 million and $100 million and liabilities between $100 million and $500 million. Near is represented by Willkie Farr & Gallagher LLP and Young Conway Stargatt & Taylor, LLP, as counsel, Ernst & Young LLP as restructuring advisor and GLC Advisors & Co., LLC, as restructuring investment banker. Kroll is the claims agent. Blue Torch, as DIP Agent and Lender, is represented by MORRIS, NICHOLS, ARSHT & TUNNELL LLP (Robert J. Dehney, Matthew Harvey, Brenna Dolphin); and KING & SPALDING LLP (Geoffrey M. King, Roger G. Schwartz, Miguel Cadavid). NEPHROS INC: Posts $14.2MM Net Revenue for Fiscal Year 2024 ----------------------------------------------------------- Nephros, Inc. (Nasdaq: NEPH), a leading water technology company providing filtration solutions to the medical and commercial markets, today announced financial results for the fourth quarter and fiscal year ended December 31, 2024. Financial Highlights Fourth Quarter Ended December 31, 2024. -- Net revenue was $3.9 million, compared to $3.3 million in the fourth quarter of 2023, up 19% -- Net income was $349,000, compared to a net loss of ($654,000) during the same period in 2023 -- Adjusted EBITDA was $466,000, compared to ($51,000) in the fourth quarter of 2023 Year-End 2024 -- Net revenue remained steady at $14.2 million for the years ended December 31, 2024, and 2023. -- Net income was $74,000, compared with a net loss of ($1.6 million) in 2023. -- Adjusted EBITDA was $533,000, compared with ($76,000) in 2023 "Nephros finished 2024 strong despite annual revenue results approximately flat to 2023. Throughout the year we consistently showed growth as our core programmatic revenue steadily increased. In contrast, we had a significant decline in our emergency response business over the first half of the year. Historically, Nephros has experienced double-digit percentages of our total revenue as a result of our emergency business, yet in Q1 and Q2, those values declined to single digits. We were able to overcome this headwind in the second half of 2024, particularly with 19% year-over-year growth in total sales in the fourth quarter," said Robert Banks, President and Chief Executive Officer. "Nephros has always had a strong product offering and been able to demonstrate significant customer value within a diverse range of applications. I am excited to share that we are continuing to expand both our product lineup and range of customer market sectors into areas such as office space and transportation-related entities." Mr. Banks continued, "With regard to our portfolio of products, most notable was the launch of our 20" HydraGuard Ultrafilter which is a new product ideal for applications with higher volumes of water than we typically support. Sterile processing, laboratories, and manufacturing are just a few of the broader industries for which we believe we are now well-positioned to advance. Concerning sterile processing (i.e., the sterilization of medical instruments), the late-2023 release of the ANSI/AAMI ST108 standard, stipulates strict guidelines for the water quality used throughout the operation. We believe the new HydraGuard, which has the tightest control of bacteria and endotoxins on the market, has the potential to serve as a key asset for sterile processing compliance, while supporting improved patient safety. "While 2024 did not meet our revenue expectations, we achieved profitability for the first time in Q3, thanks to a fantastic job controlling costs and keeping our spend in line with our revenue. Of additional note, we added nearly 600 new customer sites, which combined to almost $2 million in sales, and represented more than 13% of our annual revenue," said Mr. Banks. "We believe that we continue to be well-placed for growth as we cultivate steady expansion into new and existing markets. I am very proud of our entire team as they persist in their dedication and hard work, driving us ever closer to large-scale success!" About Nephros South Orange, New Jersey-based Nephros, Inc. -- http://www.nephros.com/-- provides innovative water filtration products and services, along with water-quality education, as part of an integrated approach to water safety. Nephros, Inc., reported a net loss of $1.57 million in 2023, a net loss of $7.11 million in 2022, a net loss of $3.87 million in 2021, a net loss of $4.53 million in 2020, a net loss of $3.18 million in 2019, and a net loss of $3.32 million for the year ended Dec. 31, 2018. NORDSTROM INC: Moody's Affirms 'Ba2' CFR, Outlook Remains Stable ---------------------------------------------------------------- Moody's Ratings affirmed Nordstrom, Inc.'s ("Nordstrom") Ba2 corporate family rating and Ba2-PD probability of default rating. Moody's also affirmed the Ba2 ratings of the company's existing senior unsecured notes and its commercial paper program rating at Not Prime ("NP"). Nordstrom's speculative grade liquidity rating ("SGL") is downgraded to SGL-2 from SGL-1. The outlook remains stable. Governance is a key rating factor as the company has signed a definitive agreement under which members of the Nordstrom Family and Mexican retailer El Puerto de Liverpool, S.A.B. de C.V. ("Liverpool", unrated), will acquire all of the outstanding common shares of Nordstrom not already owned by the Nordstrom Family and Liverpool. Once the transaction closes Nordstrom will no longer be a public entity. As part of the acquisition the company's existing senior unsecured notes will be secured by first priority security interest in substantially all assets of the company other than the collateral securing a new $1.2 billion asset based revolving credit facility (ABL) and real estate. The new ABL will replace the existing $800 million revolving credit facility. The notes will have a second priority interest in the ABL collateral. The Ba2 rating on the notes will remain unchanged following the granting of the collateral. At closing, there will be upto $450 million drawn under the ABL with proceeds used to finance the acquisition. Moody's expects the revolver drawing to be repaid in the next 12-18 months. RATINGS RATIONALE Nordstrom's Ba2 corporate family rating is supported by its solid market positioning in both the full price and off-price segments as well as its conservative approach to funded debt and good liquidity. Proforma for the management buyout transaction Moody's expects debt/EBITDA will increase modestly to 3.6x from 3.1x at the end of fiscal 2024 with proforma EBIT/Interest at 2.3x. Moody's expects leverage and coverage to improve to around 3.4x and 2.5x at the end of fiscal 2025 respectively and expect cash flow to be prioritized towards the repayment of debt. Moody's also expecst the company's cash balances to be lower than historical levels going forward. The company has made significant investments historically to provide superior customer service whether in-store, online or through its mobile app and continues to invest. Nordstrom Rack, which was approximately 35% of sales in the fourth quarter of fiscal 2024, has been refocused successfully on its core brands and has returned to new store growth. The company has also taken additional steps to improve profitability as evidenced by its exit from the Canadian market and improvements to its supply chain. Nordstrom Rack's strategy revision has included a refocus on new store development and key designer brands. Nordstrom's focus on fashion apparel and the secular trends that face the department store industry remain credit challenges as well as its concentration in California. The company must also manage its vendor partners globally and navigate changing demographic, lifestyle and workplace trends which may ultimately impact purchasing patterns. The stable outlook reflects Nordstrom's good liquidity, its continued improvement on its operational initiatives and its commitment to debt reduction. The outlook also assumes Nordstrom Rack's growth strategy continues to be successful and that its full-line business can maintain its market position. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Nordstrom consistently grow comparable sales at both its full line and off-price segments, maintains good liquidity and returns operating margins to levels at least approaching what it achieved historically. Quantitatively ratings could be upgraded if operating performance, margin improvements and debt reduction result in EBIT/interest sustained above 4.0x and debt/EBITDA sustained below 3.0x while maintaining financial strategies that would support growth and debt reduction. Ratings could be downgraded if operating margins do not show improvement, the company's off-price strategy is not successful, financial strategies become more aggressive or liquidity weakens. Ratings could also be downgraded if funded debt levels increase or free cash flow does not support the interest payments and reduction of debt. Quantitatively, ratings could be downgraded if EBIT/interest is sustained below 3.0x and debt/EBITDA is sustained above 3.75x. Headquartered in Seattle, Washington, Nordstrom, Inc. is a leading fashion retailer based in the US. Nordstrom operates 92 full-line stores, 277 Nordstrom Rack stores, two clearance stores and six Nordstrom Local service concept stores. Additionally, the company operates Nordstrom.com, and Nordstromrack.com. Revenue for the latest twelve months ended February 1, 2025 was approximately $15 billion. The principal methodology used in these ratings was Retail and Apparel published in November 2023. PARAMOUNT DRUG: Seeks Chapter 11 Bankruptcy in New Jersey --------------------------------------------------------- On March 7, 2025, Paramount Drug LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for the District of New Jersey. According to court filing, the Debtor reports $1,534,570 in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. About Paramount Drug LLC Paramount Drug LLC in Riverside, NJ, offers a range of pharmacy services, including prescription fills and refills, immunizations, and the provision of durable medical equipment. As a member of Good Neighbor Pharmacy, it is committed to providing personalized care and customer satisfaction. Paramount Drug LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 25-12381) on March 7, 2025. In its petition, the Debtor reports total assets of $269,300 and total liabilities of $1,534,570 The Debtor is represented by: Carol L. Knowlton, Esq. GORSKI & KNOWLTON PC 311 Whitehorse Ave Suite A Hamilton, NJ 08610 Tel: 609-964-4000 Fax: 609-528-0721 E-mail: cknowlton@gorskiknowlton.com PINEAPPLE PROPERTIES: Seeks Cash Collateral Access -------------------------------------------------- Pineapple Properties of SA, LLC asked the U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, for authority to use cash collateral. The Debtor needs to use the cash collateral to meet post-petition obligations such as payroll, taxes, and inventory needs. The Debtor had pledged cash collateral to South State Bank/United States Small Business Administration (SBA) as security for a loan, which includes receivables, rents, cash, and other assets. The Debtor has outstanding delinquent loans with several creditors, including South State Bank/SBA, the U.S. SBA, and Forward Finance. The Debtor estimates the value of their real estate, inventory, equipment, cash, and accounts receivable to be approximately $1.1 million. The pledged cash collateral is crucial for the Debtor's ability to reorganize and maintain business operations. The Debtor is willing to enter into an agreement with SBA, the primary secured creditor to provide a replacement lien on the cash collateral. The next hearing is set for March 24. A copy of the motion is available at https://urlcurt.com/u?l=DokEUK from PacerMonitor.com. About Pineapple Properties of SA Pineapple Properties of SA, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 25--00647) on March 5, 2025. In the petition signed by Brian A. Funk, managing member, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Bryan K. Mickler, Esq., at Law Offices of Mickler & Mickler, LLP, represents the Debtor as legal counsel. Judge Jacob A. Brown oversees the case. The Debtor is represented by: Bryan K. Mickler, Esq., Law Offices of Mickler & Mickler, LLP 5452 Arlington Expressway Jacksonville, FL 32211 Tel: (904) 725-0822 Fax: (904) 725-0855 Email: bkmickler@planlaw.com PIPELINE HEALTH: Virruso Remains in Contempt of Confirmation Order ------------------------------------------------------------------ Judge Marvin Isgur of the United States Bankruptcy Court for the Southern District of Texas held that Joseph Virruso remains in contempt of the court's confirmation order as long as Louis A. Weiss Memorial Hospital employees remain named defendants in his state court action. On Feb. 28, 2022, Virruso received medical care at the hospital in Chicago, Illinois. At that time, Virruso's residence address was 5718 W. 90th Oak Lawn, Illinois 60453. Around June 1, 2022, Virruso changed his residence address. He never provided a change of address notice to Resilience. On Jan. 13, 2023, the Court entered the confirmation order approving the second amended joint Chapter 11 plan of reorganization of Pipeline Health System, LLC, and its debtor affiliates. The plan enjoins the commencement or continuation of any cause of action against any released party. On Jan. 29, 2024, Virruso commenced an Illinois state court action against the hospital and its employees, asserting medical malpractice claims arising from his February 2022 medical treatment. AUM Global Healthcare Management, LLC, and Resilience Healthcare-Weiss Memorial Hospital, LLC, seek a finding of contempt against Virruso for maintaining his state court action against certain released parties under the confirmed chapter 11 plan. Virruso argues that he is allowed to continue his lawsuit because he did not receive notices of the bankruptcy and that the plan's third-party releases are invalid. However, Epiq's Affidavit of Service provides that notices of the Chapter 11 bankruptcy case and proof of claim bar deadlines were mailed via first class mail to Virruso's W. 90th Oak Lawn address. Virruso was also served with the confirmation hearing notice at the same address. The Court finds the evidence creates the presumption that proper notice was given. Virruso has not provided any evidence to rebut this presumption. According to the Court, the fact that notice was not mailed to his current address does not establish that due process was not satisfied. Virruso also argues that the third-party releases are nonconsensual because opt-out procedures were used. He asserts that opt-ins, rather than opt-outs, procure consent. Opt-out procedures are a proper means to obtain consent to third-party releases in a chapter 11 plan. Judge Isgur says, the fact that Virruso did not receive an opt-out form—because he did not file a proof of claim—does not change the result here. A creditor cannot appeal from a confirmation order, even if the plan contains third-party releases, if they received the relevant notices, but failed to file a proof of claim, appear in a bankruptcy proceeding, or object to the plan. Virruso did not assert his rights in any form." In this case, the mailed notices were reasonably calculated to satisfy due process requirements. Virruso is bound to the plan confirmation order and the releases, the Court finds. Virruso claims that he can still sue the hospital employees in their personal capacity for claims arising from his injury. The language in the plan is clear: the hospital employees are released parties for any prepetition claims. Accordingly, Virruso remains in contempt as long as the employees are named defendants in the lawsuit. A copy of the Court's decision is available at https://urlcurt.com/u?l=nLxhdM from PacerMonitor.com. About Pipeline Health System Pipeline Health Systems, LLC is an independent, community-focused healthcare network that offers a wide range of medical services to the communities it serves, including maternity care, cancer treatment, behavioral health, rehabilitation, general surgery, and hospice care. Headquartered in El Segundo, California, Pipeline's operations include seven safety net hospitals across California, Texas, and Illinois, with approximately 310 physicians and over 1,150 beds to serve patients, and a company-wide workforce of over 4,200. Pipeline Health Systems and its affiliates sought Chapter 11 protection (S.D. Texas Lead Case No. 22-90291) on Oct. 2, 2022. In the petition signed by Andrei Soran, authorized signatory, Pipeline Health Systems disclosed $500 million to $1 billion in assets and liabilities. Judge Marvin Isgur oversees the cases. The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy counsel; Jackson Walker, LLP as local bankruptcy counsel; Ankura Consulting Group, LLC as restructuring advisor; Jefferies, LLC, as financial advisor and investment banker; and Deloitte Tax, LLP as tax service provider. Epiq Corporate Restructuring, LLC, is the claims agent. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' bankruptcy cases. The committee tapped Akin Gump Strauss Hauer & Feld, LLP as legal counsel and FTI Consulting, Inc. as financial advisor. Susan Nielsen Goodman, the patient care ombudsman appointed in the Debtors' cases, is represented by Crowe & Dunlevy, P.C. PLANO SMILE: Gets Interim OK to Use Cash Collateral --------------------------------------------------- Plano Smile Studio, P.A. received interim approval from the U.S. Bankruptcy Court for the Eastern District of Texas, Sherman Division, to use cash collateral to fund the operation of its business. The interim order authorized the Debtor to use cash collateral from March 14 until the occurrence of an event of default such as the conversion of the Debtor's Chapter 11 case to one under Chapter 7; removal of the Debtor as debtor-in-possession; or the use of cash collateral for purposes not authorized under the interim order. T Bank, First Citizens Bank, the U.S. Small Business Administration, and BHG Financial may assert an interest in the Debtor's cash collateral. These secured lenders were granted replacement liens on the Debtor's post-petition cash and accounts receivable to secure any diminution in the value of their collateral. The final hearing is set for March 25. Due to cash flow issues caused by COVID-19 and a sudden drop in revenue in the past few years, the Debtor turned to obtaining capital from merchant cash advance lenders with onerous terms in order to stay afloat. When gross revenue did not return to the Debtor’s prior performance before COVID-19, the Debtor’s cash flow position was greatly impacted by the Debtor’s new monthly debt obligations. The Debtor’s margins simply do not account for the amount of its secured debt if revenue remains at current levels. Thus, the Debtor was forced to seek bankruptcy protection from the Court. About Plano Smile Studio Plano Smile Studio, P.A. is a dental practice located in Plano, Texas, specializing in both general and cosmetic dentistry. Led by Dr. John M. Hucklebridge, the studio offers a wide range of services including dental implants, smile makeovers, Invisalign, teeth whitening, veneers, and sedation dentistry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 25-40633) on March 6, 2025. In the petition signed by John M. Hucklebridge, member, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Brenda T Rhoades oversees the case. Brandon Tittle, Esq., at Tittle Law Group, PLLC, represents the Debtor as bankruptcy counsel. QUAD/GRAPHICS INC: Moody's Affirms B1 CFR, Outlook Remains Stable ----------------------------------------------------------------- Moody's Ratings has affirmed Quad/Graphics, Inc.'s ("Quad") corporate family rating at B1, its probability of default rating at B1-PD, and the ratings on the US senior secured term loan A due 2029 and senior secured revolving credit facility due 2029 at B1. The non-extended senior secured bank credit facilities due 2026 were also affirmed at B1. Quad's speculative grade liquidity rating (SGL) remains unchanged at SGL-2. The outlook remains stable. RATINGS RATIONALE Quad's CFR benefits from: (1) good market position and scale in the commercial print market; (2) Moody's expectations that debt/EBITDA will remain around 2.5x in 2025 and 2026; (3) the company's focus on maintaining minimal leverage with debt repayment from free cash flow and asset sale proceeds; (4) continued cost reductions; and (5) good liquidity, including its ability to generate consistent free cash flow. However, the rating is constrained by: (1) continued declines in revenue and EBITDA due to high business risk stemming from exposure to the secular decline in commercial printing driven by ongoing digital substitution; (2) execution risks as the company mitigates the secular pressures in commercial printing (retail inserts, magazines and catalogs) by transforming into an integrated marketing solutions provider; and (3) potential for increased competition in the advertising and marketing services industry. Quad has good liquidity (SGL-2). Sources of liquidity exceed $400 million with about $30 million of uses in the next four quarters through Dec 2025. At December 2024, liquidity is supported by $29 million of cash and full availability under the company's combined $325 million revolving credit facilities ($18 million expiring in 2026 and $307 million expiring 2029), and Moody's expected free cash flow of about $60 million through Dec 2025. Uses of liquidity include about $28 million debt amortization payments. The company is subject to total net leverage, senior secured leverage, and interest coverage covenants; cushion should exceed 15% on the tightest covenant (total net leverage) through the next four quarters. Quad has limited ability to generate liquidity from asset sales. The company has one class of debt, the B1 rated senior secured bank credit facilities. Although, Quad's credit facilities benefit from first-ranking security claim on the company's assets, the loss absorption cushion provided by trade payables and other obligations is not sufficient to provide uplift from the CFR. The stable outlook reflects Moody's expectations that Quad will maintain good liquidity, low leverage, and continue its transformation into an integrated marketing solution service provider. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Quad is able to generate sustainable positive organic EBITDA growth, if growth from improving sectors that more than offsets the secular decline in commercial printing, and all while sustaining debt to EBITDA below 3x. The ratings could be downgraded if the company is not able to successfully execute on its transformation away from commercial printing, leading to continued revenue and EBITDA declines. The ratings could become under pressure if debt to EBITDA increases towards 4x, or liquidity weakens. Headquartered in Sussex, Wisconsin, Quad/Graphics, Inc. (Quad) is a leading North American commercial printing company. The company operates in two segments; United States Print and Related Services (majority of revenue), and International. The principal methodology used in these ratings was Media published in June 2021. RADIANT ONE: Seeks Cash Collateral Access ----------------------------------------- Radiant One, LLC asked the U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, for authority to use cash collateral and provide adequate protection. Live Oak Banking Company may assert an interest in the cash collateral. At the time of the petition, the Debtor had cash on hand of approximately $92,488 in its bank accounts, all of which was transferred to the Debtor's DIP account after filing and unencumbered personal property, (including receivables, inventory not subject to a prior lien, equipment, furnishings, raw materials and finished goods), valued at approximately $21,500. The Debtor needs to use the funds in the DIP account to continue normal operations and to maintain its going concern value. The Debtor believes that its cash will be replenished through normal operations such that the total value of cash and personal property will increase over time. The Debtor proposes to adequately protect the Potential Secured Creditor by giving it a replacement lien on postpetition cash and personal property to the same extent, and with the same priority, as any pre-petition perfected lien. The Debtor further proposes an adequate protection payments to Live Oak , in the amount of $674, an amount that is roughly equal to the secured payment that the Debtor expects to provide for Live Oak in its Plan of Reorganization. A hearing on the matter is set for March 19. A copy of the motion is available at https://urlcurt.com/u?l=1U2k6F from PacerMonitor.com. About Radiant One, LLC Radiant One, LLC operates as a beauty salon in Fuquay-Varina, North Carolina. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.C. Case No. 25-00787-5-PWM) on March 4, 2025. In the petition signed by Manoj Michael, manager, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Pamela W. McAffee oversees the case. Danny Bradford, Esq., at Paul D. Bradford, PLLC, represents the Debtor as legal counsel. RED HORSE: Frederick Bunol Named Subchapter V Trustee ----------------------------------------------------- The Acting U.S. Trustee for Region 5 appointed Frederick Bunol as Subchapter V trustee for Red Horse Infrastructure Group LLC. Mr. Bunol will be paid an hourly fee of $390 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Bunol declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Frederick L. Bunol 3027 Ridgelake Drive Metairie, LA 70002 Telephone: (504) 207-0913 Facsimile: (504) 832-0327 Email: Fbunol@derbeslaw.com About Red Horse Infrastructure Group Red Horse Infrastructure Group LLC is a construction company based in Baton Rouge, Louisiana, that specializes in institutional building construction. Red Horse Infrastructure Group sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. La. Case No. 25-10144) on February 24, 2025. In the petition signed by Melissa Burgess, as Independent Testamentary Executor, the Debtor disclosed up to $500,000 in estimated assets and up to $10 million in estimated liabilities. Judge Michael A. Crawford oversees the case. Ryan J. Raymond, Esq., at Sternberg, Naccari & White, LLC serves as the Debtor's counsel. REMARKABLE HEALTHCARE: Subchapter V Plan Denied Confirmation ------------------------------------------------------------ Chief Judge Brenda T. Rhoades of the United States Bankruptcy Court for the Eastern District of Texas denied the confirmation of the Fourth Amended Joint Subchapter V Plan of Reorganization for Remarkable Healthcare of Seguin, LP and Remarkable Healthcare, LLC. On January 9, 2025, without seeking prior leave of the Court, and once again past the December 16th deadline previously set by the Court for the Debtors to amend their proposed plan, the Debtors filed a fourth amended reorganization plan. The Fourth Amended Plan, among other things, called for new cash flows that had previously not been included in their projections and reduced cash flows that had previously been included. For example, the Fourth Amended Plan included the following material modifications: i. For the first time among all of its plans, the Debtors reduced the recovery for Class 3 (General Unsecured Claims) from 100% to 20%, thereby impairing holders of Class 3 claims, including KRS Carrollton, LLC and Alleon Capital Partners, LLC; ii. For the first time among all its plans, the Debtors added a new revenue line item labeled "2024 A/R uncollected at 96%" in the amount of $1,274,605.00; and iii. The Debtors reduced annual QIPP revenue from $1,262,194 to $503,051. The Debtors' modifications in the Fourth Amended Plan were material and substantial to all creditors. The modifications were particularly adverse to general unsecured creditors, whose projected recovery was reduced by 80% in the Fourth Amended Plan. The Fourth Amended Plan specifically depended on Renew Partners, LLC to provide $3 million for exit financing on the Plan's effective date in order to pay accrued post-petition liabilities. According to the Debtors' cash flow projections dated January 9, 2025, the $3 million would be used to pay "Alleon Replacement Liens" of $421,024, "other cure claims" of $100,000, "administrative claims" of $430,000, "West Wharton payment" of $480,000, "KRS cure claim" of $1,307,073, and a "lender origination fee" of $45,000. Additionally, in their liquidation analysis, the Debtors estimated that they accrued attorneys' fees of $800,000 during these cases. Counsel for the Debtors represented to the Court that the Debtors would not be required to pay these fees on the Fourth Amended Plan's effective date but, instead, would pay their attorneys' reasonable fees over time on mutually agreeable terms. The Debtors did not mail or otherwise serve the Fourth Amended Plan on all creditors and parties-in-interest prior to the continued confirmation hearing. The creditors participating in the confirmation hearing received limited notice of the Fourth Amended Plan as they received it (or electronic notice that it had been filed) less than three days before the continued hearing. The Court held the continued confirmation hearing on January 13, 2025. The creditors opposing confirmation objected to the last-minute filing of the Fourth Amended Plan as insufficient notice to be able to test the Debtors' new cash flow projections. The original plan filed by the Debtors was materially incomplete and did not contain all the elements required by Sec. 1190(1) of the Bankruptcy Code. It appears to have been a placeholder plan rather than a serious attempt at reorganization. Their Fourth Amended Plan, which the Debtors are seeking to confirm, was filed in the midst of the confirmation hearing and in violation of the deadlines set forth in Sec. 1189(b) of the Bankruptcy Code and this Court's orders. The Cour finds the Debtors failed to comply with all the plan- and disclosure- related requirements of the Bankruptcy Code and Rules as required by 11 U.S.C. Sec. 1129(a)(1)-(2). All the post-petition debt accrued by the Debtors necessitated exit financing. Part VII of the Fourth Amended Plan states that the $3 million in exit financing would be used to cure the defaults under the lease of the Facility, pay administrative expense claims, and to fund the reorganized debtor's working capital and general corporate needs. Although the Debtors' reasonable attorneys' fees would be an administrative expense, to the extent allowed by the Court, the estimated fees were so high that the Debtors proposed to delay payment to some point in the future upon mutually agreeable terms. Even if Renew were willing and able to fund the proposed exit financing, the Debtors' Fourth Amended Plan lacks an adequate means of implementation because it is based on a fallacy, among other deficiencies, the Court finds. According to the Court, the Fourth Amended Plan did not seek to resolve the operational issues that led to the Debtors' most recent bankruptcy filings. The primary purpose of the Fourth Amended Plan was to obtain financing to pay $3 million in administrative expenses. The Debtors were not proposing a "fresh start" in the Fourth Amended Plan, but merely to pay the expenses associated with their latest bankruptcy filings. Under the totality of the circumstances, the Court finds that the Debtors failed to carry their burden to establish that they proposed the Fourth Amended Plan in good faith. The Court also finds the Debtors failed to carry their burden to establish that the Fourth Amended Plan is feasible. The Fourth Amended Plan relies on a $3 million credit facility, but the Debtors failed to show that Renew was willing to and capable of funding the exit loan on the effective date. After the dismissal of their prior cases in February 2024, the Debtors filed for bankruptcy again less than two months later. The Debtors did not have a plan ready to file nor any agreement from their primary creditors that they could or should attempt another reorganization through bankruptcy. The Debtors requested, and received, an extension of time to file a plan of reorganization. The Debtors started with an initial plan in August 2024 that purported to be funded through their operations and would pay creditors in full, then amended their plan in October 2024 to one that required $1.8 million in exit financing but would pay creditors in full, then amended their plan again in December 2024 to one that required $3 million in exit financing but would pay creditors in full, then amended their plan again in January 2025 to one that required $3 million in exit financing but would now would pay unsecured creditors only 20% of their claims. The Debtors failed to pay the IRS any trust fund taxes during bankruptcy, and the Fourth Amended Plan reflects that the Debtors would need to use a portion of the exit financing to pay the IRS for this liability that accrued during the pendency of the bankruptcy cases. The Debtors also incurred a $420,000 liability to the Hospital District during these cases. The Debtors' material changes to their projections, especially at the last minute, raises serious questions about whether the projections are reasonable. Further, the Debtors' speculative and erroneous cash flow projections do not support a prediction of future performance. This Court does not require a guaranty of success, but the Debtors failed to provide reasonable assurance that the Fourth Amended Plan was workable and had a reasonable likelihood of success. The Debtors failed to establish that the Sec. 1191(c) requisites have been met. The Court, therefore, concludes that the Debtors failed to establish that their plan was fair and equitable or that there is a reasonable likelihood the Debtors would be able to make all plan payments. A copy of the Court's decision is available at https://urlcurt.com/u?l=VLMva1 from PacerMonitor.com. About Remarkable Healthcare Remarkable Healthcare, LLC and Remarkable Healthcare of Seguin, LP are healthcare providers operating in Seguin, Texas. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Texas Lead Case No. 24-40611). At the time of the filing, the Debtors reported $1 million to $10 million in both assets and liabilities. Judge Brenda T. Rhoades oversees the cases. The Debtors are represented by Elizabeth Nicolle Boydston, Esq., at Gutnicki, LLP. REMEMBER ME: Gets Interim OK to Use Cash Collateral Until March 27 ------------------------------------------------------------------ Remember Me Senior Care, LLC received interim approval from the U.S. Bankruptcy Court for the Eastern District of Tennessee at Chattanooga to use cash collateral until the final hearing. The interim order authorized the company to use cash collateral to pay ordinary and necessary business expenses as set forth in its budget, with a 10% variance allowed. The company projects total operational expenses of $100,015.38 for March. As protection for the use of their cash collateral, secured creditors were granted replacement liens on the company's post-petition assets. In addition, Remember Me Senior Care was ordered to make payment of $88,000 to secured creditors on the due date set forth in their loan agreements and to keep the company's assets secured. A final hearing is scheduled for March 27. About Remember Me Senior Care LLC Remember Me Senior Care, LLC, a company in Cleveland, Tenn., offers personalized assisted living and memory care services in a homelike environment. The facility provides a range of services, including help with daily activities, medication management, and specialized care for those with Alzheimer's or other dementias. Remember Me Senior Care sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tenn. Case No. 25-10451) on February 18, 2025. In its petition, the Debtor reported up to $50,000 in assets and between $10 million and $50 million in liabilities. Judge Nicholas W. Whittenburg oversees the case. The Debtor is represented by: Jeffrey W. Maddux, Esq. Chambliss, Bahner & Stophel P.C. Liberty Tower 605 Chestnut Street, Ste. 1700 Chattanooga, TN 37450 Tel: 423-757-0296 Fax: 423-508-1296 Email: jmaddux@chamblisslaw.com SCORPIUS HOLDINGS: Assigns Lease, Saves Over $4 Million in Rent --------------------------------------------------------------- Scorpius Holdings, Inc., filed a Form 8-K with the Securities and Exchange Commission, disclosing that on March 7, it entered into an Assignment and Assumption of Lease agreement with a third-party Assignee and Durham Keystone Tech 7, LLC, as landlord, pursuant to which, the Company transferred all its rights and obligations under its lease, dated June 21, 2021 (as amended), for its former main office location in Morrisville, North Carolina, to the Assignee. In connection with the Lease Assignment, the Company made a payment of $55,720.17 to the Landlord for rent due in March 2025 and sold certain furniture, fixtures and equipment on the leased premises to Assignee for $55,720.17. The Assignee will begin paying the monthly rent directly to the Landlord starting April 1, 2025. The Company claims that this deal will eliminate over $4,000,000 in rent and facility-related expenses for the remainder of the lease term. The Company has since relocated its main office to San Antonio, Texas. Second Amendment to the Asset and Equity Interests Purchase Agreement Effective as of March 12, 2025, the Company entered into a Second Amendment to the Asset and Equity Interests Purchase Agreement, dated as of Dec. 11, 2023, as amended as of July 30, 2024, by and between Elusys Holdings Inc. and the Company. Pursuant to the Second Amendment, in exchange for the payment of $500,000 by Elusys Holdings to the Company on or about March 12, 2025, the Purchase Agreement was amended to eliminate the payment of $2.5 million to the Company on or prior to Dec. 31, 2028. About Scorpius Holdings Headquartered in Morrisville, NC, Scorpius Holdings, Inc. -- http://www.scorpiusbiologics.com/-- provides process development and biomanufacturing services to support the biomanufacturing needs of third parties who use its biomanufacturing capacity as a fee-for-service model through its subsidiary, Scorpius Biomanufacturing, Inc. (formerly known as Scorpion Biological Services, Inc.). Scorpius couples CGMP biomanufacturing and quality control expertise with cutting edge capabilities in immunoassays, molecular assays, and bioanalytical methods to support cell- and gene-based therapies as well as large molecule biologics using American-made equipment, reagents, and materials. Raleigh, North Carolina-based BDO USA, P.C., the Company's auditor since 2012, issued a "going concern" qualification in its report dated April 26, 2024. The report cited that the Company has suffered recurring losses from operations and has not generated significant revenue or positive cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. For the years ended Dec. 31, 2023 and 2022, the Company incurred net losses of $46.8 million and $43.9 million, respectively. The Company has an accumulated deficit of $254.4 million through Dec. 31, 2023. The Company expects to continue to incur operating losses until such time, if ever, as it is able to achieve sufficient levels of revenue from operations. SEDGWICK CLAIMS: $750MM Loan Add-on No Impact on Moody's 'B2' CFR ----------------------------------------------------------------- Moody's Ratings says the B2 corporate family rating and B2-PD probability of default rating of Sedgwick Claims Management Services, Inc.'s (Sedgwick) remain unchanged following the company's announcement that it plans to issue an add-on of $750 million to its existing backed senior secured first-lien term loan B due July 2031 (rated B2). The company will use net proceeds to fund the acquisition of Bottomline's legal spend management division, which provides cloud-based software applications and complementary legal bill review solutions. The rating outlook for Sedgwick is unchanged at stable. Sedgwick's ratings reflect its position as a leading global provider of claims management solutions for corporations, public entities and insurance carriers and its consistent growth in revenue and EBITDA. Sedgwick is the largest US based third party administrator (TPA) of property and casualty claims by revenue, and has a diverse client base with broad product and geographic diversification. The company benefits from long-term contracts, recurring earnings, relatively high switching costs for clients, and a somewhat variable cost structure. These strengths are offset by Sedgwick's relatively high financial leverage and modest interest and free cash flow coverage. For the 12 months ended September 30, 2024, Sedgwick reported total revenue of $4.7 billion, up from $4.6 billion in 2023 driven by solid organic growth in the group's TPA business in the mid-single digits. The company's EBITDA margin has gradually increased in recent years and remains healthy in the upper teens. Giving effect to the proposed transaction, Moody's estimates that Sedgwick has a pro forma debt-to-EBITDA ratio of around 7x, (EBITDA - capex) interest coverage of about 1.5x, and a free-cash-flow-to-debt ratio in the low single digits. These pro forma metrics include the rating agency's adjustments primarily for operating leases and pensions. The metrics would be somewhat weaker if capitalized software costs were deducted from EBITDA. Moody's expects Sedgwick to reduce its leverage through EBITDA growth and slight debt amortization over the next few quarters consistent with past practices. Sedgwick is a leading global provider of claims management, loss adjusting and technology-enabled business solutions to corporations, public entities and insurance carriers, with a footprint spanning 80 countries. Sedgwick generated revenue of approximately $4.7 billion for the 12 months through September 30, 2024. SENESTECH INC: Faces Net Loss of $6.18 Million for 2024 ------------------------------------------------------- Senestech, Inc., filed its annual report on Form 10-K with the Securities and Exchange Commission, disclosing a net and comprehensive loss of $6.18 million on net revenues of $1.86 million for the year ending Dec. 31, 2024. This contrasts with a net and comprehensive loss of $7.71 million on net revenues of $1.19 million for the year ending Dec. 31, 2023. As of Dec. 31, 2024, the Company had $3.28 million in total assets, $767,000 in total liabilities, and $2.51 million in total stockholders' equity. The Woodlands, TX-based M&K CPAS, PLLC, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 12, 2025. The report highlighted that the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. The Company has experienced operating losses since its founding, and it anticipates ongoing substantial costs and operating losses for the foreseeable future. "If we encounter continued issues or delays in the commercialization of our products or greater than anticipated expenses, our prior losses and expected future losses could have an adverse effect on our financial condition and negatively impact our ability to fund continued operations, obtain additional financing in the future and continue as a going concern. "There are no assurances that such financing, if necessary, will be available to us at all or will be available in sufficient amounts or on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to generate additional funds in the future through financings, sales of our products, licensing fees, royalty payments or from other sources or transactions, we will exhaust our resources and will be unable to continue operations. If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment in us," the Company stated in the report. Management Discussion "We concluded a truly transformational year for SenesTech with strong financial results across the board, including quarterly revenues which were up 70% and quarterly gross profit margins of 61%. When coupled with improvement in our operational efficiencies through cost reductions, resulted in our smallest quarterly Adjusted EBITDA loss in Company history as we advance our progress towards profitability," commented Joel Fruendt, CEO of SenesTech, in a press release. "We are committed to executing a focused strategy that positions SenesTech for sustainable long-term success. By concentrating on our most impactful growth areas, improving cost efficiency, and streamlining operations, we are taking decisive steps to accelerate our path to profitability. We have a first-mover advantage with a disruptive approach to the multi-billion-dollar rodent control market, which positions us well to transform the rodent control market for years to come," Fruendt concluded. The complete text of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1680378/000162828025012408/snes-20241231.htm About SenesTech Headquartered in Phoenix, AZ, SenesTech -- https://senestech.com/ -- is committed to creating healthier environments by humanely managing animal pest populations through fertility control. The Company's groundbreaking products, including Evolve rodent birth control, integrate seamlessly into pest management programs, significantly enhancing their effectiveness while reducing reliance on traditional poisons. SenesTech's mission is to create cleaner cities, more efficient businesses, and healthier communities with products that are humane, effective, and sustainable. SENSEONICS HOLDINGS: KPMG LLP Raises Going Concern Doubt -------------------------------------------------------- Senseonics Holdings, Inc. disclosed in a Form 10-K Report filed with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2024, that its auditor expressed an opinion that there is substantial doubt about the Company's ability to continue as a going concern. McLean, Virginia-based KPMG LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated March 3, 2025, citing that the Company's current operating plan, existing unrestricted cash and cash equivalents, and minimum cash and satisfaction of performance milestones to comply with debt covenants under its Loan and Security Agreement raise substantial doubt about its ability to continue as a going concern for the one-year period following the date the consolidated financial statements are issued. According to Senseonics, its management also concluded that its recurring losses from operations, existing unrestricted cash, cash equivalents and marketable securities, anticipated debt repayments, and minimum cash and satisfaction of performance milestones to comply with debt covenants under its Loan and Security Agreement raise substantial doubt about the Company's ability to continue as a going concern for the next 12 months. As of December 31, 2024, the Company had unrestricted cash, cash equivalents and marketable securities of $74.6 million consisting of cash and investments in highly liquid U.S. money market funds. On October 28, 2024, we raised additional proceeds of approximately $14.8 million before expenses incurred by the Company in a registered direct offering of the Company's common stock and concurrent private placement of warrants to purchase shares of the Company's common stock. "We do not expect our existing cash and cash equivalents will be sufficient to fund our operations through the next twelve months and we will need to seek additional capital to fund our operations, working capital needs, capital expenditures and other strategic initiatives beyond that time," Senseonics explained. "There can be no assurance that we will be successful in raising additional capital or that any needed financing will be available in the future at terms acceptable to us. As such, we cannot conclude that such plans will be effectively implemented within one year after the date that the financial statements are issued and there is uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, and substantial doubt exists about our ability to continue as a going concern. If we are unable to generate to secure additional capital on acceptable terms or at all, we may be required to significantly reduce or cease our operations, which could result in the loss to investors of their investment in our securities." A full-text copy of the Company's Form 10-K is available at: https://tinyurl.com/33395wse About Senseonics Holdings, Inc. Senseonics Holdings, Inc. is a commercial-stage medical technology company focused on the development and manufacturing of glucose monitoring products designed to transform lives in the global diabetes community with differentiated, long-term implantable glucose management technology. As of December 31, 2024, the Company had $100.4 million in total assets, $79.3 million in total liabilities, $37.7 million in total temporary equity, and total stockholders' deficit of $16.6 million. SERES THERAPEUTICS: Posts $136K Net Income in 2024 -------------------------------------------------- Seres Therapeutics, Inc., filed its annual report on Form 10-K with the Securities and Exchange Commission, disclosing a net loss of $136,000 for the year ending Dec. 31, 2024, compared to a net loss of $113.72 million for the year ending Dec. 31, 2023. To date, the Company has not generated any revenues from the sale of products. The Company's revenues have been derived primarily from its agreements with its collaborators. As of Dec. 31, 2024, the Company had $139.81 million in total assets, $126.03 million in total liabilities, and $13.78 million in total stockholders' equity. As of Dec. 31, 2024, Seres had $30.8 million in cash and cash equivalents. Based on the Company's current cash (including the $50 million installment payment received from Nestle in January 2025), an anticipated second installment payment to be received from Nestle in July 2025, transaction-related obligations and current operating plans, the Company expects to fund operations into the first quarter of 2026. Boston, Massachusetts-based PricewaterhouseCoopers LLP, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 13, 2025, citing that the Company incurred a net loss from operations and had negative cash flows from operations and will require additional funding, which raises substantial doubt about its ability to continue as a going concern "The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, and to generate profitable operations in the future. Management plans to provide for the Company's capital requirements through financing or other strategic transactions, including potential business development transactions, and selling shares under the Company's at the market equity offering. There can be no assurance that the Company will be able to raise additional capital to fund operations with terms acceptable to the Company, or at all," the Company mentioned in the report. Management Comments "We have made significant progress advancing SER-155 as a novel live biotherapeutic candidate designed to prevent life-threatening bloodstream infections in allo-HSCT recipients," said Eric Shaff, president and chief executive officer of Seres, in a press release. "Based on the strength of our Phase 1b placebo-controlled clinical results showing a relative risk reduction of 77% in bloodstream infections (BSIs), SER-155 received Breakthrough Therapy designation from the FDA. Our productive interactions with the FDA regarding plans to advance SER-155 in allo-HSCT patients have supported and informed our development plans. We are formulating the next SER-155 study design, which could be either a standalone Phase 2 or a Phase 2/3 seamless design, and plan to submit a draft protocol to the FDA in the second quarter of this year. Based on potential additional agency feedback and perspectives we expect to gain from further partnership discussions, we plan to decide upon the optimal path forward for further SER-155 development." Mr. Shaff continued, "Recently released exploratory translational biomarker results from our SER-155 Phase 1b study provide supportive mechanistic data, consistent with the observed clinical results that showed a reduction in the risk of BSIs. We believe the data also offer further evidence of the potential of Seres' biotherapeutic approach to benefit patients living with inflammatory and immune diseases such as ulcerative colitis and Crohn's disease. The market opportunity for SER-155 is significant, with clinician and payer research indicating that SER-155, if approved, could result in rapid and deep utilization in allo-HSCT, as well as other sizable patient groups at high risk of BSIs. Our efforts and investments this year are focused on preparing for the next study of SER-155 in allo-HSCT and continued pursuit of an external partnership with a counterparty who shares our vision to maximize the SER-155 clinical and commercial opportunity." The full text of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1609809/000095017025038427/mcrb-20241231.htm About Seres Therapeutics Seres Therapeutics, Inc. (Nasdaq: MCRB) -- www.serestherapeutics.com -- is a clinical-stage company focused on improving patient outcomes in medically vulnerable populations through novel live biotherapeutics. Seres led the successful development and approval of VOWST, the first FDA-approved orally administered microbiome therapeutic, which was sold to Nestle Health Science in September 2024. The Company is developing SER-155, which has received Breakthrough Therapy designation for the reduction of bloodstream infections in adults undergoing allo-HSCT and Fast Track designation for reducing the risk of infection and graft-versus-host disease in adults undergoing allo-HSCT, and which has demonstrated a significant reduction in bloodstream infections and related complications (as compared to placebo) in a Phase 1b clinical study in patients undergoing allo-HSCT. SER-155 and the Company's other pipeline programs are designed to target multiple disease-relevant pathways and are manufactured from standard clonal cell banks via cultivation, rather than from the donor-sourced production process used for VOWST. In addition to allo-HSCT, the Company intends to evaluate SER-155 and other cultivated live biotherapeutic candidates in other medically vulnerable patient populations including autologous-HSCT patients, cancer patients with neutropenia, CAR-T recipients, individuals with chronic liver disease, solid organ transplant recipients, as well as patients in the intensive care unit and long-term acute care facilities. SMITH MICRO: Net Loss Expands to $48.7 Million in 2024 ------------------------------------------------------ Smith Micro Software, Inc., submitted its annual report on Form 10-K to the Securities and Exchange Commission, revealing a net loss of $48.70 million on revenues of $20.56 million for the year ending Dec. 31, 2024, compared to a net loss of $24.40 million on $40.86 million of revenues for the year ending Dec. 31, 2023. As of Dec. 31, 2024, the Company had $48.05 million in total assets, $5.65 million in total current liabilities, $1.64 million in total non-current liabilities, and $40.76 million in total stockholders' equity. Los Angeles, California-based SingerLewak LLP, the Company's auditor since 2005, issued a "going concern" qualification in its report dated March 12, 2025, citing that the Company has suffered recurring losses from operations and has projected future cash flow requirements to meet continuing operations in excess of current available cash. This raises substantial doubt about the Company's ability to continue as a going concern. In 2023 and 2024, the Company has experienced a net loss, partly due to the loss of a U.S. Tier 1 customer in 2023. In February 2023, after receiving notice of the termination of this contract, the Company announced that it would accelerate initiatives aimed at reducing operating expenses to support its ongoing goal of achieving profitable growth. As a result, the Company has significantly cut operating costs since that time and may need to continue these efforts. However, the Company may face difficulties in implementing these actions, which could impact its financial outcomes. While the Company believes these initiatives have lowered operating expenses and improved margins, the Company cannot guarantee that it will maintain the expected benefits, or that they will be sufficient to meet its long-term profitability and operational goals. At the same time, the Company is focusing on expanding its customers' subscriber base on the SafePath platform and providing new offerings to both existing and potential customers that it believes align more closely with their core business objectives, which it anticipates will increase its revenues. However, the Company cannot guarantee that these efforts will be successful or will lead to the expected revenue growth, or any growth at all. If the Company does not meet specific revenue targets following these efforts, the Company may need to take additional cost-cutting measures, which could include further restructuring. Management Comments "Looking back on 2024, it was a transformative year for Smith Micro as we addressed challenges head-on and developed new innovations that have ignited a renewed focus for the Company. We are seeing excitement -- both within the company and among our customers and prospects -- for the opportunities that we are creating with the latest expansion of our SafePath platform," said William W. Smith, Jr., president, chief executive officer, and chairman of the board of Smith Micro, in a press release. "We have distinguished ourselves as a trusted partner to mobile operators through our delivery of value-added-services, and now, with our latest innovations in SafePath OS and SafePath Kids, carriers can leverage the strength of our SafePath solutions to offer devices and rate plans aimed at creating a safer mobile experience, not as valued-added-services, but as an integral component of the carrier's core offerings. Our successful launch of SafePath Kids with Orange Spain's TuYo solution during the fourth quarter was our first deployment under this renewed focus, and the product is generating tremendous interest," Smith added, "Our path forward is clear. We are bringing an enhanced and powerful new portfolio of our family safety solutions to market, which we believe align to mobile operators' core strengths and principal business objectives. I believe the pivot we have made positions us to capture a significant market opportunity and a return to profitability." The complete text of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/948708/000094870825000004/smsi-20241231.htm About Smith Micro Software Pittsburgh, Pa.-based Smith Micro Software, Inc. develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless and cable service providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, the Company's solutions enrich today's connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer IoT devices. The Smith Micro portfolio also includes a wide range of products for creating, sharing, and monetizing rich content, such as visual voice messaging, optimizing retail content display and performing analytics on any product set. SORENTO ON YESLER: Seeks to Amend Cash Collateral Order ------------------------------------------------------- Sorento on Yesler Owner, LLC asked the U.S. Bankruptcy Court for the Western District of Washington, at Seattle, for entry of an order amending the cash collateral order dated February 25, 2025 to remove a proviso that conditions disbursements on the execution of a deposit account control agreement with Wells Fargo Bank National Association, the Secured Creditor. Specifically, the provision requires that all cash collateral, except for the monthly protection payment, be disbursed directly to the Expense Account, but only after this agreement is signed. The Debtor argues that this proviso was included due to misrepresentations made by the Secured Creditor's counsel. These misrepresentations, according to the Debtor, involved false claims that the Debtor had not made payments to the Secured Creditor for the months of December, January, and February. The Debtor claims that this false information led the Court to condition the disbursement of funds on the signing of the deposit account control agreement, which they argue is an unfair and unjust condition. The Debtor seeks relief under Federal Rules of Bankruptcy and Civil Procedure, claiming fraud, misrepresentation, and misconduct by the Secured Creditor. A hearing on the matter is set for March 20. A copy of the motion is available at https://urlcurt.com/u?l=eJ5WzT from PacerMonitor.com. About Sorento on Yesler Owner Sorento on Yesler Owner, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Sorento sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 24-13217) on December 17, 2024, with $10 million to $50 million in both assets and liabilities. Judge Christopher M. Alston handles the case. The Debtor is represented by Christopher L. Young, Esq., at the Law Offices of Christopher L. Young, PLLC. SOUTHERN COLONEL: Gets Interim OK to Use Cash Collateral -------------------------------------------------------- Southern Colonel Homes, Inc. received interim approval from the U.S. Bankruptcy Court for the Southern District of Mississippi to use cash collateral until the final hearing. The interim order authorized Southern Colonel Homes to use cash collateral to pay ordinary and necessary business expenses as set forth in its budget. As protection, First Bank, a secured creditor, was granted post-petition liens on the company's property to the same extent as its pre-bankruptcy lien. In addition, Southern Colonel Homes was ordered to keep the bank's collateral insured. This collateral includes the company's real properties and improvements in Mississippi. About Southern Colonel Homes Inc. Southern Colonel Homes, Inc. filed Chapter 11 petition (Bankr. S.D. Miss. Case No. 25-50179) on February 10, 2025, listing up to $10 million in both assets and liabilities. Randa Campbell-Pittman, president of Southern Colonel Homes, signed the petition. Judge Katharine M. Samson oversees the case. Craig M. Geno, Esq., at the Law Offices of Craig M. Geno, PLLC, represents the Debtor as bankruptcy counsel. First Bank, as lender, is represented by: Jeff Rawlings, Esq. Rawlings & MacInnis, P.A. P.O. Box 1789 Madison, MS 39130-1789 Tel: 601-898-1180 Email: jeff@rawlingsmacinnis.net SOUTHWEST PREPARATORY: S&P Affirms 'BB+' Revenue Bond LT Rating --------------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' long-term rating on New Hope Cultural Education Finance Corp., Texas' series 2020A, 2020B, 2023A, and 2023B charter school revenue bonds, issued for Southwest Winners Foundation Inc., doing business as Southwest Preparatory School (SW Prep). S&P said, "We analyzed the school's environmental, social, and governance factors and consider them neutral in our credit rating analysis. "The stable outlook reflects our expectation that, over the next fiscal year, SW Prep will at least modestly increase cash reserves, improve lease-adjusted maximum annual debt service (MADS) coverage to more than 1x, and sustain recent enrollment improvements. "We could consider a negative rating action if financial performance and cash do not rebound to levels more in line with the 'BB+' rating. We could also consider a negative rating action if enrollment were to significantly decline. "We could consider a positive rating action if SW Prep were to increase cash and lease-adjusted MADS coverage to levels consistent with a higher rating while simultaneously increasing enrollment." SPIRIT AIRLINES: Exits Chapter 11 With Less Debt and New Financing ------------------------------------------------------------------ Spirit Aviation Holdings, Inc., parent company of Spirit Airlines, LLC, announced on March 12, 2025, that Spirit has emerged from its financial restructuring, completing a consensual, deleveraging transaction that equitizes approximately $795 million of funded debt. With significantly less debt and greater financial flexibility, Spirit emerges as a stronger company better positioned for long-term success. As part of the restructuring, the Company has also received a $350 million equity investment from existing investors to support Spirit's future initiatives, including investments to provide Guests with enhanced travel experiences and greater value. Spirit's Plan of Reorganization was confirmed by the United States Bankruptcy Court for the Southern District of New York, with overwhelming support from a supermajority of the Company's loyalty and convertible noteholders. Spirit will continue to be led by Ted Christie, President and Chief Executive Officer, and its existing executive team. "We're pleased to complete our streamlined restructuring and emerge in a stronger financial position to continue our transformation and investments in the Guest experience," said Mr. Christie. "Throughout this process, we've continued to make meaningful progress enhancing our product offerings, while also focusing on returning to profitability and positioning our airline for long-term success. Today, we're moving forward with our strategy to redefine low-fare travel with our new, high-value travel options." Spirit emerges with a reconstituted Board of Directors. In addition to Mr. Christie, the Board will include six directors with significant industry and financial leadership experience: Robert A. Milton, David N. Siegel, Timothy Bernlohr, Eugene I. Davis, Andrea Fischer Newman, and Radha Tilton. Mr. Christie continued: "I'm incredibly proud of our Team Members for their continued dedication to our Guests and each other throughout this process. Despite the challenges we've faced as an organization, we're emerging as a stronger and more focused airline. On behalf of the executive team, I would also like to thank our outgoing board members for their contributions and invaluable service to our airline." Upon Spirit's emergence, the common stock issued by Spirit Airlines, Inc. was cancelled. Newly issued shares now held by Spirit's new owners are expected to trade in the over-the-counter marketplace. The Company expects to re-list its shares on a stock exchange as soon as reasonably practicable after the Effective Date of Spirit's Plan of Reorganization. Additional Information Additional information about the Company's chapter 11 case, including access to court filings and other documents related to the restructuring process, is available at https://dm.epiq11.com/SpiritGoForward or by calling Spirit's restructuring information line at (888) 863-4889 (U.S. toll free) or +1 (971) 447-0326 (international). Additional information is also available at www.SpiritGoForward.com. Advisors Davis Polk & Wardwell LLP is serving as the Company's restructuring counsel, Alvarez & Marsal is serving as restructuring advisor, and Perella Weinberg Partners LP is serving as investment banker. About Spirit Airlines Spirit Airlines, Inc. (SAVE) is a low-fare carrier committed to delivering the best value in the sky by offering an enhanced travel experience with flexible, affordable options. Spirit serves destinations throughout the United States, Latin America and the Caribbean with its Fit Fleet, one of the youngest and most fuel-efficient fleets in the U.S. On the Web: http://wwww.spirit.com/ Spirit Airlines and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 24-11988) on Nov. 18, 2024, after reaching terms of a pre-arranged plan with bondholders. At the time of the filing, Spirit Airlines reported $1 billion to $10 billion in both assets and liabilities. Judge Sean H. Lane oversees the case. The Debtors tapped Davis Polk & Wardwell, LLP as legal counsel; Alvarez & Marsal North America, LLC, as financial advisor; and Perella Weinberg Partners LP as investment banker. Epiq Corporate Restructuring, LLC, is the claims agent. Paul Hastings, LLP and Ducera Partners, LLC serve as legal counsel for the Ad Hoc Group of Convertible Noteholders. Akin Gump Strauss Hauer & Feld, LLP and Evercore Group LLC represent the Ad Hoc Group of Senior Secured Noteholders. The official committee of unsecured creditors retained Willkie Farr & Gallagher LLP as counsel. Citigroup Global Markets, Inc., is serving as financial advisor and Latham & Watkins LLP is serving as legal counsel to Frontier. STEEL FABRICATORS: Has Deal on Cash Collateral Access ----------------------------------------------------- Steel Fabricators, Inc. asked the U.S. Bankruptcy Court for the District of Colorado for authority to use cash collateral and provide adequate protection in accordance with its agreement with the U.S. Small Business Administration. The Debtor needs to use cash collateral to pay pay approximately $59,000 to $88,000.00 in monthly wages and approximately $36,000.00 in quarterly taxes and continue to pay monthly expenses of approximately $49,000. The SBA's proof of claim asserts that the Debtor owes the SBA a total of $144,608. The SBA has a perfected security interest in the Debtor's tangible and intangible personal property. As adequate protection, the SBA will receive replacement liens to the same extent and priority as pre-petition and to the extent that using cash collateral decreases the SBA's interest. The Debtor will make monthly payments to the SBA of $731 per month commencing in April 2025. The cash collateral of approximately $41,000 is less than the $144,000 owed to the SBA. Any junior secured creditors whose purported interests seek attach to any cash collateral are unsecured due to the value of the collateral. However, to the extent any such junior interests are found to attach they will be entitled to replacement liens, post-petition, to the same extent and priority as pre-petition and to the extent that using cash collateral decreases such secured creditors' interest in the cash collateral. A copy of the motion is available at https://urlcurt.com/u?l=JF8Hz6 from PacerMonitor.com. About Steel Fabricators Steel Fabricators, Inc., doing business as SFI, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 24-17584) on December 23, 2024, with $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Heidi Fox, CEO, signed the petition. Judge Joseph G. Rosania Jr. presides over the case. Katharine S. Sender, Esq. at Allen Vellone Wolf Helfrich & Factor, P.C. represents the Debtor as legal counsel. STOLI GROUP: Seeks to Amend Final Cash Collateral Order ------------------------------------------------------- Stoli Group (USA), LLC and Kentucky Owl, LLC asked the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, to modify the Final Order allowing them to use cash collateral, and to waive the requirement to make certain payments to their lender, Fifth Third Bank. The Debtors are facing a liquidity shortfall due to a reduction in revenue and accounts receivable, primarily caused by market seasonality in the spirits industry. This has affected their ability to meet the required Interest Payments and Professional Fee Payments to the lender. The Debtors are asking the court to waive these obligations temporarily to allow them to address the liquidity issue and avoid potential defaults. Despite the short-term cash flow problems, the Debtors argue that the lender remains adequately protected due to the equity cushion in the collateral and other forms of adequate protection such as replacement liens and super-priority claims. A copy of the motion is available at https://urlcurt.com/u?l=YgMFyu from PacerMonitor.com. About Stoli Group (USA) LLC Stoli Group (USA) LLC is a producer, manager, and distributor of a global portfolio of spirits and wines. Stoli Group (USA) and its Kentucky Owl American sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-80146) on November 27, 2024. In the petition filed by Chris Caldwell, president and global chief executive officer, Stoli Group (USA) reported assets between $100 million and $500 million and liabilities between $10 million and $50 million. Judge Scott W. Everett handles the cases. Foley & Lardner, LLP represents the Debtors as legal counsel. Fifth Third Bank, as lender, can be reached through its counsel: Brent McIlwain, Esq. Christopher A. Bailey, Esq. Holland & Knight, LLP 1722 Routh Street, Suite 1500 Dallas, TX 75201 Telephone: 214.969.1700 Email: brent.mcilwain@hklaw.com chris.bailey@hklaw.com -- and -- Jeremy M. Downs, Esq. Steven J. Wickman, Esq. Goldberg Kohn, Ltd. 55 East Monroe Street, Suite 3300 Chicago, IL 60603 Telephone: 312.201.4000 Email: jeremy.downs@goldbergkohn.com steven.wickman@goldbergkohn.com SUNNOVA ENERGY: PwC Raises Going Concern Doubt ---------------------------------------------- Sunnova Energy International Inc. disclosed in a Form 10-K Report filed with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2024, that its auditor expressed an opinion that there is substantial doubt about the Company's ability to continue as a going concern. McLean, Virginia-based PricewaterhouseCoopers LLP, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 3, 2025, citing that as of December 31, 2024, the Company had $211.2 million of cash and cash equivalents, of which $34.7 million is held outside of secured collection accounts, negative working capital of $296.2 million, limited availability under any financing arrangement for general corporate purposes and its convertible senior notes and senior notes due in 2026 were trading significantly below par. Additionally, since inception, the Company has had a history of significant operating losses, operating and investing cash outflows, and at times, working capital deficits. Consequently, the Company has been heavily reliant on debt and equity financing to fund its operations and meet its obligations as they come due. These conditions have raised substantial doubt about the Company's ability to continue as a going concern. According to Sunnova, it incurred operating losses of $239.5 million, $243.4 million and $81.5 million and net losses of $447.8 million, $502.4 million and $130.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. These historical operating and net losses were due to a number of factors, including increased expenses to fund our growth and related financing needs. Sunnova expects to incur significant expenses as it finances the expansion of its operations and implement additional internal systems and infrastructure to support its growth and operations. Sunnova does not know whether its revenue will grow rapidly enough to absorb these costs. Its ability to achieve profitability depends on a number of factors, including: * growing Sunnova's customer base and originating new customer agreements on economic terms; * maintaining or lowering Sunnova's cost of capital; * reducing operating costs by optimizing Sunnova's operations and maintenance processes; * maximizing the benefits of Sunnova's dealer network; * finding additional tax equity investors and other sources of institutional capital; * ensuring customer satisfaction by maintaining high levels of quality and performance; and * the continued availability of various governmental incentives for the renewable energy industry. "Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future," Sunnova said. "The substantial doubt about our ability to continue as a going concern may adversely impact the price of our common stock, our reputation and relationship with investors, employees and third parties with whom we do business, our ability to raise additional capital or refinance existing debt, our ability to comply with certain covenants under our debt agreements or meet other contractual obligations and our ability to achieve our business objectives, which could materially and adversely impact our business, financial condition and results of operations," the Company said. A full-text copy of the Company's Form 10-K is available at: https://tinyurl.com/y4u9nwpx About Sunnova Energy International Sunnova Energy International Inc. is an industry-leading energy services company focused on making clean energy more accessible, reliable and affordable for homeowners and businesses, serving over 441,000 customers in more than 50 U.S. states and territories. Sunnova Energy Corporation was incorporated in Delaware on October 22, 2012 and formed Sunnova Energy International Inc. as a Delaware corporation on April 1, 2019. As of December 31, 2024, the Company had $13.4 billion in total assets, $10.7 billion in total liabilities, $260.6 million in redeemable noncontrolling interests, and total equity of $2.4 billion. TWIN FALLS: Gets OK to Use Additional $2.95M in Cash Collateral --------------------------------------------------------------- Twin Falls Oil Service, LLC got the green light from the U.S. Bankruptcy Court for the District of North Dakota to use cash collateral. The court order authorized the company to use up to $2,950,600 in cash collateral through the week beginning on June 30 per the financial projections. Pre-bankruptcy lenders, including First International Bank & Trust, Quick Bridge Funding, and Samson MCA LLC, were granted replacement liens on post-petition assets to the same effect and with the same priority as their pre-bankruptcy liens. First International Bank & Trust, as lender, is represented by: Eli J. Patten, Esq. Crowley Fleck PLLP P.O. Box 2529 Billings, Montana 59103-2529 Email: epatten@crowleyfleck.com About Twin Falls Oil Service Twin Falls Oil Service, LLC, a company in Killdeer, N.D., offers crude oil hauling, water hauling, aggregate hauling, hydrovac winch services, and OTR hauling. Twin Falls filed Chapter 11 petition (Bankr. D. N.D. Case No. 24-30525) on December 11, 2024, listing up to $50,000 in assets and up to $10 million in liabilities. Jeffery L. Jacobson, president of Twin Falls, signed the petition. Judge Shon Hastings oversees the case. The Debtor is represented by: Steven R. Kinsella, Esq. Fredrikson & Byron, P.A. Tel: 612-492-7244 Email: skinsella@fredlaw.com UNIQUE LOGISTICS: Financial Woes Raise Going Concern Doubt ---------------------------------------------------------- Unique Logistics International, Inc. disclosed in a Form 10-Q Report filed with the U.S. Securities and Exchange Commission for the quarterly period ended November 30, 2024, that there is substantial doubt about its ability to continue as a going concern. According to the Company, its principal sources of cash are: (i) cash generated from operations, (ii) borrowings available under its revolving line of credit and (iii) proceeds from future debt or equity issuances. As of November 30, 2024, the Company had cash and cash equivalents on hand of approximately $3.7 million, negative working capital of $2.8 million, and $9.3 million available to draw under its operating line of credit with TBK Bank, SSB based on the amount of its accounts receivable on November 30, 2024. On September 12, 2024, the Company entered into an agreement with TBK Bank to temporarily increase the credit limit under the TBK Facility from $25.0 million to $30 million for a period of six months through March 12, 2025. The Company has incurred net losses of $4.4 million and used cash for its operations in the amount of $5.5 million during the six months ended November 30, 2024, primarily due to the ramp up of accounts receivable and accounts payable during the most recent quarter ended due to an increase in sales. The negative working capital, net losses and cash used in operations are all indicators of substantial doubt about the Company's ability to continue as a going concern within the next 12 months. The Company is currently evaluating several different strategies to enhance its liquidity position. These strategies may include, but are not limited to, pursuing additional actions under its strategic plan, seeking additional financing from both the public and private markets through the issuance of equity securities and seeking to extend the term of outstanding debt. The outcome of these matters cannot be predicted with any certainty at this time. There can be no assurance that the Company will be able to raise the capital it needs to continue its operations on satisfactory terms or at all. If capital is not available to the Company when, and in the amounts, needed, the Company could be required to liquidate its assets, cease or curtail operations, which could materially harm its business, financial condition and results of operations, or seek protection under applicable bankruptcy laws or similar state proceedings. Additionally, the Company is continually evaluating its liquidity requirements considering its operating needs, growth initiatives and capital resources. Based on its assessment of the Company's projected cash flow and business performance as of and subsequent to November 30, 2024, management believes that the Company's current cash and cash availability under the TBK facility as well as the ability to renegotiate the debt repayments would be sufficient to support its operations for at least the next 12 months from the issuance of this report. The Company's plan includes securing external financing, which may include raising debt or equity capital. These plans are not entirely within the Company's control including its ability to raise sufficient capital on favorable terms, if at all, and absent an infusion of sufficient capital there is substantial doubt about its ability to continue as a going concern for 12 months after the date the condensed consolidated financial statements for the three and six months ended November 30, 2024 are issued. A full-text copy of the Company's Form 10-Q is available at: https://tinyurl.com/32zhs9hn About Unique Logistics Unique Logistics International, Inc. and its subsidiaries is a non-asset-based provider of global logistics and freight forwarding services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company's customers include retailers and wholesalers, electronics, high technology, industrial and manufacturing companies around the world. The Company provides a range of international logistics services that enable its customers to outsource sections of their supply chain process. As of November 30, 2024, the Company had $118.7 million in total assets, $112.7 million in total liabilities, and total stockholders' equity of $5.9 million. URBAN COMMONS: Can Sell Lease Interests Free and Clear of Liens --------------------------------------------------------------- Judge Philip Bentley of the United States Bankruptcy Court for the Southern District of New York overruled VIK XS Services, Inc.'s objection to the sale of Urban Commons 2 West, LLC and its affiliates' leasehold interests free and clear of liens. The Debtors are five affiliated LLC's, which collectively own long-term leasehold interests (the "Hotel Lease Interests") in a hotel located at 2 West Street in Manhattan's Battery Park City neighborhood. The hotel is part of a mixed-use condominium building, which also includes a residential unit, and which is subject to a ground lease with the Battery Park City Authority. The Debtors purchased the Hotel Lease Interests in September 2018 for approximately $147 million, of which $96 million was financed by a first mortgage issued by BPC Lender, LLC. The validity of that mortgage has not been challenged. The loan matured in 2020, and the Debtors were unable to obtain refinancing. Later that year, following the onset of the Covid-19 pandemic, the hotel ceased operations, and it has remained shuttered since that time. In November 2022, the Debtors filed these chapter 11 cases. By the time of the bankruptcy filing, the amount owed under the loan had grown to about $114 million, plus fees and costs. The Debtors sought approval of DIP financing from the Lender early in the case, which the Court approved in an amount sufficient to fund the Debtors' expenses until the Hotel Lease Interests could be sold and a liquidating plan confirmed. In February 2023, the Court entered an order approving bid procedures and scheduling an auction of the Hotel Lease Interests, to be followed by a sale approval hearing in the spring of 2023. The auction failed to attract any qualified bids other than the Lender's bid, which consisted of a $78.5 million credit bid, plus payment of tens of millions of dollars in disputed cure amounts that the Debtors owed under their leases and other agreements with BPCA, the condominium and the hotel union. In August 2023, to address a host of disputes under those leases and agreements, the Debtors commenced a mediation before former Judge Shelley Chapman with the other main parties in the case -- the Lender, BPCA, two of the condominium's governing boards, and the hotel union. Thirteen months later, in early September 2024, the Debtors informed the Court that they and the other mediation parties had reached a global resolution of these disputes. In September 2024, the Court held a combined hearing on: (i) the Debtors' motion for approval of their sale of the Hotel Lease Interests to the Lender, free and clear of all liens, claims, interests and encumbrances, pursuant to Bankruptcy Code Secs. 363(c) and 363(f), and (ii) confirmation of the Debtors' third amended plan of liquidation. Only one party objected to either the sale or confirmation -- namely, VIK XS Services, Inc., a contractor that had filed a mechanic's lien to secure its claim for approximately $189,000 in unpaid pre-petition services. VIK objected to the sale of the Hotel Lease Interests free and clear of its lien, contending that neither section 363(f)(5) nor any other subsection of section 363(f) authorized such free-and-clear treatment. On Sept. 26, 2024, the Court read into the record its bench ruling approving the sale and confirming the Plan. The Court found that the sale satisfied the requirements of Bankruptcy Code Sec. 363(b), because the Debtors had properly marketed the hotel and the Lender's bid represented the highest and best offer -- an offer that will pay almost $20 million in agreed cure claims and may enable the hotel to reopen and to reinstate the jobs that were lost when it closed more than four years ago. The Court also found that Code Sec. 363(f) authorized a sale free and clear of all liens and other interests, because: (i) all holders of liens or interests other than VIK were deemed to have consented to such treatment under Code Sec. 363(f)(2) by virtue of not having objected to the sale, and (ii) a sale free and clear of VIK's lien was authorized by Code Sec. 363(f)(5). The Court then confirmed the Plan, finding that the mediation settlement was fair and reasonable and that the Plan satisfied the Bankruptcy Code's various other confirmation requirements. Most courts, including bankruptcy courts in this District, have construed section 363(f)(5) broadly, holding that its requirements are satisfied if a foreclosure sale under state law would extinguish the interests at issue. In 2014, a district court in the Southern District of New York rejected this rule and adopted a much narrower construction. In Dishi & Sons, v. Bay Condos LLC, 510 B.R. 696, 710 (S.D.N.Y. 2014), the court held that section 363(f)(5) is satisfied only if the debtor itself, as the property's owner, could bring a legal or equitable proceeding under non-bankruptcy law to extinguish the interests in question. Under this reading, section 363(f)(5) would rarely be satisfied, and the ability of debtors to sell assets for fair value would be significantly impaired in many cases. The Court concludes Dishi's interpretation of section 363(f)(5) is unduly narrow. The broader construction previously followed in this District, under which this section's requirements are satisfied if a foreclosure sale would extinguish the interests at issue, conforms more closely to section 363(f)(5)'s text and purposes, as well as to the purposes underlying the Bankruptcy Code's other provisions concerning secured debt. The Court therefore adopts this broader interpretation and finds that the Debtors' proposed free-and-clear sale satisfies section 363(f)(5) because, under New York law, a foreclosure sale would extinguish the objecting junior holder's lien. The Court therefore overrules VIK's objection to the sale motion and holds that the Debtors are entitled to sell the Hotel Lease Interests to the Lender free and clear of all liens, claims and encumbrances. A copy of the Court's decision is available at https://urlcurt.com/u?l=b4bVJy from PacerMonitor.com. About Urban Commons 2 West Urban Commons 2 West, LLC, a company in Corona Del Mar, Calif., and its affiliates, filed voluntary petitions for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 22-11509) on Nov. 15, 2022. At the time of the filing, Urban Commons 2 West listed as much as $100 million to $500 million in both assets and liabilities. Judge Philip Bentley oversees the cases. Davidoff Hutcher & Citron, LLP and Getzler Henrich & Associates, LLC serve as the Debtor's legal counsel and restructuring advisor, respectively. Mark Podgainy, a partner at Getzler, is the Debtor's chief restructuring officer. US COATING: Gets Interim OK to Use Cash Collateral Until March 25 ----------------------------------------------------------------- US Coating Specialists, LLC received approval from the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, to use cash collateral on an interim basis until the next hearing. The company was authorized to use cash collateral to cover necessary business expenses as per the budget, with a 10% variance allowed. It projects total expenses of $367,139.91 for March. The U.S. Small Business Administration and Leaf Capital Funding, LLC may assert an interest in the cash collateral. As protection for the use of their cash collateral, both lenders were granted a post-petition lien on the cash collateral to the same extent and with the same validity and priority as their pre-bankruptcy lien. The next hearing is set for March 25. About US Coating Specialists US Coating Specialists, LLC is a licensed commercial roofing company in Florida, offering services like SPF spray foam, silicone, and metal roofing. It also provides roof repairs, maintenance, and emergency services for commercial and industrial buildings. The company works with trusted partners and offers financing options for new roofing systems. US Coating Specialists filed Chapter 11 petition (Bankr. S.D. Fla. Case No. 25-11972) on February 25, 2025, listing up to $10 million in both assets and liabilities. Anthony Flett, chief executive officer of US Coating Specialists, signed the petition. Judge Mindy A. Mora oversees the case. Mark F. Robens, Esq., at Stichter, Riedel, Blain, & Postler P.A., represents the Debtor as legal counsel. Leaf Capital Funding, LLC, as lender, may be reached at: Brian Kestenbaum Manager 110 S. Poplar Street, Suite 101 Wilmington, DE 19108 Email: sbarnett@leafnow.com US COATING: Soneet Kapila Named Subchapter V Trustee ---------------------------------------------------- The U.S. Trustee for Region 21 appointed Soneet Kapila of Kapila Mukamal as Subchapter V trustee for US Coating Specialists, LLC. Mr. Kapila will be paid an hourly fee of $450 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Kapila declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Soneet R. Kapila Kapila Mukamal 1000 South Federal Highway, Suite 200 Fort Lauderdale, FL 33316 Tel: (954) 761-1011 Email: skapila@kapilamukamal.com About US Coating Specialists US Coating Specialists, LLC is a licensed commercial roofing company in Florida, offering services like SPF spray foam, silicone, and metal roofing. It also provides roof repairs, maintenance, and emergency services for commercial and industrial buildings. The company works with trusted partners and offers financing options for new roofing systems. US Coating Specialists filed Chapter 11 petition (Bankr. S.D. Fla. Case No. 25-11972) on February 25, 2025, listing up to $10 million in both assets and liabilities. Anthony Flett, chief executive officer of US Coating Specialists, signed the petition. Judge Mindy A. Mora oversees the case. Mark F. Robens, Esq., at Stichter, Riedel, Blain, & Postler P.A., represents the Debtor as legal counsel. Leaf Capital Funding, LLC, as lender, may be reached at: Brian Kestenbaum Manager 110 S. Poplar Street, Suite 101 Wilmington, DE 19108 Email: sbarnett@leafnow.com VIASAT INC: R. Suri Retires as Director --------------------------------------- Under the Stockholders Agreement, dated November 8, 2021, among Viasat, Inc. and certain former shareholders of Connect Topco Limited, a private company limited by shares and incorporated in Guernsey, the Inmarsat Investors have the right to designate (i) two individuals to the board of directors of the Company for so long as they collectively beneficially own at least 25% of the total outstanding shares of Company common stock and (ii) one individual to the Board for so long as they collectively beneficially own at least 15% of the total outstanding shares of Company common stock. Pursuant to the Stockholders Agreement, Andrew Sukawaty and Rajeev Suri were appointed to the Board as the Inmarsat Investors' designees at the closing of the acquisition of Inmarsat. The Inmarsat Investors' ownership of Viasat common stock fell below 25% on February 10, 2025, and as a result, under the Stockholders Agreement the Inmarsat Investors were no longer entitled to designate two directors to the Board. Accordingly, on March 6, 2025, Rajeev Suri notified the Company that he intends to retire from the Board effective immediately, the Company disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission. The Company expresses its gratitude to Mr. Suri for his service as a director. About Viasat Inc. Viasat, Inc., headquartered in Carlsbad, California, operates a consumer satellite broadband internet business, an in-flight connectivity business, and provides satellite and related communications, networking systems, and services to government and commercial customers. Inmarsat operates a satellite communications network using L-band, Ka-band, and S-band spectrum and provides voice and data services to customers on land, at sea, and in the air. * * * Egan-Jones Ratings Company on November 5, 2024, maintained its 'CCC+' foreign currency and local currency senior unsecured ratings on debt issued by Viasat, Inc. VICTORIA'S SECRET: S&P Alters Outlook to Stable, Affirms 'BB-' ICR ------------------------------------------------------------------ S&P Global Ratings revised its outlook on U.S.-based intimates retailer Victoria's Secret & Co. (VS) to stable from negative and affirmed all its ratings, including the 'BB-' issuer credit rating. The stable outlook reflects S&P's expectation for improving operating performance and a financial policy that results in S&P Global Ratings-adjusted leverage sustained in the mid-2x area over the next 12 months. The stable outlook reflects VS' better-than-expected operating performance despite softer consumer spending trends. During the fourth quarter (ended Feb. 3, 2025), the company's net sales increased 1% while its comparable same-store sales increased 3% due to a strong holiday season and improved traffic trends within both its VS and PINK brands, reflecting a significant rebound from negative comparable same-store sales of 8% during the fourth quarter of fiscal 2023. S&P said, "However, we anticipate customer discretionary spending levels will remain relatively weak through fiscal 2025, particularly among lower-income consumers and expect sales growth for VS to be relatively muted, up roughly 1% for fiscal 2025 as consumers trade down to more affordable options from retailers like Walmart, Target, and Amazon. We believe VS will sustain adequate inventory levels for fiscal 2025 as it continues to oversee and manage its stock-keeping units while promoting the introduction of new, sought-after, and compelling products and apparel to meet customer demand, particularly as it continues to improve the positioning of its products. Furthermore, we believe improving traffic within its North American business and recent strategic initiatives implemented by the company's new leadership, will likely put VS in a positive position for the next several years." S&P said, "We expect VS' ongoing efforts to improve operational efficiency will benefit profitability metrics over the next 12 months despite anticipated tariff headwinds. VS' trailing-12-month S&P Global Ratings-adjusted EBITDA margin improved 60 basis points (bps) year-over-year to 16.4% as of Feb. 3, 2025 (compared to 15.8% in fiscal 2023), reflecting modest top-line growth and higher gross margin from better labor efficiency, lower product costs, and reduced promotional activity across its brands. However, we forecast input cost volatility and trade tariffs over the next year to partially offset profit margin expansion, leading to S&P Global Ratings-adjusted EBITDA margins of 16.5% in fiscal 2025. Still, we expect VS will continue to implement its turnaround strategy, consisting of disciplined inventory management and cost-improvement initiatives in non-noncustomer-facing areas throughout its store fleet. As such, we forecast S&P Global Ratings-adjusted leverage of 2.6x this year, improving slightly to 2.5x by the end of fiscal 2026, supported by modest EBITDA expansion. "We expect VS to maintain adequate liquidity over the next 12 months, supported by full availability under its ABL facility, ample balance sheet cash, and positive FOCF generation. At the end of the fourth quarter (ended Feb. 3, 2025), VS had roughly $227 million of cash on hand after successfully repaying $440 million of borrowings under its $750 million ABL facility, leading to reduced leverage while expanding its liquidity sources. Additionally, we anticipate VS will address its upcoming ABL facility maturity due August 2026 prior to it becoming current over the next five months, mitigating its liquidity risk by providing it with access to additional funding during periods of economic uncertainty. We project healthy FOCF generation in fiscal 2025 of roughly $195 million and $220 million of FOCF in fiscal 2026 given elevated capital expenditures (capex) of about $240 million annually (accounting for less than 4% of sales) as the company continues to invest in its store capital program, new store openings, store renovations, technology investments, and logistics initiatives. VS expects net new consolidated store openings will be between 13 and 53 for fiscal 2025, supported mainly through growth in its partner-operated stores. We anticipate VS to utilize a portion of its cash to opportunistically repurchase shares over the next 12 to 24 months given its board-approved share-repurchase program, allowing management to buy back up to $250 million of its common stock. "The stable outlook reflects our expectation for improving operating performance and a financial policy that results in S&P Global Ratings-adjusted leverage sustained in the mid-2x area over the next 12 months." S&P could lower its rating if leverage is sustained above 3x. This could occur if: -- Sales decline as demand for its products decreases beyond our expectations due to higher-price points to offset tariffs or a persistently challenging operating environment: or -- S&P believes the competitive standing of the company has weakened materially due to accelerated competition, merchandising missteps, or a lack of success in repositioning VS's brand that leads to sustained declines in overall sales S&P could raise its rating on VS if: -- S&P views the company's competitive standing more favorably, a demonstrated track record of sales growth, and improving margins that S&P expects it will sustain; and -- S&P believes management has successfully positioned the company for long-term growth while having remedied former operational brand challenges, leading it to remove our negative comparable rating analysis modifier. VMR CONTRACTORS: Court Extends Cash Collateral Access to April 11 ----------------------------------------------------------------- VMR Contractors Inc. received another extension from the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division to use its cash collateral. The order authorized the company to use cash collateral through April 11 in accordance with its budget and the terms of the order entered on March 1, 2023. The budget shows total expenses of $184,000 for the period ending April 4. These expenses include payroll, payroll taxes, steel purchases, office supplies, union benefits, and other expenses. The next hearing is scheduled for April 7. About VMR Contractors VMR Contractors, Inc. is in the business of supplying and installing rebar for road construction projects. VMR Contractors sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14211) on Dec. 8, 2022, with $500,001 to $1 million in assets and $1 million to $10 million in liabilities. Vincent Roberson, president of VMR Contractors, signed the petition. Judge Benjamin Goldgar oversees the case. The Debtor is represented by William J. Factor, Esq., at The Law Office of William J. Factor, Ltd. WORLD AIRCRAFT: First Service Bank's Attorney Fee Request Denied ---------------------------------------------------------------- Judge Taylor B. McNeel of the United States District Court for the Southern District of Mississippi denied First Service Bank's amended motion for attorney fees in the case captioned as FIRST SERVICE BANK, PLAINTIFF v. WORLD AIRCRAFT, INC. and THOMAS SWAREK, DEFENDANTS, CIVIL ACTION NO. 1:24-cv-20-TBM-RPM (S.D. Miss.) without prejudice to refiling. First Service Bank's motion to reopen the case is also denied. Following the Court's Order granting summary judgment in favor of First Service Bank and entering a default judgment against Thomas Swarek, First Service Bank timely moved for attorney fees and nontaxable expenses under Rule 54(d)(2) of the Federal Rules of Civil Procedure seeking a substantial sum of $3,459,833.07. After receiving a reimbursement of $623,8212.28 from the Final DIP Order in Bankruptcy Court, First Service Bank amended its request and now seeks $2,549,817.96 in attorney fees and nontaxable expenses. According to First Service Bank, these fees and expenses arise from six interrelated proceedings: (1) the Guaranty Suit (the instant action), (2) El Dorado Chapter 11 bankruptcy proceeding, (3) Hugoton Chapter 11 bankruptcy proceeding, (4) World Aircraft Chapter 11 bankruptcy proceeding, (5) Bluestone Chapter 11 bankruptcy proceeding, and (6) the Escambia Chapter 11 bankruptcy proceeding. In support of its request, First Service Bank attaches 343 pages of billing records and affidavits. Upon review, a large portion, if not the vast majority, of the fees are related to the five bankruptcy proceedings. But First Service Bank has not cited to any cases where a bank has sought to recover attorney fees and expenses in a single breach of contract action rather than in each individual bankruptcy or action from which the fees and expenses were incurred -- and the District Court has found none. Instead, First Service Bank argues that it is entitled to seek all attorney fees and expenses related to Swarek's refusal to honor his guaranty in the District Court, even if they were not incurred in this action, pursuant to the contractual language within Swarek's guaranty, the Term Loan Credit Agreement, and the Security Agreement. In light of the contractual language, the District Court finds that while First Service Bank contracted for the recovery of attorney fees and expenses in certain circumstances, it did not contract for such recovery in a singular action opposed to the individual actions in which the fees were actually accrued -- and where a court in each bankruptcy can determine the applicability of the contract language to the particular bankruptcy at issue. Even if First Service Bank had provided the District Court with authority that awarding $2,549,817.96 in attorney fees and nontaxable expenses accrued in five separate bankruptcy proceedings was permissible in this case, the bankruptcy court would nevertheless be better equipped to analyze First Service Bank's request for fees and expenses arising out of the five bankruptcy actions. First Service Bank can certainly attempt to pursue separate requests for attorney fees in the proper bankruptcy proceedings. But, as for this case, it is instructed to file a new motion for attorney fees in this action, ensuring the fees requested relate only to the fees and nontaxable expenses incurred from the instant action. The District Court need not reopen the case to rule on First Service Bank's motion for attorney fees. The parties need only to seek to reopen this case for further proceedings upon the resolution of World Aircraft Inc.'s bankruptcy proceeding. A copy of the Court's decision is available at https://urlcurt.com/u?l=G2jZNP from PacerMonitor.com. About World Aircraft, Inc. World Aircraft, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 24-50224) on February 22, 2024, listing $100 million to $500 million in assets and $50 million to $100 million in liabilities. The petition was signed by Thomas Swarek as president. Judge Katharine M Samson presides over the case. Patrick Sheehan, Esq. at SHEEHAN AND RAMSEY, PLLC represents the Debtor as counsel. [] Economic Slowdown Signals Concern, Says First American CEO ------------------------------------------------------------- Michael Eisenga, President and CEO of First American Properties, is sounding the alarm about troubling economic signals that could cause further turbulence for the U.S. markets and economy. Recent economic data suggests a potential downturn ahead, with key indicators showing signs of growing instability. According to the University of Michigan's Consumer Sentiment Survey, consumer confidence plummeted from 71.7 in January to 64.7 in February, highlighting rising pessimism among consumers. The Pending Home Sales Index (PHSI) followed suit, dropping 4.6% in January to a historic low of 70.6, marking a 5.2% decline from the previous year. These signs reflect a broader trend of cautious sentiment, which Eisenga believes could have far-reaching implications. Corporate caution is also on the rise, with Warren Buffett's cash holdings nearing $350 billion, signaling concerns about economic uncertainty. A 0.9% decline in consumer spending in January, the largest drop since March 2023, adds further worry to an already fragile economic landscape. Additionally, mortgage delinquencies spiked to 5.9% in January, with overall delinquencies surpassing 8%, signaling growing financial strain across households. The outlook for the markets remains grim, with potential impacts reverberating through the broader economy. The Atlanta Fed's GDPNow model has revised down its growth projection to -2.8% for the current quarter, while corporate bankruptcies are expected to increase by 9--12% in 2025. Personal bankruptcies already saw a 14.2% rise in 2024, and subprime auto loan delinquencies are at their highest level since data collection began. Eisenga highlights that consumer debt has surged to an alarming $18.04 trillion, with record high credit card debt at $1.21 trillion. Inflation continues to erode incomes, and while holiday spending saw slight growth, discretionary spending is expected to fall as inflation takes a bigger toll. "These are unsettling times for the U.S. economy, and we must prepare for potential challenges in the year ahead," said Eisenga. "The housing, employment, and Stock markets could face significant strains as economic pressures mount." About Michael Eisenga Michael Eisenga is the CEO of First American Properties, Eisenga has played a key role in navigating challenging markets and continues to offer valuable insights into the evolving economic landscape. [] Northgate to Auction Brooklyn Property on April 3, 2025 ---------------------------------------------------------- Northgate Real Estate Group has been exclusively retained to run the bankruptcy sale of 150 Lefferts Ave & 55 East 21st Street in the prospect - Lefferts Garden neighborhood of Brooklyn. 150 Leffert Avenue is a 6-story building consisting of 48,834 sf and 53 residential units. 55 East 21st Street is a 6-story building consisting of 60,114 sf and 60 residential units. Properties can be sold individually or as a package. The bid deadline is April 1, 2025, at 5:00 p.m., followed by an auction on April 3, 2025, at 2:30 p.m. Interested bidders must contact Greg Corbin of Northgate Real Estate Group at Gcorbin@northgatereg.com for more information on how to participate in the auction. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN: 1520-9474. 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