 | | Featured Premium Content | | | | | BankruptcyData: 4Q24 Business Development Company (BDC) Report Part I
Business Development Company ("BDC") filings have begun rolling in for 4Q24, including those of Capital Southwest Corporation CSWCZ CSWC, GOLUB CAPITAL BDC, Inc. GBDC, Oaktree Specialty Lending Corporation, Saratoga Investment Corp., Ares Capital Corporation ARCC, and Phenixfin Corporation, according to a new report from BankruptcyData.com. These filings surface multiple instances of credit deterioration, including near-term maturities and non-performing loans. Additionally, recent restructuring events suggest financial distress, while realized losses underscore heightened default risks. Of the 61 BDC portfolio companies analyzed in this report, the Healthcare and Medical sector shows the largest concentration of potential distress with 12 companies, followed by Chemicals and Allied Products with 5 companies and Telecommunications with 4 companies. READ MORE | | |  | | Editor's Picks | | | | | Diocese of Norwich Files Chapter 11 Reorganization Plan: $31 Million for Abuse Survivors
The Diocese of Norwich, Conn., has filed a joint chapter 11 reorganization plan, which includes a $31 million compensation fund for survivors of sexual abuse, the Norwich Bulletin reported. According to an announcement, the Diocese, the Official Committee of Unsecured Creditors, the Association of Parishes and Catholic Mutual Relief Society of America reached the agreement after five days of mediation with retired Judge Joan N. Feeney. The plan was filed Feb. 10 in the U.S. Bankruptcy Court in Hartford before Judge James J. Tancredi. READ MORE | | J&J Begins Crucial Battle over $10 Billion Baby Powder Settlement
Johnson & Johnson faces a critical test today over its $10 billion proposal to end litigation alleging that its baby powder caused ovarian cancer, as it tries to convince a judge to sign off on its third attempt to resolve thousands of lawsuits through a subsidiary's bankruptcy. Bankruptcy Judge Christopher Lopez in Houston will decide the fate of the company's latest chapter 11 during a weeks-long court hearing weighing competing demands to approve the settlement or end the bankruptcy altogether. READ MORE | | S&P: Most Defaults Resulted From Consumer Products, Health Care and Media and Entertainment
The consumer products, health care, and media and entertainment sectors accounted for 60% of defaults in January and 39% of the weakest links (issuers rated 'B-' and below with a negative outlook), S&P Global reported. This suggests defaults in these sectors could increase further, according to S&P. Additionally, these sectors face significant amounts of speculative-grade debt maturing before 2028, which increases their vulnerability and the potential risk of default if interest rates remain high. READ MORE
MORE NEWS BELOW | | |  | | Upcoming Events | | | | | Alexander L. Paskay Memorial Bankruptcy Seminar Tampa Marriott Water Street
February 27-28 | Tampa, Fla. | | ABI Distressed Real Estate SymposiumPendry Newport Beach
March 26-28 | Newport Beach, Calif. | | | | |  | | Daily Roundup | | | | | Solar Panel Bankruptcies Leave Frustrated Homeowners in Limbo
Thousands of homeowners are left without repair services or support for systems installed by solar companies that later went bankrupt. California alone has over 820,000 abandoned installations, according to Solar Insure data, Bloomberg Law reported. Many are stuck with leases for incomplete installations or systems that don’t function, according to interviews, letters to bankruptcy courts, and complaints filed with the Better Business Bureau. READ MORE | | U.S. Retail Sales Post Biggest Drop in Nearly Two Years Amid Winter Freeze
U.S. retail sales dropped by the most in nearly two years in January, likely weighed down by frigid temperatures, wildfires and motor vehicle shortages, suggesting a sharp slowdown in economic growth early in the first quarter, Reuters reported. But the larger-than-expected and across the board decline in retail sales reported by the Commerce Department on Friday probably does not reflect a material shift in consumer spending as it also followed four straight months of hefty increases. READ MORE | | Crypto Scams Likely Set New Record in 2024 Helped by AI, Chainalysis Says
The rise of "pig butchering" scams and the increasing use of generative artificial intelligence likely lifted revenues from crypto scams to a record high in 2024, according to blockchain analytics firm Chainalysis, Reuters reported. Revenue from pig butchering scams, where perpetrators cultivate relationships with individuals and convince them to participate in fraudulent schemes, increased nearly 40% in 2024 from the previous year, the firm estimated in a report published on Thursday. READ MORE | | Prominent Cryptocurrency Investor Faces Senate Tax Inquiry
A Senate committee is investigating whether a prominent cryptocurrency investor violated federal tax law to save hundreds of millions of dollars after he moved to Puerto Rico, a popular offshore tax haven, according to a letter reviewed by the New York Times. Sen. Ron Wyden (D-Ore.) sent the letter on Jan. 9 to Dan Morehead, the founder of Pantera Capital, one of the largest crypto investment firms. The letter said that the Senate Finance Committee was investigating tax compliance by wealthy Americans who had moved to Puerto Rico to take advantage of a special tax break for the island’s residents that can reduce tax bills to zero. The investigation was focused on people who had improperly applied the tax break to avoid paying taxes on income that was earned outside Puerto Rico, according to the letter. READ MORE | | Delaware Bill Would Limit Investor Lawsuits as Companies Threaten to Leave the State
Delaware lawmakers on Monday proposed changes to the U.S. state's widely used corporate law that would limit shareholder lawsuits after several high-profile companies said they might move their legal home to another state, Reuters reported. The bill sets out steps that corporate boards could take to insulate directors and controlling shareholders from litigation over alleged conflicts. The bill would also limit the kinds of internal records that shareholders can access, which they need to build their cases. The bill is sponsored by leaders of both parties in both houses of Delaware's state assembly. READ MORE | | Judge Blocks Trump Admin from Firing CFPB Employees
A federal judge on Friday blocked the Trump administration from firing employees at the Consumer Financial Protection Bureau (CFPB) amid a larger push to effectively dismantle the agency, The Hill reported. The Trump administration is barred from firing CFPB employees without cause or issuing any reduction-in-force notice, as part of an agreement reached between the Department of Justice and the National Treasury Employees Union, which is suing alongside other groups over the changes to the agency. READ MORE | | Applications Due on Feb. 24 for ABI’s Diversity Mentoring Program
Applications are now being accepted for ABI’s Diversity Mentoring Program, hosted by our Diversity, Equity and Inclusion Committee to connect active or recently graduated business and law students with experienced insolvency professionals and ABI members who are offering professional development guidance. Throughout the program, mentors and mentees will meet bi-monthly to discuss a variety of topics with resources from ABI and members of the reorganization community, including judges, trustees, attorneys and accountants. For more information about the Diversity Mentorship Program and to apply to be a mentee for 2025-26, please visit ABI’s Diversity and Inclusion website at diversity.abi.org; applications are due February 24. | | | |
