 | | Featured Premium Content | | | | | Debtwire: Private Credit Borrowers Debate When It’s Time to Clean Up in Bankruptcy
In the secretive world of direct lenders and financial sponsors, distressed portfolio companies are typically restructured out of the public eye. In some cases, though, companies have no choice but to file for bankruptcy to fix broken capital structures and eliminate other liabilities, according to a recent Debtwire analysis. Advisors say the decision can come down to weighing the higher cost and publicity of a chapter 11 case versus the unique benefits bankruptcy can provide. READ MORE | | |  | | Editor's Picks | | | | | Forever 21 Plans Hundreds of Store Closures in Second Bankruptcy
The U.S.-based operator of Forever 21 Inc. is preparing to close at least 200 more locations from the fast-fashion retailer’s shrinking store base as part of a bankruptcy process that’s expected to kick off as soon as next month, Bloomberg News reported. The potential bankruptcy plan taking shape would seek a buyer for the retailer’s remaining stores, said the people, who asked not to be identified discussing a private matter. If no qualified buyer emerges, they said, Forever 21 would liquidate the entirety of its approximately 350-store chain. At its height, Forever 21 operated more than 500 locations in the U.S. and at least 800 worldwide. READ MORE | | Nikola, Once a Darling of Green Investment, Files for Bankruptcy
Nikola, the electric vehicle maker that briefly sported a market value comparable to Ford Motor, has filed for bankruptcy with plans to wind down its business, WSJ Pro Bankruptcy reported. Now a penny stock, Nikola filed for chapter 11 on Wednesday in a Wilmington, Del., court, intending to conduct a court-supervised auction of its assets. The filing further swells the ranks of zero-emissions vehicle developers that have run out of road recently, following other Tesla wannabes that wound up in bankruptcy. READ MORE | | Franchise Group Moves Restructuring Forward After Lawyers Ousted
Franchise Group Inc. won court permission to press ahead with a potential restructuring despite pushback from junior lenders and the recent removal of the law firm that had guided the troubled brand manager through bankruptcy, Bloomberg News reported. The company tapped a new law firm, Kirkland & Ellis LLP, after a Delaware judge blocked Willkie, Farr & Gallagher over its ties to Franchise Group’s former chief executive officer Brian Kahn, investment adviser B. Riley Financial Inc. and a soured 2023 buyout central to the bankruptcy. The priority, despite the change in law firm, is reorganizing Franchise Group as quickly as possible to hold on to the company’s more than 2,000 retail locations and 12,000 employees, Kirkland lawyer Josh Sussberg said during a hearing on Wednesday. The company’s retail brands include Pet Supplies Plus and The Vitamin Shoppe. READ MORE
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May 14-15 | Las Vegas, Nevada | | | | |  | | Daily Roundup | | | | | FHA Job Cuts Threaten to Disrupt Major Piece of U.S. Mortgage Market
A report of coming layoffs at the Federal Housing Administration is casting fresh doubts about the future of an office responsible for insuring millions of mortgages across the country, YahooFinance.com reported. Bloomberg Law reported on Tuesday that the FHA plans to lay off at least 40% of its workforce, adding to pain at the U.S. Department of Housing and Urban Development, where many divisions are bracing for cuts of 50% or more. READ MORE | | Analysis: The Corporate Transparency Act Is Back On
The implementation of the Corporate Transparency Act, which requires millions of companies to disclose their true ownership to the government, is back on after a federal judge in Texas reversed an injunction he issued last month, the Wall Street Journal reported. The Treasury Department’s Financial Crimes Enforcement Network, which oversees the enforcement of the law, on Tuesday issued a notice that extended the filing deadline for most companies to March 21. FinCEN said it recognized that companies may need additional time to comply. (Subscription required.) READ MORE | | SEC Seeks India's Help in Adani Fraud Probe
The U.S. Securities and Exchange Commission has requested assistance from Indian authorities in its investigation of Adani Group founder Gautam Adani and his nephew Sagar Adani over alleged securities fraud and a $265 million bribery scheme, a court filing showed on Tuesday, Reuters reported. The SEC told a New York district court its efforts to serve its complaint to Gautam and Sagar Adani were ongoing and that it is seeking help from India's Ministry of Law and Justice to serve its complaint to Gautam and Sagar Adani. Neither man is in U.S. custody, and they are currently located in India. Adani Group didn't immediately respond to a Reuters request for comment. The Indian government could not be immediately reached outside regular business hours. Last year, federal prosecutors in Brooklyn unsealed an indictment accusing Adani of bribing Indian officials to convince them to buy electricity produced by Adani Green Energy, a subsidiary of his Adani Group conglomerate, and then misleading U.S. investors by providing reassuring information about the company's anti-corruption practices. READ MORE | | Trump Weighs Direct Payments to Americans From DOGE Savings
President Trump said he is considering using a portion of the savings from Elon Musk’s cost-cutting initiative to provide direct payments to Americans, the Wall Street Journal reported. “We’re thinking about giving 20% back to the American citizens and 20% down to pay back debt,” Trump said at the FII Priority summit, a gathering of business and tech executives sponsored by Saudi Arabia’s sovereign-wealth fund. “If it were a real-estate balance sheet, the debt is tiny, but we still, we still want to pay it down.” Trump didn’t offer further details about the plan. (Subscription required.) READ MORE | | | | |
