 | | Featured Premium Content | | | | | WSJ Pro Bankruptcy: Fed Pause Tests Wall Street Limit on Risky Debt
The Federal Reserve’s decision to pause interest rate cuts is likely to increase the pressure on a risky type of corporate debt that has become popular among private lenders, according to a WSJ Pro Bankruptcy analysis. Payment-in-kind, or PIK, loans don’t make regular interest payments to investors. Instead, accrued interest is added to the loan’s principal. These loans have gained in popularity in recent years to ease the higher interest costs that many borrowers faced as benchmark rates rose to a two-decade high. Investment income from PIK as a share of total interest and dividend income was 8.4% by September last year, up from 7.5% in 2023 and 5.4% for 2020, according to a Fitch Ratings analysis of private lenders. READ MORE | | |  | | Editor's Picks | | | | | Prospect Medical Holdings to Sell Crozer Health
Los Angeles-based Prospect Medical Holdings has shared plans to sell Upland, Pa.-based Crozer Health, including all hospitals, clinics, physician offices and ambulatory surgery centers to a non-profit group of healthcare operators, Becker's Hospital Review reported. The sale aims to "support the preservation and continuation of services" to community members that utilize Crozer Health, according to a Jan. 31 news release. Prospect sought chapter 11 protection on Jan. 11 and has been working to offload 10 of its 16 hospitals. READ MORE | | Trump Slaps Tariffs on Mexico, Canada and China in Opening Salvo of Trade War
The White House on Saturday announced a wave of tariffs against Mexico, Canada and China, marking the first major levies of President Trump’s second term and laying the groundwork for a continental trade war, the Wall Street Journal reported. Effective Tuesday, the U.S. will impose a 25% levy on imports from Canada and Mexico, a 10% tariff on energy products from Canada, and an additional 10% tariff on China. (Subscription required.) READ MORE | | Embattled Aquarium Chain SeaQuest Asks Idaho Bankruptcy Judge to OK Bargain Sale
Owners of the financially troubled aquarium chain SeaQuest, whose Folsom location was beset by claims of animal abuse, asked an Idaho bankruptcy judge Friday to approve the company’s sale for the cost of a luxury sedan, the Sacramento Bee reported. SeaQuest attorneys in the filing say the $88,000 sale price was “approximate to fair market value” after talking with equity partners and gauging the market for interactive animal and wildlife exhibitions. READ MORE
MORE NEWS BELOW | | |  | | Upcoming Events | | | | | Five Issues in Subchapter V for 2025 ABI/NCBJ Webinar
February 11 | | Alexander L. Paskay Memorial Bankruptcy Seminar Tampa Marriott Water Street
February 27-28 | Tampa, Fla. | | | | |  | | Daily Roundup | | | | | Housing Authority of City of Milwaukee Facing Bankruptcy After Millions in Public Funds Were Allegedly Misused
In the coming weeks, the second-largest landlord organization in the city of Milwaukee may declare bankruptcy due to accusations that the Housing Authority of the City of Milwaukee knowingly misused public funds, WSAU.com reported. The Housing Authority is accused of misusing Section 8 funding after Brad Leak, the Chief Financial Officer of HACM, sent an email to staff members on Monday detailing the organization’s dire financial situation. Based on unreconciled cash balances in the agency’s audits, $2.8 million in funds had been extracted from the Section 8 program since 2019 to pay for agency overhead salaries and benefits in order to process payroll. READ MORE | | Seniors Face Eviction Under Plan to Sell Retirement Home to Private Equity
Residents of Harborside’s Port Washington nursing home, memory-care and assisted-living units will be forced to relocate if a bankruptcy court judge approves Focus Healthcare Partners’ $80 million deal to buy the complex in February, Bloomberg News reported. There are at least 40 residents that will have to move to other facilities while some 70 people in its independent-living units have the option to remain, data from New York State Department of Health show. READ MORE | | PCE Inflation Accelerated in December
The measure of price increases targeted by the Federal Reserve sped up in December, reflecting a stubborn spell of inflation that remains modestly higher than the central bank’s target, the Wall Street Journal reported. The personal-consumption-expenditures price index rose by 0.3% last month, compared with 0.1% in November, contributing to a 2.6% increase over all of 2024. (Subscription required.) READ MORE | | Investor Files Class Action Lawsuit Against Pump.fun Over Alleged Securities Violations
A proposed class action lawsuit has been filed against Pump.fun, a platform that allows users to create meme coins on the Solana network, for allegedly offering unregistered securities, CoinMarketCap.com reported. The suit claims that the company and its founders Alon Cohen, Dylan Kerler, and Noah Tweedale have engaged in practices that violate U.S. securities laws. READ MORE | | Trump Fires CFPB Director
The Trump administration has fired Rohit Chopra, the director of the Consumer Financial Protection Bureau, NPR.org reported. The move was widely expected as President Trump is likely to name a new director for the agency, which is a frequent target of Republican attacks. Chopra was tapped by former President Joe Biden to lead the bureau in 2021. The position has a five-year term, but the Supreme Court ruled in 2020 that the president can fire the director at will. READ MORE | | FTX Reaches Settlement with Ex-Clinton Aide's Investment Firm
Bankrupt crypto exchange FTX said on Friday it had resolved a lawsuit it brought last year against K5 Global, a venture capital firm co-founded by a former aide in Hillary Clinton's office, Reuters reported. The settlement will pave the way for the parties to collaborate to maximize recoveries for FTX customers and stakeholders, the companies said. READ MORE | | | | |
