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An involuntary bankruptcy against Mexico’s TV Azteca has been dismissed, with a bankruptcy-court judge saying that the multimedia conglomerate and its bondholders are involved in a dispute that must play out in U.S. district court, WSJ Pro Bankruptcy reported. TV Azteca had been sued over missed payments to bondholders in a case in district court, and then earlier this year an involuntary bankruptcy petition was filed by a group of bondholders in bankruptcy court. Arguing for dismissal of the bankruptcy petition in August, TV Azteca said the sides are in a bona fide dispute, making the involuntary filing improper. It also said the involuntary petition was filed as a tactical maneuver related to a matter pending in another court, and that the U.S. involuntary bankruptcy would hurt the company. To the extent that an in-court reorganization should occur, it should happen in Mexico, TV Azteca said. In Monday’s ruling, Judge Lisa Beckerman said that TV Azteca’s motion to dismiss points to “the district court action as the evidence that the petitioning creditors’ claims are subject to a bona fide dispute.” “The parties specifically agreed in the indenture to submit to the exclusive jurisdiction of the state and federal courts located in the Borough of Manhattan with respect to any disputes regarding the notes and the indenture,” the ruling said. The fight stems from $400 million in unsecured bonds that TV Azteca issued in 2017. Beginning in early 2021, it missed several interest payments, primarily blaming the impact of the COVID-19 pandemic. Last year, certain investors including Contrarian Capital, Invesco and the State Teachers Retirement System of Ohio said the bonds were in default and demanded that interest and principal on the 2024 notes be paid in full.

The U.S. Justice Department is seeking more than $4 billion from Binance Holdings Ltd. as part of a proposed resolution of a years-long investigation into the world’s largest cryptocurrency exchange, Bloomberg News reported. Negotiations between the Justice Department and Binance include the possibility that its founder Changpeng Zhao would face criminal charges in the US under an agreement to resolve the probe into alleged money laundering, bank fraud and sanctions violations. Zhao, also known as “CZ,” is residing in the United Arab Emirates, which doesn’t have an extradition treaty with the U.S., but that doesn’t prevent him from coming voluntarily. The BNB cryptocurrency, a token native to Binance and the BNB Chain blockchain that was created by the exchange, rose as much as 8.5% to $266.42 after Bloomberg reported the negotiations.

Rite Aid yesterday sued the U.S. Department of Justice, seeking to block a lawsuit alleging that the bankrupt pharmacy chain ignored red flags and illegally filled hundreds of thousands of prescriptions for addictive opioid medication, Reuters reported. The DOJ, which sued Rite Aid in March, agreed only to a "brief pause" of its lawsuit after Rite Aid went bankrupt last month, a position that threatens to undermine the company's restructuring efforts, Rite Aid said in a complaint filed yesterday in New Jersey bankruptcy court. Rite Aid asked U.S. Bankruptcy Judge Michael Kaplan to rule that the DOJ lawsuit cannot proceed while Rite Aid is bankrupt, which would put the government on equal footing with other opioid plaintiffs whose lawsuits were automatically stopped by the company's bankruptcy filing. The DOJ has argued that U.S. bankruptcy law does not stop it from exercising its "police powers" through its lawsuit. Rite Aid would not concede that point, and said Kaplan, who is overseeing the company's chapter 11 proceedings, should rule on that dispute rather than the judge overseeing the DOJ's lawsuit in Cleveland federal court.

A federal judge on Tuesday tentatively approved a portion of the newest plan to restructure $10 billion of debt owed by Puerto Rico’s power company amid heated negotiations between creditors and the U.S. territory’s government, the Associated Press reported. The overall debt restructuring plan has been amended four times this year by a federal control board that oversees Puerto Rico’s finances. A confirmation hearing is set for March 2024 as various bondholders continue to oppose the plan. The board did not have immediate comment on the judge’s decision regarding the plan’s disclosure statement, which requires modifications before bondholders vote on it. The decision was issued after an hours-long hearing that drew protesters to the courthouse who are opposed to electric bill increases outlined in the plan. The bankruptcy of Puerto Rico’s Electric Power Authority has dragged on for years amid intense debate on how to restructure its debt — the largest of any government agency in the U.S. territory. Numerous restructuring attempts have failed, with several creditors seeking to recuperate more money than what the plan currently offers. The plan was amended for a third time in August and a fourth time over the weekend. The newest proposal seeks to cut the power company’s debt by nearly 80%, to some $2.5 billion. If approved, it is expected to lead to increases in residential and commercial power bills that already are among the highest of any U.S. jurisdiction.

Right-wing conspiracy theorist Alex Jones has asked a court for permission to sell a cache of firearms, jewelry, cars, boats, and a cryogenic chamber to help pay for costs of his personal bankruptcy, Bloomberg Law reported. Jones is also looking to conduct part of the sales on his Infowars radio and video talk shows to increase the value of the items, according to a filing Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas. The talk show host filed for bankruptcy protection last year after he was ordered to pay more than $1 billion in judgments related to his lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Promoting the sales on his shows could increase the items’ value “because supporters’ demand for items attributable to Debtor will increase value — much like memorabilia sales,” Jones said. Jones has previously disclosed that he has almost 50 firearms that include shotguns, rifles, pistols, and revolvers. He also previously said he’s holding a stash of guns for people who participated in the Jan. 6 attack at the U.S. Capitol. Other items Jones aims to sell include household goods, including furnishings, golf carts, and gym equipment, according to court papers. Jones has previously estimated his firearms are worth at least $72,000. Whatever money is left over at the end of his bankruptcy would be used for payments as part of a chapter 11 plan, Jones said. The request to sell some personal items comes amid criticisms by Sandy Hook victim families of Jones’ “opulent” spending habits during his bankruptcy. The sale request comes after Jones lost a key bankruptcy court ruling last month. Judge Christopher M. Lopez found that despite Jones’ bankruptcy, about $1.1 billion of the $1.4 billion in debt he owes from Connecticut and Texas defamation judgments can’t be discharged under the bankruptcy code. Judge Lopez said the debt can’t be tossed because the Texas and Connecticut state courts made findings that Jones’ conduct was intentional and malicious. Jones said that he intends to appeal.

As Celsius Network LLC nears the end of its bankruptcy, it may find the US Securities and Exchange Commission eyeing a key business element of its restructuring plan similar to those the regulator has targeted at other companies, Bloomberg Law reported. Celsius recently secured court approval to emerge from Chapter 11 as Fahrenheit LLC, a public crypto mining company that would include a crypto “staking” division. But before it can implement the plan, it needs a green light from the SEC as well. Without the regulator’s blessing, Celsius says it may be forced to liquidate, which would hurt creditors’ recoveries. In crypto staking, holders of cryptocurrency give their assets to a company to hold, which in turn pays them some reward on the holding. The SEC has previously raised issues with staking-as-a-service businesses at Coinbase and Kraken. Celsius says the Fahrenheit entity intends to operate a self-staking business. Though the staking issue could prove problematic for the SEC down the road, multiple lawyers said they expected the agency to allow Celsius to emerge from bankruptcy. The full nature of Fahrenheit’s staking operation may emerge over time, Yuliya Guseva, a professor at Rutgers Law School, said. Celsius’ successful restructuring would be a major development in the crypto landscape, which cascaded into chaos late last year with a series of bankruptcies and criminal proceedings. BlockFi Inc. and Voyager Digital Holdings both liquidated, while FTX remains in Chapter 11 as its co-founder Sam Bankman-Fried faces life in prison for fraud. The SEC’s pending decision on Celsius comes as it seeks to get a hold on a young and complicated industry. The agency has said some staking operations function as unregistered securities exchanges. It also has a contentious past with Celsius itself, having accused its founder of fraud and settling related allegations against the company.

Drugmaker Mallinckrodt said yesterday that it has emerged from bankruptcy and reduced its total funded debt by about $1.9 billion, Reuters reported. Mallinckrodt, which won court approval for its bankruptcy plan last month, said it is moving ahead with ample liquidity to execute its strategic priorities. Pursuant to the bankruptcy plan, ownership of the company will now be handed over to its lenders and all its equity shares would cease to exist. Mallinckrodt, which makes branded and generic drugs, first filed for bankruptcy in 2020 to address its high debt load, litigation over its allegedly deceptive marketing of highly addictive generic opioids and drug pricing disputes. Despite the previous bankruptcy settlement that resolved those litigation threats and cut $1.5 billion in debt, the company quickly found itself in financial trouble again due to declining sales for its key branded drugs, including Acthar Gel. Mallinckrodt said on Tuesday it will continue operating its Specialty Generics under the oversight of an independent monitor and operate in compliance with other existing Acthar-related settlement conditions.