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SunEdison Inc. hid its “toxic” financial state while granting hundreds of millions of dollars in benefits to its most powerful lenders before its April bankruptcy, its creditors say in a lawsuit that seeks to claw some of the money back, Bloomberg News reported on Friday. The lawsuit comes as SunEdison attempts to sell off assets, including yieldcos TerraForm Power Inc. and TerraForm Global Inc., while in bankruptcy — and more than a year after the developer’s finances began deteriorating. In January, in an effort “to put off the day of reckoning” for alleged financial manipulations and to hide a failed business strategy and mismanagement, SunEdison gave a “sweetheart deal” to its first- and second-lien creditors through a series of transactions,” according to the lawsuit, filed in Manhattan as part of the company’s bankruptcy. 

Unsecured creditors unhappy with Cosi Inc.’s auction proposal pushed the flatbread sandwich chain’s lead bidder to increase its offer and won extra time for rival bidders to enter the fray, the Wall Street Journal reported today. Bankruptcy Judge Melvin Hoffman of the U.S. Bankruptcy Court in Boston yesterday said that Cosi could officially put itself up for sale after hearing that hedge fund AB Value Management LLC and Ohio investment firm Milfam LLC will now start the bidding for the casual dining chain at $10 million instead of $6.8 million. They also will take on about $1.6 million in gift-card liabilities, the bidders’ attorney, William Baldiga, said yesterday. The increased stalking-horse offer, as well as a bid deadline that is two weeks later than what Cosi had originally proposed, is the result of negotiations with unsecured creditors who had expressed concerns with the company’s original sale proposal. A federal bankruptcy watchdog also had objected, calling the process “unfair” to rival bidders.

Two Platinum Partners hedge funds have sought chapter 15 protection as part of an ongoing liquidation effort, according to court documents filed in New York federal court, Reuters reported yesterday. In August, a Cayman Islands court ordered that an outside expert unwind the so-called offshore versions of its flagship hedge fund, Platinum Partners Value Arbitrage, which, along with the firm, is also being investigated by U.S. authorities. That liquidator, RHSW Caribbean, filed the chapter 15 petition and seeks to protect Platinum’s U.S. assets from creditors while an insolvency proceeding is underway in the Cayman Islands. Mark Nordlicht founded Platinum more than a decade ago and generated years of double-digit percentage returns by investing in often controversial businesses, a Reuters special report revealed. New York-based Platinum has been caught up in federal investigation by the U.S. Securities and Exchange Commission and the U.S. Attorney’s offices in Manhattan and Brooklyn.

A lawyer for the U.S. government's bankruptcy watchdog raised concerns in court over Caesars Entertainment Corp.’s $5 billion creditor deal to push its main unit out of chapter 11, even as hold-out creditors appeared closer to backing the agreement, Reuters reported yesterday. Caesars Entertainment Operating Co. Inc. filed for bankruptcy in January 2015 amid allegations by creditors that its parent had looted the unit of its best assets, leaving it with $18 billion of debt. Las Vegas-based Caesars reached an agreement with creditors last month that includes a $5 billion contribution to CEOC's reorganization plan in exchange for releases from billions of dollars in legal claims. Even though most of the creditors have agreed to drop their allegations against Caesars, the Bankruptcy Code holds that any deal must adhere to the law, Denise Delaurent, an attorney with the U.S. Trustee’s Office, said at an Illinois court hearing. She said her office was reviewing fees and aspects of the deal that released some parties from lawsuits. "From our perspective even if everyone comes to an agreement, it might still violate the law," she said.

Almost a decade after the ill-fated deal that created chemical giant LyondellBasell Industries NV, creditors headed to court to try to recover billions of dollars that they say Len Blavatnik extracted before the company went bankrupt, Bloomberg News reported yesterday. At a trial that began yesterday in a Manhattan bankruptcy court, the creditors will seek to claw back more than $1.7 billion from Blavatnik, his firm Access Industries Holdings LLC and other affiliates. They’re also seeking about $2 billion more from Blavatnik and other executives for alleged mismanagement of LyondellBasell, which filed for bankruptcy in 2009. (It exited in 2010.) They say that money he extracted as a shareholder and through certain fees was improperly and intentionally transferred away from the financially precarious company, dooming it to failure. If the creditors can prove their case, U.S. bankruptcy law would let them recover the funds for redistribution. Read more. 

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Hedge fund manager D.E. Shaw and Co. said in a regulatory filing on Friday that it may make a non-binding proposal for SunEdison Inc.’s stake in Terraform Power Inc., Reuters reported. D.E. Shaw and Co. was evaluating various deals with the two companies which could result in a controlling stake in Terraform Power. In August, Reuters reported that the hedge fund manager was weighing a bid for SunEdison's controlling stake in TerraForm Power, the bankrupt company's most valuable asset, according to sources. TerraForm Global Inc. and TerraForm Power Inc., the "yieldcos" of bankrupt solar company SunEdison Inc, said in September that they were exploring strategic alternatives, including a sale of their entire business.

Equity investors in Breitburn Energy Partners LP can receive representation on an official committee, a bankruptcy court said on Friday, giving investors in the bankrupt oil and gas company a voice in restructuring negotiations, Reuters reported. Breitburn, based in Los Angeles, filed for chapter 11 protection in May, one of more than 100 energy companies that have sought court protection from creditors in the worst energy price crash in a generation. The public unit holders of the master limited partnership began fighting for an official place in court soon after, saying that they could end up owing taxes if the company canceled some of its roughly $3.1 billion in debt in a reorganization. "(The) court concludes that ... equity has carried its burden that Breitburn does not appear to be hopelessly insolvent," Bankruptcy Judge Stuart Bernstein of the Southern District of New York said. Judge Bernstein said that the committee should focus on Breitburn's plan of reorganization, which has not been filed, and its solvency. The committee should also look into the potential tax hit the equity holders face, he said. Read more. 

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The U.S. government's pension insurer said yesterday that it opposed a deal to divvy up $7.3 billion left from the liquidation of Nortel Networks, potentially complicating efforts to end a seven-year battle over the cash, Reuters reported. The Pension Benefit Guaranty Corp. (PBGC) said that it did not support an agreement reached on Wednesday because it would not receive the entire $708 million it says it is owed. The sale of Nortel's businesses raised billions of dollars, and Wednesday's agreement divided that cash among former Nortel businesses in Canada, the United States and Europe, ending years of cross-border court fights. The PBGC was not a party to the settlement, which is subject to court approval in the United States, Canada and other countries. The agency's claim stems from the termination of Nortel's underfunded pension plan in 2009, which at the time had 22,000 participants.