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Deutsche Bank AG agreed to settle a lawsuit in which it accused a pair of offshore feeder funds of wrongfully backing out of a deal to sell the German lender $1.6 billion in claims against Bernard Madoff’s bankrupt investment advisory business, Bloomberg News reported. Lawyers for Deutsche Bank and the funds — Kingate Global Fund Ltd. and Kingate Euro Fund Ltd — filed a joint letter Thursday in federal court in Manhattan saying they’d struck a deal but didn’t disclose any terms. The Kingate funds, which funneled client money to Madoff’s firm for years before his Ponzi scheme collapsed in 2008, had agreed to sell the claims to Deutsche Bank Securities Inc. for 66 cents on the dollar in 2011, according to the lawsuit filed in 2019. Deutsche Bank claimed the funds got “sellers’ remorse” because the value of the claims had grown since they struck their purported deal. The suit was heading toward a trial after U.S. District Judge Edgardo Ramos in March 2021 denied the funds’ motion to dismiss the case.

Johnson & Johnson will seek the Supreme Court’s review after a federal appeals court declined to revive the company’s bid to use chapter 11 bankruptcy to freeze nearly 40,000 lawsuits linking its talc products to cancer, WSJ Pro Bankruptcy reported. J&J said that it would turn to the nation’s highest court after judges on the Third U.S. Circuit Court of Appeals in Philadelphia voted Wednesday against having the entire appellate court reconsider a January ruling by a panel of judges dismissing the chapter 11 case of J&J subsidiary LTL Management LLC. J&J created the LTL subsidiary in 2021 and placed it in chapter 11 to move mass talc-injury lawsuits the business faced to bankruptcy court for resolution. While the parent company didn’t file for chapter 11, LTL’s bankruptcy filing opened a path to freezing the talc lawsuits against its affiliates, including J&J itself. Other profitable companies have used the same strategy, known in legal circles as the Texas Two-Step, to try to address mass cancer litigation. Wednesday’s ruling means J&J’s hopes for reviving its talc subsidiary’s chapter 11 case now depend on the U.S. Supreme Court, which takes only a small fraction of the petitions it receives.

FTX Group will recover about $404 million that its disgraced founder Sam Bankman-Fried allegedly transferred to the investment fund Modulo Capital, according to a proposed bankruptcy settlement made public yesterday, Bloomberg reported. The agreement adds to the slowly growing pot of money FTX has been trying to collect since the crypto firm filed bankruptcy last year. Modulo Capital, managed by Xiaoyun “Lily” Zhang and Duncan Rheingans-Yoo, got $475 million last year before FTX collapsed into bankruptcy amid fraud allegations, according to the settlement, filed Wednesday afternoon in federal court in Wilmington, Delaware. Modulo has no other money it could use to repay the funds, FTX said. The proposed settlement avoids an expensive lawsuit in which Modulo would fight FTX for the cash, according to court records. FTX said the deal is worth $460 million because it would bring in $404 million in cash and require Zhang and Rheingans-Yoo to drop claims they have against the company for $56 million. The agreement must be approved by Bankruptcy Judge John Dorsey.

The former owner of Silicon Valley Bank, seized earlier this month by regulators, will need to wait, possibly for several months, to know if it can get back about $2 billion in cash it would need to repay bondholders and other creditors, Bloomberg News reported. SVB Financial Group won provisional court approval Tuesday to spend only a fraction of the cash the company claims federal regulators must return. What happens with the rest of the money will need to be decided in the coming months, with lawyers for bondholders owed more than $3.3 billion saying they are concerned that the Federal Deposit Insurance Corp. will try to keep the cash. The FDIC’s decision to lock down the $2 billion “creates jeopardy” in the bankruptcy case, said Tom Lauria, a lawyer representing a large bondholder, Appaloosa LP. “It seems to be a more urgent issue than a latent one in the context of this case,” Lauria told Bankruptcy Judge Martin Glenn during a hearing in federal court in Manhattan. Under FDIC receivership rules it can take months for the agency to decide whether the money will be returned and then years if that decision is appealed, lawyers said during the hearing.

The U.S. Senate Banking Committee will hold the first of several hearings on the collapse of Silicon Valley Bank and Signature Bank on March 28, Chairman Sherrod Brown (D-Ohio) said yesterday, Reuters reported. The first hearing will hear from witnesses including Federal Deposit Insurance Corporation Chair Martin Gruenberg, Federal Reserve official Michael Barr, and Nellie Liang, an under secretary at the U.S. Treasury Department, according to a statement from Brown. "It is critical that we get to the bottom of how Silicon Valley Bank and Signature Bank collapsed so that we can maintain a strong banking system, protect Americans' hard-earned money, and hold those responsible accountable, including the CEOs," Brown said. The U.S. House of Representatives Financial Services Committee previously said it will hold a bipartisan hearing on the banks' collapse on March 29, with Barr and Gruenberg testifying again.

As Silicon Valley Bank deteriorated late last year and regulators began internally flagging flaws in its risk management, the lender opened up the credit spigot to one group: insiders, Bloomberg News reported. Loans to officers, directors and principal shareholders, and their related interests, more than tripled from the third quarter last year to $219 million in the final three months of 2022, according to government data. That’s a record dollar amount of loans issued to insiders, going back at least two decades. The surge in loans to high-up figures may draw scrutiny as the Federal Reserve and Congress investigate the breakdown of Silicon Valley Bank, the biggest U.S. bank collapse in more than a decade. The firm — one of three U.S. lenders to fall this month — collapsed after investors and depositors tried to pull $42 billion in a single day and it failed to raise capital to shore up its finances. The government reports don’t disclose loan recipients or their purpose, and there have been no allegations of wrongdoing connected to the insider loans.

SVB Financial Group said on Tuesday the U.S. Federal Deposit Insurance Corporation had taken "improper actions" to cut it off from cash held at its former subsidiary Silicon Valley Bank, which was seized by regulators to stem a national bank run, Reuters reported. SVB Financial made the accusations in court filings ahead of its first bankruptcy hearing on Tuesday afternoon in Manhattan. It filed for chapter 11 protection about a week after California banking regulators on March 10 closed Silicon Valley Bank in the largest U.S. bank failure since the 2008 financial crisis. The collapse this month of the Santa Clara, California-based bank and Signature Bank, another U.S. midsized lender, prompted a rout in banking stocks as investors worried about other ticking bombs in the banking system and led to UBS Group AG's takeover of 167-year-old Credit Suisse Group AG to avert a wider crisis. SVB Financial is exploring options, including a potential bankruptcy sale, for its venture capital and investment banking units, which were not included in the FDIC takeover of Silicon Valley Bank, while continuing to operate its businesses, it said on Monday.

FTX has attracted bidders including Miami International Securities Exchange for its crypto-derivatives platform, LedgerX, one of the few solvent pieces of Sam Bankman-Fried’s former empire, Bloomberg News reported. The exchange, known as MIAX and owned by Miami International Holdings Inc., made an offer for LedgerX, which is being sold in FTX’s bankruptcy proceedings, according to people with knowledge of the matter. Other bidders include Kalshi Inc., the people said, asking not to be identified because the discussions are private. The size of the bids couldn’t immediately be learned. LedgerX would give MIAX a registered platform to expand its presence in the crypto industry. MIAX already operates a clearinghouse it got as part of its 2020 acquisition of the Minneapolis Grain Exchange, but LedgerX technology would give it a window into the crypto industry. Kalshi, an exchange dedicated to trading on future events, became federally regulated by the Commodity Futures Trading Commission in 2020. It received $30 million in 2021 from Henry Kravis and other investors, including Sequoia Capital and Charles Schwab. It uses LedgerX as its clearinghouse, making any acquisition a natural fit for the company. Preliminary non-binding bids were due Jan. 25, and an auction is set for April 4. Talks are ongoing, and bids could change depending on the outcome of the negotiations, the people said.