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Adam Neumann, the former chief executive and co-founder of WeWork, is trying to regain control of the bankrupt co-working company less than five years after the board forced him out, WSJ Pro Bankruptcy reported. On Monday, Neumann’s lawyers sent a letter to WeWork’s advisers saying that he is partnering with Dan Loeb’s Third Point hedge-fund firm and other investors in exploring a bid for the company. That effort is already facing challenges. Some WeWork creditors have signaled they are ready to sell the firm after it exits chapter 11, according to people familiar with the matter. But WeWork executives have been cool to Neumann’s interest. They have shut him out from information he would need to submit a bid for the company since he initially approached WeWork in December, according to Neumann’s letter that was reviewed by The Wall Street Journal. It also isn’t clear how committed Third Point is to working with Neumann on a WeWork acquisition. A Third Point spokeswoman said the hedge fund “has not made a commitment to participate in any transaction” and had “only preliminary conversations” with Flow Global, Neumann’s real-estate company. WeWork lawyers said on Monday that the company is running short on cash and needs more money to get through its costly chapter 11 cases. In Neumann’s letter to WeWork, he said the current financial crunch was caused by the management’s lack of ability to “explore alternatives” for financial support.

WeWork may be forced to take on a new bankruptcy loan to make up for slower-than-expected progress on rent negotiations, an attorney for the shared office space provider said yesterday, Reuters reported. WeWork's post-bankruptcy business plan is premised on a significant reduction in future rent costs from its landlords, and WeWork is at a crossroads in that effort, according to attorneys for WeWork and its landlords who spoke at a bankruptcy court hearing in Newark, N.J. Several of WeWork's landlords decried the company's "hardball tactics", saying that U.S. bankruptcy law requires companies to keep up with rent for properties that they continue to use. Kris Hansen, an attorney representing WeWork creditors, said that WeWork has shown "painfully little progress" in its discussions with landlords, raising doubts about the company's long-term ability to pay its debts. WeWork attorney Steven Serajeddini acknowledged that the company's initial round of negotiations had been headed for "certain failure," but he said WeWork has had more success after withholding as much as $33 million in January rent from certain landlords. WeWork initially believed it could make it through its bankruptcy case using the $164 million of cash it had on hand in November, but it now believes that amount to be insufficient and is considering taking out a new bankruptcy loan, Serajeddini said. A new loan would likely be converted into WeWork equity after the company emerges from bankruptcy, he said.

Bankruptcy Judge Paul Warren said at a hearing last week that neither plan proposed in the Rochester Diocese bankruptcy can move forward for a vote yet, the Rochester Beacon reported. Instead, he set an Apr.16 date for the hearing to be continued. It would be the hearing’s second continuation and third session. Judge Warren had previously called off an early October hearing that was to have dealt with the rival plans. Accounting for much of the complication is that insurance companies balked at payment amounts survivors sought as compensation. By the end of last year only one insurer, the Continental Insurance Co., also known as CNA, had not come to terms. Instead it offered a rival plan of reorganization to a joint plan offered earlier by the diocese and a committee representing survivors. The survivors’ committee has made it clear that it sees CNA’s plan as an inadequate take-it-or- leave-it offer. The court’s go ahead on a vote on one or both plans after the April 16 date assumes the diocese and CNA will have met series of conditions the judge laid out, many having to do with more clearly explaining legal issues to the nearly 500 abuse survivors who account for most of the diocese’s creditors.

Digital Currency Group objected late Monday to the bankruptcy plan of its subsidiary Genesis Global Capital, saying that the crypto lender is proposing to pay its customers more than they are legally entitled to, Reuters reported. DCG argued that Genesis should pay its customers and creditors no more than the value the crypto assets had in January 2023, when Genesis filed for bankruptcy. Genesis has instead proposed giving its customers "additional payouts" to account for the rising price of assets like bitcoin and etherium, which violates U.S. bankruptcy law, DCG said. According to DCG's objection, assets like bitcoin have risen substantially in value since Genesis's January 2023 filing, potentially allowing Genesis to repay customers based on deflated January 2023 prices and still have assets left over to pay DCG. "DCG cannot support a plan that is unlawful and deprives DCG of its corporate governance rights," DCG said in a statement. Genesis is proceeding with a liquidation of its assets after failing to reach settlements with DCG, its former business partner Gemini, and regulators suing the three companies over their business practices. Genesis has since reached a more limited settlement with the U.S. Securities & Exchange Commision, agreeing to pay the agency a $21 million if it has any assets left over after fully repaying its customers.

Sen. Elizabeth Warren (D-Mass.) has asked the Justice Department’s bankruptcy watchdog to join forces with the tort claimants committee in its appeal to throw out prison healthcare provider Tehum Care Services’ chapter 11 case, WSJ Pro Bankruptcy reported. Warren on Wednesday sent a letter to Tara Twomey, director of the Executive Office for U.S. Trustees, and Kevin Epstein, U.S. Trustee for the Southern and Western District of Texas. In that letter, Warren said the committee, in its motion to dismiss, argued persuasively that the case is a “bad-faith attempt to defraud creditors, many of whom faced serious injury or death” under Corizon Health. Corizon split into two in 2022 — Tehum and operating business YesCare — using a controversial legal tactic known as the Texas Two-Step. Tehum filed for chapter 11 in February last year, carrying into bankruptcy court debts and liabilities to prisoners, healthcare providers, insurance companies and others accumulated by Corizon. YesCare, among the nation’s largest providers of healthcare in prisons and jails, operates business as usual, while malpractice lawsuits filed against Corizon by former and current inmates were paused because of Tehum’s bankruptcy.

Three people have been charged with orchestrating a SIM-swapping scam that siphoned more than $400 million from FTX as the cryptocurrency exchange spiraled into bankruptcy, Bloomberg News reported. Hours after FTX filed for bankruptcy in November 2022, and its founder Sam Bankman-Fried resigned, hackers drained hundreds of millions of dollars worth of digital currency from the platform, before funneling it through a web of decentralized exchanges. Bankman-Fried, who is facing decades in prison after being convicted of fraud late last year, distanced himself from the hack, but speculated that it could have been an inside job. Turns out it wasn’t, prosecutors say. The Department of Justice charged Robert Powell, of Illinois, Emily Hernandez, of Colorado, and Carter Rohn, of Indiana, last month with participating in a SIM-swapping ring that targeted FTX and other individuals over a two year period. SIM swappers have repeatedly identified victims in the crypto world and FTX’s lax security — pointed out by the company’s new CEO after he took over — appeared to make it a prime target. According to the indictment filed in federal court in Washington, D.C., Powell, Rohn and Hernandez collected personal data of about 50 victims and used the information to convince cell phone providers to port the victims’ phone numbers to a dummy phone in their possession. In doing so, the trio could intercept text messages — including multi-factor authentication codes, which allowed them to break into the victims’ financial accounts and crypto wallets. The indictment does not name FTX, but two people familiar with the case confirmed it was in fact “victim company-1” in the court filings.

Crypto lender Genesis Global has settled a U.S. Securities and Exchange Commission lawsuit over its defunct Gemini Earn lending program, agreeing to a $21 million fine that will be paid only if Genesis is able to fully repay customers in its bankruptcy, Reuters reported. The deal will help Genesis avoid the costs and risks of defending itself from an SEC lawsuit that had accused the company of illegally selling securities. The settlement will allow Genesis to focus on repaying customers and other creditors, according to documents filed in U.S. Bankruptcy Court in Manhattan on Wednesday evening. Genesis did not admit or deny wrongdoing in the settlement agreement. The SEC sued Genesis the week before it filed for bankruptcy protection in January 2023, claiming that Genesis and cryptocurrency exchange Gemini Trust illegally sold securities to hundreds of thousands of investors through their jointly-managed crypto lending program, Gemini Earn. The two companies partnered in December 2020 to allow Gemini customers the chance to loan their crypto assets to Genesis in exchange for earning interest, ultimately collecting billions of dollars' worth of crypto assets from investors. The Earn program was halted during a crypto market crash in November 2023, and its failure has spurred litigation between Genesis, Gemini, and Genesis's parent company, Digital Currency Group. Gemini, run by the Winklevoss twins best known for their legal battle against Meta Platforms' CEO Mark Zuckerberg, had previously sued DCG over the failure of the companies' crypto lending partnership.

Customers and creditors of bankrupt crypto exchange FTX who can prove their losses will likely get back all of their money, the company told the judge overseeing the insolvency case, Bloomberg News reported. Restructuring advisers will need to examine the millions of claims that have been filed against FTX to weed out those that are not legitimate, lawyer Andrew Dietderich said during a Wednesday court hearing in Wilmington, Del. “I would like the court and stakeholders to understand this not as a guarantee, but as an objective,” Dietderich said. “There is still a great amount of work, and risk, between us and that result. But we believe the objective is within reach and we have a strategy to achieve it.” In addition, the team overseeing the company has dropped an effort to restart or sell the FTX crypto exchange after concluding it would cost too much, Dietderich said. Advisers ran an exhaustive process to find investors willing to restart FTX.com, but nobody would put up the cash needed to revive the exchange, he said. “The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in the dumpster were simply too high,” Dietderich said, referencing founder Sam Bankman-Fried, who shut down the crypto firm and handed control to insolvency experts in late 2022. Since then, restructuring advisers have been tracking down assets and trying to untangle a complex web of debt owed to various creditors, including customers who put cash and crypto on the trading platform. FTX’s four largest affiliates together nearly doubled the group’s cash pile to $4.4 billion at the end of 2023 from about $2.3 billion in late October.