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Debt-laden trucking company Yellow, one of the nation’s largest freight carriers, is trying to stave off a labor action that is sending shipping customers rushing to rival operators, adding to financial woes that are threatening the company’s survival, the Wall Street Journal reported. Some of the U.S.’s largest freight brokers are diverting business from Yellow to other carriers amid fears that goods could get stuck as Yellow unionized workers prepare to strike next week in actions that could push the company toward bankruptcy. The Teamsters union warned that it could strike as soon as Monday after Yellow missed a health care and pension payment deadline that threatened to cut off benefits for some of its 22,000 unionized workers. Yellow CEO Darren Hawkins said that it is natural that some customers would pull business following the threat of a strike. The company filed a request this week in federal court for a temporary restraining order to prevent workers from striking. A hearing is scheduled for Friday. Yellow is the third-largest operator in the less-than-truckload business, in which carriers haul cargo from multiple customers in the same trailer. The company employs 30,000 workers and is trying to streamline its operations and refinance $1.3 billion of debt that comes due next year, including a $700 million federal Covid relief loan. Tensions between the union and Yellow are intensifying as the trucker burns through cash.

Sinclair Broadcast Group is being sued by the bankrupt subsidiary it set up four years ago to manage a collection of 19 regional sports networks it paid, ruinously as it turned out, $10.6 billion to acquire, NextTV reported. Cover sheets for two separate but related lawsuits emerged in the document portal set up by the Houston court overseeing Diamond Sports Group's bankruptcy. One lists Sinclair, company executive chairman David Smith, CEO Christopher Ripley and several other Sinclair executives as defendants, along with Bally’s Corp. All the Diamond-branded holding companies are being sued by Diamond Sports LLC, as well. The other cover sheet calls out JP Morgan Chase & Co. as the defendant. Diamond lawyers subpoenaed JP Morgan officials two weeks ago. Diamond is trying to claw back Sinclair's preferred equity repayment to JP Morgan. In February, with Diamond about to enter bankruptcy, Sinclair paid JP Morgan $190.2 million, a transaction that nearly made the investment bank whole on the $1.025 billion in preferred equity units it purchased back in 2019 to help Sinclair buy the Fox-owned RSNs that became Bally Sports. The plaintiffs contend that even though Sinclair knew the bankruptcy would wipe out all equity in Diamond Sports, including its own, it manipulated the payment schedule so that JPMorgan was nearly made completely whole on its investment. Put another way: Diamond's lawyers are asking the court why the secondary creditors should be left holding the bag for the bankrupt and bleeding Bally Sports regional sports networks business when JP Morgan got mostly paid in full on its investment? (Subscription required.)

A federal judge has denied a motion by survivors of clergy sexual abuse to have bankruptcy proceedings against the Catholic Church on Long Island dismissed, Newsday reported. The motion, if approved, would have sent some 600 cases back to state court for trials and potential payouts. The Diocese of Rockville Centre praised the decision by Hon. Martin Glenn, while some attorneys for survivors said that it will further drag out negotiations for a settlement nearly three years after the diocese declared bankruptcy. But other attorneys said they believe that Judge Glenn is still giving the diocese a hard deadline of making a deal by Oct. 31, or taking the unprecedented step of kicking a Catholic diocese out of bankruptcy. Judge Glenn ruled that attorneys for the survivors failed to show that it is not possible for the diocese to come up with a deal in a “reasonable amount of time.” He, therefore, rejected their motion to dismiss the bankruptcy proceedings. He also sided with the diocese in giving the parties until Oct. 31 to agree to a deal, instead of 30 days as the survivors proposed. But Judge Glenn also indicated that he may not wait forever. “Time is beginning to weigh against the” diocese, he wrote, “because none of the dynamics in this case serve to explain why it is approaching three years with no proposal of a confirmable plan.”

Steve Andrews, who has been CEO at Briggs & Stratton since the company emerged from bankruptcy in September 2020, has left the company for personal reasons, the Milwaukee Business Journal reported. The Wauwatosa, Wis.-based company named an interim CEO — Kristina Cerniglia, who is senior vice president and chief financial officer. Andrews replaced former Briggs & Stratton chairman, president and CEO Todd Teske. At the time, the news was surprising because KPS previously agreed to retain Teske and other top Briggs executives after the bankruptcy transaction closed. Prior to his appointment at Briggs & Stratton, Andrews led International Equipment Solutions, which is based in Oak Brook, Ill., starting in 2011. As of September 2020, International Equipment Solutions operated 14 manufacturing facilities and four custom services locations with approximately 2,700 employees worldwide. In March 2019, KPS completed the sale of International Equipment Solutions’ attachments division to Black & Decker. During Andrews' tenure at Briggs & Stratton, the company accelerated diversification from its legacy internal-combustion products with newly electrified product lines and the acquisition of SimpliPhi Power, a California-based manufacturer of energy storage and management systems. Meanwhile, Briggs exited a business that sold portable generators, pressure washers and snow throwers to mass retailers and is phasing out the last production lines at its headquarters Wauwatosa plant. Both actions resulted in layoffs of Milwaukee-area employees. (Subscription required.)

A California state court jury has awarded $18.8 million to a 24-year-old man alleging that he developed cancer from exposure to asbestos in Johnson & Johnson’s (J&J) talc-based baby powder, in the first trial since the company halted their talc-related litigation two years ago with a controversial bankruptcy filing, Courtroom View Network reported. The Alameda County jury agreed that Emory Hernandez Valadez developed mesothelioma due to years of using popular products like Johnson’s Baby Powder that his attorneys argued were laced with asbestos. The six-week trial marked the first time that jurors decided a J&J talc case after J&J spun off their talc-related liability into a new subsidiary, LTL Management, and then had that entity file for bankruptcy in New Jersey where the company is headquartered. The jury also cleared retailer defendants Safeway Inc. and Target Corporation, where Valadez claimed that he purchased much of the baby powder, of all liability while assigning 100 percent liability to the J&J parent company and none to LTL. J&J issued a statement after the trial saying they planned to appeal the verdict.

Carvana shares surged Wednesday after the used-car retailer said that it had reached a bond-swap deal to reduce its debt by $1.2 billion and launched plans to issue stock through an at-the-market offering, WSJ Pro Bankruptcy reported. The company said that it had reached an agreement with a group of investors including Apollo Global Management, Pimco and Ares, who collectively own $5.2 billion of its outstanding unsecured bonds, to swap their holdings into new secured bonds that have the option to pay interest in-kind, meaning that it can be tacked onto the principal balance rather than paid in cash. Carvana also said that it has entered a distribution agreement with Citigroup and Moelis to sell up to the greater of either $1 billion or 35 million shares through the at-the-market program, filing a new shelf registration statement to the SEC. The Arizona-based company also reported a narrower second-quarter loss than analysts had expected early Wednesday. The stock jump, if sustained through the regular trading session, would extend a rally that began in May. Carvana has struggled as rising interest rates and high inflation have curbed demand for big-ticket purchases. Falling prices for used cars have weighed on the value of its inventory. In early June, though, the company said it expected cost-cutting measures to boost profitability.

A bankruptcy judge blocked sex-abuse victims’ request to throw out the Diocese of Rockville Centre’s chapter 11 case, granting the diocese until the end of October to file a new reorganization plan to compensate survivors, WSJ Pro Bankruptcy reported. The official committee representing survivors had asked Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan to dismiss the bankruptcy case of the Long Island, N.Y., diocese, arguing that it has made little progress in a reorganization plan to compensate victims and that continuing to operate in chapter 11 is draining estate resources. In an opinion filed Tuesday, Judge Glenn said that some progress has been made recently and that the diocese can have a few more months. Catholic dioceses and the Boy Scouts of America have filed for bankruptcy to address sex-abuse claims rather than litigate hundreds of lawsuits individually in state courts. Allowing Rockville Centre’s bankruptcy case to remain means the diocese can continue to address large groups of plaintiffs to drive a settlement. Six of eight Catholic dioceses in New York state, including the Rockville Centre one, have filed for bankruptcy since the enactment of a law in 2019 that opened a temporary window for victims of childhood sex abuse to file lawsuits that were otherwise barred by the passage of time.