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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.

Defense industry manufacturer Channel Technologies Group LLC, which makes underwater navigation systems for the U.S. Navy and components for other defense contractors, filed for bankruptcy protection after losing more than $10 million this year on long-term contracts, the Wall Street Journal reported today. Lawyers who put the Santa Barbara, Calif., company into bankruptcy on Friday said they plan to look for buyers for its operations, which make ceramic parts sold to top defense contractors, energy firms and medical device manufacturers. Channel Technologies, which employs 224 workers, also makes sonar equipment and underwater navigation systems for the U.S. Navy. Channel Technologies officials blamed the company’s financial trouble on several long-term contracts that have underpriced the company’s work and, in some cases, include ambiguous language that have led to delays and unexpected costs. The contract problems will cause the company to lose $11.6 million this year, they estimated in court papers.

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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A centuries-old tapestry factory in Spain has come back from the brink of bankruptcy after an injection of public money, a debt restructuring plan and its biggest order in 200 years — a German commission for dozens of tapestries, Reuters reported yesterday. The turnaround of the 296-year-old Royal Tapestry Factory in Madrid is a rare bright spot for Spanish companies facing insolvency. Nearly 50,000 businesses have entered administration since the start of the country's economic downturn in 2008. The market for hand-woven tapestries and rugs plummeted during Spain's financial crisis, with key clients like the government crippled by spending cuts. "It was now or never," said Maria Pardo, a Madrid city council official who announced, together with the regional government and the Ministry of Culture, an increase in annual subsidies to 1.5 million euros ($1.7 million) next year from 900,000 euros this year. Prior to 2015, the factory barely received any public money.

If Wells Fargo’s board had hoped John G. Stumpf’s resignation on Wednesday and the appointment of Timothy J. Sloan as the new top executive would instantly quell the bank’s numerous critics, they were mistaken, the <em>New York Times</em> reported today. Within hours of the announcement, a member of Congress and other critics were already dismissing Sloan as the wrong man to make the big changes the bank needs to move past its current predicament over the creation of as many as two million phony accounts. While the Wells Fargo board emphasized that Sloan was “ready to lead the company into the future,” the bank’s critics focused on the role that Sloan — who has spent the last 29 years at Wells Fargo — played in the bank’s troubling past. “I remain concerned that incoming C.E.O. Tim Sloan is also culpable in the recent scandal, serving in a central role in the chain of command that ought to have stopped this misconduct from happening,” said Rep. Maxine Waters (D-Calif.).