%1

All nominations for the annual Judge William L. Norton, Jr. Judicial Excellence Award must be received by the end of today. This award, co-sponsored by American Bankruptcy Institute (ABI) and Thomson Reuters, honors a distinguished bankruptcy judge whose career has embodied the same dedication to the insolvency community as did that of the award’s namesake. You can view a list of the past honorees here. The award will be presented at the annual meeting of the National Conference of Bankruptcy Judges (NCBJ) in October. To nominate a candidate for the award, please download the nomination form here, and email it to Kathryn Copeland at kathryn.copeland@thomsonreuters.com.

U.S. Bankruptcy Courts in Texas attracted about 40% of the country’s commercial chapter 11 filings in the first six months of this year, solidifying the state’s lead as the most popular restructuring destination for failed companies, WSJ Pro Bankruptcy reported. As many as 848 of a total of 2,165 chapter 11 filings were made in the four bankruptcy courts in Texas in the first half of 2023, according to bankruptcy information provider Epiq. The states of New York and Delaware ranked second and third, Epiq said. Texas extended its lead in bankruptcy filings compared with the same period last year when the state accounted for 20% of total commercial bankruptcy filings, slightly higher than runner-up New York of 18%, Epiq data show. “What the large chapter 11 debtors want, more so than some of the smaller midmarket companies, is consistency in rulings, and that’s the one thing you’re getting out of Texas right now,” ABI President-Elect Christopher Ward of Polsinelli said during a filing trend webinar hosted by ABI and Epiq. Houston was the most popular among the four Texas courts, attracting some of the largest filings including KKR-owned Envision Healthcare in May and airplane-parts giant Incora in June.

Epiq has a special offer for ABI members on its Analytics services. Click here to find out more and take advantage of the savings!

Alex Mashinsky, founder and former CEO of bankrupt cryptocurrency lender Celsius Network, pleaded not guilty yesterday to U.S. fraud charges that he misled customers and artificially inflated the value of his company's propriety crypto token, Reuters reported. Three federal regulatory agencies also sued Mashinsky and Celsius in connection with the case. Mashinsky was charged with seven criminal counts — including securities fraud, commodities fraud and wire fraud — according to an indictment unsealed earlier on Thursday. He is one of several crypto moguls to be indicted in another blow for the industry, which is undergoing a reckoning after a slump in crypto prices led to the collapse of several companies, including exchange giant FTX. That company's founder, Sam Bankman-Fried, was charged with fraud last year, and has pleaded not guilty. U.S. Magistrate Judge Ona Wang said Mashinsky would be released on a $40 million bond secured by his Manhattan residence.

FTX filed a lawsuit on Wednesday against former managers of a Swiss business the bankrupt cryptocurrency exchange had acquired, looking to claw back at least $323 million to repay creditors and customers, WSJ Pro Bankruptcy reported. The lawsuit filed in the U.S. Bankruptcy Court in Wilmington, Del., alleged FTX overpaid for Digital Assets DA AG, the Swiss company that later became FTX Europe following a series of transactions in 2020 and 2021, despite knowing it “had limited business and no intellectual property beyond a business plan.” The new management overseeing FTX’s bankruptcy said in the lawsuit that the FTX Europe business has little value and is unlikely to be sold. The defendants are Digital’s co-founders and a Digital employee and shareholder before the FTX acquisition. FTX bought the Swiss company hoping to gain access to regulators to make it easier to do business and expand its customer base in Europe, FTX said in the lawsuit. In reality, the business didn’t have and never got the type of licenses that would have been useful to FTX in Europe, the lawsuit said.

Residents, nurses and local politicians gathered at a town hall meeting in Hollister, Calif., to voice their concerns about the future of Hazel Hawkins Memorial Hospital after the San Benito Health Care District's recent chapter 9 bankruptcy filing, Becker's Hospital Review reported. Members of the California Nurses Association recently voted "no confidence" in both the Hazel Hawkins board and the administration and argued that the bankruptcy filing was a potentially catastrophic and unnecessary step in resolving the hospital's financial issues, according to the report. During the July 6 town hall meeting, Mike Rabourn, research lead for the California Nurses Association, argued that the financial health of the healthcare district is not as dire as it seems. "Ultimately, what we found, in spite of all their tales of woe, when you look under the hood, the district is actually not doing so bad, especially in the last six months," Mr. Rabourn said, according to benitolink.com. "As of May, it’s actually in quite a strong financial position according to their own financial reports. I think everybody is surprised that they are so aggressively pursuing this bankruptcy process when they’ve actually engineered quite a financial recovery since the fiscal emergency." Mr. Rabourn argued that the hospital district is not financially insolvent — despite projections that it will run out of cash by November or December 2024 — and that it currently has more than 35 days cash on hand and recorded about $2 million in net income over the past 11 months.