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Off-price retailer Tuesday Morning is officially opting to liquidate rather than reorganize, according to Retail Dive. On July 27, Judge Edward Morris in the U.S. Bankruptcy Court for the Northern District of Texas in Fort Worth will consider Tuesday Morning’s motion to convert its chapter 11 filing to chapter 7. The company had already taken steps toward going out of business, following the court’s approval of its sale to Hilco Merchant Resources in May. Tuesday Morning, founded nearly 50 years ago, exited a previous chapter 11 process in early 2021. Tuesday Morning continues to operate online, and in a message to customers floats the idea of returning to brick-and-mortar retail. “We understand that many of you are eagerly awaiting the opening of a physical store,” the company said. “We aren’t ruling that out. Perhaps we should go back to our roots and open the first location in Dallas, where Tuesday Morning first began its journey.” That seems unlikely. Earlier this year the company ran nearly 500 stores and was looking to close at least half of them. According to a court June 30 filing regarding its request to shift to chapter 7, going-out-of-business sales at all stores would be wrapped up by the end of June, “which will conclude the Debtors’ retail operations.” In the filing, the company also notes that the debtors have “sold substantially all of their assets.”

In a motion to stay the issuance of the mandate, the government has announced that it will be filing a petition for certiorari asking the Supreme Court to review the Second Circuit’s Purdue decision allowing bankruptcy courts to issue releases to nondebtors. The Second Circuit’s May 30 decision reversed the district court and reinstated the bankruptcy court’s confirmation of the chapter 11 plan of Purdue Pharma LP. The New York-based court of appeals held that chapter 11 plans may include nonconsensual releases of creditors’ direct claims against nondebtors. Purdue Pharma LP v. City of Grand Prairie (In re Purdue Pharma LP), 69 F.4th (2d Cir. May 30, 2023). The motion filed by the government on July 7 states that “the [U.S.] Solicitor General has determined to seek review of the panel’s decision in the Supreme Court” before the August 28 deadline. The government’s motion characterized Purdue’s chapter 11 plan as giving absolute, unconditional and permanent releases “from every conceivable type of opioid-related civil” claims to members of the Sackler family that owned and controlled the company.

Bed Bath & Beyond canceled an auction for its Buybuy Baby retail chain, abandoning a last-ditch effort to find a buyer to salvage the infant-focused retailer, WSJ Pro Bankruptcy reported. The retailer has been reviewing bids from interested buyers for all or parts of the company for weeks, with the sale process now down to the final stage. An auction was scheduled for Friday. Last week, Bed Bath & Beyond picked baby-product maker Dream On Me Industries as the winning bidder for the Buybuy Baby brand. The company was looking for higher and better offers, according to court papers filed Thursday. The company said it didn’t receive any higher or better offers for Buybuy Baby, and will instead seek bankruptcy court approval to sell the Buybuy Baby intellectual property to Dream On Me Industries at a hearing next week, according to the court filing Thursday. Bed Bath & Beyond filed for bankruptcy in April after years of losses and failed turnaround plans left the once-powerful retailer short of cash. Bed Bath & Beyond brand, including its website and domain names, and its customer data were sold to Overstock.com last month.
https://www.wsj.com/articles/bed-bath-beyond-abandons-efforts-to-find-b…

Celsius Network reached a $25 million deal with two large preferred shareholders, ending their litigation over claims on the company’s crypto mining business, WSJ Pro Bankruptcy reported. The settlement opens a path to ending a potentially costly fight that has been a key hurdle to its plan to transfer its bitcoin mining business to new managers and compensate customers who have digital currency trapped on the bankrupt platform. Celsius reached the settlement with WestCap Management and Canadian pension fund Caisse de depot et placement du Quebec. The settlement involves claims over the company’s U.K. affiliate, Celsius Network Ltd., and its assets including the mining business, according to a court filing Thursday by Celsius Chief Financial Officer Christopher Ferraro. The cash will come from the proceeds of a sale of a crypto services business, the court papers show. The settlement is preferable for Celsius and its customers to avoid expensive litigation that may have resulted in the preferred shareholders winning recovery of several hundred million dollars, Ferraro said in the court papers. Earlier this year, Celsius picked a group of investors led by TechCrunch co-founder Michael Arrington to run a reorganized company that will include Celsius’ mining business. Celsius customers will own nearly all of the equity in the reorganized company.

Cryptocurrency exchange Gemini, the largest creditor of bankrupt crypto lending firm Genesis, sued parent company Digital Currency Group (DCG) and its CEO, the day after DCG missed the exchange's deadline for agreeing to a restructuring deal for the venture capital firm's troubled unit, Reuters reported. DCG and Gemini, two prominent players in the crypto industry, have clashed several times over the past few months following the collapse of Genesis, which filed for bankruptcy in January. The lawsuit alleges DCG and its CEO Barry Silbert misrepresented the accounting treatment of certain liabilities that DCG assumed from Genesis as a result of losses Genesis suffered from the collapse of Singapore-based crypto hedge fund Three Arrows Capital in June 2022. In a statement, a DCG spokesperson said it expects to soon bring the Genesis bankruptcy case to a close.

Discount retailer Christmas Tree Shops Inc. has begun shutting down its business after dwindling sales prompted lenders to withdraw funding for its chapter 11 case, Bloomberg News reported. Christmas Tree Shops is negotiating a budget with lenders to continue funding payroll and other operating expenses as it conducts going-out-of-business sales, the company’s lawyer Harold Murphy said during a court hearing Friday. A lawyer representing the retailer’s unsecured creditors said they’re preparing for a liquidation. The store closings come little more than two months after Christmas Tree Shops filed bankruptcy with hopes of finding an investor that could fund a restructuring or going-concern sale. Christmas Tree Shops had an offer to sell the business but that the deal wasn’t supported by lenders, Murphy said. Murphy said the first few weeks of the company’s bankruptcy were promising but that the trajectory of the chapter 11 changed because its sales “dropped precipitously” in June and it defaulted on a $45 million bankruptcy loan. The retailer filed a notice in late June that lenders had terminated its chapter 11 financing.

Less than three months after David's Bridal filed for chapter 11 bankruptcy protection, the potential buyer of the beleaguered retailer has been revealed, the Philadelphia Business Journal reported. Court documents show New York investment and business development company CION Investment Corp. has submitted a going-concern bid to acquire a portion of the Conshohocken-based wedding dress retailer's assets. "While we still have much work to do in order to proceed with seeking approval, and as nothing is certain, this could potentially be a great outcome for David’s Bridal. This bid, if approved, would provide new money to support a go-forward David’s Bridal with up to 195 stores," David's Bridal said in a statement to the Business Journal. The retailer has more than 300 stores in the U.S., Canada and the United Kingdom, with additional franchise locations in Mexico. It is currently owned by a group of lenders including Los Angeles-based Oaktree Capital Group.

A Kirkwood, Mo.-based provider of disinfectant and antimicrobial products has filed for chapter 11 protection with plans to reorganize its debt under its current ownership, KSDK.com reported. Wexford Labs Inc. said in its filing that it has assets of $1.4 million and liabilities of $4.8 million. It filed its bankruptcy petition June 20 in the U.S. Bankruptcy Court in the Southern District of Illinois. The company also has operations in Granite City. Founded in 1973 and led by CEO Jeff Singer, Wexford Labs develops and manufactures antimicrobial solutions it says are used in health care facilities, dental offices, hospitality and food service businesses, educational institutions and public service agencies, pharmaceutical sites and agricultural firms. Singer is Wexford Labs' majority owner with a nearly 43% equity stake in the company, according to the filing.