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In October 2020, Akorn Operating Company LLC announced its emergence from chapter 11 bankruptcy as the beginning of “an exciting new chapter.” Less than three years later, the generic U.S. drugmaker ran out of money and laid everyone off. Akorn is back in bankruptcy court — this time to be sold for parts. It’s one of 12 firms this year to seek bankruptcy protection for a second or even third time after initial attempts at court-supervised rehabilitation failed, according to a Bloomberg News analysis. So-called chapter 22 filings — industry slang for repeat bankruptcies — are piling up at the fastest rate since the Great Recession, according to BankruptcyData. "Judges aren’t thrilled to see a debtor come back; nobody wants it to happen,” said Lindsey Simon, a law professor at the University of Georgia who studies bankruptcies. “It means bankruptcy failed.” David’s Bridal LLC, the biggest wedding retailer in the U.S., and Catalina Marketing, maker of well-known coupons, along with discount retailer Tuesday Morning, telecommunications company Avaya and data firm Inap, all fell back into bankruptcy this year. Such relapses follow common threads. Sometimes a company did not get enough debt off its balance sheet the first time. Or it didn’t shed unprofitable parts of the business when it had the chance, dooming its prospects when interest rates rose, or inflation forced costs higher.

Vyera Pharmaceuticals, the company that Martin Shkreli founded and used to conduct a securities fraud that landed him in prison, filed for bankruptcy yesterday, the Wall Street Journal reported. Vyera, its Swiss parent company Phoenixus and several affiliates filed for protection in the U.S. Bankruptcy Court in Wilmington, Del., after the reputational harm from Shkreli’s fraud hampered them from opening bank accounts, commercializing products or raising capital, court papers say. Shkreli founded the companies in 2014, originally under the name Turing Pharmaceuticals, focusing his efforts on acquiring drugs that were the only viable option for patients afflicted with rare life-threatening diseases, and then raising prices. He was arrested in 2015 and convicted of federal securities fraud in 2017, and began serving a federal prison sentence that year. But he continued with his business strategy from prison, conducting his operations by giving orders to directors and officers he appointed using a contraband cellphone. In 2020, the Federal Trade Commission and a number of state attorneys general sued Shkreli, Vyera and Phoenixus for alleged antitrust violations. Following the FTC complaint, the business appointed a new board and management team, which took steps to eliminate Shkreli’s influence, according to court papers filed Wednesday by their chief restructuring officer, Lawrence Perkins.

Monitronics International Inc. announced on Tuesday that it has entered into a restructuring support agreement that would reduce the home security and alarm monitoring company’s debt by about $500 million as part of a partially pre-packaged reorganization through a chapter 11 structure, the Dallas Business Journal reported. The agreement is with Monitronics’ lenders, who hold approximately 78% of the Farmers Branch company’s debt, and the holders of a majority of its equity. Funds managed by Monarch Alternative Capital and Invesco Senior Secured Management Inc. are the largest lenders and will become the new principal equity owners. In addition to creating an expedited restructuring deal to lower Monitronics’ debt, the arrangement is expected to provide more financial flexibility and support for the firm to execute its business plan. On or around May 15, Monitronics, the firm behind Brinks Home Security, plans to implement the restructuring through the partially pre-packaged chapter 11 protocol in the Southern District of Texas. Monitronics, which has already obtained the necessary support from stakeholders, plans to emerge from chapter 11 proceedings within about 46 days of filing should the bankruptcy court approve its plan. Monitronics has already received commitments for about $387 million in new financing from existing lenders during the chapter 11 cases. That includes funds for the chapter 11 process, including payments of employee wages and benefits, suppliers, partners and vendors; and funds to refinance Monitronics’ existing superiority revolving credit facility and term loan.

A judge voided the Phoenix Suns’ recently announced deal to change its local television broadcaster, ruling that the agreement violated the rights of its current broadcast partner: the bankrupt owner of the Bally Sports brand of local sports channels, Bloomberg News reported. Judge Christopher Lopez ruled that the owner of the Suns and Women’s Basketball Association’s Mercury weren’t permitted to enter into new agreements with television channel owner Gray Television Inc., including a separate webstreaming deal with Kiswe Mobile Inc., while Bally Sports owner Diamond Sports Group LLC tries to shed debt in chapter 11 and work out a potential path forward with the NBA, Major League Baseball and National Hockey Association. The Suns’ new deals with Gray and Kiswe violated the bankruptcy injunction protecting Diamond Sports that prevents leagues and sports teams from interfering with its existing broadcast rights during its chapter 11 case, Judge Lopez said. Before announcing the deal on April 28, the Suns were warned that the agreement would violate the injunction, known in bankruptcy court as the automatic stay, and deprived Diamond Sports of valuable rights, Diamond Sports’s lawyer Brian Hermann said in a hearing Wednesday.

Bankrupt cryptocurrency exchange Bittrex Inc. received court permission yesterday to borrow $7 million in bitcoin to fund the start of its chapter 11 case, Reuters reported. Seattle-based Bittrex filed for bankruptcy Monday, saying it intended to return customer funds and wind down its U.S. operations. The company's international affiliates will continue to operate crypto exchanges for customers outside of the U.S., but Bittrex said that the U.S. regulatory environment had become untenable after the SEC sued the company for allegedly running an unregistered securities exchange. Before filing for bankruptcy, Bittrex stopped accepting new deposits from U.S. customers and told its existing users to withdraw their crypto from the platform. Bittrex's U.S. operations made up a minority of its overall users. Affiliated exchanges based in Liechtenstein and Bermuda accounted for about 77% of the company's 5.4 million users as of March 27, according to court filings. Bittrex believes that it has enough cryptocurrency to fully repay all remaining customers, and the bankruptcy loan will ensure a smooth wind-down that protects customer assets, attorney Susheel Kirpalani told U.S. Bankruptcy Judge Brendan Shannon at a court hearing yesterday in Wilmington, Del.

The U.S. Internal Revenue Service (IRS) has filed claims worth nearly $44 billion against the estate of bankrupt crypto exchange FTX and its affiliated entities, CoinDesk.com reported. According to bankruptcy filings dated April 27 and 28, the IRS put forth 45 claims against FTX companies, which include West Realm Shires (the legal entity of FTX.US), Ledger Holdings (the parent company of LedgerX and LedgerPrime) and Blockfolio, among others. The largest of the claims includes $20.4 billion and $7.9 billion claims against Alameda Research LLC and two claims totaling $9.5 billion against Alameda Research Holdings Inc. The claims are filed under the classification “Admin Priority,” which could allow the IRS’s claims to take precedence over the claims of other creditors in a bankruptcy case. Bankruptcy documents detailing the $20.4 billion claim against Alameda Research LLC reveal that the IRS is claiming about $20 billion in partnership taxes. The remaining amount of the claim includes millions in withheld income taxes and payroll taxes.

California's financial regulator failed to press leadership at Silicon Valley Bank to address known problems quickly enough before the lender imploded in March, according to a report released Monday in which the agency pledged to do better in the future, Reuters reported. The post-mortem by California's Department of Financial Protection and Innovation (DFPI) follows a scathing Federal Reserve report released last month in which the U.S. central bank blamed its own poor oversight, reckless bank management and loosened regulations for contributing to SVB's failure, which now ranks as the third-largest in U.S. history. Regulators have since pledged tougher oversight of the banking sector, while lawmakers have also complained that officials were too slow to address its poor risk management. Former SVB chief executive Gregory Becker is due to testify before Congress next week. According to the report released on Monday, DFPI played a supporting role, with primary oversight for SVB conducted by the Federal Reserve Bank of San Francisco, which could devote more staff to supervision.

SVB Financial bondholders are raising their bets in a bankruptcy court battle with the Federal Deposit Insurance Corp. that they can defeat the agency’s claim to nearly $2 billion that Silicon Valley Bank’s parent company had on deposit with the bank when it failed, WSJ Pro Bankruptcy reported. The FDIC has maintained that it has no obligation to return the cash following its takeover of the bank, but SVB Financial’s $3.4 billion in bonds have rallied as some investors gain confidence that they could see more of a recovery by prevailing over the agency’s claim. When Silicon Valley Bank went under, the FDIC stepped in to make depositors whole, but it made an exception for the deposits of the bank’s parent company, SVB Financial. The parent filed for chapter 11 in March, touching off a legal battle with the FDIC over how to allocate losses stemming from Silicon Valley Bank’s collapse. The FDIC in court filings last week said it isn’t obliged to return the cash that SVB Financial deposited with its banking unit. Distressed-debt investors that scooped up the company’s bonds before and after its bankruptcy are looking to recover the deposited cash from the FDIC, which took an estimated $20 billion loss when Silicon Valley Bank went under. The FDIC has said it could use the nearly $2 billion in its capacity as the failed bank’s receiver to “set off” any legal claims and causes of action it has against the parent company.

Envision Healthcare is planning to file for chapter 11 bankruptcy protection, capping one of the biggest losses ever for the physician-staffing company’s backers at private-equity firm KKR, the Wall Street Journal reported. The bankruptcy filing, which could be made as soon as this weekend, will wipe out the investment of KKR, which took Envision private in a $5.5 billion buyout in 2018. Including debt, the deal was worth about $10 billion, making it one of KKR’s largest investments in the health care industry. Envision now has around $7 billion of debt outstanding, much of which trades at under 10 cents on the dollar as the company’s finances have steadily deteriorated over the last two years. They have been pressured by high labor costs, a bruising battle with insurer UnitedHealth and federal legislation that took aim at a key component of Envision’s business model. Much of Envision’s debt will be swapped for shares in the reorganized company. Envision had been exploring a chapter 11 bankruptcy filing to restructure its debt burden, The Wall Street Journal previously reported. The company missed a March 31 deadline to report quarterly financials and skipped an interest payment due in April, setting the clock on a 30-day grace period before its lenders could push the company into an involuntary bankruptcy.