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U.S. prosecutors justified one of the largest criminal penalties in U.S. history, saying Binance Holdings Ltd. willfully violated the nation’s economic sanctions laws and left the financial system vulnerable to “those who seek to exploit our system for their own gain,” Bloomberg News reported. The crypto trading company pleaded guilty late last year to anti-money laundering and sanctions violations and agreed to pay $4.3 billion in penalties. In a sentencing memo filed Friday in federal court in Seattle, U.S. prosecutors urged a federal judge to accept the plea deal. “In sum, given the nature and seriousness of Binance’s misconduct — it was intentional and led by senior executives, with hundreds of millions of dollars of collateral consequences,” the penalties in the proposed plea agreement are appropriate, they wrote. The plea deal also requires monitoring of the company for up to five years. Prosecutors say that Binance’s refusal to register as a so-called money services business, one that transmits or converts money, and its failure to implement an effective anti-money laundering program left “Binance, its customers, and the U.S. financial system vulnerable to those who seek to exploit our system for their own gain.” Binance has admitted that it allowed transactions with Hamas and other terrorist groups on the platform.

FTX investors sued Sullivan & Cromwell, accusing the law firm of aiding illicit schemes that helped advance a multi-billion dollar fraud before the crypto exchange’s collapse, Bloomberg News reported. Sullivan & Cromwell’s services “went well beyond those a law firm should and ordinarily provides,” the investor complaint said. “Lawyers were eager to craft not only creative but misleading strategies that furthered FTX’s misconduct.” The lawsuit filed on Friday on behalf of a proposed class of FTX customers adds to scrutiny of the elite Wall Street law firm that has acknowledged working on 20 legal matters for FTX and its founder Sam Bankman-Fried in the 16 months before the exchange’s 2022 implosion amid reports of a liquidity crisis. The Moskowitz Law Firm, which is behind actions against Tom Brady and other celebrity endorsers of FTX, brought the suit in Miami federal court. The firm “actively participated” in the FTX fraud through legal work that gave it deep insight into the exchange’s inner workings, investors allege. Firm lawyers knew where customer money was held and about the “untruthful and fraudulent conduct and misappropriation” of the money, the investors claim. The lawsuit makes Sullivan & Cromwell the second law firm to face an investor litigation over allegedly aiding and abetting the FTX fraud. Fenwick & West, a Silicon Valley law firm which worked as the crypto exchange’s main corporate counsel, is facing a separate action along with venture and private equity firms such as Sequoia Capital, Thoma Bravo and Paradigm. Bankman-Fried in November was convicted of fraud and conspiracy for siphoning customer money into an affiliated hedge fund for risky investments, political donations, and expensive real estate.

Liquidators of companies linked to the 1Malaysia Development Bhd scandal have filed for chapter 15 under the U.S. Bankruptcy Code, as they look to recover assets, Bloomberg News reported. A petition listing 1MDB Energy Holdings Ltd, Platinum Global Luxury Services Ltd, Aabar International Investments PJS Ltd, Blackrock Commodities (Global) Ltd, and Alsen Chance Holdings Ltd — all registered in the British Virgin Islands — was submitted in the Southern District of Florida court, dated Feb. 15. Liquidators said that the companies were subject to proceedings in the British Virgin Islands and made the U.S. petition because they hope to obtain information on the misappropriation of funds, according to the documents. Malaysia’s 1MDB investment fund became the center of a multibillion-dollar scandal that has spawned investigations around the world into deal-making, election spending and political patronage under former Prime Minister Najib Razak. The filing said that all five firms in question “acted as conduit for funds” from 1MDB to other entities and individuals.

The Children's Place said on Friday it had received an offer for a $130 million loan that could help it stay afloat, after the ailing U.S. retailer announced earlier this week that Saudi Arabia's wealthy AlRajhi family had amassed a 54% stake in the company in the open market via its investment firm, Bloomberg News reported. Gordon Brothers Group, a firm that specializes in liquidating brick-and-mortar retailers, has provided a term sheet for the loan that is subject to due diligence and other conditions, The Children's Place said. The company added it hoped to finalize terms next month. The loan discussions come after Mithaq Capital, the AlRajhi family's investment firm, crossed into majority ownership of The Children's Place this week through open-market stock purchases, triggering a change-of-control provision in the company's prior $50 million debt package that required it to be refinanced.

A Virginia bank says it will delay plans to auction off land at West Virginia Gov. Jim Justice’s posh resort in an attempt to recover more than $300 million on defaulted business loans by the governor's family, the Associated Press reported. In a filing Friday in Greenbrier County Circuit Court, Carter Bank & Trust of Martinsville, Va., said that it will reschedule the March 5 auction to a later date, the Charleston Gazette-Mail reported. The bank also asked that a hearing set for Tuesday be postponed on a request by the Greenbrier Sporting Club in White Sulphur Springs for a preliminary injunction against the bank. Carter Bank published a legal notice in the Charleston Gazette-Mail on Feb. 6 announcing the March 5 auction in Lewisburg involving land at the Greenbrier Sporting Club. Carter Bank has said that it would “aggressively” pursue $302 million it was owed in principal debt, plus interest and fees, from companies owned by the governor’s family. In its Friday filing, Carter Bank said it “understands that homeowners within the Greenbrier Sporting Club development are also very interested in this matter and may be considering undertaking action of their own.” The sporting club is a private equity club and residential community that opened in 2000. Justice bought the resort out of bankruptcy in 2009. He began serving the first of his two terms as governor in 2017.

The Boy Scouts of America asked the U.S. Supreme Court to reject a plea by some sex-abuse victims to put on hold a $2.4 billion settlement that allowed the youth organization to exit bankruptcy last year, WSJ Pro Bankruptcy reported. In a response filed late Thursday, lawyers for the Boy Scouts said that putting a stop to the distribution of funds to abuse victims that got under way last year would be unfair to the more than 99% of survivors who are not seeking to stay the Boy Scouts’ chapter 11 plan. A fraction of more than 82,000 survivors who filed sex-abuse claims against the organization asked the Supreme Court in recent weeks to suspend settlement payments while the court reviews a challenge to opioid maker Purdue Pharma’s bankruptcy plan. Lawyers pushing to pause the Boy Scouts settlement payments argued that a central feature of the Boy Scouts deal is similar to Purdue Pharma’s chapter 11 plan that is under an expedited review in the U.S. Supreme Court. Both restructuring plans would grant legal immunity to third parties who themselves didn’t file for bankruptcy but have close ties to the organizations. The Purdue settlement releases the company’s Sackler family owners from future liabilities related to opioid addiction in return for payments of up to $6 billion over time. Similarly, the Boy Scouts settlement shields the youth organization’s local councils and its partner organizations, which sponsor most scouting activities, from future sex-abuse claims.

Robertshaw U.S. Holding has filed for bankruptcy as the appliance parts maker seeks to cut debt by roughly $670 million and resolve lender litigation, WSJ Pro Bankruptcy reported. The company, owned by One Rock Capital Partners, has a proposed restructuring agreement to be acquired by a group that includes secured lenders Bain Capital, Eaton Vance and Canyon Partners, according to a Thursday filing in the U.S. Bankruptcy Court in Houston. Robertshaw also will consider other offers through a court-supervised sale process. The deal would need court approval to take effect. Robertshaw owes $833 million to secured lenders, as well as $37 million to vendors and services suppliers, the court paper shows. Besides “looming maturities and a challenging capital structure,” Robertshaw is still dealing with the enduring impact of pandemic-era product shortages and supply-chain disruptions, Chief Executive John Hewitt said in a sworn declaration. Also, a relocation of a major product line that was intended to reduce costs instead created inefficiencies, which actually increased costs, Hewitt said. Robertshaw hopes to resolve lawsuits filed last year by creditors left behind from financing deals the company made earlier 2023. Robertshaw said it is suing Guardian Life Insurance and Invesco during its bankruptcy proceedings, seeking a ruling that its 2023 transactions were valid.

Landlords that aren’t engaging in lease negotiations with WeWork can tap letters of credit to cover rent the bankrupt co-working space provider is withholding, the company said in a filing, WSJ Pro Bankruptcy reported. The brief was submitted on Wednesday to the U.S. Bankruptcy Court in Newark, N.J., in response to petitions from roughly 20 landlords who requested the court’s intervention to collect January and February rent payments. The New York-based company said in the filing that the “vast majority” of those landlords have access to letters of credit, a financial instrument that serves as an alternative to a traditional cash security deposit. Those landlords should go ahead and draw funds from the banks that issued the letters of credit on behalf of WeWork to cover the overdue rents, the company said in the filing. Lawyers for the landlords have argued in their filings that bankruptcy code requires WeWork to make rent payments without delay because they are considered administrative costs that are first in line to be paid as they come due. A number of previous bankruptcy cases indicated that security deposits shouldn’t be depleted to satisfy administrative costs, the lawyers said. WeWork has been in violation of bankruptcy rules by not making rent payments, they said.

A group of Democratic lawmakers are asking Bregal Partners, the former private equity parent of New Bedford-based Blue Harvest, to provide answers by the end of this month about where funds went from the East Coast whitefish company's bankruptcy, IntraFish.com reported. Bregal Partners netted an estimated $100 million for itself by selling off assets in the two years prior to declaring bankruptcy, Sens. Elizabeth Warren (D-Mass.) and Edward Markey (D-Mass.) and Rep. Bill Keating (D-Mass.) wrote to Bregal's Managing Partner Charles Yoon on Monday. "Rather than using the money to settle the debts owed to the small businesses of New Bedford," the letter said, "Bregal Partners shielded these assets from Blue Harvest’s bankruptcy filing in Delaware and pocketed the profits for itself, as it has repeatedly done throughout its 'eight-year roll up of the New Bedford fishing industry.'" The request comes nearly four years after two of the senators praised Blue Harvest for being awarded a highly sought after US Department of Agriculture (USDA) groundfish contract for just over $4.4 million. Bregal sold Blue Harvest to C&P Trawlers last November for $12 million. Mark Felger, co-chair of bankruptcy, insolvency and restructuring with the Massachusetts firm Cozen O'Connor, confirmed with IntraFish that the sale closed in December. He said that it was unlikely the sale would cover all of the nearly $23 million Blue Harvest owes to senior bank lenders, according to bankruptcy documents.