SVB Financial Group, the former parent company of failed Silicon Valley Bank, is burning through cash while it struggles to gain access to records it says are necessary to move forward in bankruptcy, Bloomberg News reported. The firm is sparring with the Federal Deposit Insurance Corp. over access to those records — things like minutes from board meetings — as well as $2 billion the agency seized after the bank failed in March. “There’s a category of material that the FDIC claims to have some rights over which the debtor also believes is its property,” Jim Bromley, an attorney representing SVB Financial, said during a bankruptcy hearing on Wednesday. First Citizens Bank’s purchase of SVB’s banking operations last month has complicated negotiations, he said. Bankruptcy Judge Martin Glenn expressed repeated concern over the slow pace of the case, especially given the company’s limited cash. “This process has got to move along,” Glenn said in the hearing Wednesday. “It was clear from the first-day hearing that liquidity is limited and it needs to move forward rapidly.” SVB Financial is negotiating with both the FDIC and First Citizens in order to obtain the records at issue and is close to signing a nondisclosure agreement that will aid the exchange, Bromley said.
Celsius Network LLC creditors want a bankruptcy judge to help them unmask FTX users they allege were involved in suspicious cryptocurrency trades that may have manipulated the price of Celsius’s native token last year, Bloomberg News reported. A committee representing Celsius creditors on Wednesday asked a bankruptcy judge for permission to subpoena FTX for information to identify users behind 10 cryptocurrency wallets they say engaged in a pattern of suspicious trades of Celsius’s so-called CEL coin between April and August. Celsius creditors said they need the FTX user information to determine whether the trading was legitimate “or instead a form of market manipulation, such as wash trading,” according to court papers filed yesterday. The committee said it retained blockchain consultant Elementus Inc., which identified 947 transactions over a three-day period “involving a near one-to-one relationship” between CEL token deposits and withdrawals among the 10 private crypto wallets and wallets on the FTX exchange. The CEL trades in question occurred between the date Celsius paused customer withdrawals on June 12 and the company’s chapter 11 filing on July 13, when the price of the token was 81 cents, according to court documents.
Cincinnati developer Ray Schneider has filed bankruptcy, and one of the creditors Schneider is engaged in other litigation with is asking for a court-appointed trustee on the matter, the Cincinnati Business Courier reported. Schneider, the president of Circle Development, filed for chapter 11 bankruptcy on March 2 in the U.S. Bankruptcy Court for the Southern District of Ohio, claiming between $10 million and $50 million in assets in a court filing. He also claimed between $100 million and $500 million in liabilities. In a court document listing the 20 largest claims and creditors that Schneider owes, claims totaled more than $177 million, with an additional unsecured claim of over $7.2 million. Circle Development is the eighth-largest commercial real estate development group in Greater Cincinnati, according to Business Courier research. It had 1.36 million square feet of locally owned and developed property in its portfolio in 2022.
Binance.US terminated an agreement to purchase the bankrupt crypto broker Voyager Digital Holdings Ltd., less than a week after federal regulators dropped their efforts to halt the deal in court, Bloomberg News reported. The decision came after months of wrangling and the intervention of multiple federal and state regulators over the deal. In a statement, Binance.US said “the hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community.” “While this development is disappointing, our chapter 11 plan allows for direct distribution of cash and crypto to customers via the Voyager platform,” the company said on Twitter. “Consistent with the plan, we will now move swiftly to return value to customers via direct distributions. We will provide more information on next steps and any actions customers need to take in the coming days.” It is the second failed deal for Voyager, which has been trying to exit bankruptcy and repay its customers since filing for chapter 11 protection last year. Voyager was among the first examples of crypto platforms that Sam Bankman-Fried tried to bail out, which at the time earned him a reputation as an industry savior. In September, FTX US won an auction for Voyager assets in an agreement valued at about $1.4 billion. Mere months later, with FTX International facing bankruptcy of its own and Bankman-Fried under arrest on criminal charges, that deal collapsed. In December, Binance.US entered the fray with a proposal worth around $1 billion at the time and that would have brought in about $20 million in cash for creditors of the failed firm.
Bankrupt crypto exchange FTX has agreed to sell U.S. derivatives exchange LedgerX for $50 million, a fraction of its purchase price when FTX bought it, WSJ Pro Bankruptcy reported. If the court overseeing FTX’s bankruptcy approves the sale, it would mark a nearly $250 million loss for FTX on its investment in LedgerX, which the company acquired for about $298 million in August 2021, according to a copy of FTX’s 2021 annual financial documents seen by The Wall Street Journal. An affiliate of Miami International Holdings Inc., which operates a number of options exchanges in the U.S., is the proposed buyer for LedgerX. Proceeds from the sale would help FTX’s new management close the $9 billion gap in customer funds it entered bankruptcy with last year. The proposed deal “is an example of our continuing efforts to monetize assets to deliver recoveries to stakeholders,” said John J. Ray III, FTX’s chief executive. In the years before FTX filed for bankruptcy, it went on a streak of investing in and buying other crypto companies. FTX, Alameda Research and other entities controlled by FTX co-founder Sam Bankman-Fried put more than $5 billion into more than 150 startups, as well as venture firms like Sequoia Capital.
Bankrupt crypto lender Genesis Global Holdco LLC asked the judge overseeing its reorganization to appoint a mediator in order to save the outline of a deal with its parent, Digital Currency Group, Bloomberg News reported. Genesis is seeking mediation to take place over a two-day period prior to May 9, and ahead of a mid-May due date on $630 million of debt owed to Genesis by DCG. “While these discussions were initially focused on resolving issues left open in the restructuring term sheet, more recent discussions have made it clear that a mediator is necessary to assist the mediation parties in reaching a resolution,” Genesis said in a bankruptcy filing. In particular, the unsecured creditor committee is opposed to the restructuring proposal as it stands now and are seeking better terms, according to two people familiar with the situation, who asked not to be named discussing private information. For its part, DCG in a tweeted statement said that “a subset of creditors have decided to walk away” from a settlement agreement that was submitted to the court. “DCG remains committed to reaching a fair outcome and while we look forward to a constructive mediation process, we will have to weigh any new demands against the concessions we’ve previously made.” “Given that DCG owes GGC approximately $630 million pursuant to certain fixed term loans due during the second week of May ... the Debtors believe that the mediation should be scheduled immediately,” the filing said.
Hundreds of shopping centers across the U.S. are poised to lose their anchor tenant in the coming months after Bed Bath & Beyond Inc. filed for bankruptcy and announced plans to eventually close its remaining stores, the Wall Street Journal reported. While property owners will have to absorb additional costs to lure replacement tenants, and some might still struggle to fill large vacated spaces, many landlords say they aren’t worried. Demand for big-box space in open-air shopping centers remains strong despite rising interest rates, and plenty of other retailers are waiting in the wings to fill the spaces vacated by Bed Bath & Beyond, several real-estate executives said. New tenants will in most cases pay higher rents, too, these property owners say. “There is strong interest across the board in these locations,” said John Kite, chief executive of Kite Realty Group Trust, one of Bed Bath & Beyond’s biggest landlords, with 22 locations across its portfolio. “If this was going to happen, this is probably a pretty good time for this to happen.” Retail real estate struggled for years because of oversupply and the rise of online shopping. But the sector rebounded strongly over the past two years after pandemic lockdowns eased, shoppers returned to stores and retailers fine-tuned their mix of e-commerce and bricks-and-mortar locations. Nationwide, the retail availability rate fell to 4.8% in the first quarter, the lowest level since at least 2005, when real-estate firm CBRE began tracking the market.
A bankruptcy judge on yesterday concluded a five-day court hearing to examine whether a chapter 11 filing of 3M Co.'s earplug unit Aearo Technologies LLC should be thrown out of court, MarketWatch.com reported. Following a federal appeals court's decision to dismiss Johnson & Johnson's first chapter 11 filing to freeze its talc lawsuits, 3M's earplug lawsuit claimants in February petitioned Judge Jeffrey Graham with the U.S. Bankruptcy Court in Indianapolis to dismiss Aearo's bankruptcy filing. J&J's case was dismissed because the federal appeals court deemed its bankrupt unit was not in financial distress. A significant time in the Aearo hearing was spent to argue the 3M unit's financial condition at the time of bankruptcy filing in July 2022. The judge is expected to rule in several weeks.