Home-goods retailer Tuesday Morning Corp. is moving toward a liquidation of additional store locations following a bankruptcy auction for the company’s remaining assets, WSJ Pro Bankruptcy reported. If a Hilco Global unit closes on its bid for Tuesday Morning, the Dallas-based retailer will be liquidated, its senior vice president of finance, Dell Young, testified in bankruptcy court on Monday. Tuesday Morning last week selected Hilco as the successful bidder for more than 200 store locations that weren’t already designated as going out of business. Lenders to Tuesday Morning filed court papers Monday saying that a sale to Hilco likely would result in a liquidation of the business, which filed for bankruptcy in February for the second time in less than three years. “We are working with the company to develop the final detailed plan on which stores will close and do not have a specific number of store closings at this time,” said Ian Fredericks, president of Hilco’s consumer-retail group.
Ubo Technologies, a limited liability company connected to Waatr founder and CEO Rakesh Guduru, filed for chapter 11 bankruptcy protection, the South Florida Business Journal reported. The Doral, Fla.-based venture submitted its petition to the U.S. Bankruptcy Court in Miami on April 13. The petition was signed by Guduru. Ubo Technologies has more than $2.5 million in liabilities and $327,181 in assets, according to court documents. Its largest debts are $641,465 owed to supplier Unique Industrial Product and a $464,000 business loan from Cellular Nanomed, a California biotech startup. Guduru is also listed as an unsecured creditor, with $291,627 owed. Most of Ubo Technologies assets consists of inventory, office equipment and intellectual property. It also owns patents, copyrights, trademarks and trade secrets related to Waatr, the maker of a self-cleaning reusable water bottle with UV purifiers and filters and CrazyCap, a portable cap that sterilizes water bottles.
Damages for a constructively fraudulent transfer were the difference between what the buyer paid and what the business was really worth, based on accurate income and expenses.
Bed Bath & Beyond Inc. filed for chapter 11 protection yesterday after the home goods retailer failed to secure funds to stay afloat, and has begun a liquidation sale, Reuters reported. The home goods retailer, which shot to popularity in the 1990s as a go-to shopping destination for couples making wedding registries and planning for new babies, has seen demand drop off in recent years as its merchandising strategy to sell more store-branded products flopped. Last year's moves to abandon that strategy, and to bring in more national brands that shoppers recognize, had not shown signs of working, with the company reporting a loss of about $393 million after sales plunged 33% for the quarter ending Nov. 26. The Union, N.J.-based retailer filed for bankruptcy in a District of New Jersey court, listing both its estimated assets and liabilities in the range of $1 billion and $10 billion, according to a court filing. The company said that it has received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc., according to a statement. While the retailer has begun a liquidation sale, it intends to use the chapter 11 proceedings to conduct a limited sale and marketing process for some or all of its assets, according to the statement. The company added that its 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as it starts efforts to effect the closure of its retail locations.
The Pill Club, a birth control and telehealth provider backed by an affiliate of venture financing firm TriplePoint Capital LLC, went bankrupt after California authorities accused the startup of fraudulently billing the state’s Medicaid program for contraceptives customers didn’t order and counseling sessions it never provided, Bloomberg News reported. The San Mateo, California-based business is trying to sell itself in chapter 11 as it braces for the possibility that other states will launch additional investigations into its billing practices. The company, also known for a time as Favor, filed bankruptcy months after agreeing to pay a total of $18.275 million to settle California regulators’ claims without admitting wrongdoing. The Pill Club is finalizing an agreement to sell the business in chapter 11, a deal that would be subject to higher offers, company lawyer Timothy Walsh said Friday during a court hearing. Walsh didn’t disclose the name of the potential buyer. The startup is also discussing with TriplePoint and other parties the terms of proposed chapter 11 financing, which could be finalized over the weekend, he said. TriplePoint Venture Growth BDC Corp. is the collateral agent for a $30 million loan to The Pill Club and holds a senior lien on the company’s assets, court papers say. TriplePoint also owns shares in the startup, according to a securities filing. Walsh said The Pill Club and TriplePoint are currently at an impasse over a request to continue using lenders’ cash, though he said the company is hopeful an agreement will be reached soon. TriplePoint did agree to The Pill Club’s use of as much as $850,000 to pay wages for its approximately 220 employees, said Dan McGuire, another lawyer for startup.
Pfizer Inc. has completed its $36.4 million acquisition of assets of Lucira Health Inc., the Emeryville company that filed for bankruptcy protection after developing the first at-home molecular diagnostic test for COVID-19 and recently won approval for a combined COVID-flu test, the San Francisco Business Times reported. Pfizer, the maker of a COVID vaccine and COVID treatment, was chosen last week by Lucira and a committee of creditors over a higher bid by a unit of Aditxt Inc. Lucira and the committee said Pfizer's resources gave it the best ability to not only close the deal but carry on Lucira's product line. The bidding for Lucira's assets pitted Pfizer, the world's largest drug maker by revenue with nearly $23 billion in cash, equivalents and short-term investments, against the Pearsanta unit of immune system-focused Aditxt, which had to borrow $1 million to make the deposit to participate in the auction. Pfizer's bid consisted of $5 million cash and more than $20 million to cure various Lucira contracts and another $11 million for the manufacturer of the test kits, Jabil Inc. If the total cures come in under the $20 million mark, the difference will go to the Lucira estate.
Failed crypto lender Celsius Network Ltd. has attracted two new bidders in a three-way auction set for Tuesday, according to a Saturday filing by Kirkland & Ellis, which is overseeing the bankruptcy, Bloomberg News reported. Joining an earlier bid by NovaWulf Digital Management to manage a restructured version of the bankrupt cryptocurrency company are Fahrenheit LLC, a consortium backed by Techcrunch Inc. founder Michael Arrington, and Blockchain Recovery Investment Committee, backed by Gemini Trust, run by the Winklevoss twins, and exchange-traded fund manager Van Eck Absolute Return Advisers Corporation. Meanwhile, the official committee of Celsius creditors won court approval on April 18 to assert claims including fraud and negligent misrepresentation against the failed crypto lender on behalf of its account holders. Allegations of fraud and misrepresentation have plagued Celsius since it filed for bankruptcy with a $1.19 billion deficit in July. The company made false statements publicly that signaled keeping money with Celsius was safer than that of a bank, Aaron Colodny, a lawyer representing the official unsecured creditor’s committee, said during the April 18 hearing.
A federal judge refused on Friday to recuse himself from the New Orleans Roman Catholic bankruptcy after an Associated Press report that he donated tens of thousands of dollars to archdiocese charities and consistently ruled in favor of the church in the contentious case involving nearly 500 clergy sex abuse victims. U.S. District Judge Greg Guidry told attorneys in the high-profile case that a panel of federal judges he asked to review the possible conflict determined no “reasonable person” would question his impartiality despite his contributions and longstanding ties to the archdiocese. Judge Guidry read from the opinion of the Washington-based Committee on Codes of Conduct, which noted that none of the charities he donated to “has been or is an actual party” in the bankruptcy and that Judge Guidry’s eight years on the board of the archdiocese’s charitable arm ended more than a decade before the bankruptcy. “Based upon that advice and based upon my certainty that I can be fair and impartial, I have decided not to recuse myself,” said Guidry, who oversees the bankruptcy in an appellate role.
A month after the collapse of Silicon Valley Bank, the U.S. appears to have avoided the worst-case scenario — a rapidly escalating financial crisis — and markets have rebounded. And yet, just below the surface, signs are mounting that credit is drying up in pockets of the economy at a worrisome rate, according to a Bloomberg News analysis. Small businesses say that it hasn’t been this difficult to borrow in a decade; the amount of corporate debt trading at distressed levels has surged about 300% over the past year, effectively locking a growing swath of businesses out of financial markets; bond and loan defaults have ticked up; and the Federal Reserve says banks have tightened lending standards. Corporate bankruptcies are on the rise, too, particularly in the construction and retail industries. Some of this is, of course, by design — the result of Fed Chair Jerome Powell’s rapid shift away from the easy-money policies of the pandemic. And none of the signals is cause for alarm on its own. But, taken together, they underscore the lingering concern that the Fed may have gone too far, too fast in pushing up interest rates to squelch inflation — and that by unleashing the forces that sunk SVB, policymakers could push banks to dial back lending so sharply the economy dives into a deep recession. “We were already debating a hard landing before SVB happened,” said Torsten Slok, chief economist at Apollo Global Management. “If credit conditions continue to tighten because banks need time to be in a position where they can give loans and operate, that increases risk of a harder landing — even more so than what we thought before.” Treasury Secretary Janet Yellen recently said that she hasn’t seen evidence yet that lending is contracting and that the possibility that it will hasn’t significantly altered her economic outlook. That view was supported on April 14, when the Fed said bank lending rose for the first time in three weeks. But other indicators show less reason for optimism. Take small businesses, which are facing more difficulty raising money since worries about regional banks flared up last month. A net 9% of owners who borrow frequently said in March that financing was harder to get than it was three months earlier, the most since December 2012, according to a survey by the National Federation of Independent Business.
