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U.S. veterans and members of the military on Wednesday urged a judge to dismiss 3M's bid to use the bankruptcy of its subsidiary Aearo Technologies to shield itself from nearly 260,000 lawsuits over military-issue earplugs that former users allege were defective and damaged their hearing ability, Reuters reported. 3M and Aearo say the earplug litigation has spiraled out of control. But attorney Adam Silverstein, who represents veterans suing 3M over hearing loss, said at a court hearing in Indianapolis that filing for bankruptcy, like "pulling a fire alarm," should be reserved for urgent threats. Aearo was not in need of emergency rescue, because it had filed for bankruptcy solely as "a strategic alternative to managing 3M's litigation," Silverstein said. "If the firemen determine something is a false alarm, they don't wait around to see if a fire might start later or if there's some other problem they can assist with," he said. "They leave." Aearo, which made the combat arms earplugs, filed for bankruptcy last July, with 3M pledging $1 billion to fund its liabilities stemming from the lawsuits that accuse both Aearo and 3M of misrepresenting the earplugs' effectiveness, leading to hearing damage. The plaintiffs have called that move a bid to escape the Florida federal court where the earplug lawsuits are consolidated in a so-called multidistrict litigation, following a series of unfavorable legal rulings and trial losses. On Tuesday, Aearo attorney Chad Husnick said U.S. law does not require the "house to be on fire" before a company files for bankruptcy. Aearo should be allowed to proactively resolve the growing problem of earplug lawsuits through a bankruptcy settlement, Husnick said.

Bed Bath & Beyond Inc. is preparing a bankruptcy filing for as early as this weekend as its falling stock price makes it near impossible to raise enough capital to avert default, WSJ Pro Bankruptcy reported. The embattled retailer recently said it needed to raise $300 million from share sales by April 26 to stay out of chapter 11. The company will have to stop selling stock by that date, when it would lose eligibility to continue under its share registration documents. Given the stock’s closing price on Wednesday of 46 cents, Bed Bath & Beyond faces long odds to raise that amount of money within that time. As of April 10, Bed Bath & Beyond had raised $48.5 million from its latest stock-sale effort. At the time, it had 178 million shares available to sell, which would only net the company about $70 million or $80 million given the stock’s recent trading prices. The retailer has warned that if it isn’t able to raise capital through its equity offering, it would have to file for bankruptcy and likely liquidate its assets. Bloomberg reported earlier Wednesday that Bed Bath & Beyond had resumed preparing for bankruptcy. The home-goods retailer’s business has been deteriorating. Bed Bath & Beyond in preliminary results reported a decline in comparable-store sales of 40% to 50% in the quarter that ended Feb. 25.

Credit Suisse has lodged a $440 million claim against Japan's SoftBank Group Corp in London as it presses ahead with formal proceedings in a dispute borne from the failure of Greensill Capital, a finance firm, Reuters reported. The Swiss lender is trying to recover client funds that Greensill had lent to Katerra, a SoftBank-backed U.S. construction group that filed for bankruptcy in 2021. SoftBank has vowed to vigorously fight the claim. The collapse of Greensill, along with a string of scandals, helped dent confidence in the 167-year-old Swiss bank. When turmoil hit the global banking industry in March, the Swiss government engineered a takeover by its rival UBS to "secure financial stability and protect the Swiss economy." But Credit Suisse remains determined to salvage outstanding money from the collapse of about $10 billion in client funds linked to financier Lex Greensill's supply chain finance firm, which imploded two years ago. It has alleged that SoftBank was aware of a Katerra restructuring in 2020 that effectively placed Credit Suisse's investor assets out of reach, according to court documents filed in the United States in 2021.

KKR & Co.’s Envision Healthcare Corp. is exploring a chapter 11 bankruptcy that would give control of the physician-staffing company to its creditors, WSJ Pro Bankruptcy reported. Envision is in negotiations with some of its lenders about a restructuring that could result in KKR, its private-equity owner, writing down its stake, these people said. The staffing company has struggled with debt, litigation and other headwinds since KKR bought it in 2018 for roughly $6 billion, excluding debt, in one of the private-equity firm’s biggest healthcare deals. Large creditors to Envision have been signing nondisclosure agreements to gain access to the company’s financial details and discuss a recapitalization. Some proposals include transactions where lenders would swap debt for equity, diluting or wiping out KKR’s equity stake in the process. Envision could file for chapter 11 protection as part of the recapitalization efforts, although it is possible that the company will be able to complete the transactions out-of-court and avoid filing for bankruptcy. The Nashville, Tenn.-based company missed a roughly $40 million interest payment due Saturday under some of its unsecured bonds, the people said, kicking off a grace period that could trigger a default if Envision fails to pay within 30 days.

A Johnson & Johnson subsidiary is again asking a U.S. judge to pause tens of thousands of lawsuits alleging that the company's baby powder and other talc products cause cancer, as it takes another shot at resolving the litigation in bankruptcy after a federal appeals court found its first attempt improper, Reuters reported. At a hearing yesterday in Trenton, N.J., a lawyer for LTL Management argued that the lawsuits, which are already stayed against LTL, should also be stopped against J&J, which has a market value of over $430 billion and has not filed for bankruptcy itself. LTL has said litigation against J&J would imperil its effort to negotiate a comprehensive settlement of all current and future talc claims in its bankruptcy. Two groups of cancer plaintiffs and the U.S. Department of Justice's bankruptcy watchdog have opposed the company's bid for a stay, arguing that it is a fraudulent attempt to evade the earlier court ruling and that the second bankruptcy has "slim to nonexistent prospects" of success. LTL attorney Greg Gordon pushed back on those arguments at the start of the hearing, saying "the likelihood of a successful reorganization is very high." LTL believes it now has support of 70,000 to 80,000 claimants, enough to meet the 75% voting threshold required for a bankruptcy court to approve the settlement and make it binding on all claimants, Gordon said.

FTX’s potential plan to reboot its crypto exchange has attracted interest from Tribe Capital, a venture firm that invested in the platform before FTX collapsed and is now considering a fresh capital injection to jump-start the effort, Bloomberg News reported. Tribe co-founder Arjun Sethi met with FTX’s committee of unsecured creditors in January to discuss the informal proposal. Tribe is considering leading a $250 million fund-raising campaign, anchored by $100 million from itself and its limited partners. Founded in 2018, Tribe was a venture investor in both FTX, the international exchange, and FTX US, the American entity. With more than $1.6 billion under management, the San Francisco-based firm invests in a range of startups, including crypto platform Kraken, payments firm Bolt, and e-commerce vendor Shiprocket. John J. Ray III, FTX’s new chief executive officer, aims to decide in the second quarter whether a restart is feasible, according to a presentation in bankruptcy court. FTX attorney Andrew G. Dietderich said during a hearing last week that the company is still in the early stages of assessing the idea, and that a restart would require a significant amount of cash, which may come from third-party investors.

A government-backed reverse-mortgage program intended to help seniors tap their home equity ran into problems as interest rates rose, pushing one of the largest participating lenders into bankruptcy last fall, recent court documents show, WSJ Pro Bankruptcy reported. Reverse Mortgage Investment Trust Inc. filed for chapter 11 in November as it faced a liquidity crunch, and the 116,000 loans on its books are now being managed by the U.S. government. RMIT’s bankruptcy filings reveal how the government-backed loan program worked against the company’s survival. The program’s rules required RMIT to take out a rising number of market-rate loans to buy out existing loans that carried lower rates, something that became unsustainable as interest rates kept rising and funding dried up, the lender said. The Department of Housing and Urban Development is “exploring ways to offer support to address current liquidity challenges” facing lenders by making changes to the program, a HUD representative said. What happened to RMIT illustrates the challenges facing reverse-mortgage lenders, said Jim Parrott, a nonresident fellow at the Urban Institute, a Washington think tank. A recent report co-written by Mr. Parrott said policy makers “need to work quickly, because if this burden is not addressed soon, the liquidity challenges that brought down [RMIT] will drive off the rest of the industry.”