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Akorn Pharmaceuticals has announced they are filing chapter 7 bankruptcy and laying off hundreds in Decatur, Ill., WCIA.com reported. In a company-wide video call, Akorn President Douglas Boothe announced to employees that Wednesday would be the last day they can visit the office to pack up their belongings. Mayor of Decatur Julie Moore Wolfe estimates about 450 workers were laid off by Akorn. Boothe said the company had been looking for potential buyers since last year. “The company’s owners have just informed us they will not provide any additional financing required to run the business,” Boothe said. “Their decision leaves us, the board and the ownership and the management team, with no other alternatives to conclude the sales process and initiate bankruptcy proceedings.” The pharmaceuticals company will terminate all benefits from employees at the end of the month. Boothe also said they will be unable to pay severance or provide COBRA health insurance coverage to their former employees. Akorn previously filed for chapter 11 protection in 2020. Illinois Rep. Sue Scherer (D-Decatur) believes the company broke state law. Illinois’ WARN Act requires companies of more than 75 employees to give state and local officials 60 days’ notice before a mass layoff if they are laying off more than a third of the location’s workforce, or 250 workers. If the company is found violating the WARN Act, Akorn is liable to give backpay and benefits to their workers for every day they are in violation.

U.S. subsidiaries of Australian coal mining company Allegiance Coal Ltd. filed for chapter 11 protection on Tuesday, WSJ Pro Bankruptcy reported. The chapter 11 filing includes the New Elk and Black Warrior coal mines located in Colorado and Alabama, respectively, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del., by Allegiance Coal USA Ltd. The Australian parent company said last week that it is switching away from the production of thermal coal because of a decline in prices for thermal coal delivered to Europe. Instead the company said it is ramping up production of metallurgical coal.

Lenders to Revlon Inc. eased the way for its exit from bankruptcy by settling their lawsuit over a 2020 debt deal that stripped their collateral and sent it to a rival creditor group, WSJ Pro Bankruptcy reported. The bankrupt beauty-products business said the agreement between the company and its primary creditor groups would put Revlon on a clear path to exiting chapter 11 with $2.7 billion less in debt. The proposed settlement positions Angelo Gordon & Co., Glendon Capital Management LP and other lenders to take control of Revlon following the debt deal they engineered that sparked years of litigation with other creditors. Creditors that challenged the 2020 deal agreed to accept their share of an 18% stake in the restructured company or a $56 million cash pool to walk away from the lawsuit. They could recover at least 17% of their claims, if they take cash, and potentially as much as 25%, if they participate in an equity-buying program to provide Revlon with $670 million in fresh equity capital upon its exit from chapter 11. A previous estimate showed their recoveries at up to roughly 13%. Judge David Jones of the U.S. Bankruptcy Court in New York had largely dismissed a lawsuit challenging the 2020 debt deal, which transferred intellectual property collateral from existing Revlon lenders to Angelo Gordon and other participants. Last week, the judge said the plaintiff lenders’ claims against Revlon were barred by bankruptcy law and that their remaining claims against rival lenders appeared to be on shaky legal ground.

Broadband internet startup Starry Group Holdings Inc. filed for bankruptcy less than a year after going public by merging with a special-purpose acquisition company, or SPAC, WSJ Pro Bankruptcy reported. The discount internet service provider said in papers filed with the U.S. Bankruptcy Court in Wilmington, Del., that a liquidity crunch, mounting debts and the high costs of supporting existing infrastructure made it necessary to resort to chapter 11 to restructure the business. The bankruptcy filing came less than a year after Starry went public in March 2022 by completing its merger with FirstMark Horizon Acquisition Corp., a SPAC backed by the founders and executives of technology-focused venture-capital firm FirstMark Capital. SPACs were popular investments on Wall Street in 2021, booming alongside cryptocurrencies, meme stocks and other risky assets. The boom has since turned to bust. Shares in many companies that went public through SPACs have crashed and some startups are backing out of these merger deals. Starry, based in Boston, has reached an agreement with key creditors on a restructuring framework and aims to sell its assets for at least $170 million through a competitive bidding process, subject to bankruptcy-court approval. Starry’s key creditors back its restructuring plan, the court filing said.

Sam Bankman-Fried is resisting efforts to make him testify in the bankruptcy case of the digital asset lender Voyager Digital Ltd, Bloomberg News reported. Lawyers for the co-founder of FTX, the cryptocurrency exchange that collapsed causing billions of dollars in losses, asked a federal judge in California Tuesday to block a subpoena from lawyers representing unsecured creditors in the bankruptcy case underway in New York. The subpoena calls for Bankman-Fried to appear in person Feb. 23 at the San Francisco offices of McDermott Will & Emery to answer questions, and it included 49 separate and wide-ranging document requests to be turned over by Feb. 20. Bankman-Fried’s lawyer, Marc R. Lewis, argued the subpoena should be quashed because it wasn’t properly served, it’s unreasonable, and it may require the FTX chief executive officer to invoke his Fifth Amendment constitutional right to avoid incriminating himself. The subpoena was delivered to Bankman-Fried’s mother at his parents’ house in California, but Sam wasn’t there because he was attending a bail hearing in his New York criminal case, according to the filing. Alameda Research Ltd., Bankman-Fried’s defunct crypto trading house, is attempting to claw back about $446 million from Voyager Digital. The funds are related to cryptocurrency loans Voyager provided to Alameda before Voyager filed for bankruptcy in July.

As Party City Holdco Inc. wades through bankruptcy, some of its most important vendors are banding together to negotiate better trade terms for a holiday the company relies on: Halloween, Bloomberg News reported. Halloween orders are placed months ahead of time, meaning costume suppliers have to decide soon what they’re willing to ship to the bankrupt party supplier and on what terms. But with the company’s future still in the hands of a federal judge, some suppliers are wary of waiting until after the holiday to get paid for their goods. “It’s crunch time,” said Jason Torf, an attorney representing the group. “The goal of the committee is to support Party City, but in a way that protects these vendors.” New Jersey-based Party City has proposed paying the vendors two months after Halloween, by Dec. 31, according to Torf. That months-long wait puts vendors in a precarious position: taking on millions of dollars of risk without a guarantee of how the company’s restructuring will unfold. What’s more, Party City still owes some suppliers money from pre-bankruptcy shipments, court papers show. The newly formed vendor group is tied to the Halloween & Costume Association, a trade group, and includes some of the biggest Halloween suppliers in the country, according to Torf. It was formed in part to talk with the company about an agreement that ensures protection in case Party City runs out of money.

The end of federal pandemic aid is putting many Americans and businesses under mounting financial pressure, leading to a spike in bankruptcies, CBSNews.com reported. Total bankruptcy filings in January were 31,087, up 19% from a year ago, according to data from Epiq Bankruptcy Analytics. The surge in filings comes as rising interest rates and high inflation continue to stress household budgets after government pandemic aid programs expired. The federal government sent $817 billion in stimulus payments to Americans, according to a New York Times estimate, but that lifeline ended in March 2021. Congress similarly doled out $800 billion in Paycheck Protection loans to companies large and small before that program ended in May 2021. "There's no cash coming in from the government anymore," Amy Quackenboss, executive director at the American Bankruptcy Institute, told CBS MoneyWatch. "Some people are finally experiencing that economic crunch. They're having to pay their mortgage, their car payments. There are several people who haven't been able to weather that storm." Difficulty hiring in a tight labor market, the ongoing war in Ukraine and fears of a recession have also prompted some companies to file for bankruptcy, Quackenboss said. That said, while bankruptcies have increased, they still haven't reached pre-pandemic levels, she added.