Pet-care retailer Independent Pet Partners Holdings LLC filed for bankruptcy, seeking to sell some of its stores to its top lenders, WSJ Pro Bankruptcy reported. The Woodbury, Minn.-based company filed for chapter 11 in the U.S. Bankruptcy Court in Wilmington, Del., on Sunday, blaming a sudden change in consumers’ pet food preference and the COVID-19 pandemic for lost revenue. Founded in 2017, the company has expanded its footprint by acquiring regional pet-store chains. The portfolio spans about 160 stores in a dozen states across the nation, under the banners Chuck & Don’s, Kriser’s Natural Pet, Natural Pawz and Loyal Companion, according to court papers. The company generated about $220 million in net sales in 2022. As of the petition date, it had about $182 million in assets and about $215 million in liabilities, according to the filing. It recorded about $111.4 million in secured debt. The company said its focus on grain-free, high-protein dog food caused it to lose about $10 million in sales in the second half of 2019 because pet owners stopped buying that type of product after reading reports that the food could cause dilated cardiomyopathy, a potentially fatal heart disease in dogs, according to the declaration filing by Stephen Coulombe, co-chief restructuring officer of the company. The filing said the U.S. Food and Drug Administration hasn’t established a causal relationship between grain-free diets and the disease.
Bed Bath & Beyond Inc. said on Monday it was planning to raise some $1 billion through an offering of preferred stock and warrants in a last-ditch effort to stave off bankruptcy, Reuters reported. The home goods retailer said in securities filings that if it can't complete the complex transaction, it would "likely file for bankruptcy protection." The chain has said in recent weeks that it had defaulted on a loan and may not be able to remain in business, raising concerns about its future. Bed, Bath & Beyond held talks in recent days with an investment firm to underwrite a significant portion of the proposed offering. Bed Bath said it was planning to raise just over $1 billion through sales of preferred stock and warrants and from securities when the warrants are exercised. Bed Bath will receive a waiver on its recent bank default should the proposed offering succeed, the company said. The embattled retailer said it would use the proceeds of the offering to repay outstanding revolving loans which it would then use to make an interest payment on bonds it missed on February 1. It also plans to draw an additional $100 million from a first-in-last-out loan from investment firm Sixth Street, that takes priority for repayment in a possible bankruptcy.
FTX's lawyers on Monday strongly urged a U.S. bankruptcy judge in Delaware not to greenlight a court-supervised investigation into its collapse, saying it would waste time and money and could pose a security risk, Reuters reported. FTX attorney James Bromley at Monday's hearing told Bankruptcy Judge John Dorsey, who is overseeing the crypto exchange's chapter 11 case, that the proposed review the U.S. Department of Justice's bankruptcy watchdog is seeking is so vague that it is essentially asking for an examiner to look at "everything, everywhere, all at once." The U.S. Trustee has asked Dorsey, to appoint an independent examiner to investigate allegations of fraud, misconduct, and mismanagement that are "too important to be left to an internal investigation." Juliet Sarkessian, an attorney for the U.S. Trustee, argued such an investigation is mandatory under federal law in large bankruptcy cases where DOJ or a creditor requests one. Judge Dorsey, who said he believed an examiner was not required, but should be appointed if "appropriate," did not rule on Monday. He asked FTX, its creditors and the U.S. Trustee to try to reach an agreement on the scope of a potential examiner review. FTX said that an examiner would merely duplicate work already being done by FTX, its creditors, and law enforcement agencies, adding cost and delay to its effort to repay customers in bankruptcy.
Potential buyers are inquiring about purchasing the struggling crypto lender Hodlnaut and its claims against bankrupt digital-asset exchange FTX, Bloomberg News reported. “Various parties who are interested in acquiring” Singapore-based Hodlnaut’s crypto platform and FTX claims have contacted the interim judicial managers overseeing the company after it sought protection from creditors, according to an affidavit seen by Bloomberg News. The judicial managers are in the process of signing non-disclosure agreements with the potential investors, the document shows. The affidavit indicates that as of Dec. 9 Hodlnaut Group owed a combined $160.3 million, or 62% of outstanding debt, to Algorand Foundation, Samtrade Custodian, S.A.M. Fintech and Jean-Marc Tremeaux. Hodlnaut, which also has operations in Hong Kong, halted withdrawals in August amid last year’s crypto rout — one of many lenders to hit the buffers. FTX accounted for about 72% of the digital assets the platform deployed on centralized exchanges, with an estimated market value of S$18.5 million ($14 million), according to a November filing. Last month, key Hodlnaut creditors rejected a proposed restructuring plan and said they preferred to liquidate the company.
Genesis, its parent company Digital Currency Group (DCG), and crypto exchange Gemini have reached an agreement on an initial term sheet to settle issues that have left progress on Genesis' bankruptcy repayment plan at a standstill for the past two weeks, YahooFinance.com reported. According to a source familiar with the matter, the term sheet includes "a compromise and settlement of inter-company claims between Genesis and DCG, as well as issues revolving around Gemini." Cryptocurrency broker Genesis filed for bankruptcy on January 20 with hopes of delivering a speedy, prearranged plan. Genesis owes creditors a total of $3.5 billion, a sum includes claims of at least $795.5 million owed to 340,00 Gemini Earn customers, many of which are retail investors. DCG, Genesis' parent company, owes the bankrupt firm approximately $1.65 billion, including a $1.1 billion promissory note and $575 million due in May of this year, per a court filing.
Roughly one year ago, a handful of crypto heavyweights made swaggering debuts on the Super Bowl ad roster, airing costly commercials with messages like “Don’t miss out” (FTX) and “Fortune favors the brave” (Crypto.com). Then came the swoon in crypto and the bankruptcy of FTX. Now, companies across the sector are using marketing and public relations efforts to defend their brands, distance themselves from dubious players like FTX and, in many cases, present a friendlier face to investors and regulators alike, the Wall Street Journal reported. “The problem they face is a massive drop-off of trust as holders of assets that have value,” said Tom Wason, global principal at Wolff Olins, a brand strategy firm that has worked with top crypto brands. Companies in the sector are trying to continue growing — or stay afloat — while simultaneously reassuring both the crypto faithful and the government agencies under pressure to rein them in, he said. Their marketing must evolve in turn, according to Mr. Wason. He compared last year’s burst of Super Bowl ads to those for dot-com startups in the 2000 Super Bowl, “where VC money [was] being burned for awareness.”
Lawyers for veterans suing 3M Co. over its earplugs have asked a federal judge to dismiss the bankruptcy filing of a 3M subsidiary that would shield the industrial conglomerate from court trials, WSJ Pro Bankruptcy reported. The motion for dismissal filed late Thursday in U.S. Bankruptcy Court for the Southern District of Indiana followed a federal appeals court ruling last week that tossed out a chapter 11 filing by LTL Management LLC, a company created by Johnson & Johnson in 2021. J&J had transferred its talcum-powder-related liabilities to LTL, which then filed for bankruptcy, blocking plaintiffs from bringing additional lawsuits. 3M, the St. Paul, Minn.-based manufacturer of thousands of consumer and industrial products, followed a similar strategy in 2022. Its Aearo Technologies LLC subsidiary filed for bankruptcy after accepting the responsibility for about 230,000 claims from veterans alleging that 3M’s foam earplugs failed to protect them from service-related hearing loss. 3M has said that its military earplugs are safe if service members receive proper training on using them. Aearo was the original manufacturer of the earplugs, but 3M acquired the company in 2008 and absorbed its operations into 3M. 3M pledged last summer to pay for the settlement of the claims negotiated by Aearo in bankruptcy court.
Federal prosecutors are scrutinizing a growing array of people tied to Sam Bankman-Fried’s collapsed cryptocurrency empire, including his father, his brother and former colleagues, as part of a rapidly expanding investigation into one of the biggest American financial crime cases in more than a decade, the New York Times reported. The U.S. attorney’s office in Manhattan has created a special task force to pursue its investigation into the collapse of FTX, the crypto exchange founded by Mr. Bankman-Fried. More than half a dozen prosecutors, led by Damian Williams, the U.S. attorney for the Southern District of New York, are building the criminal case and tracking down the billions of dollars in customer money that Mr. Bankman-Fried has been charged with misappropriating. In recent weeks, prosecutors have had talks with lawyers representing a dozen former executives and employees at FTX and Alameda Research, the hedge fund Mr. Bankman-Fried also founded. Prosecutors have also examined the role of Mr. Bankman-Fried’s family members in his business empire. The collapse of FTX has forced virtually everyone in Mr. Bankman-Fried’s immediate orbit to seek legal counsel as the investigation intensifies and prosecutors weigh bringing more charges. Defense lawyers at the law firms Mayer Brown, Steptoe & Johnson, and Covington & Burling each represent multiple former FTX executives who may have information to contribute. The FTX investigation could also ensnare companies that either received money from the exchange or lent it funds. The collapse of FTX last year set off a crisis at the crypto lending firm Genesis, which was recently charged with securities law violations by the S.E.C. And in late January, a bipartisan group of senators sent a letter to Silvergate, a bank that did business with FTX, asking company officials whether they were aware of the exchange’s misuse of customer money.
Sam Bankman-Fried’s Emergent Fidelity Technologies Ltd., an offshore entity that owns 55 million shares of Robinhood Markets Inc., filed for bankruptcy Friday amid a fight over who should get the stock following the collapse of FTX Group, Bloomberg News reported. The Robinhood stake, worth more than $590 million at current market prices, has been seized by the U.S. government, but its ultimate fate is unclear. A hodgepodge of parties including the Justice Department, bankrupt crypto lender BlockFi Inc., and Bankman-Fried himself, are trying to take the shares for good. The chapter 11 filing gives Emergent Fidelity and its liquidators — appointed by a court in Antigua — some breathing room. The liquidators’ “duties are to the debtor’s creditors, whoever those creditors may be,” Angela Barkhouse, one of the liquidators, said in a sworn court statement. “Given the many parties claiming to be creditors or outright owners of the debtor’s assets in proceedings in the U.S., the JPLs believe that Chapter 11 protection is the only practical way to empower the debtor to defend itself, the assets, and its creditors’ interests in the U.S.” Emergent Fidelity also holds $20.7 million of cash, but has no other assets, according to court papers.
