%1

Former FTX Chief Executive Sam Bankman-Fried is expected to appear in court in the Bahamas today to reverse his decision to contest extradition to the United States, where he faces fraud charges, Reuters reported. The 30-year-old cryptocurrency mogul was indicted in federal court in Manhattan on Tuesday and accused of engaging in a scheme to defraud FTX customers by using billions of dollars in stolen deposits to pay for expenses and debts and to make investments for his crypto hedge fund, Alameda Research LLC. His decision to consent to extradition would pave the way for him to appear in U.S. court to face wire fraud, money laundering and campaign finance charges. Upon arrival in the United States, Bankman-Fried would likely be held at the Metropolitan Detention Center in Brooklyn, though some federal defendants are being held at jails just outside New York City due to overcrowding at the facility, said defense lawyer Zachary Margulis-Ohnuma. At his initial court hearing in Manhattan, Bankman-Fried would be asked to enter a plea and a judge would make a determination on bail, Margulis-Ohnuma said. The attorney added that such a hearing must take place within 48 hours of Bankman-Fried's arrival in the United States, though it would likely be sooner. Prosecutors will likely argue that Bankman-Fried is a flight risk and should remain in custody because of the large sums of money involved in the case and the unclear location of those funds.

Attorneys for the U.S. bankruptcy trustee in Delaware and several major media outlets are challenging an effort by cryptocurrency exchange FTX to withhold names of the company’s customers and creditors from the public, the Associated Press reported. At a brief hearing Friday, the judge presiding over the FTX bankruptcy granted a motion by media outlets to intervene for the purpose of objecting to the sealing of creditor information. A separate objection by the U.S. trustee, the government watchdog that oversees chapter 11 reorganizations, also was on the agenda for Friday’s hearing but was postponed by Bankruptcy Judge John Dorsey until Jan. 11, when he likely will also hear arguments from the media. In a court filing earlier this week, an attorney for Delaware’s acting U.S. trustee noted that “disclosure is a basic premise of bankruptcy law.” “The debtors simply cannot seek bankruptcy protection and then do business behind a shield of secrecy” Juliet Sarkessian wrote. Sarkessian warned that allowing FTX to shield creditor lists and financial schedules would be a “slippery slope” and create an unfavorable precedent for bankruptcies in which creditors are also customers. Last month, Judge Dorsey temporarily granted a request by FTX to redact the names and addresses of clients and creditors from court filings, even though such information is typically public. The judge did direct FTX to file an unredacted creditor matrix under seal with the court, but the company has yet to do so.

U.S. midstream infrastructure company Tallgrass said on Friday that it had reached an agreement to acquire Houston-based Ruby Pipeline, which has been under chapter 11 protection since March, Natural Gas World reported. The transaction, the value of which was not disclosed, is expected to close in Q1 2023, subject to customary regulatory approvals and closing conditions. Ruby is a 1.5bn ft3/day, 680-mile pipeline between Opal, Wyoming and Malin, Oregon. It was placed under bankruptcy protection by its joint venture owners, Kinder Morgan and Canada’s Pembina Pipeline, in March. In November, Pembina Pipeline said it had reached a settlement agreement with Ruby that provided for the release of Pembina from any causes of action that might arise from the bankruptcy proceeding. Pembina agreed to a US$102mn payment to Ruby but retains all its recovery rights as a creditor. Ruby, Tallgrass said, offers a “unique opportunity” to advance its initiatives to offer decarbonised energy solutions such as responsibly sourced and renewable natural gas to customers across the U.S.

Puerto Rico’s financial oversight board filed a plan to restructure about $9 billion of power utility debt after failing to reach a deal with bondholders, signaling the agency’s five-year bankruptcy will take even longer to resolve, Bloomberg News reported. The federal board is overseeing the island’s finances and the debt proposals for Puerto Rico’s Electric Power Authority, known as Prepa, the main supplier of electricity on the island. The board wants to slash nearly 40% of Prepa’s debt — $8.5 billion in bonds and another $700 million in loans to fuel-line lenders — down to a combined $5.4 billion of new restructured securities, according to the debt adjustment plan submitted to the bankruptcy court Friday night. Court-ordered mediation between the board, insurance companies and an ad hoc group of bondholders has so far failed to produce a consensual repayment plan. At the same time, the parties are litigating whether bondholders are entitled to Prepa’s future revenue or limited to accounts holding about $16 million.

Avaya Holdings Corp. is nearing a chapter 11 bankruptcy filing to restructure its balance sheet as it looks to turn around its business and move past problems surrounding the company’s accounting, the Wall Street Journal reported. Avaya disclosed earlier this week it has reviewed various restructuring proposals from competing creditor groups. One plan, supported by a senior lender group including Apollo Global Management, would significantly reduce Avaya’s debt load through chapter 11, wipe out shareholders and, pending the completion of an internal investigation into controls over financial reporting, provide directors and executives with releases from potential litigation. In August, Avaya said it had launched an investigation while it was “reviewing matters related to potential material weaknesses in the company’s internal control over financial reporting.” Another plan, supported by holders of Avaya’s unsecured bonds, proposes to restructure the company out of court, including by issuing new bonds and loans to retire some old debt. The company in August said there was substantial doubt about its ability to continue as a going concern in light of a debt maturity next year, and disclosed it would miss its third-quarter earnings forecast by more than 60% after closing a deal to issue $600 million of new debt in June. Prices on the newly issued debt tumbled after the disclosure about the earnings, saddling investors with losses.

Core Scientific — one of the largest publicly-traded crypto miners — soared more than 70% early Thursday after B. Riley offered $72 million in fresh financing, the Wall Street Journal reported. The bitcoin miner has suffered from this year's crypto rout as well as high electricity prices. It suspended payments to lenders in late October and suggested bankruptcy as an option. One of its largest creditors, B. Riley, wrote an open letter to the firm on Wednesday suggesting it was willing to give Core Scientific $40 million immediately, and an additional $32 million following stipulations that included the price of bitcoin rising above $18,500. As of Thursday, it traded at $17,475. B. Riley's outstanding loan was set to mature this December. The beleaguered miner is still down 96% on the year. It counts BlockFi Lending LLC — a bankrupt crypto firm caught up in the FTX scandal — as another one of its creditors, according to FactSet.

Party City Holdco Inc., a purveyor of party favors, has engaged attorneys to help it evaluate options to address a liquidity crunch while its bondholders have tapped restructuring professionals as well, the Wall Street Journal reported. Party City has been suffering from widening net losses, and its recent Halloween sales came in at the low end of expectations in part because inflationary pressures have hampered customers’ willingness to spend, the company said last month. Party City has engaged law firm Paul Weiss Rifkind Wharton & Garrison LLP as restructuring counsel. Meanwhile, investors with interests in Party City’s bonds have engaged the law firm Davis Polk & Wardwell LLP as well as financial adviser Lazard Ltd. In addition to the macroeconomic headwinds the company has faced, Party City is also contending with constraints in the market for helium, a key gas it uses to blow up balloons. The company has said it is working to diversify its sources of helium to alleviate the supply limitations and price increases in the helium market, which have pressured both its retail and wholesale business segments.

Lawyers for the bankrupt crypto exchange FTX on Wednesday opposed a demand for internal records from an insolvent affiliate based in the Bahamas, saying they "do not trust" the Bahamian government with data that could be used to siphon off assets from the bankrupt company, Reuters reported. Liquidators of FTX's Bahamian business, FTX Digital Markets, had asked U.S. Bankruptcy Judge John Dorsey to give them access to the U.S. unit's Slack, Google and Amazon Web Services accounts and data. At a court hearing in Delaware, lawyers for FTX asked Dorsey to deny the request. They argued that Bahamian regulators had worked with FTX's founder, the recently arrested Samuel Bankman-Fried, to undermine the U.S. bankruptcy case and withdraw assets to the detriment of some creditors. FTX attorney James Bromley told Dorsey that the Bahamian government has previously obtained information from FTX Digital Market's liquidators and used it to siphon digital assets away from FTX. "This is dangerous information," Bromley said. "We do not trust the Bahamian government." The Securities Commission of the Bahamas (SCB) has previously disputed FTX's "misstatements" about the Bahamian government's response to FTX's collapse.