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Customers and creditors of bankrupt crypto exchange FTX who can prove their losses will likely get back all of their money, the company told the judge overseeing the insolvency case, Bloomberg News reported. Restructuring advisers will need to examine the millions of claims that have been filed against FTX to weed out those that are not legitimate, lawyer Andrew Dietderich said during a Wednesday court hearing in Wilmington, Del. “I would like the court and stakeholders to understand this not as a guarantee, but as an objective,” Dietderich said. “There is still a great amount of work, and risk, between us and that result. But we believe the objective is within reach and we have a strategy to achieve it.” In addition, the team overseeing the company has dropped an effort to restart or sell the FTX crypto exchange after concluding it would cost too much, Dietderich said. Advisers ran an exhaustive process to find investors willing to restart FTX.com, but nobody would put up the cash needed to revive the exchange, he said. “The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in the dumpster were simply too high,” Dietderich said, referencing founder Sam Bankman-Fried, who shut down the crypto firm and handed control to insolvency experts in late 2022. Since then, restructuring advisers have been tracking down assets and trying to untangle a complex web of debt owed to various creditors, including customers who put cash and crypto on the trading platform. FTX’s four largest affiliates together nearly doubled the group’s cash pile to $4.4 billion at the end of 2023 from about $2.3 billion in late October.

The end of China Evergrande is near, and foreign investors face a long, and likely bumpy, road trying to recover billions of dollars of their investments in the beleaguered property developer. The process will serve as a lesson for fund managers of the potential risks in investing in China’s distressed assets, WSJ Pro Bankruptcy reported. On Monday, Hong Kong’s high court ordered the liquidation of Evergrande, putting an end to repeated extensions trying to save the company from being dissolved. But obstacles remain for overseas creditors eyeing proceeds from the sale of assets to recover scraps of their investments in the developer. In total, there are nearly $20 billion of dollar-denominated bonds involved in Evergrande’s restructuring. As things stand, the bonds are worth pennies on the dollar. Investors outside China who hold the debt aren’t likely to recover anything more than that, and it will take years for any recovery. Obstacles standing in the way of Evergrande’s offshore creditors include legal uncertainty over whether the Shenzhen-based company will enforce the Hong Kong court’s order. Hong Kong is a separate jurisdiction from mainland China where the majority of the assets are located.

Audacy Inc., a radio broadcaster reorganizing in US bankruptcy court, announced plans to cut a number of positions in its Pineapple Street podcast division, Bloomberg News reported. The reductions amount to 12 positions, or about 25% of the staff. A number of factors weighed on the company, including recent entertainment industry strikes, tighter marketing budgets and waning demand for limited-run, narrative series. “We are continuing to optimize our structure to align with the podcast market opportunity and set us up for continued growth,” the company said. “Unfortunately, that means reducing the size of some of our teams, and we have made the difficult decision to reduce a portion of our Pineapple staff.” Audacy, which counts New York’s 1010 WINS among its stations, filed for chapter 11 bankruptcy protection in Texas this month after reaching a pact with creditors that would hand them ownership in exchange for slashing $1.6 billion of debt.

U.S. companies defaulted on over $19 billion of debt in the fourth quarter of 2023, half of which were repeat defaulters, according to a report by ratings agency Moody's Investors Service, Reuters reported. The 20 fourth quarter defaults contributed to a U.S. corporate default rate of 5.6% in 2023, its highest since the pandemic downturn in 2020, according to the Wednesday report. Companies defaulted on more than $91 billion in debt last year, nearly tripling from $38 billion in 2022, Moody's noted on Wednesday. Half of the fourth quarter defaults were repeat offenders, the majority of which previously completed a distressed exchange followed by an out-of-court restructuring. In addition, roughly two-thirds of the fourth quarter defaulters were owned by private equity firms. The largest fourth quarter default was by Ligado Networks, a satellite communications company that missed payments on over $4 billion in secured bonds due in November 2023, Moody's said.

Digital-news startup the Messenger is shutting down less than a year after it launched, the Wall Street Journal reported. Founder and Chief Executive Jimmy Finkelstein delivered the message Wednesday to the company in an internal memo. “I am personally devastated to share that we have made the painfully hard decision to shut down The Messenger, effective immediately,” Finkelstein said in the memo to staffers. The venture launched in May 2023 with $50 million in funding and 175 reporters. A representative for the publisher at the time said its ambition was to have 500 journalists by the end of 2024. On Wednesday evening, the website appeared to stop displaying articles, and the home page only showed the company’s name and general email address.

Moody’s Investors Service downgraded the credit rating deeper into junk for Rider University, a private college outside of Trenton, N.J., with about 3,700 students, citing the school’s struggling finances, Bloomberg News reported. Moody’s cut the rating on $119 million of outstanding debt one notch to Caa1, seven levels below investment grade. The rating company also revised the outlook on the debt to stable from negative, according to a release Tuesday. Moody’s categorizes debt within that rating level as in “poor standing” and “subject to very high credit risk.” The downgrade reflects the school’s ongoing deficits and “severely limited” liquidity despite cost cutting measures that saved Rider nearly $10 million in fiscal year 2023, the release said. Despite those efforts, the school is still expected to face operating deficits through at least fiscal 2025. “It’s important to note that Moody’s reports on data from more than a year ago, which is very different from the scenario Rider is experiencing today,” said James Hartman, Rider’s chief financial officer. He said the school is making enrollment, retention and budgetary progress, and is on track to meet financial goals to achieve fiscal sustainability within the next 18 months.

Five years ago, 23andMe’s green up-pointing triangle was one of the hottest startups in the world. Millions of people were spitting into its test tubes to learn about their ancestry. Oprah had named its kit one of her favorite things; Lizzo dressed up as one for Halloween; Eddie Murphy name-checked the company on “Saturday Night Live.” 23andMe went public in 2021 and its valuation briefly topped $6 billion. Forbes anointed Anne Wojcicki, 23andMe’s chief executive and a Silicon Valley celebrity, as the “newest self-made billionaire.” Now 23andMe’s valuation has crashed 98% from its peak and Nasdaq has threatened to delist its sub-$1 stock, the Wall Street Journal reported. Wojcicki reduced staff by a quarter last year through three rounds of layoffs and a subsidiary sale. The company has never made a profit and is burning cash so quickly it could run out by 2025. Wojcicki, for her part, isn’t giving up. She’s sticking to her goal to transform 23andMe from a supplier of basic ancestry and health data into a comprehensive healthcare company that develops drugs, offers medical care and sells subscription health reports. She still has to prove the business can sustain itself. She’s raised about $1.4 billion for 23andMe, and spent roughly 80% of it.

The U.S. government filed an objection on Monday to crypto lender Genesis Global’s chapter 11 plan, saying it effectively provides a legal shield to the company and a myriad of related parties, WSJ Pro Bankruptcy reported. The U.S. Trustee, the Justice Department’s bankruptcy monitor, said in a filing with the U.S. Bankruptcy Court in White Plains, N.Y., that the plan fails to meet certain requirements needed for confirmation under bankruptcy code. The plan also contains a provision that, in effect, serves as a “hidden third-party release,” the DOJ said. The crypto lender, which filed for bankruptcy in January of last year, is aiming to get its chapter 11 liquidation plan confirmed in mid-February. Genesis said it had more than 100,000 creditors and owed roughly $5.1 billion a few months before its bankruptcy filing. Lawyers for the company didn’t immediately respond to a request for comment. In its filing, the DOJ said the plan’s release provision is overly broad, appearing to effectively impose a “nonconsensual release on every person and every entity existing in the world.” The provision binds even those who didn’t check the opt-in box in the ballot, the DOJ said. In addition, the Genesis plan seeks to give the parties legal cover for actions taken before and after the bankruptcy filing, including Genesis’s out-of-court restructuring efforts, the filing said. “The court simply is not at the vantage point to make that judgment,” the DOJ said in the filing.

Restoration Forest Products, a lumber company based in Arizona, filed for bankruptcy on Monday after the pandemic upended construction on a new production facility and a critical governmental contract fell through, Bloomberg News reported. The manufacturer listed liabilities of $367 million and assets of at least $100 million in court documents. The chapter 11 filing lets Restoration Forest Products keep operating while it seeks approval of its bankruptcy plan. The company, which produces everything from lumber to wood chips, has already struck a deal with stakeholders in which it intends to slash more than $300 million in debt. As part of the bankruptcy plan, Invesco has agreed to give the firm $95 million to help finance the court process, according to a statement. After emerging from bankruptcy, Invesco is slated to own the company along with its current equity sponsor, Lateral Investment Management. The plan and financing are subject to court approval. Restoration Forest Products touts its focus on sustainability because it works with the U.S. Forest Service to mitigate wildfire risk by clearing brush and other low-lying plants that can stoke flames. In early 2022, the company raised nearly $200 million in sustainability-linked bonds, according to its website. The bonds were issued by the Arizona Industrial Development Authority and were sold in two parts. About $113 million of Series A bonds were purchased by affiliates of Invesco while about $87 million of Series B bonds were bought by affiliates of Lateral.