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Carvana, which promised to reinvent the business of selling used cars, has never turned a profit and has borrowed money to cover its losses, WSJ Pro reported. Carvana Co.’s bonds are touching all-time lows, spotlighting investors’ concerns about the used-car seller’s long-term trajectory as it burns cash and faces rising borrowing costs. Carvana’s long-term bonds have declined to distressed levels, with some now trading as low as 33 cents on the dollar on Wednesday, a sign that investors don’t believe they will be paid back in full. The yield on their 10.25% notes was over 30% as of Tuesday, according to MarketAxess, a sign that Carvana would struggle to borrow from bond markets presently. The used-car business thrived when people opted to drive to avoid mass transportation during the pandemic. But car prices have dropped as interest rates went up and concerns over a recession grew, denting the company’s growth prospects. The company, which promised to reinvent the business of selling used cars, has never turned a profit and has borrowed money to cover its losses. The bonds had already dropped this year as the Federal Reserve started to raise interest rates in March. But they slid around 25% after Carvana’s latest earnings report on Friday, indicating that investors have become more pessimistic about the company’s fundamentals, rather than following broader market moves.

Fast Radius, Inc. announced that the U.S. Bankruptcy Court for the District of Delaware has approved all of the first-day motions related to the company’s voluntary chapter 11 petitions filed on Nov. 7, Globe Newswire reported. The ruling enables Fast Radius to continue operations in the normal course including maintaining employee payroll and health benefits, paying vendors for all post-petition goods and services, continuing all customer programs, and other programs that are essential to continuing the business without disruptions. In addition, the court set a hearing for Nov. 14 to consider the company’s sale and marketing procedures motion which lay out the timeline and criteria for bids to be received including a proposed bid deadline of Dec. 5.

More than a dozen insurers have filed appeals challenging the Boy Scouts of America's $2.46 billion sex abuse settlement, arguing that bogus abuse claims helped rig the deal against them, Reuters reported. The insurers, including Liberty Mutual, asked a Delaware federal judge to reverse a bankruptcy court's approval of the settlement, reiterating doubts about the number of abuse claims and alleged collusion between the youth organization and attorneys for abuse victims. The settlement, approved in September by Bankruptcy Judge Laurie Selber Silverstein, has the support of the Boy Scouts’ largest insurers and 86% of the abuse victims who voted in the youth organization's bankruptcy case. But it has been challenged by appeals from minority factions of insurers and abuse victims. Those insurers argued that "a significant portion" of the 82,000 abuse claims resolved by the settlement "are likely fraudulent." The number of sexual abuse claims filed against the organization skyrocketed after the bankruptcy filing, and little was done to vet claims, the insurers said. They blamed the rise in claims on plaintiffs' lawyers "who saw the bankruptcy as an opportunity for a windfall," and enlisted potential clients en masse, sometimes without contacting the claimants.

An outspoken critic of the Buffalo Catholic Diocese’s handling of childhood sex abuse cases has been removed without explanation from the committee of unsecured creditors that represents abuse survivors in the diocese’s chapter 11 case, the Buffalo News reported. Kevin Brun, who confronted diocese leaders in bankruptcy court about pension payments for priests who were credibly accused of abuse and other issues, was dismissed amid the committee’s ongoing mediated settlement negotiations with the diocese and its insurers, parishes and schools. Brun sued the diocese in 2019, alleging a priest molested him in a Washington, D.C., hotel room when he was 16. He was named to the creditors committee in 2020 with six other people who have childhood sex abuse claims against the diocese. The committee is responsible for examining the diocese’s assets, liabilities, operations and claims made against it and acting as fiduciary for all abuse survivors in negotiating a settlement. “The trustee has reconstituted the committee without Kevin as a participant,” said Brun’s attorney, Paul Barr. Changes to creditors committees in the middle of a chapter 11 are unusual but not unprecedented. In June, two committee members were replaced as the committee began mediated settlement negotiations in the Archdiocese of New Orleans bankruptcy. Barr said he couldn’t reveal why Brun was no longer involved, other than to say it was “an unfortunate turn of events.”

Fast Radius Inc., an on-demand manufacturer of metal and plastic parts, has filed for bankruptcy nine months after going public through a merger with a blank-check company, WSJ Pro reported. Shares in the Chicago-based company were down 42% at 17 cents in late-afternoon trading Tuesday after it filed for chapter 11 in the U.S. Bankruptcy Court in Wilmington, Del., late Monday. The stock had been plummeting since Fast Radius was listed through a deal with a special-purpose acquisition company valuing it at $1.4 billion in February. Lou Rassey, Fast Radius’s co-founder, chairman and chief executive, said in a sworn declaration filed with the court that his company had hoped to raise as much as $445 million through the SPAC transaction, but raised only $106 million. “Recent headwinds in the capital markets have inhibited our ability to adequately put in place the capital structure needed,” Mr. Rassey said in a statement. The bankruptcy petition lists assets of $69.3 million and liabilities of $55.2 million as of the end of June. The liabilities include roughly $24 million of secured debt. The company said it plans to keep operating and paying its employees and suppliers normally as it looks to sell its assets in bankruptcy. Fast Radius has 182 employees, down from a workforce of more than 280 before layoffs in June.

After another disappointing quarterly earnings report, audio content provider Audacy saw its stock drop to below 30 cents per share Tuesday and its chief financial officer addressed speculation that it might need to file for chapter 11 protection, the Philadelphia Business Journal reported. Audacy Chairman and CEO David Field said that market conditions were “worse than our expectations,” as the Philadelphia-based company reported an operating loss of $152 million in the third quarter, a swing from a $29 million operating profit in the same period of 2021. The company suffered a $141 million net loss, compared to a $4.7 million loss in the same period of 2021. Adjusted EBITDA was down to $36 million from $49 million. As he did in the second quarter, Field noted that the macroeconomic issues plaguing the company have come during a period of transition, as Audacy has been attempting to morph from a radio company into one focused on broader audio products and services. That has taken significant investment through the acquisition of podcast studios, advertising technology and new talent. Even though Audacy has built those new capabilities, Field said it is still not reaping a large portion of the revenue benefits. Field described the quarter as challenging, “with market conditions worse than our expectations impacting performance across our various channels.” Revenues were down 4% compared to the same period of 2021. Radio revenue was down 6% and digital revenue up 2%. While the company cited double-digit growth in revenue for streaming audio and digital marketing solutions, podcasting revenue declined in 3Q by 23%. Field said the podcasting business was adversely impacted by the departure of Crooked Media, which left Audacy's podcast platform in May.

Meta is laying off 13% of its staff, or more than 11,000 employees, CEO Mark Zuckerberg said in a letter to employees and CNBC reported. “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” Zuckerberg said. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.” Shares of Meta were up nearly 4% in premarket trading. The layoffs come amid a tough time for Facebook parent company Meta, which provided lukewarm guidance in late October for its upcoming fourth-quarter earnings that spooked investors and caused its shares to sink nearly 20%. Investors have been concerned about Meta’s rising costs and expenses, which jumped 19% year over year in the third quarter to $22.1 billion. Meta’s overall sales declined 4% year over year to $27.71 billion in the third quarter while its operating income dropped 46% from the previous year to $5.66 billion. Zuckerberg said Meta is making reductions in every organization but that recruiting will be disproportionately affected since the company plans to hire fewer people in 2023. The company extended its hiring freeze through the first quarter with a few exceptions, Zuckerberg said. Impacted employees will receive 16 weeks of pay plus two additional weeks for every year of service, Zuckerberg said. Meta will cover health insurance for six months. Meta is heavily investing in the metaverse, which generally refers to a yet-to-be developed digital world that can be accessed by virtual reality and augmented reality headsets. This hefty bet has cost Meta $9.4 billion so far in 2022, and the company anticipates that losses “will grow significantly year-over-year.”

Legal-service firms that administer major corporate bankruptcies are apologizing for undisclosed data-sharing deals, asking the bankruptcy court in New York to spare them from punishment for collecting unauthorized fees in large chapter 11 cases, WSJ Pro reported. Bankruptcy service providers Stretto Inc., Donlin, Recano & Co. Inc., Epiq Corporate Restructuring LLC and Omni Agent Solutions Inc. apologized in court papers Friday for agreeing to feed information they gathered from administering chapter 11 cases to a claims-trading startup. The apologies followed a monthslong investigation by bankruptcy judges in New York into side deals between the firms and Xclaim Inc., which used claims data to facilitate trades between bankruptcy creditors and debt-buyers on its platform. The firms face possible sanctions after a bankruptcy judge ruled in July they couldn’t serve as chapter 11 claims agents while generating revenue by furnishing data to Xclaim. Epiq, Stretto, Donlin and Omni said Friday they shouldn’t be sanctioned and that they believed their deals with Xclaim in 2019 were permissible because they were providing the startup with publicly available claims data in a format it could use. In exchange for supplying the information in a digital format, Xclaim paid the claim agents 10% of the commission it received when its users completed a trade on its platform, according to court papers. The firms said they either didn’t collect or returned fees generated under the agreements, which amounted to just hundreds or thousands of dollars per company, according to court documents. The investigation, led by Judge Martin Glenn of the U.S. Bankruptcy Court in New York, is exploring the firms’ dealings with Xclaim during past cases in which they served as court-approved claims agents. Fees generated under the Xclaim deals were substantially less than what bankruptcy service providers earn for claims agent work, which can cost bankrupt companies millions or tens of millions of dollars depending on the size of a chapter 11 case.