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Some Dish Network Corp. creditors are examining legal options including sending a default notice to the company after it moved prized assets out of bondholders’ reach, Bloomberg News reported. The discussions come after the company’s bonds plummeted — in at least one case to a record low — on its decision to shuffle valuable spectrum licenses and television customers into new legal entities. Such moves are often precursors to rescue money deals that hurt existing creditors. The creditors are considering whether Dish’s asset transfers run afoul of rules governing the company’s debt contracts, giving rise to a technical default. The deliberations are in their early stages and no decision has been made. Last week, the Englewood, Colorado-based company transferred a handful of wireless spectrum licenses into a new legal entity under EchoStar, and freed a new unit holding 3 million television subscribers from debt covenants. Dish has struggled to transition from a legacy pay-TV business into a wireless communication company, saddling itself with more than $20 billion of debt in the process and crimping its access to credit markets. Its recent merger with EchoStar, the satellite network it spun off in 2008, is expected to buy time for its 5G buildout, but the company still must address looming debt maturities.

Kirkland & Ellis has been sued for allegedly profiting from an undisclosed romantic relationship between a Houston bankruptcy judge and a local bankruptcy lawyer, a relationship that ultimately caused the judge to resign, Reuters reported. Plaintiff Michael Van Deelen, whose October lawsuit led former U.S. Bankruptcy Judge David Jones to publicly acknowledge a romantic relationship with bankruptcy attorney Elizabeth Freeman, expanded his lawsuit Thursday to add Freeman, her former law firm Jackson Walker, and Kirkland & Ellis as defendants. Van Deelen alleged that Kirkland profited from Jones and Freeman's relationship by frequently teaming up with Jackson Walker, which served as local counsel, to represent debtors in Jones' court, knowing that Jones would give favorable treatment to the law firm that employed his girlfriend. Van Deelen said that Kirkland and the other defendants "deliberately concealed" the relationship in order to continue placing their cases in front of a friendly bankruptcy judge. Kirkland said Friday that Van Deelen's allegations against the firm were "baseless and false."

Almost three years after the brand filed for chapter 11 protection, Eminent Cycles' remaining frames, bikes and parts are being auctioned this month, BicycleRetailer.com reported. Eminent's initial chapter 11 filing showed debts of $1.4 million and assets of $139,000. At the time the company said it planned to continue operating and servicing customers during a reorganization. Fischer Auction Co. Inc. is listing about 400 lots available in an online auction starting Jan. 17. The lots include individual bikes, frames and crates containing multiple Fox suspension parts. An auction preview will be held Jan. 16 at the Eminent headquarters in San Marcos. In a December 2023 filing with the U.S. Bankruptcy Court for Southern California, Eminent Cycles owner Jeff Soncrant said that since the bankruptcy initial filing he has invested more than $300,000 in the company and worked without salary for two and a half years. He said Eminent sales grew rapidly during the COVID-19 pandemic but then the company was unable to obtain additional inventory for several months due to supply chain challenges. Later, Eminent was challenged by tariffs on China-made frames and high shipping costs that resulted in higher pricing. He said factories also prioritized orders from larger brands during this period. "However, because there were back orders from customers, it provided Eminent confidence that business growth would increase," he said of the 2022 scenario. When inventory began arriving in June 2022, more than half of customers canceled their orders, he said in the filing. By early 2023, he said, "there was no demand for bikes."

A Johns Creek software company has filed for bankruptcy protection as it fends off up to a billion dollars in debt, the Atlanta Journal-Constitution reported. Ebix, which has a history of allegations regarding its financial reporting, filed under chapter 11 of the U.S. Bankruptcy Code. The filing, Dec. 17 in the U.S. Bankruptcy Court for the Northern District of Texas, put the debt at between $500 million and $1 billion. The company, which has a worldwide business providing software behind many transactions in insurance, financial services, travel and healthcare, did not respond Thursday to phone calls or emails requesting comment. But it said in its bankruptcy filing that it intends to make up much of the gap between what it owes and what it can pay by selling its North American assets in life and annuities. Those assets would be sold to Zinnia Distributor Solutions for $400 million, according to a filing by Ebix with the U.S. Security Securities and Exchange Commission. Those assets account for 14.5% of Ebix annual revenue, the company said.

Robert Martin of Beckley, W.Va., pleaded guilty yesterday to fraudulent receipt of property from a debtor, according to a DOJ press release. Martin admitted to paying himself without authorization while serving as the chief executive officer of the entity that operated the West Virginia Courtesy Patrol. According to court documents and statements made in court, Martin was CEO of Citizens Conservation Corp (CCC), which he formed in 1993 and which dissolved in or about 2019. CCC’s primary source of income from in or around 1998 until in or around the summer of 2018 was a multimillion-dollar contract with the State of West Virginia to operate the Courtesy Patrol roadside assistance service. On April 3, 2019, CCC filed for bankruptcy after the loss of the state contract in 2018 left it financially unstable. During a May 2, 2019, bankruptcy creditors meeting, Martin testified that CCC was not generating income, that he was not receiving a salary because of the lack of income, and that he expected CCC to be paid on some receivables owed to it. The United States Trustee, who oversees the administration of bankruptcy cases in the Southern District of West Virginia, told Martin that he was not allowed to take a salary as a controlling officer without U.S. Bankruptcy Court approval.

Some former customers of the bankrupt crypto firm FTX Trading Ltd. are pushing a U.S. judge to change how they will be repaid, arguing that proposed rules unfairly leave them out of a yearlong rise in the price of Bitcoin and other digital currencies, Bloomberg News reported. More than 80 individual customers have filed letters attacking a plan to peg the value of their digital assets to the date FTX filed bankruptcy — Nov. 11, 2022 — and pay claims in U.S. dollars instead of returning the crypto coins. The customers had some form of crypto trapped on the FTX platform when company founder Sam Bankman-Fried stepped down amid fraud allegations. Nearly a year later, he was convicted of orchestrating a massive fraud that led to the collapse of his FTX exchange. Since the collapse, a team of bankruptcy experts, lead by chief restructuring officer John J. Ray III, has been trying to recover as much cash and as many crypto assets as possible. The team won court approval to sell crypto held on the platform in order to create a pool of billions of dollars that can be returned to customers. The size of each customer’s claim will be based on the price of the crypto coin they held on the FTX platform when the company filed its chapter 11 petition in Wilmington, Delaware. For Bitcoin holders, that means they will be owed $16,871 for each of their former coins, according to court records. The current price surged past $49,000 at one point on Thursday after trading began on the first U.S. exchange-traded funds that invest directly in the biggest cryptocurrency.

Careismatic Brands has engaged restructuring advisers to address financial challenges, according to people familiar with the matter, as competitive pressure and deteriorating performance make it difficult for the medical apparel company to satisfy its debt obligations, WSJ Pro Bankruptcy reported. Careismatic, owned by private-equity firm Partners Group, has engaged financial adviser PJT Partners and legal counsel Kirkland & Ellis to explore options for its debt load, the people said. Partners Group acquired the company in 2021. At the time, it raised more than $800 million in loans to fund the acquisition. Careismatic, founded in 1995, bills itself as the world’s largest retailer of medical apparel, including products like hospital uniforms, scrubs and footwear. The Santa Monica, Calif.-based company has faced competition from Figs, an apparel retailer that entered the market in 2013. Moody’s downgraded Careismatic in October, citing deterioration in its operating performance, cash flow and credit metrics. The company’s sales have deteriorated due to intense competition and softening demand after the COVID-19 pandemic, according to the report.

Troika Media Group is suing a former co-owner of a business it acquired in 2022, asking a bankruptcy court to halt his lawsuit against a lender key to Troika’s restructuring, WSJ Pro Bankruptcy reported. The advertising-services provider, which filed for bankruptcy in December, on Wednesday sued Thomas Marianacci, co-owner of Converge Direct, a company Troika bought for $125 million. The lawsuit asks the Bankruptcy Court of the Southern District of New York to suspend the state-court lawsuit filed by Marianacci against lender Blue Torch Finance seeking $29 million, a suit Troika says would impede its restructuring. Troika acquired Converge Direct partly through $75 million in loans provided by Blue Torch, $29 million of which went into an escrow account to be released to Marianacci and his co-owners after certain Converge audited financial statements were delivered. The funds, however, haven’t been delivered, as the two sides disagree on whether the conditions to release them have been met. In November — prior to Troika’s bankruptcy filing — Marianacci sued to collect.

A U.S. bankruptcy court judge this week dismissed the personal bankruptcy filing of Boston Market owner Jay Pandya and his wife, Mital, who had sought federal debt protection last month, RestaurantBusinessOnline.com reported. The dismissal came at the request of a U.S. bankruptcy trustee. The trustee said that Pandya had not provided insurance information on two properties he owned. They also said that Pandya had not responded to repeated requests for that information over a two-week period. The dismissal adds to the uncertainty over the future of Boston Market, which has closed as many as 200 locations this year, mostly due to evictions from landlords over unpaid bills. The company has been sued at least 140 times over the past three and a half years, since Pandya acquired the chain from Sun Capital Partners. Most of the lawsuits are over unpaid bills, from employees, landlords and various contractors. The biggest lawsuit is from US Foods, which has accused Boston Market of refusing to pay bills for food distribution. The distributor is asking a judge to award it nearly $12 million in that case. In his bankruptcy filing, Pandya said that he was not the sole owner of any business. But the filing also cited some of his business debts, including a $10 million US Foods liability.