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Reusable sticky note startup mcSquares, which also does business as M.C. Squares, filed for chapter 11 protection just days before Christmas, the Denver Business Journal reported. Thornton, Colo.-based mcSquares sells reusable home, office and classroom products such as sticky notes, planners, calendars and to-do lists. According to the filing, the company will propose a reorganization plan that suits the best interests of its creditors. A plan has not yet been filed with the District of Colorado bankruptcy court. According to the Dec. 22 bankruptcy filing, mcSquares owes between 20 and 49 creditors approximately $3.34 million. The filing also states that mcSquares has roughly $906,000 in assets and about $5.7 million in net operating losses.

Companies that claim an Albany-based lender defrauded them out of more than $22 million are trying to force the lender to liquidate its assets, the Albany Business Review reported. The three companies last week filed an involuntary chapter 7 bankruptcy petition against the lender, Prime Capital Ventures LLC, and convinced a federal judge to authorize an independent trustee to oversee the lender’s assets. The order, issued last Thursday by Judge Robert E. Littlefield Jr. of the Northern District of New York, found that the appointment of an interim trustee was needed “to preserve property of the estate and to prevent loss to the estate.” In response to Judge Littlefield’s order, the U.S. Trustee program, a part of the Department of Justice that oversees bankruptcy cases, appointed attorney Christian H. Dribusch as the interim trustee. Dribusch will serve in the role until the judge grants the petition, placing Prime Capital into bankruptcy, or dismisses it. In court papers and during a hearing last week, Justin Heller of Nolan Heller Kauffman LLP, an attorney for the three companies that brought the involuntary bankruptcy case, characterized the need for a trustee as urgent. Heller said that his clients gave Prime Capital multimillion-dollar deposits that were supposed to cover interest payments for loans that the lender never issued. The companies demanded the return of their deposits but Prime Capital never obliged, according to Heller. They allege that Prime Capital has paid some amounts back to certain creditors but not others.

Former remodeling and construction company owner Leighton “Joe” Wood, who allegedly defrauded dozens of customers, has been using bankruptcy protection to avoid accountability to those very customers, the bankruptcy case’s trustee claimed in a Dec. 18 filing, WJHL.com reported. “The Debtors’ strategy is unfair to their many creditors, who have been thus far deprived due process in this case, and is an abuse of the Bankruptcy process,” Trustee Gerard Vetter wrote in a motion to convert the case to a chapter 7 bankruptcy. Vetter’s filing also reveals for the first time that Wood has a criminal defense attorney and is the subject of a federal criminal investigation. It says that Wood’s attorney, Lynette Byrd, “met with the U.S. Attorney’s Office and federal agents on December 5, 2023” and that she and prosecutor Mac Heavener, an assistant U.S. attorney, “are actively engaged in discussions about possible resolution of the criminal investigation.” Leighton Wood and his wife, Cameron Wood, filed for chapter 11 bankruptcy protection in South Carolina’s federal bankruptcy court Oct. 21. The filing came two months after the Tennessee attorney general filed a civil suit on behalf of dozens of victims who the state claimed were bilked to the tune of “millions of dollars” when Wood failed to complete home renovation work those customers had paid for.

Party City Holdco Inc.’s bankrupt balloon-manufacturing affiliate, Anagram Holdings, is close to striking an agreement with the retail chain and won court permission to sell the unit to lenders, Bloomberg News reported. Anagram lawyer Nicholas Baker said during a court hearing Friday that the firm is optimistic it will be able to finalize the settlement with its parent company in the coming days. The sale and proposed agreement with Party City would resolve disputes between the companies and allow Anagram to continue operating without interruption, Baker said. A group of Anagram lenders agreed to take over the balloon business in exchange for forgiving about $168 million in debt. Lenders are also offering to continue employing all of Anagram’s current employees, Baker said. Judge Marvin Isgur said on Friday that he was comfortable approving the lender sale relatively soon after Anagram filed bankruptcy because the deal isn’t opposed by other creditors or company stakeholders. Silver Point Capital, a major shareholder of Party City, criticized the Anagram sale when the company filed chapter 11 last month. But Silver Point didn’t challenge the sale at Friday’s hearing.

Creditors involved in the bankruptcy proceedings of Israeli insurtech firm Vesttoo have submitted claims surpassing $4.8 billion against the company and its affiliated entities. However, the anticipated amount recovered is expected to be less than $100 million, according to industry website Artemis. The report suggests that a sum between $77 million and $88 million is available for disbursement to general unsecured creditors. Further recuperation, contingent on favorable litigation outcomes, is estimated to fall within the range of $6 million to $48 million. The U.S. Bankruptcy Court for the District of Delaware conditionally sanctioned last week the reorganization plan under chapter 11 for Vesttoo's bankruptcy, setting the stage for a vote on the matter, which seems likely to be approved, as the main creditors are backing it.

Seattle-based online retailer Zulily — battered after weeks of layoffs, website outages and management reversals — posted a message on its website saying that it has made “the difficult but necessary decision to conduct an orderly wind-down of the business to maximize value for the companies’ creditors,” GeekWire.com. To help expedite that process, Zulily said on Friday that it entered into an agreement with a third-party fiduciary operating under the name of Zulily ABC LLC, a subsidiary of a San Diego-based firm by the name of Douglas Wilson Companies that, among other things, specializes in receiverships and liquidating assets of troubled companies. According to a FAQ provided by Douglas Wilson Companies, the goal of the process is to gather and sell assets and then distribute proceeds “in accordance with statutory priorities.” The process usually takes 12 to 18 months. The new Zulily ABC entity is no longer accepting orders from customers through the Zulily website, and refunds to existing customers are unable to be processed at this time. For customers owed money by Zulily — either refunds or holders of gift cards — they are required to fill out a proof of claim form if they want a chance to receive money back. The deadline to file a claim is June 14.

Plans to restore a historic building in Charlotte’s Lockwood neighborhood appear to be dead in the water after its owner filed for bankruptcy protection earlier this month, the Charlotte Business Journal reported. Tara Ellerbe, under limited liability company The Optimus Building, on Dec. 7 filed a voluntary chapter 11 bankruptcy petition for 1024 N. Tryon St., according to records from the U.S. Bankruptcy Court for the Western District of North Carolina. Ellerbe had purchased The Optimus Building under the LLC in July 2019 for $875,000, according to Mecklenburg County real estate records. She filed a petition with the city of Charlotte that year to rezone the 0.33-acre parcel from industrial to mixed-use development.