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Corporate bankruptcies are increasing at double-digit rates in most advanced economies as borrowing costs rise and governments unwind pandemic-era measures to support business worth trillions of dollars, the Financial Times reported. Following a decade of decline the number of U.S. corporate bankruptcies rose 30 per cent in the 12 months to September compared with the year-ago period, according to courts data. Germany, the EU’s largest economy, said bankruptcies rose 25 per cent from January to September compared with the year-ago period. Since June, monthly “double-digit growth rates have been consistently observed compared to the previous year”, the country’s statistical office Destatis said on Tuesday. Across the bloc, corporate insolvencies rose 13 per cent year on year in the nine months to September to reach their highest level in eight years, according to Eurostat. Higher interest rates, along with the collapse of zombie companies that had survived on COVID-era government support, have fuelled the trend, according to Neil Shearing, chief economist at Capital Economics. Shearing cited “the cost of debt servicing” and “the rollback of pandemic support” as well as “high energy bills, particularly in energy-intensive sectors”. The industries suffering the most from the increased insolvency rates included transportation and hospitality, analysts said. Businesses weathered the precipitous downturns triggered by the pandemic thanks to massive government support schemes for companies and households that amounted to more than $10tn, according to IMF estimates for 2020 and the first four months of 2021. But since then the packages have been largely withdrawn.

The U.S. Bankruptcy Court for the Southern District of Florida on Nov. 30 granted a motion by the USTP’s Miami office to extend the deadline for creditors to file claims in the chapter 11 bankruptcies of MV Realty PBC LLC and its nearly three dozen affiliates, according to a USTP press release. The court’s order extends the original Dec. 1 deadline to Feb. 1, 2024. The court also directed the MV Realty entities to serve — at their expense — copies of the order on all parties to the bankruptcies, including roughly 38,000 homeowners whom MV Realty listed as current contract holders but not as creditors. Additionally, the companies must provide claim forms to about 2,850 other consumers who may have been forced to pay damages after terminating their agreements; those consumers were neither listed as creditors nor notified of the bankruptcy cases. MV Realty opposed the USTP’s motion, citing the costs of additional service. Its objection was overruled. “This ruling protects the due process rights of thousands of people across the country who were affected by MV Realty’s business practices,” said Director Tara Twomey of the Executive Office for U.S. Trustees. MV Realty, which operates in 33 states, has been the subject of lawsuits by several state attorneys general alleging deceptive trade practices. In 2018, MV Realty began marketing homeowner benefit agreements (HBAs), under which consumers receive one-time payments of 0.3% of a property’s value in exchange for a 40-year exclusive right for MV Realty to market the property if the consumer decided to sell. Breaching an HBA — for example, by retaining a different real estate agent — could render a consumer liable for damages of up to 3% of the property value. In other words, consumers who received upfront payments of a few hundred dollars could end up owing thousands under an HBA. Additionally, MV Realty files liens or memoranda in the official records to encumber title to the properties.

Amazon is in talks to invest in the biggest regional-sports programmer, a move that would advance the e-commerce giant’s aggressive push into sports content as it takes on streaming rivals like Disney and Netflix, the Wall Street Journal reported. Diamond Sports Group, which carries the games of more than 40 major sports teams across the country and filed for bankruptcy earlier this year, is actively negotiating with Amazon about a strategic investment and a multiyear streaming partnership. If an agreement is reached, Amazon’s Prime Video platform would eventually become the streaming home for Diamond’s games. Diamond, which has the local rights to about half the teams in Major League Baseball and the National Basketball Association and about a third of the National Hockey League teams, would continue operating its cable networks through its existing partnerships. It isn’t clear how much money Amazon is planning to invest or at what valuation. Diamond has received support from a select group of creditors for proceeding with the talks. Any transaction is subject to bankruptcy-court approval and could still fall through. Should the companies manage to strike a deal, it could help enable Diamond, which operates Bally Sports-branded networks, to stave off liquidation.

The largest skilled nursing facility in St. Louis has closed suddenly, forcing about 170 residents to be bused to other care centers. Many left with nothing but the clothes they were wearing, the Associated Press reported. The abrupt shutdown of Northview Village Nursing Home on Friday came after workers learned they might not be paid and walked out, confusing residents and their relatives. Many family members gathered through the day Saturday outside the facility on the city's north side. Some didn't immediately know where their loved ones were taken. The difficulties started Friday when, according to the union representing workers, more than 130 people went unpaid, and it became unclear if their checks would be forthcoming. Marvetta Harrison, a certified medical technician, said workers received emails from the company this weekend promising they’ll be paid, but it was unclear when. “This is real wrong,” Harrison said. “I have worked in that building for 37 years. Not only did they mistreat us, they mistreated the residents we take care of.” Northview Village has been fined 12 times for federal violations since March 2021, according to the Centers for Medicare and Medicaid Services. Fines totaled over $140,000 and ranged from $2,200 to more than $45,000. The federal agency gives Northview a one-star rating out of a possible five, but doesn’t spell out reasons for the fines.

The American Bankruptcy Institute (ABI) Subchapter V Task Force today released its “Preliminary Report of ABI’s Subchapter V Task Force on Maintaining the $7,500,000 Debt Cap for Subchapter V Eligibility” with findings to support permanently maintaining the eligibility limit of $7.5 million in aggregate noncontingent, liquidated debt for small businesses looking to reorganize under subchapter V. The Task Force’s Preliminary Report, which was also transmitted today to key members of Congress, is the result of nine months of public hearings, roundtable discussions and an industry survey inviting comment on Subchapter V. Read more.

FTX Trading Ltd. unveiled its latest proposal for returning billions of dollars to customers and creditors, kicking off a final round of potential squabbles about how best to end the bankruptcy case of the fraud-tainted crypto firm, Bloomberg News reported. The reorganization plan left some of the most important questions unanswered, including whether FTX will restart its defunct crypto exchange, how the company will estimate the value of some digital tokens and how much creditors can expect to get back. Next year, the plan will be sent to creditors for a vote — likely with key details added — before it goes to US Bankruptcy Judge John Dorsey for final approval. The major creditor and customer groups that have been involved in the chapter 11 case have agreed to the broad outlines of the plan. The payout plan calls for billions of dollars to be distributed as cash after much of the firm’s cryptocurrencies have been liquidated. Last month, FTX founder Sam Bankman-Fried was convicted of orchestrating a massive fraud that led to the collapse of his FTX exchange. The company filed for bankruptcy last year after Bankman-Fried agreed to turn over control of his empire to restructuring professionals. Since then, the 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.

Creditors of 4E Brands say findings of a survey they commissioned support their case for Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston to recuse himself from weighing in on a dispute over legal fees the maker of hand sanitizer paid its law firm, WSJ Pro Bankruptcy reported. The creditors are seeking the return to 4E Brands of fees it paid to the Jackson Walker law firm. The creditors say Isgur shouldn’t rule on their request because of his friendship and professional relationship of more than two decades with David R. Jones, a former bankruptcy judge who had been handling the company’s chapter 11 case. Results of the survey were made public late Wednesday after the creditors presented them in a hearing a day earlier before Chief Bankruptcy Judge Eduardo Rodriguez of the Southern District of Texas. At the hearing, Mark P. Jones, a public opinion survey analyst at Rice University, testified he provided 150 adults randomly selected across the Southern District of Texas with basic facts about the circumstances of the fee dispute without naming its parties, and then asked if a judge in the situation could be impartial. Roughly 80% of respondents said it was unlikely a judge could be impartial in the fee matter, said Jones, who isn’t related to the former judge. “They don’t know [Judge Isgur] as a person. Just looking at the objective facts in the case, these objective observers say this appears to be a case where Judge Isgur would not be able to be impartial,” said Jones. San Antonio-based 4E Brands filed for chapter 11 protection in February 2022, following the fallout from a recall of and lawsuits over its methanol-contaminated hand sanitizers.

Right-wing conspiracy theorist Alex Jones on Friday proposed a bankruptcy exit plan that offers to settle with Sandy Hook Elementary School shooting victims’ families by paying them at least $55 million over 10 years, Bloomberg News reported. The amount represents at least $30 million less than what the families had proposed, and is a fraction of the roughly $1.4 billion judges ruled they’re owed in defamation judgments against Jones related to to his lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Jones filed for bankruptcy protection a year ago, after the judgments. Those who choose to settle with Jones would share in a pot of at least $5.5 million annually over 10 years, according to a chapter 11 plan Jones filed with the US Bankruptcy Court for the Southern District of Texas on Friday. The plan requires court approval. Beyond that annual minimum, family members who settle could receive all the disposable income from Jones’ bankrupt Infowars parent company, Free Speech System LLC, plus half of his own income over five years, and then a quarter of his income for the next five years, according to his plan. In exchange for settling with Jones, Sandy Hook victim families would receive faster payments but wouldn’t be able to continue to chase him down after his plan for the full worth of their litigation claims, according to the proposal.