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A lawyer who is trying to broker a settlement in Johnson & Johnson’s baby powder cancer lawsuits proposed that it can resolve the decade-long litigation and any future cases for $19 billion — $10 billion more than the company offered in two failed trips through bankruptcy court, Bloomberg News reported. James Conlan, a former law firm partner who used to defend J&J against baby powder suits, now runs a business aimed at helping corporations corral liability in mass personal injury litigation. He floated his proposal to J&J’s board in November, according to a court filing unsealed this week. But J&J rejected it and insisted a third chapter 11 filing by one of its units is the best way forward, even though courts previously ruled the world’s largest maker of health-care products wasn’t in enough financial distress to use that process. But Conlan’s proposal — backed by leaders of law firms suing J&J over claims that the talcum in its baby powder contained cancerous asbestos — is the first time plaintiffs have said publicly how much J&J should pay to resolve more than 50,000 cases that have created an overhang on the company’s stock price. Clare Boyle, a J&J spokeswoman, said in a statement that an “improper and unethical collaboration” between Conlan and a plaintiffs’ lawyer “was designed to thwart a reasonable and appropriate resolution of the talc litigation.” J&J contends its talc-based products don’t cause cancer and it has marketed its baby powder appropriately for more than 100 years. Still, the New Brunswick, New Jersey-based company has been moving since 2020 to replace talcum powder in its products with cornstarch.

Yellow, the trucking company that shut down its operations and filed for bankruptcy protection this summer, on Wednesday rejected a trucking executive’s bid to buy and restructure its business, the New York Times reported. In a letter sent to the prospective buyer, Yellow’s lawyers contended that the bid was “not viable,” saying they had not gotten any indication that the bid had the support of the company’s creditors, including the Treasury Department, which had made an emergency loan to the company during the pandemic. The letter also said that the plan to revive Yellow underestimated the costs and difficulties of such an effort. The bid would not be “confirmable by a bankruptcy court or in the best interests of Yellow’s stakeholders,” the letter said. Yellow’s management intends to soon complete its own bankruptcy plan, which involves selling off the company’s assets to different buyers. The company this week released the results of an auction in which the winning bidders committed to spend nearly $1.9 billion on 128 terminals, Yellow’s most valuable assets. On Dec. 12, the company plans to seek approval for the sales from a federal bankruptcy judge in Delaware.

Cryptocurrency prices have been on a wild tear this year. But thousands of FTX customers, whose tokens have been trapped on the exchange for more than a year, are missing out on the action, WSJ Pro Bankruptcy reported. That is because the new managers running FTX plan to sell all of their bitcoin and other cryptocurrency and return a sum of cash to customers, according to a draft plan FTX is expected to propose to a bankruptcy judge later this month. While the run-up in crypto prices means FTX could have more money to distribute, some FTX customers are realizing they may never recover any of their increasingly valuable tokens. The exchange says it is easier to repay customers in cash because of the difficulty in untangling the company’s poor record-keeping and figuring out who has title to the exchange’s tens of millions of leftover tokens. U.S. bankruptcy law also says unpaid creditors can only demand to be repaid in dollars, no matter if they are owed euros, yen, or bitcoin. The expected proposal is a shock, many FTX customers say, as many of them believed they would eventually recover some of their frozen savings. Read more.

Be sure to listen to the latest ABI TechBytes podcast examining fiduciary duties in cryptocurrency cases!

Mercon Coffee Group, one of the world's largest coffee traders, has filled for bankruptcy protection in the United States due to what it defined as "exceptionally challenging operating environment," according to a document seen by Reuters. Mercon, which has operations in all the major producing regions including Brazil, Vietnam and Central America, said in a letter sent to clients that problems in recent years such as the logistical disruption during the pandemic, frost and drought in Brazil, price volatility and rising interest rates all combined to hurt the company's financial situation. In the letter, signed by Mercon's Chief Executive Oscar Sevilla, the company said that lenders have elected "not to extend credit agreements, resulting in extremely tight working capital conditions." Court documents from the U.S. Bankruptcy Court for the Southern District of New York show Mercon and its affiliates in several countries have a total debt of $363 million. Among the largest creditors are several banks in the countries where Mercon operates, but also trade companies in Brazil, Central America and the United States.

Hildred Capital Management is set to buy bankrupt baby brand Hello Bello after nobody bested the healthcare-focused private equity firm’s $65 million opening offer, according to court papers, Bloomberg News reported. Hello Bello, best known for its sustainable diapers, filed for chapter 11 protection less than two months ago. Actors Kristen Bell and Dax Shepard launched the Los Angeles-based company in 2019 alongside a deal to sell the products exclusively at Walmart Inc., according to a statement at the time. Today, its products are also sold at other retailers and online. Hildred plans to combine Hello Bello with Hyland’s Naturals, another portfolio company that sells supplements and over-the-counter medicine, under one umbrella parent company, according to people with knowledge of the plans. Hildred is set to hold Hello Bello in a newly launched continuation fund expected to close above $650 million.

Troika Media Group, an advertising professional services company, filed for bankruptcy Thursday, after defaulting on debt it raised to finance the acquisition of a marketing agency last year, WSJ Pro Bankruptcy reported. New York-based Troika filed for chapter 11 with the Bankruptcy Court of the Southern District of New York with a deal to sell all of its assets to existing lender Blue Torch Finance. The creditor would swap the debt it lent to the company for assets. Troika can entertain higher and better offers and the deal is subject to court approval. “We expect that the process will be relatively short and that the company will have adequate liquidity” to operate normally throughout the process, interim CEO Grant Lyon said in an announcement Thursday. Blue Torch is also providing the company with a $11 million debtor-in-possession loan which will be used to finance the company’s bankruptcy and pay critical vendors, according to a court filing by Lyon. In June 2022, Troika defaulted on the debt it took on to acquire New York-based marketing agency Converge Direct last year for $125 million, according to Lyon. Soon after the acquisition, Troika appointed Sadiq Toama, one of the owners of Converge, as its CEO. Toama soon shut down other money-losing businesses and made Converge the company’s core business, he added. Blue Torch provided a $75 million loan to finance the deal.

Tampa’s fast-casual Mexican food chain Taco Bus has filed for chapter 11 bankruptcy to restructure more than half a million dollars in debt, the Tampa Bay Business Journal reported. A Small Business Administration Emergency Injury Disaster Loan received during the pandemic accounted for $500,000 of Taco Bus’s total liabilities. The SBA loan was partially secured by $25,000 of equipment as collateral, according to the filing. Taco Bus also owes RJCE Properties LLC around $14,000 in rent and the Internal Revenue Service $11,200 for taxes to resolve four liens filed between 2018 and 2021, the filing shows. Taco Bus also received a $240,000 grant from the SBA during the pandemic, which it does not believe it must repay, according to the filing. Taco Bus was previously named one of the most popular food trucks in the U.S. after a feature on Food Network’s “Diners, Drive-Ins and Dives” in 2011. Taco Bus changed ownership in 2013 when Founder Rene Valenzuela sold off a majority of the company. While Valenzuela reportedly maintained a minority stake after that deal, Umar Farooq was listed as the sole owner of Taco Bus in the filing and has been listed as president of the company since 2017, according to Florida’s division of corporations. Taco Bus has 10 locations across Tampa Bay, three fewer than reported in 2019 when the company opened a location in Orlando.

A Bloomberg report draws attention to the financial distress faced by suburban moms who invested in boutique fitness franchises such as CycleBar, Pure Barre, Club Pilates, Stride, and Row House, among others. These franchises, offering specialized workouts to cater to individual preferences, have reportedly led many franchisees, particularly suburban moms, towards financial ruin. Franchisees are attracted to brands like CycleBar, a fitness chain akin to SoulCycle, but minus the high-profile amenities and atmosphere. Targeting a demographic of thirty- and fortysomething women, CycleBar offers upscale, technology-infused spinning classes. Other specialized fitness franchises cater to niche workout preferences, such as barre workouts at Pure Barre, Pilates at Club Pilates, treadmill-based interval training at Stride, and rowing at Row House. Additional fitness experiences include AKT for dance workouts, Rumble Boxing for a nightclub-style boxing gym, Body Fit Training for traditional workouts, YogaSix for yoga, and StretchLab for muscle stretching services. Despite the allure of owning a fitness franchise, many suburban moms who invested in these brands are now facing financial devastation. The report highlights the possible pitfalls of franchising in an industry marked by its competitiveness and volatility. The situation is exacerbated by rising costs, labor shortages, and economic instability, leading to significant losses for companies involved in physical operations.

In a move that could further complicate the already contentious final chapter in the Roman Catholic Diocese of Rochester’s bankruptcy, the U.S. Trustee is urging the court to reject competing plans of reorganization filed by the diocese and the Continental Insurance Co., the Rochester Beacon reported. The Trustee’s Dec. 5 filing comes on the eve of hearings scheduled for the court to consider the dueling plans filed by the diocese and Continental. Also known as CNA, Continental is a lone holdout among several insurers refusing to go along with a plan agreed to by the diocese, other insurance companies and survivors with claims in the bankruptcy. Projecting that the bankruptcy would end with a more than $100 million payout to abuse survivors, diocese officials stated early on that they expected the church’s liability carriers to shoulder the bulk of the financial burden. The diocese and Continental filed competing reorganization plans earlier this year after ongoing tortuous, court-ordered negotiations failed to yield an agreement acceptable to the official creditors' committee. Such plans are the final step in resolving chapter 11s. Made up of abuse survivors, the creditors committee is a body appointed by the U.S. Trustee to look out for the interests of the more than 400 sexual abuse survivors who have now waited more than four years for the chapter 11 to wrap up. Both the insurer’s and the diocese’s plans contain provisions that render them unconfirmable and should be scrapped, attorneys in the Trustee’s New York City office maintain in the Dec. 5 filling.