A group of Endo International lenders have proposed paying up to $465 million to settle U.S. government claims that have held up the drug company's bankruptcy restructuring, according to court documents filed this week, Reuters reported. The lender group, which includes investment firms Oaktree Capital Management, Silver Point Capital, and Bain Capital, has offered to buy Endo in exchange for wiping out $6 billion in company debt, but objections from the U.S. Department of Justice have blocked the sale from moving forward. The lenders said they have not yet reached final agreement with the Justice Department, and they are seeking financial contributions from other Endo stakeholders for the proposed settlement, according to a Monday court filing in federal bankruptcy court in New York. The lender group had previously agreed to fund nearly $600 million in settlements that Endo had reached with states and people afflicted by the U.S. opioid crisis resolving claims it helped fuel the epidemic with its painkillers.
Bankrupt crypto lender Genesis Global Holdco LLC is suing Gemini Trust Co. to recover nearly $690 million that Genesis says the crypto platform withdrew from Genesis in the months before the company’s chapter 11 filing in January, Bloomberg News reported. Genesis said in a Tuesday complaint in New York bankruptcy court that the withdrawals made by Gemini were unprecedented and amounted to a run-on-the-bank that came at the expense of the crypto lender’s other creditors. The lawsuit escalates disputes in the bankruptcy between Genesis and Gemini, which collaborated on its Gemini Earn program that let clients collect about 8% interest on their digital-asset holdings. Last month, Gemini sued Genesis in an attempt to determine who rightfully owns a slug of shares in the Grayscale Bitcoin Trust now worth nearly $1.6 billion.
Sandy Hook Elementary School shooting victims’ families proposed that conspiracy theorist Alex Jones wind up his bankruptcy by paying creditors at least $85 million over 10 years or undergo an orderly liquidation, Bloomberg Law reported. The Sandy Hook families, along with an official committee of Jones’ creditors, argued in court papers Wednesday that the 11-month-long bankruptcy case for the right-wing radio host should be brought to a close by February. The creditors laid out a dual-option proposal in light of what they say is Jones’ failure to advance a viable way out of chapter 11 while continuing to enjoy an extravagant lifestyle costing up to $90,000 a month. The plan, as described to the US Bankruptcy Court for the Southern District of Texas, would allow Jones to undergo an orderly liquidation of his assets or adhere to a 10-year fixed-payment plan with distributions of at least $8.5 million a year. Under the fixed-payment plan, the creditors would agree to release their roughly $1.5 billion in state court judgment awards stemming from Jones’ repeated lies that the 2012 massacre of elementary school students and teachers was a hoax. Both options contemplate preserving causes of actions against third parties affiliated with Jones and his Infowars program.
WeWork said on Tuesday that it had secured commitments for up to $682.5 million in debtor-in-possession financing from some of its lenders, weeks after the shared office space provider filed for bankruptcy protection, Reuters reported. The SoftBank-backed company is seeking to address more than $4 billion in debt and unsustainable future rent costs through a bankruptcy plan. WeWork, once the most valuable U.S. startup, struggled to achieve profitability as a rise in work-from-home trends following the pandemic soured demand for its shared office spaces. In a regulatory filing, WeWork disclosed it had entered into a commitment letter on Nov. 15 with parties including Goldman Sachs International Bank, JPMorgan Chase Bank and SoftBank Vision Fund 2 for the financing of a letter-of-credit facility. The financing could be as much as $682.5 million but it could also be smaller than that depending on other conditions, WeWork said, adding that the parties have agreed to provide the financing individually and not jointly.
Lion Star, the private company that operates the Nacogdoches Memorial Hospital, has filed for bankruptcy in federal court after the Nacogdoches County Hospital District voted to terminate its lease with the group last month, CBS19.tv reported. According to a petition filed in U.S. Bankruptcy Court of the Northern District of Texas on Nov. 17, Lion Star owes anywhere between $10 million and $50 million to an estimated 200 to 999 creditors. Another court document that details a list of the 20 largest claims shows Lion Star owes over $2.8 million to a clinical staffing company from Arkansas, over $1 million to an electronic health record company and more then $580,000 to a biomedical services group based in California. Other debts listed include electricity, telephone services and other services and recordkeeping. This bankruptcy filing comes after the Nacogdoches County Hospital District board voted to terminate the 10-year lease agreement with Lion Star on Oct. 13. In the agreement, the district is serving as the landlord while Lion Star is the tenant.
Bankrupt pharmacy chain Rite Aid Corp. has until March 1 to complete its turnaround under a timeline approved by a federal judge yesterday, Bloomberg News reported. Bankruptcy Judge Michael Kaplan scheduled a final hearing that day to decide the fate of the company’s reorganization proposal. The ruling comes after complaints that the case was moving so fast it threatened to harm lower-ranking creditors, including people who claim Rite Aid wrongly sold addictive pain killers. The company, backed by senior lenders, had urged Judge Kaplan to hold the hearing in February, arguing that the longer Rite Aid stays in bankruptcy, the more likely it is to liquidate instead of finding a buyer willing to rescue the retailer. Rite Aid faced pressure from its two official creditor committees to slow the pace of the reorganization. A panel of lower-ranking, unsecured creditors and a group representing opioid victims argued that they need more time to review the $3.45 billion loan package Rite Aid says it needs to help fund its reorganization. The company has filed a proposal built on the assumption Rite Aid will have a successful pair of auctions set for December. The heart of the proposal can’t be finished until after the sale is locked down.
Some owners of WeWork Inc.’s more than 700 properties are objecting to the company’s plans to shut down many of its locations in bankruptcy, Bloomberg News reported. Objections filed yesterday pushed back on the company’s timeline for rejecting leases, and rules they say wrongly favor WeWork. For example, one landlord claims WeWork would retain the right to stay in a location, even after canceling a lease. The filings provide a fresh look at the delicate balance WeWork must strike as it seeks to renegotiate or shed onerous leases, a key part of its bankruptcy plan. It’s in talks with landlords for hundreds of properties about rent cuts and other concessions, and must be careful not to push so aggressively that landlords choose to walk away and seek new occupants. “WeWork is walking a fine line because it has to aggressively cut rent costs in order to reorganize successfully, but at the same time its future depends on maintaining healthy relationships with some of those same landlords if it hopes to strike new agreements with them after emerging from bankruptcy, ” said Evan DuFaux, a special situations analyst at the research firm CreditSights. “The case is likely to turn on the landlords’ strategy regarding renegotiation and rejection of leases.” Regulatory filings show that plans during bankruptcy discussions with creditors involved shuttering nearly half of its U.S. and Canadian locations. The company hasn’t shared new figures since filing for chapter 11, but said in a response to questions from Bloomberg that the disclosed numbers were “outdated” and didn’t reflect the “significant progress” made in talks since then.
