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Some first-lien lenders to Joann Inc. are seeking advice from law firm Gibson Dunn & Crutcher as the fabric and crafts retailer looks to build up its cash reserves, Bloomberg News reported. Joann had about $19.7 million in cash and $61.3 million of availability under its revolver as of April 29, regulatory filings show. Its term loan due 2028 was quoted at about 47.5 cents on the dollar Thursday, according to data compiled by Bloomberg. Joann is exploring a sale-leaseback of its corporate headquarters in Hudson, Ohio. The company has undertaken sale-leaseback deals in the past and is always looking for strategic opportunities. The company has also been working with Alvarez & Marsal’s consumer & retail group since February to explore process optimization and cost savings related to store labor and information technology. It’s also getting advice from Houlihan Lokey Inc., which helped the company raise a $100 million first-in last-out facility that was completed in March.

Shares of Hawaiian Electric Co.'s parent fell more than 18% by market close Friday, one day after the utility was sued by Maui County over the fires that devastated Lahaina earlier this month, the Associated Press reported. Maui County accused Hawaiian Electric of negligently failing to shut off power despite exceptionally high winds and dry conditions — saying that the destruction from the deadly Aug. 8 fires could have been avoided if the company had taken essential actions. Outrage towards Hawaiian Electric grew as witness accounts and video indicated that sparks from power lines ignited fires as utility poles snapped in the winds, which were driven by a passing hurricane. In the weeks since the fires — which killed at least 115 people and left an unknown number of others missing — broke out, Hawaiian Electric Industries Inc.'s market capitalization has fallen from $4.1 billion to $1.1 billion. Late Thursday, the company said that it would suspend its quarterly dividend of 36 cents per share, starting in the third quarter, in order to improve its cash position. In a Friday report, analysts at Wells Fargo said that Hawaiian Electric is “potentially under severe financial duress” and “could face a future liquidity event” — pointing to the company's struggles to bring in external funds, recent downgrading of credit ratings from the S&P, as well as the costs of normal operating expenses and an upcoming $100 million debt maturity for the utility.

Business and legal services provider Kroll said it’s cooperating with federal law enforcement after a hacker gained access to files that may have contained personal information for customers of bankrupt crypto platforms FTX, BlockFi Inc. and Genesis Global Holdco, Bloomberg News reported. Kroll said on Friday that it appears the attack occurred on or about August 19 and that the company is cooperating with the Federal Bureau of Investigation. Kroll took immediate action to secure the three affected accounts and “a full investigation is underway,” the company said in a statement. The hacker appears to have accessed files on Kroll’s cloud system that may have contained customer names, addresses, emails and other information on claims creditors have with the three crypto firms, the company said. An attacker used a so-called “SIM swap” attack to gain access to a Kroll employee’s T-Mobile mobile phone number, Kroll said. Generally, such scams involves someone taking over a target’s phone number by getting a phone service provider to transfers numbers to phones the attacker controls. Kroll and a handful of other private companies provide administrative services to companies in chapter 11. Kroll said that it has no evidence to suggest its other systems were impacted in the hack and warned customers of Genesis, FTX and BlockFi about potential phishing scams that could seek unauthorized access to their crypto wallets.

A group of Wall Street firms that lent hundreds of millions of dollars to WeWork is exploring the possibility of a bankruptcy filing that could help the company exit from expensive office leases, one of several options under discussion, WSJ Pro Bankruptcy reported. After WeWork raised doubts about its ability to stay in business a few weeks ago, fund managers including BlackRock, King Street Capital and Brigade Capital are holding preliminary talks about the company’s restructuring options and indicated that they would support a plan for WeWork to file for chapter 11 bankruptcy. The creditors haven’t presented proposals related to a bankruptcy or debt restructuring to the company’s board. Bankruptcy could allow WeWork to shed a portion of its expensive commercial real-estate leases and in the process hand over control of the company to creditors like themselves. If a bankruptcy process is pursued, WeWork would likely restructure its debts and offer creditors shares in the reorganized company. The fund managers have become some of WeWork’s most important investors after they lent $1.2 billion in new debt to the company in March, accounting for about 50% of the company’s long-term debt, according to public filings. If WeWork is able to renegotiate a sufficient number of its high-cost office leases with landlords and bring down its cost of rent, the company may not need to file for bankruptcy and the company could possibly avoid restructuring its debts.

A bankrupt California hospital will receive a $10 million loan from a new state program to aid troubled providers, Bloomberg News reported. The loan would throw a lifeline to the San Benito Health Care District, which operates Hazel Hawkins Memorial Hospital in Hollister. San Benito filed for a rare Chapter 9 bankruptcy in May as it faced waning cash and unfunded pension obligations. Hazel Hawkins is one of 17 facilities to receive a loan through the program, a state press release outlined on Thursday. The community hospitals will be award a combined total of close to $300 million of assistance. “Across the country, community hospitals are experiencing financial stress like never before. These hospitals are often the only acute health care access point in their area,” said Governor Gavin Newsom said in the statement. “In partnership with the legislature, we are working to keep the doors open so Californians can access critical care close to home.” Like hundreds of other ailing rural hospitals, Hazel Hawkins caters to poorer patients lacking private insurance, or any insurance at all. Meanwhile, US hospitals still contend with higher labor costs and staffing shortages exacerbated by the pandemic. Hazel Hawkins said it would exhaust its cash next year and needed to restructure its outstanding obligations as it sought a buyer or partner, according to court papers. Read more.

The financially troubled healthcare sector will be the focus of the ABI Healthcare Program, September 18-19, 2023, in Nashville, Tenn. For more information and to register, click here.

A group of bond investors is expected to back a new restructuring plan for Puerto Rico’s power utility but would have to contend with other creditors that want to keep fighting for a better deal, the Wall Street Journal reported. BlackRock, Nuveen and Franklin Advisers are nearing a restructuring deal to write down $8.3 billion in debt owed by the bankrupt electric monopoly to a fraction of that amount. The new deal would open a path to ending the Puerto Rico Electric Power Authority’s six-year bankruptcy case and has divided bondholders that until recently were united in negotiations. Bondholders including GoldenTree Asset Management are preparing to battle in court to try to sink the debt plan, due to be filed in court today. BlackRock and others owed nearly $2.4 billion recently broke with a longstanding Prepa bondholder committee advised by law firm Kramer Levin Naftalis & Frankel and formed their own splinter group with lawyers from Paul Weiss Rifkind Wharton & Garrison, court records show. GoldenTree also has hired its own lawyers from White & Case.

Shares of Orbital Infrastructure Group plummeted after the company and multiple subsidiaries filed voluntary chapter 11 petitions in federal bankruptcy court, extending a selloff that ravaged shares on Wednesday, MarketWatch.com reported. The stock dropped 29% to 85 cents in off-hour trading. When the market closed Wednesday, shares had fallen by a third that day and by 96% over the preceding 12 months. The infrastructure services platform said on Wednesday that it received notice from Nasdaq that it was violating listing requirements by failing to file a quarterly report, spurring the initial selloff. Orbital Infrastructure said it had until Aug. 25 to request a stay of the suspension of its shares from the exchange. Then late Wednesday night, the Houston-based company disclosed that it and four subsidiaries had filed for chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas. The bankruptcy filing excludes subsidiaries Front Line Power Construction and Gibson Technical Services, which are being sold as part of the bankruptcy process. Orbital Infrastructure has entered into purchase agreements with each company's lenders, who are considered "stalking horse" bidders as the purchase agreements contain terms against which competing offers will be solicited during a chapter 11 auction process.