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Mallinckrodt said it plans to file for bankruptcy in the coming days after reaching a deal with most of its lenders to restructure its debt as the company struggles to make opioid settlement payments, WSJ Pro Bankruptcy reported. The filing will mark the company’s second bankruptcy filing. Mallinckrodt, one of the largest makers of opioids, emerged from chapter 11 last year. The company said it has reached a restructuring deal that has the support of most of Mallinckrodt’s creditors. The agreement provides for a final payment of $250 million to an opioid victims compensation trust. Mallinckrodt said it has already paid $450 million to the trust, which was established to fund addiction treatment and address the U.S. opioid crisis. The creditor agreement also would reduce the company’s total funded debt by about $1.9 billion, Mallinckrodt said. The company said it expects to complete the chapter 11 process in the fourth quarter of this year, and said it is still operating normally.

Bankruptcy courts nationwide have seen more litigation-funding deals in recent years, as distressed companies and their creditors sell the rights to pursue lawsuits in exchange for upfront cash, WSJ Pro Bankruptcy reported. With the pace of corporate defaults picking up, litigation funding could fuel more disputes in bankruptcy court that can alter creditors’ recoveries. “We’re seeing a recognition of litigation assets as another source of value for companies and their unsecured creditors in a more robust way than we have in the past,” said Ken Epstein, investment manager and legal counsel at litigation funder Omni Bridgeway. Benefit Street and three other investment firms put up nearly $5.6 million to bankroll a lawsuit on behalf of unsecured bondholders of Sanchez, which exited bankruptcy in 2020 under the new name Mesquite Energy. Earlier this month, a bankruptcy judge ruled that 70% of the company belongs to unsecured creditors, rather than to its former bankruptcy lenders Fidelity Investments and Apollo Global Management. Benefit Street and the three other asset managers negotiated for 90% of the lawsuit’s proceeds in return for their financing. That means only 10% of the recent award would be spread among all the company’s unsecured creditors. One of them, Lake Whillans Capital, sued earlier this month to challenge the litigation loan, saying that a court-appointed creditor representative signed away too much of the lawsuit’s value.

WeWork Inc. is rounding up advisers for help with a restructuring as it struggles with a heavy debt load and poor financial performance, Bloomberg News reported. The co-working giant reportedly has hired real estate adviser Hilco Global, once again tapped consultant Alvarez & Marsal and re-engaged law firm Kirkland & Ellis for advice on its options. The company is seeking to avoid a chapter 11 bankruptcy filing and restructure its debts out of court, one of the people said. WeWork’s ability to stave off bankruptcy will depend in large part on whether it can terminate or renegotiate a substantial number of its leases in more expensive markets, the people said. The company earlier this month told investors there is “substantial doubt” about its ability to stay in business. “We will continue to invest in our product offerings while simultaneously taking necessary steps to reduce rent and tenancy costs. Our members remain our priority and, regardless of any near-term actions we may take, we will continue to operate and serve them for the long term,” a representative for WeWork said in a statement.

Bankrupt crypto exchange FTX has hired U.S. crypto firm Galaxy as an advisor to help hedge and sell its crypto holdings, according to court filings yesterday, Reuters reported. Hedging of bitcoin and ether will provide a means to lessen FTX's exposure to adverse price movements before their sale, the filing said. Galaxy, owned by billionaire investor Mike Novogratz, will also help "stake" FTX's crypto, a process where crypto is lent to validate blockchain transactions, earning interest in the process. "Galaxy Asset Management has extensive experience in areas relevant to digital asset management and trading, including with respect to the types of transactions and investment objectives contemplated," the filing said, referring to the investment advisory arm of Galaxy. FTX filed for bankruptcy in November 2022 in the wake of claims that the company misused and lost billions of dollars worth of customers' crypto deposits.

Juul Labs plans to lay off roughly 30% of its workforce, whittling its operations as it seeks to raise capital or sell the company, the Wall Street Journal reported. The e-cigarette maker has been on tenuous financial footing since U.S. regulators last year ordered its vaping products off the market, then suspended the ban pending the company’s appeal. Juul staved off bankruptcy last fall after some early investors bailed it out. Since then, Juul has sought and failed to make a deal with a larger company on a sale, investment or licensing arrangement that could provide capital to continue its operations. Juul is awaiting a final decision from the Food and Drug Administration on whether its current products can remain on the U.S. market. The dispute hinges on unresolved technical questions in Juul’s application for federal authorization. Last month, in a separate application, Juul submitted its next-generation vaporizer for U.S. clearance. Juul hasn’t been able to strike a deal at what it deems a fair valuation without FDA authorization for one of its devices, a company spokesman said. Potential investors also have expressed concerns about the proliferation of illegal disposable vaping products, which have taken market share in the U.S. from Juul and others.

SVB Financial Group said it agreed with the Justice Department to tweak the financial terms and benchmarks of a plan to pay millions of dollars in bonuses to executives at a subsidiary, Bloomberg News reported. Bonus benchmarks for nine leaders of SVB Capital — the capital and investment arm of the bankrupt company — are now more “substantive and focused,” James Bromley of Sullivan & Cromwell said at a Tuesday hearing. The total payout for executives at lower performance benchmarks was reduced by $500,000, Bromley said, while the top level of payouts was increased by the same amount. The changes come after the Justice Department’s bankruptcy watchdog said the plan’s performance benchmarks were vague and not rigorous. The “true purpose” of the initial $12.5 million in bonuses was to maximize SVB Capital’s sale value by keeping the executives in place, the department said. SVB Financial Group, the former parent of Silicon Valley Bank, filed chaper 11 in March. It’s exploring a sale of SVB Capital, its primary remaining asset. The US Trustee, part of the DOJ, oversees bankruptcies on behalf of all creditors, and can object to a companies’ restructuring plans.