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FTX-affiliated cryptocurrency trading firm Alameda Research was granted a $175 million unsecured claim on the estate of bankrupt crypto lender Genesis Global Capital, according to a court filing dated Wednesday, Reuters reported. The settlement marks a significant reduction from the nearly $3.9 billion claim that FTX, which is also bankrupt, had asserted earlier this year. Genesis said the settlement was "fair and equitable" and would allow the company to avoid pursuing "protracted litigation," the outcome of which would be "inherently uncertain." Once-prominent digital asset exchange FTX and lender Genesis Global are two of several crypto firms that went belly up after a turbulent 2022 hit investor sentiment for bitcoin and other crypto tokens. FTX has previously said Genesis was a primary "feeder fund" for Alameda, loaning it crypto assets that it used for further loans and investments. As part of the settlement, the companies also agreed to release all claims against each other.

Bankrupt trucking company Yellow has struck a deal to sell its real estate to rival Estes Express Lines for a minimum of $1.3 billion, enough to roughly cover the loans the company accumulated before its chapter 11, WSJ Pro Bankruptcy reported. Estes, a rival trucker that had been vying to finance Yellow’s wind-down in bankruptcy, agreed instead to serve as a stalking-horse bidder for the property assets, meaning its offer is subject to higher or better proposals at a court-supervised auction, a lawyer for Yellow said at a court hearing Thursday. Yellow also accepted an offer from Citadel and Boston hedge fund MFN Partners, the trucker’s largest shareholder, to jointly provide a $142 million bankruptcy loan, according to Yellow lawyer Allyson Smith. The loan will fund operations at the business as it winds down and sells assets. Citadel will provide $100 million of the new bankruptcy loan, while MFN will fund the rest, Smith said. Yellow will seek bankruptcy court approval for both the debtor-in-possession loan, which will fund the company’s limited operations as it winds down, and the stalking-horse bid from Estes.

Logistics service provider Matheson Flight Extenders Inc. will permanently close its Atlanta facility in October and lay off 335 employees, according to a letter sent to the state through the Worker Adjustment and Retraining Notification (WARN) Act, the Atlanta Business Chronicle reported. The decision comes nearly a year after the Sacramento, California-headquartered company filed for voluntary chapter 11 protection. The WARN filing for the Atlanta facility, which is located at 1970 Maple Avenue in West Fulton, did not indicate if Matheson Flight intends to close other locations. The positions affected by the layoffs, which will start Oct. 15, include supervisors, assistant managers, forklift drivers and material handlers, according to the WARN filing. Matheson Flight contracts with the U.S. Postal Service to haul mail. It’s an affiliate of postal logistics contractor Matheson Trucking Inc., which also filed for voluntary chapter 11 protection during the same period.

Hawaiian Electric is speaking with firms that specialize in restructuring advisory work, exploring options to address the electric utility’s financial and legal challenges arising from the Maui wildfires, WSJ Pro Bankruptcy reported. Hawaiian Electric is facing a selloff in its stock and bonds, and has been hit with lawsuits alleging that its actions both before and during the wildfires exacerbated the devastation Maui residents have suffered. The company is in discussions over the strategies the company can pursue and to determine whether it needs to hire legal and financial advisers, the people said. More customer lawsuits are expected in coming weeks to increase the costs of defending and settling claims for Hawaiian Electric just as its access to financing is being threatened. S&P Global Ratings downgraded Hawaiian Electric’s credit rating to junk on Tuesday, saying the wildfires destroyed a significant segment of the company’s customer base and will take many years to restore. S&P also said that wildfire lawsuits seeking compensation for injuries, deaths and property damage will weigh on the company’s credit quality.

Mallinckrodt said on Tuesday that it was preparing to seek bankruptcy protection for the second time in three years after struggling to make a required $200 million settlement payment to opioid victims, Reuters reported. The drugmaker, one of the largest makers of opioids, said that it is negotiating a restructuring support agreement with its stakeholders, while deferring deadlines for missed debt payments and opioid settlement payments to next week. The agreement contemplates a second bankruptcy filing that would result in no recovery for holders of its ordinary equity shares, Mallinckrodt said. The Ireland-based company failed to make scheduled payments to its lenders and opioid creditors in June, and it has sought several short-term extensions of the debt deadlines. Mallinckrodt emerged from bankruptcy last year after winning court approval for a reorganization plan that included a $1.7 billion settlement. It paid the first $450 million of that settlement after emerging from bankruptcy, but it failed to make a $200 million payment due in June. The company on Tuesday said it has reached an agreement to extend the opioid payment due date to Aug. 22.

Sinclair Broadcast Group Inc. wrongfully drained at least $1.5 billion from its regional-sports-network subsidiary in the years leading up to its bankruptcy, a new lawsuit alleges, MarketWatch.com reported. In a lawsuit filed last month but made public Wednesday, Diamond Sports Group — which broadcasts nearly half of all Major League Baseball, National Basketball Association and National Hockey League games — accused its parent company of a “nefarious strategy” that sent it “careening toward bankruptcy.” According to the lawsuit, which was filed in U.S. Bankruptcy Court for the Southern District of Texas, Sinclair took more than $100 million a year in management fees from Diamond after acquiring the sports network for $10.6 billion from the Walt Disney Co. DIS, -0.82% in 2019, loaded it with billions in debt and funneled resources from the company while its business was left to languish. According to the suit, MLB Commissioner Rob Manfred testified that Sinclair Executive Chairman David Smith told him in late 2021 that he intended to “continue to milk” Diamond out of hundreds of millions in management fees along with “whatever else” he could take from the company until Sinclair’s original investment in the regional sports network was recouped.

A U.S. judge on Wednesday converted Christmas Tree Shops' bankruptcy to a chapter 7 liquidation, saying a court-appointed trustee should take over the bargain retail chain's wind-down and address doubts about unpaid employee wages, Reuters reported. Christmas Tree Shops filed for bankruptcy in May, hoping to keep most of its stores open while addressing its debt. But the company pivoted to a full liquidation in July after its store closing sales failed to meet revenue targets and Christmas Tree Shops defaulted on a $45 million bankruptcy loan. During a hearing before U.S. Bankruptcy Judge Thomas Horan in Wilmington, Delaware, a lawyer for Christmas Tree Shops, Harold Murphy of Murphy & King, traded barbs with an attorney for bankruptcy lender and store liquidator, Hilco Global. Murphy said that Hilco's store-closing sales missed revenue targets by $14 million. Hilco counsel Gregg Galardi of Ropes & Gray countered that the retailer's management exceeded its loan budget and told employees they would receive bonuses that Hilco never agreed to fund.

Loss-making private jet firm Wheels Up Experience nabbed a key $500 million lifeline but still faces turnaround challenges, as demand for private travel softens in the wake of the COVID-19 pandemic and rival operators lure some of their customers, Reuters reported. Wheels Up avoided a possible bankruptcy when it secured backing from investors on Tuesday, including U.S. carrier Delta Air Lines. Shares rose 11% on Wednesday in midday trading. But the company still has work to do to become profitable in a more difficult environment, said business aviation consultant Brian Foley. Two operators have closed down since May in the face of diminished traffic and higher labor costs could force some private-jet operators out of business. "There will be some more casualties," Foley said. Rivals, meanwhile, say they have been picking up some of the company's customers. "I don't wish for turmoil in the market at all, but I'm an opportunist," said Jim Segrave, CEO of private operator FlyExclusive, who said his company has attracted customers from Wheels Up, the third-largest private-flight operator last year.

The Texas-investment firm that sought to take over Mercy Hospital in Iowa City is now asking the court to appoint an examiner to investigate the hospital's bankruptcy filings ahead of its sale to the University of Iowa, the Des Moines Register reported. Preston Hollow Community Capital, a major investor in the 194-bed Iowa City hospital, called into question the hospital's plans to liquidate through a bankruptcy fire sale process to the university health system for $20 million. In court filings this week, the Dallas-based company accused Mercy Iowa City leadership of mismanagement, leading to the hospital's "financial freefall" in recent years. As a result, Preston Hollow Community Capital asked the court to approve "a comprehensive financial and legal review" of the hospital, its board of directors, its former managing partner MercyOne and its other partners, including Allscripts Healthcare Solutions, an electronic health records vendor. "In order to achieve that outcome, Preston Hollow Community Capital has requested the court appoint an examiner in line with longstanding provisions of the U.S. Bankruptcy Code," the company said in a statement. "This step will help maximize financial recovery for all creditors, including the pensions of hospital employees and retirees, while at the same time ensuring the sale process is fair and accurately reflects the hospital’s overall value to the community." Mercy Iowa City officials disputed the allegations made by the investment firm in a statement this week. 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.