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The collapse of one of America’s largest trucking companies is reverberating across the economy, from domestic shipping and real-estate markets to Wall Street, WSJ Pro Bankruptcy reported. Yellow was a $5.2 billion business as recently as last year when it moved around 50,000 shipments a day in a trucking network that made it a fundamental part of the supply chains of hundreds of U.S. companies. The rapid wind-down of its business last month, capped by the shutdown of all operations and a bankruptcy filing in recent days, is leaving behind a trail of winners and losers as the 99-year-old trucker disappears from the highways. The most immediate winners are Yellow’s competitors in the less-than-truckload sector, known as LTL, a segment of the trucking industry that acts as a kind of circulatory system for the goods economy by having trucks carry cargo for multiple customers on the same trailer in fast-paced distribution networks. The clearest losers in Yellow’s demise are the company’s workers, who were laid off, dismissed and locked out of closed terminals and offices last month as the trucker wound down its business. The loss of some 30,000 jobs is the largest at a single company since Boeing at the end of 2020 announced it would cut its workforce by around 30,000 jobs, according to Challenger, Gray & Christmas, an outplacement services firm.

The University of Iowa has revealed plans to acquire Mercy Hospital on the heels of the organization's recent bankruptcy filing, the Iowa City Press-Citizen reported. Mercy "voluntarily" filed a bankruptcy petition, the company announced in a press release Monday morning. The 194-bed facility has served area residents since 1873. “Mercy Iowa City believes this plan is the best path forward to preserve our hospital operations,” said Tom Clancy, Chairman of the Board and CEO of Mercy Iowa City in a press release. “As we implement this plan, our dedicated Mercy Iowa City staff remain steadfast in their commitment to provide compassionate care to our community.” The State of Iowa Board of Regents will consider the university's proposed $20 million acquisition of Mercy's facilities and business operations at Tuesday morning's special session.
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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.

U.S. trucking firm Yellow Corp. filed for chapter 11 protection yesterday and said that it would wind down, after struggling with a mounting debt load and following tense contract negotiations with the Teamsters Union, Reuters reported. The nearly 100-year-old company's bankruptcy filing in a Delaware court estimated assets and liabilities of $1 billion to $10 billion, with more than 100,000 creditors. The collapse of Yellow, formerly called YRC Worldwide, puts about 30,000 workers at risk when the freight industry is already grappling with a slump in volumes. Yellow said yesterday that it intends to fully pay back a $700 million loan former President Donald Trump's administration issued to bail out the long-troubled firm in 2020 under a pandemic relief program. The company has $1.3 billion in debt payments coming due in 2024, including a $567.4 million private-equity term loan in June and the U.S. loan in September.

Oxycontin maker Purdue Pharma on Friday asked the U.S. Supreme Court to reject the U.S. Department of Justice's request to delay its multi-billion-dollar bankruptcy settlement resolving thousands of lawsuits against it over the opioid epidemic, Reuters reported.The department's bankruptcy watchdog last week asked the Supreme Court to pause the settlement, which would shield the company's Sackler family owners from opioid lawsuits in exchange for a $6 billion contribution to a broader settlement with states, local governments and victims of addiction. The Department of Justice (DOJ) asked the high court to put the deal on hold after a federal appeals court rejected a proposed delay. Purdue on Friday argued that a delay would be destructive, imperiling a settlement that has the support of all major stakeholders, including state attorneys general and people affected by the opioid crisis. The DOJ's position would "take billions of dollars out of opioid abatement programs that are sorely needed" and potentially "deprive victims of any meaningful recovery" if the deal falls apart, Purdue's lawyers wrote. That position was echoed by a group representing 60,000 people who have filed personal injury opioid claims in Purdue's bankruptcy.

A U.S. bankruptcy judge has awarded junior creditors a 70 percent ownership stake in the post-bankruptcy oil producer Mesquite Energy, handing a defeat to senior lenders who argued they should own the entire business, Reuters reported. Thursday's ruling by Bankruptcy Judge Marvin Isgur in Houston settles an ownership dispute that has lingered since Mesquite's 2020 emergence from chapter 11 by setting a $200 million value for litigation claims pursued by junior creditors and awarding them a majority of the company's equity and a seat on its board. The senior lenders, Fidelity and Apollo Global Management, increased their stake in the business to 30% from 20% on account of the loan they extended to Sanchez at the start of its bankruptcy. Mesquite, then known as Sanchez Energy, filed for bankruptcy in 2019 with $2.3 billion in debt and emerged a year later through a reorganization plan that gave its top lenders 20% of the reorganized equity and set aside the rest for senior and junior creditors to fight over. The unusual arrangement allowed the company to emerge from bankruptcy without first resolving contentious disputes about the validity of the secured creditors' pre-bankruptcy liens on valuable oil and gas assets.

The judge overseeing the bankruptcy of Puerto Rico’s power utility granted it an additional week — for the second time in the past 10 days — to reach a deal with bondholders as talks are progressing, Bloomberg News reported. The island’s federally appointed financial oversight board, which is managing the utility’s bankruptcy, sought more time to negotiate with bondholders as it anticipates reaching an agreement with at least one creditor, a lawyer for the board said in a court document filed Thursday. U.S. District Court Judge Laura Taylor Swain agreed to the board’s request to push out the deadline to file an amended debt-restructuring proposal to Aug. 11. The board had made a similar request last week, and had been allowed to postpone an original July 28 deadline to Aug. 4. The board “continues to believe the prospects of at least one major settlement is high and possibly two major settlements are sufficient to avoid filing an amended plan this week,” a lawyer for the board wrote in the request for more time. The Puerto Rico Electric Power Authority, called Prepa, has been in bankruptcy for six years and is seeking to reduce nearly $9 billion, the commonwealth’s last remaining sizable debt restructuring. Resolving the utility’s obligations will help stabilize electricity costs on the island and allow officials to focus on modernizing its power grid. Negotiations between the board and Prepa’s bondholders increased after Swain in June capped at $2.38 billion the amount of utility net revenue that bondholders have a claim to.

Party City Holdco Inc. is considering splitting up its balloon manufacturing and retailing businesses as the latter charts a course out of bankruptcy, Bloomberg News reported. Party City has held confidential talks with debt holders about spinning off its Anagram unit. Anagram has a debt stack separate from its parent and didn’t follow most other Party City units into chapter 11 bankruptcy in January. But the businesses are deeply linked. Party City accounts for around 40% of Anagram’s revenue, according to a Fitch Ratings report from July. The retailer buys almost all of its balloons from Anagram, but has threatened to abandon that contract during bankruptcy. Anagram’s debt arose from a 2020 financing in which some Party City creditors exchanged their existing holdings to move closer to the prized balloon manufacturer. It was an ill-fated attempt to save Party City — which saw its sales plummet when the COVID-19 pandemic crimped social functions — from bankruptcy. Party City recently revised a key deal with some of its biggest lenders, tweaking its plan to exit chapter 11 protection after struggling to meet financial projections.

Alex Mashinsky, the founder and former chief of the now-bankrupt cryptocurrency lender Celsius Network, must face a lawsuit by New York Attorney General Letitia James accusing him of civil fraud, a Manhattan state court judge ruled on Friday, Reuters reported. Justice Margaret Chan said the attorney general sufficiently alleged that Mashinsky defrauded investors by touting Celsius as a safe alternative to banks and concealing its risks, including hundreds of millions of dollars of investment losses. Judge Chan also said James could pursue some claims under the Martin Act, a powerful state securities law, and that the "earned interest accounts" that Celsius offered customers qualified as securities under state law. The attorney general's lawsuit "supports a reasonable inference that the harm suffered by investors flowed, at least in part, from Mashinsky's alleged misrepresentations made in New York concerning Celsius' overall financial health and investment safety," Chan wrote in a 25-page decision.

A 10-bedroom home in the Southampton, N.Y., compound associated with Canadian art magazine publisher Louise Blouin was placed under chapter 11 bankruptcy protection this week ahead of a scheduled foreclosure auction, WSJ Pro Bankruptcy reported. The mansion is part of the two-home oceanfront compound on Gin Lane known as La Dune. The other home in the complex has already been under chapter 11 since April 2022, according to court documents filed with the U.S. Bankruptcy Court in Central Islip on Long Island, N.Y. Both are owned by entities led by Blouin, according to court papers. The two-home compound on a 4-acre lot has been on and off the market since 2016. The most recent listing price was $150 million, according to the listing website. While the two homes are located in the same complex, they can be sold separately, according to Geoff Gifkins of Nest Seekers International, which is marketing the property. Gifkins said on Friday that while he wasn’t privy to the details of the recent bankruptcy filing, he knew that the property owners have spent a “considerable amount of money over the last year restoring the properties.”

AT&T SportsNet channels will be shut down by the end of 2023, the company announced during a second-quarter earnings call last week. But that doesn’t mean the TV rights to the Houston Astros are in trouble, SI.com reported. Per cordcuttersnews.com and other outlets, both the Astros and the Houston Rockets have been in negotiations with AT&T and Warner Bros. Discovery since March to acquire AT&T SportsNet Southwest, which would allow the two teams to run the channel and maintain their own regional television rights. Earlier this year, Warner Bros. Discovery, which owns AT&T SportsNet Southwest and the regional broadcast rights to three MLB teams, announced they wanted out of the Regional Sports Network (RSN) business due to cost. Warner Bros. Discovery informed the Astros, the Colorado Rockies and the Pittsburgh Pirates of their intentions in February. Instead of seeking bankruptcy protection, Warner Bros. Discovery sought to return the rights to those teams with the teams waiving the opportunity for further legal action.