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Digital Currency Group (DCG) can’t make any ownership changes with Genesis until the former exits bankruptcy, a judge ruled on Monday, Blockworks.co reported. The ruling leaves Genesis protected under DCG’s tax consolidated group, giving certain benefits to the bankrupt institutional-focused crypto lender. Those benefits are in effect until the “occurrence of the effective date of a Chapter 11 plan” or the bankruptcy is converted to a chapter 7 case. Genesis filed the motion back in late November, arguing that DCG’s stake in Genesis must stay above 80% to “to protect the potential value of [its holding company’s] interest in the federal net operating loss [NOL] carryforwards of the DCG Group.” Net operating loss carryforwards are a tax benefit, allowing Genesis — or any eligible company — to deduct losses from future profits. Genesis is “estimated to have generated in excess of $700 million of NOLs in the course of [its] business,” which it could lose under ownership changes. The carryforwards, Genesis said, are “directly attributable to the failure by the digital asset hedge fund Three Arrows Capital” to repay loans given by Genesis Asia Pacific.

Final payments from a trust funded by utility PG&E to compensate victims of wildfires caused by its power lines will soon be distributed, but none will make the victims whole for their losses, the Wall Street Journal reported. The trust was created in 2020 after PG&E reached a $13.5 billion settlement with roughly 70,000 people who suffered losses and damages. The company, which had sought bankruptcy protection after the fires, used equal parts cash and stock to fund it. The trust this month sold its last block of shares, finalizing the amount of money available for distribution to victims. Its assets are worth just over $14 billion, more than the nominal value of the settlement. Victims’ claims, though, are expected to top $19 billion. They have so far received about 60% of their value, and the final percentage will likely be much lower than what some attorneys touted at the time the settlement was negotiated. “I understand and I’m very sympathetic to the fact that people had the impression they were going to get 100%, but that was never true,” said Cathy Yanni, an attorney who serves as trustee of the trust. “In bankruptcy, no one gets 100%.” PG&E, as part of its plan to exit bankruptcy, agreed to pay more than $25 billion overall to compensate for wildfire-related losses, but two other major settlements — with California governments and insurance companies — paid those parties entirely in cash. Fire victims were the only class of claimants to be compensated with shares in the company.

The U.S. Bankruptcy Court for the Southern District of Florida on Nov. 30 granted a motion by the USTP’s Miami office to extend the deadline for creditors to file claims in the chapter 11 bankruptcies of MV Realty PBC LLC and its nearly three dozen affiliates, according to a USTP press release. The court’s order extends the original Dec. 1 deadline to Feb. 1, 2024. The court also directed the MV Realty entities to serve — at their expense — copies of the order on all parties to the bankruptcies, including roughly 38,000 homeowners whom MV Realty listed as current contract holders but not as creditors. Additionally, the companies must provide claim forms to about 2,850 other consumers who may have been forced to pay damages after terminating their agreements; those consumers were neither listed as creditors nor notified of the bankruptcy cases. MV Realty opposed the USTP’s motion, citing the costs of additional service. Its objection was overruled. “This ruling protects the due process rights of thousands of people across the country who were affected by MV Realty’s business practices,” said Director Tara Twomey of the Executive Office for U.S. Trustees. MV Realty, which operates in 33 states, has been the subject of lawsuits by several state attorneys general alleging deceptive trade practices. In 2018, MV Realty began marketing homeowner benefit agreements (HBAs), under which consumers receive one-time payments of 0.3% of a property’s value in exchange for a 40-year exclusive right for MV Realty to market the property if the consumer decided to sell. Breaching an HBA — for example, by retaining a different real estate agent — could render a consumer liable for damages of up to 3% of the property value. In other words, consumers who received upfront payments of a few hundred dollars could end up owing thousands under an HBA. Additionally, MV Realty files liens or memoranda in the official records to encumber title to the properties.

FTX Trading Ltd. unveiled its latest proposal for returning billions of dollars to customers and creditors, kicking off a final round of potential squabbles about how best to end the bankruptcy case of the fraud-tainted crypto firm, Bloomberg News reported. The reorganization plan left some of the most important questions unanswered, including whether FTX will restart its defunct crypto exchange, how the company will estimate the value of some digital tokens and how much creditors can expect to get back. Next year, the plan will be sent to creditors for a vote — likely with key details added — before it goes to US Bankruptcy Judge John Dorsey for final approval. The major creditor and customer groups that have been involved in the chapter 11 case have agreed to the broad outlines of the plan. The payout plan calls for billions of dollars to be distributed as cash after much of the firm’s cryptocurrencies have been liquidated. Last month, FTX founder Sam Bankman-Fried was convicted of orchestrating a massive fraud that led to the collapse of his FTX exchange. The company filed for bankruptcy last year after Bankman-Fried agreed to turn over control of his empire to restructuring professionals. Since then, the advisers have been tracking down assets and trying to untangle a complex web of debt owed to various creditors, including customers who put cash and crypto on the trading platform.

Creditors of 4E Brands say findings of a survey they commissioned support their case for Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston to recuse himself from weighing in on a dispute over legal fees the maker of hand sanitizer paid its law firm, WSJ Pro Bankruptcy reported. The creditors are seeking the return to 4E Brands of fees it paid to the Jackson Walker law firm. The creditors say Isgur shouldn’t rule on their request because of his friendship and professional relationship of more than two decades with David R. Jones, a former bankruptcy judge who had been handling the company’s chapter 11 case. Results of the survey were made public late Wednesday after the creditors presented them in a hearing a day earlier before Chief Bankruptcy Judge Eduardo Rodriguez of the Southern District of Texas. At the hearing, Mark P. Jones, a public opinion survey analyst at Rice University, testified he provided 150 adults randomly selected across the Southern District of Texas with basic facts about the circumstances of the fee dispute without naming its parties, and then asked if a judge in the situation could be impartial. Roughly 80% of respondents said it was unlikely a judge could be impartial in the fee matter, said Jones, who isn’t related to the former judge. “They don’t know [Judge Isgur] as a person. Just looking at the objective facts in the case, these objective observers say this appears to be a case where Judge Isgur would not be able to be impartial,” said Jones. San Antonio-based 4E Brands filed for chapter 11 protection in February 2022, following the fallout from a recall of and lawsuits over its methanol-contaminated hand sanitizers.

Right-wing conspiracy theorist Alex Jones on Friday proposed a bankruptcy exit plan that offers to settle with Sandy Hook Elementary School shooting victims’ families by paying them at least $55 million over 10 years, Bloomberg News reported. The amount represents at least $30 million less than what the families had proposed, and is a fraction of the roughly $1.4 billion judges ruled they’re owed in defamation judgments against Jones related to to his lies that the 2012 Sandy Hook Elementary School shooting was a hoax. Jones filed for bankruptcy protection a year ago, after the judgments. Those who choose to settle with Jones would share in a pot of at least $5.5 million annually over 10 years, according to a chapter 11 plan Jones filed with the US Bankruptcy Court for the Southern District of Texas on Friday. The plan requires court approval. Beyond that annual minimum, family members who settle could receive all the disposable income from Jones’ bankrupt Infowars parent company, Free Speech System LLC, plus half of his own income over five years, and then a quarter of his income for the next five years, according to his plan. In exchange for settling with Jones, Sandy Hook victim families would receive faster payments but wouldn’t be able to continue to chase him down after his plan for the full worth of their litigation claims, according to the proposal.

Showfields is facing concerns over its bankruptcy financing. The landlord at its Brooklyn store in New York City on Dec. 5 filed an objection to the final approval of its debtor-in-possession financing, Retail Dive reported. The landlord in its filing said the proposed DIP financing transaction is “to be provided by an entity controlled by one or more insiders” at Showfields. A group of funders cited a similar concern in an objection filed at the end of November. The DIP Lender is listed as Showfields Investment LLC, with the loan agreement between the lender and Showfields for an amount of up to $2.5 million. “The motion does not disclose the identity of the insiders of [Showfields] who are members or owners of the DIP Lender,” the landlord’s objection says. “Without transparency, there remains the possibility that the true purpose of the DIP Financing (rather than obtaining financing from a different source) is to allow the DIP Lender to procure a roll-up of the DIP Lender’s prepetition debt, to the detriment of [Showfields’] estates and their creditors.” The landlord’s objection also alleges that Showfields did not “even attempt to satisfy their burden to demonstrate that the proposed DIP Financing” should be approved, such as not providing evidence to justify loan terms including the roll-up of over $1.6 million of the DIP Lender’s prepetition debt.

A process to sell the venture-capital arm of bankrupt SVB Financial, the former parent of Silicon Valley Bank, has fallen flat and creditors are now gearing up for a potential takeover of the business, WSJ Pro Bankruptcy reported. Two front-runners had been vying for SVB Capital: a duo of Anthony Scaramucci’s SkyBridge Capital and Atlas Merchant Capital, and San Francisco private-equity firm Vector Capital, the Wall Street Journal reported in September. Those bidders aren’t moving forward in the process, after SVB considered the bids to be too low. Instead a group of SVB Financial’s creditors is planning to take over the venture capital business for themselves, the people said. SVB Capital has around $10 billion in assets under management, including investments in venture capital funds, direct investments in tech companies, and a book of private loans. It was expected to fetch anywhere between $250 million and $500 million. Bankers at Centerview Partners were advising the parent company on the process. If new bidders don’t show up to buy the business, it would stay in the reorganized SVB Financial which could be controlled by creditors including Pacific Investment Management Co. and Davidson Kempner Capital Management once the bankruptcy is done.

Madera hospital’s creditors want to be repaid through the bankruptcy process — including the hospital’s chief executive, the Fresno (Calif.) Bee reported. Last month, the hospital’s creditors submitted to a federal bankruptcy court their plan to liquidate the hospital, which, if approved by the court, would start the process of selling off the hospital assets to pay back millions owed to the creditors. Among the dozens of businesses, doctors and individuals who filed claims is Karen Paolinelli, Madera Community Hospital’s chief executive. Earlier this year, she filed a claim requesting payment for $200,658 in unpaid vacation time and unpaid self-funded insurance benefits. Paolinelli, who earns an annual salary of $359,668, according to the hospital’s latest available tax records, is a key player along with the hospital board of trustees in trying to find a partner to reopen the hospital, which ceased operations and closed its doors nearly a year ago. The hospital has just months to secure a reopening partner before creditors plan to vote on the liquidation plan in February. The liquidation plan filed by creditors allows for the hospital to pursue an agreement with a partner to reopen the hospital, subject to creditor and court approval.