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A bankruptcy judge designated the Flynn Restaurant Group LLC’s bid for Wendy’s and Pizza Hut franchisee NPC International Inc. as the best offer so far, setting an $816 million minimum price that rival bidders must beat, WSJ Pro Bankruptcy reported. The decision came after Wendy’s Co. voiced opposition, saying Flynn operates brands of sandwich competitors Arby’s and Panera Bread. Wendy’s has also formed a consortium with regional franchisees to launch its own offer for NPC’s Wendy’s restaurants. Both Wendy’s and Pizza Hut LLC have expressed concerns about NPC’s quick timeline for a sale, and have pushed for greater involvement in vetting any new owner of NPC’s restaurants. Last week NPC, the biggest franchisee of both Wendy’s and Pizza Hut restaurants, proposed tapping Flynn, the largest restaurant franchisee in the U.S., as the lead bidder, or stalking horse, to buy the company out of bankruptcy. At a hearing Friday in the U.S. Bankruptcy Court in Houston, Judge David Jones agreed to confer stalking-horse status on Flynn. He also signed off on breakup fees despite Wendy’s opposition. Wendy’s lawyer Sean O’Neal indicated the burger chain might ultimately not consent to Flynn’s planned takeover of NPC’s Wendy’s restaurants.

Creditors who lost money on Loot Crate Inc. say venture-capital investors used hardball tactics, such as acting out scripted confrontations, to tighten their grip on the company, making moves that eventually pushed it into bankruptcy, according to court documents, WSJ Pro Bankruptcy reported. Loot Crate, which markets itself as a subscription service for “gamers and nerds,” filed for chapter 11 last year. A lawsuit filed by the Loot Crate creditors in bankruptcy court last week contains excerpts of emails involving executives at investors Upfront Ventures and Breakwater Management LP. The suit alleges the venture-capital firms used a playbook they created, as well as acting advice from a law firm, to use during boardroom negotiations with Loot Crate management. The investment firms also threatened to pressure Loot Crate co-founder Christopher Davis through his father, a Fortune 500 executive, according to an email cited in the lawsuit. Loot Crate raised $18.5 million in 2016 from investors including Upfront, Breakwater and Robert Downey Jr.’s venture-capital firm, Downey Ventures, which isn’t named in the complaint. Loot Crate owed more than $50 million to creditors when it filed for bankruptcy. A committee of unsecured creditors, including Major League Baseball, is seeking compensation of at least $10 million for the loss of value surrounding Loot Crate.

Online cryptocurrency platform Cred Inc. filed for bankruptcy protection, blaming alleged mismanagement and a bitcoin thief while owing clients and customers $140 million, WSJ Pro Bankruptcy reported. The company, which made money investing cryptocurrencies it held for customers, sought chapter 11 in the wake of a legal tussle between co-founder, Chief Executive and former PayPal official Daniel Schatt and former executive James Alexander, who departed from Cred on bad terms in June. Cred has more than 6,000 creditors, most of whom are clients and customers with cryptocurrency positions, according to a filing in U.S. Bankruptcy Court in Wilmington, Del. Customer accounts have been frozen, said a person familiar with the matter. Some customers closed their accounts as word got around about the company’s troubles, including the litigation between the company, Schatt and Alexander as well as a $10 million bitcoin theft from a fraudulent investment scheme run by an impostor, Cred said in court papers. Customers transferred their cryptocurrency, often through a loan agreement, to Cred, which also makes loans. The closely held company, which has about 20 full-time employees, is half-owned by Schatt of San Mateo, Calif.

The trustee for bonds issued on behalf of the bankrupt Roman Catholic Church of the Archdiocese of New Orleans negotiated a settlement that allows bondholders to be paid interest — but not principal — during the pendency of the case, Bond Buyer reported. The diocese filed for reorganization under the weight of sexual abuse claims in May, with $38 million of outstanding revenue bonds among its debts, according to filings in the United States Bankruptcy Court for the Eastern District of Louisiana. TMI Trust Co., trustee for the bonds, negotiated the settlement with the archdiocese that the court approved, TMI said in a material event notice posted on the Municipal Securities Rulemaking Board’s EMMA filing system on Wednesday. "The order approving the settlement agreement provides that, during the pendency of the bankruptcy proceeding, the archdiocese is authorized to pay interest due on the bonds according to the payment schedule provided for in the bond documents," TMI's notice said. "Bondholders will not receive payment of any principal due on the bonds during the pendency of the bankruptcy proceeding." TMI said that the archdiocese paid the missed July 1, 2020 interest payment on the bonds, and that bondholders will be paid on Nov. 20. The missed interest payment that will be paid totals $930,206.25, but the missed annual principal payment of $1.385 million remains unpaid, according to the settlement, which also states that TMI did not agree to support a plan of adjustment. U.S. Bankruptcy Judge Meredith S. Grabill approved the settlement Nov. 2. It contains the agreement between TMI and the archdiocese.

Bankruptcy Judge Mary Walrath has overruled objections in the Weinstein Co. bankruptcy to a disclosure statement outlining a revised plan providing about $35 million for creditors, with roughly half that amount going to women who have accused disgraced film mogul Harvey Weinstein of sexual misconduct, ABCNews.go.com reported. Judge Walrath yesterday overruled objections to the disclosure statement by attorneys representing 11 women, including producer Alexandra Canosa and actresses Wedil David and Dominique Huett, who oppose the proposed settlement. Judge Walrath said that the group’s objections were “not well-stated.” Her ruling means the company can begin soliciting votes on the plan by holders of sexual misconduct claims and general unsecured claims. Ballots are due by Dec. 8, and a hearing on whether Walrath will approve the plan is set for Dec. 18. Attorneys said that 65 tort claims were filed by the Oct. 31 deadline, although it’s unclear whether sexual misconduct claims account for the entire total. Company attorneys have said they will not seek approval of the plan if holders of sexual misconduct claims vote to reject it.

Shogo Takemoto’s family has tilled the rice fields of eastern Japan for more than 200 years. They stash their savings in an agricultural cooperative and borrow from it to help finance the farm’s day-to-day operations. But with interest rates near zero, the return on the loans is too little to keep the cooperative going. So it deposits Takemoto’s savings with Japan’s bank for farmers and fishermen, which sends the money overseas to earn a better yield. That’s how Takemoto became an indirect investor in car rental company Hertz Global Holdings Inc. before it declared bankruptcy in May, the Wall Street Journal reported. Among the owners of Hertz’s debt was Norinchukin Bank, which owned bonds backed by pieces of loans to struggling companies like Hertz. Later that month, the bank — founded nearly 100 years ago to serve the people who feed Japan — disclosed a staggering $3.7 billion unrealized loss on such bonds and said it would pause further investments. The loss, which has mostly been recouped as markets rebounded, was shocking for its size, and also because Norinchukin invested exclusively in triple-A rated bonds, which are supposed to be among the safest securities anywhere. The stumble disrupted one of Wall Street’s most lucrative trade routes — a steady flow of capital from yield-starved investors in Asia who turned to the U.S. to avoid the sting of zero interest rates at home. In doing so, they channeled their customers’ savings into a boom for loans to some of America’s riskiest corporate borrowers.

Shopping mall owners CBL & Associates Properties Inc. and Pennsylvania Real Estate Investment Trust are facing determined opponents to the companies’ respective bankruptcy restructuring plans, WSJ Pro Bankruptcy reported. CBL, one of the largest mall owners in the country, filed for bankruptcy on Sunday hoping to convert bondholders to owners but has a fight on its hands with its bank lender, Wells Fargo Bank NA, which isn’t on board, CBL lawyer Ray Schrock said at a court hearing on Monday. Likewise, PREIT—which also filed for bankruptcy Sunday—reached agreement on a restructuring with nearly all major creditors, save for one opponent that said the company’s proposal does virtually nothing to improve the balance sheet and is destined to end in another bankruptcy. “This company filed for bankruptcy with a deal with its bondholders and a fight with its bank lenders,” said Michael Stamer, a lawyer for the CBL bondholders that agreed to convert some debt to equity, during Monday’s court hearing. After CBL’s bondholders sent a restructuring proposal to Wells Fargo, the bank declared a default against the company and proceeded to step in to collect rent itself at some of the company’s properties, according to CBL’s court filings.

J.C. Penney Co. cleared the way to sell itself out of bankruptcy to lenders and landlords, settling with a group of holdout creditors led by Aurelius Capital Management LP that wanted a bigger share of value from the restructuring, the Wall Street Journal reported. The settlements resolved objections to a planned restructuring under which the department store chain’s retail operations and most of its stores will be acquired by landlords Simon Property Group Inc. and Brookfield Property Partners LP for roughly $800 million. As part of the proposed deal, top lenders agreed to buy the remaining stores in return for forgiving $1 billion of Penney’s $5 billion in debt while leasing the locations to Simon and Brookfield. Other lenders including Aurelius had opposed the company’s proposed breakup, arguing it would funnel a disproportionate amount of value to a subset of participating lenders led by H/2 Capital Partners LLC. The settlement announced Monday brings “widespread consensus” to the bankruptcy case and positions Penney to complete the restructuring sale well ahead of the holiday shopping season, the company said in court papers. Simon and Brookfield beat out competition from private-equity firm Sycamore Partners Inc. and Saks Fifth Avenue owner Hudson’s Bay Co. to acquire Penney’s retail assets.

Pittsburgh-based GNC Holdings LLC announced that it completed its chapter 11 bankruptcy plan of reorganization and that it will begin to "wind-down the affairs of the remaining bankruptcy estates," pay allowed claims and resolve those in dispute, the Pittsburgh Business Times reported. On Oct. 7, GNC had a substantial amount of its assets acquired in a $770 million sale to Harbin Pharmaceutical Group Holding Co., its largest shareholder, which let GNC improve its financial standing following adjustments it made to its store footprint and restructuring plan. The company plans to continue providing "innovative wellness solutions to customers" and that the chapter 11 plan and sale to Harbin will allow the company to continue to expand.

A bipartisan group of congressional lawmakers is urging a U.S. regulator to shake up the receivership cleaning up after R. Allen Stanford ’s $7 billion Ponzi scheme, saying the money recovered from the fraud is insufficient, WSJ Pro Bankruptcy reported. The lawmakers asked Securities and Exchange Commission Chairman Jay Clayton in a letter last week to consider intervening in the court-supervised receivership of Stanford International Bank, the defunct institution that carried out the fraud exposed in 2009. Stanford is serving a 110-year prison sentence in Florida after his 2012 conviction on 13 felony counts. He has petitioned several courts to free him and has published a book saying prosecutors made him a scapegoat. Liquidators have spent a decade selling assets, suing alleged beneficiaries of the Ponzi scheme and distributing the proceeds. But the amount of money recovered for victims has been insufficient, said the lawmakers, including Reps. Al Green (D-Texas), Matt Gaetz, (R-Fla.) and Cedric Richmond (D-La.). Only a fraction of the money lost in the fraud has been recovered, according to court records. “We hope you agree that it is completely unacceptable that the Stanford Ponzi scheme victims have recovered pennies on the dollar over the past 11 years,” the lawmakers wrote in the letter to Clayton. “While some of these individuals have become infirm or passed away over this time, thousands of others still await economic justice.” The lawmakers urged Mr. Clayton to shake up the receivership proceeding, including by cracking down on professional fees and possibly petitioning a federal court to replace the receiver. While the receivership had brought in more than $681 million as of April, professional fees totaled $216 million, nearly as much as the $221 million distributed to victims, according to court records.