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Dura Automotive Systems LLC, a parts maker that drew buyout offers of more than $400 million in late 2018, is being taken over by the company’s top lenders in bankruptcy for $55 million, the Wall Street Journal reported. Bankruptcy lenders Bardin Hill Investment Partners and Charlton Group Inc. are set to buy Dura’s North American assets with a $5 million credit bid, court papers say. A credit bid is an offer to buy a company by canceling some of what it owes the buyer. Earlier this month, Bardin Hill and Charlton outlined a $50 million buyout proposal for Dura’s European business, also in the form of a credit bid. Dura, based in Auburn Hills, Mich., supplies parts to Ford Motor Co., BMW and Honda Motor Co., court papers say. The proposed deal for Dura’s U.S. and Mexican business operations comes after the company failed to generate an opening bid to spark an auction that was to have been held in early March. Dura has been on the market since 2018, as part of turnaround manager Lynn Tilton’s effort to pay off investors in the Zohar funds, a trio of investment vehicles specialized in making loans to distressed businesses.

PG&E Corp. said that it would replace most of its board as part of a broad overhaul of its governance structure as the California power giant pushes to exit bankruptcy, Bloomberg News reported. PG&E said that only three of the 14 current directors will remain after the company exits chapter 11 by mid-year, according to a statement on  Friday. The utility’s chair, Nora Mead Brownell, will be among the departing directors, the company confirmed in an e-mail. PG&E had promised to shake-up its leadership and bring in new safety experts as part of a number of reforms that were pledged to win the approval of California Governor Gavin Newsom of its reorganization plan. Last week, PG&E said that Chief Executive Officer Bill Johnson will retire at the end of June. The company will appoint William Smith, a former AT&T executive and one of the three PG&E board members who will remain, as interim CEO until a replacement is found. PG&E is racing to win court and regulatory approval of its turnaround proposal ahead of a state deadline of June 30 so it can participate in a state wildfire fund that will help cover liabilities from future wildfires. The company said on Friday that it was on track to meet that goal. The San Francisco-based company filed for chapter 11 in January 2019 with an estimated $30 billion in liabilities from deadly wildfires blamed on its equipment.

Records show that the Archdiocese of New Orleans, whose finances have been strained by the mounting cost of unresolved-clergy abuse lawsuits and the coronavirus-related shutdown of church services, filed for bankruptcy in New Orleans' federal courthouse just after midnight, NOLA.com reported. The archdiocese serving half a million New Orleans-area parishioners joins more than two dozen other dioceses and Catholic religious orders across the U.S. who have sought financial protection from creditors since the clergy-abuse scandal boiled over in 2002. Pressure from creditors — including investors of more than $38 million in bonds and abuse victims pushing claims that could potentially cost millions of dollars — could force Archbishop Gregory Aymond and other church leaders into difficult choices resembling the post-Hurricane Katrina reorganization plan that shuttered dozens of churches and merged parishes across metro New Orleans. The archdiocese's bankruptcy filing comes amid widespread shutdowns which officials implemented to slow the spread of the highly contagious, potentially deadly coronavirus — but which also devastated various institutions’ bottom lines. Filings early today listed between $100 million and $500 million in both assets and liabilities for the archdiocese, which is being represented by <b>Mark Mintz</b> of Jones Walker. According to prior filings, some specific church assets include a $306 million endowment and $77 million worth of land and buildings whose market value may actually be much higher.

Two major investors in PG&E Corp. are also backing a loan to one of the law firms suing the bankrupt California utility on behalf of thousands of wildfire victims, Bloomberg News reported. Centerbridge Partners LP is among the 20 biggest shareholders in PG&E and has committed to buying as much as $325 million in the utility’s shares when it emerges from chapter 11. Apollo Global Management Inc. last year held as much as $506 million in PG&E bonds and tried unsuccessfully with other creditors to take control of the company. The two firms bought stakes in a line of credit provided in September to the law firm of Mikal Watts, who worked with a group of lawyers that later negotiated a $13.5 billion settlement with PG&E for almost 80,000 people who lost homes, businesses or loved ones in blazes blamed on the utility’s equipment. Victims are now in the middle of voting whether to approve the bankruptcy plan.

More troubled businesses and nonprofits — from Catholic dioceses to rural hospitals — are suing the Small Business Administration for blocking companies in bankruptcy from getting COVID-19 relief loans, WSJ Pro Bankruptcy reported. At least a dozen lawsuits have been filed in courts across the U.S. that seek access to Paycheck Protection Program loans for businesses restructuring in chapter 11. The companies, joined by legal experts and some members of Congress, say there is nothing in the CARES Act, the law authorizing the loan program, that makes businesses in chapter 11 ineligible for the emergency funding. Companies on the front lines of the pandemic have sued the SBA for barring them from the loan program because of their bankruptcies. Texas-based ambulance company Hidalgo County EMS, Springfield Hospital in Vermont as well as the Calais Regional Hospital and Penobscot Valley Hospital in Maine have filed lawsuits seeking a total of nearly $10 million in PPP loans. Businesses want access to the emergency funding because the PPP loans don’t have to be paid back if the money is used to cover employee paychecks, avoiding layoffs. SBA chief Jovita Carranza, in consultation with Treasury Secretary Steven Mnuchin, determined that providing PPP loans to companies in bankruptcy “would present an unacceptably high risk of an unauthorized use of funds or non-repayment of unforgiven loans,” the SBA said on Friday. Several members of Congress have urged Carranza to amend PPP applications or waive the agency’s bankruptcy restriction to allow funding to critical-access hospitals and federally qualified health centers. Sens. Bernie Sanders (I-Vt.), Patrick Leahy (D-Vt.) and Rep. Peter Welch (D-Vt.) recently wrote to Carranza, saying that the SBA’s decision “denies the potential for critical funding to hospitals, health centers, and other essential services that are reorganizing their debt in a responsible way.” Sen. Susan Collins (R-Maine) and Sen. Angus King Jr. (I-Maine) also urged the SBA to allow financially distressed hospitals to access PPP loans.

Pacific Gas & Electric and thousands of California families who lost homes or loved ones in fires caused by the utility’s equipment reached a $13.5 billion settlement in December, seemingly putting off a lengthy and fraught legal battle. The deal would allow the company to resolve its bankruptcy and provide homeowners money to rebuild. But as a crucial deadline for a formal vote on the agreement nears, some victims are pressing the company to make changes, the New York Times reported. A group of victims and their lawyers say that they are worried that they will receive a lot less than $13.5 billion since half of that amount will be paid out in shares in PG&E. The company’s stock price has been whiplashed as the economy has been upended by the coronavirus pandemic. In addition, some victims said that a leading lawyer who negotiated the deal on behalf of thousands of victims appeared to have a conflict of interest: He has borrowed money from a loan facility funded by two investment firms that purchased claims against PG&E, own stock in the utility, invested in PG&E bonds or helped finance its bankruptcy. Two-thirds of the votes cast by the roughly 70,000 victims, most of whom live in Northern California, by May 15 must be for the deal for it to be approved. If the victims don’t ratify the deal, PG&E might not be able to resolve its bankruptcy by June 30, a deadline state lawmakers set for the company to qualify for a $20 billion wildfire fund that will help pay for future wildfire claims against privately owned utilities.

Two bankrupt Maine hospitals have warned that they could both have to close their doors by the end of June if they don’t receive funding through a federal loan program meant to help small businesses keep their staff employed through the coronavirus crisis, the Bangor (Maine) Daily News reported. Both Calais Regional Hospital and Penobscot Valley Hospital in Lincoln have been denied access to the Paycheck Protection Program because its rules disqualify entities that have filed for bankruptcy protection from receiving funds. But in separate lawsuits filed this week as part of their chapter 11 bankruptcy proceedings, both hospitals argued that those rules are unlawful because they’re not in the federal legislation that originally created the program last month. The two hospitals are now facing steep revenue shortfalls after following state and federal guidance to delay elective and outpatient services during the pandemic, even though those types of services bring in large portions of their revenue, according to their legal complaints.

Fast casual restaurant Cosi sued the Small Business Administration yesterday, alleging it illegally denied its $3.7 million emergency loan request on grounds that the company is currently undergoing bankruptcy proceedings, Yahoo Finance reported. The Charlestown, Mass.-based flatbread chain filed a lawsuit yesterday in the U.S. Bankruptcy Court for the District of Delaware, arguing that the company should be eligible, under the CARES Act, to apply for Paycheck Protection Program loans designed to help small businesses keep employees on payroll amid the novel coronavirus. In a five-count complaint, requesting that the court enjoin the SBA from excluding Cosi and other bankruptcy debtors from access to PPP funds, the food chain alleges that the exclusion is discriminatory, exceeds authority under the CARES Act, and is arbitrary and capricious. “No law, regulation, or rule of any kind disqualifies, or authorizes the SBA to disqualify, bankruptcy debtors from participating in the PPP,” the complaint states. According to Cosi, holding back PPP funds from companies in bankruptcy runs counter to the stated purposes of the CARES Act. Cosi filed for chapter 11 bankruptcy on Feb. 24, before the number of coronavirus cases exploded in the U.S.

Senate Majority Leader Mitch McConnell (R-Ky.) said yesterday that the next coronavirus relief legislation must include liability protections for business owners who reopen and indicated he would be open to some aid for beleaguered states, Bloomberg News reported. The House and Senate both plan to convene in Washington, D.C., on May 4 and resume business with the expectation of additional action to respond to the novel coronavirus pandemic that has shut down businesses and thrown millions of people out of work. As some states begin gradually lifting stay-at-home orders and other restrictions, McConnell said that without protection from lawsuits, business owners could end up with years of legal claims over their efforts to restart the economy.