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The soup recipes of Hale & Hearty, the New York chain forced into bankruptcy last year, are up for grabs after its lawyers settled a fight with a wholesale food manufacturer that claimed to own the brand, Bloomberg News reported. The deal, announced in bankruptcy court yesterday, clears the way for the beleaguered chain to sell its soup recipes and other intellectual property — including its website and branding — to the highest bidder. The process had been stymied by a dispute with Mauzone Food Services, a kosher food maker that has been selling soups under the Hale & Hearty name in recent months. Mauzone said it bought the rights to Hale & Hearty’s brand when it took over the soup chain’s Brooklyn factory last year, but the trustee overseeing Hale & Hearty’s liquidation disagreed. “We are trying to sell the intangible assets as quickly as possible,” Lauren Kiss, an attorney representing the trustee who’s overseeing the business’s liquidation, said in a bankruptcy hearing Tuesday. “The longer the brand is out of the market the less valuable it is.” The brand — once a lunchtime favorite for Midtown office workers — is likely one of the most valuable assets left for the company. The parties came to a tentative settlement yesterday before a hearing with US Bankruptcy Judge James Garrity. Under the deal, Hale & Hearty is allowed to sell all of its intellectual property, while Mauzone will hand over branding it has been using and pay $50,000 for furniture, fixtures and equipment at the Brooklyn facility. Mauzone will also have to prove it is no longer making Hale & Hearty soups.

A new judge has been assigned to oversee tens of thousands of lawsuits in New Jersey federal court against Johnson & Johnson over its talc products, two weeks after an appeals court rejected the company's plan to offload the claims into bankruptcy, Reuters reported. U.S. District Judge Michael Shipp, based in Trenton, will take over the long-running litigation from former Chief District Judge Freda Wolfson, who retired from the bench on Feb. 1, according to an order filed on Monday. The cases, numbering more than 38,000, had been on hold since October 2021, when a J&J subsidiary newly created to hold the talc liabilities filed for bankruptcy. Plaintiffs have said that J&J's Baby Powder and other talc products contain asbestos and caused cancer. J&J maintains its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free. The company has said it will challenge the ruling by the Philadelphia-based 3rd U.S. Circuit Court of Appeals dismissing the bankruptcy, which it said was intended in good faith to resolve talc claims efficiently and equitably.

Biopharmaceutical company Sorrento Therapeutics Inc. has filed for bankruptcy weeks after being hit with judgments totaling more than $173 million in a licensing dispute with affiliates of billionaire health entrepreneur Patrick Soon-Shiong’s NantWorks LLC, WSJ Pro Bankruptcy reported. Sorrento filed for chapter 11 on Monday in the U.S. Bankruptcy Court in Houston, an action that immediately pauses NantWorks affiliates’ attempt to collect the judgments awarded over alleged breaches by Sorrento of an exclusive licensing agreement between the companies related to the development of anticancer immunotherapies. An arbitrator awarded NantCell Inc. and Immunotherapy NANTibody LLC the judgments in December, a decision confirmed last week by a Los Angeles Superior Court judge. NantCell was awarded more than $156.8 million and NANTIbody was awarded more than $16.6 million, according to U.S. Securities and Exchange Commission and bankruptcy filings. The judgments are part of a broader legal dispute between Sorrento, NantWorks affiliates and Dr. Soon-Shiong. In December, Sorrento was awarded $125 million in a separate arbitration with NantPharma LLC related to the development of the cancer drug Cynviloq. Sorrento said that before filing for bankruptcy that it faced significant disruption to its business because the NantWorks affiliates planned to immediately take steps to levy the company’s assets to satisfy the judgments it was awarded in the licensing dispute. Sorrento said in December that it believed the arbitration was wrongly decided and would explore its options for vacating the judgments.

The Roman Catholic Diocese of San Diego is warning it may have to file bankruptcy in the future because of the potential fallout from hundreds of pending lawsuits alleging sexual abuse by clergy over the last 75 years, the Los Angeles Times reported. The warning comes nearly 15 years to the day since the diocese last sought the sanctuary of the bankruptcy code, filing for chapter 11 reorganization in the face of 144 claims of sexual abuse by clergy. The bankruptcy was dismissed eight months later, after the diocese reached a settlement with the victims for $198 million. Now the diocese might have to go down the same path, said Keven Eckery, the communications director for the sprawling diocese of 1.3 million Roman Catholics in San Diego and Imperial counties. On Thursday night at a 90-minute meeting with priests from the 96 diocesan parishes, Cardinal Robert McElroy informed them of the possibility the diocese could again file for reorganization under chapter 11 of the Bankruptcy Code. Lawyers representing accusers criticized the move and said the diocese was trying to avoid or lessen its liability for clergy misconduct, as well as pressure plaintiffs into seeking a settlement. Irwin Zalkin, who represents about 120 of the 400 plaintiffs who have filed suits in San Diego Superior Court, said the diocese has enough assets to pay settlements. Zalkin represented hundreds of claimants in the 2007 cases and was instrumental in negotiating the final settlement.

The founders of failed hedge fund Three Arrows Capital Ltd. have resurfaced with a $25 million crypto-exchange venture that will let users trade bankruptcy claims from insolvent platforms and funds, including their own, the Wall Street Journal reported. Open Exchange, or OPNX, was created by Su Zhu and Kyle Davies — who set up Three Arrows together — and the two founders of crypto exchange CoinFLEX. The new platform is expected to launch by the end of this month, Mr. Su said. It has begun accepting applications from individuals who want to be among the first to trade their crypto claims; Mr. Su tweeted on Sunday that there were more than 3,600 sign-ups so far. U.S. residents are among those that aren’t eligible for the wait list, the company said. The company’s website said there is a $20 billion market of crypto claimants, and the exchange will allow creditors to convert their claims into cryptocurrencies to use them as margin collateral for crypto futures trading. Claims against Three Arrows Capital are among those that can be traded on the new exchange, in addition to claims against FTX, Genesis Global Capital, Celsius Network LLC and others, OPNX said. Further down the road, OPNX wants to introduce decentralized custody and clearing services and also stocks and foreign-exchange products, Mr. Zhu said in a tweet.

The biggest bondholder of the bankrupt Pennsylvania city of Chester is scheduled to appear in court on Monday to argue that the city’s chapter 9 bankruptcy petition is invalid and should be dismissed, WSJ Pro Bankruptcy reported. Preston Hollow Community Capital LLC, which holds municipal bonds issued by Chester in 2017 with the initial principal amount of $19.2 million, has argued that the city failed to engage in the good-faith negotiations required before a municipality can access the protections of chapter 9 bankruptcy. Once a thriving industrial and manufacturing hub near Philadelphia, Chester filed for bankruptcy in November after facing financial challenges in recent years. The unsecured bonds held by Preston Hollow make up a fraction of the city’s overall obligations, notably mounting pension obligations that include at least $127.2 million in back payments. Recognizing Chester’s financial distress, Preston Hollow approached the city in June 2022 to discuss its proposal for the city to pay down the bonds using a portion of the $30.4 million in federal assistance that it received under the COVID-19 stimulus package. The firm’s proposal would have reduced the city’s debt service obligations by more than $900,000 in the fiscal year 2023, according to court papers filed by Preston Hollow managing director Charles Visconsi. He said the city’s receiver, Michael Doweary, didn’t engage in negotiations and just said he would contact the firm “in the coming weeks.”

A U.S. judge on Thursday extended a ban on FTX cryptocurrency exchange founder Sam Bankman-Fried's ability to contact employees of companies he once controlled and use encrypted messaging technology while out on bail awaiting trial on fraud charges, Reuters reported. U.S. District Judge Lewis Kaplan on Feb. 1 had temporarily barred Bankman-Fried from contacting any current or former employees of FTX or Alameda Research, his hedge fund, after prosecutors raised concerns that the 30-year-old former billionaire may be trying to tamper with witnesses. As a condition of his release on $250 million bond, the judge also prevented Bankman-Fried from using messaging apps such as Signal that let users auto-delete messages. After rejecting an agreement between defense lawyers and prosecutors to loosen those conditions on Tuesday, Kaplan on Thursday said the restrictions would remain in place until Feb. 21 and instructed both sides to explain by Feb. 13 how they could be sure Bankman-Fried would not delete electronic messages.

FTX’s bankruptcy lawyers, legal and financial advisors have billed the company more than $19.6 million in fees for their work done in 2022, according to court documents unveiled on Tuesday, the Wall Street Journal reported. The law firms that billed FTX are Sullivan & Cromwell, Landis Rath & Cobb, and Quinn Emanuel Urquhart & Sullivan. Advisory firms Alvarez & Marsal and AlixPartners also billed the company, according to their applications for compensation.

A group of insurers fighting the Boy Scouts of America’s bankruptcy reorganization plan wants to capitalize on a recent court ruling rejecting Johnson & Johnson’s use of chapter 11 to freeze 40,000 lawsuits linking its talc products to cancer, WSJ Pro Bankruptcy reported. Allianz Global Risks US Insurance Co. and Liberty Mutual Insurance Co. are among the carriers scheduled to appear Thursday in the U.S. District Court in Wilmington, Del., to argue against a bankruptcy court’s 2022 approval of the Boy Scouts chapter 11 plan, which would settle tens of thousands of sexual abuse claims. Last week, they argued in written papers that the now-dismissed bankruptcy of J&J subsidiary LTL Management LLC could apply to the youth group as well. The appeals-court ruling against LTL said that debtors seeking protection in chapter 11 must demonstrate good faith by acting in conformity with the underlying principles of the bankruptcy code, according to the insurers’ recent letter. They have previously said the Boy Scouts plan seeks to inflate financial distress to provide a windfall for sex-abuse attorneys. “Good intentions — such as to protect the J&J brand or comprehensively resolve litigation — do not suffice alone,” the insurers’ letter said, quoting the LTL decision. Some insurers settled with the Boy Scouts, but those that are appealing the chapter 11 plan argue their contractual rights under the policies they issued the Boy Scouts or its affiliates were unfairly disregarded.

Bankrupt cryptocurrency lender Celsius Network’s request to extend the deadline to present its chapter 11 plan has run into opposition because of cash burn and the length of time already taken, Bloomberg News reported. The debtors are seeking to extend the period during which they can exclusively file a plan to the end of March from Feb. 15. They also want to be the only ones who can solicit a plan until the end of June. But the U.S. Trustee, the official committee of unsecured creditors and an ad hoc group of borrowers filed objections on Wednesday, expressing little confidence in the debtors’ ability to come up with a restructuring proposal. Celsius filed for bankruptcy in July after a sharp decline in crypto prices caused risky bets to backfire. The firm is one of a number of digital-asset lenders that hit the buffers in last year’s market rout. A court-appointed examiner late last month blasted Celsius and its former Chief Executive Officer Alex Mashinsky for lacking adequate risk management and misleading customers about its business practices and financial health.