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Seattle-based research device company NanoString Technologies Inc. has secured $47.5 million in debtor-in-possession financing following its Feb. 4 announcement that it has filed for chapter 11 bankruptcy protection in federal court in Delaware, the Puget Sound Business Journal reported. The company's debtor-in-possession financing includes $12.5 million that has already been approved by the bankruptcy court, while an addition $35 million still needs final approval, expected in late February. The amount is up from an initial $40 million commitment announced early last week, and is being provided by the company's existing lenders. "With this financing, we will continue to conduct business as usual," NanoString CEO Brad Gray said in the release. "We are concurrently exploring several strategic options with the goal of assuring the long-term continuation of our mission, on behalf of all NanoString stakeholders including our customers and employees.” NanoString has filed for bankruptcy after being hammered by legal battles with competitor 10x Genomics Inc. over patent claims. When NanoString announced the bankruptcy filings, it said in a news release that it was considering options such as selling the company or certain product lines.

About a year and half ago, a small San Antonio pharmacy found itself in Bexar County’s crosshairs, targeted because of the huge amount of pain pills it dispensed. A lawyer for the county dubbed it a “pill mill.” So Trinity Pharmacies LLC was added to a 2018 lawsuit targeting drug manufacturers, a distributor and various retailers that officials said were fueling the opioid addiction crisis sweeping the San Antonio area. The litigation — in which Trinity is charged alongside retail giants such as CVS, Walgreens and Walmart — became too costly for Trinity. So, on Feb. 4, it sought chapter 11 bankruptcy protection, the San Antonio Express-News reported. “It can’t, your honor, sustain the litigation costs,” Trinity lawyer H. Anthony Hervol told Chief U.S. Bankruptcy Court Craig Gargotta during a hearing Wednesday. The pharmacy has racked up more than $40,000 in legal fees defending itself in the massive multi-district litigation that’s unfolding in Harris County District Court. The bankruptcy puts the county’s lawsuit against Trinity on hold. But the filing under a subchapter of the bankruptcy code designed for small-business debtors is part of a larger legal strategy its owners hope will eventually do away with the causes of action against it. The county's claims against Trinity and other retailers include: negligent and/or intentional creation of a public nuisance; common law fraud; and civil conspiracy. The county seeks to recover from defendants its costs associated with the opioid epidemic and punitive damages.

Lawyers representing a group of sex-abuse victims with claims against the Boy Scouts of America are asking the U.S. Supreme Court to pause payments to survivors from a $2.4 billion settlement fund created as part of the youth organization’s bankruptcy plan, WSJ Pro Bankruptcy reported. The lawyers, who represent a fraction of over 82,000 Boy Scouts sex-abuse plaintiffs, argued that since a central feature of the youth organization’s settlement is being litigated in the U.S. Supreme Court in the challenge to Purdue Pharma’s similar bankruptcy plan, the Boy Scouts plan should be suspended until the high court reaches a decision in the opioid maker’s case, according to court papers filed on Wednesday. Federal courts last October rejected earlier efforts by the same lawyers to suspend the Boy Scouts bankruptcy plan. U.S. District Judge Richard Andrews in Wilmington, Del., said then that unlike Purdue’s bankruptcy plan, the youth group’s reorganization had already gone into effect and many of the transactions it contemplated had already happened. The Supreme Court is set to examine on an expedited basis the issue of legal immunity granted in the Purdue reorganization plans that is also a key feature in the Boy Scouts settlement: whether bankruptcy courts can extinguish legal claims against third parties that aren’t in chapter 11 without the consent of all claimants.

Genesis Global on Wednesday won a court ruling confirming its ownership of 31.2 million shares of Grayscale Bitcoin Trust, a windfall for the bankrupt cryptocurrency lender’s creditors, WSJ Pro Bankruptcy reported. Crypto exchange Gemini Trust in October sued Genesis, its former business partner, over the shares, saying they were pledged as collateral on loans to Genesis from customers in Gemini’s Earn investment program. The shares are now worth more than $1.2 billion as the price of bitcoin, the fund’s underlying asset, has more than doubled since Genesis filed for bankruptcy. In August 2022, Genesis offered Gemini about 30.9 million shares of Grayscale Bitcoin Trust to secure $1.2 billion in loans from Gemini Earn users. Three months later, as the industry’s troubles deepened following the collapse of crypto exchange FTX, Genesis Global agreed to offer an additional 31.2 million shares as collateral. But those shares in dispute were never transferred to Gemini or Earn users. Judge Sean Lane with the U.S. Bankruptcy Court in White Plains, N.Y., said in his written decision Wednesday that the Grayscale shares held in bankruptcy belong to Genesis because they were never transferred and dismissed Gemini Trust’s assertion to claim ownership of the shares.
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In related news, Genesis Global Holdco LLC has settled a lawsuit brought by New York’s top law enforcement official alleging the bankrupt crypto lender defrauded customers of its now-terminated Gemini Earn program, which was run jointly with Gemini Trust Co., Bloomberg News reported. The settlement with New York Attorney General Letitia James is structured so that assets that could have otherwise gone to state authorities will instead be returned to former Earn customers and other Genesis creditors. The deal must be approved by a bankruptcy judge and follows a settlement Genesis struck resolving a separate complaint over the Earn program brought by the US Securities and Exchange Commission. James sued Genesis, its parent company Digital Currency Group and Gemini last October, accusing the crypto firms of defrauding customers of $1.1 billion. The settlement disclosed Thursday in New York bankruptcy court only resolves allegations against Genesis, according to court documents. The companies have denied wrongdoing and Genesis is settling the allegations without admitting liability. Genesis, which intends to liquidate, also agreed it will no longer do business in New York.
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A group of shareholders of bankrupt Ebix is seeking to appoint an official committee to represent its interests in the software and e-commerce services supplier’s chapter 11, saying that the company’s stock still has value, WSJ Pro Bankruptcy reported. The group owning 18% of Ebix stock made a request on Tuesday in the U.S. Bankruptcy Court for the Northern District of Texas, asking Judge Scott Everett to order the U.S. Trustee, the Justice Department’s bankruptcy watchdog, to appoint an official committee of equity holders. These equity holders said the stock market views Ebix as a solvent business and the stock is currently trading at roughly $2.40 a share, indicating a market capitalization of roughly $74 million. Also, “insiders and sophisticated investors are accumulating shares,” the equity group said. It pointed out, for example, that, days after the bankruptcy, Ebix director George Hebard bought 409,000 shares for roughly $1 apiece. The official unsecured creditors' committee in the Ebix bankruptcy, however, has said that the appointment of an equity committee shouldn’t be considered “at this time,” saying either the company itself or the creditor committee could protect shareholder interests.

Fells Point Tavern is no longer serving customers, and the Thames Street restaurant’s ownership agreed to vacate the premises by Feb. 15 as it endures lengthy bankruptcy litigation, the Baltimore Sun reported. The business’s attorney in U.S. Bankruptcy Court, Robert Scarlett, said yesterday that he and his client, tavern owner Vasilios Keramidas, voluntarily decided to give up the premises after they couldn’t agree with the restaurant’s landlord. According to court documents, Keramidas has not made any of his $21,000 monthly rent payments since October and owes property owners Thames Property LLC over $395,000 in unpaid rent, late fees and utilities since the lease started in June 2021. Doing business as Kali’s Court LLC, Keramidas filed for bankruptcy in the spring of 2023, stating that the restaurant owed hundreds of thousands of dollars to the IRS and the Maryland Office of the Comptroller as well as the U.S. Small Business Administration. Keramidas’ attorney said the business was one of “an array of” restaurants in Baltimore that suffered from the coronavirus pandemic, which started in March 2020, struggles he said led to the restaurant filing for bankruptcy in May. Their application noted that $160,000 in rent was past due, and their monthly payment needed to be renegotiated and is still pending nearly seven months later. The business’s landlord filed a motion in November asking a bankruptcy court judge to order the restaurant to turn over the property, alleging that the restaurant had paid only $25,400 against nearly $198,000 that had come due in the months since filing the petition.

Witnesses came from Ohio, Tennessee, North Carolina, Florida, Kansas and around Indiana to be in federal bankruptcy court in downtown Indianapolis in a proceeding to decide if Rodney Grubbs should be forced into chapter 7 bankruptcy, Fox59.com reported. Eight witnesses testified they met Rodney Grubbs through pickleball, usually at tournaments. Grubbs’ pickleball equipment and apparel business impressed them. Later, Grubbs would befriend them, and eventually ask if they wanted to invest in his business. With promises of a 12 percent or higher annual return on investment, they handed over thousands. All of them said Grubbs never paid back interest or principle on the loans. For each, the losses totaled in the thousands. Attorney Matthew Foster, who filed the bankruptcy petition on behalf of a group of seven creditors, said there are many more owed money. Foster says losses are in the “millions of dollars.” FOX59/CBS4 has previously reported Grubbs already faced a trio of civil court judgments and a cease-and-desist order from state regulators. To execute the loans, Grubbs had been issuing promissory notes without a state license. Grubbs functioned as his own attorney in the court proceeding, but did not contest any of the testimony, did not challenge evidence and did not cross-examine witnesses. Instead, he made repeated pleas to let his business, Pickleball Rocks, continue to operate under the belief that in the long term revenue from sales could provide more money. Grubbs even acknowledged that someone else would need to be brought in to run the company but predicted with continued growth in the popularity of the sport, it could generate a million dollars a year in sales. Bankruptcy Judge Robyn Moberly was not convinced and ordered Grubbs into bankruptcy.

Adam Neumann, the former chief executive and co-founder of WeWork, is trying to regain control of the bankrupt co-working company less than five years after the board forced him out, WSJ Pro Bankruptcy reported. On Monday, Neumann’s lawyers sent a letter to WeWork’s advisers saying that he is partnering with Dan Loeb’s Third Point hedge-fund firm and other investors in exploring a bid for the company. That effort is already facing challenges. Some WeWork creditors have signaled they are ready to sell the firm after it exits chapter 11, according to people familiar with the matter. But WeWork executives have been cool to Neumann’s interest. They have shut him out from information he would need to submit a bid for the company since he initially approached WeWork in December, according to Neumann’s letter that was reviewed by The Wall Street Journal. It also isn’t clear how committed Third Point is to working with Neumann on a WeWork acquisition. A Third Point spokeswoman said the hedge fund “has not made a commitment to participate in any transaction” and had “only preliminary conversations” with Flow Global, Neumann’s real-estate company. WeWork lawyers said on Monday that the company is running short on cash and needs more money to get through its costly chapter 11 cases. In Neumann’s letter to WeWork, he said the current financial crunch was caused by the management’s lack of ability to “explore alternatives” for financial support.

WeWork may be forced to take on a new bankruptcy loan to make up for slower-than-expected progress on rent negotiations, an attorney for the shared office space provider said yesterday, Reuters reported. WeWork's post-bankruptcy business plan is premised on a significant reduction in future rent costs from its landlords, and WeWork is at a crossroads in that effort, according to attorneys for WeWork and its landlords who spoke at a bankruptcy court hearing in Newark, N.J. Several of WeWork's landlords decried the company's "hardball tactics", saying that U.S. bankruptcy law requires companies to keep up with rent for properties that they continue to use. Kris Hansen, an attorney representing WeWork creditors, said that WeWork has shown "painfully little progress" in its discussions with landlords, raising doubts about the company's long-term ability to pay its debts. WeWork attorney Steven Serajeddini acknowledged that the company's initial round of negotiations had been headed for "certain failure," but he said WeWork has had more success after withholding as much as $33 million in January rent from certain landlords. WeWork initially believed it could make it through its bankruptcy case using the $164 million of cash it had on hand in November, but it now believes that amount to be insufficient and is considering taking out a new bankruptcy loan, Serajeddini said. A new loan would likely be converted into WeWork equity after the company emerges from bankruptcy, he said.

Bankruptcy Judge Paul Warren said at a hearing last week that neither plan proposed in the Rochester Diocese bankruptcy can move forward for a vote yet, the Rochester Beacon reported. Instead, he set an Apr.16 date for the hearing to be continued. It would be the hearing’s second continuation and third session. Judge Warren had previously called off an early October hearing that was to have dealt with the rival plans. Accounting for much of the complication is that insurance companies balked at payment amounts survivors sought as compensation. By the end of last year only one insurer, the Continental Insurance Co., also known as CNA, had not come to terms. Instead it offered a rival plan of reorganization to a joint plan offered earlier by the diocese and a committee representing survivors. The survivors’ committee has made it clear that it sees CNA’s plan as an inadequate take-it-or- leave-it offer. The court’s go ahead on a vote on one or both plans after the April 16 date assumes the diocese and CNA will have met series of conditions the judge laid out, many having to do with more clearly explaining legal issues to the nearly 500 abuse survivors who account for most of the diocese’s creditors.