%1

Revlon Inc., a meme-stock favorite after it filed for bankruptcy in June, said it will likely wipe out shareholders in its chapter 11 restructuring, but that didn’t stop the beauty supplier’s stock from rallying on MondayWSJ Pro Bankruptcy reported. Revlon, controlled since 1985 by billionaire financier Ronald Perelman, will be taken over mostly by lenders, and its shareholders aren’t expected to receive any distribution, according to a proposed restructuring agreement filed on Monday in the U.S. Bankruptcy Court in New York. Shareholders are generally wiped out in bankruptcy cases, except for the rare instances where there is value left over after debt claims are repaid. Revlon saw a surge of market interest after filing bankruptcy in June, closing at prices approaching $9 in August and staying above $4 through much of October despite its financial strains. Individual investors bet on Revlon hoping for a repeat of the Hertz Global Holdings Inc. bankruptcy case. The car-rental company was delisted from the New York Stock Exchange after filing for chapter 11 in 2020, yet the stock was in the money when Hertz left bankruptcy, providing shareholders with more than $1 billion in value. In October, Revlon shares lost more than half their value after the NYSE made its delisting of the company official. Now trading over the counter, the shares closed Friday at 35 cents each. They rallied to as high as $1.37 on Monday and closed at 57 cents, up 63%. Under Revlon’s restructuring deal, top lenders will pick the new board of directors for the reorganized company, which plans to emerge as a private company, court papers show.

Cases can move forward against Alex Jones regarding the nearly $1.5 billion he’s ordered to pay families of Sandy Hook victims over his conspiracy theories about the 2012 school massacre, a federal bankruptcy judge ruled Monday, but the families can’t yet pursue collection efforts against the Infowars host, the Associated Press reported. Bankruptcy Judge Christopher Lopez approved an order that attorneys for Jones, his media company and the Sandy Hook families had all agreed to. The order lifts a stay that automatically halted the cases when Jones filed for bankruptcy. Free Speech Systems, Jones’ media company, is also seeking bankruptcy protection. Judge Lopez approved the order, which prevents the families from pursuing collection efforts, during an hour and a half long hearing that Jones attended remotely. Jones filed for chapter 11 personal bankruptcy protection earlier this month in Texas, citing $1 billion to $10 billion in liabilities and $1 million to $10 million in assets. For years, Jones described the 2012 Sandy Hook massacre as a hoax. A Connecticut jury in October awarded victims’ families $965 million in compensatory damages, and a judge later tacked on another $473 million in punitive damages. Earlier in the year, a Texas jury awarded the parents of a child killed in the shooting $49 million in damages. Read more.

Conspiracy theorist Alex Jones on Monday asked a judge to allow him to take a $1.3 million annual salary from the bankrupt parent company of his Infowars' website, Reuters reported. Jones and his company, Free Speech Systems LLC, both went bankrupt in recent months as they owe families of the 2012 Sandy Hook mass shooting a total of $1.5 billion in damages for falsely claiming the massacre was a hoax. Jones has said he cannot pay those judgments, which came after back-to-back defamation trials in Texas and Connecticut. Jones drew a $1.3 million salary from Free Speech Systems before its bankruptcy, and his attorney asked Bankruptcy Judge Christopher Lopez to restore his salary to that level at a hearing yesterday. Jones has been paid a reduced biweekly salary of $20,000 since his company filed for bankruptcy on July 29, just over a third of what he had been paid before, according to his court filing. Read more.

The developer of “League of Legends,” one of the world’s most popular videogames, wants to end a lucrative sponsorship deal with FTX, saying its association with the bankrupt cryptocurrency exchange is damaging its brand and potentially hurting its upcoming competitive season due to the uncertainty of the funding, WSJ Pro Bankruptcy reported. Riot Games Inc. said in papers filed on Friday with the U.S. Bankruptcy Court in Wilmington, Del., that it doesn’t have time to replace FTX as a sponsor for the 2023 League of Legends competitive season, but wants to end the sponsorship as soon as possible so it can find a new cryptocurrency exchange partner. The League of Legends esports league boasts the third most-watched professional sport in the world among males between 18 and 34 years old, behind only the National Football League and National Basketball Association, Riot said in the filing. The FTX sponsorship was the largest Riot had ever signed for an esport league and represented a critical funding source for compensating its teams, the company said. FTX paid Riot $4 million in 2021 and agreed to pay the videogame maker $12.5 million in 2022 and roughly $12.88 million in 2023, according to a partially redacted copy of the agreement filed in bankruptcy court.

FTX’s U.S. managers are negotiating with Bahamian authorities to resolve a dispute over access to the failed crypto exchange’s electronic records, lawyers said in a court hearing Friday, following weeks of publicly criticizing each other over the handling of FTX’s collapse, WSJ Pro Bankruptcy reported. FTX Chief Executive John J. Ray III and company lawyers met in New York on Thursday with representatives of the Securities Commission of the Bahamas and Bahamian court-appointed liquidators to try to resolve a dispute over sharing information from inside the exchange that is relevant to their investigative work. “While we haven’t come to any conclusions, we did have a productive exchange of views,” FTX lawyer James Bromley said during a hearing in the U.S. Bankruptcy Court in Wilmington, Del. The Bahamian liquidators have sought access to data from FTX’s international trading platform, email records from employees of FTX’s Bahamas affiliate, FTX Digital Markets Ltd., employee Slack chat records, documents stored on a shared company Google Drive and FTX’s QuickBooks accounting system, according to court papers. Their access to the information was cut off by FTX’s U.S. management on Nov. 12, a day after FTX filed for chapter 11, according to their court filings.

Former FTX Chief Executive Sam Bankman-Fried is expected to appear in court in the Bahamas today to reverse his decision to contest extradition to the United States, where he faces fraud charges, Reuters reported. The 30-year-old cryptocurrency mogul was indicted in federal court in Manhattan on Tuesday and accused of engaging in a scheme to defraud FTX customers by using billions of dollars in stolen deposits to pay for expenses and debts and to make investments for his crypto hedge fund, Alameda Research LLC. His decision to consent to extradition would pave the way for him to appear in U.S. court to face wire fraud, money laundering and campaign finance charges. Upon arrival in the United States, Bankman-Fried would likely be held at the Metropolitan Detention Center in Brooklyn, though some federal defendants are being held at jails just outside New York City due to overcrowding at the facility, said defense lawyer Zachary Margulis-Ohnuma. At his initial court hearing in Manhattan, Bankman-Fried would be asked to enter a plea and a judge would make a determination on bail, Margulis-Ohnuma said. The attorney added that such a hearing must take place within 48 hours of Bankman-Fried's arrival in the United States, though it would likely be sooner. Prosecutors will likely argue that Bankman-Fried is a flight risk and should remain in custody because of the large sums of money involved in the case and the unclear location of those funds.

Attorneys for the U.S. bankruptcy trustee in Delaware and several major media outlets are challenging an effort by cryptocurrency exchange FTX to withhold names of the company’s customers and creditors from the public, the Associated Press reported. At a brief hearing Friday, the judge presiding over the FTX bankruptcy granted a motion by media outlets to intervene for the purpose of objecting to the sealing of creditor information. A separate objection by the U.S. trustee, the government watchdog that oversees chapter 11 reorganizations, also was on the agenda for Friday’s hearing but was postponed by Bankruptcy Judge John Dorsey until Jan. 11, when he likely will also hear arguments from the media. In a court filing earlier this week, an attorney for Delaware’s acting U.S. trustee noted that “disclosure is a basic premise of bankruptcy law.” “The debtors simply cannot seek bankruptcy protection and then do business behind a shield of secrecy” Juliet Sarkessian wrote. Sarkessian warned that allowing FTX to shield creditor lists and financial schedules would be a “slippery slope” and create an unfavorable precedent for bankruptcies in which creditors are also customers. Last month, Judge Dorsey temporarily granted a request by FTX to redact the names and addresses of clients and creditors from court filings, even though such information is typically public. The judge did direct FTX to file an unredacted creditor matrix under seal with the court, but the company has yet to do so.

A federal judge approved a bankruptcy settlement of about $100 million Friday over Carolina Panthers owner David Tepper’s failed plan to build a practice facility for his NFL team in South Carolina, the Associated Press reported. The deal will turn the land and the incomplete steel shell of what was supposed to have been the team’s new headquarters over to the city of Rock Hill. It’s estimated to be worth $20 million. Tepper’s real estate company GT Real Estate Holdings will pay York County, which provided sales tax revenue for road improvements, $21 million, and $60 million will be split among the contractors who worked on the project before it was abandoned earlier this year. All sides agreed to drop their current lawsuits and not file any other claims as part of the deal approved on Friday by Bankruptcy Judge Karen Owens. Tepper, a hedge fund manager who is one of the NFL’s wealthiest owners, and the Panthers announced plans for an $800 million practice facility, team offices, sports medicine complex, hotels and entertainment near Rock Hill in 2019. Both local and South Carolina leaders cheered the investment, offering incentives and relishing getting a piece of the NFL team away from North Carolina and Charlotte, where the team plays its games about 25 miles (40 kilometers) away. But after less than two years, Tepper’s company abruptly stopped work. York County Sheriff Kevin Tolson and Solicitor Kevin Brackett continue to investigate Tepper and his company to see whether public money was misused on the project. York County, which is separate from the sheriff, released a statement after reaching its deal with Tepper that said Tepper and his company “have acted in good faith and that the county “believes that no action of any kind with respect to the county payment is warranted.”

Lawyers for the bankrupt crypto exchange FTX on Wednesday opposed a demand for internal records from an insolvent affiliate based in the Bahamas, saying they "do not trust" the Bahamian government with data that could be used to siphon off assets from the bankrupt company, Reuters reported. Liquidators of FTX's Bahamian business, FTX Digital Markets, had asked U.S. Bankruptcy Judge John Dorsey to give them access to the U.S. unit's Slack, Google and Amazon Web Services accounts and data. At a court hearing in Delaware, lawyers for FTX asked Dorsey to deny the request. They argued that Bahamian regulators had worked with FTX's founder, the recently arrested Samuel Bankman-Fried, to undermine the U.S. bankruptcy case and withdraw assets to the detriment of some creditors. FTX attorney James Bromley told Dorsey that the Bahamian government has previously obtained information from FTX Digital Market's liquidators and used it to siphon digital assets away from FTX. "This is dangerous information," Bromley said. "We do not trust the Bahamian government." The Securities Commission of the Bahamas (SCB) has previously disputed FTX's "misstatements" about the Bahamian government's response to FTX's collapse.