%1

Almost three-and-one-half years after the Catholic Diocese of Camden, New Jersey filed for bankruptcy citing financial effects from the pandemic and sexual abuse settlements, its chapter 11 reorganization plan has been approved, according to the Insurance Journal. The final plan, the ninth amended proposal, establishes an $87.5 million trust to compensate about 324 survivors of sexual abuse within the diocese. The trust will be funded with $87.5 million from the diocese and related Catholic entities. Insurance policies turned over to the diocese will contribute $30 million. Bankruptcy Judge Jerrold N. Poslusny, Jr., in Camden, approved the plan that allows the diocese to pay into the trust over five years and keep operating so it can pay creditors. The settlement also requires the church to maintain and enhance protocols for the protection of children that were first implemented in 2002.

The profits were multiplying at a dizzying clip: 50%, 100%, then suddenly almost 200%. Even for long-time veterans at Attestor Ltd., a boutique London firm that specializes in trading distressed assets, this had the makings of a score to remember, Bloomberg News reported. The trade — targeting the remains of Sam Bankman-Fried’s once-vast cryptocurrency empire — became a popular one in distressed investing circles last year. Many of Attestor’s rivals jumped in, too, and as the value of crypto coins skyrocketed once again, so did the value of the assets they had purchased at rock-bottom prices from clients of Bankman-Fried’s, desperate to recoup whatever they could. Lawyers running the bankruptcy now estimate the clean-up will deliver investors 100% of the money frozen in FTX when it failed. But this is where the story gets messy for Attestor — and its grip on a chunk of that windfall becomes a bit fragile. The seller of one of the biggest FTX accounts it purchased — an obscure Panamanian firm called Lemma Technologies that’s controlled by an embattled South Korean trader — has opted, so far at least, to keep the claim for itself. Attestor’s lawyers have argued in a New York court that this is a clear case of “seller’s remorse.” Over the years, other bankruptcies have brought handsome returns, but rarely, if ever, so rapidly. Back in June, Lemma agreed to a sell price of $58 million, according to evidence submitted to the court. Today, the claim is expected to pay out $165 million.

Dayton Senior Care LLC, which does business under the name Friendship Village, is part of a chapter 11 bankruptcy filing in Tennessee along with six other entities owned by the same company, but the Ombudsman Office does not anticipate the facility will close, the Dayton Daily News reported. Friendship Village filed for bankruptcy in the U.S. Bankruptcy Court for the Middle District of Tennessee in Nashville. Among the top creditors listed is the Montgomery County Treasurer’s Office with $444,411.31 owed in property taxes, according to court records. The Ombudsman Office recently visited Friendship Village to conduct staff and resident interviews at the request of the U.S. Bankruptcy Court to ensure resident care does not decline during the bankruptcy proceedings. While the Ombudsman Office does not anticipate Friendship Village to close — expecting it will be sold — the facility would be required to give residents a 90-day notification before closing. Friendship Village’s assets are listed as being between $10 million and $50 million, according to court filings. The liabilities for the debtors are between $100 million and $500 million with between 200 and 1,000 creditors.

Trade groups representing the private fund management industry sued the U.S. Securities and Exchange Commission (SEC) on Monday over a rule requiring firms that routinely deal in government bonds and other securities to register as broker-dealers, Reuters reported. The SEC adopted the rule last month to enforce stricter oversight and risk management controls on proprietary traders and other firms that it says have become important sources of liquidity in the U.S. Treasury market. The groups say that the rule is confusing and could capture investors that regularly trade securities but which are not dealers. As such, they allege it violates the Administrative Procedure Act, a federal law which requires regulators to act within their authority, justify new rules and take on board feedback. The National Association of Private Fund Managers (NAPFM), MFA, and the Alternative Investment Management Association (AIMA) filed the lawsuit asking the U.S. District Court for the Northern District of Texas in Fort Worth to vacate the rule, they said in a statement. "The Dealer Rule is indeterminate and leaves certain market participants uncertain of their need to comply with the dealer regulatory framework," said Bryan Corbett, president and CEO of MFA. "Alternative asset managers are not dealers. They are customers of dealers," he said. The SEC rule is part of a push by regulators to improve the resilience of the U.S. government bond market at times of stress. The SEC introduced another major rule last year that will force more Treasury trades through clearing houses. The broker-dealer rule, which was first proposed in March 2022, would apply to trading firms that either routinely express interest in trading at the best available prices on both sides of the market, or mainly derive revenue by trading the spread on government bonds, or from incentives offered by trading venues. The final rule scrapped certain criteria that investors had said were too broad and could inadvertently capture market participants such as corporations, insurers and pensions.

Fabric and crafts retailer Joann Inc. filed for bankruptcy, unable to sustain its debt load after a sales boom during pandemic lockdowns faded, Bloomberg News reported. The Hudson, Ohio-based chain will be delisted after the bankruptcy proceedings and be privately owned by “certain of its lenders and industry parties,” according to a company statement released as it filed a chapter 11 petition in Delaware today. The filing listed liabilities of $1 billion to $10 billion. Joann’s lenders struck a restructuring deal to provide about $132 million in new financing that would help the company reduce debt by about $505 million, the firm said. The parties in the deal also agreed to a six-month extension of certain loans and credit facilities.

The Roman Catholic Diocese of Sacramento, which announced in December that it planned to file for bankruptcy protection because of a crush of sexual abuse lawsuits, will file with the bankruptcy court on April 1, The Sacramento Bee reported. “The faithful of the diocese are being notified of the filing date at this weekend’s Masses,” diocese spokesman Frank Lienert wrote Saturday in an email to The Bee. Bishop Jaime Soto announced in December that the diocese would follow the same path as some other ecclesiastical districts in California, including the Diocese of San Francisco, Diocese of Oakland, Diocese of Stockton and Diocese of Santa Rosa. Soto said in a statement in December that “it is now clear to me that this is the only way available to me to resolve these claims as fairly as possible.” “There are many victim-survivors awaiting compensation for the reprehensible sins committed against them,” the bishop wrote in the statement. “The diocese faces more than 250 lawsuits alleging sexual abuse by clergy or other church staff. The reorganization process will allow me to equitably respond to the large number of those who are victim-survivors of abuse.” The diocese originally said it expected to file in March, but has now pinpointed April 1 as the date court papers will be filed. The crush of lawsuits stems from a measure signed into law in California in 2019 that extended the statute of limitations for such cases. Other states have passed similar laws. The Sacramento diocese has published a list of 46 “credibly accused clergy” who served in the Diocese of Sacramento from 1933 through 2018. Many of them are now deceased, and some are listed as being fugitives from justice.

Genesis Global is facing off against its parent company in bankruptcy court on Monday, aiming to resolve more than a year of disputes over who reaps the benefits of the surging bitcoin price, WSJ Pro Bankruptcy reported. Judge Sean Lane of the U.S. Bankruptcy Court in White Plains, N.Y., is scheduled to hear closing arguments of Genesis’s chapter 11 plan that would offer a path, if approved, for it to wind down the business. After lengthy litigation that played out in court, Genesis’s lenders, customers and regulators support a proposal that would repay as much as 77% of its customers’ holdings in the type of digital assets that they are owed. However, Digital Currency Group, Genesis’s parent company and the biggest borrower, opposes the chapter 11 plan. Much of DCG’s dispute centers around who gets the benefit of bitcoin’s current high price, which has gone up more than 200% since January 2023, when Genesis filed for bankruptcy. DCG has argued that Genesis should repay its lenders and customers at the old rock-bottom price in U.S. dollars, allowing the remaining stakeholders, including DCG, to benefit from the upside of the price increases in digital assets. DCG has cited bankruptcy code stipulating that chapter 11 claims be valued in dollars as of the filing date. New York-based Genesis filed for bankruptcy in the aftermath of the collapses of crypto hedge fund Three Arrows Capital and crypto exchange FTX in 2022. The bankruptcy exposed the interconnected nature of the crypto industry, where companies lend to each other and when one fails it creates a domino effect.

Creditors want to force Rudy Giuliani to sell his $3.5 million Florida condo to help pay his significant debts, according to a court document filed on Friday, CNBC.com reported. The former New York City mayor filed for bankruptcy protection in December, citing myriad unpaid debts including a $148 million payment to two Georgia election poll workers who he falsely claimed had tampered with the 2020 election ballots while he was serving as a lawyer for former President Donald Trump. In response to Friday’s filing, Giuliani’s counsel said the request to sell the Florida condo is “extremely premature.” “The case is still in its infancy,” said Heath Berger, partner at Berger, Fischoff, Shumer, Wexler & Goodman, LLP, who is representing Giuliani in his bankruptcy litigation. Giuliani has argued that he does not have the funds to pay his debts, the Friday court filing said: “According to the Debtor’s counsel, ‘there’s no pot of gold at the end of the rainbow.’” Giuliani’s primary income comes from Social Security payments and money from his Individual Retirement Account, Berger told CNBC. But the court document cited various expenses Giuliani pays now to maintain his lifestyle.

Sushi Garage, LLC, a Japanese restaurant in Miami Beach aims to reorganize its business through chapter 11 bankruptcy, the South Florida Business Journal reported. The sushi restaurant, which is a subsidiary of the hospitality-focused Juvia Group, filed for Chapter 11 reorganization with the U.S. Bankruptcy Court for the Southern District of Florida on March 12. Sushi Garage was founded by local restaurateurs Jonas and Alexandra Millán and chef partner Sunny Oh. It launched in 2016 with a 4,000-square-foot, 100-seat restaurant in the Sunset Harbour neighborhood of Miami Beach. The restaurant is located at 1784 West Ave. The 19-page bankruptcy filing lists Jonas Millán as the managing member of Sushi Garage, LLC. Sushi Garage’s bankruptcy filing says the company estimates it has 50 to 99 creditors and owes less than $3 million in debt. The restaurant also estimates it has assets and liabilities valued at between $1 million and $10 million.