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Hospital bankruptcies spiked in 2023 with 12 filings compared to a total of 11 filings in the previous three years combined. Three of those bankruptcy filings were by hospitals in Texas, with another four hospitals in the state either closing or sharing plans to close as inflation, staffing shortages and other financial headwinds continue to challenge healthcare providers, according to Becker's Hospital CFO Report. Dallas-based Steward Health Care on May 1 closed Texas Vista Medical Center in San Antonio, resulting in 827 layoffs. The 325-bed hospital was already struggling financially when Steward acquired it in 2017, and the pandemic exacerbated its losses. Traditionally, the hospital served lower-income patients; nearly 25% of its patients cannot and do not pay for medical services, according to the health system. Steward, which is trying to to sell four of its hospitals amid financial difficulties, will also close the Medical Center of Southeast Texas in Beaumont, effective Feb. 2. All care offered at the Beaumont location will be taken in by the center's Port Arthur campus. The physician-owned hospital "was severely underutilized given the needs in the region," a spokesperson for Steward told Becker's. Another Texas physician-owned hospital, West Lake Hills-based the Hospital at Westlake Medical Center, closed its emergency department on Dec. 29. The decision came three months after the hospital filed for chapter 11 bankruptcy protection, citing significant debt that was exacerbated by the COVID-19 pandemic. La Grange-based St. Mark's Medical Center also closed its doors Oct. 12 after unsuccessful efforts to fulfill its financial obligations. After cutting nearly half of its staff in February, the hospital converted to a rural emergency hospital designation to preserve its emergency department services and most outpatient care. However, the hospital found it could no longer sustain the $13 million of mortgage debt, as it had been paying less than the full mortgage since 2020. Lion Star LLC, the group that operates Nacogdoches Memorial Hospital, filed for chapter 11 bankruptcy in November. The filing outlines that the hospital owes as much as $50 million to creditors. At least 200 creditors have claims against Lion Star, and the largest 20 credit claims total more than $8 million.

An appointee of the U.S. Department of Justice is seeking to throw out the Gastonia Honey Hunters owner's chapter 11 bankruptcy case, the Charlotte Business Journal reported. Acting U.S. Trustee Gerard Vetter motioned earlier this month to dismiss NC Gas House Gang LLC's case. The motion argued that a dismissal would be in the best interest of creditors in the case. Vetter's motion highlights that the entity, which is led by Honey Hunters owner Brandon Bellamy, has struggled to obtain and maintain proper insurance. In the alternative to dismissal, Vetter's motion seeks to convert the case to a chapter 7 liquidation. Vetter made the motion on Jan. 8. The motion argued that NC Gas House Gang's total assets — which the entity recently reported to be $8,615 — cannot come close to satisfying its $2.5 million in liabilities. NC Gas House Gang filed an opposition to Vetter's motion on Jan. 22. The entity argues the motion should be denied because NC Gas House Gang has now obtained all required insurance coverage. Judge Lori S. Simpson last week scheduled a hearing for Feb. 12 to consider the dismissal motion, court records state.

FTX is unloading cryptoassets and hoarding cash as bankruptcy advisers look for a way to repay customers whose accounts have been frozen since the platform collapsed in 2022, Bloomberg News reported. The fraud-tainted crypto firm’s four largest affiliates — including FTX Trading Ltd. and Alameda Research LLC — together nearly doubled the group’s cash pile to $4.4 billion at the end of 2023 from about $2.3 billion in late October, according to chapter 11 monthly operating reports. The company’s total cash is likely higher including the rest of its affiliates. The company said in a court filing last month that FTX raised $1.8 billion through Dec. 8 by selling off some of the firm’s digital assets. FTX also said that it’s conducting Bitcoin derivative trades to hedge exposure to the coin and generate additional yield on its digital holdings — and is exploring options to potentially restart the exchange. An uptick in FTX’s cash stockpile has coincided with the rising value of customer accounts. Since FTX unraveled in November 2022, bankruptcy advisers have been tracking down assets and struck deals intended to benefit customers who had smaller accounts on the platform. The company has also brought major lawsuits against former associates of Sam Bankman-Fried and crypto firms like Bybit Fintech Ltd. that withdrew funds from FTX before it filed chapter 11. Customer claims worth more than $1 million traded at around 73 cents on the dollar as of Friday, up from around 38 cents on the dollar in October, according to investment firm and bankruptcy claims broker Cherokee Acquisition. Actual trading prices depend on the value of a specific claim and other factors, Cherokee Acquisition said. Read more.

In related news, Rashit Makhat was paid close to $500 million months before FTX collapsed when he sold most of his stake in a bitcoin-mining enterprise, Genesis Digital Assets, to Bankman-Fried’s hedge fund, the Wall Street Journal reported. Makhat’s lawyers in London say he remains in possession of the proceeds. The peak-of-market deal made Makhat one of the biggest individual beneficiaries of what U.S. prosecutors in Bankman-Fried’s recent trial called a “spending spree” of money Bankman-Fried stole from FTX customers. In pressing their case, prosecutors used details such as bank-account data and testimony from insiders to show how much of the $8 billion of customer money went into startups and other investments. Bankman-Fried was convicted and is in custody awaiting sentencing. The early 2022 Genesis Digital deal was among the largest highlighted by prosecutors, who displayed to jurors a diagram showing how more than $1 billion of funds went from customers to an account owned by Bankman-Fried’s hedge fund and then into Genesis Digital shares. Prosecutors didn’t mention Makhat, who hasn’t been accused of wrongdoing. Prosecutors also singled out Bankman-Fried-led deals including Bahamas property purchases and $1.2 billion that went toward buying out the rival crypto exchange Binance, which had been an FTX shareholder. Read more. (Subscription required.)

Property developer China Evergrande Group has been ordered to liquidate by a Hong Kong court, bringing an end to the yearslong saga of a company whose default rippled through the world’s second-largest economy, WSJ Pro Bankruptcy reported. The liquidation order came despite an 11th-hour push by the company’s creditors to reach a deal over the weekend, according to people familiar with the matter. It comes more than two years after the company defaulted on its dollar bonds, becoming one of the first dominoes to fall in China’s beleaguered real-estate sector. “The time is for the court to say enough is enough,” said Judge Linda Chan in Hong Kong’s high court. The judge said that Evergrande was given another adjournment in December to come up with a new restructuring deal, seek comments from the creditors, and get a legal opinion on the proposal. “None of that has happened,” Chan said. Evergrande’s lawyer argued for another adjournment, saying that an immediate liquidation order would affect the value of the company’s offshore assets and subsidiaries, thereby damaging the potential recovery rate for creditors. But a lawyer for the main creditors group argued that Evergrande hadn’t negotiated with them in good faith, and the judge agreed.

Brazilian airline Gol does not expect its chapter 11 proceedings to trigger job cuts, its chief executive said on Friday, reiterating that the carrier's operations will remain as usual while it is under bankruptcy protection, Reuters reported. Gol, Brazil's second-largest airline in terms of passengers transported, filed for bankruptcy protection in the United States on Thursday as it grapples with high debt seen at around 20 billion reais ($4.07 billion). CEO Celso Ferrer in an interview with CBN radio said that the carrier's main goal with the move is to restructure its balance sheet so it can grow again. "There will not be layoffs related to this process. From now on we want to grow," Ferrer said, adding that operationally the carrier has been seeing a "significant recovery" after positive results in recent quarters. Gol is the latest in a series of Latin American carriers to seek bankruptcy protection after the COVID-19 pandemic, following the path of sister company Avianca, Mexico's Aeromexico and Chile-based LATAM Airlines.

A Texas-based trucking company has filed for bankruptcy liquidation four days before a wrongful death civil trial filed by the family of one of its former drivers who drowned in 2016 was slated to start in El Paso County, Texas, Freight Waves reported. J.J. & Sons Logistics, doing business as JJ Transport, of Clint, Texas, filed its petition Monday in the U.S. Bankruptcy Court for the Western District of Texas. In its Chapter 7 petition, JJ Transport listed its assets as up to $500,000 and liabilities as between $100 million and $500 million. The shuttered company states that it has up to 49 creditors and maintains that funds will be available for unsecured creditors once it pays administrative fees. JJ Transport once had 19 drivers and 18 power units prior to filing for bankruptcy. In its bare-bones petition, the company listed Fleetone Factoring LLC of Antioch, Tennessee; Auxillior Capital Partners of Plymouth Meeting, Pennsylvania; and Wells Fargo Bank of Des Moines, Iowa, as creditors, although no amounts were given. Its trucks had been inspected 27 times and two had been placed out of service in a 24-month period, resulting in a 7.4% out-of-service rate. This is lower than the industry’s national average of around 22.3%, according to the Federal Motor Carrier Safety Administration’s SAFER website. JJ Transport’s drivers had been inspected 53 times over the same 24-month period and one driver was placed out of service, resulting in a 1.9% out-of-service rate. This is lower than the national average of around 6.7%, according to FMCSA data. In the past two years, the company’s trucks had been involved in five crashes, including two injuries and three towaways.

Distressed-debt investors will be watching a trial starting Thursday over Incora’s 2022 debt transaction that could reshape the aerospace parts distributor’s restructuring plan, WSJ Pro Bankruptcy reported. In that deal, Wesco Aircraft Holdings, which does business as Incora, raised $250 million in new financing from Silver Point Capital, Pimco and other bondholders and exchanged $450 million in bonds due in 2024 for new debt with later maturities. The deal excluded holders of secured bonds including JPMorgan, BlackRock and SSD Investments, which is an affiliate of Golden Gate Capital, as well as a large holder of unsecured bonds, an affiliate of investment firm King Street Capital. The excluded investors filed two separate lawsuits two years ago against Incora, its private-equity owner Platinum Equity, participating investors, and the bondholder trustee that signed off on the deal, claiming that the deal violated the debt agreements and seeking damages for up to the full value of their debt holdings. They also said Incora failed to garner the approval of two-thirds of its bondholders to clear the threshold for the 2022 debt transaction. The trial, which is expected to last several days, follows a ruling by Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston earlier this month allowing the lawsuits to proceed.

Brazilian airline Gol said on Thursday it is filing for chapter 11 bankruptcy protection in the United States, with a $950 million financial commitment from its controlling shareholder Abra Group, Reuters reported. Abra also controls Colombian carrier Avianca, though the two airlines operate separately. The move makes Gol the latest Latin American carrier to seek bankruptcy protection after a pandemic-related crisis, following the path of its sister company Avianca, Mexico's Aeromexico and Chile-based LATAM Airlines. The decision was somewhat expected by market participants after media reports earlier this month said Gol was considering the move, even as the company maintained it sought a "consensual" restructuring in discussion with creditors.

Lumen Technologies garnered the support of more debtholders for an out-of-court restructuring deal that would allow the telecom company to push out maturities past 2027, WSJ Pro Bankruptcy reported. The company on Thursday said it secured the backing of holders of $12.5 billion of debt — up from $7 billion last fall — extending their due dates to 2029 and 2030. The holders who have agreed to swap their debt together own 70% of the debt coming due at Lumen and its Level3 subsidiary between now and 2027, the company said. The new deal provides fresh capital totaling $1.3 billion, up from $1.2 billion agreed to last year, according to the company’s disclosures. “The broad support for this agreement across our capital structure is a clear indication of the confidence in our transformation strategy and our vision, which allows us to focus on our path forward,” Chris Stansbury, Lumen’s chief financial officer said. Formerly known as CenturyLink, Monroe, La.-based Lumen expanded through several takeovers, including a $25 billion merger with Level 3 Communications in 2017. The company is grappling with $20 billion in debt, much of which comes due in the next several years. The company faces more than $12 billion in debt maturities between now and 2027, according to Moody’s Investors Service.

A federal judge moved to limit the cost and length of a new outside investigation of FTX Trading, the fraud-tainted crypto firm, saying its insolvency case should not be disrupted by another multimillion-dollar probe, Bloomberg News reported. Bankruptcy Judge John Dorsey sided with lawyers for FTX and its creditors, who argued that the new investigation ordered by an appellate court should be short and limited in scope. Earlier this month, a federal appeals court in Philadelphia ordered the appointment of an examiner for the chapter 11 case, but left the details of any investigation up to Judge Dorsey. The Office of the U.S. Trustee, the federal watchdog that monitors corporate bankruptcies, had argued that the cost, length and scope of the new investigation should be left open until after the appointment of an examiner. Judge Dorsey said that was a recipe for runaway costs that won’t turn up anything new. “Left to an open process, that could involve tens of millions of dollars,” Judge Dorsey said during a court hearing in Wilmington, Delaware. In the coming weeks, attorneys for the company, its creditors and the U.S. Trustee should work together on a formal proposal to appoint an examiner, Judge Dorsey said.