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Creditors of distressed Brazilian retailer Americanas SA approved a restructuring plan to overhaul 50 billion reais ($10.3 billion) of debt in a key step to applying a recovery plan nearly a year after its sudden implosion due to a multi-year fraud, Bloomberg News reported. With more than 97% of banks, bondholders and suppliers represented at the virtual meeting, the creditors gave the company the green light to proceed with the plan that envisions a capital injection of 24 billion reais in 2024 and recovery rates close to 30%. The stock gained as much as 7.8% in Sao Paulo trading to 0.97 reais a share. Brazil’s wealthiest and most iconic businessmen billionaires Jorge Paulo Lemann, Carlos Sicupira and Marcel Telles are the largest shareholders of Americanas and have agreed to inject 12 billion reais into the company as part of the recovery plan. They’ve already put up 1.5 billion reais as part of debtor-in-possession financing and will disburse another 3.5 billion reais shortly after the plan’s approval, chief financial officer Camille Loyo Faria said in the assembly on Tuesday.

The "National Guard and Reservists Debt Relief Extension Act of 2023" (H.R. 3315) was signed into law yesterday by President Biden after passing the Senate on Monday and the House of Representatives on Dec. 11. The bipartisan measure was reintroduced on May 15 by Rep. Steve Cohen (D-Tenn.) to provide the same means-test treatment under chapter 7 of the Bankruptcy Code for guard members and reservists who were recently federally deployed as that of active duty servicemembers. The legislation exempts for an additional four-year period, from the application of the means-test presumption of abuse under chapter 7, qualifying members of reserve components of the Armed Forces and members of the National Guard who, after September 11, 2001, are called to active duty or to perform a homeland defense activity for not less than 90 days.

Bankrupt pharmacy chain Rite Aid Corp. agreed to begin court-supervised mediation with lower ranking creditors, including groups that blame the company for contributing to America’s opioid addiction crisis, Bloomberg News reported. The company, backed by senior lenders, will negotiate with unsecured creditors about how to end the retailer’s insolvency case and on a potential loan package to fund the company’s exit from bankruptcy, Rite Aid attorney Aparna Yenamandra said in court Tuesday. The company will try reach a deal before the end of January, Yenamandra said. The pharmacy chain held a video court hearing Tuesday to ask US Bankruptcy Judge Michael Kaplan to approve a $3.25 billion loan package to refinance older debt and to help pay for the company’s reorganization case. Kaplan said he will sign an order approving the financing later this week after the company makes adjustments to the wording of the loan proposal documents. Rite Aid is trying to sell itself while under court protection in order to pay creditors owed billions of dollars. Should the company fail to find a buyer willing to keep at least part of the chain open, Rite Aid would be forced to liquidate. When retailers liquidate in bankruptcy, lower-ranking creditors are typically paid far less than if the company successfully reorganizes.

Bankrupt crypto exchange FTX Trading on Tuesday announced a settlement with liquidators for FTX's Bahamas unit, resolving a long-simmering dispute over whether the company's U.S. bankruptcy proceedings should take precedence over the Bahamian liquidation, Reuters reported. FTX and FTX Digital Markets have agreed to pool their assets and harmonize their approach to valuing customer claims to ensure equal treatment for customers in either country's insolvency process. The settlement will allow most customers of FTX.com's international crypto exchange to choose whether to seek repayment from either the U.S. bankruptcy or the Bahamian liquidation, according to FTX. FTX's CEO John Ray, who took control of the company from convicted FTX founder Sam Bankman-Fried, said that the agreement is a critical milestone in the company's effort to repay customers. "The unique challenges raised by the conflicting filings of the FTX Debtors and FTX Digital Markets have been some of the toughest the team has faced," Ray said in a statement. "But we recognized at the beginning that we have an overlapping constituency: FTX.com customers."

Digital Currency Group (DCG) can’t make any ownership changes with Genesis until the former exits bankruptcy, a judge ruled on Monday, Blockworks.co reported. The ruling leaves Genesis protected under DCG’s tax consolidated group, giving certain benefits to the bankrupt institutional-focused crypto lender. Those benefits are in effect until the “occurrence of the effective date of a Chapter 11 plan” or the bankruptcy is converted to a chapter 7 case. Genesis filed the motion back in late November, arguing that DCG’s stake in Genesis must stay above 80% to “to protect the potential value of [its holding company’s] interest in the federal net operating loss [NOL] carryforwards of the DCG Group.” Net operating loss carryforwards are a tax benefit, allowing Genesis — or any eligible company — to deduct losses from future profits. Genesis is “estimated to have generated in excess of $700 million of NOLs in the course of [its] business,” which it could lose under ownership changes. The carryforwards, Genesis said, are “directly attributable to the failure by the digital asset hedge fund Three Arrows Capital” to repay loans given by Genesis Asia Pacific.

Bird Global Inc., the company that put electric scooters onto the sidewalks of major cities, has filed for chapter 11 bankruptcy protection in Southern Florida, Bloomberg News reported. The Miami, Fla.-based company listed assets and liabilities of between $100 million and $500 million in a court filing. The filing protects the company from creditors while it seeks court approval of a plan to try to repay them. A former Uber Technologies Inc. executive, Travis VanderZanden, founded Bird in 2017. It let customers remotely unlock the scooters and rent them using an app. The model was widely copied and turned Bird into one of the fastest startups to reach a $1 billion valuation at one point. Bird shares plunged this year as scooter enthusiasm faded and in September the NYSE began delisting proceedings against the company after its average global market capitalization over a consecutive 30 trading day period fell below at least $15 million.

Houston bankruptcy court rejected a request from creditors of hand-sanitizer maker 4E Brands to disqualify Judge Marvin Isgur from ruling on a fee dispute involving the company’s law firm, saying no evidence of bias was established, WSJ Pro Bankruptcy reported. The creditors of 4E Brands, whose products included Blumen Hand Sanitizer and Assured Hand Sanitizer, are seeking the return of more than $860,000 in legal fees it paid to law firm Jackson Walker since its 2022 bankruptcy. The case was overseen by former Bankruptcy Judge David R. Jones who approved the hiring of Jackson Walker as bankruptcy counsel and also signed off on the fees charged. Jones resigned in October from the bench after his romantic relationship with former Jackson Walker bankruptcy lawyer Elizabeth Freeman became public. Creditors seeking a reversal of the fees had said that, while Freeman didn’t bill hours in the 4E Brands case, she benefited from the fees the company paid the law firm because she was a Jackson Walker equity partner. Judge Isgur took over several of Jones’s cases, including the 4E Brands case, when Jones stepped down.

The U.S. Bankruptcy Court for the Southern District of Florida on Nov. 30 granted a motion by the USTP’s Miami office to extend the deadline for creditors to file claims in the chapter 11 bankruptcies of MV Realty PBC LLC and its nearly three dozen affiliates, according to a USTP press release. The court’s order extends the original Dec. 1 deadline to Feb. 1, 2024. The court also directed the MV Realty entities to serve — at their expense — copies of the order on all parties to the bankruptcies, including roughly 38,000 homeowners whom MV Realty listed as current contract holders but not as creditors. Additionally, the companies must provide claim forms to about 2,850 other consumers who may have been forced to pay damages after terminating their agreements; those consumers were neither listed as creditors nor notified of the bankruptcy cases. MV Realty opposed the USTP’s motion, citing the costs of additional service. Its objection was overruled. “This ruling protects the due process rights of thousands of people across the country who were affected by MV Realty’s business practices,” said Director Tara Twomey of the Executive Office for U.S. Trustees. MV Realty, which operates in 33 states, has been the subject of lawsuits by several state attorneys general alleging deceptive trade practices. In 2018, MV Realty began marketing homeowner benefit agreements (HBAs), under which consumers receive one-time payments of 0.3% of a property’s value in exchange for a 40-year exclusive right for MV Realty to market the property if the consumer decided to sell. Breaching an HBA — for example, by retaining a different real estate agent — could render a consumer liable for damages of up to 3% of the property value. In other words, consumers who received upfront payments of a few hundred dollars could end up owing thousands under an HBA. Additionally, MV Realty files liens or memoranda in the official records to encumber title to the properties.

Nearly 170 former employees of California's failed First Republic Bank have sued the U.S. Federal Deposit Insurance Corporation (FDIC), alleging that the regulator is improperly blocking their access to at least $150 million in retirement funds, a plaintiffs' attorney said yesterday, Reuters reported. The lawsuit marks the latest fallout for the FDIC from three bank failures earlier this year that cost the agency's deposit insurance fund about $32 billion and have drawn scrutiny from lawmakers. The lawsuit was filed on Dec. 5 in the U.S. District Court for the Northern District of California but has not been previously reported. With assets of more than $200 billion, First Republic in May became the largest bank to fail since the 2007-2009 global financial crisis, despite efforts by major banks including JPMorgan Chase & Co to right the ship, including a $30 billion infusion of deposits in March of this year. As receiver, the FDIC in May sold virtually all the bank's assets to JP Morgan, which assumed all deposits as well. In their complaint, the former employees allege that in mid-May the FDIC stopped payments intended for them under a deferred compensation plan that First Republic had earlier established for them in a trust. They say the FDIC instead began treating them as unsecured creditors, meaning they could be left with nothing.

Amazon is in talks to invest in the biggest regional-sports programmer, a move that would advance the e-commerce giant’s aggressive push into sports content as it takes on streaming rivals like Disney and Netflix, the Wall Street Journal reported. Diamond Sports Group, which carries the games of more than 40 major sports teams across the country and filed for bankruptcy earlier this year, is actively negotiating with Amazon about a strategic investment and a multiyear streaming partnership. If an agreement is reached, Amazon’s Prime Video platform would eventually become the streaming home for Diamond’s games. Diamond, which has the local rights to about half the teams in Major League Baseball and the National Basketball Association and about a third of the National Hockey League teams, would continue operating its cable networks through its existing partnerships. It isn’t clear how much money Amazon is planning to invest or at what valuation. Diamond has received support from a select group of creditors for proceeding with the talks. Any transaction is subject to bankruptcy-court approval and could still fall through. Should the companies manage to strike a deal, it could help enable Diamond, which operates Bally Sports-branded networks, to stave off liquidation.