%1

Celsius Network, the crypto platform that touted itself as safer than a bank, won court approval to end its bankruptcy case and release most of its remaining cryptocurrency back to hundreds of thousands of customers whose funds have been trapped since last year, WSJ Pro Bankruptcy reported. The plan approved in a New York bankruptcy court Thursday also creates a new company built around Celsius’s crypto mining and staking activities, wrapping up a first-of-its-kind bankruptcy process that saw intense involvement from individual customers who fought to influence the outcome. Customers are expected to get back only a fraction of the cryptocurrency they deposited with Celsius before it froze user accounts last year with a $1.2 billion hole in its balance sheet, one of the biggest crypto collapses ever. Bankruptcy Judge Martin Glenn issued an opinion approving the plan proposed by Celsius and striking down the last remaining challenges to the terms of the reorganization plan. With the ruling, nearly all the major U.S. crypto firms that filed bankruptcy due to the market meltdown in 2022 have now concluded the court process and repaid what they could to their customers. The chapter 11 case of crypto exchange FTX is continuing.

A top financial regulator is crafting a plan to ensure that more derivatives exchanges keep client funds separate from their corporate cash, the latest response by U.S. policymakers to the havoc wrought by fallen crypto giant FTX, Bloomberg News reported. A draft proposal being worked on by the Commodity Futures Trading Commission would expand the scope of existing regulatory defenses to apply to exchanges that let customers trade without going through a brokerage. A version of those limits helped keep FTX from raiding customer funds at its LedgerX subsidiary, a former unit of Sam Bankman-Fried’s sprawling crypto universe that was overseen by the CFTC, according to one of the agency’s commissioners. The CFTC required the firm to separate customer and company assets as a condition for letting it offer crypto derivatives fully backed by collateral directly to customers. Kristin Johnson, a Democratic member of the CFTC, said rules requiring segregation of customers assets should apply to any firms using or seeking similar direct-to-customer models, whether they’re offering crypto products or other types of derivatives. That argument is bolstered by LedgerX’s insulation from the broader crumbling of the FTX empire and a desire to avoid such crises going forward. The CFTC should act immediately to put in place rules to prevent misuse or loss of customer funds, in light of events like FTX’s collapse, Johnson said. “This is especially critical when we are considering direct-to-retail market structures for complex financial products, like leveraged, crypto derivatives transactions, and particularly important when permitting untested liquidation and resolution approaches,” she said.

A company run by former New York Stock Exchange President Tom Farley is among three suitors vying to buy the remnants of FTX, as the auction for the collapsed cryptocurrency exchange founded by Sam Bankman-Fried reaches its final stages, the Wall Street Journal reported. Bullish, the crypto exchange run by Farley, fintech startup Figure Technologies and crypto venture-capital firm Proof Group are competing to buy FTX, according to people familiar with the matter. The winner could restart the exchange after its planned exit from bankruptcy next year. A banker advising FTX on the process said at a hearing last month that the company received interest from over 70 parties and narrowed it to three, without naming them. A winner could be picked in December. CoinDesk earlier reported on Proof’s bid; the other two haven’t been previously reported. There are no guarantees a deal will come together, and another suitor could yet emerge. As recently as last fall, FTX ranked as one of the world’s biggest crypto exchanges, handling billions of dollars in trading volumes for individual investors outside the U.S. and professional traders. Venture capitalists valued FTX at $32 billion in January 2022, making Bankman-Fried a billionaire several times over. It collapsed abruptly in November 2022 following a run on FTX customer funds. Prosecutors charged Bankman-Fried with fraud, accusing him of using a back door to plunder billions of dollars of customer funds and spend it on luxury real estate, personal investments and political donations. A New York federal jury last week convicted him on all seven counts he faced. He is expected to be sentenced in March and faces up to 110 years in prison.

Jack Cooper Transport, a specialized operator that hauls automobiles for carmakers, plans to submit a bid backed by $1 billion in financing and support from the Teamsters union and some U.S. lawmakers that would halt the liquidation of trucking giant Yellow and seek to resurrect the shuttered business, the Wall Street Journal reported. The improbable effort would require the Treasury Department to defer repayment for several years of a $700 million loan provided to Yellow under a COVID pandemic-era bailout, one of several debts that helped push one of the country’s biggest truckers into collapse earlier this year. The Jack Cooper Transport bid would provide about $1 billion to pay off other secured creditors, offer unsecured creditors shares in the business and hire back some of the 22,000 Teamsters members that lost their jobs when the company shut down over the summer, according to the people familiar with the matter. It would restore operations under a new, leaner company and seek to win back freight business that has dispersed to other carriers. The effort comes as the sale of Yellow’s sprawling network of trucking terminals and tens of thousands of trucks and trailers is moving through U.S. Bankruptcy Court. The bankruptcy process has a deadline Thursday for submission of bids for real-estate assets, with a minimum of $1.525 billion already set for the land and buildings ahead of an auction scheduled for Nov. 28. That would be enough to repay the company’s secured creditors, including the $700 million federal loan, and to cover wages and other payments owed to laid off workers.

Swedish truck manufacturer Volvo announced Friday today that it was successful in its $210 million bid in an auction for the battery business of financially troubled Proterra in the U.S., Investing.com reported. This auction was conducted as part of Proterra's ongoing chapter 11 bankruptcy protection proceedings. “We entered into the Chapter 11 process with a mission to maximize the potential of each of our product lines. Today, we have taken an important step towards that goal for our Proterra Powered business,” said Proterra CEO, Gareth Joyce. Volvo expressed its intention to conclude the acquisition early next year, subject to approval by the bankruptcy court.

A federal bankruptcy judge has ordered U.S. Marshals to arrest Jonathan Burden to force him to show up in court, after the self-proclaimed real estate investor failed to pay $26,800 in sanctions and failed yet again to show up for a hearing, WWLTV.com reported. Burden is accused in at least seven lawsuits of tricking New Orleans area homeowners into signing over their properties to him and, in some of the cases, of filing false documents to seize people’s homes out from under them. He has repeatedly ignored court orders and tied up those cases in civil court, even while the FBI and New Orleans Police Department investigate him over the allegations of criminal fraud. But Thursday was the first time a judge has ordered Burden to be forced into court, with U.S. Bankruptcy Judge Meredith Grabill issuing the order to force Burden to appear at a hearing on Nov. 30. It’s unclear when federal marshals plan to arrest him or if they will hold him in jail until the hearing.

Anagram, Party City’s balloon-manufacturing subsidiary, filed for bankruptcy with a deal to hand over ownership to a group of bondholders after its parent company rejected its supply contract, WSJ Pro Bankruptcy reported. The credit bid by Anagram bondholders, which would extinguish a large portion of the company’s debt, is subject to higher and better offers in an auction supervised by the bankruptcy court. Anagram, which has a separate board and employees from Party City, has come under pressure from the lingering effects of the COVID-19 pandemic, helium shortages, a liquidity crunch because of cash distributions to its parent company and Party City’s recent move to reject its supply contract, according to a court filing made by its chief restructuring officer, Adrian Frankum. Party City itself filed for bankruptcy in January, emerging from it last month. It kept its balloon-making division out of chapter 11 because the retailer had separated its own debt from the debt of the subsidiary in a 2020 debt exchange. Eden Prairie, Minn.-based Anagram has lined up a $22 million debtor-in-financing loan from the bondholder group that has proposed to take over the unit.

Congressional pressure is growing on the U.S. Treasury to help salvage trucking giant Yellow from bankruptcy, from Republicans and Democrats alike, letters viewed by Reuters show. Republican Senator Josh Hawley is the latest lawmaker to ask Treasury, in a letter on Thursday, to extend the terms of a controversial $700 billion pandemic loan granted by the Trump administration to Yellow. It follows separate letters sent by Republican Senator Roger Marshall and Democrats Sherrod Brown and Bob Casey last month. Earlier this week, Democratic senators Elizabeth Warren and Ed Markey sent letters. Republicans and Democrats pushing Treasury could benefit Jack Cooper, one the largest U.S. privately owned auto transport companies, making its long-shot bid to rescue Yellow from bankruptcy liquidation more likely. Key to Jack Cooper's bid is convincing Treasury to extend the loan currently due at the end of September 2024 to the same time in 2026, allowing Jack Cooper to offer more favorable terms for Yellow.

WeWork Inc. never figured out how to make money. Former company CEO Adam Neumann did, Bloomberg News reported. The office-leasing business declared bankruptcy this week, two years after finally going public minus its infamous co-founder. It has $19 billion of liabilities and $15 billion of assets. Longtime investors, including Softbank Group Corp. and the Vision Fund, will add to the enormous losses they’ve already taken on the venture. “It has been challenging for me to watch from the sidelines as WeWork has failed to take advantage of a product that is more relevant today than ever before,” Neumann said in a statement. But a part of Neumann might be thankful he was forced out in 2019 following the company’s disastrous first attempt at an initial public offering. While battering his reputation, the exit left him with plenty of liquidity, and he’s still worth $1.7 billion, according to the Bloomberg Billionaires Index. To be sure, WeWork’s failure hurt Neumann’s wealth. When it went public in a merger with a special purpose acquisition company in 2021, Neumann had a fortune of $2.3 billion, according to the index, with nearly one-third in WeWork shares. They’ve since fallen more than 99%. But the deal also revealed how he managed to extract huge amounts of cash from WeWork in better times. The ex-CEO’s name was mentioned 197 times in a merger filing alongside eye-popping payouts, including a $185 million non-compete agreement, $106 million settlement payment and $578 million received for shares sold by Neumann’s We Holdings to SoftBank.