The latest trial over claims that Johnson & Johnson's talc products cause cancer ended in a mistrial on Tuesday, as a Florida state court jury said it could not agree on a verdict, Reuters reported. The lawsuit was brought by Bob Sugarman, who said that J&J's talc-based baby powder led his wife to develop ovarian cancer and die from the disease. J&J said in a statement after the mistrial that its baby powder "is safe, does not contain asbestos and does not cause cancer." J&J faces more than 50,000 lawsuits over talc, most by women with ovarian cancer, with a minority of the cases involving people with mesothelioma. The cases were on hold for about two years as J&J unsuccessfully tried to resolve them through bankruptcy.
The Brazilian airline Azul SA is working with Citigroup Inc. and Guggenheim Partners as it explores a potential offer for its troubled competitor Gol Linhas Aereas Inteligentes SA, Bloomberg News reported. Shares in both companies rallied. The companies are advising Azul as it weighs several options, including an outright acquisition of its rival. Azul still could decide to shelve the idea. Any offer would need approval from the country’s regulator — known as Cade. A tie-up between Azul and Gol would help them cut costs and boost revenue, helping support share prices, Bradesco BBI analyst led by Victor Mizusaki wrote in a note. Sao Paulo-based Gol filed for chapter 11 after grappling with $2.7 billion in near-term liabilities and carrying out a dozen debt exchanges. Under the process, it has managed to increase its debtor-in-possession financing to $1 billion from $950 million. Moody’s Investors Service on Tuesday upgraded Gol parent Abra Group’s credit rating to Caa1 from Caa3 and lifted the outlook to stable from negative. The upgrade hinged on Gol securing the $1 billion DIP financing, the ratings company said.
The founder of a small Florida hedge fund could be jailed for refusing to reveal where Indian tech firm Think & Learn Pvt allegedly hid $533 million that lenders are trying to recover, according to a federal judge, Bloomberg News reported. William C. Morton could be locked up for contempt of court if he can’t explain why he disobeyed a court order to provide details about the money, which was briefly placed with his hedge fund, Camshaft Capital Fund. Bankruptcy Judge John Dorsey scheduled a hearing for later this month in Delaware to decide what should happen to the founder for defying a court order. “I want to make sure it is absolutely clear to Mr. Morton that one of the possible remedies is civil confinement if he doesn’t comply,” said Judge Dorsey, referring to the federal rules that allow judges in non-criminal cases to jail people. Morton has recently hired criminal lawyers to represent him, Pieter Van Tol, one of his attorneys, told Judge Dorsey during a bankruptcy hearing Monday. Dorsey said he warned the hedge fund founder during a hearing last week that “it would be in his best interest” to attend today’s proceeding in Wilmington, Del. Instead, Morton left the country during the middle of last week’s hearing, Van Tol told Judge Dorsey. “We advised Mr. Morton that he should produce the information, that he should produce the documents and he declined,” Van Tol said during Monday’s hearing.
Home-fitness company BowFlex has filed for chapter 11 bankruptcy with a deal in hand to be acquired by specialty fitness retailer Johnson Health Tech, WSJ Pro Bankruptcy reported. BowFlex today said that it has secured a commitment for $25 million in debtor-in-possession financing that will allow the Vancouver, Wash., company to continue operating in a normal course and to fulfill customer orders during the bankruptcy process. Taiwan’s Johnson Health Tech will act as the stalking horse, or lead, bidder in a court-supervised auction for BowFlex with a bid of $37.5 million in cash for substantially all of the company’s assets. BowFlex said that multiple parties have indicated an interest in bidding for the company. Johnson Health Tech, whose fitness brands include Matrix, Horizon Fitness and Vision Fitness, operates more than 460 locations in Asia, Europe and the Americas. BowFlex said that it initiated the chapter 11 proceeding in the U.S. Bankruptcy Court for the District of New Jersey.
Crafts retailer Joann Inc. is considering a bankruptcy filing as soon as next week as part of a deal that would hand control of the company to lenders while allowing it to shed expensive debt, Bloomberg News reported. The company, which sells fabric and craft supplies and has around 850 stores in the U.S., has been holding confidential talks with its lenders as it seeks fresh capital to bolster its cash reserves. Discussions are ongoing and plans aren’t final, but the company is seeking to line up enough support from lenders that would allow it to exit chapter 11 quickly in what’s known as a pre-pack filing. Joann has struggled to maintain liquidity and manage inventory levels amid a challenging environment for retailers. It raised more than $34 million in a sale and leaseback deal for its Hudson, Ohio facility, but is contending with high interest expenses and required term loan payments, Moody’s Investors Service wrote in a note in January.
The U.S. bankruptcy judge who is weighing whether to dismiss the bankruptcy of prison healthcare company Tehum Health said on Friday that he doesn't intend to make a sweeping ruling on so-called "Texas two-step" bankruptcy cases, Reuters reported. Opponents of Tehum's bankruptcy, including prisoners who have sued over substandard medical care and the U.S. Department of Justice, have argued that the company's predecessor Corizon Health abused U.S. bankruptcy law when it created a new shell company, Tehum, and placed it into bankruptcy to halt lawsuits filed against Corizon. Bankruptcy Judge Christopher Lopez said during a Friday court hearing in Houston that he intends to take a narrow view of Tehum's bankruptcy and its proposed $55 million settlement of creditor claims, without making a "sweeping ruling" on the Texas two-step or other companies' efforts to resolve lawsuits in bankruptcy. "For me, those issues are for policymakers and not for this court," Judge Lopez said. Tehum filed for bankruptcy in February 2023, shortly after its predecessor, Corizon Health, used a Texas statute to split itself into two companies, YesCare and Tehum. YesCare inherited Corizon's assets and its go-forward business, while Tehum was stuck with the liability from about 200 lawsuits accusing Corizon of providing prisoners with substandard medical care that led to injuries and deaths at 50 detention facilities in 27 states.
The shrinking North American box office has forced a 100-year-old movie theater operator into bankruptcy, Bloomberg News reported. Metropolitan Theatres Corp. — a family-owned business operating 16 theaters in California, Colorado and Utah — said in court papers that the COVID pandemic and its aftermath on the movie industry stressed its liquidity. Last year’s Hollywood strikes are a further blow because fewer film releases are expected through 2025, the company said. Much-larger peer AMC Entertainment Holdings Inc. avoided bankruptcy during the height of the pandemic, but Regal Cinemas parent Cineworld Group Plc filed chapter 11 in 2022. Others have either gone bankrupt or closed in recent years, including the former owner of the historic Cinerama Dome in Hollywood. Metropolitan Theatres said in Thursday’s filing that it doesn’t have enough cash to make-up for this year’s poor ticket sales without reducing rent at its remaining locations. President David Corwin, in a sworn statement, also highlighted continued pressure from streaming as North American ticket sales are down roughly 20% this year. Corwin, whose family has owned Metropolitan Theatres since it was founded by Joseph H. Corwin in 1923, said the company intends to use chapter 11 to negotiate rent reductions with landlords and close locations it can no longer afford. The firm pays about $2.6 million annually in rent, a cost he said continues “to be a drain.” Metropolitan Theatres elected to file for subchapter V under chapter 11 protection. The company filed customer motions to continue paying ordinary business expenses, including wages for 240 part-time and 12 full-time employees.
As a Boy Scout victim from Alabama, Gill Gayle is likely to get around $15,000 from a settlement fund compensating child sexual abuse victims, according to estimates. But if he had been abused in New York, he would be eligible for more than 10 times that amount. Gayle is one of more than 82,000 men who have submitted claims to a multibillion-dollar settlement fund set up after the Boy Scouts of America filed for bankruptcy amid an onslaught of child sexual abuse cases, the Wall Street Journal reported. Victims are each entitled to up to $2.7 million from the fund, according to court documents, depending on the severity of the abuse they experienced and other factors. But the settlement is designed to pay out less to men like Gayle, who grew up in states where their claims would likely be barred because too much time has gone by. Some say the settlement as structured is generous — offering the men more than they likely would receive had they pursued their claims in state court. But others say it creates a patchwork where men abused in one state receive a fraction of what those in others receive. Men in more than 30 states will likely have their awards reduced based on local statutes of limitation. The Boy Scout settlement has drawn renewed attention to statute-of-limitation laws that determine how long victims or prosecutors have to sue perpetrators. In recent years, some states have adjusted those laws in the wake of high-profile scandals, like sexual abuse within the Catholic Church or USA Gymnastics. Some lawyers and lawmakers say the different statutes — and different payouts — reflect a core tenet of American governance, where states have different laws on any number of topics.
A small Florida hedge fund that allegedly helped Indian tech firm Think & Learn Pvt hide $533 million must reveal where the money is located or face possible sanctions from a federal judge on Monday, Bloomberg News reported. Bankruptcy Judge John Dorsey in a Friday hearing dismissed an effort by the investment firm, Camshaft Capital Fund, to avoid answering questions about the cash. The missing money is at the heart of a fight between lenders owed $1.2 billion and Think & Learn, the education-tech startup founded by entrepreneur Byju Raveendran. “The fact that they know the information and are refusing to produce it is just a huge red flag,” Judge Dorsey said during a court hearing in Wilmington, Delaware on Friday. The cash belongs to Byju’s Alpha Inc., a bankrupt shell company affiliated with Think & Learn that was taken over by the lenders after their loan defaulted. The $533 million was transferred to the hedge fund and then moved to an unnamed, off-shore trust by Raveendran’s brother, Riju Ravindran, Byju’s lawyer Benjamin Finestone said during the hearing. Camshaft fought efforts to disclose details about the money because a hedge fund has a duty to protect its clients, lawyer Pieter Van Tol told Dorsey. The hedge fund also argued that Byju’s and the lenders should instead get information about the cash from a Delaware company called Inspilearn, which got the money from Camshaft before it was transferred to the unnamed trust.
The NYSE American exchange has and intends to delist shares of Polished.com after the company said it plans to file for bankruptcy, MarketWatch.com reported. The New York Stock Exchange's regulatory arm has determined that the stock is no longer suitable for listing after the online retailer of home appliances said on Thursday that it has suspended operations. Polished.com said that it was unable to obtain additional financing after "working to reach a resolution with its lenders" and explored multiple alternative funding paths, and now intends to file for chapter 7 protection. NYSE said that the company can review the staff's determination to delist the stock and appeal if it chooses.
