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Texas law firm Jackson Walker was urged nearly two years ago to disclose that one of its partners was in a romantic relationship with a federal judge who oversaw many of the firm's cases, the U.S. Justice Department's bankruptcy watchdog said in a court filing, Reuters reported. Bankruptcy Judge David Jones resigned in October after his relationship with the lawyer, Elizabeth Freeman, became public. Since then, the U.S. Trustee has filed motions in several corporate bankruptcy cases seeking to force Jackson Walker to turn over millions of dollars in legal fees Jones awarded. A lawyer for Freeman, who was a bankruptcy partner at Jackson Walker until December 2022, had advised the firm earlier that year that it should disclose her relationship with Jones "in all past cases and in cases going forward," the U.S. Trustee said in its court filing on Thursday. A spokesperson for Jackson Walker on Friday said that the firm "emphatically" denies receiving the disclosure advice. Jones, once the busiest bankruptcy judge in the United States, publicly acknowledged he was in a years-long romantic relationship and shared a home with Freeman when he retired last year. The firm in November said it had been deceived by Freeman into thinking the relationship had ended in March 2020. The U.S. Trustee in November said Jones presided over at least 26 cases in which he awarded Jackson Walker about $13 million in fees while he was in a relationship with Freeman. Thursday's filing said Freeman's lawyer had gone so far as to draft papers for Jackson Walker to use to disclose her relationship with Jones. The U.S. Trustee in the filing asked a Houston bankruptcy judge to award sanctions against Jackson Walker in the bankruptcy of the Westmoreland Coal Company.

Endo International settled federal civil and criminal charges over the company’s marketing and sale of opioids, agreeing to pay up to $465 million over several years, WSJ Pro Bankruptcy reported. The settlement with the U.S. government would clear the last major hurdle the Malvern, Pa.-based company needs to overcome to clinch a restructuring plan that would hand ownership of the company to its lenders. The agreement is subject to approval by the U.S. Bankruptcy Court in New York. Endo filed for bankruptcy in 2022 under the weight of thousands of lawsuits from state and local governments and others over its sale and marketing of painkiller Opana ER. Under the settlement, Endo can pay $200 million when it wraps up its bankruptcy case or make installment payments totaling $365 million over 10 years, according to an announcement by the U.S. Attorney’s Office in New York. Additionally, the company must make payments tied to its financial performance totaling up to $100 million between 2024 and 2028. As part of the settlement, Endo also agreed to plead guilty in federal court in Michigan to a misdemeanor count tied to misbranding Opana ER, according to the announcement. The settlement payments of up to $465 million resolve $1.5 billion in a criminal fine and a civil claim stemming from the marketing and sale of opioids as well as a payment obligation to the Internal Revenue Service.

Bankrupt electric vehicle manufacturer Lordstown Motors Corp. agreed to pay $25.5 million to settle US Securities and Exchange Commission allegations that the firm exaggerated the demand for its electric pickup truck, Bloomberg News reported. The automaker made misleading statements about its pre-orders for the truck, called the Endurance, and misrepresented how quickly it could deliver the trucks, according to the SEC. The firm rose to prominence after former US President Donald Trump hailed it for saving auto-maker jobs. A lawyer for the Lordstown, Ohio-based company declined to comment. The automaker didn’t admit to or deny the SEC’s findings as part of the settlement. “In a highly competitive race to deliver the first mass-produced electric pickup truck to the U.S. market, Lordstown oversold true demand for the Endurance,” Mark Cave, an associate director of enforcement at the SEC, said in a statement. The company filed for bankruptcy in June 2023 and later sold the last of its assets to the company’s founder, Steve Burns. Nasdaq delisted the company’s shares last July. The $25.5 million fine will be deemed satisfied through payments the company plans to make to settle two class-action lawsuits.

WeWork’s official junior creditors committee is seeking court approval to sue SoftBank, the co-working space provider’s biggest equity holder, alleging the Japanese conglomerate used WeWork’s prebankruptcy debt restructuring deal to improve its position in the company’s capital structure, WSJ Pro Bankruptcy reported. The committee said in a bankruptcy court filing Wednesday that SoftBank and another group of creditors representing 62% of WeWork’s unsecured notes orchestrated the May 2023 debt restructuring to “mitigate their losses and elevate their position in” WeWork’s capital structure, knowing that the company’s bankruptcy filing was imminent. Because of these “uptier transactions,” WeWork’s general unsecured creditors—including landlords and holders of about $180 million in unsecured notes—were left subordinated to $2.4 billion in newly created secured debt, the committee said. A WeWork spokesman didn’t directly comment on the committee’s assertion but said the company has made transparency and full cooperation with its key stakeholders a priority since its bankruptcy filing in November. The company remains focused on its lease renegotiations with landlords, aiming to emerge from bankruptcy “financially strong and profitable,” he said. The committee wants the bankruptcy court’s approval to pursue its claims against SoftBank and the participating creditors and, if appropriate, wants to seek a settlement to recover money for its constituents, according to the filing.

Terraform Labs Pte. transferred nearly $122 million to its lawyers just before it filed for bankruptcy and used some of the money to cover legal expenses for criminally charged co-founder Do Kwon, according to the US Securities and Exchange Commission (SEC), Bloomberg Law reported. The SEC is challenging cash transfers to Terraform’s top law firm, Dentons US, that occurred in the three months before the company filed for bankruptcy in January, court papers show. The firm behind the now-collapsed TerraUSD stablecoin said it filed chapter 11 because it can’t afford penalties sought by federal regulators. Although the SEC said that it doesn’t oppose the company paying legitimate legal expenses, the “amount of funds at issue is extraordinary,” according to the regulator. Terraform transferred $166 million to Dentons in the full year before its chapter 11 filing, more than $5 million of which helped Do Kwon cover legal bills. The SEC alleges that the size and timing of the transfers are suspicious and that Terraform Labs must provide more documentation on them, saying that the company transferred $122 million into “an opaque slush fund for its lawyers.” The SEC argued that Judge Brendan Linehan Shannon, who is overseeing Terraform Labs’ bankruptcy, should deny the company’s request to retain Dentons unless the law firm returns $81 million, which roughly represents the amount of money that hadn’t been spent as of Feb. 13. Judge Shannon is expected to hear arguments on the dispute at a March 5 court hearing in Wilmington, Del.

A small North Texas custom homebuilder is trying to recover from runaway costs during the Covid-19 pandemic and a judgment of more than half a million dollars that it's struggling to pay, the Dallas Business Journal reported. Argyle, Texas-based Noble Classic Homes Inc. filed on Feb. 26 for chapter 11 protection in the Eastern District of Texas. The company listed almost $632,000 in assets and about $630,000 in debt tied to a judgment for a 2022 construction-leak lawsuit in Denton County court. "We have constructed an estimated 800 custom homes over the past 23 years and never once experienced something like this," Noble President John Michaels wrote in a letter attached to the bankruptcy filing. The same couple who filed the 2022 lawsuit also sued Noble for allegedly making fraudulent transfers to other entities, according to court documents. In the bankruptcy filing, Noble reported $16.7 million in revenue from home sales in 2023 through affiliate company Noble Classic Management LLC but only about $94,000 in profit.

Madison’s Karben4 Brewing has filed for bankruptcy, but the filing won’t result in the closure of the business or employee layoffs or loss of pay, the brewery’s attorney said on Wednesday, the Wisconsin State Journal reported. The brewery is still recovering from COVID-related financial losses and filed for chapter 11 bankruptcy on Monday, attorney Jerry Kerkman said. “Part of the difficulty is that the sales mix has changed,” Kerkman said. “The company is changing the mix of the type of products they have to regain profitability, but their margins aren’t there yet.” Karben4 Brewing co-owner Zak Koga said that since COVID hit in 2020 that the brewery has pivoted every few months to adjust its business focus. “As pandemic aid dried up and inflation ramped up, we have been running out of room to pivot," Koga said.

Binance Holdings Ltd., the world’s largest cryptocurrency exchange, said it has recovered $4.4 billion worth of digital assets for its users who mishandled their deposits in the past two years, Bloomberg News reported. Users can mishandle their funds for a variety of reasons including entering wrong wallet addresses, depositing incompatible tokens and problems from blockchain upgrades, according to Thursday’s report. Binance said it resolved 381,616 cases of cryptocurrency that was deposited by users but not credited in 2022 and 2023. The report, which also mentions efforts to deal with hackers and other crimes, comes as the exchange is reshaping itself after pleading guilty last year to US charges of anti-money laundering and sanctions violations. The district judge approving the company’s plea deal, which includes a $4.3 billion fine, noted last week Binance had left participants in the financial system vulnerable to exploitation by bad actors. “To nurture the ecosystem’s growth in its still-early period, industry leaders like Binance should use their reach and resources to lend support to other participants of the emerging marketplace, protecting users and upholding the integrity of the space,” Binance said in the report.

Bankrupt Brazilian airline Gol received U.S. court approval on Wednesday for a $1 billion loan, after resolving the concerns of a group of lenders that feared they would be sidelined by the new loan, Reuters reported. Gol had previously proposed borrowing $950 million in bankruptcy, but it allowed the objecting lenders to kick in an additional $50 million on the new loan and receive interest on that new debt, Gol's attorney Justin Cunningham said at a hearing in Manhattan. Bankruptcy Judge Martin Glenn approved the loan at the hearing in Manhattan, saying he was pleased to see a compromise. "It's nice when more people want to put money in," Judge Glenn said. The previously objecting lenders, a group of investment funds that had loaned money to Gol in 2020, will not receive the same level of fees as the original group of lenders, who could receive up to $47.5 million in additional commitment fees and backstop fees under the loan agreement, according to court documents. Gol instead agreed to pay them $800,000 for attorneys' fees and costs related to the renegotiation of the loan. Gol filed for chapter 11 bankruptcy protection in the United States on Jan. 25. The airline had been suffering from long-term impacts of the COVID-19 pandemic on travel and has had difficulty sourcing sufficient Boeing 737 Max aircraft to meet a surge in post-pandemic demand for air travel, according to court documents. Judge Glenn previously approved a portion of the loan, allowing Gol to borrow up to $350 million at a court hearing in January.

Gemini Trust Co., the crypto exchange founded by twin entrepreneurs Cameron and Tyler Winklevoss, will return at least $1.1 billion to customers though the Genesis Global Capital bankruptcy as part of settlement with the New York Department of Financial Services, Bloomberg News reported. The New York-based firm will also pay a $37 million fine for various compliance failures to the New York Department of Financial Services, Superintendent Adrienne A. Harris said in a statement Wednesday. Gemini is returning the funds to customers who lost money through the Gemini Earn program that the exchange ran together with now-bankrupt lender Genesis Global. Gemini also agreed to contribute $40 million to Genesis’s bankruptcy for the benefit of Earn customers in coordination with the bankruptcy court. “Gemini failed to conduct due diligence on an unregulated third party, later accused of massive fraud, harming Earn customers who were suddenly unable to access their assets after Genesis Global Capital experienced a financial meltdown,” Harris said. “Today’s settlement is a win for Earn customers, who have a right to the assets they entrusted to Gemini.” The Earn program, which was launched in early 2021, let more than 200,000 Gemini users — including almost 30,000 New Yorkers — lend out their coins through Genesis for yield. Genesis stopped withdrawals in late 2022, and filed for bankruptcy in early 2023. Gemini failed to conduct ongoing due diligence into Genesis, or to maintain adequate reserves throughout the running of Earn, the department said.