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Canadian Pacific Railway Ltd. has emerged as an unlikely target for a few distressed-debt investors. It wasn’t because of the railroad operator’s creditworthiness, but rather because rising interest rates pummeled the value of some of its bonds in recent months ahead of its roughly $30 billion acquisition of U.S. rival Kansas City Southern, according to a WSJ Pro Bankruptcy commentary. Canadian Pacific sold bonds in December 2021 to finance the acquisition, including $2.4 billion in notes due 2031 and 2041, with coupons of 2.45% and 3%, respectively. Due to the rise in interest rates since then, some of those bonds have tumbled in value to between 70 and 80 cents on the dollar amid a broad selloff in high-grade fixed-income debt. Investors sensed opportunity in the beaten-down bonds. A bondholder group represented by the law firm Paul Hastings LLP has argued in recent weeks that Canadian Pacific is required to pay off the bonds at 101 cents on the dollar after triggering a redemption event baked into the bond indenture. Under the indenture, Canadian Pacific agreed to redeem the bonds if it failed to achieve a key regulatory approval for its purchase of Kansas City Southern by March 25. The relevant regulatory agency, the Surface Transportation Board, issued its ruling on March 15, clearing the way for the final stages of the merger to close. But the STB said it wouldn’t take effect before April 14.

David's Bridal, one of the largest sellers of wedding gowns in the U.S., has filed for chapter 11 bankruptcy protection for a second time, 6abc.com reported. The news comes just days after the formalwear store chain said it would be eliminating 9,236 positions across the United States. The Conshohocken, Pa.-based retailer employs more than 11,000 workers. David's Bridal said that it is looking to sell the company, but in the meantime, stores are open and fulfilling orders for brides without disruption or delay. The announcement today marks the second time that David's Bridal has filed for bankruptcy in the last five years. The company previously filed for bankruptcy in 2018 after being laden with growing debt and declining sales of wedding dresses. It emerged from bankruptcy in 2019 as it continued to try to fix the business.

Vice Media has hired an executive from turnaround specialist AlixPartners as its interim finance chief as the struggling media company looks for a buyer, WSJ Pro Bankruptcy reported. AlixPartners Director Mark Del Priore fills a vacancy left by Bruce Dixon, who is now the media company’s co-chief executive. Mr. Del Priore will work with Vice Media management in “making decisions for company finances and overseeing strategic plans to improve the company’s financial health,” according to the memo. Mr. Del Priore has experience in turning around struggling companies in the media and marketing sector, having served as chief financial officer of marketing-services company Harte Hanks Inc. and advertising and mobile data business SITO Mobile Ltd. Vice Media’s divisions include online-publishing brands such as the flagship site Vice, Refinery29 and tech specialist Motherboard, as well as the Vice TV channel, Vice Studios and the Virtue ad agency.

SAS will not be using the second tranche of its $700 million debtor-in-possession (DIP) term loan in the second quarter of the year, due to stronger than expected development of the airline's liquidity, the airline said on Monday, Reuters reported. SAS may, depending on the development of its liquidity, continue discussions with Apollo regarding access to the second tranche of the DIP term loan at a later stage of the chapter 11 process. The airline will continue to pursue other financing initiatives that could boost its liquidity at a lower cost than a near-term use of the second tranche of the DIP term loan.

Major League Baseball’s largest local broadcaster is seeking discounts on contracts to air three teams’ games in a move the league has vowed to oppose, Bloomberg News reported. In a bankruptcy court hearing Thursday, Diamond Sports Group LLC’s lawyer Ross Firsenbaum told Judge Christopher Lopez that its contracts with the Minnesota Twins, Cleveland Guardians and Arizona Diamondbacks are unreasonable and worth “materially” less than what the company was paying to exclusively broadcast games in those markets through its Bally Sports brand. Lawyers for the MLB and the three teams said company is violating its contractual obligations that require periodic payments to continue broadcasting games. The company hasn’t paid the teams since it filed for bankruptcy last month. James Bromley, a lawyer representing the MLB Commissioner’s Office, said Diamond’s financial problems are its own doing and that if the broadcaster can’t pay, the league is prepared to broadcast games itself. The teams need the broadcast fees to pay their employees and other expenses, he said. Lopez denied the MLB’s request to rule on the dispute on an expedited basis and instead scheduled a hearing at the end of May that could determine the value of the contracts with the three clubs.

Tupperware Brands Corp., the household storage brand, has brought on advisers from Moelis & Co., Kirkland & Ellis LLP and Alvarez & Marsal while warning of a possible bankruptcy, WSJ Pro Bankruptcy reported. The Orlando, Fla.-based company warned this week that it may not be able to continue as a going concern and that it is exploring options for boosting liquidity, including raising financing from investors and selling its real-estate holdings. In addition to investment bank Moelis & Co. and law firm Kirkland & Ellis LLP, the company has been working with turnaround adviser Alvarez & Marsal, people familiar with the matter said. Bloomberg earlier reported the hiring of Moelis and Kirkland. “Like other companies that have been impacted by the pandemic, inflation and high-interest rates, we are working with our financial advisers to improve our capital structure,” a spokesperson for the company said. Tupperware said earlier this week that it has been squeezed by higher interest costs and challenging internal and external business conditions that have constrained its access to cash. Tupperware’s senior loans traded at 51.75 cents on the dollar on Tuesday, according to Markit.

Bankrupt drugmaker Sorrento Therapeutics Inc.’s subsidiary Scilex Holding Co. is exploring a sale of new stock to take advantage of a share-price rally as Sorrento charts a path out of chapter 11, WSJ Pro Bankruptcy reported. Shares in publicly traded Scilex, Sorrento’s largest asset, have more than doubled in value since its parent company filed for chapter 11 in February, closing at $14.80 on Wednesday to give Scilex a market capitalization of more than $2 billion. The run-up in Scilex shares came after it became a popular pick in some online investing forums geared toward small, nonprofessional traders. If the fundraising is successful, the new money could boost Sorrento’s value as it seeks to end its chapter 11 case and resolve the yearslong licensing dispute that drove the company into bankruptcy. A stock issuance could also dilute San Diego-based Sorrento’s roughly 51% stake in Scilex, which makes nonopioid painkillers and isn’t in bankruptcy itself. Sorrento and other Scilex shareholders can’t sell their holdings until a lockup period stemming from a recent merger deal runs out on May 11, according to court filings.

A top Federal Deposit Insurance Corp. official said the agency could have moved more quickly to find a buyer for Silicon Valley Bank after it failed last month, suggesting a lack of urgency worsened the crisis that sent tremors through the banking system, the Wall Street Journal reported. Travis Hill, the FDIC’s vice chairman and one of two Republicans on its five-member board, said the agency was too slow in setting up a platform for potential bidders to look at SVB’s finances after its closure on March 10. The so-called data room allows would-be buyers to perform due diligence on a bank’s business. Hill also said in a speech on Wednesday that policy changes made by FDIC Chairman Martin Gruenberg might have hurt the regulator’s access to the bank’s data. He said it was a mistake to scrap a plan to develop a new reporting prototype aimed at providing the agency with more timely and targeted data about banks’ credit exposures and deposit information.

Bankrupt crypto exchange FTX has recovered over $7.3 billion in cash and liquid crypto assets, an increase of more than $800 million since January, the company's attorney said on Wednesday at a U.S. bankruptcy court hearing in Delaware, Reuters reported. FTX attorney Andy Dietderich said the company is starting to think about its future after months of effort devoted to collecting resources and figuring out what went wrong under the leadership of indicted ex-founder Sam Bankman-Fried. Bankman-Fried has pleaded not guilty. "The situation has stabilized, and the dumpster fire is out," Dietderich said. FTX has benefited from a recent rise in crypto prices, Dietderich said. Its total recovery would be valued at $6.2 billion based on crypto prices from November 2022, when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. FTX's new CEO John Ray has detailed improper fund transfers and poor accounting at the collapsed crypto exchange, describing it as a "complete failure" of controls. Read more.

In related news, FTX may use money marked to repay customers to restart its failed crypto exchange because the project would require a significant amount of cash, a lawyer for the company said in court yesterday, according to Bloomberg News. The company is still in the early stages of deciding whether to bring back the exchange, which allowed customers to trade digital assets before FTX collapsed, Andrew G. Dietderich, an FTX attorney with law firm Sullivan & Cromwell told U.S. Bankruptcy Judge John T. Dorsey. The company could also try to raise money to fund a restart or drop the entire concept. Read more.