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"Hubris, incompetence, and greed" led to the implosion of crypto exchange FTX, the now-defunct entity's debtors said in a Sunday report detailing control failures at the exchange, according to a report in Business Insider. In a 39-page strongly-worded report filed to the U.S. Bankruptcy Court for the District of Delaware, the debtors — which includes FTX Trading and affiliates — further alleged that FTX lacked basic accounting and financial controls and was under the command of a small group of individuals who "stifled dissent." "These individuals stifled dissent, commingled and misused corporate and customer funds, lied to third parties about their business, joked internally about their tendency to lose track of millions of dollars in assets, and thereby caused the FTX Group to collapse as swiftly as it had grown," the debtors wrote in their first report since the exchange's collapse in November. "While the FTX Group's failure is novel in the unprecedented scale of harm it caused in a nascent industry, many of its root causes are familiar: hubris, incompetence, and greed," they said. FTX's implosion was shocking and swift. The exchange — worth $32 billion in early 2022 — filed for chapter 11 protection on November 11 of the same year, after a week of a liquidity crisis. The crisis was followed by swift criminal cases against the company's top brass. Sam Bankman-Fried, a high-profile cofounder of the exchange and former CEO, pleaded not guilty in the U.S. government's criminal case against him and is scheduled for a trial in October. Gary Wang, another cofounder, and Caroline Ellison, former CEO of FTX subsidiary Alameda Research, have pleaded guilty and are working with prosecutors. Former engineering chief Nishad Singh also pleaded guilty.

Baltimore-based Shoe City is shutting down after 74 years and closing all 39 stores in Maryland, Virginia and Washington, D.C., WMAR2News.com reported. "Unfortunately, after 74 years in business, the Shoe City legacy has come to an end," wrote attorney Stanley W. Mastil, the chief restructuring officer in a bankruptcy filing for the company. Shoe City, which goes by ESCO, Ltd., and YCMC, filed for bankruptcy in federal court in Maryland on April 3. Mastil noted that it "remains a family-owned business to this day as the equity of the Debtor is owned by family members and family trusts of the founders." All stores will close by May 31.

FTX founder Sam Bankman-Fried pleaded not guilty Thursday to new federal charges tied to the collapse of the crypto exchange while his lawyer said he plans to challenge the new criminal counts, arguing they violate the terms of the former chief executive’s extradition, the Wall Street Journal reported. Mr. Bankman-Fried appeared in a New York federal court to be arraigned on five charges that federal prosecutors unveiled in recent indictments, including one this week that alleged he conspired to bribe Chinese government officials in violation of a U.S. anticorruption law. His lawyer Mark Cohen entered the not guilty plea for Mr. Bankman-Fried during the proceeding. The Manhattan U.S. attorney’s office charged Mr. Bankman-Fried in December with eight criminal counts connected to stealing billions of dollars from FTX customers while lying to investors of the company and lenders to his crypto investment firm Alameda Research. Prosecutors have since filed two additional indictments, bringing the total number of criminal counts to 13. The charges range from securities fraud to a bank fraud conspiracy to a campaign-finance violation.

Bankrupt startup SiO2 Medical Products Inc. on Thursday received court approval for a $120 million loan, which includes $60 million of new capital, on its way to a planned handover of the business to Oaktree Capital Management LP, WSJ Pro Bankruptcy reported. The Auburn, Ala.-based medical device company filed for chapter 11 bankruptcy protection on Wednesday, facing a liquidity crisis after its unsuccessful capital raise efforts in the past few weeks, SiO2’s lawyer Brian Schartz said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del. Bankruptcy Judge John Dorsey approved the $120 million bankruptcy loan sponsored by top lender Oaktree that will provide the business with $60 million of new capital, with the remaining $60 million to be used to pay back a portion of the debt held by Oaktree before the bankruptcy. Founded in 2012, SiO2 rapidly expanded in the medical device sector by manufacturing vials, syringes and tubes, using its patented materials. The company said it was running out of cash partly because of an ill-fated government contract signed during the pandemic to develop a vial for a COVID-19 vaccine. The 2020 contract granted SiO2 $143 million in funding to build necessary manufacturing facilities, while requiring as much as $128 million in expenditures under a cost-sharing agreement.

Catalina Marketing Corp., a data and marketing services provider to retailers and consumer products companies, filed for bankruptcy on Tuesday for the second time with a prepackaged plan to slash debt and sell its business in Japan, WSJ Pro Bankruptcy reported. Catalina has suffered from a decline in demand for its services in recent years, including during the COVID-19 pandemic when most retailers were forced to close their doors, according to a court filing yesterday by Chief Financial Officer Michael Huffmaster. The company filed for chapter 11 protection with a deal in hand to sell its Japanese business to a buyer backed by a Japanese private-equity firm for $103 million and to restructure its U.S. business by reducing its $370 million in debt, according to the filing. The St. Petersburg, Fla.-based company has garnered the support of nearly all creditors to cut $260 million in debt and will seek to exit bankruptcy within just over two months, court papers show. A restructuring plan has already been put to a vote of creditors, with ballots due on April 11. The company slashed even more debt, $1.6 billion, when it last filed for bankruptcy in 2018, but the business faced unexpected headwinds since then, according to Mr. Huffmaster.

Platinum Equity LLC-owned Incora risks running out of cash later this year as the aerospace supplier is struggling to drum up enough money to service its debts while facing mounting creditor litigation, WSJ Pro Bankruptcy reported. The Fort Worth, Texas-based distributor of airplane parts had about $140 million of liquidity late last year, according to people familiar with the company’s finances. Incora has approximately $100 million in interest payments due in May, the people said. Traders said the company would struggle to raise new funds in volatile capital markets and its own debt is trading at deeply distressed levels. Incora’s 13.125% unsecured bonds due 2027 were recently quoted around 8 cents on the dollar, while its 8.5% unsecured bonds due 2024 traded around 12 cents, according to traders, implying that investors think a bankruptcy or restructuring is likely. Incora was formed through a combination of two Platinum Equity companies, Wesco Aircraft Holdings Inc. and Pattonair, a provider of supply-chain management services for the aerospace and defense industries, in 2020. The lack of access to funding has prevented the company from capitalizing on high spending from aerospace companies because of a surge in airplane travel and military expenditures, according to the people.

A federal judge backed the Boy Scouts of America’s chapter 11 plan to settle sex-abuse lawsuits that sent the youth group to bankruptcy, bringing it closer to ending more than three years of court protection, WSJ Pro Bankruptcy reported. U.S. District Judge Richard G. Andrews of the U.S. District Court in Wilmington, Del., upheld the youth group’s settlement plan for more than 82,000 claims of childhood sexual abuse, rejecting appeals from some victims and insurance companies following its approval by a bankruptcy court last year. Yesterday’s ruling puts the Boy Scouts on the cusp of ending the largest-ever bankruptcy case resulting from allegations of childhood sexual abuse and bolsters the use of chapter 11 to resolve mass litigation. The chapter 11 plan is expected to resolve the Irving, Texas-based group’s liability for decades of childhood sexual abuse and settle claims against affiliated local councils and the civic and religious groups that sponsored scouting activities. Local councils, sponsoring groups, insurance companies and the Boy Scouts put together a $2.5 billion fund for victim compensation. The bankruptcy plan makes it possible for abuse claims to be administered and paid in “an equitable process,” according to the judge’s ruling. Judge Andrews said that nearly every creditor constituency supported the chapter 11 plan, a “commendable result for such a lengthy, contentious and emotionally charged proceeding.” The Boy Scouts would leave chapter 11 low on cash but retaining much of the property held by its local councils that makes up the majority of the organization’s wealth.

Cineworld Group Plc is set to submit its bankruptcy-exit plan on Wednesday after reaching a deal with creditors to trim billions of dollars of debt from its balance sheet, according to a lawyer for the company, Bloomberg News reported. Cineworld expects to file the plan alongside a restructuring support agreement — a deal in which a troubled company’s key creditors agree to back a debt-cutting proposal. Both agreements should be filed publicly on Wednesday, Josh Sussberg, a bankruptcy lawyer for Cineworld, said in a court hearing Tuesday. “We are down to literally dotting ‘i’s and crossing ‘t’s,” Sussberg said. He didn’t provide further details on the plan. The world’s second-largest theater chain, which owns Regal Cinemas in the US, has struggled to find buyers for the whole company in recent months. It has received no bids that come close to covering Cineworld’s $6 billion in outstanding secured debt, Sussberg said. A sale process for the holding company has effectively “been terminated,” he added. However, there are several potential buyers interested in the company’s operations in eastern Europe and Israel, he said. Binding bids for that portion of the firm are due on April 10.