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A federal judge showed growing impatience Thursday with FTX founder Sam Bankman-Fried’s use of the internet, suggesting that incarceration might eventually be the most effective way to prevent him from violating his bail conditions by communicating on electronic devices in ways that can't be traced, the Associated Press reported. Judge Lewis A. Kaplan did not immediately change a $250 million bail package that lets Bankman-Fried live with his parents in Palo Alto, California, while preparing for trial on charges that he cheated investors and looted customer deposits at FTX, his cryptocurrency trading platform. But he raised the possibility for the first time that jail might be the only way to ensure Bankman-Fried won't outfox the government with ways to use electronic devices in ways that can't be tracked. “There is a solution, but it’s not one anybody’s proposed yet,” Kaplan said as Bankman-Fried sat passively at the defense table. He then noted that there may be many devices in Bankman-Fried's family home that the government will not be tracking, even with any new rules imposed on his bail conditions.

The largest creditor in the long-running bankruptcy process of the Mt Gox crypto exchange has opted for an early payout in Bitcoin rather than fiat currency, easing some concerns about the token’s price outlook, Bloomberg News reported. Mt Gox Investment Fund has picked an early payout in September this year. The fund decided against waiting for all the litigation around the failed exchange to be resolved, which could take as many as nine years. The fund will get 90% of what’s collectible. The bankruptcy trustee won’t have to sell tokens in the open market since the creditor chose to receive Bitcoin. Such sales could have sapped Bitcoin’s price. Mt Gox creditors have until March 10 to decide whether to chose the September payout or to wait longer to recover a higher percentage of their claims. Tokyo-based Mt Gox was at one time the world’s biggest Bitcoin exchange. It lost some customer assets and went bankrupt in 2014.

Auto parts maker Stanadyne LLC filed for bankruptcy Thursday, saying it has been “crippled” by the rising costs of variable-rate debt owed to top creditor Cerberus Capital Management LP, WSJ Pro Bankruptcy reported. Interest rates on the automotive supplier’s $273 million in debt have risen “into the teens,” according to a sworn declaration by Chief Executive Officer John Pinson, with potentially more rate increases on the horizon as benchmark rates rise. Stanadyne can’t keep operating with the current debt load and filed for chapter 11 protection to get breathing room to reorganize as a financially stable business, according to his declaration filed in the U.S. Bankruptcy Court in Wilmington, Del. The company, which has $3.8 million in cash on hand, has been negotiating with Cerberus since November, Mr. Pinson said. Jacksonville, N.C.-based Stanadyne designs and makes fuel injectors, pumps and other parts for diesel and gasoline internal combustion engines, serving both the original equipment market and the aftermarket for everything from passenger vehicles to tractors to utility vehicles. It says its roots date back more than 140 years. Stanadyne has 468 U.S. employees working in states that include South Carolina, North Carolina and Michigan. The company also has affiliates in Italy, the United Arab Emirates, India and China. It said it has made nearly $100 million of capital expenditures in its manufacturing plants since 2014.

Bed Bath & Beyond Inc. executives told suppliers on a video conference call yesterday that the company would pay them in advance for their merchandise or upon delivery, part of the retailer’s effort to win over skittish manufacturers and put the troubled business back on track, Bloomberg News reported. Executives told suppliers that they intend to use funds from a recent equity offering to get more products into the company’s stores. Shelves have been sparse because Bed Bath & Beyond has struggled to pay manufacturers. But the impact won’t be immediate, interim Chief Financial Officer Holly Etlin told suppliers. The home-goods retailer secured an equity offering last week that will potentially allow it to raise as much as $1 billion over time. “While we think that that will be the necessary funding to fund the turnaround, it isn’t all here right now,” Etlin said. “It came in — a small amount up front — and then $100 million a month over the next few months until we get up to the committed amount.” The equity deal is underpinned by anchor investor Hudson Bay Capital Management, a New York-based hedge fund. Bed Bath & Beyond is “prepared to pay” cash in advance or on delivery to suppliers to convince them to sell their products to the retailer, Etlin said during the presentation. Suppliers have been demanding upfront payments for months because they were concerned about not being paid for their goods. But the company — short on cash — hasn’t been able to meet those requests, so many suppliers limited or halted their shipments. “We don’t expect you to come forward immediately, but we hope that we will ultimately restore your trust in us,” said Etlin, a restructuring expert at consulting firm AlixPartners who joined Bed Bath & Beyond last week on a temporary basis.

Bankrupt home-goods retailer Tuesday Morning Corp. has received a $15 million lifeline to support its reorganization effort while its secured lenders push to shut down all 464 of its stores and liquidate its inventory to cash out, WSJ Pro Bankruptcy reported. Judge Edward L. Morris of the U.S. Bankruptcy Court in Dallas on Wednesday allowed investment firm Invictus Global Management LLC to finance the off-price retailer’s bankruptcy process with a $15 million loan, less than a third of the proposed amount of $51.5 million. Judge Morris said the emergency loan is enough to avoid immediate, irreparable harm to the company and its stakeholders until he can determine whether the business has a chance to reorganize under chapter 11 or if it will be better off simply liquidating its inventory. The judge scheduled a hearing in early March to revisit the financing. A restructuring sponsored by Invictus would cut the number of stores by more than half under chapter 11, bringing the company out of bankruptcy with about 200 locations intact. Wells Fargo Bank NA and other secured lenders oppose the retailer’s plans, arguing that an orderly liquidation of inventory would maximize recoveries for creditors compared to a risky reorganization attempt.

Sinclair Broadcast Group Inc.’s regional sports business, Diamond Sports Group LLC, is preparing to file for bankruptcy soon, after having missed a $140 million interest payment to its bondholders, WSJ Pro Bankruptcy reported. Diamond Sports has engaged law firm Paul Weiss Rifkind Wharton & Garrison LLP to advise on its financial restructuring. The company’s earnings have been pressured by the cord-cutting trend, leading to lower-than-expected revenue that can’t sustain the payments it has to make to professional sports teams and leagues for broadcast rights. Its earnings were also hit after it lost a major contract with Dish Network Corp. in 2021. Diamond Sports has a debt load of more than $8 billion, stemming from Sinclair’s acquisition of sports networks from Walt Disney Co. in 2019 for $10.6 billion.

A Delaware bankruptcy judge on Wednesday denied a request by the U.S. Justice Department for an additional independent investigation into FTX’s collapse, saying it would needlessly suck up funds that could go to customers, WSJ Pro Bankruptcy reported. Bankruptcy Judge John Dorsey said existing probes by the cryptocurrency exchange’s new management and government authorities were sufficient. The judge praised the qualifications of FTX’s new chief executive, John J. Ray III, who was brought on to succeed FTX founder Sam Bankman-Fried as CEO just before the company filed for chapter 11 in November. “There is no question that Mr. Ray is completely independent of prior management,” Judge Dorsey said. Ray and his team are investigating FTX’s collapse, while federal and state agencies are doing their own probes, making additional review unnecessary, the judge said. Judge Dorsey said that a new investigation by an outside examiner would need to bring in a team of experts, a move that could lead to more than $100 million in extra costs—counter to the bankruptcy’s purpose to recover as much money as possible for FTX customers and creditors.

Debtors of bankrupt crypto lender Celsius Network have presented a sale plan to the U.S. Bankruptcy Court of the Southern District of New York, Coindesk.com reported. The plan is as part of the overall reorganization plan for Celsius' retail platform and mining business and has the support of the official committee of unsecured creditors. At the center of the plan is an in-principle agreement with NovaWulf Digital Management, a digital asset investment firm, making it the plan sponsor. The debtors chose NovaWulf as it "provides the best method to distribute the debtors’ liquid crypto assets and maximize the value of the Debtors’ illiquid assets through a new company run by experienced asset managers," the filing said. The plan is the product of the debtors’ court-approved sales process which Celsius Network lawyers had outlined in January 2023. They had said that the bankrupt crypto lender is planning to reinvent itself as a new, publicly traded “recovery corporation” in order to exit the bankruptcy process. The "comprehensive" sale process involved debtors’ advisors contacting over 130 parties and executing non-disclosure agreements with 40 potential bidders. This was whittled down to six bids for the retail platform, and three bids for the mining operation. The next step will be to finalize a binding agreement to designate NovaWulf as the successful bidder. According to the plan, NovaWulf will make a direct cash contribution of $45 million to $55 million to NewCo, a term used a describe a corporate spin-off before it is assigned a final name. Read more.

Revlon Inc. scored a legal victory against a lenders group when a bankruptcy judge dismissed a lawsuit against the company over a 2020 debt deal that stripped their collateral and sent it to a different creditor group, WSJ Pro Bankruptcy reported. Judge David Jones of the U.S. Bankruptcy Court in New York dismissed the lenders’ lawsuit against Revlon, though not against the rival creditor group that benefited from the transfer of collateral in return for providing the cosmetics company a lifeline. The judge has yet to issue a decision concerning the rival creditor consortium being sued along with Revlon, including Ares Management LLC, Angelo Gordon & Co. and Deutsche Bank AG. But he said that claims brought by HPS Investment Partners, Symphony Asset Management and others had wrongly attempted to sidestep the automatic stay that bars legal actions against Revlon in bankruptcy. Judge Jones said it was “difficult to conceive of a viable way to unwind” years-old deals that have been relied on by market participants in subsequent transactions and financial calculations. He also said that lenders targeted in the lawsuit have provided bankruptcy financing to Revlon expecting that deals made before the chapter 11 case would hold up.

Sue Gove wanted to keep Bed Bath & Beyond Inc. out of bankruptcy. Few believed it was possible. Alarmed by the retailer’s deteriorating finances, banks in January had cut off their credit lines and pushed for the company to start a liquidation, including selling off inventory, to repay their loans, according to a Wall Street Journal analysis. Gove, Bed Bath & Beyond’s chief executive, and her team sought a delay. They told the lenders they needed more time to set up bank accounts to make payroll in bankruptcy, the people said. They also were seeking a lifeline. Watching the drama from his home office in suburban Connecticut, George Antonopoulos, a managing partner at hedge fund Hudson Bay Capital Management, saw a troubled company that had at least one thing going for it: the passionate interest of individual investors who were keeping its stock price afloat despite an expected bankruptcy. Working with Hudson Bay’s co-founder, Yoav Roth, and others at the fund, Mr. Antonopoulos determined Bed Bath & Beyond’s shares could be an attractive investment — as long as the fund could get a guaranteed below-market price. Their thinking: Bed Bath & Beyond was a storied brand. If it somehow could turn around its fortunes, an investment at these levels would lead to big gains. But if the company’s prospects turned bleaker, the Hudson Bay team knew there was a good chance they could dump the retailer’s shares without losing too much money, thanks to the high investor interest in the stock. The unusual $1 billion financing arrangement — with $225 million upfront and installments paid over the rest of the year — will buy the unprofitable retailer more time to fix its business. The hedge fund stands to profit as long as the company can stay out of bankruptcy court this year and its stock stays above 72 cents.