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The city of Chester, Pa., is seeking bankruptcy protection, aiming to cut hundreds of millions of dollars that it owes in pension obligations and other debts, WSJ Pro Bankruptcy reported. The city’s bankruptcy petition was filed Thursday with the U.S. Bankruptcy Court in Philadelphia under chapter 9. Chester’s chapter 9 filing makes the city the largest U.S. municipality to go bankrupt since Puerto Rico in 2017 and echoes the earlier bankruptcies of the cities of Detroit and Stockton and San Bernardino, Calif., in the years following the 2008-09 financial crisis. Once a thriving industrial and manufacturing hub, Chester has struggled financially in recent decades, and its condition got worse after the COVID-19 pandemic, said Michael Doweary, the city’s receiver since June 2020, in a court filing. Without reorganization, the city would have to expect a deficit of $46.5 million in 2023, $3.6 million in 2024 and $12.5 million in 2025, with the shortfall increasing each subsequent year, he said. Gov. Tom Wolf placed Chester under receivership in 2020, citing its “fiscal emergency.” “The residents of Chester have borne too much burden for too long, and the city can no longer afford to mortgage its future to pay for past and present financial peril,” Mr. Doweary said. One of the biggest financial burdens for the city near Philadelphia has been its obligations to its retirees. The city of about 32,500 people failed to make payments to its three pension plans — for police, firefighters and other employees — between 2013 and 2020, and it owes at least $127.2 million in back payments, Mr. Doweary said.

More than two years after filing for chapter 11 bankruptcy protection in the face of mounting lawsuits related to past child sexual abuse, the Archdiocese of New Orleans is beginning to raise cash by selling some of its vast real estate holdings, NOLA.com reported. Attorneys for the local Roman Catholic Church will ask a judge this week to allow two separate property transfers to move forward. One is the sale of a former 12-story office building at 1000 Howard Ave. to a Lafayette-based investor. The other is the sale of a parking lot on Loyola Avenue behind the Howard Avenue building. Together, the deals would generate nearly $10 million for the local church, and follow property sales totaling some $1.9 million earlier in the bankruptcy process. It's unclear how far the millions raised by the property sales will go to resolving the 450 abuse claims levied at priests and other clergy who served in the archdiocese. And it's also not known what other financial steps Archbishop Gregory Aymond and his advisers will take to pay off what is expected to be a multimillion-dollar settlement with abuse victims. When the New Orleans Catholic Church joined two dozen other U.S. archdioceses by filing for bankruptcy protection in May 2020, it listed $243 million in assets and $139 million in liabilities. At the time, Aymond said that the church, which serves 500,000 Catholics across 112 parishes, needed to seek chapter 11 protection due to the mounting costs of abuse settlements and the fallout from the pandemic. Financial records have previously valued archdiocesan-owned buildings and land at some $70 million. But that estimate is likely significantly lower than what the properties would fetch on the market, because it is based on the prices that the archdiocese paid for the properties.

The Borrego Community Health Foundation, which filed for chapter 11 protection earlier this year amid a criminal investigation into its finances, has agreed to mediation to try and resolve disputes with creditors and regulators, the San Diego Union-Tribune reported. Officials from the health care provider known as Borrego Health joined creditors and California Department of Health Care Services lawyers in agreeing to non-binding negotiations that will be overseen by an independent court-appointed official. “Because litigation is time-consuming and expensive, it is beneficial to both Borrego Health and our patients if we are able to sit down with DHCS in front of a judicial officer and resolve our issues quickly,” Borrego Health spokesperson Daniel Kramer said. “This more efficient process also benefits our patients by allowing our managers and other team members to spend more time focusing on providing excellent medical care,” he said. State regulators did not respond to a request for comment on the mediation effort. They previously have resisted discussing Borrego Health beyond saying they are working to protect its patients. Meanwhile, businesses and others owed tens of millions of dollars by Borrego Health set up a committee to represent their interests before the bankruptcy court. An attorney for the committee said he welcomes the plan to negotiate a settlement.

The Diocese of Rochester (N.Y.) reached a $55 million deal to compensate 475 individual claims of childhood sex abuse while scrapping an earlier pact with its insurers and allowing abuse victims to pursue litigation to unlock additional insurance payouts, WSJ Pro Bankruptcy reported. The deal announced on Thursday marks a new phase in the three-year-old bankruptcy case and ends an earlier settlement between the New York diocese and its insurers, which had agreed to pay more than $107 million to compensate victims. Victims’ representatives opposed the earlier deal, saying the insurers weren’t paying enough. The new agreement unveiled Thursday “represents the fairest approach for the survivors and the most viable path forward,” Bishop Salvatore Matano said in a statement. The Diocese of Rochester’s insurers didn’t immediately return requests for comment. Some victims’ lawyers said Thursday that it should be able to wrap up its bankruptcy case within six months.

After three years in bankruptcy court and many months of negotiations, the Roman Catholic Diocese of Rochester (N.Y.) and more than 400 sexual abuse survivors with claims in the diocese’s chapter 11 bankruptcy have agreed to terms, the Rochester Beacon reported. “There’s still a long road ahead,” predicts James Cali, chairman of the bankruptcy’s official creditors committee. Formed by the U.S. Trustee to represent survivors’ interests, the creditors committee worked out the settlement’s terms with the diocese. Anticipating a flood of claims under the New York Child Victims Act, the diocese asked for court protection in September 2019, a month after the CVA took effect. The CVA temporarily lifted a statute of limitations that had kept survivors of long-past abuse suffered as children from going after their abusers. A virtual tsunami of CVA cases filed against Catholic churches across the state followed. The Rochester diocese was the first to file for bankruptcy protection in New York. Dioceses in Buffalo, Syracuse and Rockville Center, Long Island, followed and remain to be resolved. Filed Thursday in the Western District of New York Bankruptcy Court’s Rochester Division by the diocese, the agreement calls for the diocese and its parishes to jointly contribute $55 million to a fund to compensate survivors. The bankruptcy will not be finally resolved until the diocese puts forward a reorganization plan that creditors agree to and Bankruptcy Judge Paul Warren signs off on.

Birchbox is weighing its options, including chapter 11 bankruptcy, sources have told WWD.com. In a letter to creditors sent Tuesday, Birchbox’s parent company FemTec Health, which acquired the business last year, said those owed money from Birchbox could opt into shares of FemTec instead. “We believe, in the best interests of Birchbox and the entire FMTC family of companies spanning the U.S. and Europe, a chapter 11 or some equivalent structure may be necessary,” the letter read. Birchbox was founded in 2010 by Katia Beauchamp and Hayley Barna as the original beauty subscription box service, but the company has struggled in recent years. The letter said Birchbox’s revenue projections dropped from $74 million to $47 million, even following a $30 million infusion from FemTec.

A company that owns biomass electricity plants in West Enfield and Jonesboro and had access to millions in state subsidies to help it stay afloat has filed for bankruptcy, stating it owes $17.8 million to creditors including an energy market investor, the states of Maine and New Hampshire, and Maine loggers, the Bangor Daily News reported. Stored Solar LLC and all but one of its subsidiaries filed for chapter 11 protection in September in U.S. Bankruptcy Court in Bangor. The filing comes six years after Maine lawmakers passed a $13 million bailout of the state’s biomass industry, which uses waste wood to produce electricity, with the aim of preserving electric plants and logging jobs. Stored Solar was one of two companies to benefit from the subsidy package, which used taxpayer dollars to guarantee biomass producers above-market prices for their electricity. But the company, which bought the West Enfield and Jonesboro plants in 2016 after previous owner Covanta shut them down, only ran the plants intermittently following the bailout’s passage. The West Enfield plant hasn’t produced power since December 2020 while the Jonesboro plant last produced power earlier this year, in June, according to records from the U.S. Energy Information Administration. Months into its restart efforts in West Enfield and Jonesboro, a trade association representing Maine loggers, the Professional Logging Contractors of Maine, alleged that some of its members supplying Stored Solar weren’t being paid. The company said in late March 2017 that it had paid the loggers and settled what it called an “invoicing dispute.” But Dana Doran, executive director of the Professional Logging Contractors of Maine, said this week that Stored Solar still has not repaid those debts.

An Iowa grain company that does business in Minnesota has gone bankrupt and the Minnesota Department of Agriculture is advising farmers that they may need to file a claim against the company, AgWeek.com reported. Global Processing Inc. is based in Kanawha, Iowa, and operating in Hope, Minn. The company filed for chapter 11 bankruptcy on Oct. 24. Anyone who has not received payment for grain or who had grain stored with Global Processing Inc. is encouraged to submit a bond claim with the Minnesota Department of Agriculture. The Hope facility, in accordance with state law, held a $50,000 bond with the state. Farmers should submit a claim as soon as possible. The deadline for claims is April 24, 2023. The ag department will review all claims to determine which claims are valid. In the case of multiple valid claims, a pro-rated share will be calculated and dispersed.

Some of Revlon's creditors have asked a U.S. bankruptcy judge in Manhattan to unwind the bankrupt cosmetic giant's 2020 loan restructuring, saying that a group of senior lenders fleeced other creditors by improperly laying claim to the company's valuable intellectual property assets, Reuters reported. The creditors, including Brigade Capital and Nuveen Asset Management, in a court filing late Monday accused a separate faction of lenders, known as the Brandco lenders, of exerting enormous leverage over Revlon's bankruptcy proceedings based on "sham" loan transactions made in 2019 and 2020. If successful, their challenge could eliminate the Brandco lenders' right to claim Revlon's brands as their exclusive collateral, reducing the Brandco lenders' leverage in the bankruptcy. Both lender groups participated in a $2 billion loan that Revlon used to purchase Elizabeth Arden in 2016. But the Brandco lenders, which include private equity and hedge funds such as Ares Management and Oak Hill Advisors, then loaned Revlon additional money and claimed more of Revlon's assets as collateral, in violation of the 2016 loan agreement, according to the filing. When Revlon filed for bankruptcy in June, the Brandco lenders held about $1.88 billion of Revlon's $3.5 billion debt. They loaned the company another $975 million to fund the chapter 11 case. Through transactions in 2019 and 2020, Revlon transferred trademarks and other intellectual property rights associated with its beauty brands, including Elizabeth Arden, Almay and Roux, to newly created subsidiaries which took on additional, higher-priority debt than the company's existing debts.