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The company behind Alex Jones' conspiracy site, Infowars, has picked a new chief restructuring officer to guide his business through chapter 11 after a bankruptcy judge rejected a prior pick over an undisclosed conflict, Dow Jones Newswires reported. Infowars parent Free Speech Systems LLC on Monday sought bankruptcy court permission to hire Patrick Magill as its new CRO. Mr. Magill is a licensed certified public accountant in retired status with more than 40 years experience assisting private and public companies, according to court documents. Infowars' founder Alex Jones signed an engagement agreement with Mr. Magill's firm on October 3, court papers say. Mr. Magill was selected weeks after U.S. Bankruptcy Judge Christopher Lopez declined FSS' request to hire a different CRO and a lawyer because they failed to disclose their connections to a prior chapter 11 case involving different Infowars affiliates. Judge Lopez also ordered an independent trustee assigned to the chapter 11 case to conduct an investigation of Infowars. FSS said Monday that the trustee has indicated that she'd support appointment of Mr. Magill as the company's new CRO.

Pipeline Health System LLC, an operator of a network of community hospitals and health clinics serving patients on government insurance or who are uninsured, has filed for bankruptcy, citing rising labor costs and aging facilities, WSJ Pro Bankruptcy reported. The privately held hospital owner filed for chapter 11 on Sunday in the U.S. Bankruptcy Court in Houston to restructure roughly $603 million in senior debt and leases to address problems in the business that the company says have been exacerbated by the COVID-19 pandemic. The company said it plans to either sell its operations or hand the business to lenders. Pipeline blamed its bankruptcy in part on rising labor costs that cut into its margins and aging medical facilities that required significant expenditures to continue operating. The company, whose patients mostly rely on Medicare and Medicaid, said it has also had problems getting timely funding from federal and state authorities. Based in El Segundo, Calif., Pipeline operates seven so-called safety-net hospitals that provide care to vulnerable or socioeconomically disadvantaged patients. The company’s facilities include Weiss Memorial Hospital in Chicago, White Rock Medical Center in Dallas, Coast Plaza Hospital in Norwalk, Calif., East Los Angeles Doctors Hospital and Memorial Hospital of Gardena in Gardena, Calif. Read more.

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Bankrupt cryptocurrency lender Celsius Network Ltd. has set dates for the auction of its assets, Bloomberg News reported. Celsius will have a final bid deadline of Oct. 17 at 4 p.m., with an auction if necessary on Oct. 20 at 10 a.m., according to a filing with the U.S. Bankruptcy Court for the Southern District of New York dated Monday. A sale hearing will be held on Nov. 1 at 11 a.m. before Chief U.S. Bankruptcy Judge Martin Glenn via Zoom, the filing said, adding that a large number of participants is expected. Celsius has been one of the most high-profile casualties of this year’s crypto-market meltdown that claimed the likes of the TerraUSD stablecoin, hedge fund Three Arrows Capital and lender Voyager Digital Ltd. Founder Alex Mashinsky recently resigned the chief executive officer role, ceding it to Chief Financial Officer Chris Ferraro, a JPMorgan Chase & Co. alum. Sam Bankman-Fried, the crypto billionaire who has been bailing out distressed industry players in recent months, is considering bidding for Celsius assets, Bloomberg News reported last week, citing a person familiar with his deal-making.

Bed Bath & Beyond Inc.’s bondholders are organizing, looking to protect their investments in the struggling retailer as it looks for ways to ease its debt during a slump in sales, WSJ Pro Bankruptcy reported. Financing adviser Perella Weinberg Partners is working with holders of Bed Bath & Beyond’s unsecured notes due in 2024 ahead of debt talks expected to be held with the company. Bed Bath & Beyond said in its second-quarter results last week that it is considering launching a distressed exchange that would swap the outstanding bonds for new, longer-tenured debt or equity in the company, based on their trading prices. But the transactions could take other forms or might not be launched at all, the company said in a securities filing last week. Bed Bath & Beyond didn’t respond to a request for comment Monday. Bondholders are wary about a potentially coercive exchange deal that raises new secured debt but weakens other creditors’ claims on Bed Bath & Beyond’s assets. The company said last week that it had liquidity of about $850 million as of September, reflecting new loans it secured from its banks and from Sixth Street Partners after the quarter ended.

Bankrupt crypto lender Celsius Network said on Friday it is not seeking to enforce payment obligations for outstanding loans during its chapter 11 proceedings and that borrowers do not need to repay such loans, Reuters reported. New Jersey-based Celsius said no interest or penalties will be assessed post loan maturity, in a filing at the U.S. Bankruptcy Court for Southern District of New York. Celsius filed for bankruptcy in July, with estimated assets and liabilities between $1 billion to $10 billion, with more than 100,000 creditors. The lender also listed a $1.19 billion deficit on its balance sheet and had about 23,000 outstanding loans to retail borrowers totaling $411 million backed by collateral with a market value of $765.5 million in digital assets, as of July 13 this year.
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In related news, Alex Mashinsky, the embattled founder and former CEO of Celsius Network, removed $10 million from the now bankrupt crypto lender weeks before Celsius halted customer withdrawals in June, the Financial Times reported, citing unnamed sources. Mashinsky, who resigned as CEO Sept. 27 Eastern time, withdrew the cryptocurrency in May. At the time, crypto markets were being roiled by the collapse of the Terra ecosystem, which saw $60 billion in value evaporate that month. Celsius is supposed to submit details about Mashinsky's transactions to the court in a few days as part of a wider financial disclosure by the company. A Mashinsky spokesperson said that the entrepreneur had disclosed to an unsecured creditors committee (UCC) in the bankruptcy proceedings that he and his family had $44 million in crypto frozen with Celsius following the withdrawal. Read more.

Far-right conspiracist Alex Jones is facing heightened scrutiny as the bankruptcy of his Infowars parent company reveals a complicated web of corporate entities tied to his family and associates, Bloomberg Law reported. Jones’ parents and sister control companies that are now looking to be paid as creditors of the bankrupt debtor, Free Speech Systems LLC. Other companies run by his personal trainer and an Infowars contributor also have supplier contracts with Free Speech that will be probed during the chapter 11 case. Jones and his company now owe about $50 million in defamation judgment—and possibly more in the future—to Sandy Hook Elementary School shooting victim families for his lies that the 2012 shooting was a hoax. Those families, as unsecured creditors, have led the call to investigate whether Free Speech, through his family and friends, has established corporate structures that allow him to protect assets that could otherwise be used to pay the defamation judgment. A judge has ordered the bankruptcy trustee in the case to investigate the intra-family and other dealings that could hurt creditor payout. Future court rulings could wreak havoc on Jones’ quest to use bankruptcy to limit his liabilities.

Survivors of Guam clergy sexual assault are a step closer to obtaining compensation as a judge today is set to begin hearing arguments that would get the Archdiocese of Agana out of bankruptcy and pay claimants $34 million to $101 million, Pacific Daily News reported. “We’re almost at the finish line,” U.S. District Court of Guam Chief Judge Frances Tydingco-Gatewood, who’s been serving as bankruptcy judge in the archdiocese case, said on the first day of the hearing. The remaining concerns about the plan related to the Boy Scouts of America, among other things, are expected to be addressed, and the judge assured of a “reasonable, fair, expeditious” decision. If the judge confirms or approves the fifth amended joint reorganization plan this week, payments could start reaching survivors in “90 to 120 days,” according to attorney Robert Kugler of Minneapolis-based Stinson LLP, counsel for the creditors committee. Attorney Edwin Caldie, also representing the creditors committee, told the court about the 99.3% support to the joint plan by abuse survivors, referring to the 152 votes to “accept” it versus only one vote to “reject” it. There are more than 270 Guam clergy sex abuse claims from those who said they were raped or sexually molested by parish priests and others associated with the Guam Catholic church as minors.

Victims of Bernard Madoff’s massive Ponzi scheme will soon get another $372 million in payouts, bringing the total amount distributed from a government fund to more than $4 billion since the collapse of the fraudster’s company in 2008, Bloomberg News reported. The eighth payment so far from the U.S. Justice Department’s Madoff Victim Fund will go out to about 40,000 victims worldwide, and will increase the total recovery from all sources of compensation to 88% of losses, the U.S. Attorney’s Office in Manhattan said Wednesday in a statement. The money was raised through government settlements with Madoff’s bank, JPMorgan Chase & Co., as well as some of his oldest customers, such as investor Jeffry Picower, who died in 2009, according to the statement. Madoff died last year in prison, where he was serving a 150-year prison term. “This office continues its historic work seeking justice for the victims of Madoff’s heinous crimes,” U.S. Attorney for Manhattan Damian Williams said in the statement. “But our work is not fully complete, and this Office’s tireless commitment to compensating the victims who suffered as a result of Madoff’s crimes continues.” The U.S. fund is separate from the repayment process being overseen by a trustee, Irving Picard, in federal bankruptcy court in Manhattan. His litigation against customers who profited from the scam has so far recovered more than $14.5 billion, most of which has already been returned to victims.

The liquidation of Lehman Brothers’ brokerage unit has ended, 14 years and 13 days after its parent’s bankruptcy helped trigger a market freefall and global financial crisis, Reuters reported. Bankruptcy Judge Shelley Chapman in Manhattan closed the brokerage’s estate yesterday and awarded final payments to the trustee who oversaw its liquidation and his law firm. More than $115 billion was paid out. Lehman’s 111,000 customers received all $106 billion they were owed, and secured creditors also received full payouts. Unsecured creditors recovered $9.4 billion, or about 41 cents on the dollar. They were originally expected to recover about 20 cents on the dollar. Lehman Brothers Holdings Inc., the brokerage’s parent, had been Wall Street’s fourth-largest investment bank before filing what remains by far the largest U.S. bankruptcy on Sept. 15, 2008.