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A subsidiary of Chinese developer Xinyuan Real Estate Co Ltd. has filed for chapter 11 protection in the Southern district of New York court, according to a court filing, Bloomberg News reported. Hudson 888 Owner LLC, whose business is “single asset real estate,” filed the petition, according to the court document dated Sunday. Its estimated liabilities and assets are both within the range of $100 million to $500 million, the filing shows. Hudson 888 Owner is a US unit of Xinyuan, according to a document on the SEC website. Like many distressed Chinese developers, Xinyuan fell into distress in 2022 and didn’t make an interest payment in October that year. It did a dollar debt exchange in June 2023 and hired Alvarez and Marsal as its restructuring adviser.

Pharmaceutical developer Humanigen has filed for bankruptcy, attributing its financial problems largely to the U.S. Food and Drug Administration’s rejection of its COVID-19 drug in 2021, WSJ Pro Bankruptcy reported. The Burlingame, Calif.-based company, once controlled by convicted pharma fraudster Martin Shkreli, sought protection from creditors Wednesday with unsecured debts of $44.1 million, while listing assets of $521,000. Humanigen is fending off lawsuits by manufacturers and marketers over its inability to pay for services it procured in anticipation of selling the drug. The company said that its antibody medicine lenzilumab showed promise in treating COVID-19 patients with pneumonia early in the pandemic. Humanigen raised more than $140 million through two stock sales in 2020 even though it had generated little revenue and the drug candidate hadn’t been approved. Humanigen signed agreements with companies that year that would manufacture, package and market lenzilumab. But in September 2021, the FDA declined to give emergency-use authorization to lenzilumab to treat COVID patients because it said it failed to establish the potential benefits outweighed the potential risks, according to a regulatory filing.

Mass tort exposure has created a proliferation of bankruptcies, affecting organizations from Johnson & Johnson (talcum powder) to the Boy Scouts (sexual abuse), according to a Wall Street Journal commentary. Congress could come up with systemic solutions to the claims-proliferation problem, but that seems unlikely given political gridlock and trial lawyers’ clout, according to the commentary. The Judicial Conference of the U.S., which prescribes the official rules and forms governing bankruptcy practice and procedure, is a more viable avenue for reform. The Judicial Conference could quickly change the claim forms to require greater upfront disclosures—including requiring submission of a specific diagnosis linking the claim to the alleged tort, as well as disclosure of any relationship between the doctor giving the diagnosis and the lawyers—and heightened certification requirements for lawyers and others who help file claims on behalf of tort claimants. Bankruptcy judges could also appoint claims examiners in cases where large numbers of claims are brought into the proceedings to review how claims were generated and to advise judges on their findings, prior to those claims being allowed.
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*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Tessemae’s, a Baltimore-based maker of organic salad dressing and condiments sold at dozens of national and regional retailers, plans to sell to a New Jersey owner of specialty food brands for $4.5 million through a bankruptcy procedure, the Baltimore Sun reported. The U.S. Bankruptcy Court in Baltimore must approve the sales agreement between the company, founded 15 years ago by three Annapolis brothers, and Panos Brands. Tessemae’s filed for chapter 11 reorganization Feb. 1 to restructure debts and stop what it called costly and distracting litigation by a former lender. The filing at the time listed liabilities in a range of $10 million to $50 million. After working to stabilize the business and boost orders, the company determined it could best preserve the brand by selling its assets, according to a Dec. 21 court filing. Panos, based in Rochelle Park, New Jersey, manages a portfolio of brands such as Andrew & Everett cheese, KA-ME Asian food products, Walden Farms calorie-free foods and Amore Italian cooking pastes. Panos, which offered $4.5 million, was selected Dec. 18 as the highest or best bidder of two competitors at a bankruptcy auction. The Panos bid excluded Tessemae’s $800,000 in accounts receivable. If the sale to Panos falls through, the company would be sold to McDermott Group, made up of principals of Tesse DIP Fund I LLC. McDermott was chosen as backup bidder with a $4.75 million offer, including accounts receivable.

The U.S. Supreme Court review of Purdue Pharma’s $6 billion opioid settlement could open the door for Canada’s municipalities and indigenous First Nations — the only two groups not made up of individual claimants that have opposed the deal — to seek compensation they say has been denied them, WSJ Pro Bankruptcy reported. Purdue’s bankruptcy plan would compensate thousands of individuals, healthcare providers, and U.S. state and local governments accusing the maker of the OxyContin painkiller of helping to fuel the opioid epidemic. But Canadian cities and First Nations don’t have access to the settlement money promised by the Sackler family owners. The bankruptcy plan is being challenged by the U.S. Justice Department, which contests the lifetime immunity the settlement would grant Purdue’s Sackler family owners from opioid-related lawsuits. The Supreme Court heard arguments on the challenge last month. If the Supreme Court rejects the plan, lawsuits that Canadian municipalities and First Nations have filed against Purdue and the Sacklers in Canada and New York could move forward, giving them a new opportunity to litigate their cases for compensation.

A solar company under investigation in Connecticut and around the country filed for bankruptcy, NBCConnecticut.com reported. Vision Solar filed for chapter 7 bankruptcy on December 28. After a joint investigation by the state’s Department of Consumer Protection and Attorney General’s office, the AG’s office sued Vision Solar in March 2023 alleging the company used high-pressure sales tactics, like pressuring consumers into loans for solar panels which they could not afford and in some cases were never activated. In addition, the suit claimed the company did unpermitted work, leaving customers struggling to get connected to the grid as it originally promised, among other allegations.

The slot machine operator formerly known as Lucky Bucks is suing members of its former management and their affiliates, seeking the return of approximately $200 million and accusing them of defrauding the company, WSJ Pro Bankruptcy reported. Now known as Arc Gaming and Technologies, Georgia-based Lucky Bucks emerged from bankruptcy in October. The company’s new management filed a lawsuit in state court on Tuesday under Georgia’s Racketeer Influenced and Corrupt Organizations Act that named nine former high-ranking employees and one contractor as well as a dozen associated entities. The lawsuit alleged Lucky Bucks founder and former owner Anil Damani led a scheme to loot the company. Damani was barred from the company’s operations by a state regulator in June 2020, the lawsuit said. Damani and his lieutenants had Lucky Bucks and its affiliated entities borrow hundreds of millions of dollars from lenders and distributed the proceeds among themselves, the lawsuit said. The mounting debt ultimately pushed the company to file for chapter 11 bankruptcy protection last June, the lawsuit said. Lucky Bucks covered about 345 locations throughout Georgia with about 2,300 slot machines when it filed for bankruptcy. It blamed a sharp decline in revenue in 2022 caused by challenges such as increased local competition and regulatory enforcement. Lucky Bucks handed itself to its lenders in exchange for reducing its debt by more than $500 million under the company’s chapter 11 plan, which was approved in July.

Guanella Pass Brewing, which has locations in Georgetown and Empire, Colo., filed for chapter 11 on Dec. 30, the Denver Post reported. The 7-year-old brewery has $2.3 million in debt, far more than the $860,000 in gross revenue that it earned in 2023. Guanella Pass became Georgetown’s first brewery since Prohibition when it opened in May 2017 at 501 Rose St. in the tiny Clear Creek County town. It has 16 owners, led by Steven and Stacey Skalski of Evergreen, who together are its majority shareholders. Steven Skalski bought 501 Rose St. for $180,000 in 2016, county records show. In 2020, Guanella Pass opened a brewpub at the foot of Berthoud Pass along U.S. 40 in Empire. It also operates the SilverBrick Saloon, a restaurant in Georgetown. On Dec. 7, the brewery, along with both Skalskis, were sued in Jefferson County by On Tap Credit Union, a beer-themed banking institution that said the defendants owe it $36,000 and counting on a credit card. The Skalskis and their company have not responded to the lawsuit in court but the brewery’s bankruptcy paperwork shows a $36,000 debt to On Tap. Guanella Pass has just $72,340 in assets: brewing and restaurant equipment mostly, along with a few thousand dollars in a bank account. It brought in $792,000 in gross revenue in 2021, $1.1 million in 2022 and $860,000 last year, according to its bankruptcy paperwork.

FTX is on the hunt for billions of dollars that the cryptocurrency exchange says it is owed. Since filing for bankruptcy in November 2022, the company — through a dozen or so lawsuits — has been trying to claw back the money. FTX is expected to file more such lawsuits in 2024, WSJ Pro Bankruptcy reported. “There are many more actions coming as a result of our comprehensive investigation,” an FTX spokesperson said. In a September presentation to creditors, FTX said it had identified $16.6 billion in such potential actions. “We are highly confident there will be significant recoveries for creditors from these new actions,” as well as from pending cases and other investigative efforts, the FTX spokesperson said. The company faces 36,075 customer claims for a total of $16 billion. FTX has said customers would get as much as 90% of whatever is recovered during the bankruptcy. Roughly $9 billion of customer deposits remain unaccounted for.

A Louisville business and its affiliates have filed for bankruptcy protection, the Louisville Business First reported. Hull Organization LLC, Hull Properties LLC, Hull Equity LLC and 4 West LLC all filed for chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the Western District of Kentucky on Dec. 13. The companies are all registered to Robert Hull, whose LinkedIn profile states he works in retail shopping center and office development. Each of the entities are represented by Tyler Yeager, a bankruptcy attorney with Kaplan Johnson Abate & Bird LLP. He and Hull declined to comment on the cases. The majority of unsecured claims relating to Hull Organization are taxes owed on several properties in Springfield and Dayton, Ohio, totaling more than $61,000, according to one of the filings. Locally, the business owes $9,193 in electric bill payments to LG&E for the two suites it owns at 1902 Campus Place in Louisville, according to filing documents. Hull Organization has between $1 million and $10 million in assets, the filing states.