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Imerys SA is pressing ahead in an effort to get out from under lawsuits over its U.S. mining operation, Imerys Talc America Inc., over the protests of health-care company Johnson & Johnson, WSJ Pro Bankruptcy reported. The Imerys talc-mining business, which supplied talc for Johnson’s Baby Powder, had been hit with lawsuits claiming the product caused cancer. It was placed into chapter 11 protection in 2019 and sold in 2020 for $223 million, with the proceeds earmarked for a trust to pay cancer claims. It is now trying to win court permission to seek creditor approval of its bankruptcy repayment plan. Johnson & Johnson, which has denied liability and is fighting the lawsuits, says Imerys Talc’s bankruptcy is an improper effort to immunize the mining company’s French parent, and make it easier for cancer victims to sue Johnson & Johnson. Imerys Talc is putting sale proceeds, insurance policies and funds from settlements into a trust that will pay claims for cancer. Victims won’t get much from Imerys, court papers say. Under the Imerys Talc plan, some ovarian cancer victims can expect to collect only about 5% of the value that has been assigned to their claim, for example. Johnson & Johnson says the bankruptcy plan allowed cancer victims to set the amount of their damages without opposition, setting a precedent for collecting the rest of the money from Johnson & Johnson.

Being on the brink of bankruptcy no longer seems to matter much in the U.S. stock market. While that might sound like the beginning of a cautionary tale about the state of investing in 2021, the reality is far stranger, according to a Bloomberg commentary. Redditors have bid up shares of AMC Entertainment Holdings Inc. and GameStop Corp. so much that it’s saved them — for now, at least — from deep trouble. They’re not the only troubled companies where social-media users are trying to conjure magic. In a broad benchmark of U.S. stocks known as the Russell 3000 Index, there are 726 companies whose earnings don’t cover their interest payments, a red flag to pros, according to data compiled by Bloomberg. These zombies are up an average of 30% in 2021 — trouncing the 13% return for the whole index — and 41 of them have doubled since New Year’s Eve. Even explicitly dire warnings don’t seem to register. A bankruptcy plan under consideration by GTT Communications Inc. would wipe out shareholders, which is typical in chapter 11 cases, Bloomberg reported May 24. Nevertheless, the company’s stock is up about 69% since then. Wall Street is starting to factor in the impact of traders drumming up enthusiasm for stocks on social media and Reddit threads. Theater operator AMC, which was on the brink of bankruptcy last year, now has a “path to a sustainable capital structure,” according to S&P Global Ratings, in part because it’s been able to sell new shares amid huge demand from retail investors. Video-game retailer GameStop is now debt-free for the same reason.

Brazos Electric Power Cooperative Inc. lobbied Texas Gov. Greg Abbott to veto a pair of bills that would compel electricity cooperatives to put their customers on the hook for full payment to the state’s grid operator for power purchases during February’s extreme winter weather in the state, the Wall Street Journal reported. Louis Strubeck, a lawyer representing Brazos in its bankruptcy case, said in a court hearing on Friday that co-op executives met with the governor’s staff over the legislation, which would compel Brazos and other co-ops to issue debt to pay the full amount owed to the state’s grid operator, the Electric Reliability Council of Texas. Brazos also sent a letter to the governor urging him to veto the debt-financing legislation, Mr. Strubeck said Friday. “We think if those bills are signed into law, they have serious consequences for Brazos,” he said at a hearing in the U.S. Bankruptcy Court in Houston. Texas lawmakers passed legislation last month that authorizes several sources of financing to cover the huge bills that some electricity cooperatives and retailers, including Brazos, ran up during the freeze. It requires cooperatives that still owe money to the state grid operator Ercot to “use all means necessary” to sell 30-year securitization bonds, using the proceeds to pay their storm bills in full.

Family-owned oil barge transport company Bouchard Transportation Company, headquartered on Long Island, informed regulators and its bankruptcy court that it is seeking a buyer, the Maritime Executive reported. The company, which filed for chapter 11 bankruptcy protection eight months ago, said it may begin layoffs in a matter of weeks if a buyer could not be located. The company, which was founded in 1918, was up until recently managed by family member Morton S. Bouchard III as the company's chief executive and director. The company filed for bankruptcy protection in September 2020, saying it planned to continue normal operations with previously arranged debtor-in-possession financing while it moved forward with an operational restructuring. As part of the bankruptcy proceeding, Judge David R. Jones, who is hearing the company's case in U.S. Bankruptcy Court in Houston, later replaced Bouchard in the role of CEO with Matthew Ray, a managing partner at Chicago-based Portage Point Partners. According to a filing made with the New York State Department of Labor Office of Dislocation of Workers Program, “the company is currently in the process of seeking a purchaser of Bouchard or its assets.” Bouchard's fleet includes 25 double-hulled barges and 26 tugboats. The notice informed New York State that the company is contemplating layoffs at its Long Island headquarters, which it reports currently employs 108 people. The firm said a buyer may elect to continue the employment of all or a substantial number of employees. Otherwise, depending on the terms of a purchase transaction, the company may need to engage in layoffs. The layoffs may begin on July 15 and would continue through August 15, the targeted closing date of the Long Island office.

Indorama Ventures Ltd (IVL) has competed the acquisition of the recycled polyethylene terephthalic (R-PET) assets of CarbonLite Holdings and its subsidiaries in Dallas, Texas, the Thailand-listed producer said today, ICIS.com reported. IVL has completed all formalities with regards to the acquisition "and has taken charge of the plant effective from 11 June 2021", it said in a filing to the Stock Exchange of Thailand. IVL won a $63.8m bid for CarbonLite's Dallas rPET facility during a May 24 auction. CarbonLite in March this year filed for chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware citing pressures stemming from the coronavirus pandemic, among other factors.

Toronto-Dominion Bank defeated a lawsuit that sought nearly $4.3 billion in damages over allegations the institution ignored red flags about R. Allen Stanford’s financial empire before it was exposed as one of the largest-ever Ponzi schemes, WSJ Pro Bankruptcy reported. A judge in Ontario on Tuesday dismissed legal claims brought by court-appointed liquidators of Stanford International Bank Ltd., a former TD Bank customer, following a trial that examined an 18-year business relationship that unraveled when U.S. authorities exposed Mr. Stanford’s fraud in 2009. Liquidators appointed in Antigua, where SIB was located, have been pursuing TD and other banks that did business with Mr. Stanford in an attempt to recover money for creditors. Justice Barbara Conway of the Ontario Superior Court of Justice ruled TD Bank employees had no reason to believe at the time that Mr. Stanford was committing fraud or there was anything amiss at SIB. Liquidators argued there were warnings before 2009 that should have tipped off TD Bank, saying it should be liable for between $1.1 billion and $4.28 billion in damages, according to the ruling. But Justice Conway said Mr. Stanford and other SIB directors “went to great lengths to present SIB as a responsible, upstanding bank,” noting it hired experienced bankers and accountants, kept nice offices and presented professional annual reports. The SIB liquidators said they were disappointed with Justice Conway’s ruling, “which leaves many thousands of creditors around the world without justice, more than a dozen years after the collapse of Allen Stanford’s massive Ponzi scheme.” The liquidators are evaluating SIB’s position and considering an appeal, they said.

Blackstone Group Inc. and Starwood Capital Group’s proposed takeover of Extended Stay America Inc. is expected to pass a shareholder vote Friday despite opposition from some of its investors, Bloomberg News reported. Early results show that investors in the lodging company will approve the deal. The figures are preliminary, and shareholders could still change their vote ahead of the meeting Friday. The vote as of Thursday was extremely close. The private equity firms agreed to buy Extended Stay in March for $19.50 a share, boosting their offer by $1 per share after opposition from six shareholders, including Tarsadia Capital, which campaigned to block the deal. Tarsadia and some other investors continued to oppose the deal despite the price increase, arguing that the sales process was flawed, the timing was wrong, and the standalone prospects for the company were better than the value being offered. 

Hertz Global Holdings Inc. shareholders have officially notched an improbable win. If not for U.S. regulators, the victory could have been twice as sweet, Bloomberg News reported. All told, Hertz’s bankruptcy exit plan will repay creditors and return more than $1 billion of value to shareholders, lawyer Tom Lauria said on behalf of the company in a Thursday court hearing. But the deal might have delivered more than twice that if Hertz had succeeded in issuing stock to fund its bankruptcy last year, Lauria said. Hertz was an early favorite of traders on Reddit’s WallStreetBets forum, and the ensuing rally prompted the bankrupt firm to explore selling potentially “worthless” shares to raise cash. Hertz scrapped those efforts after Securities and Exchange Commission officials questioned the unusual approach. Instead, Hertz had to borrow more money to fund operations, ultimately arranging a $1.65 billion debtor-in-possession loan from the likes of Apollo Global Management. Because all creditors have to be repaid before equity can get anything in U.S. bankruptcy, the additional debt weighed on recoveries for stockholders. Still, Hertz’s bankruptcy plan is “a fantastic result,” U.S. Bankruptcy Judge Mary Walrath said in hearing Thursday, noting that payouts to equity are virtually unheard of in chapter 11. The case “surpasses any result that I’ve seen in any chapter 11 case that I’ve faced in my 20-plus years,” Judge Walrath said. Read more.

In related news, Hertz Global Holdings Inc. is concluding a chapter 11 case that generated big gains for shareholders, who are usually an afterthought in corporate bankruptcies, WSJ Pro Bankruptcy reported. Bullish individual investors, in particular, were drawn to Hertz and were rewarded for the risk they took on a bankrupt stock. But many of Hertz’s backers are unfamiliar with the bankruptcy process and with their options to get paid under the company’s exit plan, which was approved by a judge Thursday. WSJ Pro Bankruptcy breaks down the choices facing Hertz shareholders, who have a Friday deadline for some parts of the payout. Read more.

The bankruptcy case of Little Rock, Ark.-based wholesale food company Affiliated Foods Southwest that began more than 12 years ago has closed, according to court documents, the Arkansas Democrat Gazette reported. In early March, Richard Cox, chapter 7 trustee, submitted his final account and distribution report to Judge Richard D. Taylor, which showed $20.9 million in claims abandoned and $91.89 million in claims discharged without payment. The trustee distributed $12.91 million from the bankruptcy estate, with $7.35 million going to creditors and $5.56 million for administrative expenses, according to the documents. Of the claims paid, $1.23 million were to secured creditors, $2.28 million went to priority unsecured claims and $3.84 million went to general unsecured claims, according to the report. The company initially filed for chapter 11 in an attempt to reorganize its debts and then shifted to chapter 7 to liquidate the company's holdings. Court documents showed the bankruptcy case was closed on Wednesday. In May of 2009, Affiliated Foods Southwest filed for bankruptcy protection in U.S. Bankruptcy Court for the Eastern District of Arkansas, Central Division, after more than 50 years in business. The company stopped operations in July of that year and about 1,800 workers with the Affiliated Foods and its associated companies, lost their jobs. Affiliated Foods Southwest was a wholesale food distribution company that provided products, services and technology for independently owned grocery stores and chains in Arkansas, Texas, Louisiana, Mississippi, Oklahoma and Tennessee.

Jewelry maker Alex and Ani LLC, which operates dozens of stores, filed for chapter 11 protection yesterday, Bloomberg News reported. The Rhode Island-based jewelery company sells wares like charm bracelets and necklaces and was founded in 2004 by Carolyn Rafaelian. It opened its first store in the state in 2009 and has since expanded locations spanning the United States, Aruba and Panama. Alex and Ani’s filing in Delaware listed assets and liabilities of $100 million to $500 million each. Mall owners Simon Property Group Inc. and Brookfield Property Partners LP are among its largest unsecured creditors; each are owed more than $3 million in rent payments. The filing comes nearly two years after the firm sued Bank of America Corp. for more than $1 billion, in a lawsuit which accused the bank of fraudulently declaring Alex and Ani in default of a $50 million line of credit and of driving it toward bankruptcy. The bank said it strongly disagreed with the allegations at the time. That case was later dropped in August 2019.