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Equinox Holdings Inc. got relief on some of its debts tied to the luxury fitness chain’s SoulCycle subsidiary after agreeing to pay down a portion of the borrowings, Bloomberg News reported. Equinox, backed by billionaire Stephen Ross’s Related Cos., reached a deal that releases it from a limited guarantee of SoulCycle’s $265 million credit facility with lender HPS Investment Partners. As part of the deal, Equinox will also add additional protections to its borrowings. Equinox struck a forbearance deal with HPS last May to delay the payment deadline until Feb. 15. Equinox’s guarantee originally required it to buy back at least part of SoulCycle’s obligations if the spin studios’ debt relative to earnings exceeded certain thresholds. The new agreement releases Equinox Holdings from certain debt requirements, though another unit of the company still guarantees the obligations.

Tyson Foods Inc.’s beef-producing unit has asked a judge to appoint a bankruptcy trustee to run Easterday Ranches Inc., which filed for chapter 11 protection after the food company sued it for alleged fraud, WSJ Pro Bankruptcy reported. Tyson said restructuring professionals who recently took over Pasco, Wash.-based Easterday allowed a significant land sale to go through just before its Feb. 1 bankruptcy filing. Much of the money from the $16 million sale of the feed lot went to pay professionals and insiders of the family-run operation who had steered the business into trouble, according to Tyson, Easterday’s sole customer. Tyson said that it is out roughly $200 million it funded Easterday to feed cattle that didn’t exist, adding it was forced to come up with more money last week to keep 54,000 cattle actually on Easterday’s ranch from starving. The push for a bankruptcy trustee from one of the country’s largest meat producers takes aim at alleged actions involving restructuring adviser Paladin Management Group, a consulting firm that works with distressed businesses. Paladin failed to prevent the land sale, according to Tyson’s motion calling for a trustee, which was filed Monday in U.S. Bankruptcy Court for Spokane and Yakima, Wash. A spokeswoman for Paladin said Easterday will respond to the motion at the appropriate time, adding the company doesn’t believe the appointment of a trustee is in the best interests of the estates.

Chesapeake Energy Corp., the once-iconic energy explorer that helped ignite the American shale-gas boom, is emerging from bankruptcy protection a shadow of its former self, Bloomberg News reported. And in a way, that’s just fine with its boss. “Shale has been marked by growth, and growth for all the wrong reasons,” Doug Lawler, the company’s chief executive officer, said in an interview. “What we see going forward is a new era for shale.” The driller exited chapter 11 protection on yesterday. Long gone is co-founder and ex-CEO Aubrey McClendon, who died in 2016, three years after he was forced out in a Carl Icahn-led boardroom revolt. Also consigned to history is Chesapeake’s spot in the pantheon of premier U.S. energy producers like Exxon Mobil Corp. and Chevron Corp. The company lost most of its acquisitive swagger as it grappled with the fallout of ill-timed deals that saddled it with a crushing debt load. These days, Chesapeake is slimmed down, chastened and looking to make its way in a shale industry that has gone through a painful evolution. Lawler, who’s led the company since 2013 (and who says bankruptcy could have been avoided if it wasn’t for 2020’s oil price crash) has overseen a reduction of 90% of its workforce. Just last week, the company made another round of job cuts at its Oklahoma City-based campus, and moved to redevelop the expansive site, much of which is now surplus to requirements. 

Fraud allegations against the National Rifle Association should be investigated by a bankruptcy examiner before the group is allowed to reorganize, a former director for the organization argued in an unusual request to the federal court overseeing the case, Bloomberg News reported. Phillip Journey, a Kansas judge and former state legislator, asked a Texas bankruptcy judge to appoint an independent investigator to determine the truth of claims made by New York regulators in a lawsuit. “Former and current board members have grave concerns about the overall propriety and oversight that the NRA’s board used to exercise,” Journey said in the filing yesterday. The board of directors “to this day, has reduced its role to merely that as a ‘figure head.’” Journey served on the NRA’s board of directors from 1995 to 1998, according to the filing. He also spent more than 20 years on the Kansas State Rifle Association’s board. Journey based much of his request on the lawsuit brought by officials in New York and other cases filed around the country. New York Attorney General Letitia James is seeking to dissolve the NRA, arguing misappropriation of money and breach of fiduciary duty. The NRA filed bankruptcy last month in an effort to reorganize and resolve the many lawsuits its faces. The group said it wants to move its corporate charter to Texas because James’s lawsuit is a political attack.

Bankers for American Tire Distributors Inc. are sounding out investors on a junk bond sale that would help the company refinance its debt more than two years after exiting bankruptcy, Bloomberg News reported. Goldman Sachs Group Inc. is leading talks for the roughly $1 billion deal, which is being discussed with a yield of about 8.5%. The company, one of the nation’s biggest independent sellers of replacement tires, has term loans due 2023 and 2024 that trade around 97 and 98 cents on the dollar, respectively, according to Bloomberg data. They were issued to help American Tire exit bankruptcy and both are structured as payment-in-kind, which pay interest in additional debt rather than cash. American Tire sought bankruptcy protection in 2018 after the manufacturers of Goodyear and Bridgestone tires decided to deal directly with consumers through their own networks. In what was an almost simultaneous blow, Sears Holdings Corp.’s auto centers agreed to install tires bought on Amazon.com. The company emerged from chapter 11 in late 2018, which cut its borrowings by $1.1 billion through a swap of debt claims for equity. Moody’s Investors Service upgraded American Tire two notches to Caa1 in December, citing expectations for adequate liquidity, positive free cash flow and deleveraging. It generated about $4.8 billion of revenue for the twelve months ended Oct. 3, Moody’s said.

Belk today reaffirmed that it expects to complete its financial restructuring through an expedited "pre-packaged, one-day" reorganization, according to a press release. The company expects to file for chapter 11 on February 24, 2021, and anticipates that the confirmation hearing to approve the restructuring will be held on the same day, at 2:00 p.m. Central Time. Lenders holding 99% of Belk's first lien term loan and 100% of Belk's second lien term loan have now entered into the previously announced Restructuring Support Agreement (the "RSA"), evidencing near unanimous term loan lender support for Belk's "one-day" reorganization. The RSA enables Belk to raise $225 million of new capital, significantly reduce debt by approximately $450 million, and extend maturities on all term loans to July 2025. Belk plans to continue normal operations throughout its financial restructuring. Under the RSA, suppliers will be unimpaired and will continue to be paid in the ordinary course for all goods and services provided to the company. Under the terms of the RSA, Sycamore Partners will retain majority control of Belk. Belk has secured financing commitments for $225 million in new capital from Sycamore Partners, leading global investment firms KKR and Blackstone Credit, and certain existing first lien term lenders. Belk has also secured an extension of the early consent deadline for additional lenders to provide commitments for the $225 million of new capital. The commitment deadline has been extended to 4:00 p.m. Central Time on February 11, 2021, although additional commitments are not required for successful completion of the restructuring. Members of an ad hoc crossover lender group led by KKR Credit and Blackstone Credit and other participating lenders will acquire a minority ownership in Belk.

Bankruptcy Judge David T. Thuma shot down a request by the Archdiocese of Santa Fe and its parishes to derail three lawsuits claiming church officials are shielding millions of dollars in assets to limit payouts to clergy sex abuse victims, the Albuquerque Journal reported. Judge Thuma will allow the three lawsuits filed by attorneys for nearly 400 victims to proceed while church lawyers appeal directly to the 10th Circuit — a protracted process that could take a year or two and cost an estimated $5 million. But it may not come to that. “The mediation process is continuing and we hope this ruling will result in getting a consensual deal done (on a settlement of the case),” said James Stang, a Los Angeles attorney representing the nearly 400 claimants who say they were abused as children by priests and other clergy in the archdiocese. Archdiocese attorney Ford Elsaesser at a hearing last week told Judge Thuma that four settlement offers had been exchanged in the past 60 days and “we’re at the narrowest gap we’ve ever been between the settlement discussions that began approximately 14 months ago.” About two-thirds of the claims are fully or partially covered by insurance, he said, but there is no such coverage for the remaining 120 or so filed in the case. Thuma’s ruling came more than two years after the archdiocese, the state’s largest, filed for chapter 11 reorganization, citing financial losses from clergy sexual abuse cases and the prospect of more being filed. Victims’ attorneys contend that, before the filing, the archdiocese transferred most of its property to its 94 parishes, with the intent “to hinder, delay, or defraud its creditors (almost entirely sex abuse claimants),” Thuma wrote in his ruling. Some of the assets were transferred to trusts or a savings and loan fund.

A group representing Boy Scouts of America sex abuse survivors is urging a judge to reject insurers' requests for more details about the survivors' claims filed in the youth organization's bankruptcy case, Reuters reported. The Coalition of Abused Scouts for Justice made its statements in court papers filed on Friday in the U.S. Bankruptcy Court for the District of Delaware. The group called the insurers' request for more information about the sex abuse claims "wasteful and ugly games" and a delay tactic "to prevent the (Boy Scouts) from reorganizing on terms that treat sexual abuse victims fairly." The dispute between the insurers — affiliates of Chubb Ltd and Hartford Financial Services Group — and the survivor representatives comes as the Boy Scouts, represented by White & Case, aims to submit a restructuring proposal that would settle widespread allegations of sexual abuse spanning decades. The chapter 11 case has been going on since last February. The insurers filed papers in January suggesting some of the 95,000 claims filed in the case may be fraudulent, noting that some plaintiffs' attorneys working with the coalition filed "implausibly high" numbers of claims on behalf of survivors. A hearing on the motion, as well as the insurers' recent motion seeking more disclosures about who the coalition represents, is scheduled for Feb. 17 before U.S. Bankruptcy Judge Laurie Selber Silverstein. Chubb and Hartford said in their filings that several plaintiffs' firms conducted an "extraordinary claim-mining operation" that has resulted in some sex abuse claims that "are deficient on their face." They say that some plaintiffs' lawyers ran a deceptive media campaign that may have resulted in illicit claims filed against the organization and failed to vet the claims that were submitted. The insurers argue that it will be nearly impossible to obtain court approval of a reorganization plan that attempts to address 95,000 sex abuse claims. In its response, the coalition says the insurers are focused on attacking the lawyers involved "whenever possible" and that their motion for more details about the sex abuse claims are "filled with invective and unsubstantiated allegations."

A former Cred Inc. executive was ordered to turn over millions of dollars of cash and bitcoins that the bankrupt cryptocurrency platform and its creditors said belong to the business, WSJ Pro Bankruptcy reported. But Cred and its clients and customers learned that it might be a struggle to get all of what they believe they are owed from the former officer, who was said to be making transfers of the company’s bitcoins as recently as last month. Cred’s unsecured creditors committee was awarded an emergency restraining order against James Alexander on Friday after petitioning the U.S. Bankruptcy Court in Wilmington, Del., where the company filed for chapter 11 protection in November. The committee said that, shortly before Alexander was fired by Cred in June, he had another employee transfer about 225 bitcoins to Mr. Alexander’s personal digital wallet, worth about $8.5 million today. Soon after, Alexander, Cred and one of its executives began trading lawsuits in California state court over control of subsidiary Cred Capital and its cryptocurrency. In July, a California judge entered a temporary restraining order restricting Alexander’s use of cryptocurrency that the company alleged he had stolen. Cred has also blamed some of its financial troubles on him.

With plaintiffs lawyer Tom Girardi and his law firm both forced into insolvency proceedings, arguments over Girardi's mental competency are moving to center stage, Reuters reported. But even if a judge finds that Girardi requires a guardian ad litem, it won't serve to keep his creditors at bay, experts said. "It really doesn't affect the debts, it doesn't affect the liabilities. What it affects is the procedure under which you would go about attempting to figure out what debts are what," said Bruce Markell, a bankruptcy professor at Northwestern University Pritzker School of Law and a former Nevada bankruptcy judge. U.S. Bankruptcy Judge Barry Russell in Los Angeles is slated to hear arguments on Feb. 16 over whether Girardi's brother, Robert Girardi, should be appointed guardian of both Girardi and his firm, Girardi Keese. Robert Girardi said in a January court filing that his brother is incapable of understanding the bankruptcy proceedings. Tom Girardi suffers from short-term memory loss and is unable to have "a reasoned conversation" about the issues at stake, the filing said.
The guardianship bid has drawn opposition from Elissa Miller, the chapter 7 trustee for Girardi Keese, and from Edelson PC, whose allegations that Tom Girardi misappropriated $2 million in client settlement funds helped spark the bankruptcies.