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Troika Media Group, an advertising professional services company, filed for bankruptcy Thursday, after defaulting on debt it raised to finance the acquisition of a marketing agency last year, WSJ Pro Bankruptcy reported. New York-based Troika filed for chapter 11 with the Bankruptcy Court of the Southern District of New York with a deal to sell all of its assets to existing lender Blue Torch Finance. The creditor would swap the debt it lent to the company for assets. Troika can entertain higher and better offers and the deal is subject to court approval. “We expect that the process will be relatively short and that the company will have adequate liquidity” to operate normally throughout the process, interim CEO Grant Lyon said in an announcement Thursday. Blue Torch is also providing the company with a $11 million debtor-in-possession loan which will be used to finance the company’s bankruptcy and pay critical vendors, according to a court filing by Lyon. In June 2022, Troika defaulted on the debt it took on to acquire New York-based marketing agency Converge Direct last year for $125 million, according to Lyon. Soon after the acquisition, Troika appointed Sadiq Toama, one of the owners of Converge, as its CEO. Toama soon shut down other money-losing businesses and made Converge the company’s core business, he added. Blue Torch provided a $75 million loan to finance the deal.

Tampa’s fast-casual Mexican food chain Taco Bus has filed for chapter 11 bankruptcy to restructure more than half a million dollars in debt, the Tampa Bay Business Journal reported. A Small Business Administration Emergency Injury Disaster Loan received during the pandemic accounted for $500,000 of Taco Bus’s total liabilities. The SBA loan was partially secured by $25,000 of equipment as collateral, according to the filing. Taco Bus also owes RJCE Properties LLC around $14,000 in rent and the Internal Revenue Service $11,200 for taxes to resolve four liens filed between 2018 and 2021, the filing shows. Taco Bus also received a $240,000 grant from the SBA during the pandemic, which it does not believe it must repay, according to the filing. Taco Bus was previously named one of the most popular food trucks in the U.S. after a feature on Food Network’s “Diners, Drive-Ins and Dives” in 2011. Taco Bus changed ownership in 2013 when Founder Rene Valenzuela sold off a majority of the company. While Valenzuela reportedly maintained a minority stake after that deal, Umar Farooq was listed as the sole owner of Taco Bus in the filing and has been listed as president of the company since 2017, according to Florida’s division of corporations. Taco Bus has 10 locations across Tampa Bay, three fewer than reported in 2019 when the company opened a location in Orlando.

In a move that could further complicate the already contentious final chapter in the Roman Catholic Diocese of Rochester’s bankruptcy, the U.S. Trustee is urging the court to reject competing plans of reorganization filed by the diocese and the Continental Insurance Co., the Rochester Beacon reported. The Trustee’s Dec. 5 filing comes on the eve of hearings scheduled for the court to consider the dueling plans filed by the diocese and Continental. Also known as CNA, Continental is a lone holdout among several insurers refusing to go along with a plan agreed to by the diocese, other insurance companies and survivors with claims in the bankruptcy. Projecting that the bankruptcy would end with a more than $100 million payout to abuse survivors, diocese officials stated early on that they expected the church’s liability carriers to shoulder the bulk of the financial burden. The diocese and Continental filed competing reorganization plans earlier this year after ongoing tortuous, court-ordered negotiations failed to yield an agreement acceptable to the official creditors' committee. Such plans are the final step in resolving chapter 11s. Made up of abuse survivors, the creditors committee is a body appointed by the U.S. Trustee to look out for the interests of the more than 400 sexual abuse survivors who have now waited more than four years for the chapter 11 to wrap up. Both the insurer’s and the diocese’s plans contain provisions that render them unconfirmable and should be scrapped, attorneys in the Trustee’s New York City office maintain in the Dec. 5 filling.

More than $1 billion doled out to shareholders in Sycamore Partners’ 2014 buyout of retailer Nine West and other apparel brands owned by Jones Group is legitimate and can’t be unwound, according to an appeals court ruling that gave priority to market stability over creditors seeking to recoup funds in bankruptcy, according to a WSJ Pro Bankruptcy analysis. In a long-awaited 56-page ruling, the U.S. Court of Appeals for the Second Circuit last week affirmed the Southern District of New York’s 2020 decision that extended safe harbor protections to payments distributed to shareholders in the deal. Nine West’s bankruptcy trustee has argued that directors, officers and shareholders of the retailer’s former parent company unlawfully profited from the buyout. Junior debtholders said the LBO saddled the company with debt, stripped it of its best assets and led it to bankruptcy. These creditors, who suffered big investment losses after the retailer filed for chapter 11 in 2018, asked the court to deem more than $1.18 billion of payments made to both the shareholders and to former directors and officers in the buyout illegal and that they should be paid back. The court of appeals held that in Nine West’s LBO most of the distributions in question — $1.105 billion paid to shareholders — are protected by the safe harbor and that Nine West was considered a financial institution because it hired a bank agent, Wells Fargo, as the conduit of the transactions. The court said in this case a customer to a financial institution is a financial institution itself. The Nine West trustee hasn’t said whether this ruling will be appealed.

Terrestrial Brewing Co. has filed for bankruptcy protection, the brewery confirmed Wednesday, Cleveland.com reported. The brewery, which opened in 2017 in the Cleveland’s Battery Park neighborhood and a short walk from Edgewater Park, listed assets of less than $50,000 and liabilities of $1 million to $10 million, according to the Cleveland Business Journal. Also, the U.S. Small Business Administration and Cleveland’s economic development department hold claims for $150,000 and $6,500, respectively. In a statement, Terrestrial owners Ryan Bennett and Ralph Sgro said that the proceedings position the brewery for the future. “After careful consideration, Terrestrial Brewing filed a chapter 11 in order to help the business to remain open while we continue to work with our lenders," according to the statement. “Due to numerous circumstances outside our control, we experienced significant delays and costs associated with the expansion project. As a result, the main component of the project, the upstairs event space, has not been completed.” Bennett and Sgro mulled a restaurant and event space expansion as far back as 2019, but the subsequent coronavirus pandemic’s economic impact curbed those plans until 2021.

Air Methods, a helicopter ambulance business backed by a private-equity firm, received bankruptcy court approval for its restructuring plan to cut $1.7 billion of debt, WSJ Pro Bankruptcy reported. Under the plan approved by the U.S. Bankruptcy Court for the Southern District of Texas, Air Methods is expected to exit chapter 11 before the end of the year, according to a court filing yesterday. The Greenwood Village, Colo.-based company sought protection from creditors in October with a proposed restructuring agreement that would cut its debt load to roughly $550 million from $2.24 billion. Both secured lenders and unsecured bondholders will take a loss on their original investments. Creditors will also take some of the equity in the reorganized business. Air Methods provides more than 100,000 rides a year on its helicopters and airplanes. Private-equity firm American Securities bought it in 2017. The company was among a few healthcare providers that filed for bankruptcy this year, partly because of the fallout from the No Surprises Act that took effect last year to protect patients from surprise medical bills. Envision Healthcare and American Physician Partners were other companies that sought bankruptcy protection, citing the negative impact from the law.

Johnson & Johnson's worldwide vice president for litigation said yesterday that the company has recently reached settlements with several law firms over their clients' claims that J&J talc products caused cancer, Reuters reported. The settlements were reached "with a goal to facilitate our pursuit of a consensual prepackaged bankruptcy resolution," Erik Haas said on an investor call. It was not clear whether the deals have been finalized. J&J said in October that it was considering a new bankruptcy filing to resolve talc claims. Courts have rejected its two previous attempts to resolve talc litigation through bankruptcy, most recently a proposed $8.9 billion deal. Haas said that the recent settlements covered cases involving plaintiffs with mesothelioma, a type of cancer linked to asbestos, but did not provide any details about the dollar amounts involved or say how many people they covered. He said the company had resolved all but one of the cases scheduled for trial in 2023, "significantly curtailed" trials in 2024 and did not require the company to record any new charges against earnings. Bloomberg reported earlier yesterday that J&J had reached settlements covering about 100 people.

Enforcement action against crypto firms may have peaked after last month's $4.3 billion settlement with Binance, as such cases provide companies with a "template" for how they should be governed, a senior U.S. regulator said on Tuesday, Reuters reported. Binance's settlement with the Commodity Futures Trading Commission (CFTC) and Treasury Department, negotiated by the Justice Department, was for breaking U.S. anti-money laundering and sanctions laws. U.S. regulators have brought several cases against crypto firms such as Binance, helping to establish "guardrails" to bring "order and structure" to the market, CFTC Commissioner Kristin Johnson told an FT crypto and digital assets summit. "My hope would be that we have seen a spike, and what we will see going forward is that these early cases will really be a bit of cautionary tale for those firms that really do want to successfully operate in this ecosystem," Johnson said. She urged crypto firms to study the Binance settlement to see what sort of governance regulators look for at crypto firms.

Trucking company XPO Inc. won a bid to buy 28 service centers of bankrupt Yellow Corp for $870 million in a closely watched auction of the nearly 100-year-old firm's assets, Reuters reported. Yellow, formerly known as YRC, filed for chapter 11 bankruptcy protection in August after blaming the International Brotherhood of Teamsters union for its demise. The company was one of the nation's largest so-called less-than-truckload carriers in the U.S. and owned about 12,000 trucks and 35,000 trailers and its customers included Walmart and Home Depot. XPO expects the deal, which is subject to court approval, to add to core profit in 2024 and adjusted profit per share from continuing operations from 2025, according to a filing on Tuesday. The deal will add "significant footprint in areas where XPO was previously capacity constrained, the path towards the company's 2027 goals," said Jonathan Chappell, analyst at Evercore ISI. The company has also entered into an $870 million credit agreement which it may use to finance a deal it said would help optimize routes for its less-than-truckload transportation in North America.

Van’s Aircraft has filed for chapter 11 protection while it reorganizes with the goal of maintaining existing services and emerging as a solvent company again, AVWeb.com reported. In a statement posted on Monday, Van’s tried to assure owners of 10,000 finished aircraft, builders and future customers the company has a future. “During this period of reorganization, we will continue to source, produce, and provide parts, service, and support to our customers. We will also be crating and shipping kit orders,” the company said. The company blamed a maelstrom of issues for the decision, which was made about a month after company founder Dick Van Grunsven announced the company was pausing certain functions while it addressed a serious cash flow crisis. Two separate quality control issues, along with an imbalance of orders and deliveries due to COVID, led to the crisis.