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Toys “R” Us Inc. has missed payments to some suppliers in recent days as its U.S. division heads toward a likely liquidation, Bloomberg News reported. Toys “R” Us also recently stopped negotiating settlements with vendors on money owed before it filed for bankruptcy, some of the people said. The bleak situation lends evidence to the notion that Toys “R” Us is moving toward winding down its U.S. operations for good. Bloomberg reported last week that the retailer was making preparations for a liquidation of its domestic business. The company has failed to find a buyer or reach a debt restructuring deal with lenders, leaving it with few options. A hearing in bankruptcy court is scheduled to be held tomorrow, after being delayed.

The Provident Bank bought back Smuttynose Brewing Co. for $8.25 million following a foreclosure auction on Friday, but a Portsmouth, N.H.-based investor said that he is planning to purchase the popular brewery, SeaCoastOnline.com reported. Norman Rice said that he entered a verbal agreement with Provident Bank in the minutes that followed the 2 p.m. auction at Smuttynose’s facility. Provident Bank President Chuck Withee said that multiple other buyers also approached him after the auction about buying Smuttynose and that no sale has been made, but Rice spoke confidently of his plans to revitalize the struggling beer company. The sale will not include the Portsmouth Brewery, also owned by Smuttynose founder Peter Egelston and his partner Joanne Francis. They will continue to operate the Portsmouth Brewery. Egelston announced the foreclosure auction in January, saying that an explosion of microbreweries caused the company’s growth to decelerate, among other factors. The company’s financial models were based on 20 years of consistent growth, he said. The brewery launched in 1994 and opened its current state-of-the-art brewing facility in Hampton, N.H., in 2014. 

Breitburn Energy Partners LP yesterday reached an agreement with holdout creditors over its $3 billion bankruptcy exit plan and hopes to win court confirmation as soon as this month for a reorganization under new ownership, Reuters reported. On Friday, U.S. Bankruptcy Judge Stuart Bernstein rejected Breitburn’s plan to split into two separate creditor-owned companies, saying certain terms discriminated against retail bondholders, who had voted against the plan. During a status conference yesterday in U.S. Bankruptcy Court in New York on Monday, Breitburn lawyer Ray Schrock of Weil, Gotshal & Manges LLP said that individual bondholders will be offered the same cash recovery as institutional bondholders, addressing Bernstein’s concerns. The deal will cost Breitburn “a couple of million dollars,” he said, a small amount considering that the $3 billion bankruptcy of the oil-and-gas producer has lingered in court for two years. Breitburn filed for chapter 11 protection in 2016 after oil prices had slumped to below $30 a barrel from more than $100 in 2014, triggering a wave of bankruptcies across the energy industry.

Bon-Ton Stores Inc. bondholders plan to make a $650 million joint bid for assets of the department-store chain with liquidation firm Great American Group, a lawyer for the bondholders said yesterday, WSJ Pro Bankruptcy reported. The group of second-lien bondholders will use the $100 million value of their bonds as part of the consideration, in a credit bid for the company, the attorney, Sidney Levinson, told the U.S. Bankruptcy Court in Wilmington, Del. The bondholders and Great American plan to liquidate the business if their bid prevails in an upcoming sale process, Levinson said. Meanwhile, the retailer is continuing to search for a strategic investor to keep part of the department-store chain alive after bankruptcy. The company, which filed for chapter 11 protection in early February after years of declining sales, has already said it would close 42 of its 260 stores.

Financier Lynn Tilton on Sunday placed the Zohar investment funds she created under chapter 11 bankruptcy protection, a maneuver designed to quell lawsuits over her collection of distressed companies and realize their full value, WSJ Pro Bankruptcy reported. Structured as collateralized loan obligations, the three Zohar funds were created by Tilton to finance her private-equity empire but are now locked in several lawsuits with her over loans made to troubled companies in her portfolio. Tilton said in a sworn declaration filed yesterday with the U.S. Bankruptcy Court in Wilmington, Del., that she planned to use the chapter 11 process to sell the underlying portfolio companies or refinance their obligations to the Zohar funds. The companies, she said, are worth more than the roughly $2.4 billion owed to investors in Zohar I, Zohar II and Zohar III. But the cloud of legal uncertainty has turned off potential buyers and lenders and kept their value tied up in the courts, according to her bankruptcy documents.

The U.S. Environmental Protection Agency granted a bankrupt Philadelphia oil refining company a reprieve from complying with the nation’s renewable fuel laws, according to a settlement agreement filed yesterday, Reuters reported. The refiner, Carlyle Group-backed Philadelphia Energy Solutions (PES), filed for bankruptcy protection in January and asked a judge to waive some $350 million in compliance costs under the U.S. Renewable Fuel Standard, or RFS. The EPA and PES agreed yesterday that the refiner would only have to satisfy about half those costs, but would face more scrutiny moving forward, court documents showed. The settlement is facing early opposition from ethanol groups.

Two former executives at Transmar Commodity Group Ltd pleaded guilty on Friday to defrauding banks to win a $400 million credit line for the now bankrupt New Jersey-based cocoa trading company, Reuters reported. Peter G. Johnson, who was Transmar’s chief executive, and his son Peter B. Johnson, who oversaw Transmar’s Euromar Commodities affiliate, both pleaded guilty to conspiracy to commit bank fraud and wire fraud before U.S. District Judge Jed Rakoff in Manhattan, according to the office of U.S. Attorney Geoffrey Berman. Transmar, a Morristown, New Jersey-based unit of Transmar Group Ltd, sold cocoa products to chocolate makers including Hershey Co. and Nestle SA prior to filing for chapter 11 protection on Dec. 31, 2016. Prosecutors have accused the three executives of “lying repeatedly” from 2014 to December 2016 by giving banks false “borrowing base” reports that inflated the amount of collateral Transmar had to support its borrowings. Transmar owed the banks roughly $360 million at the time of the bankruptcy, prosecutors said. Read more. 

For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. 

Drugmaker Orexigen Therapeutics Inc. said today that it filed for chapter 11 protection and will also file a motion to pursue an auction and sale process of substantially all its assets, Reuters reported. The company, which focuses on the treatment of obesity, said it expects proposed bids to be submitted by May 21 and the sale is intended to be concluded by July 2. Orexigen listed assets in the range of $50 million to $100 million and liabilities in the range of $100 million to $500 million, according to a filing in the Delaware bankruptcy court. A number of its senior secured noteholders have made a $35 million financing commitment to the company during the process, Orexigen said.

Texas regulators that killed two earlier deals for a major piece of the state’s power infrastructure, Oncor, yesterday gave the nod to Sempra Energy’s $9.45 billion deal for a majority stake, WSJ Pro Bankruptcy reported. Sempra, of California, was the winner of a competition that lasted years, a contest for the thriving transmissions business that dominated the bankruptcy of Energy Future Holdings Corp., the former TXU Corp. The Public Utility Commission of Texas voted to approve Sempra’s buyout of Energy Future’s 80 percent stake in the business, which carries power to millions of people.