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The Trump administration recommended retaining the government’s power to seize and unwind a failing financial firm in a crisis, departing from some conservative Republican lawmakers and endorsing a plank of the 2010 Dodd-Frank financial law, the Wall Street Journal reported. The Treasury Department, in a report yesterday, called for changes to correct what it described as “serious defects” around how and when orderly liquidation authority (OLA) would be used. As expected, it said that the authority should be retained as a tool for the government if a huge financial firm were on the brink of failure. “Treasury shares many of the concerns raised by critics of OLA,” the report said, adding the authority is “a far preferable alternative to destabilizing financial contagion or ad hoc government bailouts.” The report also recommended changes to the bankruptcy code to make it easier for such a failure to be resolved in bankruptcy court, without the government taking over the failing firm. Read more. (Subscription required.) 

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A drug company once led by Martin Shkreli is grappling in bankruptcy court with an international consortium that includes medical charities that bested it in a competition over U.S. rights to sell a treatment for a dangerous infection, WSJ Pro Bankruptcy reported. Humanigen Inc., the company, wants to use chapter 11 investigative powers to see whether it has some claim on benznidazole, a drug used for decades in Latin America to treat Chagas disease, a parasitic infection that can cause serious heart problems. Last year, crucial rights to bring the drug to the U.S. market were awarded, and Humanigen lost out, dealing a blow to its plans for post-bankruptcy success. Hopes of profits from its benznidazole assets propelled Humanigen, then called KaloBios, out of bankruptcy in 2016. However, the U.S. Food and Drug Administration awarded the coveted “golden ticket” priority review voucher for the drug to a rival coalition, which included Chemo Research S.L., Exeltis and the Mundo Sano Foundation, along with the Drugs for Neglected Diseases Initiative.

Seadrill’s main owner, billionaire John Fredriksen, is close to reaching a final agreement with banks, bondholders and South Korean shipyards on a financial restructuring plan, the drilling rig company said in a court filing, Reuters reported. The Oslo and New York-listed firm, once the world’s largest offshore driller by market value, filed for chapter 11 protection last September after a sharp drop in oil prices cut demand for rigs. Seadrill failed, however, to meet a self-imposed Friday deadline, announced last week, to file an amended plan and details of a final settlement to a Texas bankruptcy court. In its latest court filing, dated Friday, Seadrill said that progress had been made during the last several days. “The parties have narrowed the number of open points and are close to reaching a final agreement,” the company wrote. Seadrill had debt and liabilities of more than $10 billion at the time of the initial chapter 11 court filing last year.

A bankruptcy judge has approved the sale of the Boston Herald to Digital First Media for nearly $12 million, the newspaper’s law firm said on Friday, the Boston Globe reported. The approval was expected after Digital First, which is controlled by New York investment firm Alden Global Capital, emerged as the top bidder for the Herald at an auction Tuesday at the Boston offices of Brown Rudnick, the Herald’s law firm. Digital First narrowly beat rival bidder GateHouse Media, which had roughly doubled its initial bid for the Herald. Herald Publisher Pat Purcell is using the bankruptcy process to shed the paper’s debt — about $31 million in liabilities, as of December — to make it more viable for a potential seller. He had been losing money amid the industry’s prolonged advertising downturn. The Herald employed about 240 people at the time of the chapter 11 filing in December. Digital Media has agreed to offer jobs to 175 Herald employees when the sale process is complete, expected at the end of March.

Menswear retail chain Bachrach Clothing is preparing to file for bankruptcy protection, less than a year from its last round through bankruptcy court, WSJ Pro Bankruptcy reported. Bachrach is currently reviewing bids from liquidation firms to close the roughly 11 store-chain as part of the bankruptcy filing, the people added. This filing would mark the retailer’s fourth time through bankruptcy court since 2006. Bachrach filed for bankruptcy protection last April in the U.S. Bankruptcy Court in Los Angeles. As part of the filing, Bachrach closed 13 of some two dozen stores in the U.S. Prior to the bankruptcy filing, however, Bachrach had closed four of its stores. Bachrach won court approval of its reorganization plan in August, shortly after blaming disappointing liquidation sales at five locations on other chains’ store-closings sales that were occurring at the same time.

Takata Corp’s U.S. unit received court approval for its bankruptcy exit plan, a plaintiffs’ law firm said on Saturday, clearing the way for a $1.6 billion sale of Takata assets and providing compensation for those injured by the company’s deadly air bags, Reuters reported. Takata and its U.S. unit, TK Holdings Inc., filed for bankruptcy last year in the wake of the largest automotive recall in history. The company’s air bags can inflate with too much force and spray metal fragments, and have been linked to hundreds of injuries and at least 22 deaths. The U.S. unit’s reorganization plan will include funds provided by automakers to help compensate those injured by the air bags. On Friday, a lawyer for Takata’s U.S. unit told the bankruptcy court in Wilmington, Delaware, that the U.S. government will complete its review of the planned sale of Takata’s non-air bag businesses by March 26. The non-air bag inflator businesses are being sold to Key Safety Systems, a unit of China’s Ningo Joyson Electric Corp.

Former Red Bull NASCAR Cup series team BK Racing has filed for chapter 11 protection ahead of the 2018 Daytona 500, AutoSport.com reported. In BK Racing's bankruptcy filing, there are 20 creditors owed money which totals over $1.2 million and the team is estimated to have between 50 and 99 creditors total. The largest claim is $569,539.95 owed to Race Engines Plus LLC. BK Racing's filing also adds that it has more than $10 million in assets and liabilities. NASCAR could revoke BK Racing's charter — its guaranteed right to start a Cup race and entitlement to larger race revenue — but said it will remain with the team for now.

Seadrill’s main owner, billionaire John Fredriksen, is close to a deal with unsecured bondholders and South Korean shipyards on a restructuring plan for the rig operator, Reuters reported. The Norwegian company, which last year filed for bankruptcy protection in a U.S. court, has been working with creditors since last month on a restructuring plan to bring in more than $1 billion in fresh funding, allow it to maintain its fleet of rigs and pay creditors and staff. The breakthrough in the talks came after Seadrill agreed on claims from Daewoo Shipbuilding & Marine Engineering (DSME) and Samsung Heavy Industries under Seadrill-guaranteed newbuild contracts for four drillships. The South Korean companies had previously claimed a total of $1.7 billion in contingent liabilities.

Fieldwood Energy LLC, one of the largest oil producers in the Gulf of Mexico, sought bankruptcy protection yesterday after agreeing to the terms of a novel deal with investors that calls for a combination of a debt-for-equity swap and the purchase of Noble Energy Inc.’s Gulf-based oil and gas assets, WSJ Pro Bankruptcy reported. Fieldwood, which is backed by energy investment firm Riverstone Holdings LLC, filed for chapter 11 in U.S. Bankruptcy Court in Houston with a pre-packaged bankruptcy plan that hands control of the reorganized business to a group of junior debt holders, which includes Riverstone, and slashes $1.6 billion in debt off its books. Riverstone, which pumped nearly $700 million into Fieldwood’s equity since founding the company in late 2012, will see its stake greatly reduced under the chapter 11 plan. The New York investment firm will emerge with about 50 percent of the equity in the reorganized company by swapping debt it owns and injecting new cash.