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As the North Carolina Theatre in Raleigh works to emerge from bankruptcy reorganization, it’s pushing to terminate key contracts, from leases to employment, the Triangle Business Journal reported. The action includes an employment agreement with Eric Woodall, who was named executive artistic director of the theater last September. In a court motion to terminate Woodall’s contract, NCT says that doing so is “a proper use of its business judgment.” The theater is asking a judge to rule that any claims arising from the contract termination be filed in the next 30 days. Last year, Woodall had actively pushed for additional funding for the theater, which is housed downtown at the Martin Marietta Center for the Performing Arts. “We are determined to stay afloat and thriving," he told WRAL in November. But a post-pandemic comeback proved to be a difficult task. Last month, Woodall posted on LinkedIn that he was looking for a new role. The theater's board voted to pursue bankruptcy on Feb. 12. The bankruptcy filing shows just under $205,000 worth of assets and more than $2.1 million in debts.

The U.S. Department of Justice's bankruptcy watchdog on Friday asked a judge to dismiss the bankruptcy of a prison healthcare contractor, saying that the company appeared unable to reach a viable settlement of prisoners' lawsuits accusing it of providing substandard care at detention facilities nationwide, Reuters reported. The DOJ's office of the U.S. Trustee said that Tehum Care, a subsidiary of prison health provider Corizon, now known as YesCare, should not remain in bankruptcy if it insists on pursuing a "coercive" and legally flawed settlement that would eliminate prisoners' lawsuits against Corizon and its owners. The company's proposed bankruptcy deal is not a true settlement, because it could end prisoners' lawsuits against their wishes, U.S. Trustee Kevin Epstein wrote in a filing in Houston, Texas, bankruptcy court. "Considering that after a year of spending considerable resources in this Chapter 11 case, the debtor is still unable to propose a confirmable plan, the U.S. Trustee supports dismissal," Epstein wrote. Tehum and YesCare have been criticized by prisoners, their families and U.S. lawmakers for pursuing a strategy known as the "Texas two-step," which involves placing a shell company into bankruptcy to stop lawsuits against a better-funded parent company. The companies' predecessor, Corizon Health, used a Texas statute to split itself into two companies, YesCare and Tehum, shortly before the bankruptcy was filed in February 2023. YesCare inherited Corizon's assets and its go-forward business, while Tehum was stuck with the liability from about 200 lawsuits accusing Corizon of providing prisoners with substandard medical care that led to injury and death at 50 detention facilities in 27 U.S. states.

Lawyers for biopharmaceutical company Sorrento Therapeutics disputed allegations that they committed bankruptcy fraud, saying that a bank account and mailbox created in Texas justified a chapter 11 filing in the state days later, WSJ Pro Bankruptcy reported. The U.S. Justice Department’s bankruptcy watchdog alleged last week that the bankruptcy filed in Houston by Sorrento subsidiary Scintilla Pharmaceuticals in February 2023 falsely represented that its principal assets and business are in Texas when it is actually based in San Diego. A Sorrento shareholder had separately made allegations in court that the company’s lawyers committed fraud by filing the case in Texas. San Diego-based Sorrento had used Scintilla’s chapter 11 petition in the U.S. Bankruptcy Court in Houston as the basis to file its own petition in that court. The U.S. trustee for the Southern District of Texas said that the Sorrento and Scintilla cases should either be dismissed or transferred out of state, noting that Scintilla is a Delaware-incorporated company that made repeated representations to the California secretary of state in June 2023 that its principal address was in San Diego.

Rudolph Giuliani must pay the $148 million debt he owes two Georgia election workers — despite his bankruptcy, the pair said in a new complaint, Bloomberg Law reported. The judge overseeing the former New York City mayor’s chapter 11 case shouldn’t allow Giuliani to use bankruptcy to avoid the debt because bankruptcy law blocks the discharge of debt incurred through “willful and malicious injury,” the election workers, Ruby Freeman and Shaye Moss, said in a filing Friday. Freeman and Moss were awarded $148 million in December after a court found Giuliani liable for defaming the pair by accusing them of rigging 2020 election results for Joe Biden. He filed for bankruptcy shortly after. A ruling in favor of Freeman and Moss in the bankruptcy case would prevent Giuliani from clearing what is by far his biggest debt. Giuliani has reported having $10.6 million in assets against almost $153 million in liabilities.

At least one lender to Express Inc. has approached the retailer to put aside a pool of money for expenses tied to a potential future bankruptcy filing, Bloomberg News reported. A demand to set aside so-called cash reserves, if enforced, could push Express into chapter 11 as it would eat into limited liquidity available for necessary payments to vendors, landlords and other parties, said the people, who asked not to be identified discussing private negotiations. Creditors have been growing increasingly antsy and considering whether to push the company to file for bankruptcy, Bloomberg previously reported. Express, which is burning through a short supply of cash as it attempts to fix troubled operations, is looking to avoid any move to fund reserves for as long as possible. The retailer lost over $150 million in three quarters through late October as it faced an escalating competitive threat from fast-fashion rivals. More of its major creditors would have to join the request in order for it to mandate action on the part of Express. Lenders to the retailer include Wells Fargo & Co., Bank of America Corp., Hilco Global and Gordon Brothers Group.

Bankrupt cryptocurrency exchange FTX received court approval to sell its stake in Anthropic, an artificial-intelligence startup in which Amazon.com and Google late last year agreed to invest billions of dollars, WSJ Pro Bankruptcy reported. Judge John Dorsey in the U.S. Bankruptcy Court of Wilmington, Del. approved the sale on Thursday after FTX reached a compromise with a group of customers who had objected to the sale. FTX invested $500 million in Anthropic in 2021 and holds a stake of about 7.8% in the company. In a court filing earlier this month, FTX said that “given the increased interest in AI and large language models, there has been significant appreciation in the value of the Anthropic shares.” In September, Amazon said it would be investing up to $4 billion in Anthropic. And in October, Google agreed to invest up to $2 billion in Anthropic, building on its earlier investment in the AI company. By getting approval for the sale procedures, FTX said it can unload the shares at “the most optimal and appropriate time.” Read more. (Subscription required.)

In related news, the FTX estate has agreed to drop a lawsuit that sought to claw back at least $323.5 million from the original owners of the bankrupt cryptocurrency exchange’s European unit, WSJ Pro Bankruptcy reported. Under a proposed settlement, the two main targets of the lawsuit—FTX Europe co-founders Patrick Gruhn and Robin Matzke—agreed to buy back the unit’s assets for $32.7 million. Details of the proposed settlement emerged in a Thursday court filing from the FTX estate. The deal still needs to be approved by a judge. The proposed settlement marks a retreat by the FTX bankruptcy estate, led by Chief Executive John J. Ray III. The suit against the former owners of the European unit was one of around a dozen lawsuits filed by FTX seeking to claw back billions of dollars from former FTX insiders and companies that did business with FTX under the leadership of its former CEO and founder, Sam Bankman-Fried. In recent months, the rising value of cryptocurrencies and FTX’s stake in artificial-intelligence startup Anthropic have made it less imperative for the estate to claw back funds. A lawyer for FTX said in court in January that the estate expected to repay customers in full. Filed in July, FTX’s lawsuit alleged that Bankman-Fried massively overpaid for Digital Assets DA AG, the Swiss firm that became FTX Europe, when FTX bought it for more than $376 million in a series of transactions in 2020 and 2021. At the time, Bankman-Fried was eager for his crypto exchange to become licensed in the European Union. Read more. (Subscription required.)

Baudax Bio, a Malvern, Pa.-based biopharmaceutical company spun out of Recro Pharma more than four years ago, has filed for U.S. Bankruptcy Court protection, the Philadelphia Business Journal reported. In Thursday's chapter 11 filing at U.S. Bankruptcy Court in Philadelphia, Baudax listed assets of just under $20.6 million and debts of nearly $21.8 million. The company's two largest unsecured creditors, according to the filing, are law firms. Goodwin Procter of Boston is owed $1.8 million, and Troutman Pepper Hamilton Sanders in Philadelphia is owed $1.3 million. The next largest unsecured creditor among the 20 listed in the filing is ERG Holding Co., a clinical services provider based in St. Louis, which is owed $917,000. Baudax was established in 2019 after Recro Pharma decided to split its two businesses. Recro continues to serve as a contract development and manufacturing organization with its headquarters in Malvern and a manufacturing plant in Gainesville, Georgia. Baudax was established as a drug development company. It received Food and Drug Administration approval for a non-opioid paid medicine called Anjeso, which Recro had been developing. Early last year, Baudax shelved Anjeso, which was approved for the management of moderate to severe pain for patients in medical centers or other acute-care settings. When announcing the decision in February 2023, Baudax Bio CEO Geri Henwood said the company was halting sales and marketing efforts for the drug due to "persistent economic challenges facing hospitals."

A New Jersey-based police training firm singled out in a government watchdog report for its “vulgar” and “unconstitutional” lessons has since relocated to Florida and declared chapter 11 bankruptcy as officials in at least nine states move to ban Street Cop Training from instructing officers, NJ.com reported. New Jersey Attorney General Matthew Platkin this week directed any Garden State police officers who attended Street Cop’s 2021 conference in Atlantic City to undergo mandatory re-training in Trenton in March and steer clear of the company going forward. That order followed a scathing New Jersey State Comptroller report, released in December, that found conference speakers “promoted likely illegal tactics, glorified violence and demeaned women and minorities.” The report drew national attention as videos spread of invited speakers remarking on the size of their penises, mocking suspects and motorists with lewd images and memes and complaining about police oversight. Now, several states have prohibited officers from attending Street Cop trainings, including Minnesota, Missouri, Maryland, Illinois, California, Oregon, Nevada, Michigan and New Jersey, according to court filings. Facing a shrunken customer base and more investigations, Street Cop founder Dennis Benigno, a former Woodbridge police officer, filed for chapter 11 bankruptcy for the firm in a Florida federal court earlier this month, citing continued “harassment from the State of New Jersey” among the sources of the firm’s financial woes.

The North Carolina Theatre, Raleigh’s largest professional theatre company producing live musical theatre for the past 40 years, announced on Friday they are filing for chapter 11 protection, WRAL.com reported. They are also suspending the remainder of their 2024 season. This comes after financial challenges the production company faced during and following the pandemic. "With profound sadness, the NCT Board of Directors announces that it must implement a financial restructuring by seeking protection under Chapter 11," said. "The financial restructuring is a necessary step toward rebuilding and revitalizing The North Carolina Theatre for the future." NCT will join multiple prominent live theatres across the country that have either closed or sought bankruptcy protection resulting from external forces during and after the pandemic, including significant increases in production costs, loss of corporate and personal sponsorships, decline in subscription sales and a slow return of audiences to live venues.