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Western Global Airlines LLC has reached a deal with creditors that would allow the cargo carrier to keep operating while it reworks its debt load in a potential bankruptcy, Bloomberg News reported. The distressed carrier has lined up $77.3 million of bankruptcy financing at a rate of 9% over the Secured Overnight Financing Rate to fund the company’s operations while in chapter 11 protection. The cargo airline is expected to seek court protection from creditors in the coming days. The deal includes a roll-up of debt held by founder and Chief Executive Officer Jim Neff while other creditors, including bondholders, will provide about 50% of the financing. It also puts Neff in position to retain control of the company following its emergence from bankruptcy. The airline has been considering options including a bankruptcy filing to address its debt load while facing dwindling liquidity for months, as Bloomberg previously reported.

Shares of indebted trucker Yellow have risen fivefold this week, defying its recent shutdown of operations and impending bankruptcy filing, WSJ Pro Bankruptcy reported. Yellow stock closed yesterday at $3.90, more than doubling for the second day in a row. Some investors were struggling to understand the stock rally, which suggested that buyers see value in Yellow’s equity even as it nears a bankruptcy filing and freight customers take their business elsewhere. Equity ranks junior to debt in bankruptcy and holders typically recover nothing unless creditors are fully paid with a surplus of value left over. Shareholders of bankrupt companies are rarely in the money — usually when the business gets an unexpected boost that restores its solvency. That isn’t likely to happen for Yellow, which faces long odds to exit bankruptcy as a going concern because of the nature of the trucking business. Its customers would be long gone, afraid of leaving their inventory stranded in court proceedings. Yet now that customers have fled, Yellow could be more valuable in some respects in liquidation than as an ongoing operation, in large part because of its real estate and other holdings, said people familiar with the situation.

Voyager Digital Holdings Inc. may have been hacked just as it reopened its crypto platform so that customers could recover their money as part of a court-supervised liquidation process, a lawyer for the bankrupt firm said, Bloomberg News reported. Voyager reopened its platform for 30 days to allow customers to retrieve any remaining assets, after months of court-supervised fundraising efforts to repay customers and other creditors. During that window, customers were able to withdraw about $490 million worth of assets, or nearly 80% of what was available, lawyer Darren Azman told the judge overseeing the chapter 11 case in Manhattan. The possible breach has been reported to law enforcement agencies and is being investigated by the bankruptcy officials overseeing the company’s wind down, Azman said during the brief court hearing. Customers have been hit with various scams designed to gain access to their digital wallets, according to Azman. Typically, the scammers set up a fake website that claims Voyager customers can increase their payout by linking their non-Voyager crypto wallets to a new account. Once the new account is created, the non-Voyager wallets are drained, said Azman. Very few customers have fallen for any of the scams, but there have been some victims, he added. “It’s disgraceful,” Bankruptcy Judge Michael Wiles said during the court hearing, which was held by telephone. “I don’t know what to say. After everything these folks have been through.” Voyager is the first of a string of bankrupt crypto firms to begin returning money to creditors and customers.

Overstock has officially relaunched the Bed Bath & Beyond domain online yesterday in the U.S., after acquiring the bankrupt retail chain’s intellectual property assets for $21.5 million in June, the Associated Press reported. The online retailer Overstock.com said in late June that it was dumping its name online and it will become Bed & Bath & Beyond, which declared bankruptcy earlier this year. The name change was made in Canada on June 29, but at the time the Midvale, Utah-based company didn't specify a date for the U.S. relaunch. Overstock.com’s CEO Jonathan Johnson told The Associated Press in a phone interview last week that the relaunch in Canada has “run without a hitch.” The company has added roughly 600,000 bed and bath items since its bid for the retailer became public last month, Johnson said. The company has still not made any decisions on a corporate name, he said. Johnson had said that the name change was necessary because Overstock still confuses some customers and suppliers who thought it was a liquidator. That’s how it got its start in 1999. It transformed in 2004 into a general merchandise retailer, selling a wide variety of items. In 2021, Overstock fine-tuned its strategy to focus on furniture and home decor, getting rid of items like clothing.

The $102.1 million sale of the Banyan Cay hotel, residential and golf project in West Palm Beach has fallen through, the South Florida Business Journal reported. Denver-based Westside Investment Partners was scheduled to close on the purchase of the 200-acre resort out of U.S. Bankruptcy Court on July 25, but the attorney for the debtor alleged that the buyer hasn’t fulfilled the terms of the asset purchase agreement. Joseph A. Pack, the Miami-based attorney for Banyan Cay Resort & Golf LLC, filed a motion on July 30 to compel Westside to turnover the escrow agreement and all evidence related to monetary transfers for funding of the purchase. Pack alleged that Westside failed to fund $3.06 million due under the escrow agreement and has breached the asset purchase agreement. The debtors are now working to find another buyer for Banyan Cay. Banyan Cay Resorts & Golf filed chapter 11 reorganization in March to stay a $95.1 million foreclosure judgment from U.S. Real Estate Credit Holdings, in care of El Segundo, Calif.-based Calmwater Capital. It also blocked a $5 million mezzanine loan claim from a group of foreign investors in the EB-5 visa program.

The Second Circuit on July 25 denied the request of the government to stay issuance of the mandate pending the U.S. Solicitor General’s petition for certiorari asking the Supreme Court to review the Purdue decision allowing the bankruptcy court to issue nonconsensual releases of creditors’ direct claims against nondebtors. The mandate from the Second Circuit is scheduled to issue today, allowing the Purdue debtor to consummate the chapter 11 plan originally confirmed by the bankruptcy court in New York in September 2021, according to a special analysis from Rochelle's Daily Wire. The government isn’t giving up. The Solicitor General filed an application in the Supreme Court on July 28, asking the high court to stay issuance of the mandate pending disposition of the government’s forthcoming certiorari petition. The Supreme Court immediately directed that responses be filed by noon on Friday, August 4. The response deadline suggests that a grant or denial of a stay could come as early as Friday afternoon.

The Buffalo (N.Y.) Diocese faces more pressure to make a deal with child sex abuse survivors after Catholic dioceses in Rochester and Syracuse recently took major steps toward exiting their chapter 11 bankruptcy proceedings, according to legal experts, the Buffalo News reported. The Syracuse Diocese announced on Thursday that it will pay abuse victims at least $100 million, and possibly more, through insurance funds, while Rochester last week negotiated a new deal with victims that now includes some insurance money, and would pay at least $126 million toward a settlement. The proposed deals in Rochester and Syracuse still must be approved by a vote of victim creditors and confirmed by a federal bankruptcy judge, but they provide the Buffalo Diocese with a potential path forward in resolving what has been a lengthy and arduous reorganization effort now in its 40th month. Mediated talks between the Buffalo Diocese and abuse survivors are ongoing, although the status of the negotiations is unclear because the parties are bound by a gag order.

Beverly Hospital near Los Angeles tried and failed for years to sell itself. It turned the corner when it filed for bankruptcy, WSJ Pro Bankruptcy reported. The chapter 11 filing in April gave the hospital operator some leverage against the state’s attorney general, who has the authority to mandate prospective buyers to maintain costly services such as emergency and charity care, and to accept patients covered by government-backed healthcare programs. Such requirements had stunted Beverly’s earlier sale attempts. As its finances worsened, the hospital faced the rising possibility of shutting down, leaving tens of thousands of low-income patients in the city of Montebello without healthcare services. About two months after Beverly filed for bankruptcy, North Carolina-based American Healthcare Systems Foundation agreed to buy the nonprofit hospital for $100 million, keeping the 202-bed facility open. And unlike previous would-be buyers, AHS was able to swiftly negotiate terms of conditions with the attorney general. Read more.

The financially troubled healthcare sector will be the focus of the ABI Healthcare Program, September 18-19, 2023, in Nashville, Tenn. For more information and to register, click here.

Cineworld Group said it has emerged from chapter 11 bankruptcy after nearly 11 months, coming out with lower debt and a new slate of management and board, Reuters reported. The world's second largest cinema chain operator behind AMC Entertainment said it has appointed former Chair and CEO of Warner Bros Ann Sarnoff to its board, along with four other members to join new Chairman Eric Foss and CEO Eduardo Acuna. The movie chain operator and owner of brands such as Regal, Cinema City, Picturehouse and Planet had filed for U.S. bankruptcy in early September to restructure its massive debt. The "New Cineworld" has fixed its balance sheet after cutting debt by $4.53 billion, raising about $800 million in new equity capital and securing new debt financing of about $1.71 billion, the company said.

White House economic adviser Jared Bernstein on Monday said the reported impending bankruptcy of cash-strapped U.S. trucking company Yellow Corp does not indicate an economy-wide problem, Reuters reported. The company, through a string of mergers, appeared to take on more debt than it could handle, Jared Bernstein of the Council of Economic Advisers, said in an interview with CNBC. "So I think that this looks like more of a Yellow story than an economy-wide one by a long shot," Bernstein said. Yellow Corp has ceased operations and is filing for bankruptcy after failing to reorganize and refinance over a billion dollars in debt, the Teamsters Union said on Sunday. Earlier this month, Yellow averted a threatened strike by 22,000 Teamsters-represented workers and last week said it was exploring opportunities to divest its third-party logistics company.