%1

Bed Bath & Beyond shareholders will receive zero recovery under a proposed reorganization plan that the bankrupt home-goods retailer revealed on Thursday, WSJ Pro Bankruptcy reported. The proposal, filed with the U.S. Bankruptcy Court in New Jersey, said the stock in Bed Bath & Beyond “shall be canceled, released and extinguished.” Shareholders will have no right to claim any future recovery either, according to the proposed plan. Shares at the bankrupt retailer dropped 11.3% to 32 cents Friday morning. The stock has rallied since its bankruptcy filing, peaking at 38 cents this week from a low of 8 cents in early May. Some individual investors continued to buy Bed Bath & Beyond shares even after the company entered chapter 11 in April, ignoring warnings by the company that its shares would be worthless in bankruptcy. Supporters fueled social media hype that the iconic chain could defy the odds and make an unlikely comeback. Bed Bath & Beyond ditched its efforts to find buyers for both its namesake retail chain, as well as its Buybuy Baby stores, and is shutting down stores and liquidating much of its inventory.

Celsius Network reached settlements that potentially clear a path for the crypto lender to win court approval for its plan to return assets to its customers and conclude its bankruptcy, the Wall Street Journal reported. One of the settlements resolves customer claims over allegations of fraud and misrepresentation by prior Celsius management by bumping up recoveries by 5%. The agreement resolves 30,000 claims seeking $78 billion in compensation, according to court papers filed on Thursday by lawyers for Celsius. The settlements set the stage for a confirmation hearing on Celsius’s reorganization plan in October before U.S. Bankruptcy Judge Martin Glenn and for customers to start receiving disbursements of crypto and other assets by the end of the year, according to the court papers. Lawyers for Celsius had argued customers were owed no more money than what they deposited on its platform, but many users filed claims seeking damages over alleged misconduct by the company’s former management, according to the court papers.

Lawyers for FTX founder Sam Bankman-Fried rejected prosecutors' claims that his discussions with a New York Times reporter amounted to witness tampering but agreed to accept a gag order, they said in a letter to the judge in the criminal fraud case, Reuters reported. The letter, released on Sunday, came after prosecutors sought to bar Bankman-Fried and allies from making public statements that could interfere with the case. Cryptocurrency exchange FTX, once valued at $32 billion, filed for bankruptcy protection in November as it was unable to repay depositors. Bankman-Fried has pleaded not guilty to fraud. In the letter, Bankman-Fried's attorney confirmed he had spoken with and provided personal documents to the New York Times that included documents written by a former colleague, Caroline Ellison, who has cooperated with the U.S. government. "Bankman-Fried did not violate the protective order in this case, nor did he violate his bail conditions, nor did he violate any law or rule governing his conduct," Bankman-Fried's lawyer Mark Cohen said in the letter.

Sexual abuse survivors in the Diocese of Rochester’s bankruptcy case have reached a settlement with two of the diocese’s insurance companies, WHEC.com reported. The new settlement is $50.75 million. The Diocese filed for chapter 11 bankruptcy back in 2019, after 475 survivors brought suit against it. Friday’s settlement is in addition to a $75.6 million settlement from the Diocese and another insurance company. In total, survivors have won $126.35 million in settlements.

Diamond Sports Group, the struggling subsidiary of Hunt Valley, Md.-based Sinclair Broadcast Group that owns regional sports networks, has entered a legal fight with Sinclair as part of Diamond’s bankruptcy case, the Baltimore Sun reported. Diamond Sports, which is independently managed, filed a lawsuit under seal Wednesday in the U.S. Bankruptcy Court for the Southern District of Texas. Diamond, a subsidiary Sinclair created to hold the 19 sports networks it acquired from The Walt Disney Co., filed for bankruptcy reorganization in March, burdened by more than $8 billion in debt. The lawsuit accuses Sinclair of receiving about $1.5 billion as a result of alleged misconduct, including fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties.

After more than 150 years of newsgathering, the Pulitzer Prize-winning newspaper Santa Barbara News-Press has posted its last online edition a month after the News-Press ceased publication of its print newspaper and went all-digital, the Los Angeles Times reported. The death knell for the once-mighty but long-floundering News-Press came in the form of a bankruptcy filing last week by Ampersand Publishing LLC, the entity by which the newspaper does business. Ampersand’s chapter 7 bankruptcy filing was authorized during a meeting “on or about” May 1, nearly three months before it was filed Friday in U.S. Bankruptcy Court for California’s Central District, according to federal court records. The move also comes about three months after the newspaper relocated its operations and staff from the landmark building on Santa Barbara’s De la Guerra Plaza — where it had been housed for the last 101 years — to its printing plant in Goleta, the Santa Barbara Independent reported.

Parties in a bankruptcy case involving a bond-financed Arizona participant sports venue objected to a motion to either appoint an independent chapter 11 trustee or dismiss the case, arguing either move would be detrimental or premature, The Bond Buyer reported. Legacy Cares, the venue's owner, which filed for bankruptcy May 1 in Arizona federal court, along with bond trustee UMB Bank and the official committee of unsecured creditors raised concerns Thursday that efforts to sell the 320-acre Legacy Park in Mesa would be derailed and $9 million of debtor-in-possession (DIP) financing that is allowing the facility to continue to operate would be exhausted before a sale could be consummated. Legacy Cares objected to a motion in bankruptcy court to appoint an independent trustee or dismiss the chapter 11 case. U.S. Trustee Ilene Lashinsky asked the court last month to appoint an independent entity to assume control of Legacy Cares' assets and operations or dismiss the bankruptcy, citing "dishonesty, incompetence, or gross mismanagement," as well as the possible misuse of bond proceeds on the part of the nonprofit owner.

San Francisco's landmark Anchor Brewing Co., which has announced plans to cease operations after more than 126 years, says it's willing to consider a takeover by employees, CBSNews.com reported. The company that describes itself as the nation's first craft brewery said Wednesday that it has stopped brewing and will file for bankruptcy because of declining sales. But that could change if employees come through with an offer to purchase the company, spokesman Sam Singer said Saturday. "We have received an e-mail from Anchor's union spokesperson stating that the 'workers of Anchor Brewing have met, discussed and decided to launch an effort to purchase the brewery,'" Singer said in a statement. "This inquiry was on behalf of an unidentified group of Anchor employees, not the union itself." "Given our deep respect for the Anchor union and our team members, should our employees put forward a bona-fide, legally binding offer to buy the company, one that includes a verifiable source of funds, we would gladly consider it," Singer said. In its announcement Wednesday, the company said its only option was to cease operations because of the impacts of the pandemic, inflation and a highly competitive market. While the company is interested in an employee takeover, "time is running short," Singer said Saturday. He said Anchor is moving forward with plans to file for bankruptcy through chapter 7 liquidation or chapter 11 reorganization.

Williams Industrial Services Group filed for chapter 11 protection in a U.S. Bankruptcy Court for the District of Delaware on Saturday, according to court documents, Reuters reported. The company listed both assets and liabilities in the range of $50 million to $100 million, per the filings.

U.S. Bankruptcy Courts in Texas attracted about 40% of the country’s commercial chapter 11 filings in the first six months of this year, solidifying the state’s lead as the most popular restructuring destination for failed companies, WSJ Pro Bankruptcy reported. As many as 848 of a total of 2,165 chapter 11 filings were made in the four bankruptcy courts in Texas in the first half of 2023, according to bankruptcy information provider Epiq. The states of New York and Delaware ranked second and third, Epiq said. Texas extended its lead in bankruptcy filings compared with the same period last year when the state accounted for 20% of total commercial bankruptcy filings, slightly higher than runner-up New York of 18%, Epiq data show. “What the large chapter 11 debtors want, more so than some of the smaller midmarket companies, is consistency in rulings, and that’s the one thing you’re getting out of Texas right now,” ABI President-Elect Christopher Ward of Polsinelli said during a filing trend webinar hosted by ABI and Epiq. Houston was the most popular among the four Texas courts, attracting some of the largest filings including KKR-owned Envision Healthcare in May and airplane-parts giant Incora in June.

Epiq has a special offer for ABI members on its Analytics services. Click here to find out more and take advantage of the savings!