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Alex Mashinsky, founder and former CEO of bankrupt cryptocurrency lender Celsius Network, pleaded not guilty yesterday to U.S. fraud charges that he misled customers and artificially inflated the value of his company's propriety crypto token, Reuters reported. Three federal regulatory agencies also sued Mashinsky and Celsius in connection with the case. Mashinsky was charged with seven criminal counts — including securities fraud, commodities fraud and wire fraud — according to an indictment unsealed earlier on Thursday. He is one of several crypto moguls to be indicted in another blow for the industry, which is undergoing a reckoning after a slump in crypto prices led to the collapse of several companies, including exchange giant FTX. That company's founder, Sam Bankman-Fried, was charged with fraud last year, and has pleaded not guilty. U.S. Magistrate Judge Ona Wang said Mashinsky would be released on a $40 million bond secured by his Manhattan residence.

FTX filed a lawsuit on Wednesday against former managers of a Swiss business the bankrupt cryptocurrency exchange had acquired, looking to claw back at least $323 million to repay creditors and customers, WSJ Pro Bankruptcy reported. The lawsuit filed in the U.S. Bankruptcy Court in Wilmington, Del., alleged FTX overpaid for Digital Assets DA AG, the Swiss company that later became FTX Europe following a series of transactions in 2020 and 2021, despite knowing it “had limited business and no intellectual property beyond a business plan.” The new management overseeing FTX’s bankruptcy said in the lawsuit that the FTX Europe business has little value and is unlikely to be sold. The defendants are Digital’s co-founders and a Digital employee and shareholder before the FTX acquisition. FTX bought the Swiss company hoping to gain access to regulators to make it easier to do business and expand its customer base in Europe, FTX said in the lawsuit. In reality, the business didn’t have and never got the type of licenses that would have been useful to FTX in Europe, the lawsuit said.

Residents, nurses and local politicians gathered at a town hall meeting in Hollister, Calif., to voice their concerns about the future of Hazel Hawkins Memorial Hospital after the San Benito Health Care District's recent chapter 9 bankruptcy filing, Becker's Hospital Review reported. Members of the California Nurses Association recently voted "no confidence" in both the Hazel Hawkins board and the administration and argued that the bankruptcy filing was a potentially catastrophic and unnecessary step in resolving the hospital's financial issues, according to the report. During the July 6 town hall meeting, Mike Rabourn, research lead for the California Nurses Association, argued that the financial health of the healthcare district is not as dire as it seems. "Ultimately, what we found, in spite of all their tales of woe, when you look under the hood, the district is actually not doing so bad, especially in the last six months," Mr. Rabourn said, according to benitolink.com. "As of May, it’s actually in quite a strong financial position according to their own financial reports. I think everybody is surprised that they are so aggressively pursuing this bankruptcy process when they’ve actually engineered quite a financial recovery since the fiscal emergency." Mr. Rabourn argued that the hospital district is not financially insolvent — despite projections that it will run out of cash by November or December 2024 — and that it currently has more than 35 days cash on hand and recorded about $2 million in net income over the past 11 months.

The largest consumer bankruptcy law firm in Illinois and one of the biggest in the country has filed for bankruptcy after taking millions in taxpayer-backed loans meant to help struggling businesses survive the pandemic, the Chicago Sun Times reported. The Semrad Law Firm LLC, which markets itself as DebtStoppers, filed for chapter 11 bankruptcy on April 26 in Delaware — blaming the COVID-19 pandemic. The PPP loans were aimed at small businesses that needed help maintaining their payroll, but court filings show Semrad Law was using paralegals and call center workers in Bulgaria while ultimately cutting its U.S. workforce in half. Its Bulgarian vendor, ZenTeli OOD, is partly owned by the two brothers behind Semrad Law. Records show the law firm received a financial lifeline during the pandemic, obtaining more than $3.8 million in loans through the federal Paycheck Protection Program, launched early in the economic crisis. Patrick Semrad, 44, said the COVID-19 pandemic ravaged the consumer bankruptcy sector, forcing the firm to make the tough decision to file for chapter 11 earlier this year. The law firm went from filing 1,112 cases in June 2019 to filing 486 cases in June 2021, he said. Last month, it filed 632 cases.

Aruze Gaming America — the slot machine developer behind Shoot to Win Craps, Go Go Claw and other electronic table games — will close its Las Vegas headquarters next month and lay off 100 workers, according to a notice filed with the state, the Las Vegas Review-Journal reported. The closure is expected to be effective Aug. 18, according to a required notice to the Nevada Department of Employment, Training and Rehabilitation. Few other details were immediately available. Aruze representatives did not respond to additional questions about the closure by the time of publication. The closure comes roughly six months after the equipment manufacturer filed for chapter 11 bankruptcy protection. The company said at the time that the filing was part of its efforts to restructure financially because of “external factors outside (their) control.” It listed a “garnishment judgment against Aruze resulting from a separate judgment against Aruze’s shareholder.”

A Memphis-based restaurant group filed for chapter 11 protection last Friday, according to federal bankruptcy court records, LocalMemphis.com reported. Holiday Ham Holdings, LLC, the parent company of Memphis-based restaurants Pimento's and Holiday Deli & Ham Co., filed for bankruptcy with the West Tennessee Bankruptcy Court Friday, July 7, with more than $3.2 million in debt, according to court records. While the group, which owns four different restaurants around Memphis between the two brands, has not said whether the move will affect restaurants or jobs, they will not be required to sell their assets to debt collectors, according to the terms of chapter 11 bankruptcy. Holiday Deli & Ham Co. began operations in Tennessee in July, 2015, and opened their first restaurant shortly thereafter.

Monster Beverage Corp. won bankruptcy court approval to acquire former rival Bang Energy out of chapter 11 for $362 million and settle litigation between the energy drink companies, Bloomberg News reported. Judge Peter Russin said on Wednesday that he’d approve the settlement and sale — averting the shutdown of Bang Energy, which has faced an uncertain future after its board fired founder and former Chief Executive Officer Jack Owoc earlier this year. The tie-up remains subject to additional customary closing conditions, lawyers said. Judge Russin also said he’d approve a resolution to false advertising litigation against the maker of Bang Energy. Bang maker Vital Pharmaceuticals Inc. filed bankruptcy last October, months after a California jury awarded Monster $293 million over Bang’s “super creatine” branding on its products. The deal nearly fell apart before the U.S. Federal Trade Commission granted early termination of its antitrust review of the merger between Monster and Bang. Bang lawyers said at earlier hearings that the company could shut down because it was running out of cash and argued its merger with Monster qualified for early termination under the so-called failing firm defense. Monster Executive Vice President and Deputy General Counsel Paul Dechary said in a sworn statement that the company has substantial resources to satisfy financial obligations under the Bang deal. Monster has a market capitalization of about $59 billion and cash and cash equivalents of about $3 billion, Dechary said.

Teen clothing chain rue21 Inc. is working with AlixPartners LLP for operational help as the company racks up earnings losses, Bloomberg News reported. Year-to-date, the retailer has posted negative Ebitda. The chain recently underwent a change in its C-suite, with Josh Burris taking over as chief executive officer in March. Burris had previously served as the head of GNC Holdings Inc., following the vitamin chain’s restructuring in 2020. In October, rue21 entered into negotiations with its lenders to avert a second bankruptcy filing, Bloomberg reported. It went through a bankruptcy in 2017, after its sales were hurt by falling foot traffic and changing consumer habits. It operates more than 600 stores.

After 127 years in San Francisco, Anchor Brewing Co. has brewed its last batch of beer. The historic San Francisco brewery had already announced last month that it would end production of its signature "Anchor Christmas Ale" and planned to stop selling its beer nationally. Now, all brewing has stopped, the San Francisco Business Times reported. It intends to package and distribute the beer that it has on hand through the end of the month, after which it will cease operations and liquidate the business as part of an assignment for the benefit of creditors (ABC) — a voluntary alternative to formal bankruptcy proceedings. The decision follows an early Wednesday morning vote by the board of directors of Sapporo Holdings Ltd., the Japanese brewing giant which purchased Anchor Brewing in 2017. In a statement, Anchor Brewing cited a "combination of challenging economic factors and declining sales since 2016."

A marketing firm in Raleigh, N.C., has filed for chapter 11 protection — a circumstance its attorney blames on rising wages, the Triangle Business Journal reported. Direct Marketing Group, which also goes by its initials, DMG, filed for bankruptcy reorganization on July 7. The company bills itself as developing digital marketing strategies for its clients. It was founded by Ryan Fuller, formerly a retail operations manager for Hendrick Automotive Group. The company's attorney, Danny Bradford, said a big part of the firm’s cash flow problems are tied to rising labor costs. Higher costs caused DMG to incur expensive short-term loans — and payments have impaired cash flow. As a result, the firm has to streamline its operations and reduce personnel, he said. “The reality is that higher wages are here to stay,” Bradford said, adding that DMG hopes to use software in order to increase productivity for the employees it’s retaining. DMG is not alone. Philip Sasser, a bankruptcy attorney in Cary who is not connected to DMG's case, said wage and labor issues have been a major driver of why business owners are reaching out to his firm about possible bankruptcies.