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The Global Tee Co. LLC, a seller of motivational fitness apparel, has filed for chapter 11 bankruptcy protection, citing the effects of the COVID-19 pandemic on the business, Crain's Grand Rapids reported. The Cascade Township, Mich.-based company, which does business as Fitness Tee Co., filed for bankruptcy protection on May 25 in the U.S. Bankruptcy Court for the Western District of Michigan. Global Tee is pursuing chapter 11 under Subchapter V of the U.S. Bankruptcy Code, which allows small businesses to reorganize while allowing owners to retain a stake in the company. Owned by CEO Scott Sandberg, Global Tee listed nearly $190,000 in assets, which include cash on hand, equipment, and blank and finished clothing inventory, according to court filings. That compares with $1.1 million in liabilities, including nearly $658,000 in unsecured claims. In the filing, the company said it “has fallen behind in payments to its creditors, including taxing authorities” who have filed levies on its bank accounts, “which has interrupted cash flow necessary for continuation of (Global Tee’s) business operations.” Creditors with some of the largest priority unsecured claims include the city of Kentwood ($15,000), the Florida Department of Revenue Taxpayer Services ($16,900), the Indiana Department of Revenue ($6,400), the Michigan Department of Treasury ($6,400), the State of Texas Comptroller of Public Accounts ($10,500) and the Ohio Department of Taxation ($9,700).

Reversing the district court, the Second Circuit reinstated the bankruptcy court’s confirmation of the chapter 11 plan of Purdue Pharma LP and its inclusion of nonconsensual releases of creditors’ direct claims against nondebtors, Rochelle’s Daily Wire reported today. In the majority’s 74-page opinion, Circuit Judge Eunice C. Lee found statutory authority for nondebtor, third-party releases in Sections 105(a) and 1123(b)(6) of the Bankruptcy Code and in “this Circuit’s caselaw stating that a bankruptcy court has authority to impose such releases.” Circuit Judge Richard C. Wesley wrote a 14-page concurrence that reads like a dissent and urges the Supreme Court to grant certiorari to resolve the split of circuits. Judge Wesley concurred in the judgment because he saw the issue as having been resolved in In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 293 (2d Cir. 1992), Second Circuit authority that “has not been overruled either by the Supreme Court or by this Court sitting en banc.” The third judge on the panel was Circuit Judge Jon O. Newman. Having served 44 years on the appeals court, he is the most senior judge on the Second Circuit.

Johnson & Johnson’s first jury trial in nearly two years over allegations that its talc-based baby powder causes cancer could influence plaintiffs weighing the $8.9 billion settlement offer put forth by the company last month, Bloomberg News reported. The trial in Anthony Hernandez Valadez’s suit alleging he got mesothelioma from asbestos-contaminated talc in J&J products is scheduled to go before a jury Wednesday in state court in Oakland, California. Due to Valadez’s failing health, the case was allowed to proceed as an exception to the order putting all litigation on hold after J&J sought to wall off all of its talc liability in a chapter 11 bankruptcy for its LTL Management unit. J&J, which is trying to settle more than 40,000 talc cases in the bankruptcy, must convince 75% of plaintiffs to back its settlement offer. The company is hoping the chapter 11 halt to most jury trials will help it build support for the deal. But a big award for Valadez could convince more plaintiffs to go to trial, potentially tanking the deal. Over the years, New Brunswick, New Jersey-based J&J has steadfastly maintained its baby powder — sold in distinctive white bottles — never contained asbestos, is safe and doesn’t cause cancer. Executives say they are seeking a settlement to avoid billions in legal fees and expenses, along with a new wave of trials. “The company deeply sympathizes with anyone suffering from cancer and understands they are looking for answers,” J&J said in a statement on the Valadez trial. “However, the science doesn’t support that the exceedingly rare form of mesothelioma at issue in this case is connected to talc exposure.” In 2021, another Oakland jury awarded a woman more than $26 million in a talc case against the J&J. The company is appealing the verdict.

Diebold Nixdorf plants to file for chapter 11 bankruptcy protection after reaching an agreement with key financial stakeholders to restructure its debt, the Hudson company said yesterday, according to a report in the Akron (Ohio) Beacon Journal. The company, a leading provider of automated teller machines and financial security software and hardware, is seeking to complete the restructuring "efficiently and quickly" to "support seamless ongoing operations and establish a long-term, sustainable capital structure." Octavio Marquez, Diebold Nixdorf chairman, president and chief executive officer, said: "Our company is focused on continuing our solid operational performance and delivering best-in-class products and services to banks and retailers around the world. With the support of our creditors, we have reached an agreement to restructure and strengthen our balance sheet, enhance liquidity and position Diebold Nixdorf for long-term success." The company said it expects the restructuring transactions to be consummated in the third quarter of 2023.

Allied Healthcare Products, a respiratory medical-devices maker, spent hundreds of thousands of dollars in 2020 expanding its product line to meet what it believed would be a surge in demand for ventilators at the onset of the pandemic. By the time it churned out more machines, demand fell short of expectations. Earlier this month, the company filed for bankruptcy and plans to sell its assets, WSJ Pro Bankruptcy reported. “Having diverted a lot of resources — time, personnel, floor and machine space — to ventilator production, Allied found it had an inventory of ventilators it couldn’t sell,” Eric Peterson, the St. Louis, Mo.-based company’s lawyer, said at a hearing earlier this month. Other healthcare suppliers, including a vial manufacturer and a COVID-19 test-kit maker, are among companies that have filed for chapter 11 bankruptcy. Many such companies are rattled by diminishing sales as pandemic worries recede, and they are now burdened with products piling up in storage. “More than anything I’ve ever seen, COVID chose winners and losers during the lockdown, and it is determining winners and losers now,” said Ken Mann, managing director for investment bank SC&H Capital. Vial manufacturer SiO2 Medical Products, which sought protection from creditors in March, ramped up capacity to make 120 million vials a year during the pandemic. By the time the facility was ready, demand for COVID-19 vaccines had tapered. And vaccine distribution ended up favoring syringes over vials.

Diamond Sports Group lost the rights to televise San Diego Padres baseball games after its local cable TV channel failed to make a required payment to the MLB team, Bloomberg News reported. In a statement, Diamond Sports said that while it has significant liquidity and has been making payments to other teams, the terms of the Padres contract were “not aligned with market realities.” The broadcaster said Major League Baseball forced its hand by refusing to negotiate direct-to-consumer streaming rights for all the teams in its portfolio “despite our proposal to pay every team in full in exchange for those rights.” Diamond Sports, the largest owner of regional sports networks, filed for bankruptcy protection in March, a victim of the high debt load taken on by parent Sinclair Broadcast Group Inc. to purchase the business and the shrinking ranks of cable-TV customers. The company has been trying to acquire the streaming rights to more teams to launch a new online alternative to its traditional cable channels. Diamond operates local channels under the Bally Sports name. A hearing in the bankruptcy case is scheduled for today.

Prosecutors urged a Manhattan federal court judge on Monday to deny a request by FTX founder Sam Bankman-Fried to dismiss criminal charges accusing him of stealing billions of dollars from customers to plug losses at his hedge fund, Reuters reported. Bankman-Fried, the 31-year-old former cryptocurrency billionaire, has pleaded not guilty to 13 counts of fraud, conspiracy, making illegal campaign contributions and foreign bribery. On May 8, Bankman-Fried urged U.S. District Judge Lewis Kaplan to dismiss most of the counts, saying prosecutors charged him in a "rush to judgment" following a broad crash in 2022 where several prominent crypto companies went bankrupt, including his own Alameda Research. In a filing late Monday, prosecutors described motions to dismiss the charges as "meritless", rebutting Bankman-Fried's argument that the indictment's allegations were insufficient and legally defective. "The Indictment sufficiently alleges that the defendant and his co-conspirators made false and misleading representations to lenders relating to Alameda's financial condition. No more specificity is required," prosecutors wrote. Judge Kaplan will hear oral arguments on June 15.

Peace Equipment LLC, a company headquartered in Edcouch, Texas, filed for chapter 11 protection last week, citing rising operating costs and “reduced income in the trucking industry,” Freight Waves reported. The company also noted merchant cash advances as being a contributing factor to Peace Equipment’s financial issues, according to court filings. Peace Equipment filed its chapter 11 petition, which seeks to reorganize, in the U.S. Bankruptcy Court for the Southern District of Texas on Wednesday. The company, which has been operating since 2016, has 38 drivers and 27 power units and hauls general freight, fresh produce and refrigerated food throughout the U.S. In its filing, Peace Equipment lists both its assets and liabilities as between $1 million and $10 million. The petition states the company has up to 49 creditors and maintains that funds will be available for distribution to unsecured creditors once it pays administrative fees. Chief U.S. Bankruptcy Judge Eduardo V. Rodriguez authorized Peace Equipment’s interim order on Thursday, authorizing the temporary use of its cash collateral to continue operating.

Venator Materials PLC, the former pigments and additives division of The Woodlands, Texas-based Huntsman Corp., has filed for bankruptcy protection in Houston along with 23 affiliates, the Houston Business Journal reported. In the main chapter 11 petition filed May 14, the U.K.-based company listed total assets of nearly $1.42 billion and total debts of more than $1.53 billion. The petitions were filed in the U.S. Bankruptcy Court for the Southern District of Texas, which is well known for handling large corporate restructurings. However, Venator expects to emerge from bankruptcy quickly. On May 15, the manufacturer and marketer of chemical products said an "overwhelming majority of its lenders and noteholders" had agreed to the terms of a comprehensive recapitalization plan, which would be implemented through an expedited prepackaged chapter 11 process. Venator's plan already had support from "the holders of 94% in principal of the obligations under the Term Loan Facility, holders of 98% in principal of the obligations under the Senior Secured Notes, and holders of 92% in principal of the obligations under the Senior Unsecured Notes and rolls-up all of the obligations under the (asset-based lending facility)," CFO Kurt Ogden said in a declaration filed May 15. Venator plans to exchange nearly all of the company's funded debt for equity. The New York Stock Exchange delisted Venator, as expected, and the company's shares are trading on the over-the-counter marketplace during the chapter 11 process. The shares are expected to be canceled as part of the restructuring. On May 16, Judge David R. Jones approved setting June 15 as the deadline to vote on the plan, June 20 as the deadline to file objections and June 26 as the date for a hearing on the confirmation of the plan.

A timber company owned by Yakutat’s village corporation has filed for bankruptcy this month after a bank sued the corporation over $13 million in outstanding debts, AlaskaPublic.org reported. It’s the latest chapter in the story of a contentious logging operation that many of the corporation’s shareholders didn’t support. Yak Timber filed for bankruptcy on May 11. In a letter to shareholders the next day, the village corporation, Yak-Tat Kwaan, said they filed “only after exhausting all efforts to negotiate a resolution” with the bank. Yakutat’s tribal government, Yakutat Tlingit Tribe, says the lawsuit is further dividing a town that was already stressed — many residents didn’t agree with the logging operation in the first place. Andrew Gildersleeve is the Tribe’s executive director. The lawsuit, brought by AgWestFarm Credit, alleges that Yak Timber owes the Washington-based bank about $13.3 million in unpaid loans. The suit was filed in U.S. District Court in Seattle on March 31. The suit says the corporation hasn’t made payments since the middle of 2022. The bank is seeking repayment, interest, and attorney’s fees. It lists equipment along with timber, proceeds, and property as collateral.