%1

Envision Healthcare has filed for chapter 11, beginning one of the largest healthcare-related bankruptcy cases ever and likely wiping out the $3.5 billion stake that private-equity firm KKR acquired in the physician-staffing company in 2018, WSJ Pro Bankruptcy reported. KKR’s loss on Envision would be among the steepest write-downs the private-equity firm has swallowed in recent years and highlights some of the continuing instability in the healthcare industry. KKR has already written off its investment in Envision. KKR and its co-investors bought Envision hoping to expand its business of helping hospitals staff emergency rooms and other departments. The company was taken private for almost $10 billion including debt, with KKR and co-investors’ stake in the company worth around $3.5 billion. But, in recent years, Envision has faced a litany of headwinds. High labor costs, the lingering effects of the pandemic and a contract dispute with insurer UnitedHealth Group took their toll on the company. Envision was also embroiled in a costly public fight over federal legislation that took aim at part of the company’s business model by banning healthcare providers from going after patients for bills that their insurers refuse to cover. A new management team installed in 2020 suffered from a “whiplash-inducing onslaught of obstacles and complications,” Chief Restructuring Officer Paul Keglevic said in a Monday court filing.

At least seven large companies filed for chapter 11 protection in less than 48 hours, a breakneck pace of restructurings that included once-hot digital-broadcaster Vice Media LLC and KKR & Co.-backed Envision Healthcare Corp., Bloomberg News reported. That’s the largest number of filings on record during a two-day period since at least 2008, according to Bloomberg-compiled data on companies with at least $50 million of liabilities. And it comes as two Federal Reserve officials signaled that they favor a pause in their aggressive monetary-tightening campaign amid the ongoing fallout in credit markets. Firms across every sector are struggling with higher interest costs — making it more challenging to refinance loans and bonds — while corporate executives are drawing more scrutiny from investors and creditors. The weekend also saw filings from home security company Monitronics International Inc., chemical producer Venator Materials Plc, oil producer Cox Operating LLC, fire protection firm Kidde-Fenwal Inc. and biotechnology company Athenex Inc.

Former Silicon Valley Bank chief executive Greg Becker plans to tell the Senate Banking Committee today that no bank could have survived the unprecedented deposit run that led to his institution’s failure in March, the Wall Street Journal reported. Becker hasn’t spoken publicly since regulators seized SVB two months ago, after a failed capital raise and historic deposit run doomed the startup- and technology-focused California bank. Two former executives at New York-based Signature Bank, which failed shortly after, are also set to appear before the Senate Banking Committee. “I do not believe that any bank could survive a bank run of that velocity and magnitude,” Mr. Becker wrote in testimony prepared for the hearing. Depositors withdrew approximately $42 billion the day before SVB’s closure. Another $100 billion of deposits were set to be withdrawn the day regulators seized SVB, Becker said, or about 80% of the bank’s total deposits over two days. Becker apologized to employees, clients and shareholders in the prepared remarks, saying the takeover of SVB was “personally and professionally devastating.” <a hef="https://www.wsj.com/articles/former-svb-ceo-becker-apologizes-for-bank-… required.)

For prepared testimony and a link to watch today's Senate Banking Committee hearing titled " examining="" the="" failures="" of="" silicon="" valley="" bank="" and="" signature="" bank,"="" please="" click="" here.

Bankrupt cryptocurrency lender BlockFi plans to liquidate its cryptocurrency lending platform after concluding that selling the business to a new owner wouldn’t generate enough value for its creditors, WSJ Pro Bankruptcy reported. Jersey City, N.J.-based BlockFi outlined its chapter 11 plan of reorganization, which will be sent to creditors — including more than 100,000 retail customers — for a vote, in a document filed Friday with U.S. Bankruptcy Court in Trenton, N.J. The company said that after having engaged with potential buyers to solicit a sale of its digital-assets platform and about 660,000 client accounts since January, it concluded that a sale might not generate meaningful value for creditors. The company cited recent regulatory developments as one reason that it didn’t receive value-maximizing offers from prospective buyers. BlockFi said how much clients will recover largely depends on the outcome of pending litigation against its commercial counterparties, including crypto exchange FTX and trading firm Alameda Research, both founded by Sam Bankman-Fried, as well as cryptocurrency hedge fund Three Arrows Capital and crypto miner Core Scientific. The success or failure of these lawsuits “will make a difference in excess of $1 billion to clients,” BlockFi said in the filing.

SAS's rescue has moved a step closer after a U.S. court approved a revised plan from the Scandinavian airline to raise equity, Reuters reported. The long-suffering airline filed for chapter 11 protection last year. The court approval of the fundraising proposal — a key element of the "SAS Forward" rescue plan — means investors may start placing bids for a stake in the airline. An SAS spokesperson said that the new procedure reflected court concerns in April about a requirement for bidders to accept the participation of Denmark — the airline's biggest shareholder alongside Sweden — in the equity raising. "That formal requirement has been removed," she said. "But we are clearly stating that the Danish state's support is essential to succeed with SAS Forward and to emerge from the chapter 11 process." That fact would be taken into account when assessing other bids, she said, adding: "SAS' intention remains clear that we are doing this together with Denmark." In the updated plan, SAS said that without the support of Denmark the emergence from chapter 11 "will face significant uncertainty, cost, and delay."

Vice Media Group, popular for websites such as Vice and Motherboard, filed for bankruptcy protection on Monday to engineer its sale to a group of lenders, capping years of financial difficulties and top-executive departures, Reuters reported. Vice said that the lender consortium, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, will provide about $225 million in the form of a credit bid for substantially all of the company's assets and also assume significant liabilities at closing. The company listed both assets and liabilities in the range of $500 million to $1 billion, according to a court filing. Vice said that it received commitments for debtor-in-possession financing from the lenders, as well as consent to use more than $20 million in cash, which it said will be "more than sufficient" to fund its business throughout the sale process.

Drugmaker Athenex Inc. and certain of its subsidiaries voluntarily filed for chapter 11 protection, the company said on Sunday, according to Reuters. Athenex reached an agreement with its lenders to move forward with an expedited sale process of its assets, the company said in a statement. The Buffalo, N.Y.-based company has listed estimated assets and liabilities in the range of $100 million-$500 million, according to a filing with the U.S. Bankruptcy Court for the Southern District of Texas. The assets to be sold would be across its primary businesses of Athenex Pharmaceutical Division (APD), Orascovery, and Cell Therapy, the company said, adding that it expects the expedited process to be completed by July 1, 2023. The company said it has sufficient resources to support Athenex Pharma Solutions operations, and fulfill APD customer orders during the sale process.

Venator Materials said Monday that it has reached an agreement with the overwhelming majority of its lenders and noteholders on the terms of a comprehensive recapitalization plan, which includes chapter 11 bankruptcy, MarketWatch.com reported. Venator shares were halted at 27 cents in premarket trading. The company said that the agreement will equitize nearly all of its funded debt, strengthen its balance sheet and help add an infusion of new capital. The recapitalization will be implemented through a prepackaged chapter 11 process in the U.S., and will be financed by a debtor-in-possession financing facility, which includes a commitment for $275 million in new-money financing from the company's supporting creditors. Following approval by the court, the DIP financing, together with cash on hand and cash generated from ongoing operations, is expected to provide substantial liquidity to support Venator throughout the recapitalization process and beyond. Venator said that its businesses are expected to continue to operate as normal for the duration of the process, and it expects to continue to pay wages and benefits to its global workforce, and to pay all trade partners in the ordinary course. Venator sees completing its chapter 11 process within two months, and expects to be delisted by the New York Stock Exchange. Its common shares will continue to trade in the over-the-counter marketplace throughout the duration of the chapter 11 process.

Austin-based startup accelerator Newchip announced May 12 it is shutting down, the Austin Business Journal reported. "It's with a heavy heart that I announce the closure of Newchip today,” founder and CEO Andrew Ryan posted to LinkedIn, along with a lengthy explanation. The company, legally known as AstraLabs Inc., has been dealing with a chapter 11 reorganization case that started on March 17. On May 12, a bankruptcy judge ordered the case to be converted into a chapter 7 business liquidation. A meeting of creditors has been set for June 16. The Austin-based company was founded in 2016 by Ryan, Nihar Patel and Travis Brodeen and has operated a virtual incubator and accelerator to help early-stage founders grow their businesses. Newchip raised $7.9 million across several rounds of venture funding, including a $250,000 round in February this year, according to Crunchbase. Despite its history of connecting entrepreneurs with startup capital — Newchip's website boasts that it works with investors at Elevate Capital, DreamIt and others — the accelerator's finances have fallen into disarray, according to a May 10 motion from Shane Tobin on behalf of Eric Terry, the U.S. Trustee assigned to the case. The document states the company doesn’t have enough money on hand to cover its next payroll on May 15 or its other expenses.

Satellite launch company Virgin Orbit is planning to move back the deadline for prospective bidders to buy its assets by a handful of days, Reuters reported. Virgin Orbit, founded by billionaire Richard Branson, filed for chapter 11 bankruptcy protection in April after the company struggled to secure long-term funding following a failed satellite launch in January. Virgin Orbit went public two years ago at a valuation of roughly $3 billion, but the January mishap left the company scrambling for new funding and forced it to halt operations. U.S. rocket startups have faced a tight funding environment, exacerbated by the Virgin Orbit bankruptcy. Venture investment in space startups has dropped 50% year-over-year in 2022, according to VC firm Space Capital.