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The U.S. Internal Revenue Service (IRS) has filed claims worth nearly $44 billion against the estate of bankrupt crypto exchange FTX and its affiliated entities, CoinDesk.com reported. According to bankruptcy filings dated April 27 and 28, the IRS put forth 45 claims against FTX companies, which include West Realm Shires (the legal entity of FTX.US), Ledger Holdings (the parent company of LedgerX and LedgerPrime) and Blockfolio, among others. The largest of the claims includes $20.4 billion and $7.9 billion claims against Alameda Research LLC and two claims totaling $9.5 billion against Alameda Research Holdings Inc. The claims are filed under the classification “Admin Priority,” which could allow the IRS’s claims to take precedence over the claims of other creditors in a bankruptcy case. Bankruptcy documents detailing the $20.4 billion claim against Alameda Research LLC reveal that the IRS is claiming about $20 billion in partnership taxes. The remaining amount of the claim includes millions in withheld income taxes and payroll taxes.

California's financial regulator failed to press leadership at Silicon Valley Bank to address known problems quickly enough before the lender imploded in March, according to a report released Monday in which the agency pledged to do better in the future, Reuters reported. The post-mortem by California's Department of Financial Protection and Innovation (DFPI) follows a scathing Federal Reserve report released last month in which the U.S. central bank blamed its own poor oversight, reckless bank management and loosened regulations for contributing to SVB's failure, which now ranks as the third-largest in U.S. history. Regulators have since pledged tougher oversight of the banking sector, while lawmakers have also complained that officials were too slow to address its poor risk management. Former SVB chief executive Gregory Becker is due to testify before Congress next week. According to the report released on Monday, DFPI played a supporting role, with primary oversight for SVB conducted by the Federal Reserve Bank of San Francisco, which could devote more staff to supervision.

SVB Financial bondholders are raising their bets in a bankruptcy court battle with the Federal Deposit Insurance Corp. that they can defeat the agency’s claim to nearly $2 billion that Silicon Valley Bank’s parent company had on deposit with the bank when it failed, WSJ Pro Bankruptcy reported. The FDIC has maintained that it has no obligation to return the cash following its takeover of the bank, but SVB Financial’s $3.4 billion in bonds have rallied as some investors gain confidence that they could see more of a recovery by prevailing over the agency’s claim. When Silicon Valley Bank went under, the FDIC stepped in to make depositors whole, but it made an exception for the deposits of the bank’s parent company, SVB Financial. The parent filed for chapter 11 in March, touching off a legal battle with the FDIC over how to allocate losses stemming from Silicon Valley Bank’s collapse. The FDIC in court filings last week said it isn’t obliged to return the cash that SVB Financial deposited with its banking unit. Distressed-debt investors that scooped up the company’s bonds before and after its bankruptcy are looking to recover the deposited cash from the FDIC, which took an estimated $20 billion loss when Silicon Valley Bank went under. The FDIC has said it could use the nearly $2 billion in its capacity as the failed bank’s receiver to “set off” any legal claims and causes of action it has against the parent company.

Envision Healthcare is planning to file for chapter 11 bankruptcy protection, capping one of the biggest losses ever for the physician-staffing company’s backers at private-equity firm KKR, the Wall Street Journal reported. The bankruptcy filing, which could be made as soon as this weekend, will wipe out the investment of KKR, which took Envision private in a $5.5 billion buyout in 2018. Including debt, the deal was worth about $10 billion, making it one of KKR’s largest investments in the health care industry. Envision now has around $7 billion of debt outstanding, much of which trades at under 10 cents on the dollar as the company’s finances have steadily deteriorated over the last two years. They have been pressured by high labor costs, a bruising battle with insurer UnitedHealth and federal legislation that took aim at a key component of Envision’s business model. Much of Envision’s debt will be swapped for shares in the reorganized company. Envision had been exploring a chapter 11 bankruptcy filing to restructure its debt burden, The Wall Street Journal previously reported. The company missed a March 31 deadline to report quarterly financials and skipped an interest payment due in April, setting the clock on a 30-day grace period before its lenders could push the company into an involuntary bankruptcy.

Private jet company Wheels Up announced yesterday that its founder and CEO, Kenny Dichter, is stepping down from his post immediately as the company faces mounting losses and the potential for bankruptcy, CNBC.com reported. Board member Ravi Thakran will become executive chairman, while Chief Financial Officer Todd Smith will serve as interim CEO, the company said in a statement. Wheels Up didn’t give a reason for the executive changes, but thanked Dichter for his “vision and work” in growing revenue to over $1.5 billion a year and membership to over 12,000 customers. Dichter’s departure caps a dramatic fall for one of the private jet industry’s most high-profile startups. Wheels Up once promised to become the Uber or Airbnb of private jets. Dichter, who founded Marquis Jets in 2001 and later sold it to NetJets, launched Wheels Up in 2013 aiming to “democratize” private jets and make them more affordable and easier to book.

Indicted FTX founder Sam Bankman-Fried has renewed his attacks on the bankrupt cryptocurrency exchange’s law firm as he mounts his defense against a raft of fraud, money laundering and campaign-finance charges, Reuters reported. Bankman-Fried late Monday asked a judge to designate FTX’s current leadership and the exchange’s attorneys at law firm Sullivan & Cromwell as part of the “prosecution team” in the criminal case against him. FTX and Sullivan & Cromwell provided such extensive cooperation to the government that prosecutors had “effectively deputized the company to aid the prosecution,” Bankman-Fried argued. The 31-year-old ex-CEO is fighting charges that he stole billions of dollars in customer funds to plug losses at his Alameda Research hedge fund. Sullivan & Cromwell, a prominent Wall Street law firm with about 900 lawyers, represented FTX on transactions and regulatory matters before its collapse last year. The firm secured court approval in January to advise FTX in its bankruptcy, overcoming objections from some FTX creditors and U.S. lawmakers that its past work created a conflict of interest.

An attorney who represents survivors of sexual abuse in the Archdiocese of New Orleans bankruptcy is asking a newly appointed federal judge to toss out rulings from U.S. District Judge Greg Guidry, who recused himself from the case last month amid questions about his ties to the Roman Catholic church, NOLA.com reported. Judge Guidry, who as a district court judge was tasked with hearing appeals related to the bankruptcy case, recused himself April 28 after the Associated Press reported that he had donated $50,000 to local Catholic charitable organizations. In court documents filed Monday, New Orleans attorney Richard Trahant asked Guidry’s successor in the case, U.S. District Judge Barry Ashe, to vacate two rulings by Guidry because of the circumstances surrounding his recusal.

Bittrex and several affiliates went bankrupt on Monday after its U.S. operations were shut down at the end of April in response to a regulatory crackdown, Bloomberg News reported. The bankruptcy, which the Seattle company said doesn’t impact its non-U.S. operations, comes less than a month after the U.S. Securities and Exchange Commission accused the crypto platform of having flouted securities rules for years. Bittrex Global will continue operating as normal for customers outside the U.S., the company said. For users who didn’t withdraw their assets before the shutdown, Bittrex intends “to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements will be able to withdraw them.” Bittrex listed assets and liabilities of as much as $1 billion each in its chapter 11 petition. Related entities Desolation Holdings LLC, Bittrex Malta Holdings Ltd. and Bittrex Malta Ltd. also entered bankruptcy, court papers show. The SEC sued Bittrex in federal court last month, alleging it broke the regulator’s rules from 2017 through 2022 while bringing in at least $1.3 billion in revenue. The SEC said Bittrex at times acted as a brokerage, exchange, and clearing agency, but didn’t register with the SEC.

Facing hundreds of lawsuits over sexual abuse claims, the Roman Catholic Bishop of Oakland, Calif., filed for bankruptcy on behalf of the diocese, saying he hopes to “stabilize” the church’s finances and provide “just compensation” for victims, the Los Angeles Times reported. “It is important we take responsibility for the damage done so we can all move beyond this moment and provide survivors with some measure of peace,” Bishop Michael C. Barber said of the chapter 11 bankruptcy. “Sadly, for many, the pain caused by these horrific sins, no matter when they occurred, will never wash away, which is why we offer support to survivors and pray for their continued healing.” The diocese was facing more than 330 lawsuits alleging childhood sexual abuse mostly from the 1960s, ’70s and ’80s by priests, Barber said. Other California-based dioceses also facing a wave of lawsuits have either filed or pondered filing bankruptcies in the past few months, including dioceses in Santa Rosa, Sacramento and San Diego.

Weight loss brand Jenny Craig has begun liquidating its operations in the U.S. after efforts to ease a cash crunch fell short, Bloomberg News reported. Jenny C Holdings LLC and affiliates filed for chapter 7 bankruptcy on Friday in Delaware, court papers show. The move means Jenny Craig will cease operating and see its assets sold off in pieces. Jenny Craig acknowledged the wind-down on its website. Customers’ auto-delivered subscriptions have been canceled, while coaching sessions and merchandise sales have ceased, the company said. Since founder Jenny Craig opened the company’s first brick-and-mortar location in 1983, diet fads have changed dramatically. Weight-loss drugs, at-home exercise machines and health-food stores have reshaped the industry landscape. The firm, backed by HIG Capital, struggled to maintain enough cash in recent months as it stared down a first-lien term loan due in October 2024. It has searched for a buyer and held active discussions with lenders in an attempt to rework roughly $250 million of debt.