Shift Technologies said it would file a petition for chapter 11 protection as it winds down its business, MarketWatch.com reported. The San Francisco-based used-car retailer said Friday it would use cash on hand and proceeds from selling off inventory to support shutting down operations during bankruptcy. Shift said on its website and two locations in Oakland, Calif., and Pomona, Calif., have stopped operations. Chief Executive Ayman Moussa said the company attempted to raise funds and restructure to allow for continuing operations, but those efforts were unsuccessful. "This was not the outcome we had expected or hoped to achieve," Moussa said. The company announced a restructuring in July, reducing 34% of its workforce, to cut costs and extend its cash runway.
Bridal dressmaker JLM Couture Inc. has filed for bankruptcy in Delaware — hit hard by the disputes with a landlord and a former designer as well as by the pandemic, WWD reported. Already the company — which makes bridal-related dresses under the Allison Webb, Lazaro, and Hayley Paige brands, among others — had cut back its operations significantly, shifting down from a workforce of 70 in 2020 to 21 employees today. Leading the company was Joseph L. Murphy, who founded JLM in 1988 and became chief executive officer and controlling shareholder in the mid-’90s, according to a declaration that was part of the chapter 11 filings. Murphy said that the company was on the “verge of insolvency” when he took the reins, but that he was able to raise new equity and set up new lines of credit and expand the business. In 2012, JLM expanded the luxury portion of the business, adding the Hayley Paige line as well as a West Hollywood flagship. But the pandemic weighed heavily on the bridal business generally as well as on JLM and by 2021 the relationship with the brand’s designer — Hayley Paige Gutman — had broken down into a nasty legal dispute over Gutman’s use of the Hayley Paige name professionally and access to an Instagram account. While a court largely sided with JLM and Gutman ultimately changed her name to Cheval, the battle weighed on the company. “The debtor’s operations were primarily affected by the active and contentious litigation with one of its former designers,” Murphy said. “The breach of contract by this designer has substantially hurt the company’s sales, and the legacy costs associated with the designer’s operation could not be reduced quickly enough to offset this damage."
Wichita-based Pioneer Balloon Co. filed chapter 11 protection on Friday in U.S. Bankruptcy Court for Kansas, the Wichita Business Journal reported. The 106-year-old company filed under the corporate names Continental American Corp. and affiliate Pioneer National Latex Inc., both located at 5000 E. 29th Street N. Under Continental American Corp., the company claims liabilities of more than $23 million, with more than $5 million owed in wages and $18 million in services and goods, according to court filings. It estimates assets between $50 million and $100 million. There are less than 1,000 creditors, according to the filing, with the largest individual creditors located outside the Wichita area. Pioneer Balloon manufactures latex balloons and hosts international balloon conventions. In addition, the company has listed several inter-company loans. These include $1.4 million owed to Pioneer Automation Technologies in El Dorado and $600,000 to Emily's Bubble Company, also in El Dorado.
Noble House Home Furnishings LLC filed for bankruptcy with plans to sell its assets after inflation and weakening consumer spending crimped its finances, Bloomberg News reported. The company — which counts Amazon.com Inc., Wayfair Inc., and Target Corp. among its customers — listed assets and liabilities of at least $100 million each in its bankruptcy petition. The filing allows Noble House to keep operating while it works to close a sale of itself to publicly traded GigaCloud Technology Inc. or another, higher bidder. GigaCloud has agreed to buy Noble House’s assets for $85 million, subject to a working capital adjustment, plus $4.1 million for equipment and the assumption of certain debts, according to court papers. The bid sets a floor for further offers and the deal with GigaCloud has an outside closing date of Oct. 31, court papers show. Chatsworth, Calif.-based Noble House was founded in 1992 and is a distributor, manufacturer and retailer of indoor and outdoor home furnishings. Its brands include Christopher Knight Home, LePouf and OkiOki. The company’s sales grew quickly during the COVID-19 pandemic as stuck-at-home customers bought more furniture. But as pandemic restrictions eased, total net sales started falling. They dropped from $671 million in 2021 to $491 million in 2022 and 2023 revenue is projected lower, court papers show. The decrease in sales coupled with persistent inflation and supply chain challenges pushed the company to financial instability. Noble House worked to cut costs in 2023, including reducing headcount, optimizing inventory management and vacating a facility in New Jersey, but those efforts failed to keep it out of bankruptcy.
Hog Father's Old Fashioned BBQ, a Washington County, Pa.-based restaurant that includes a total of three locations, has filed for chapter 11 bankruptcy protection from creditors in the United States Bankruptcy Court for the Western District of Pennsylvania, the Pittsburgh Business Times reported. Filed on Sept. 1, the legal action encompasses four separate filings for the local Washington County chain, which has locations in Washington, Canonsburg and Monongahela. The restaurants remain open and operating amid a chapter 11 filing that reveals estimated liabilities of between $500,000 and $1 million, the largest claim of which is for more than $683,000 by Reinhart Food Service LLC, a major food distributor. It's a restaurant that first opened in Washington County in the early days of the Marcellus Shale gas play in 2007, and the barbecue joint often thrived and expanded by serving the often Texas-based clientele who migrated to the region to work on the new natural gas rigs that expanded in western Pennsylvania at the time. So much so that the restaurant acknowledged that 40% of its business came from the oil and gas sector in the Pittsburgh Business Times in 2015, a period in which Hog Father's five locations included one in the lobby of the Washington County regional headquarters of Range Resources Corp., but for which two other restaurant openings were put on hold amid a decline in natural gas prices. It remains a very different world for natural gas production in western Pennsylvania, as the Marcellus play has evolved to more midstream activity and to the operation of the Shell cracker plant in nearby Beaver County. Other barbecue restaurants are expanding and opening in the region, including long-time North Side favorite Wilson's B-B-Q, which reopened recently on Perrysville Avenue after its previous location was lost in a fire in 2019.
Trinity Regional Hospital Sachse borrowed $68 million just three years ago to build a new, state-of-the-art facility in a fast-growing area northeast of Dallas, Bloomberg News reported. Since opening its doors in November 2021, the hospital has encountered a litany of problems. On Tuesday, it filed for bankruptcy and is searching for a buyer. Trinity Regional’s plight, exacerbated by its own missteps, follows similar trouble for health-care facilities across the U.S., including a chapter 9 petition for a hospital district in California and the announced closure of a hospital in Eugene, Oregon, home of the state’s flagship research university. The health-care sector is still struggling with the effects of staff shortages and higher costs for wages and supplies that came after the COVID-19 pandemic prompted lockdowns and health crises in early 2020. But Trinity Regional’s own mishaps compounded its troubles from the start. Trinity Regional’s owners laid out the case for a new hospital in the bond offering: a fast-growing population, a site near a new highway, a fractured market with two recent hospital closures, a plan to expand into a 20-acre medical campus including doctors’ offices and an outpatient surgery center. The hospital would differentiate itself with a “lean” structure and a “culture of speed and quality in patient care,” with 30-minute limits for tasks such as reading radiology films. It would make “minimal” use of managed care and discounted services, the prospectus said, noting that 80% of the population in the area had commercial insurance. Read more.
The financially troubled healthcare sector will be the focus of the ABI Healthcare Program, September 18-19, 2023, in Nashville, Tenn. For more information and to register, click here.
Louisville-based Green District Salads has filed for chapter 11 bankruptcy protection, according to court documents, the Louisville Courier-Journal reported. Green District, led by Green District Franchisee Parent Inc., filed for chapter 11 protection with the U.S. Bankruptcy Court for the Western District of Kentucky Aug. 18, court records show. The fast-casual salad and sandwich-style restaurant operates at least eight locations in Louisville and the surrounding area, according to the restaurant's website. The company, represented by DelCotto Law Group PLLC., would be able to "restructure its creditor obligations to keep the business alive and pay back its debts over time" under chapter 11, according to the report. Opened by Jordan Doepke, Chris Furlow and Matt Petty, Green District's first store was opened in 2017 in St. Matthews. They have since added franchises in other states such as Indiana and Ohio. Lousiville-based investment company, The Castellan Group, was part of a private equity investment in the restaurant's expansion plans, according to previous Courier Journal reporting. The company planned a goal of $100 million in revenue from the restaurant by 2026.
After going public in 2021, Irving-based IT services company AgileThought Inc. announced a financial restructuring deal with Blue Torch Finance LLC that is set to take the company off the market, the Dallas Morning News reported. The company yesterday announced a go-private transaction, underpinned by an asset purchase agreement with an affiliate of Blue Torch Finance. In order to run this deal, AgileThought filed for bankruptcy under chapter 11, which allows companies to stay in business while restructuring their financial obligations. A Blue Torch affiliate has agreed to serve as the stalking-horse buyer of AgileThought’s assets. Blue Torch has agreed to provide approximately $22 million in new-money financing, according to a press statement. The restructuring alongside the capital funding aims to reduce AgileThought’s debt load and ground the firm’s financial foundation for the future. When the company went public in 2021, it had an initial market value of $491 million. AgileThought linked up with a special purpose acquisition company to go public. LIV Capital Acquisition Corp., headquartered in Mexico, backed the SPAC after it evaluated 80 companies before deciding on AgileThought. In its second-quarter financial report, the company reported $38.3 million in revenue, down 17.0% year over year from $46.2 million in Q2 2022.
London-based digital-first healthcare platform Babylon Health has filed for chapter 7 bankruptcy for two subsidiaries — Babylon Healthcare and Babylon Inc. — as it shuts down core U.S. operations, according to documents filed on Aug. 9 in a Delaware bankruptcy court, Becker's Hospital Review reported. The filing comes shortly after a planned combination Babylon's core operating subsidiaries with MindMaze, digital neurotherapy company, collapsed. Both Babylon subsidiaries list hundreds of creditors with liabilities between $100 million and $500 million, according to the filing signed by COO Paul-Henri Ferrand. After administrative expenses are paid, only secured creditors — where the debt is backed by collateral — will be able to get paid. Earlier this month, Babylon closed its Austin, Texas, headquarters, laid off 94 employees and abruptly canceled patient appointments.
Prime Trust, a firm that bridged the crypto industry’s banking access and stored its assets, filed for bankruptcy protection late Monday, after facing a shortfall in customer funds, the Wall Street Journal reported. The company estimates that it has between 25,000 and 50,000 creditors. It listed assets of between $50 million and $100 million, and liabilities of between $100 million and $500 million, according to a court filing. The bankruptcy filing comes after a Nevada regulator filed a petition to place the company into receivership in June, pointing to a shortfall of roughly $83 million. Part of the shortfall stemmed from Prime Trust losing access to some crypto wallets that held customers’ digital assets in December 2021, Nevada regulators have said. The Las Vegas-based company said it intends to explore a number of options, including a potential sale of its assets and operations. It expects to continue paying wages and providing benefits to remaining employees. Prime Trust started catering to the nascent and volatile crypto industry in 2018. The company started catering to crypto clients in 2018, acting as a bridge with the banking system, which had largely shunned the nascent and volatile digital-asset industry. In addition to holding firms’ crypto assets, Prime Trust also helped clients stash dollars with its network of banking partners. When crypto exchange Binance.US struggled to find a bank for customer funds, Prime Trust acted as a stopgap.
