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A Cayman Island mutual fund whose manager was charged in a $100 million bait-and-switch scheme filed for chapter 15 bankruptcy protection in the U.S. to protect its assets from lawsuits by disgruntled investors, Bloomberg News reported. Representatives of the so-called Income Collecting 1-3 Months T-Bills Mutual Fund asked a federal bankruptcy judge in New York on Friday to recognize their efforts to liquidate the company, which they said would include an attempt to pay back investors. Recognition of the foreign liquidation would put a hold on any lawsuits against the fund. The fund’s manager, Ofer Abarbanel, was arrested June 24 in Los Angeles and charged with securities and wire fraud. U.S. prosecutors said the California man told an investor group that its money would be primarily placed in short-term U.S. Treasury securities but instead put it in funds he controlled or was closely associated with. Two days before Abarbanel’s arrest, the fund was placed in liquidation in the Cayman Islands on the vote of its sole shareholder, NY Alaska ETF Management LP, according to court records. The fund’s representatives said in court papers that the fund has “a particular need” for recognition of its liquidation efforts, given the Securities and Exchange Commission’s findings of “potential significant fraud against the fund and its creditors.” According to the SEC, the fund “had $106 million in liabilities against possibly only approximately $88 million in assets,” the lawyers said. “Based upon these serious allegations of fraud, it is likely that other parties may assert litigation against the fund. A stay of any pending and potential future proceedings will be important to the (representatives’) investigation and efforts to collect assets and wind down the fund.”

Philippine Airlines Inc. won approval yesterday from a New York bankruptcy judge to access financing for its chapter 11 proceedings, the first step in an effort to relieve the national carrier of roughly $2.1 billion in financial obligations, WSJ Pro Bankruptcy reported. Bankruptcy Judge Shelley Chapman granted approval to let Philippine Airlines draw up to $20 million from a $505 million loan facility led by the carrier’s controlling shareholder, Buona Sorte Holdings Inc. Buona Sorte, controlled by the Tan family, a prominent Filipino business clan, has also agreed to forgive several hundred million dollars in unsecured loans it provided to Philippine Airlines as emergency advances since the COVID-19 pandemic curbed air travel world-wide, according to court documents. Buona Sorte is expected to maintain majority ownership of Philippine Airlines after the restructuring. The company has said it aims to exit from bankruptcy by the end of the year. Before filing for bankruptcy, Philippine Airlines reached a restructuring agreement with almost all of its aircraft lenders, lessors and equipment suppliers that will cut roughly $2.1 billion of the carrier’s roughly $6 billion in total liabilities. Jasmine Ball, an attorney for the airline, said during the Thursday court hearing that there will be just one class of creditors deemed impaired under the bankruptcy plan, because they will receive less than full value, and are therefore entitled to vote on the plan. Ball said that more than 90% of the impaired creditors have signaled support.

LATAM Airlines said yesterday that it has received several offers to fund its exit from chapter 11 bankruptcy, each of which are worth more than $5 billion, Reuters reported. LATAM, the largest airline in Latin America, received the offers from creditors and shareholders, according to a filing with the U.S. Bankruptcy Court in New York City. The Santiago, Chile-based company did not reveal the number of offers received or from whom they came, but Delta Air Lines Inc is LATAM’s largest shareholder. Other shareholders include Qatar Airways, with a 10% stake. LATAM, which also operates in Brazil, Colombia, Ecuador and Peru as well as having operations through Latin America, Europe, the United States and the Caribbean, only said in the filing the offers came from “its most significant claimholders and its majority shareholders.” It said negotiations for financing are ongoing. LATAM filed for chapter 11 protection in New York in May 2020 as world travel came to a halt amid the COVID-19 pandemic. It hopes to accomplish by the end of the year the major tasks it needs to exit bankruptcy but may not formally exit by that time.

Credit Suisse Group AG said it made a $400 million payment to investors in its supply-chain finance funds that invested in Greensill products, its fourth such disbursement to clients hit by the liquidation, Bloomberg News reported. The Aug. 6 payment takes the total paid to investors in the funds to about $5.9 billion, according to an updated Q&A on the bank’s website on Tuesday. The funds’ total cash position is about $7 billion, or about 70% of assets under management when they were suspended, it said. The Aug. 6 payment takes the total paid to investors in the funds to about $5.9 billion, according to an updated Q&A on the bank’s website on Tuesday. The funds’ total cash position is about $7 billion, or about 70% of assets under management when they were suspended, it said. The collapse of Greensill marked an early reversal in Chief Executive Officer Thomas Gottstein’s tenure, before the bank was hit by the even bigger meltdown at hedge fund client Archegos Capital. After Greensill, Gottstein replaced asset management head Eric Varvel and removed the business from direct oversight of wealth management. The bank had indicated that it expected to make a fourth payment to Greensill investors at the time of second quarter earnings on July 29. The bank marketed its popular supply-chain finance funds as among the safest investments it offered, because the loans they held were backed by invoices usually paid in a matter of weeks. But as the funds grew into a $10 billion strategy, they strayed from that pitch and much of the money was lent through Greensill against expected future invoices, for sales that were merely predicted. The business quickly collapsed after Greensill’s loss of trade credit insurance on many of its notes to less credit-worthy borrowers.

Centerra Gold Inc.’s units on Wednesday filed a motion in a U.S. Bankruptcy Court seeking penalties of $1 million a day against the Kyrgyzstan government, related to the seizure of the Canadian company’s Kumtor gold mine, Reuters reported. Centerra Gold said in May, its Kyrgyzstan units Kumtor Gold Co. (KGC) and Kumtor Operating Co. (KOC) commenced bankruptcy proceedings in a U.S. court following nationalization of the miner’s Kumtor gold mine by the former Soviet republic. The government seized control of Kyrgyzstan’s largest foreign investment project in May in a move challenged by Centerra Gold through international arbitration. Kyrgyzstan has established enough evidence to press on with removing Centerra Gold from the Kumtor gold mine, the state security service and prosecutors said earlier this month. The security service is investigating possible corruption in the deal that gave Centerra control over the country’s biggest gold mine and subsequent amendments to the agreement. Centerra has denied all the allegations. The motion filed by the Canadian miner on Wednesday also seeks an order staying the Kyrgyz government's efforts to dismiss the case.

Not quite a decade ago, the potential for defective Takata Corp. air bags to explode in a crash erupted into the global auto industry’s most complex and far-reaching safety crisis in history. While roughly 100 million of them were recalled worldwide, more than 14 million as of early July still hadn’t been fixed in the U.S. alone, in addition to an unknown but likely substantial number in the rest of the world. That means that millions of car owners — especially those in countries with weak consumer protections — may remain unaware that the propellant used in their cars’ air bags could be degrading as a result of heat and humidity, turning their vehicles into potential explosion hazards. At least 37 fatalities and 450 injuries allegedly linked to the defective parts worldwide have been reported to U.S. auto safety regulators. Of the deaths, 19 were in the U.S., while others have been reported from all corners of the globe, including in French Guiana, Nigeria, Brazil, Australia, and China.

A former Vermont ski resort president pleaded guilty Friday to providing false documents during a failed plan to build a biotechnology plant in Newport using tens of millions of dollars in foreign investors’ money, the Associated Press reported. In exchange for the guilty plea from William Stenger, the former president of Jay Peak Resort, the federal government dropped nine other fraud charges. The 72-year-old faces up to five years in prison. Stenger’s lawyer Brooks McArthur said after the hearing that Miami businessman Ariel Quiros, the former owner of Jay Peak and Burke Mountain Resort, and his advisor William Kelly, were career con men and fraudsters who took advantage of Stenger, who said he had spent his life trying to improve the economic conditions in the Northeast Kingdom region of Vermont. In 2019, Quiros, Stenger and Kelly were indicted criminally over a failed plan to build the biotechnology plant in Newport, Vermont, using millions raised through the EB-5 program. The visa program encourages foreigners to invest in U.S. projects that create jobs in exchange for a chance to earn permanent U.S. residency. The AnC-Bio project was designed to raise $110 million from 220 immigrant investors to construct and operate the biotechnology facility, according to proceedings and documents. There were about 800 investors in a total of eight projects, which brought the promise of jobs to the Northeast Kingdom. The remote area has some of the highest unemployment rates in the state.