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Solus Alternative Asset Management LP didn’t kill Toys “R” Us Inc., the hedge fund said in a letter to its investors after coming under pressure for its investments in the liquidating retailer, Bloomberg News reported. “Solus did not force Toys ‘R’ Us to liquidate,” Chief Investment Officer Christopher Pucillo said in the Sept. 6 letter seen by Bloomberg News. “It was the culmination of a host of factors, including a decade-plus of excessive leverage, mismanagement and the increasing effects of competition from the likes of Amazon and Walmart.” The two-page letter lays out a timeline and narrative to rebut allegations that the refusal of Solus and other creditors to compromise on their investments forced the company to wind down when it could have lived on through a sale. New York-based Solus invested $20 million in a Toys “R” Us loan before its bankruptcy and added stakes in its senior debt after the chapter 1u1 filing, according to the letter. As the company closes its operations, Solus has attracted criticism from worker groups who say they deserve hardship pay after losing their jobs and that Solus and other lenders share the blame for the company’s failure to restructure.

The liquidation of Lehman Brothers Holdings Inc’s brokerage unit could end in 2019, 11 years after its parent’s bankruptcy became a primary cause of the global financial crisis, Reuters reported. James Giddens, the trustee overseeing the liquidation, said yesterday that just 381 of the roughly 140,000 claims against the brokerage remain unresolved. Customers and secured creditors have been repaid in full. Unsecured creditors have received about $9 billion, or 39.75 cents on the dollar, roughly double what was once expected. In a filing with the U.S. bankruptcy court in Manhattan, Giddens said that the wind-down is in its final phase, and that resolving all claims and making a final payout “could occur in the next year” if the court’s schedule permits. Giddens said the bankruptcy estate still has $543 million of assets.

Just last month, a piece of Lehman’s earthly remains won a lawsuit in the U.S. Court of Appeals for the First Circuit, when the judges agreed that an employee’s claim of retaliatory discharge had been properly dismissed, according to a Bloomberg News commentary. A few days earlier, this time as plaintiff, Lehman successfully avoided dismissal of its own lawsuit against entities from whom it purchased mortgage securities. Yes, you heard that right. Lehman claims it was misled by the sellers. In its lingering existence as a bankrupt estate, the company now proclaims itself the victim. “Insolvent corporations,” warned a federal bankruptcy referee back in 1914, “usually live forever.” A decade, by no means represents an unusually long period for a company’s estate to continue, according to the commentary. Early in 2014, for instance, W.R. Grace emerged from bankruptcy after proceedings that lasted almost 13 years. Its stock price exceeded $90 per share — a huge jump from the value of $1.52 when the company filed for bankruptcy in April, 2001.

Reforms made in response to the bankruptcy of Lehman Brothers in 2008 won’t prevent a repeat, experts told MarketWatch.com. As the 10th anniversary of the Sept. 15, 2008, bankruptcy of investment bank Lehman Brothers approaches, MarketWatch looked at whether the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 and other reforms will prevent another financial crisis if there’s a failure of a non-bank financial institution like Lehman. MarketWatch looked at two areas of reform resulting from Lehman’s bankruptcy and the effect the failure had on the financial crisis: the new Dodd-Frank orderly resolution authority that replaced bankruptcy for “too big to fail” banks, and the elimination by accounting standard setters of the loophole that enabled the use of Repo 105, an accounting technique Lehman used that also allowed balance sheet “window dressing.” Anton Valukas, the Lehman bankruptcy examiner, wrote in 2010 that determining whether the bankruptcy filing made the financial crisis worse was beyond the scope of his investigation. However, what happened next suggests the Lehman bankruptcy filing had a significant impact on the depth of the crisis. Read more. 

In related news, almost all of the mandatory provisions of the law had been finalized by the Securities and Exchange Commission by the end of 2015, five years after the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010. The executive compensation-related provisions of the Dodd-Frank Act were “designed to address shareholder rights and executive compensation practices,” according to the text of the law, MarketWatch.com reported. But 10 years after the failure of Lehman Brothers, and eight years after the passage of the reform law, five of 12 mandatory executive compensation rules remain to be approved by the Securities and Exchange Commission. Read more. 

SEC Chairman Jay Clayton said that the commission wants to make it easier for individuals to invest in private companies, including some of the world’s hottest startups, the Wall Street Journal reported. Clayton, a Trump appointee wrestling with how to boost flagging interest in public markets, said that the commission also wants to take steps to give more individual investors a shot at companies that have been out of their reach because they haven’t gone public. Companies including Uber Technologies Inc. and Airbnb Inc. have shunned the public markets in favor of private investors such as venture capitalists. For decades, regulators have typically walled off most private deals from smaller investors, who must meet stringent income and net-worth requirements to participate because of the added risk private investing holds. Clayton said the SEC is now weighing a major overhaul of rules intended to protect mom-and-pop investors, with the goal of opening up new options for them.

Brigade Capital Management LP, a hedge-fund manager that focuses on junk bonds and distressed debt, is raising new money tied to an anticipated downturn in high-yield and leveraged-loan prices, WSJ Pro Bankruptcy reported. The firm, which manages $20 billion, recently started talking to investors about raising funds of up to $1 billion, which will be designed to be deployed only if there is a downturn in the high-yield and leveraged-loan markets. The funds, which will have a so-called delayed drawdown feature, won’t actually collect any money from investors today but rather tap the committed capital when interest rates on high-yield bonds and leveraged loans climb above levels that Brigade agrees upon with investors. Brigade won’t touch the money until rates on high-yield bonds and leveraged loans climb to 6 percent above the prevailing rate on Treasury bonds. At that point, Brigade can draw on one-third of investors’ funds. Brigade has two years for its bet on a downturn in the high-yield markets to play out. If yields on high-yield debt remain less than 6 percent above the prevailing Treasury rates, then the money won’t be available for Brigade to invest.

Noble Group Ltd. won approval from shareholders today for a $3.5 billion debt-restructuring plan that should ensure the survival of what was once Asia’s biggest commodity trader, Reuters reported. Faced with the prospect of the company’s insolvency, shareholders reluctantly backed a debt-for-equity swap that will leave them owning just 20 percent of the business, while handing majority control to a group of creditors comprised mainly of hedge funds. Noble, founded in 1986 by Richard Elman, who took advantage of a commodities bull run to build it into one of the world’s biggest traders, has had its market value all but wiped out from $6 billion in February 2015. The crisis for the company started that month after Arnaud Vagner, a former employee, published reports anonymously under the name of Iceberg Research that accused Noble of inflating its assets. The upheaval triggered a share price collapse, credit downgrades, writedowns and asset sales.