Allena Pharmaceuticals Inc. filed for chapter 11 bankruptcy protection and terminated the employment of substantially all of its employees, MarketWatch.com reported. The company said it intends to continue operating at a reduced level. Allena expects the filing will result in the cancellation or extinguishment of all outstanding shares without any payment or other distribution. Allena, which had requested a hearing after receiving a Nasdaq delisting warning, said on Friday that it is unlikely to pursue the hearing and expects its stock will soon be suspended. Allena warned last month that an in-court or out-of-court restructuring was possible.
The tight U.S. labor market loosened some in August as employers hired fewer workers, more people sought work and wages rose at a slower pace, the Wall Street Journal reported. Employers added 315,000 jobs last month, down from the prior month’s revised 526,000 jobs, the Labor Department said on Friday, with new jobs spread across the economy. The deceleration marked a pullback from robust gains that characterized much of the past two years. Still, job growth remained well above the prepandemic trend. “The labor market is still very strong,” said Rhea Thomas, senior economist at Wilmington Trust, adding the August report “shows an initial step towards some cooling of what has been a very tight labor market.” The jobless rate rose to 3.7% in August from a half-century low of 3.5% the prior month. The increase in the unemployment rate reflected more workers entering the labor force. The share of adults working or seeking a job rose to 62.4% in August from 62.1% in July, as participation among women ages 25 to 54 jumped to the highest level since 2000.
Bed Bath & Beyond Inc. said that it would close roughly 150 of its flagship stores, cut its workforce and bring in fresh cash to help turn around the struggling retail chain, the Wall Street Journal reported. It also made preparations to sell additional shares, a move that would dilute current shareholders and that sent its stock price tumbling. Shares were down 21% at midday Wednesday. The announcements, including laying off about 20% of its corporate and supply-chain staff, were part of a strategic update just days after the end of the company’s latest quarter. The retail chain reported that comparable sales tumbled 26% in the quarter ended Aug. 27 and its operations burned through about $325 million of its cash reserves. Bed Bath & Beyond said it had secured more than $500 million in new financing, which includes the expansion of an existing credit line. The new lifeline for the company is being led by JPMorgan Chase & Co. and Sixth Street Partners. The retailer said that its board had determined not to sell its buybuy Baby chain, which operated 135 stores as of May. The company had hired advisers to explore a potential sale of buybuy Baby. Overall, Bed Bath & Beyond had about 955 total stores as of May 28.
The number of open jobs in the United States rose in July after three months of declines, a sign that employers are still urgently seeking workers despite a weakening economy and high inflation, the Associated Press reported. The increase that the government reported Tuesday will be a disappointment for Federal Reserve officials, who are seeking to cool hiring and the economy by raising short-term interest rates to try to slow borrowing and spending, which tend to fuel inflation. Fed officials hope that their policies will serve primarily to reduce job openings and spare workers the pain of widespread layoffs and higher unemployment. There were 11.2 million open jobs available on the last day of July — nearly two jobs, on average, for every unemployed person — up from 11 million in June. June’s figure was also revised sharply higher. “The Fed has made very little progress in terms of narrowing the gap between labor supply and demand,” Aneta Markowska, chief economist at investment bank Jefferies, wrote in a research note.
SAS AB, which is working its way through a chapter 11 restructuring in the U.S., warned that much more needs to be done to persuade stakeholders to invest in the ailing Scandinavian airline, Bloomberg News reported. The airline is also having to overcome the effects of a pilots’ strike and travel disruptions that have hampered its important summer season, just as the price of kerosene has skyrocketed and inflation is accelerating. “Cost cutting across all SAS remains a focus to ensure our cost competitiveness,” the Stockholm-based airline said in a statement on Friday as it announced third-quarter results. It has identified “the vast majority” of the 7.5 billion kroner ($707 million) in annual spending it needs to cut. It reported total operating expenses of 24.4 billion kroner for the nine months to July, up 10.8 billion kronor after adjusting for currency effects. The tri-national airline made significant progress on both its staffing crisis and financial restructuring plans over the summer. Earlier this month, Apollo Global Management Inc. agreed to provide the company with a loan known as Treasury Financing of approximately $700 million to help it through its chapter 11 bankruptcy proceedings. In addition to the loan deal with Apollo, SAS is nearing the results in talks to renegotiate contracts to reduce leasing costs and “right size” the fleet, CEO Anko van der Werff said in an interview. “We are making progress on our ongoing talks,” he said. “I think they’ll last a few more months.” In August, the company’s pilots also agreed to a collective bargaining agreement the airline and unions struck last month to end a 15-day strike. The July strike hit SAS at its busiest time of the year, when it was forced to cancel 3,700 flights, affecting 380,000 passengers and costing $135 million.
Days before the money-losing opioid drug firm Endo International filed for bankruptcy last week, the company paid chief executive Blaise Coleman an $11.85 million bonus, the Philadelphia Inquirer reported. It was, in fact, the latest installment of an eye-popping $55.5 million in pre-bankruptcy bonuses paid over 10 months to Coleman and three other top executives at the drug firm, which faces potentially huge legal liability for its part in the nation’s opioid epidemic. Endo manufactured and marketed hundreds of millions of branded Opana and generic opioid pain pills. Endo paid the first bonuses last November when it considered an earlier bankruptcy date. The firm drug paid a second round of bonuses right before the actual bankruptcy filing in Manhattan on Aug. 16, court and regulatory records show. Endo describes them as prepaid incentives and management retention. Pre-bankruptcy bonuses reward executives for failing enterprises, critics say. They aren’t scrutinized by the bankruptcy court or creditors, and they siphon money out of the funds available for the business, or settling debts.
Voyager Digital Ltd. won a bankruptcy judge’s permission to pay $1.6 million in bonuses to employees deemed critical to the insolvent crypto lender’s future, Bloomberg News reported. The payouts will go to 34 Voyager employees — none of whom are top executives — who work in areas like accounting and IT infrastructure, according to court papers. The bonuses are equal to 22.5% of each employee’s annual salary. Voyager’s official creditor committee had earlier attacked the bonus plan as unnecessary, but dropped its objection after the crypto lender agreed to take steps including slashing the size of the bonus pool and to quickly cut $4.6 million of annual costs elsewhere. Bankruptcy Judge Michael Wiles in a hearing yesterday said that he would approve the bonuses. Preventing key employees from quitting will help Voyager maximize the value of its business and, in turn, maximize creditor recoveries, he said. Voyager customers with crypto stuck on the platform still haven’t recovered any of their holdings. Those who stored cash with the company have so far fared better: about $219 million, or 80%, of customer cash trapped in the platform since the start of the bankruptcy has since been returned, a lawyer for Voyager said in the hearing.
Crypto lender Voyager Digital's creditors do not believe the company needs to pay employees "retention awards," according to a new legal filing shared late Friday, CoinDesk.com reported. Voyager, which is currently undergoing bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York, asked a federal judge to approve $1.9 million of its funds for a "Key Employee Retention Plan" (KERP), meaning bonuses to 38 employees that the company claimed were vital to its continued operation and restructuring. On Friday, the official unsecured creditors' committee objected, saying that Voyager's employees are "already well-compensated," and arguing that the company has otherwise done little to reduce costs. "The Debtors have not provided any evidence to justify the retention awards beyond conclusory statements that these employees are needed. Importantly, the Debtors provide no evidence that the 38 Participants are at risk of resigning. And that is because no such evidence exists — since the Petition Date, only 12 of the Debtors’ approximately 350 employees have voluntarily resigned," the filing said. The employees perform "essential accounting, cash and digital asset management, IT infrastructure, legal, and other critical functions for the Debtors," Voyager's August 2 filing said.
