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Bankrupt crypto exchange FTX has recovered over $7.3 billion in cash and liquid crypto assets, an increase of more than $800 million since January, the company's attorney said on Wednesday at a U.S. bankruptcy court hearing in Delaware, Reuters reported. FTX attorney Andy Dietderich said the company is starting to think about its future after months of effort devoted to collecting resources and figuring out what went wrong under the leadership of indicted ex-founder Sam Bankman-Fried. Bankman-Fried has pleaded not guilty. "The situation has stabilized, and the dumpster fire is out," Dietderich said. FTX has benefited from a recent rise in crypto prices, Dietderich said. Its total recovery would be valued at $6.2 billion based on crypto prices from November 2022, when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. FTX's new CEO John Ray has detailed improper fund transfers and poor accounting at the collapsed crypto exchange, describing it as a "complete failure" of controls. Read more.

In related news, FTX may use money marked to repay customers to restart its failed crypto exchange because the project would require a significant amount of cash, a lawyer for the company said in court yesterday, according to Bloomberg News. The company is still in the early stages of deciding whether to bring back the exchange, which allowed customers to trade digital assets before FTX collapsed, Andrew G. Dietderich, an FTX attorney with law firm Sullivan & Cromwell told U.S. Bankruptcy Judge John T. Dorsey. The company could also try to raise money to fund a restart or drop the entire concept. Read more.

Six U.S. states and the District of Columbia reached a $462 million settlement with e-cigarette giant Juul Labs, YahooFinance.com reported. The settlement represents the company's largest multi-state agreement to date to end one of a string of disputes over its allegedly deceptive ads targeting children. Announced Wednesday, the settlement ends lawsuits against the company brought starting in 2019 by California, Colorado, Illinois, Massachusetts, New Mexico, New York, and the District of Columbia. The suits accuse Juul of violating their respective state laws that prohibit harmful and deceptive marketing practices. Juul, owned in part by tobacco giant Altria (MO), did not admit wrongdoing in entering the settlement. “Taking a page out of Big Tobacco’s playbook, Juul misled consumers about the health risk of their products,” New York Attorney General Letitia James said during a press conference Wednesday. “The e-cigarette company falsely led consumers to believe that its vapes were safer than cigarettes and contained less nicotine. However, just one pod of Juul contains as much nicotine as a whole pack of cigarettes.”

A Johnson & Johnson unit said cancer victims who refuse to settle with the company are attempting to intimidate other claimants from signing onto an $8.9 billion deal to end lawsuits over allegedly tainted baby powder, Bloomberg News reported. The health-care giant is trying for the second time to use the bankruptcy of its LTL Management to round up support for a plan that would settle more than 40,000 lawsuits that allege baby powder contained talc that was tinged with asbestos, a toxic substance. LTL has the backing of 60,000 victims, or about two thirds of all claimants, lawyer Gregory M. Gordon said in federal court on Tuesday. The company must get to 75% to have a chance at winning approval for the deal from U.S. Bankruptcy Judge Michael Kaplan. The holdouts are working to block the company from reaching that goal, Gordon said. As the bankruptcy goes forward, LTL and J&J will present evidence to “show an aggressive, concerted effort by the plaintiff firms on this committee to scuttle this agreement through threats and intimidation directed at LTL, J&J” and plaintiffs who support the plan, Gordon said.

Johnson & Johnson’s second attempt to resolve talc lawsuits in bankruptcy should be dismissed as an unprecedented fraud designed to deny plaintiffs just compensation, lawyers representing cancer victims argued in a Monday court filing, Reuters reported. The attorneys contend J&J defied a January appeals court rejection of its first attempt to settle the litigation, noting that a J&J subsidiary refiled for chapter 11 about two hours after a court dismissed its first bankruptcy. The lawyers blasted the move as the "largest intentional fraudulent transfer in United States history." Johnson & Johnson is offering to settle all claims for $8.9 billion, up from its original offer of $2 billion. Monday's legal broadside challenged the company’s latest gambit as an unlawful abuse of the chapter 11 system, echoing earlier objections to its first effort to resolve the lawsuits. In October 2021, J&J executed a controversial legal maneuver known as a Texas two-step. The tactic involved dividing its consumer business in two and then offloading tens of thousands of talc lawsuits onto a newly created subsidiary, which almost immediately filed for chapter 11. The goal: to halt the avalanche of lawsuits and force plaintiffs into a global settlement in bankruptcy court. The plaintiffs allege J&J's talc-based Baby Powder and similar cosmetic products caused ovarian cancer and mesothelioma. The company maintains its talc products are safe.

Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) sent letters on Sunday to 14 of the largest depositors with Silicon Valley Bank that raised concerns over the failed bank’s relationship with some of the venture capitalists and tech founders who made up much of its customer base, Bloomberg News reported. In letters reviewed by Bloomberg that were sent to companies including Circle Internet Financial, BILL Holdings Inc., BlockFi Inc. and Eiger BioPharmaceuticals Inc., Warren and Ocasio-Cortez asked questions about the nature of their connections with SVB. Those included the length of their relationship and the amount of money they had deposited with the bank, which collapsed in March after investors and depositors tried to pull out $42 billion in a single day. The two Democrats, who have been vocal critics of SVB and its executives, also want to know whether board members, executives or investors had received special benefits, such as lines of credits, from SVB. In particular, the lawmakers are interested in reports that said SVB coddled some of its largest venture capitalists and showered them with special perks, and in return the VC firms gave the bank access to huge unsecured sources of short-term funding, the letters said. The lawmakers asked for the answers to these questions to be provided by April 24.

The former parent companies of Maxus Energy Corp. reached a $575 million settlement on Thursday to end a longstanding bankruptcy-court lawsuit over who should pay to clean up the contaminated Passaic River in New Jersey, WSJ Pro Bankruptcy reported. Argentine energy company YPF SA has agreed to pay half of the settlement, according to a securities filing by YPF on Friday. Spain’s Repsol SA, another former owner of Maxus, has agreed to pay the other half, a company representative said. The settlement amounts to a fraction of the $14 billion that the remnants of Maxus have sought, although it isn’t unusual for a party demanding large damages to end up with a much smaller settlement amount. Occidental Chemical Corp., which shares liabilities for the Passaic cleanup with Maxus, also agreed to drop all claims against YPF and Repsol related to Maxus, the Passaic River and other areas subject to environmental remediation, according to YPF’s filing.

"Hubris, incompetence, and greed" led to the implosion of crypto exchange FTX, the now-defunct entity's debtors said in a Sunday report detailing control failures at the exchange, according to a report in Business Insider. In a 39-page strongly-worded report filed to the U.S. Bankruptcy Court for the District of Delaware, the debtors — which includes FTX Trading and affiliates — further alleged that FTX lacked basic accounting and financial controls and was under the command of a small group of individuals who "stifled dissent." "These individuals stifled dissent, commingled and misused corporate and customer funds, lied to third parties about their business, joked internally about their tendency to lose track of millions of dollars in assets, and thereby caused the FTX Group to collapse as swiftly as it had grown," the debtors wrote in their first report since the exchange's collapse in November. "While the FTX Group's failure is novel in the unprecedented scale of harm it caused in a nascent industry, many of its root causes are familiar: hubris, incompetence, and greed," they said. FTX's implosion was shocking and swift. The exchange — worth $32 billion in early 2022 — filed for chapter 11 protection on November 11 of the same year, after a week of a liquidity crisis. The crisis was followed by swift criminal cases against the company's top brass. Sam Bankman-Fried, a high-profile cofounder of the exchange and former CEO, pleaded not guilty in the U.S. government's criminal case against him and is scheduled for a trial in October. Gary Wang, another cofounder, and Caroline Ellison, former CEO of FTX subsidiary Alameda Research, have pleaded guilty and are working with prosecutors. Former engineering chief Nishad Singh also pleaded guilty.

FTX founder Sam Bankman-Fried pleaded not guilty Thursday to new federal charges tied to the collapse of the crypto exchange while his lawyer said he plans to challenge the new criminal counts, arguing they violate the terms of the former chief executive’s extradition, the Wall Street Journal reported. Mr. Bankman-Fried appeared in a New York federal court to be arraigned on five charges that federal prosecutors unveiled in recent indictments, including one this week that alleged he conspired to bribe Chinese government officials in violation of a U.S. anticorruption law. His lawyer Mark Cohen entered the not guilty plea for Mr. Bankman-Fried during the proceeding. The Manhattan U.S. attorney’s office charged Mr. Bankman-Fried in December with eight criminal counts connected to stealing billions of dollars from FTX customers while lying to investors of the company and lenders to his crypto investment firm Alameda Research. Prosecutors have since filed two additional indictments, bringing the total number of criminal counts to 13. The charges range from securities fraud to a bank fraud conspiracy to a campaign-finance violation.

The White House is planning as soon as this week to recommend tougher rules for midsize banks, according to people familiar with the matter, after the collapse of two lenders earlier this month sent tremors through the banking system, the Wall Street Journal reported. The recommendations are expected to call for new rules from the Federal Reserve and other agencies, including for banks with $100 billion to $250 billion in assets. The Fed is already rethinking a number of its rules related to those banks after Silicon Valley Bank and Signature Bank failed. Options include tougher capital and liquidity requirements, as well as steps to strengthen annual “stress tests” that assess banks’ ability to weather a hypothetical severe downturn. The recent worries about U.S. banks have centered on regional lenders that are perceived to be at risk of customers pulling deposits. Both SVB and Signature had large amounts of uninsured deposits — or customers with more than the standard deposit-insurance cap of $250,000 per depositor. President Biden has called for Congress to toughen penalties on bank executives deemed responsible for financial institutions failing. The White House hasn’t coalesced around additional recommendations for congressional action, the people said. The Washington Post earlier reported some of the details of the administration’s planned recommendations.Read more. (Subscription required.)

Don't miss the "The SVB Collapse: What Went Wrong, and What Happens Next?" session at the Annual Spring Meeting in April. Are you registered?