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Less than five years ago, a $430 million merger with Provide Commerce Inc. was supposed to make aging flower-delivery service FTD Cos. a contender online, capturing the technology that had made Provide’s ProFlowers a competitive threat. On Monday, FTD filed for bankruptcy, swamped in more than $200 million in debt and blaming the badly executed combination of its business and ProFlowers for its financial troubles, WSJ Pro Bankruptcy reported. FTD plans to sell off its businesses while in bankruptcy. FTD also planned to use tax breaks generated by its business losses to pay off debt, but a stock sale by shareholder Qurate Retail Inc. on the Friday before the bankruptcy filing has potentially thrown a wrench in that plan. Qurate, formerly known as Liberty Interactive Corp., is controlled by cable tycoon John Malone and is the company that sold Provide, including the ProFlowers business, to FTD. On Friday, it sold its 36.8% stake in FTD in off-market deals for $3 — not $3 a share, but $3 total — in a move meant to lock in losses on its investment, according to a filing with the Securities and Exchange Commission.

Wayne State University School of Medicine's faculty practice, University Physician Group (UPG), has emerged from bankruptcy, Crain's Detroit Business reported. The U.S. Bankruptcy Court in Detroit on Monday approved University Physician Group's reorganization plan and its exit from bankruptcy protection after the nonprofit medical practice suddenly filed for chapter 11 in November. UPG said in court documents filed in November that it planned to continue operating, move its corporate administrative functions to Midtown Detroit and focus on being the "premier academic clinical practice" for the Detroit Medical Center. The filing was driven by discovery earlier in the year that financial losses of the 20-year-old faculty practice plan were double the $5.5 million expected and that a new, more drastic turnaround plan was required, Crain's reported at the time. Over the past decade, UPG's number of physicians has declined by 50 percent, which has hurt clinical revenue and made its leased network of suburban offices untenable, the filing said. The court-approved reorganization plan created with consulting firm AlixPartners will help determine the future of UPG. It is expected to carry UPG from its 2018 loss of $8.1 million to $3 million in profit by 2022. Wayne State University is financially supporting UPG's efforts to pay back debts and rebuild through a restructuring support agreement.

ABI will hold a live media webinar today at 11 a.m. EDT featuring experts discussing the Supreme Court's unanimous ruling in the case of Taggart v. Lorenzen (No. 18-489) that a court may hold a creditor in civil contempt for violating a discharge order if there is no fair ground of doubt as to whether the order barred the creditor’s conduct. ABI Editor-at-Large Bill Rochelle will be speaking with Nicole Saharsky of Mayer Brown, who was the Counsel of Record for the Respondents, and Hon. Eugene Wedoff (ret.), who joined an amicus brief in support of the petitioner. Register here to join the media webinar at 11 a.m. EDT (no CLE).

The Supreme Court yesterday rejected a strict-liability standard for the imposition of contempt for violating the discharge injunction, according to a special analysis by ABI Editor-at-Large Bill Rochelle. Instead, the justices held unanimously that the bankruptcy court “may impose civil contempt sanctions when there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful under the discharge order.” The opinion for the Court by Justice Stephen G. Breyer also rejected the Ninth Circuit’s idea that a subjective, good faith belief about the inapplicability of the discharge injunction is a defense to contempt. It is unclear from the opinion whether the Court’s standard for a discharge violation also applies to violations of the automatic stay under Section 362. Read more. 

ABI will hold a live media webinar tomorrow at 11 a.m. EDT featuring Bill Rochelle speaking with Nicole Saharsky of Mayer Brown, who was the Counsel of Record for the Respondents, and Hon. Eugene Wedoff (ret.), who joined an amicus brief in support of the petitioner. Register here to join tomorrow's media webinar (no CLE). 

The parent company of Sears and Kmart stores, controlled by former Sears Holdings Corp. Chief Executive Eddie Lampert, has agreed to buy the rest of Sears Hometown and Outlet Stores Inc.’s shares outstanding that Lampert’s hedge fund doesn’t already own, the Wall Street Journal reported. Transform Holdco LLC is buying the rest of Sears — or 42 percent of the company — for $2.25 a share in cash. The companies said that the deal brings Sears Hometown and Sears and Kmart stores back together after Sears Hometown stores were spun off from Sears Holdings Corp. seven years earlier. Transform’s majority owners are ESL Investments Inc., Lampert’s hedge fund, and its affiliates. A judge earlier this year approved a plan for Sears Holdings Corp., the former owner of Sears and Kmart stores that applied for bankruptcy last year, to sell assets to Lampert’s new company. Lampert was previously CEO of Sears Holdings.

Restructuring advisers should be able to limit how much they reveal about potential conflicts of interest in large bankruptcy cases, a role typically left to federal judges, according to a new protocol on bankruptcy practices drafted by consulting firm McKinsey & Co., WSJ Pro Bankruptcy reported. The 24-page document, filed with the U.S. Bankruptcy Court in Houston in response to criticism from federal monitors, outlines new bankruptcy disclosure practices recommended by the consulting firm, whose Recovery & Transformation Services unit advises multibillion-dollar companies on bankruptcy matters. Bankruptcy Judge David R. Jones authorized McKinsey to draft the new guidelines, dubbed the Houston Disclosure Protocol, after McKinsey was criticized for its failure to identify an array of connections and relationships it had with parties involved in 14 chapter 11 cases in which it has worked. Disclosure requirements should exclude matters that are deemed de minimis, meaning they are of minor monetary value or otherwise insignificant, McKinsey said in the new protocol, and shouldn’t trump an adviser’s “valid confidentiality concerns.” The consulting firm has said the new protocol is necessary to clarify what it calls complex and ambiguous disclosure rules.