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A judge said bankrupt greeting cards and stationery retailer Papyrus can sell leases to about 30 of its stores to private equity-backed rival Paper Source Inc., WSJ Pro Bankruptcy reported. Paper Source will pay $575,000 for the locations, as well as their furniture, fixtures and equipment, a lawyer for Papyrus said yesterday in U.S. Bankruptcy Court in Wilmington, Del. Founded in 1983, Paper Source will expand to 165 stores through the deal. The Chicago-based company, which is owned by private-equity firm Investcorp, said it plans to remodel the stores and rename them Paper Source. Paper Source sells gifts, greeting cards, gift wrap, craft kits, party supplies and custom invitations, announcements and stationery. Papyrus filed for bankruptcy in January with a plan to close all its stores in the U.S. and Canada after it was unable to find a buyer to keep the locations and sister outlets, American Greetings, Carlton Cards and Paper Destiny, in business. Schurman Fine Papers, which runs the greetings cards business, entered bankruptcy with 254 stores. The Tennessee-based business said that it expects to finish closing its remaining stores by the end of February.

Comptroller of the Currency Joseph Otting is an unusually pro-bank regulator who once ran a California lender and understands the business. But his proposed overhaul of landmark anti-redlining rules is causing the industry a lot of angst, Politico reported. The reform of the 1977 Community Reinvestment Act, jointly put forward by Otting’s agency and the FDIC, aims to address a slew of long-standing complaints from banks about the law, which encourages them to lend to lower-income borrowers in the neighborhoods where they do business. But industry representatives warn that the proposal would hike their costs and in some cases actually dim their incentive to lend to people who don’t already have access to credit. Especially concerning to bankers: They don’t have time to crunch the numbers on what the new regime would mean for their bottom line since Otting is moving ahead with what amounts to sprint speed for a rule change. According to interviews with a dozen bank representatives, the companies are supportive of Otting’s attempt to improve and modernize CRA, an effort that is his top priority. But they say the proposal could cost billions for financial institutions that will now have to do much more intensive recordkeeping of certain data, such as where their depositors live.

Fannie Mae and Freddie Mac’s existing shareholders shouldn’t expect a huge payday after the mortgage giants raise capital from new investors as part of a plan to free them from U.S. control, the companies’ chief regulator said yesterday, according to Bloomberg News. “The shareholders will be heavily diluted when we raise capital,” Federal Housing Finance Agency Director Mark Calabria said. “So at the end of the day I am not focused on whether there’s a windfall, because I don’t think there’s really going to be that big of a windfall.” He noted that the shareholders haven’t had a dividend in more than a decade. Calabria reiterated his view that investors should have been wiped out after Fannie and Freddie were seized by regulators during the 2008 financial crisis, and said that current shareholders could be wiped out in the future “were we to find ourselves in the situation where they’re insolvent again.” He said that when the time comes for the companies to go to the public markets to raise capital, it could result in the “largest equity offering ever.” FHFA is working with investment bank Houlihan Lokey to figure out specifics such as whether Fannie and Freddie would go to market at the same time or sequentially, he said.

The U.S. Securities and Exchange Commission is investigating a non-profit that defaulted on $170 million of municipal bonds issued to finance the acquisition of about 1,800 low-income apartments in Chicago and its suburbs, Bloomberg News reported. The disclosure of the investigation came in a court filing earlier this month by attorneys for the Better Housing Foundation. Lindran Properties LLC, a subsidiary of the foundation, filed for chapter 11 protection from creditors on Jan. 31. Clark Hill Plc, a law firm representing BHF in the bankruptcy, said that the non-profit received a subpoena from the SEC “seeking records related to the events that preceded current ownership’s involvement in BHF and its affiliates.” BHF was incorporated in 2015 by Meredith Rosenbeck, an attorney in a Columbus, Ohio, suburb, just one-year before it started borrowing through the Illinois Finance Authority to acquire the apartments in Chicago. The non-profit paid Chicago-based real estate investor L. Mark DeAngelis more than $4 million to acquire and manage three of the five portfolios of apartments, known as Shoreline, Icarus and Ernst, according to a lawsuit filed by BHF in October 2018.

A Duluth, Minn.-based home builder has filed for chapter 7 bankruptcy after falling behind on payments, CBSDuluth.com reported. According to court documents filed on February 13th, Calzion Construction LLC's total liabilities amount to $753,500. 68 entities, including dozens of local area businesses, are listed as creditors. Some are owed as much as $20,000 to $25,000, according to the court filing. Until recently, Calzion was the primary company doing work for Wasusau Homes, which provides custom built homes. Hacker Construction is now listed as the general contractor for the Duluth area.

A federal judge yesterday said that he was prepared to approve Philadelphia Energy Solutions’ bankruptcy plan which includes the sale of the largest East Coast oil refinery to a Chicago real estate developer for $252 million, Reuters reported. The refinery, which had capacity to process 335,000 barrels of crude oil per day into gasoline and other energy products, has been closed since June after a major fire. It would be permanently shuttered and redeveloped for warehouses under the bankruptcy plan. Bankruptcy Judge Kevin Gross delayed his confirmation of the plan until today to allow himself and stakeholders time to review the details. But Judge Gross said in a hearing yesterday that he was likely to approve the proposal. As part of the agreement, Chicago-based Hilco Redevelopment Partners will buy the more than 1,300-acre refinery site for $252 million, $12 million more than initially agreed upon.

Opponents of Philadelphia Energy Solutions’ bankruptcy plan have vowed a long legal fight if a federal court this week approves a sale that would keep the largest East Coast oil refinery permanently shut while paying out bonuses to company executives, Reuters reported. A June fire at the 335,000 barrel-per-day PES refinery led the company to file for bankruptcy and shut the plant over the summer, laying off more than 1,000 workers and ending long-standing ties with dozens of businesses. The refinery endured years of financial trouble, hurt by poor access to U.S. crude oil production and heavy costs of complying with federal laws on blending biofuels with gasoline. The PES plan to exit bankruptcy includes a $240 million sale of the refinery to a real estate developer, Hilco Redevelopment Partners. The U.S. Bankruptcy Court for the District of Delaware is scheduled to consider the plan today. Former contractors and worker unions, who are among the long list of unsecured creditors in the case, want the refinery to reopen. Even if the court approves the deal, they are asking the decision to be put on hold pending an appeal, court filings show.

CoStar Group Inc. has agreed to buy RentPath Inc. for $588 million, as the real-estate data giant pushes deeper into the fast-growing business of helping renters find apartments online, the Wall Street Journal reported. The all-cash deal was yesterday announced by the companies as RentPath said that it would seek chapter 11 protection. Atlanta-based RentPath has been struggling financially and recently hired financial advisers to help it restructure more than $650 million of debt. RentPath, which is owned by private-equity firms TPG Capital and Providence Equity Partners LLC, controls real-estate websites ApartmentGuide.com, Rentals.com and Rent.com. It had about 28,000 properties listed on its network in December. RentPath described CoStar as a “stalking horse bidder” in what will be a bankruptcy court-supervised sales process. “If other qualified bids are submitted, the company will conduct an auction,” RentPath said.