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Party City Holdco Inc. is retaining documents and data in connection with a Securities and Exchange Commission probe, according to bankruptcy court papers, Bloomberg News reported. The regulator sent a letter to the bankrupt party supplies retailer on July 12 asking it to preserve and retain information “relevant to an ongoing investigation,” Party City said in court papers filed on Friday. The letter came a little more than a month after its longtime auditor, Ernst & Young LLP, resigned. The disclosure was included in a section on the accountant’s resignation. Additional details about the nature of the investigation, including its target, weren’t disclosed. Party City said it’s complying with the SEC’s request. After working as Party City’s financial auditor for more than two decades, EY quit in June in the wake of a disagreement about how and when the company should have warned the market there was substantial doubt about its ability to survive, the company said in a securities filing. “The company strongly disagrees with EY’s assertions in its resignation letter to the extent that they inaccurately imply that the company refused to make any required disclosures under the federal securities laws,” Party City said in the filing.
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AppHarvest said that it is pursuing a financial and operational transition, using chapter 11 bankruptcy, that would allow the company to reduce its outstanding liabilities, WSJ Pro Bankruptcy reported. The sustainable food company said business operations will continue at its farms, including shipping product to grocery store chains, restaurants and food-service outlets. To pursue its transition, AppHarvest has filed voluntary petitions for protection under chapter 11 of the U.S. bankruptcy code in the U.S. Bankruptcy Court for the Southern District of Texas. The company also has obtained a commitment from Equilibrium, its largest secured creditor, to provide $30 million of debtor-in-possession financing to provide the necessary liquidity to support operations at the AppHarvest Morehead, AppHarvest Richmond and AppHarvest Somerset farms during the cchapter 11 process. The DIP financing is subject to approval of the court. AppHarvest is pursuing a transition of its AppHarvest Berea operations to its distribution partner, Mastronardi Produce, or one of its affiliates, in exchange for $3.75 million, additional incremental funding and support for the company’s restructuring plan.

Bed Bath & Beyond shareholders will receive zero recovery under a proposed reorganization plan that the bankrupt home-goods retailer revealed on Thursday, WSJ Pro Bankruptcy reported. The proposal, filed with the U.S. Bankruptcy Court in New Jersey, said the stock in Bed Bath & Beyond “shall be canceled, released and extinguished.” Shareholders will have no right to claim any future recovery either, according to the proposed plan. Shares at the bankrupt retailer dropped 11.3% to 32 cents Friday morning. The stock has rallied since its bankruptcy filing, peaking at 38 cents this week from a low of 8 cents in early May. Some individual investors continued to buy Bed Bath & Beyond shares even after the company entered chapter 11 in April, ignoring warnings by the company that its shares would be worthless in bankruptcy. Supporters fueled social media hype that the iconic chain could defy the odds and make an unlikely comeback. Bed Bath & Beyond ditched its efforts to find buyers for both its namesake retail chain, as well as its Buybuy Baby stores, and is shutting down stores and liquidating much of its inventory.

AMC Entertainment shares soared 70% after-hours Friday after a judge rejected a proposed court settlement that would have cleared the way for the movie-theater giant to complete a set of equity transactions enabling it to issue substantially more shares, the Wall Street Journal reported. Delaware Chancery Court Vice Chancellor Morgan Zurn said that she couldn’t approve the settlement as presented. AMC’s proposed transactions would involve a conversion of its preferred equity units, known as Apes, into common shares, as well as a 10-for-1 reverse stock split. AMC has said the transactions would let it raise money by selling additional shares, and that it might need the liquidity buffer to avoid bankruptcy as it struggles with a heavy debt load amid uncertain cinema industry conditions. However, many meme investors who own AMC’s common shares oppose the transactions out of concerns that their shares could be diluted. Certain shareholders sued AMC to prevent the transactions from being consummated, though they later reached a settlement with the company that would provide an extra common share for every 7.5 shares owned. But other investors opposed both the transactions and the settlement, and the Delaware Chancery Court received more than 2,800 objections to it in advance of a two-day trial that took place last month.