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Anagram, Party City’s balloon-manufacturing subsidiary, filed for bankruptcy with a deal to hand over ownership to a group of bondholders after its parent company rejected its supply contract, WSJ Pro Bankruptcy reported. The credit bid by Anagram bondholders, which would extinguish a large portion of the company’s debt, is subject to higher and better offers in an auction supervised by the bankruptcy court. Anagram, which has a separate board and employees from Party City, has come under pressure from the lingering effects of the COVID-19 pandemic, helium shortages, a liquidity crunch because of cash distributions to its parent company and Party City’s recent move to reject its supply contract, according to a court filing made by its chief restructuring officer, Adrian Frankum. Party City itself filed for bankruptcy in January, emerging from it last month. It kept its balloon-making division out of chapter 11 because the retailer had separated its own debt from the debt of the subsidiary in a 2020 debt exchange. Eden Prairie, Minn.-based Anagram has lined up a $22 million debtor-in-financing loan from the bondholder group that has proposed to take over the unit.

Local mattress company Direct Mattress Inc. and its associated businesses filed for bankruptcy last month, following a series of lawsuits from its landlords over unpaid rent, the St. Louis Post-Dispatch reported. Bankruptcy documents reflect that the company's estimated assets and liabilities are both between $1 million and $10 million. Filed documents also reflect that the company will continue to operate. Headquartered in St. Peters, the firm has 11 store locations around the St. Louis region. This year alone, Direct Mattress has been peppered with a number of lawsuits totaling nearly $1 million in unpaid rent from half a dozen landlords. Local creditors with unsecured claims include $480,000 to Carrollton Bank; $252,176 to Dierbergs Wentzville; $99,858 to St. Louis Post-Dispatch; $260,971 to USR-DESCO Washington Crossing LLC; and $106,617 to Water Tower Development LLC.

Denn-Ohio LLC, a Denny’s franchisee in Kentucky, Michigan, and Ohio, has filed for chapter 11 protection, seeking to close two more diner units and facing a hearing in December, court documents indicate, NRN.com reported. Denn-Ohio, which expects to have eight diners remaining after it closes units in Toledo, Ohio, and Kalamazoo, Mich., filed its chapter 11 petition on Oct. 31 in the Bankruptcy Court for the Western District of Michigan. The presiding bankruptcy judge filed an order for a hearing on the case Dec. 13. Filings indicate the company, which once operated 27 Denny’s locations, expects after the Toledo and Kalamazoo closures, to have units in Kentucky (Elizabethtown and Louisville), Michigan (Grand Rapids and Wyoming) and Ohio (Berkshire Township, Columbus, Jeffersonville, Perrysburg).

Hwa Yuan Szechuan, one of Manhattan’s most critically acclaimed Chinese restaurants, filed for bankruptcy on Monday, a sign of the pressures that restaurants around the country are facing as they fight to keep their slice of consumers’ stretched food budgets, WSJ Pro Bankruptcy reported. Started by Taiwanese immigrant Yu Fa Tang in the late 1960s, Hwa Yuan has operated in its current location in New York’s Chinatown since 2018. Famed for popularizing cold sesame noodles in the U.S. and frequented by A-list celebrities such as Jennifer Lawrence and Gwyneth Paltrow, the restaurant hasn’t recovered from the impact of COVID-19-related lockdowns on its finances, according to court papers. Even though it received a publicity boost when former New York Mayor Bill de Blasio visited the restaurant in February 2021 to promote the resumption of indoor dining in New York City, Hwa Yuan defaulted on its mortgage because of its pandemic-related loss of revenue and now faces an imminent foreclosure from its mortgage lender, according to court papers. The restaurant’s bankruptcy filing in New York’s Southern District will stave off the foreclosure and give the Tang family time to find a new loan that could repay the defaulted mortgage, court papers said.

The U.S. Federal Reserve is set to propose slashing the amount of fees banks can charge merchants for processing debit card transactions by nearly a third, setting up a pitched battle between the two industries, Reuters reported. The Fed proposal, due to be voted on by the board later Wednesday, would cut the current cap from 21 cents per transaction to 14.4 cents per transaction. The Fed said the reduction was in response to data received since the cap was first set in 2011, showing transaction processing costs had roughly halved. The proposal would also slightly trim an added fee that banks can charge from 0.05% of the cost of the transaction to 0.04%. However, the Fed did propose expanding a supplemental fee banks can charge to cover fraud prevention services from 1 cent per transaction to 1.3 cents per transaction, citing a slight uptick in those costs over the years. In practice, the proposed changes would result in, on average, a 17.7 cent fee on a $50 transaction, down from what would be a 24.5 cent fee today, according to Fed officials.

Hello Bello, the environmentally-friendly diaper and baby products startup founded by two TV stars, filed for bankruptcy with a plan to sell its business after its pandemic-fueled expansion faltered due to rising shipping costs and inflation, WSJ Pro Bankruptcy reported. Unconditional Love, the company behind Hello Bello, founded in 2019 by actors Kristen Bell and Dax Shepard, quickly gained popularity to become the biggest direct-to-consumer diaper brand by 2021. The company’s net sales reached $200 million by 2021 when it signed up 130,000 subscribers, according to court papers filed by Chief Executive Erica Buxton. Shepard and Bell are listed as holders of more than 12% of the company’s common equity, according to a court filing. The company has a deal to sell itself to New York-based investment firm Hildred Capital Management. An investment in 2020 by private-equity firm VMG Partners helped the startup expand its product offerings as well as its reach beyond Walmart, its first retail partner, to grocery, drug and specialty retailers in the U.S. and overseas, according to the court filing. In addition to diapers, training pants and baby products the company also sells sanitizers and vitamin gummies.

Rite Aid plans to plans to close about 7% of its stores initially, as the drugstore chain makes its way through its chapter 11 bankruptcy process, the Associated Press reported. The company submitted a list of 154 stores in a court filing. Most of the chain’s stores are on the East and West Coasts, and the list reflects that. Several locations in New York, New Jersey, Pennsylvania, California and Washington made the list. The company also plans to close some stores in Michigan and Ohio as well. Rite Aid said in a recent Securities and Exchange Commission filing that it has more than 2,200 locations in 17 states. That filing also noted that the company lost about $1.3 billion in the first half of its fiscal year. That’s more than double the $441 million it lost in the same period during the previous fiscal year.

Electric vehicle company Lordstown Motors received U.S. bankruptcy court approval Wednesday to sell its manufacturing assets to a new company affiliated with its founder and former CEO Stephen Burns for $10.2 million, Reuters reported. LAS Capital, majority-owned by Burns, will acquire Lordstown's intellectual property, business records, and machinery including assembly lines for electric vehicle motors and batteries. Bankruptcy Judge Mary Walrath approved the sale at a court hearing in Wilmington, Del., saying that it was the best available offer. The sale does not include any rights to pursue legal claims against Lordstown's directors, officers or equity owners, which will remain with the bankrupt company, Lordstown Motors' attorney David Turetsky said at the court hearing. Several investor groups have already brought claims against Lordstown and its directors, alleging that the electric truck startup misled consumers and investors about its ability to ramp up electric vehicle production. Lordstown Motors filed for bankruptcy in Delaware in June, seeking to wind down its business after failing to resolve a dispute over a promised investment from Taiwan's Foxconn, which had agreed to collaborate on the development of Lordstown's electric pickup truck after its purchase of Lordstown's manufacturing center.

Home-decor retailer Z Gallerie is searching for a buyer after it filed bankruptcy for the third time on Monday, Bloomberg News reported. The California-based firm, which sells upscale furniture pieces, said in a Delaware court filing that high mortgage rates and a resulting pullback in home sales crimped demand for its products. It also cited higher import costs, negative cash flow in many of its stores and industry headwinds as factors that led to its filing. It listed assets and liabilities of as much as $100 million each in its bankruptcy petition. The company has secured a $1.1 million debtor-in-possession financial facility from ZG Lending SPV, its existing secured lender, according to court papers. It plans to retain Stump & Company, an M&A advisory firm, to help market its assets. If Z Gallerie can’t find a buyer willing to invest in brick and mortar stores, the company will shut down all of its 21 locations along with its warehouse by the end of the year, Robert Fetterman, the company’s chief financial officer and interim chief executive officer said in a court filing. He also said the firm was prepared to trim its 250-person workforce as a means to save cash.