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Dabur India said on Wednesday its subsidiaries were among companies sued in the U.S. and Canada by customers alleging that the use of hair relaxer products had caused ovarian cancer, uterine cancer and other health issues, Reuters reported. "Currently, the cases are in the pleadings and early discovery phases of litigation," it said in an exchange filing, adding the allegations are based on "unsubstantiated and incomplete" study. The consumer goods firm said that about 5,400 cases against several companies including its subsidiaries, Namaste Laboratories, Dermoviva Skin Essentials and Dabur International, have been consolidated as a multi-district litigation before a U.S. District Court in Illinois. The units have denied liability and have retained counsel to defend them, the company said. Dabur India, which sells Vatika Shampoo and Honitus cough syrup brands, said it could not determine the financial implication due to settlement or verdict outcome at this stage but expected the defense costs to breach the materiality threshold in the near future.

Rite Aid Corp. resolved a fight with its largest supplier of prescription drugs, McKesson Corp., that the retailer said threatened its ability to continue providing customers with life saving medicines and imperiled its ability to survive bankruptcy, Bloomberg News reported. Lawyers for the two companies said during a court hearing Tuesday in New Jersey that they’ve agreed in principal to a settlement that will end a lawsuit Rite Aid filed against McKesson over their supply agreement. The settlement ensures that Rite Aid’s stock of prescription drugs won’t be impacted during its chapter 11 case, the lawyers said. The deal avoids a potentially costly fight that could have hindered Rite Aid’s restructuring efforts. Rite Aid claimed McKesson was threatening to walk away from the supply agreement unless it paid for new goods when delivered, describing the effort as “a cynical ploy for negotiating leverage” over the retailer. McKesson argued the long-term supply deal ended prior to the bankruptcy. Rite Aid lawyer Josh Sussberg said the retailer has now agreed to pay McKesson within seven days of receiving new products, versus 19 days previously. Terms of the proposed settlement must be documented and the agreement might be challenged by other Rite Aid creditors, he added. Any settlement must be approved by Judge Michael Kaplan, who is overseeing Rite Aid’s chapter 11 case.

Z Gallerie, the Los Angeles-based contemporary furniture retailer, has filed for chapter 11, citing liabilities between $50 million and $100 million, HomeAccentsToday.com reported. The retailer, which is owned by CSC Generation Holdings Inc. and does business as part of DirectBuy Home Improvement Inc., filed for protection in the U.S. Bankruptcy Court in the District of New Jersey. According to the filing, which was reported on Bankruptcycompanynews.com, ZGallerie has 21 locations in nine states. CSC bought DirectBuy/Z Gallerie out of bankruptcy in July 2019 for $20.3 million. In the filing, according to the report, Robert Fetterman, chief financial officer and interim CEO, said the debtor planned to retain Stump & Co. as its investment banker to market the debtor’s assets. “Additionally, the debtor also intends to file a motion proposing an efficient, public and flexible auction process in connection with its sales efforts. If the debtor is unable to implement a going-concern transaction, the debtor will turn to an orderly liquidation of its remaining assets, close its stores in the coming months.

Rite Aid appears to be pursuing a novel strategy to handle a huge number of opioid-related lawsuits by sidestepping plaintiffs until after filing for bankruptcy, WSJ Pro Bankruptcy reported. The drugstore chain on Sunday became the first large company facing mass opioid liabilities to file chapter 11 without any agreement with opioid plaintiffs, who may end up getting very little from Rite Aid. Other companies facing opioid litigation, including drugmakers Purdue Pharma, Mallinckrodt, Endo and Insys Therapeutics, had all lined up settlements with at least some opioid plaintiffs before filing for bankruptcy. Rite Aid said that it intends to use bankruptcy to cut billions of dollars in financial debt and reduce its store count. It has a proposed deal with bondholders to hand them full equity control. The retailer said it also intends to address various litigation facing the company, including the more than 1,600 opioid lawsuits that have been a drain on its resources. “It’s unusual that there’s no explicit settlement with [opioid] victims, which was the case in most of the other opioid bankruptcy cases,” said Edward Neiger, a lawyer who has represented opioid plaintiffs in other chapter 11 proceedings. The Supreme Court is currently examining Purdue Pharma’s use of chapter 11 to resolve opioid lawsuits and bankruptcy courts’ practice of granting releases from liability for affiliates and other parties tied to a bankrupt company. If the Supreme Court rules against Purdue, the decision could outlaw third-party releases as a tool to forge settlements of opioid lawsuits and other mass torts. That possibility may give Rite Aid and other companies pause before reaching similar deals, Neiger said.

Owners of the Tattered Cover Book Store have filed for chapter 11 reorganization — part of which includes closing three stores and eliminating employee positions. The bookstore chain currently owns seven stores and employs 103 people, the Denver Business Journal reported. Bended Page LLC, the owners and operators of the Tattered Cover, made the announcement through a press release after filing in the U.S. Bankruptcy Court for the District of Colorado. The three stores that will be impacted are in Denver’s McGregor Square, Westminster and Colorado Springs. Closure of these locations is expected to begin Oct. 23, and be completed by early November. The McGregor Square location opened in June 2021, the Westminster location opened in January 2022 and the Colorado Springs location opened in June 2022. At least 27 staff positions will be affected by the closures, the company said in a statement. Some impacted employees may fill temporary seasonal positions at the remaining stores during the holiday season. The company is working to develop severance packages for eligible employees affected by the closures. Earlier this year, the Tattered Cover went through a leadership change when bankruptcy attorney Brad Dempsey was appointed as CEO of the business. At that time, Dempsey told the Denver Business Journal he was tasked with addressing immediate financial issues of the company and putting it back on its feet.

Rite Aid filed for bankruptcy on Sunday in New Jersey, unable to find the money to settle hundreds of federal, state and private lawsuits alleging it oversupplied prescription painkillers, WSJ Pro Bankruptcy reported. The filing puts all those suits on hold. As part of the restructuring, the company will close more of its 2,100 stores and name a new chief executive. Its collapse imperils some of the roughly 47,000 jobs at the company, which just celebrated its 61st anniversary. Lenders will provide the company with about $200 million in new financing as part of a plan to restructure more than $3 billion of existing debt in chapter 11. MedImpact, a pharmacy benefit management firm, has offered to buy Rite Aid’s Elixir segment for $575 million, though an auction will be held to see if Rite Aid can find a higher bid. Jeffrey Stein, head of a financial advisory firm, will take over as Rite Aid’s chief executive. The drugstore chain’s current interim CEO Elizabeth Burr will remain on the board. The company faces a Justice Department complaint that Rite Aid pharmacists filled opioid prescriptions despite clear “red flags.” The DOJ alleged that Rite Aid ignored evidence that its stores were dispensing unlawful prescriptions, deleted internal notes about suspicious prescriptions and directed managers to tell pharmacists “to be mindful of everything that is put in writing.” Rite Aid has denied the allegations.

Party City Holdco completed its restructuring and exited from chapter 11 bankruptcy, WSJ Pro Bankruptcy reported. The celebrations and party goods retailer said it eliminated nearly $1 billion in debt, enhanced its liquidity and optimized its store portfolio after negotiations resulted in improved lease terms. The company also exited from less productive stores. It plans to move forward with about 800 locations nationwide. Party City’s restructuring, approved by the U.S. Bankruptcy Court for the Southern District of Texas in September, resulted in a new exit ABL facility of $562 million and a $75 million new money investment to fund go-forward operations and distributions. In connection with the completed restructuring, Chief Executive Brad Weston intends to step down on Nov. 3. Sean Thompson, currently president and chief commercial officer, will transition to interim CEO.

Home furnishings manufacturer Mitchell Gold + Bob Williams has been ordered into liquidation by a federal bankruptcy court judge responding to a request by its primary lender, PNC Financial Services Group, the Winston-Salem (N.C.) Journal reported. The manufacturer in August became the third prominent North Carolina furniture maker to abruptly cease operations, leaving its 533 employees in Hiddenite, Statesville and Taylorsville without jobs. Like United Furniture Industries and Klaussner Furniture Industries, Mitchell Gold cited an inability to secure future funding as the primary reason for shutting down. Recently, Judge Laurie Silverstein ordered the liquidation, saying it is "in the best interests of the debtors and their respective entities, creditors and all parties." Judge Silverstein did not address the reasoning behind the decision to convert to liquidation nor deadlines for completing the process.

Platinum Equity is nearing an agreement to put an extra $100 million into Petmate to help its portfolio company avert a default, WSJ Pro Bankruptcy reported. Platinum, the Beverly Hills, Calif.-based private-equity firm led by Tom Gores, is expected to fund a new secured debt facility for Petmate to help the company meet coming payments due on other debt instruments. Petmate, which Platinum acquired in 2021, has struggled with slumping consumer demand for pet products that has made it difficult to satisfy the company’s high leverage. Petmate has been operating since 1959 and is known for its dog kennels, houses, toys and other canine treats and accessories. Pet owners are scaling back spending to cope with inflation-driven price increases and looking for lower-cost options, especially on discretionary items that generally generate higher margins.

An award-winning North Texas distillery that declared bankruptcy earlier this year has been purchased for $6 million, according to U.S. bankruptcy court records, the Dallas Morning News reported. Les Beasley, the master distiller and founder of Whiskey Hollow, received a $250,000 deposit toward the sale from the buyer, Pals WH Holdings LLC. Kevin Lange is listed as the firm’s president in an asset purchase agreement filing. He’s an Austin-based financial adviser and owner of Legacy One Financial Advisers, a wealth management firm. When the deal closes, the deposit will be applied as a credit against the $6 million purchase. Included in the purchase and sale of assets are typical elements, like the land and the facility with all its improvements. Also included in the deal, according to court documents, are machinery, vehicles, inventory, ingredients and finished goods. The filings detail the barrels by spirit age, what kind of wood the liquors aged in and the thousands of bottles in inventory.