Below is our initial take on recent bankruptcy-related developments:

BlockFi Bankruptcy Plans Opposed by FTX, Three Arrows, and SEC | CoinDesk

Bankrupt crypto lender BlockFi submitted bankruptcy plans which have now been opposed by bankrupt companies FTX and Three Arrows Capital as well as by the SEC. The opposition states that BlockFi’s proposed plans are an abuse of bankruptcy rules.

S&K Take: The challenges to the BlockFi plan are mounting. The UCC had previously previewed its objection to the disclosure statement, and they are gathering allies with their own discrete issues. Clearly the DS is not the main event, but it is going to meet with fierce resistance, particularly given the fact that it is coupled in a way with the Debtors’ request for an extension of exclusivity. This has been a knock-down drag-out fight almost from the jump, with the UCC and the Debtors going head to head on multiple occasions. July 13 hearing will be a popcorn event for sure.    

Jenny Craig will be revived for e-commerce by the owner of diet meal maker Nutrisystem | CNBC

Weight-loss meal provider Wellful Inc., which also owns Nutrisystem, has acquired rights to Jenny Craig’s intellectual property and will be reviving the bankrupt brand for e-commerce in the coming months. After four decades of business, Jenny Craig filed for Chapter 7 bankruptcy back in May 2023. Wellful Inc.’s acquisition does not include any of Jenny Craig’s real estate or physical locations.

S&K Take: Jenny Craig was subject to a chapter 7 filing and the trustee has been selling estate assets, including the IP, which was purchased by a familiar name in Nutrisystem.  So at least the name will live on, although it sounds like the purchaser is going to try to replicate the Jenny Craig system in a separate entity.  The article makes an interesting point—does Ozempic make this all moot? Shifting deck chairs on the Titanic?   

Christmas Tree Shops is closing all 70 stores | CNN Business

Discount retail chain Christmas Tree Shops will be going out of business and liquidating all its 70 store locations in the coming weeks. The company initially filed for Chapter 11 bankruptcy back in May after years of declining sales, and last week confirmed it had defaulted on a $45 million loan. The brand was sold to Handil Holdings by Bed Bath & Beyond in 2020, which had planned to revitalize the discount store. 

S&K Take: Another sad end to a (relatively) nostalgic retail name.  The BBBY spin off did not fare any better than BBBY as we are headed to a total liquidation.  The bankruptcy cases, particularly retail, that have filed in the last 3-6 months have routinely been ugly.  Quite a few deals that were done at the height of late 2020 excitement have made for bankruptcy blood baths.    

Trucking CEO suing Teamsters urges negotiations ‘immediately’: ‘Trucking truly moves America’ | Fox Business

After last week’s lawsuit filing by the Yellow Corporation against the International Brotherhood of Teamsters, one of the nation’s largest trucking unions, Yellow Corporation CEO Darren Hawkins is calling for the union to enter into negotiations and approve the company’s restructuring plans. The Teamster Union, meanwhile, has denied the company’s allegations and claims of breach of contract.

S&K Take: Little follow up on a distressed situation this week.  The Yellow CEO commented on the litigation we covered in last week’s iteration of the blog, noting that he just wanted to open negotiations.  The union’s response is pretty much what you’d expect—we have a contract and nothing to talk about, plus you blew about $700 million that was given to you by the government.  Sweet.  We expected some interesting news to come out of this situation, and I think that qualifies.  We will continue to keep an eye on this.