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Ron Burkle Sues Lantern for Fraud in Weinstein Buyout

Ron Burkle’s Yucaipa Cos. is suing the buyout shop that acquired Harvey Weinstein’s former entertainment studio in a bankruptcy sale, accusing Lantern Capital Partners LP of fraud in connection with the $289 million deal, WSJ Pro Bankruptcy reported. Lantern declined comment, citing a policy of not commenting on ongoing litigation. The allegations stem from a time when both Yucaipa — the investment firm co-founded by Burkle, a billionaire grocery-store magnate — and Lantern were involved in an effort to help Weinstein Co. avoid bankruptcy. According to Yucaipa, it did the work, but Lantern did the deal, and the new owner is refusing to pay an agreed-to fee for using information gathered by Yucaipa to acquire the Weinstein film and TV business. In a lawsuit filed in state court in California, Yucaipa says it shared information with Lantern based on an agreement that Lantern allegedly never intended to honor.

Toys ‘R’ Us Workers to Seek Higher Priority Status for Severance

Former Toys “R” Us workers will ask a bankruptcy judge to give them severance pay, which could give them the same repayment priority as the lawyers, financial advisers and suppliers who were considered vital to winding down its U.S. operations, Bloomberg News reported. Toys “R” Us has agreed to give the workers until July 23 to file the request, according to a July 16 court document, leaving the possibility open that a severance agreement could be reached. The company also said that it reserves the right to fight the claim. By submitting an administrative claim in Toys “R” Us’s bankruptcy liquidation, the 33,000 workers are setting up a confrontation with other creditors given high priority under the U.S. Bankruptcy Code. Any severance deal that uses Toys “R” Us’s shrinking pool of cash would need court approval and would likely be opposed by other creditors.

Gawker Bankruptcy Nears End After Sale to Bustle Owner

A judge has approved the sale of dormant blog Gawker to Bustle owner Bryan Goldberg for $1.35 million, closing the book on the liquidation of the former gossip and culture blog’s former publisher, WSJ Pro Bankruptcy reported. Judge Stuart Bernstein said that he would approve the deal during a court hearing yesterday in U.S. Bankruptcy Court in New York. Goldberg is the founder and chief executive of Bustle Digital Group, publisher of websites aimed at millennial women including Bustle and Elite Daily. He emerged last week as the top bidder at an auction for Gawker, which has sat dormant in chapter 11 since 2016. Gregg Galardi, a bankruptcy lawyer representing Gawker’s former publisher, said at the hearing that the blog was the company’s last remaining asset to be liquidated and the transaction allows him to close the chapter 11 case more than two years after it began. The blog’s former publisher, Gawker Media LLC, was forced into bankruptcy in 2016 after losing a lawsuit brought by Hulk Hogan resulting in a $140 million judgement against the company. Hulk Hogan’s case was secretly funded by billionaire Peter Thiel. Gawker Media has maintained the judgement would have been reduced or overturned had it had the financial means to mount an appeal.

House Passes Bipartisan Bill to Boost Business Investment

The House yesterday passed (406-4) a bipartisan package of 32 bills intended make it cheaper and easier for small businesses and startups to access capital markets and woo investors, The Hill reported. Lawmakers voted almost unanimously to pass the JOBS and Investor Confidence Act one day after the leaders of the House Financial Services Committee announced a deal following months of markups and negotiations. The package contains several dozen bills focused on capital markets regulations, all of which passed the Financial Services panel or House with little resistance. The deal also rolls back some Dodd-Frank Act banking rules with provisions that have also earned wide bipartisan support. he package now faces an uncertain future in the Senate. House Financial Services Committee Chair Jeb Hensarling (R-Texas) has said that Senate leaders have promised to hold a vote on the House measure, but the bill would need support from 10 Senate Democrats to pass. Hensarling secured a pledge from Senate leaders to take up the House deal when he promised to support the upper chamber’s bipartisan Dodd-Frank rollback, which President Trump signed in May.

Court Rules FHFA Leadership Structure Unconstitutional

A federal appeals court in Texas has ruled that the single-director structure of the Federal Housing Finance Agency is unconstitutional but validated a dividend agreement requiring the government-sponsored enterprises to deliver nearly all of their profit to the Treasury Department, National Mortgage News reported. The U.S. Court of Appeals for the Fifth Circuit in Texas reversed the previous court’s decision and agreed with the shareholders that the FHFA was “unconstitutionally insulated from executive control” since its single director — as opposed to a board or commission — cannot be fired by a sitting president without cause. If upheld, the decision could render the agency’s actions void. The court panel consisted of Chief Judge Carl Stewart and Judges Catharina Haynes and Don Willett. Haynes agreed with the court’s decision, while Stewart dissented on the constitutionality issue. Willett also dissented on the profit sweep issue.

Wall Street Dark Pools Set to Come Out of Shadows Thanks to SEC

Wall Street banks will soon have to cough up more details on the private stock markets they run, which are estimated to account for about one-seventh of all U.S. equities trading, Bloomberg News reported. The Securities and Exchange Commission plans to vote today on rules that would force trading venues known as dark pools to disclose more data and reveal potential conflicts of interest. The SEC proposed the regulations — some of which resemble requirements for public stock exchanges — in 2015 after firms including UBS Group AG paid tens of millions of dollars to settle allegations that they allowed practices that benefited high-frequency traders without properly informing other clients.
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