February 2023

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Chuck & Don’s parent company files for bankruptcy

  • February 28, 2023

Woodbury-based Independent Pet Partners Holdings, the parent company of Chuck & Don’s and several other high-end pet supply stores, filed for Chapter 11 bankruptcy protection.

The filing will mean that 66 pet-supply stores under the Chuck & Don’s and Kriser’s Natural Pet (IPP) store banners will be sold. About 100 other stores will eventually close, including the Chuck & Don’s in downtown St. Paul, according to court papers filed Sunday.

The Lowertown store is the only Minnesota store on the company’s list of closing stores. IPP has a goal of completing the liquidation process by the end of February.

The other pet supply stores to close will be under IPP’s other flags including Loyal Companion and Natural Pawz. IPP will continue to operate under Kriser’s and Chuck & Don’s banners.

“We intend to use these proceedings to reorganize our operations and focus on our core markets where we have the strongest foothold including Chuck & Don’s stores” in Minnesota, Wisconsin, Kansas and Colorado, said Julie Maday, recently appointed IPP chief executive, in a statement to the Star Tribune.

“This was a very difficult decision,” Maday said. “We worked diligently to explore all alternatives to keep all brands and markets going; however, in the end we concluded that the right path was to apply our focus to those markets and stores where we have the strongest market position today.”

IPP will sell the 66 remaining stores to a group of lenders including Main Street Capital Corp., Newstone Capital Partners and CION Investment Corp., which are providing a stalking horse bid that includes including a $60 million credit bid, the court papers said.

The company operates 160 pet care locations across a dozen states. Its stores included Chuck & Don’s, Kriser’s Natural Pet, Loyal Companion and Natural Pawz. The stores not

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Wells Fargo Agrees to Pay $300 Million to Settle With Shareholders Over Auto Insurance Disclosures

  • February 28, 2023

(Reuters) -Wells Fargo & Co agreed to pay $300 million to settle a shareholder lawsuit claiming the bank hid that it had pushed unnecessary insurance on auto loan customers, according to documents filed in U.S. court on Tuesday.

The Construction Laborers Pension Trust for Southern California, which led the class action brought on behalf of investors, said in federal court in San Francisco that Wells Fargo and its former chief executive, Timothy Sloan, had agreed to settle.

The bank did not admit wrongdoing.

The deal requires approval from U.S. Judge James Donato, who is overseeing the case. Trial in the case had been scheduled for Feb. 27.

“While we disagree with the allegations in this case, we are pleased to have resolved this legacy issue,” a Wells Fargo spokesperson said in a statement.

An attorney who represents Sloan did not immediately reply to a request for comment.

Scott Saham of Robbins Geller Rudman & Dowd, the law firm representing Wells Fargo shareholders, said the settlement “is part of remediating the entire spectrum of harm that you get in a complex fraud case.”

The lawsuit stems from one of the San Francisco-based bank’s past scandals over sales practices that resulted in government investigations and fines.

Wells Fargo disclosed in July 2017 that hundreds of thousands of customers had been unnecessarily charged for “collateral protection insurance,” which covers auto lenders when borrowers are uninsured. The bank said it had learned of concerns a year earlier.

Shareholders sued in 2018, alleging Wells Fargo misled them when Sloan said in November 2016 that he was “not aware of any issues” when asked about the bank’s sales practices and culture.

The bank also concealed auto insurance issues from the U.S. Senate Banking Committee in November 2016, the investors alleged.

The lawsuit sought damages for investors

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Bitcoin miner Core Scientific borrows $70 mln to replace bankruptcy lender

  • February 27, 2023
  • Judge also approves $6 million termination fee to initial lender group
  • Core Scientific says new loan offers better terms, more flexibility

(Reuters) – Bitcoin miner Core Scientific Inc received bankruptcy court approval on Wednesday to replace its existing bankruptcy lenders with a new $70 million loan provided by its largest junior creditor.

U.S. Bankruptcy Judge David Jones said at a court hearing in Houston that Core Scientific may end its agreement with a group of creditors that financed the start of its bankruptcy case and proceed with a new loan from financial services company B. Riley Financial Inc, which was owed $42 million when Core Scientific first filed for bankruptcy.

Jones also approved a $6 million termination fee to the lender group that is being replaced, overruling objections from Core Scientific’s equity holders and junior lenders who argued that the termination payment was too high.

Jones said the earlier bankruptcy loan was “incredibly expensive,” but that he had approved it because it was the best financing available at the start of Core Scientific’s bankruptcy. Invalidating the termination fee would invite debtors and creditors to second-guess loan agreements reached in the initial stages of future bankruptcy cases, Jones said.

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“My orders have to mean something,” Jones said. “The process is far more important than $6 million.”

Austin, Texas-based Core Scientific filed for bankruptcy in December with a $75 million loan in hand, but it said that it was open to better financing offers from other lenders.

The B. Riley loan was a better deal, even with the $6 million termination fee factored in, because it offers better financial terms and does not commit Core Scientific to a restructuring path chosen by its senior lenders, Core Scientific attorney Ronit Berkovich told Jones on Wednesday.

Jones’ approval

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Edmunds: Car shopping trends and tips for 2023

  • February 27, 2023

Shopping for a new or used car over the last few years has become a frustrating and expensive undertaking. Car shoppers have had to deal with vehicle shortages, high prices, dwindling incentives and rising interest rates. Will 2023 bring any relief? Yes and no.

“Many buyers exited the market due to inventory issues or pricing that was not what they were expecting,” said Ivan Drury, Edmunds’ senior manager of insights. “While some of those issues will subside for 2023, current buyers will face a new set of challenges. The cost of financing continues to climb, which can offset some of the discounts from the manufacturer’s suggested retail price.”

The experts at Edmunds have gathered five important issues you need to know about the current car-buying climate, plus tips on how to make the best of them.

INTEREST RATES ARE HIGH AND STILL RISING

According to Edmunds data, the average annual percentage rate, or APR, on new financed vehicles climbed to 6.5% in the fourth quarter of 2022, up from 4.1% in Q4 2021. For used cars, the average APR climbed to 10% in the same timeframe, up from 7.4% in 2021. Experts are predicting that the Federal Reserve might have a couple more rate hikes in store for this year, so this situation isn’t likely to improve in the coming months.

Tip: Get preapproved for an auto loan with your local bank or credit union. A preapproval allows you to compare rates offered by a dealership. Lower APRs can be found through the automaker’s finance arms, though the loan may have a shorter term than expected. And while it might be tempting to take a longer loan term to drop the monthly payment, keep in mind that you’ll be paying more for the car over time due to the

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Law firms in Meta antitrust lawsuit clash over lead role

  • February 27, 2023

Two major US law firms are feuding over which one will lead a consumer antitrust class action against Meta Platforms Inc’s Facebook, after a judge scrapped a prior order appointing them both as co-leaders for the plaintiffs and started from scratch.

US District Judge James Donato in San Francisco said in January that he would make a new determination to select one of the firms to lead the class action amid quarreling between Hagens Berman Sobol Shapiro and Quinn Emanuel Urquhart & Sullivan. Part of the clash included a Hagens Berman partner accusing Quinn Emanuel of discounting her views based on her gender. Quinn Emanuel denied the allegation, calling it a “mystery.”

“I have significant experience-based qualms about these multi-headed plaintiff-side structures,” Donato said at a recent hearing in the case, as he heard about the dispute and wiped out a 2021 order by another judge who appointed both firms. “You don’t need them.”

The underlying case involves class claims from consumers and advertisers that Facebook exploited user data to maintain its market power. The company has denied the allegations from both sets of class plaintiffs.

The two law firms on Friday night submitted their pitches to Donato about why he should appoint them solely rather than jointly to lead the consumer class.

In its filing, Quinn Emanuel said partner Kevin Teruya was the “architect of the consumer class’s case.” Hagens Berman in its submission questioned Quinn Emanuel’s rates, suggesting they were too high.

Plaintiffs’ firms routinely vie for court-appointed leadership roles in class actions, allowing them to steer litigation and potentially to recover bigger portions of legal fees in cases that settle or win at trial.

A representative from Hagens Berman did not immediately comment, and a Quinn Emanuel spokesperson declined to comment.

The lawyers who are seeking

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Genesis, DCG, Gemini reach bankruptcy agreement [Video]

  • February 26, 2023

Genesis, its parent company Digital Currency Group (DCG), and crypto exchange Gemini have reached an agreement on an initial term sheet to settle issues that have left progress on Genesis’ bankruptcy repayment plan at a standstill for the past two weeks.

According to a source familiar with the matter, the term sheet includes “a compromise and settlement of inter-company claims between Genesis and DCG, as well as issues revolving around Gemini.”

“I’m pleased to say today that we have reached an agreement,” Sean O’Neal a lawyer representing Genesis said later Monday afternoon, confirming the development.

As laid out in previous court documents, the plan include efforts to market Genesis assets and raise additional capital if those assets cannot be sold.

However, the latest plan also will include selling sister company, Genesis Global Trading as well as a “backup” equitization plan. The settlement will also restructure the debt DCG owes Genesis including $575 million in loans due in May (“BCG loans”) and the $1.1 billion promissory note due in 2032 (“DCG note”).

For the $575 million, DCG will issue a second lien term credit facility that will mature in June 2024. Under this facility, payouts will come in U.S. dollars, paying a 11.5% interest and bitcoin, paying a 5% interest.

The total loan amount is equal to $500 million according to O’Neal.

For the promissory note, DCG will issue a class of convertible preferred stock that can be converted into common equity for DCG or one of its subsidiaries, if mutually agreed upon.

O’Neal added that while details for the note disbursement are still being ironed out, if DCG fails to meet its listing requirement by June 2025, creditors will be entitled to cash dividends at a rate of 10.5%.

DCG will also contribute the first $25 million in recoveries

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Car insurance premiums are on the rise

  • February 26, 2023

Some Ontario insurers have received approval for rate hikes as high as 15 per cent

THUNDER BAY — Many drivers can expect to experience sticker shock when their car insurance policies come up for renewal this year.

In Ontario, the Financial Services Regulatory Authority has already approved insurance companies’ applications for rate increases as high 11 to 15 per cent, while others have been granted smaller hikes.

“Insurance rates are going to go up in the near term, because we’ve already seen rate approvals at FSRA come in. An insurer operating in Ontario has to apply to FSRA if they want to raise rates. It will look at the application and say ‘Yes, that makes sense based on your numbers. Your costs have gone up,’ ” explained John Shmuel of rates.ca. 

In interviews with TBnewswatch, Shmuel and a spokesperson for the Insurance Bureau of Canada cited multiple reasons for the rise in premiums.

Some of the recent increases are “the biggest ones I’ve seen in a long time,” said Shmuel, managing editor of the website that allows consumers to compare rates for a variety of financial products.

“If nothing else changes in the next few months, most people who are renewing will probably see an increase from their car insurance company.”

This may come as a surprise to many drivers, as during the COVID-19 pandemic over the past three years, insurers were offering rebates or discounts on existing premiums because people weren’t driving as much and the frequency of collisions declined.

According to the Insurance Bureau of Canada, premiums in Ontario actually fell by an average of 4.5 per cent from July 2021 to July 2022.

“That’s changed in the past six months,” Shmuel said. “We’ve seen traffic come back to pre-pandemic levels and exceed them in some cities,

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Billable Hours Remain a Barrier to Law Firms Embracing AI: The Morning Minute

  • February 26, 2023

FIRM FRUGALITY – In this economy, everybody’s having to sacrifice. For some, maybe that means forgoing takeout a couple nights a week. For law firm partners, it might be mean forgoing that transcontinental flight to visit a client who wishes they would have stayed home anyway. ”Law firms can’t control the economy. But they can control their expenses,” Joe Mendola, senior director of sales for the Wells Fargo Legal Specialty Group, told Law.com’s Andrew Maloney. “In a slow economic environment, you do expect firms to drill down and focus more on managing their expense growth.”  Really, that drilling has already commenced. While surging expenses have kept law firm leaders up at night lately, costs in the legal industry actually went down “sharply” by the end of the year, Wells Fargo analysts found, and they expect the trend to continue in 2023.

YOU DOWN WITH GPT? – Over the past few weeks, there’s been a growing trickle of legal tech providers leveraging GPT-3.5—a large language model that one can think of as the AI engine powering ChatGPT—in their products and services. But don’t expect many law firms—some of whom have become legal tech developers themselves—to follow suit anytime soon. For most firms, the expertise needed to develop GPT 3.5 tools is still a bridge too. That’s not the only barrier to entry, however.  As Law.com’s Rhys Dipshan reports, this new tech once again presents law firms with an age-old problem: where’s the value in becoming more efficient when your business model depends on billing a boatload of hours?

ON THE RADAR – Boeing was hit with a lawsuit Monday in Washington Western District Court claiming $83 million in damages due to the company’s sale of ‘non-airworthy’ 737 MAX aircraft, which has been connected to two crashes resulting in

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FTX Bankruptcy: Texas, California, and New Jersey Join Call for Independent Examiner

  • February 25, 2023

A growing chorus of regulators wants an independent examiner appointed to review the financial statements, or lack thereof, in the FTX bankruptcy proceedings.

“Texas, among several other state and federal regulators, is currently investigating the Debtors and their related entities for violations in connection with their transaction of business in Texas and with Texas account holders,” wrote attorney Roma Desai on behalf of Texas Attorney General Ken Paxton.

The statement from the Texas attorney’s office follows similar motions from Wisconsin and Vermont regulators. The new court filing on Wednesday included letters of support from banking and securities officials in a handful of other states: Alaska; Arkansas; California; Florida; Hawaii; Idaho; Illinois; Kentucky; Maine, Maryland, New Hampshire, New Jersey, North Carolina, Oklahoma, Tennessee, and D.C..

If an examiner is appointed in the FTX case, it won’t be without some precedent.

Earlier this week the independent examiner who dug through bankrupt crypto lender Celsius released their 689-page report, concluding that problems at the company “dated back to at least 2020.”

The downfall of FTX

FTX and its related entities, including trading desk Alameda Research, filed for bankruptcy on November 11. Days later, newly appointed FTX CEO John Ray III, who’s overseeing the company’s restructuring, wrote in his first day declaration that the lack of corporate governance at the insolvent crypto exchange trumped anything he’d ever seen. He called the former leadership team, led by FTX founder Sam Bankman-Fried, “inexperienced, unsophisticated and potentially compromised.”

Although FTX’s restructuring team has maintained that it can untangle the mess it’s been left with, the U.S. Trustees appointed to oversee its bankruptcy proceedings aren’t convinced.

The U.S. Trustee, appointed by the Department of Justice to oversee FTX’s bankruptcy case, filed a motion to have an examiner appointed to “investigate the substantial and serious allegations of

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Wells Fargo agrees to pay $300 mln to settle with shareholders over auto insurance disclosures

  • February 25, 2023

Feb 7 (Reuters) – Wells Fargo & Co (WFC.N) agreed to pay $300 million to settle a shareholder lawsuit claiming the bank hid that it had pushed unnecessary insurance on auto loan customers, according to documents filed in U.S. court on Tuesday.

The Construction Laborers Pension Trust for Southern California, which led the class action brought on behalf of investors, said in federal court in San Francisco that Wells Fargo and its former chief executive, Timothy Sloan, had agreed to settle.

The bank did not admit wrongdoing.

The deal requires approval from U.S. Judge James Donato, who is overseeing the case. Trial in the case had been scheduled for Feb. 27.

“While we disagree with the allegations in this case, we are pleased to have resolved this legacy issue,” a Wells Fargo spokesperson said in a statement.

An attorney who represents Sloan did not immediately reply to a request for comment.

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Scott Saham of Robbins Geller Rudman & Dowd, the law firm representing Wells Fargo shareholders, said the settlement “is part of remediating the entire spectrum of harm that you get in a complex fraud case.”

The lawsuit stems from one of the San Francisco-based bank’s past scandals over sales practices that resulted in government investigations and fines.

Wells Fargo disclosed in July 2017 that hundreds of thousands of customers had been unnecessarily charged for “collateral protection insurance,” which covers auto lenders when borrowers are uninsured. The bank said it had learned of concerns a year earlier.

Shareholders sued in 2018, alleging Wells Fargo misled them when Sloan said in November 2016 that he was “not aware of any issues” when asked about the bank‘s sales practices and culture.

The bank also concealed auto insurance issues from the U.S. Senate Banking Committee in

… Read the rest
INSURANCE
February 2023
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