Bondoro Insights: Weekly Docket Update

This Week's Key Filings

Character Technologies, Inc.

• Case Summary
  • Character.AI filed Chapter 11 citing declining liquidity, heavy compute and AI-talent costs, mounting employee attrition, and product-safety litigation and regulatory investigations, including a probe by 46 states and territories, that it says thwarted efforts to raise capital or sell the business. The company plans to run a sale process anchored by Disney as stalking horse, which agreed to pay $20 million in cash, $7.5 million of it up front before the filing, for a perpetual, non-exclusive license to certain IP. It also intends to negotiate a global resolution with state attorneys general, personal-injury claimants and other creditors, and to propose a liquidating plan for near-term distributions, winding down the platform absent a bid that keeps it running.
• Bidding Procedures Summary
  • Character.AI filed a motion to establish bidding procedures designating Disney Worldwide Services as stalking horse bidder with a $20 million all-cash offer, $7.5 million of it already paid prepetition, for a perpetual, worldwide, non-exclusive license to certain of the debtor's AI technology and its patents, backed by $700,000 in bid protections, ahead of a proposed Nov. 20 bid deadline, Nov. 23 auction and Nov. 24 sale hearing.

LIV Golf New Jersey LLC

• DIP Terms
  • LIV Golf obtained final approval for a $53.6 million senior secured priming new-money DIP term loan from Saudi Arabia's Public Investment Fund, its prepetition lender and equity holder. The loan includes a $4 million upsize funded through a participation sold to funds managed or advised by BC Partners, rolls up prepetition debt dollar-for-dollar with each draw, carries 12% PIK interest and matures no later than 120 days after the petition date. The facility requires binding documentation for a going-concern business transfer sponsored by BC Partners or another sponsor to be signed within 52 days of the petition date, otherwise the debtors must file a wind-down plan.

Sleep Number Corporation

• Plan Terms
  • Sleep Number's revised joint Chapter 11 liquidation plan winds down the company following the court-approved sale of all or substantially all of its assets to SNBR Inc. The prepetition lenders' claims are allowed at $477.5 million, less amounts repaid under the court's paydown order. The lenders keep their liens and share pro rata in the remaining estate assets after a reserve for wind-down costs and professional fees. That includes proceeds of preserved claims tied to Google's advertising practices and tariff refunds. General unsecured creditors share a $3.5 million cash trust, net of the trust's costs. The trust is the sole consideration for the committee's release of its challenge rights under the orders approving the $260 million DIP facility. Existing equity is cancelled.

Vanderbilt Minerals, LLC

• Plan Terms
  • Vanderbilt Minerals’ Chapter 11 plan, proposed with its official committee of unsecured creditors after the court-approved sale of substantially all of its assets to VM Buyer, moves the remaining assets, including insurance rights and retained causes of action, into a liquidation trust. The trust assumes all talc claims and resolves them under trust distribution procedures. It pays them from a fund built from post-effective date recoveries once its reserves are covered. General unsecured creditors share a separate fund seeded with $1 million plus proceeds of non-talc causes of action and London market insurers’ reimbursement of prepetition talc defense costs. The plan cannot go effective unless the trust’s operating reserve holds at least $11 million, though the debtor may waive any condition with the committee’s consent. Pending appeals of the global settlement and sale orders, which the committee may continue prosecuting, survive confirmation.

Linqto Texas, LLC

• Plan Modification
  • Linqto asks the court, on an emergency basis, to modify its Chapter 11 plan, confirmed Feb. 13, 2026, to make Kroll subsidiary BW Asset Management liquidating trustee in place of Forge Global, which withdrew on July 15, 2026; the debtors and the committee have sued Forge over the withdrawal. The debtors say BWAM's compensation and other economic terms are substantially the same as those approved for Forge. BWAM must take possession of the liquidating trust assets, which carry the platform securities in which Class 4 customers hold indirect interests, by Nov. 23, 2026. If it does not, a "deadman switch" moves those assets temporarily into the wind-down trust, segregated for liquidating trust beneficiaries. The modified plan also preserves claims that arose after confirmation, including all claims against Forge, so that no release, exculpation or injunction reaches them, and adds a segregated holdback for disputed Class 4 customer claims. The debtors say creditor treatment, including the wind-down trust waterfall and the customer rescission settlement, is unchanged, and they ask the court to require no resolicitation. A hearing is set for Oct. 22, 2026.

Marelli Automotive Lighting USA LLC

• Plan Terms
  • Marelli’s amended joint plan of reorganization implements a debt-for-equity swap centered on converting the junior DIP facility’s Tranche C roll-up loans into the reorganized company’s new common stock. The Tranche A and Tranche A-1 DIP loans and prepetition emergency loans will be paid in full in cash, while the Tranche B DIP loans will be paid in full in cash, exchanged for exit facility loans or converted into equity at the Required Plan Sponsors’ election. Senior lenders that did not participate in the DIP will receive cash equal to 11% of their claims, general unsecured claims will ride through unimpaired and existing equity in Marelli Holdings will be cancelled, with emergence conditioned on the closing of an exit facility and court approval of OEM accommodation agreements.

F-Star Socorro, L.P.

• Plan Terms
  • The Ritz Project Debtors' amended joint liquidating plan vests remaining property of 27 of 34 debtors in a plan trust, overseen by CRO Lance Miller as trustee, that will pursue the estates' claims against construction lender Madison. Its centerpiece is a Section 363 sale of the Ritz-Carlton in Paradise Valley, subject to a parent equity option to buy the hotel, FF&E and undeveloped parcels for at least $570.0 million before adjustments. Madison's disputed $570.31 million loan claim is treated as allowed, subject to reduction for defenses, setoffs and counterclaims, and receives the El Paso properties through its credit bid, net villas proceeds and A trust interests. Trust distributions are paid in full by class in order: Madison's A interests, B interests for unpaid professional fees, C interests for GUCs, D interests for insider and affiliate claims and E interests for parent equity. A non-plan affiliate transaction resolves the replacement DIP, and its net proceeds are lent to the trust.

FlexShopper, Inc.

• Plan Terms
  • FlexShopper's amended combined plan of liquidation follows the sale of substantially all its assets to ReadySett after a borrowing base fraud that the debtors estimate caused more than $140 million of overborrowing. The plan centers on a mediated distribution settlement with the official committee, the warehouse agent and lenders, and Kasowitz LLP, a creditor of parent FlexShopper, Inc. that had opposed substantively consolidating the two plan debtors. Under the settlement, the two estates are deemed consolidated only for voting, claims allowance and distributions. An estimated $1.7 million initial distribution goes 55% to the warehouse agent on its allowed $161.7 million claim and 45% to other unsecured creditors. Later recoveries, expected mainly from retained litigation claims, including those against former CEO and CFO Russell Heiser and auditor Grant Thornton, and related insurance proceeds, flow through a liquidating trust under a four-tier waterfall.

BioXcel Therapeutics, Inc.

• Plan Terms
  • BioXcel Therapeutics' liquidating plan centers on the sale of substantially all of its assets to Teva, the stalking horse designated the successful bidder after no competing bids arrived, for $57.5 million in cash plus up to $67.5 million in contingent milestone payments, the full amount payable only if the FDA approves IGALMI for at-home use by Nov. 21, 2026, whereby proceeds flow first to the up to $77.25 million DIP facility and then to the Oaktree- and Qatar Investment Authority-affiliated prepetition secured lenders, which are projected to recover 84.4%, while general unsecured creditors are projected to recover 0% to 2.9% through a liquidation trust from a 30% share of litigation proceeds capped at $1 million.

Brewster Heights Packing & Orchards, LP

• Sale Order / APA Summary
  • Brewster Heights Packing & Orchards obtained approval of the sale of substantially all assets to stalking horse bidder Heritage Orchard Alliance for $231.3 million, including $73.75 million in cash and the assumption of re-tranched Prudential debt and other secured obligations, following cancellation of the auction, with the sale incorporating a committee settlement that funds a $1.1 million pool for nonaffiliated unsecured creditors and closing targeted for Oct. 30 subject to confirmation of the debtors' joint plan of liquidation.

Pacifica of the Valley Corporation

• DIP Terms
  • Pacifica of the Valley obtained final approval of a $52.5 million superpriority DIP facility from Axios Capital Solutions, its prepetition senior lender and plan sponsor. The facility comprises $21 million of new money and a roll-up of up to $31.5 million of prepetition senior debt. The facility carries 12% PIK interest and a 10% commitment fee on the new money, and sets up a sale of the hospital to Axios through a credit bid of at least $40 million of DIP obligations, via either a plan with a Dec. 8, 2026 confirmation milestone or a private Section 363 sale, at Axios's election. Axios' recovery from the excluded assets set aside for a liquidating trust for unsecured creditors is capped at $15 million.

Searles Valley Minerals Inc.

• Plan Terms
  • Searles Valley Minerals' amended combined plan of liquidation distributes the remaining proceeds of its $21.5 million soda ash contract sale to TATA Chemicals North America and its approximately $34 million going-concern sale to a 5E Advanced Materials ("5E") affiliate, which was paid largely in stock. Prepetition secured lender HSBC is projected to recover 50% to 53% on an estimated $82 million of claims. HSBC will receive all receivables collections and half of the remaining 5E shares, with the other half going to sponsor-affiliated DIP lender Karnavati Holdings, subject to a share reserve held for a disputed mechanics lien. General unsecured creditors are projected to recover 3% to 4% through a liquidating trust, seeded with $3 million and preserved avoidance actions. The trust structure comes from a settlement among the debtors, sponsor Nirma, DIP lender Karnavati and the unsecured creditors' committee.

Yardbird Group LLC

• DIP Terms
  • Yardbird Group obtained final approval for a $5.4 million superpriority priming DIP facility from prepetition lender Brightwood Capital SBIC III, LP that pairs $1.8 million of new money with an up to $3.6 million roll-up of prepetition term loans. The loans carry Term SOFR plus 12% PIK interest with a 1% floor, and milestones require a sale transaction, with the DIP lenders as proposed stalking horse, to close within 53 days of the Sept. 21 petition date.

The Stephan Co.

• Plan Terms
  • The Stephan Co.'s amended plan of reorganization channels its talc and asbestos personal injury liabilities to a Section 524(g) trust, leaving talc claims as the only impaired class while every other class rides through unimpaired and existing equity retains its interests. Its non-debtor affiliates fund the trust with a $1 million, five-year, 5% note, which the reorganized debtor guarantees, securing its guaranty with a pledge of newly issued stock equal to at least 50.1% of its equity. The trust also takes the cash left in the professional fee escrow, funded by Fireman's Fund's court-approved policy buyback settlement, once professional fees and the affiliates' financing claim are paid, along with rights under non-settling insurers' policies and identified estate causes of action. In exchange, the affiliates receive estate releases and channeling injunction protection.

About Bondoro Insights Summaries

Our goal with Bondoro Insights is to provide you with faster, broader coverage on active Chapter 11 cases. These summaries are generated by Bondoro's proprietary AI, tuned on our historical coverage and validated against source filings. While accuracy is a priority, they are intended for immediate informational purposes, may contain errors, and are not a substitute for professional or legal advice. Please refer to the source filings for definitive information.

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