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Delaware Court's Market Share Ebbs; Private-Credit's Chief Evangelist Faces Crisis Of Faith
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Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, April 1. In today's briefing, indications that Delaware's dominance among chapter 11 venues is lessening as other courts gain ground. And a look at how the turmoil in private credit has one of its flagship firms, Cliffwater, racing to reassure clients.
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Delaware court's share ebbs in bankruptcy market. Delaware’s bankruptcy court remains the busiest venue for large restructurings, but its dominance has lessened. The jurisdiction saw its proportion of $100 million-plus cases fall to 29% in the year ended March 10, down from 46% in the prior year, according to a review of Bankruptcydata.com statistics. Bankruptcy courts in New York, Dallas, Houston and New Jersey each gained market share. –Becky Yerak
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Emil Lendof/Wall Street Journal, iStock
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Stephen Nesbitt’s Cliffwater is racing to calm investors. Private credit's chief evangelist grew his firm to manage $50 billion, but many of the wealthy individuals who powered Cliffwater’s rise are itching to leave. Wall Street skeptics who long questioned Cliffwater’s growth are now calling it a “canary in the coal mine” and a “turducken” of problems, given its entanglement in other funds.
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What banks stand to lose from private-credit mess. Credit losses aren’t the only bad scenario for banks from the current uncertainty around private credit. Besides being a source of loan growth, the business of fund financing has been a growth engine for banks’ markets units. And buyouts financed by these debts drive advisory fees. Losing a good portion of that activity would hit banks’ fee revenue.
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Carolyn Fong for The Wall Street Journal
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