Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Thursday, May 29. In today's briefing, Citgo Petroleum is attracting renewed bidder interest after a court ruling freed it from $1.5 billion in Venezuelan debt claims, leading the company to seek more time to complete its court-supervised auction. TPG-backed Exactech delayed its chapter 11 plan confirmation to negotiate with injury claimants after facing objections. And Brazil’s Azul's chapter 11 includes a plan backed by potential investments from American and United Airlines.

Citgo Petroleum is drawing fresh interest from potential buyers after a recent court ruling cleared a major legal hurdle, prompting the refiner to request more time to complete its court-supervised auction.

The special master overseeing the sale, Robert Pincus, said Tuesday that additional parties have expressed interest in bidding for Citgo, following a federal judge’s ruling last week that the company and its U.S.-based parent, PDV Holding, are not on the hook for roughly $1.5 billion in debt owed by Venezuela’s state-run oil company, Petróleos de Venezuela SA.

Bidders have since asked Pincus to give them more time to tweak their proposals, while new potential buyers said they are working to finalize their offers for the company.

“The situation has changed substantially,” Pincus said, asking U.S. District Judge Leonard Stark to give bidders 21 more days beyond the auction deadline to make their offers for the company.

That extra time could also be enough for a separate litigation affecting Citgo’s sale price to shake out. A group of investors in bonds that matured in 2020 allege that they also have claims against the company. If they win, they would be awarded a 50.1% stake in Citgo and would have a say in the company’s future.

The Citgo auction is part of a broader effort to satisfy billions of dollars in judgments against the Venezuelan government through the sale of U.S.-based assets.                                                                                —Alicia McElhaney

Exactech, a bankrupt maker of joint-replacement implants backed by TPG Capital, postponed its chapter 11 plan confirmation hearing Wednesday, opting instead to negotiate with opposing injury claimants.

The decision came in response to objections from a committee representing patients who allege they were harmed by Exactech’s defective implants. Ryan Preston Dahl, a lawyer for Exactech, said at the start of the hearing that considering the “complexity of the matters” and the time that would be required to deliberate them, the company was willing to negotiate with opponents to reach a consensual plan.

Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., approved the request to adjourn the hearing, saying that “a consensual, or largely consensual plan” is the best option for the case.

Exactech filed for bankruptcy in October following mass lawsuits alleging that its defective implants harmed patients. The creditor committee, representing joint-replacement patients, objected to the proposed chapter 11 plan, arguing that it would pay claimants almost nothing while stripping them of their ability to sue TPG. Lawyers for TPG disagreed with the assertion, saying that the plan leaves some room for the claimants to sue TPG.

Dahl indicated that to come to terms with the creditors quickly, Exactech might consider a plan that doesn’t include its settlement with TPG, under which the private-equity firm would contribute $10 million to the bankruptcy estate in exchange for litigation releases.

Mark Premo-Hopkins, a lawyer representing TPG, said in court that the parent company was ready to present its case in the confirmation hearing and was “disappointed that the other parties in the bankruptcy aren’t ready or willing to proceed.”                                                                   —Akiko Matsuda

Brazilian airline Azul has filed for chapter 11 protection in the U.S., becoming the latest Latin American carrier to seek bankruptcy following prolonged industry headwinds.

The São Paulo, Brazil-based airline entered its petition with a proposed restructuring deal backed by possible equity investments from American Airlines and United Airlines.

In a filing in the U.S. Bankruptcy Court in Manhattan, the company cited fallout from the Covid-19 pandemic, macroeconomic hurdles and aviation supply-chain problems as the key drivers behind its financial distress. Azul’s debt has more than quadrupled since 2019, reaching roughly $9.6 billion.

Macy’s is raising prices on certain items, renegotiating vendor agreements and shifting its inventory sourcing to ease the brunt of global tariffs.

The department-store chain on Wednesday cut its full-year profit outlook to account for the tariff war and some moderation in consumer spending. Macy’s also cited a more competitive and promotion-heavy retail landscape for the reduced outlook.

The impact of tariffs on demand is hard to read so far, Chief Executive Tony Spring said on a call with analysts. Sales were stronger than expected in the spring quarter, though Macy’s isn’t touching its revenue guidance in case demand takes a downturn.

Federal Reserve officials signaled concern at their meeting earlier this month that large tariff hikes would push up prices and could risk stoking higher inflation.

Policymakers largely agreed that heightened economic uncertainty and increased risks of both higher unemployment and inflation warranted no change in their wait-and-see policy stance, according to minutes of the May 6-7 meeting released Wednesday.

• Argentina’s government will issue a five-year bond denominated in pesos that’s aimed at international investors who are allowed to purchase it in U.S. dollars, a move the government hailed as its return to global markets after a sovereign restructuring during the pandemic. (Bloomberg)
   

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