Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, March 25. In today's briefing, the SEC is skeptical of Egan-Jones Ratings’ attempt to gain authorization to rate asset-backed and government securities, citing concerns about its resources and past findings. And a little-known bank capital rule has helped fuel the rise of private credit, and proposed changes could further boost nonbank lending by encouraging banks to lend more to these lenders.

An attempt by credit evaluator Egan-Jones Ratings to restore its asset-backed and government securities authorization ran into skepticism at the Securities and Exchange Commission, which on Monday questioned whether the company has the “financial and managerial resources to consistently produce credit ratings with integrity.”

The SEC also cited findings from annual examinations of the company by its Credit Ratings office as well as certain nonpublic information it has access to. The agency said it had determined that a formal review and a hearing are needed before a decision can be made on the application to expand the company’s ratings authorizations.

Egan-Jones responded to the agency’s administrative order calling for a hearing with assurances that it will “provide all information necessary” to win the agency’s approval, in a public statement.

An obscure bank capital rule has helped enable the growth of nonbank lending like private credit. It could be about to get even more enabling.

One of the goals of some newly proposed U.S. capital rules is to help foster more bank lending. The thinking goes that tougher capital requirements for banks since the aftermath of the 2008 crisis has helped give rise to more nonbank lending, including the now-multi-trillion dollar private-credit market. Within that market are the nontraded loan funds that have been receiving a lot of investor redemption requests.

But some of the changes could also incentivize banks to lend still more money to nonbank lenders. And it should put to bed the idea that banks and private-capital managers are playing a zero-sum game with each other.

Stratus Properties said Tuesday its board unanimously approved a plan for a complete liquidation.

The Austin, Texas, real estate developer said proceeds from the planned sale of assets, subject to shareholder approval, will go to stockholders after it pays down liabilities and obligations.

Stratus estimates the proceeds could result in total distributions to shareholders of $29.73 a share to $37.69 a share. The amounts will be distributed periodically at the board's discretion.

The company plans to sell stabilized assets soon, with longer-term development opportunities slated to be sold when certain milestones are reached, Chief Executive William Armstrong III said.

Stratus said it may voluntarily delist its shares from Nasdaq, trading under the ticker symbol STRS, to reduce operating expenses and maximize liquidating distributions.

The board had considered options, including a merger or continuing operations before it determined liquidation would deliver the best value for stockholders.

Shares of Stratus gained 9% to $31.58 in after-hours trading Tuesday. The stock was up 20% this year.

—Katherine Hamilton

Comstock appointed three independent directors to its board.
Donald Colvin, Steven Pei and Robert Spence joined effective immediately, the renewable-energy products company said Tuesday.

Comstock said it reached the appointments through "constructive dialogue" with significant shareholders, including MAK Capital Fund and Gratia Capital.

Kristin Slanina will assume a non-executive chair role after the company's 2027 annual shareholder meeting. Walter Marting Jr. will serve as non-executive chair of the board during a transition period until that time.

Marting and fellow board director William Nance have each committed not to stand for reelection at the 2027 shareholder meeting.

Colvin previously served as finance chief of Caesars Entertainment and ON Semiconductor. He is slated to serve on Comstock's audit and finance committee once he gets the necessary approvals.

Pei is the founder and chief investment officer of Gratia Capital, one of Comstock's shareholders. He also has experience in restructuring.

Spence is a senior legal and governance executive with experience in industrial and manufacturing. He is director of Ecobat, a battery recycling company. He is set to chair both the audit and finance and the compensation committees, effective immediately, Comstock said.

Shares advanced 5.4% to $2.93 in after-hours trading Tuesday.

–Katherine Hamilton

Ashurst has bolstered its U.S. finance and restructuring practice with the addition of four partners in New York as the firm advances a proposed combination with Perkins Coie.

Jeris Brunette, Mark Dendinger, Rebecca Keep and William Ebert join the firm’s New York office, bringing the total number of U.S.-based finance and restructuring lawyers to 30. The group is expected to expand Ashurst’s capabilities in debt finance and restructuring, particularly across the energy, infrastructure and commodities sectors.

The hires follow recent additions to the firm’s New York debt finance practice and mark a significant step in building out a dedicated U.S. restructuring offering. The team advises on complex transactions, including acquisition financing, asset-based lending, project finance and both in- and out-of-court restructurings.

Firm leaders said the expansion aligns with broader strategic goals tied to its anticipated tie-up with Perkins Coie, as Ashurst seeks to scale its U.S. presence and meet growing client demand amid volatile global markets.

Child care has joined the growing list of industries in which private equity’s influence is facing renewed government skepticism.

On Tuesday, Sen. Jeff Merkley (D., Ore.) announced an investigation into whether two private-equity firms are putting their own profits ahead of the safety and welfare of children at the facilities the firms control.

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