Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Friday, July 11. In today's briefing, Genesis Healthcare, which operated more than 500 nursing facilities at its peak, filed for bankruptcy, citing unsustainable legacy liabilities. And bondholders owed $1.7 billion by Venezuela are moving to block the forced sale of Citgo Petroleum, escalating a dispute over control of the country’s top foreign asset as a court weighs the validity of their claim.

Genesis Healthcare, which operates approximately 175 nursing facilities throughout the U.S., filed for bankruptcy Thursday after struggling to overcome financial burdens including legal costs from personal-injury and wrongful-death claims.

The company operated over 500 facilities at its peak in 2016, but began divesting hundreds of the facilities after finding it unprofitable to operate at that scale. However, the legacy liabilities from its peak footprint continued to hamper the company, according to papers filed in the U.S. Bankruptcy Court in Dallas.

The overhang includes about $8 million a month in settlement and defense costs arising from alleged injury and death claims, co-chief restructuring officer Louis E. Robichaux said in a sworn declaration.

Bondholders are moving to block the forced sale of Venezuela’s Citgo Petroleum, setting up a clash with some of the country’s other creditors over control of its most valuable external asset.

A group of bondholders owed some $1.7 billion by Citgo’s ultimate parent company, Petróleos de Venezuela SA, has been excluded from the latest offer for the company. The group, referred to as the 2020 bondholders, had agreed to a deal in April with Citgo’s previous leading bidder, Contrarian Capital-backed Red Tree Investments.

The legitimacy of the Venezuela bondholders’ claims against Citgo is being litigated in a separate court. If the judge decides that these claims are valid, the bondholders will have a 50.1% stake in Citgo and decision-making power over the company’s ownership.

A federal district court judge has denied the California attorney general’s request to stop the sale of bankrupt 23andMe to TTAM Research Institute, a nonprofit led by its founder.

On Thursday, District Judge Matthew Schelp of the Eastern District of Missouri said that 23andMe could go ahead with its sale as planned, pending a brief administrative stay that will allow California to appeal its decision.

California state law prohibits the sale of someone’s genetic information without their consent. The state attorney general’s office has been trying to prevent 23andMe from selling the data of its customers in bankruptcy. 23andMe structured the sale to avoid the need for customer consent by transferring its assets into a subsidiary, then selling the equity in that subsidiary to TTAM. The California attorney general’s office has until late Friday to appeal this decision.

At a separate hearing on Thursday, Judge Brian Walsh of the U.S. Bankruptcy Court in Missouri heard arguments over whether the law firm WilmerHale, representing the consumer privacy ombudsman in 23andMe’s bankruptcy case, has a conflict of interest. The firm has also represented Regeneron, the losing bidder for 23andMe. Judge Walsh said he wouldn’t make a decision on the matter until later this month.

–Alicia McElhaney

• The private-equity industry has almost all the pieces in place to start managing Americans’ 401(k) money—everything but the customers.
• A failed GOP effort to block a jumble of state AI privacy and security laws has developers calling for “consistent standards.”
• It’s never been easier to create your own app with “vibe coding.” Now, professional software engineers are bringing it into the enterprise.
• Some creators say their work has been wrongly tagged as AI on tech platforms, hurting their reputation, while some all-artificial ads get through undisclosed.

Chinese property developer stocks had a rare day of outperformance in the Hong Kong market, posting sharp gains amid hopes that more policy support is on the way.

Property was one of the best-performing sectors in Hong Kong on Thursday, with the Hang Seng Mainland Properties Index up 3.9% in the afternoon session. The benchmark Hang Seng Index was 0.6% higher.

Leading the charge was Beijing-based Sino-Ocean Group, which surged 28%, on track for its best day since October 2024. Redsun Properties rose 20%, Sunac China was up 14% and Kaisa Group gained 17%.

• Kirkland & Ellis advised on the most major bankruptcy cases in the first half of the year as a group of competing restructuring practices led by Kirkland alum lined up behind the longtime leader. (Bloomberg)
• Sunnova Energy said on Wednesday that it has agreed to sell a portion of its residential solar installation business to Omnidian for $7 million in cash, along with the assumption of certain liabilities, as part of a stalking-horse deal. (Reuters)

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