Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Tuesday, July 8. In today's briefing, gift-packaging supplier Design Group Americas has filed for bankruptcy after years of declining consumer spending, exacerbated by tariff uncertainty and the loss of a key customer, the Joann retail chain. Linqto, the once-highflying private-stock investment platform, has filed for bankruptcy protection, citing investigations into its business and questions about what its customers even own. Hundreds of millions of dollars in FTX customer claims might be delayed or unpaid because of legal uncertainties around distributing funds to account holders in jurisdictions restricting cryptocurrency activity. And a bankruptcy judge has denied California's request to pause 23andMe’s sale to a nonprofit led by its founder.

Design Group Americas filed for bankruptcy following a decline in consumer spending, ongoing tariff uncertainty and the loss of a key customer that crippled its business.

Berwick, Pa.-based DGA, which specializes in gift packaging, party supplies, ribbons, crafts, stationery and seasonal decor, plans to sell assets, including wrapping paper and sewing-related businesses, as a going concern, while winding down its unit for ribbon manufacturing, the company said in filings made with the U.S. Bankruptcy Court in Houston on Sunday.

DGA said it has navigated economic headwinds for several years. Domestic consumers in recent years have tightened their belts on discretionary spending on ribbons and wrapping papers because of the rising cost of essential items.

Linqto was one of the first to capitalize on small investors’ hunger for the hottest private companies, including Elon Musk’s SpaceX and artificial-intelligence company Anthropic, and it became a test case for the risks to individual investors entering the lightly regulated market for pre-IPO shares.

Earlier this year, an internal investigation uncovered evidence that Linqto customers never owned the securities they thought they did and that Linqto was marketing to some investors who might not have been eligible to buy private-company shares, The Wall Street Journal reported.

The Securities and Exchange Commission and the Justice Department are looking into whether Linqto failed to adequately disclose its pricing practices to customers and whether its former CEO sold shares customers thought they owned without telling them, the Journal reported.

“The only way forward is to seek court-supervised protection that will let us restructure the business into a profitable, law-abiding organization while resolving the ongoing regulatory investigations faster,” Dan Siciliano, Linqto’s current chief executive officer, said.

Hundreds of millions of dollars of FTX customer claims are at risk of being held up or potentially not being paid because the account holders live in China, Afghanistan or 47 other areas that restrict cryptocurrency activity.

A creditor trust set up by the defunct crypto exchange said last week that it shouldn’t make distributions to customers in those “potentially restricted” markets until it determines that it can do so without breaking foreign laws.

The foreign payments represent 5% of the value of the allowed claims in FTX’s bankruptcy case, which dates to 2022. FTX had more than $14 billion in allowed claims as of March, court papers show. FTX’s account holders are supposed to be paid in full under its chapter 11 plan for the value of cryptocurrency they held as of its chapter 11 filing.

A bankruptcy judge has denied the California attorney general’s request to temporarily halt the sale of 23andMe to a nonprofit led by its founder.

A California state law prohibits the sale of someone’s genetic information without their express consent. 23andMe structured its $305 million sale to TTAM Research Institute to avoid the need for this so-called opt-in consent by transferring its assets into a subsidiary and then selling the equity in that subsidiary to TTAM.

Judge Brian Walsh of the U.S. Bankruptcy Court in Missouri approved the sale with this structure last month.

An attorney representing California called the transfer an “artifice” that would allow 23andMe to evade state law during a hearing Monday. Judge Walsh denied California’s request for a stay of the sale during the hearing. California will file an appeal with the district court, an attorney representing the state attorney general’s office said Monday.

—Alicia McElhaney

Shares of Wolfspeed soared after the company tapped Gregor van Issum as chief financial officer, effective at the start of September.

Shares climbed almost 96% to $2.31 Monday. The stock had been down 63% so far this year.

The Durham, N.C., silicon-carbide technologies company said Monday that van Issum's appointment follows a comprehensive review of internal and external candidates.

Wolfspeed said van Issum, 46, brings more than 20 years of experience in transformational restructuring and strategic-financing positions across the technology industry.

Most recently, van Issum served as executive vice president, group controller at ams-OSRAM, a light-and-sensor technologies company, Wolfspeed said. He also served there as chief transformation and performance officer, the company added.

Van Issum succeeds Kevin Speirits, who has been serving as CFO on an interim basis. Speirits will remain with Wolfspeed to support the company and ensure a smooth transition, the company said.

Van Issum will receive an annual base salary of $500,000, according to a filing with the Securities and Exchange Commission. Wolfspeed said he will be eligible to receive an annual performance bonus with a target achievement of 75% of his then-current base salary. Van Issum also will receive a cash sign-on bonus of $450,000.

—Adriano Marchese and Natalie Weger

• Earlier: U.S. semiconductor supplier Wolfspeed signed a restructuring deal with top creditors to cut roughly $4.6 billion in debt through a bankruptcy filing.

Eugene Park has joined Gibson Dunn as a partner in the firm’s business restructuring and reorganization and liability management practice groups, the firm said Monday. Previously, Park was at Milbank, where he advised Oregon Tool on a set of recapitalization transactions and advised debt investors on liability management exercises involving SI Group and Magenta Buyer.

The University of Chicago Law School graduate said that he believes Gibson Dunn gives him a unique opportunity to scale his practice. “The momentum and energy out of this team was really attractive,” Park said.

Park said he expects LMEs will become more common internationally, pointing to the recent record-size transaction involving Altice France, adding that he hopes to play a role in helping Gibson Dunn expand its international debt finance and restructuring practices. “The firm is strategically trying to add muscle so we can service clients in these cross-border transactions,” he said.

—Alexander Gladstone

CoreWeave will acquire Core Scientific in an all-stock transaction valued at approximately $9 billion.

The artificial-intelligence company, which went public earlier this year, said the deal will help it verticalize its data center footprint, resulting in revenue growth and enhanced profitability.

“This acquisition accelerates our strategy to deploy AI and high-performance computing workloads at scale,” Chief Executive Michael Intrator said Monday. He added that the purchase will enable CoreWeave to improve its operating efficiency and de-risk future expansion.

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