Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Tuesday, February 10. In today's briefing, Tai Lopez promoted a get-rich-quick strategy of buying bankrupt retail brands, but regulators say the operation was a Ponzi scheme, leading to a criminal investigation into the fallout. And Multi-Color's New Jersey bankruptcy is being challenged by lenders who say it should be dismissed or moved, claiming the label maker opened local bank accounts just days before filing to manufacture venue eligibility.

Investors say they were swindled by RadioShack buyer. Tai Lopez told his followers they could get rich investing in dying retail brands. The SEC says it was a Ponzi scheme, and the FBI is investigating.

After the Covid pandemic hit, Lopez's Retail Ecommerce Ventures went on a shopping spree. It purchased home-furnishings retailer Pier 1 Imports out of bankruptcy for about $31 million, followed later that year by two more bankrupt chains: sporting-goods retailer Modell’s for $3.6 million and discounter Stein Mart for $6 million. REV added electronics retailer RadioShack, home-goods chain Linens ‘N Things and collectibles company Franklin Mint for undisclosed sums.

To help finance the acquisitions, Lopez and his partners raised more than $230 million from at least 660 investors. The SEC alleges that $112 million of it came through fraudulent securities offerings.

Multi-Color, lenders gear up for bankruptcy venue fight. Label maker Multi-Color and some of its lenders are gearing up for a showdown on Tuesday over the company’s decision to file for bankruptcy in New Jersey, as those creditors claim bank accounts opened by the company days before filing aren’t enough to justify the choice of venue.

Some of Multi-Color’s lenders said the company opened the bank accounts only five days before it filed for chapter 11 and have asked the court to either dismiss the case or move it to a different jurisdiction.

Eddie Bauer store operator files for bankruptcy. The operator of Eddie Bauer stores in the U.S. and Canada has filed for bankruptcy, becoming the latest retailer to do so as headwinds challenge the industry. If Eddie Bauer is unable to come to a sale arrangement, it indicated it will proceed to an orderly liquidation. 

Red Lobster CEO says seafood chain needs to get smaller. Red Lobster’s chief executive said the chain still needs to slim down to help move past its stint in bankruptcy two years ago.

The casual-dining chain is reviewing its real-estate footprint and leases as it works to cut costs, and it could close more locations, Chief Executive Damola Adamolekun said. Red Lobster previously closed around 130 restaurants during its 2024 bankruptcy.

The recent selloff in software stocks driven by artificial intelligence fears might prompt bad surprises in private markets, says Michel Saugne, CIO at French asset manager La Financiere de l'Echiquier.

The software industry saw sizable liquidity inflows from private markets and recent pressure on the sector in public markets could sow the seeds of distress, he says. 

—Adria Calatayud

President Trump spent much of last year courting foreign investment in U.S. factories, promising to replace jobs lost to the global economy. The rise of a Chinese automotive glass plant in the Ohio heartland shows the risks when America’s biggest rival sets up shop.

Competition from the Fuyao Glass America plant is threatening about 250 jobs at a rival glass factory operating since the 1950s. Vitro, the company that owns the longtime plant in Crestline, Ohio, has spent the past year considering whether to shut down, said Carlos Bernal, Vitro’s head of automotive glass.

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