Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Thursday, February 26. In today's briefing, Optimum Communications expanded its legal attack on its top lenders, alleging that they cooperated not only to lock the company out of credit markets but also to sideline its chosen legal counsel, Kirkland & Ellis. Elsewhere, Jefferies Financial Group and its Point Bonita Capital fund were sued by investors who allege the firm misrepresented its handling of First Brands receivables.

The struggling telecom Optimum Communications is escalating its antitrust attack on its top lenders, alleging that they cooperated to sideline its chosen legal counsel, Kirkland & Ellis.

In the amended complaint filed Wednesday, the cable operator accused a bloc of lenders including Apollo Global Management, Ares Management and Oaktree Capital Management of not only locking the company out of credit markets but of targeting the company's lawyers at Kirkland as part of an ongoing antitrust conspiracy.

Optimum alleged the group acted collectively to achieve what one creditor couldn’t accomplish alone. Threats to pull at least hundreds of millions of dollars in legal work forced Kirkland to abandon Optimum, according to Wednesday's filing.

Kirkland’s exit reinforces the core allegation in Optimum’s complaint that the lender group operated in concert, the company said. Optimum alleged the lender group, operating under a cooperation agreement, has an effective lock on the leveraged-finance markets, making it harder for Optimum to access new money.

In court papers, the lenders have described their actions as coordinated self-protection. The question is how far collective lender action can go before it becomes an antitrust problem.

• Earlier: Kirkland’s About-Face on Optimum Shows Credit Market’s Clout

Jefferies Financial Group has been sued by fund investors who blame the firm for losses tied to the demise of auto-parts supplier First Brands.

Two British Virgin Islands investment vehicles, Eugenia II and Eugenia III, said in a Tuesday lawsuit that Jefferies and its trade financing fund Point Bonita Capital misrepresented how it managed its dealings with First Brands before they invested in the fund. Point Bonita purchased accounts receivable from suppliers at a discount, then sold them to the suppliers’ customers at face value through a strategy called factoring.

Point Bonita allegedly told Eugenia during the fund diligence process that it collected cash from the customers and then passed it on to suppliers. Instead, according to the lawsuit, First Brands collected payments directly from its customers, leaving Point Bonita out of the loop. Point Bonita “appointed the proverbial wolf (here, First Brands) to run the hen house,” giving up its ability to detect double-pledging or falsified invoices according to the complaint, which was filed in New York State Supreme Court.

–Alicia McElhaney

• Earlier: Jefferies Fund Didn’t List First Brands Exposure When Seeking Investors

Multi-Color is set to defend its choice of New Jersey as a chapter 11 venue, a test of whether a $1 million bank account located in the state is enough to anchor a bankruptcy case there.

Judge Michael Kaplan of the U.S. Bankruptcy Court in Trenton, N.J. is scheduled Thursday to consider a bondholder group's venue objection arguing that Multi-Color lacks a bona fide connection to the state. Multi-Color, its private-equity owner CD&R and other creditors have said its venue is proper based one subsidiary's bank account at ConnectOne Bank, a New Jersey state-chartered bank.

Multi-Color unit MCC-Norwood opened bank accounts with ConnectOne weeks before filing chapter 11 and listed those monies as the subsidiary's principal asset when filing for bankruptcy. The objecting bondholders argued the company's actions amount to a "cynical manipulation" of venue rules.

–Andrew Scurria

The selloff hitting some listed private-markets managers hasn’t yet bled into the rest of the industry—and things would have to get far worse before it does.

The basic cause of the selloff is lack of transparency. Investors don’t know what’s in many private-credit portfolios, so they fear the worst. Many have chosen to cash out rather than roll the dice. But the data available suggests that the private-credit industry—despite fears over its future prospects—is, for the moment, performing pretty much as usual, according to several analysts.

Share your tips, suggestions and feedback with the WSJ Pro Bankruptcy team: Alexander Gladstone; Jodi Xu Klein; Akiko Matsuda; Alicia McElhaney; Andrew Scurria; Becky Yerak. 

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