Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, June 22. In today's briefing, some recent prepackaged bankruptcies such as QVC, Trinseo and Multi-Color are facing prolonged restructuring battles as stakeholders challenge aggressive past out-of-court corporate debt deals. And Barretts Minerals faces a potential dismissal of its deadlocked three-year-old chapter 11 bankruptcy case unless it submits a confirmable restructuring plan by June 29.

Aggressive corporate debt deals in the past are coming back to haunt companies in bankruptcy, turning what were billed as fast-track cases into prolonged legal battles.

Prepackaged bankruptcies used to signal near-unanimous creditor support that allowed companies to glide through court in weeks, or even days. But recent cases filed by home-shopping network QVC, chemical maker Trinseo and label manufacturer Multi-Color are facing pushback from stakeholders who dispute prebankruptcy debt deals and threaten to derail plans for a quick chapter 11.

The pushback reflects the lingering fallout from a wave of so-called liability management transactions—out-of-court debt restructurings that sometimes advantage one creditor group over another. In all these cases, stakeholders challenged the transactions they say were executed to benefit certain investors at their expense.

A Texas bankruptcy judge has ordered Barretts Minerals, a subsidiary of Minerals Technologies, to file a confirmable chapter 11 plan by June 29 or face a dismissal of the case.

The chapter 11 case of Barretts Minerals has been in a deadlock for nearly three years. At a hearing Thursday, mediator Robert Drain said that the parties have narrowed their differences on the settlement's structure and the amount of funding.

Jeff Jonas, a lawyer representing a committee of injury claimants, said the case should be dismissed because he claimed the sole purpose of the bankruptcy was to shield Minerals Technologies and its affiliates from asbestos liabilities. Jonas said the bankruptcy’s automatic stay has caused asbestos lawsuits to pause while victims continue to suffer and die.

Lawyers for Barretts, its special committee, and Minerals Technologies all asked Judge Isgur to grant them more time to reach an agreement. A lawyer representing future claimants also expressed support for continued mediation.

Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston said he would dismiss the case unless the debtor proposes a chapter 11 plan with a reasonable probability of being confirmed by June 29.

–Akiko Matsuda

New Fortress Energy on Thursday secured U.K. court approval for its restructuring plan, clearing the way for a transaction that will reduce roughly $5.2 billion in debt and hand majority ownership to creditors.

The High Court of Justice of England and Wales approved the restructuring support agreement signed in March. As part of the plan, the energy infrastructure company's Brazilian operations, including terminals and power plants, will become independent while the new NFE keeps the remaining assets.

New Fortress said the transaction will reduce the reorganized entity’s corporate debt to about $527.5 million from roughly $5.7 billion and leave creditors owning 65% of the reorganized company's common equity. Existing shareholders are expected to retain the remaining 35% stake, subject to dilution if preferred equity is converted.

Nearly all creditors backed the plan, according to the company. Participating creditors will exchange existing claims for a mix of new debt, preferred equity and common stock. The company expects to complete the restructuring in the third quarter, subject to remaining implementation steps and regulatory approvals.

Subsidiaries of the company filed for chapter 15 bankruptcy in New York on May 28 seeking recognition of its U.K. restructuring process. A U.S. bankruptcy court will hear the plan on June 26.

–Samantha Kroontje

Individual investors accelerated their withdrawal requests from once-hot private-credit funds in the second quarter, adding to the squeeze the industry is facing as fundraising slows and money heads for the exit.

So far, investors in four large credit funds, including those managed by Blackstone and BlackRock, have requested to redeem about $12 billion in the second quarter, up from $7.7 billion the previous quarter, according to data from the investment bank Robert A. Stanger & Co. The requests add to pressure on the industry, continuing months of turmoil that executives have tried to calm by arguing investors are overreacting to a few losses and a lot of scary headlines.

Chad Hileman had convinced his colleagues at Gibson Capital to pull the plug on one of their most successful recent investments. Their chance to do so was still months away.

By the fall of last year, the Wexford, Pa.-based wealth-management firm thought the returns on the private-credit fund that housed $80 million of its clients’ money had begun to look less attractive. The risks were also growing. The $33 billion fund allowed only one chance per quarter to pull money out.

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

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