Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, May 19. In today's briefing, FTX will distribute more than $5 billion to creditors on May 30 in a second batch of payout since its collapse, with recovery rates ranging from 54% to 120% of original claims. And Goldman Sachs credit analysts say that improving financial conditions, reduced recession risk and rising business optimism are lowering the chance of a sharp rise in U.S. defaults.

FTX Recovery Trust will distribute over $5 billion to creditors on May 30, marking the second major payout since the cryptocurrency exchange's collapse in November 2022.

The upcoming payments will be processed through custodians BitGo and Kraken, with funds expected to reach eligible claimants within one to three business days.

Recovery rates vary by creditor class, ranging from 54% to 120% of original claims, based on asset values at the time of FTX's bankruptcy filing. Plan Administrator John J. Ray III said the distribution is a significant milestone in the unprecedented recovery process, emphasizing ongoing efforts to maximize asset recovery and resolve outstanding claims. 

FTX collapsed in November 2022 after a sudden surge in customer withdrawals that triggered a severe liquidity crisis. 

The risk of defaults rising sharply in the U.S. falls as conditions improve, Goldman Sachs credit research analysts say in a note. The risk of a recession is lower, financial conditions are improving and business optimism is resurfacing, lowering the possibility of "a sharp acceleration in defaults", the analysts say. Easing trade tensions and declining borrowing costs create favorable conditions for U.S. businesses, Goldman Sachs credit analysts say.

--Miriam Mkuru

Shares of Omeros fell after the company reported lower royalties after sales of its partner Rayner fell.

The stock fell 14% to $3.42 after touching a 52-week low. Shares have risen 3.2% over the past 12 months.

The biopharmaceutical company on Thursday posted a loss of $33.5 million, or 58 cents a share, compared with a loss of $37.2 million, or 63 cents a share, a year earlier. Analysts polled by FactSet expected a loss of 57 cents a share.

The company saw $6.7 million in royalties for its Omidria treatment from Rayner's U.S. sales of $22.3 million, down from royalties of $9.4 million on sales of $31.2 million a year ago.

The company also said it has temporarily paused certain activities to prioritize spending on the launch of narsoplimab, a treatment for transplant-associated thrombotic microangiopathy.

The suspended operations include its Phase 3 trial evaluating zaltenibart, a treatment for paroxysmal nocturnal hemoglobinuria.

–Kelly Cloonan

Struggling solar company Sunnova Energy International bought itself another week to strike a restructuring deal with creditors to avoid bankruptcy. The Houston-headquartered company now has until May 22 before the forbearance runs out.

• Earlier: Sunnova is preparing to file for bankruptcy to restructure $8.5 billion in debt.

Even though both countries have 1.4-billion strong populations, mainland China has more than 60 Louis Vuitton stores while India has only three.

Designer brands’ struggles in India are a reminder of just how difficult it can be to find new growth markets. That search is taking on new urgency, as the two biggest drivers of demand in the luxury goods industry, China and the U.S., are in the doldrums.

Together, Chinese and American shoppers generate around half the sector’s sales. But demand from Chinese consumers has been muted for four years. The country’s deflating property bubble has wiped 30% off Chinese household wealth, according to Barclays Private Bank, lessening the appetite for luxury goods.

Boot Barn, Birkenstock and On Holding reported this week, all indicating they had room to grow despite tariff fears pressuring their stocks in April. Jefferies analysts say in a note that On's reported strong balance across wholesale and direct-to-consumer signals growth is still in the early stages, the analysts say. Birkenstock is well-run and has room to expand because it's investing in whitespace opportunities such as closed-toe shoes, they say. Boot Barn managed to keep its guidance relatively in line with Wall Street expectations despite factoring in new tariffs costs, making the analysts optimistic it can gain or maintain market share.

–Katherine Hamilton

Ratings that grade private-credit products and are used by investors to categorize debt issued by lending firms are increasingly being called into question by industry decision makers.

Credit firms that bundle packages of loans to back securities like collateralized loan obligations, or CLOs, are often able to choose the ratings provider for such issues. Critics say this can lead to conflicts of interest, as the issuer pays fees to the ratings provider while the resulting grades can significantly affect the marketability of the rated securities.

American households in May felt worse about the economy than they did in April, with sweeping tariffs raising the prospect of higher prices.

The University of Michigan said Friday its preliminary index of consumer sentiment for May was 50.8, down about 3% from a final reading of 52.2 in April. Economists polled by The Wall Street Journal had expected consumer sentiment to rise to 53.5 in May.

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