Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Friday, June 12. In today's briefing, PrimaLend Capital Partners and its affiliates are being sued by Dallas-based dealership Simple Auto, which claims the bankrupt subprime auto lender pressured it into buying a troubled $46 million loan portfolio to shield PrimaLend from its own $10 million exposure. Separately, a group of Trinseo creditors, including Apollo Global Management and Oaktree Capital Management, has asked the court to dismiss a lawsuit by rival lender CastleKnight Management, arguing that their pre-bankruptcy debt restructuring deals didn't violate credit agreements or facilitate a takeover.

A Texas auto dealership has filed a lawsuit against bankrupt subprime auto lender PrimaLend Capital Partners and its affiliates, alleging it was tricked into buying a troubled $46 million loan portfolio so PrimaLend could protect its own $10 million financial exposure.

Simple Auto, a small, three-year-old dealership based in Dallas, filed the adversary complaint Wednesday, asserting that PrimaLend, acting as a paid financial adviser, pushed the dealer into acquiring the loan portfolio to save its own financial losses, according to a filing with the U.S. Bankruptcy Court in Dallas.

The lender to the buy-here-pay-here auto dealership sought chapter 11 protection in October and its liquidation plan was approved in February, including the sale of its primary assets to top creditors. Simple Auto said it now faces “escalating” foreclosure action by PrimaLend’s liquidation trust over more than $29 million it borrowed from a PrimaLend affiliate to finance the deal.

A group of asset-management funds with positions in Trinseo’s revolving credit facility have moved to dismiss the lawsuit filed against them by rival creditor CastleKnight Management, disputing allegations that pre-bankruptcy debt transactions violated credit agreements.

CastleKnight, which owns nearly $300 million of term loans in Trinseo’s operating company, filed its complaint on the same day when the chemical manufacturer filed for bankruptcy last month. The suit accuses creditors including Apollo Global Management and Oaktree Capital Management of orchestrating refinancing deals in 2023 and 2025 that allegedly positioned them to take control of the company at CastleKnight’s expense.

Those defendants filed a motion this week seeking to dismiss the suit, claiming CastleKnight’s “narrative is baseless” and that the transactions were permitted by governing loan documents. The defendants said that CastleKnight has an “often-used strategy of pursuing baseless claims to dramatically increase estate expenses as means of extracting an undeserved recovery.”

The motion challenges CastleKnight’s standing, alleging that the credit agreement required lenders to act collectively when pursuing remedies upon a default. The motion also claimed that CastleKnight added to its position after the agreement’s execution, and “built its overall position in significant measure over the last several months clearly in anticipation of attempting to litigate an outsized recovery on its claims.”

CastleKnight didn’t respond to a request for comment.

—Alexander Gladstone

The California Public Employees’ Retirement System revived its private-equity program by swimming against the stream—raising its bets on the asset class as other investors were pulling back.

Now the $598 billion pension system hopes the manager who led that turnaround can get the same results in other private asset classes.

Calpers on Thursday promoted Anton Orlich to be its deputy chief investment officer for private markets, succeeding Daniel Booth, who stepped down in October 2025. The change expands Orlich’s current role overseeing the pension system’s $119 billion private-equity office. He will be responsible for its $79 billion real-assets portfolio and its $25 billion private-debt program as well, along with other alternative investments.

The European Central Bank raised interest rates for the first time in almost three years, leading the charge among central banks in the developed world in tackling inflation driven by the war in Iran.

The ECB lifted its key rate to 2.25% from 2%, a move that was widely expected by markets, but which underscores the challenges facing major economies from the jump in energy prices caused by the prolonged closure of the Strait of Hormuz. Investors are betting the central bank will lift rates at least once more this year.

The global economy could grow this year at less than half its 2025 pace if the conflict in the Middle East leads to a lengthy reduction in energy supplies and a sharp fall in equity prices, the World Bank said Thursday. The conflict is now in its fourth month, with little sign of a lasting peace. The U.S. began a fresh wave of attacks on Iran on Wednesday, launching strikes against several targets on President Trump’s orders.

U.S. jobless claims rose last week but remained in a range suggestive of a healthy labor market. The number of people who filed for unemployment benefits rose to 229,000 in the week through June 6 higher than the 225,000 reported a week earlier, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal expected 220,000 new claims.

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